BILL NUMBER: AB 1574	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Galgiani

                        FEBRUARY 1, 2012

   An act to amend Section 13975 of the Government Code, and to
repeal and add Division 19.5 (commencing with Section 185000) of the
Public Utilities Code, relating to high-speed rail.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1574, as introduced, Galgiani. High-speed rail.
   Existing law, the California High-Speed Rail Act, creates the
High-Speed Rail Authority with 9 members to develop and implement a
high-speed train system in the state, with specified powers and
duties. Existing law, pursuant to that act, specifies the powers and
duties of the authority, which include entering into contracts with
private and public entities for the design, construction, and
operation of high-speed trains, the acquisition of rights-of-way
through purchase or eminent domain, and the relocation of highways
and utilities, among other things. Existing law requires the
authority to adopt and submit to the Legislature, every 2 years, a
business plan. Existing law authorizes the authority to appoint an
executive director, and authorizes the Governor to appoint up to 6
additional persons exempt from civil service. Existing law provides
for the authority to establish an independent peer review group.
Existing law, the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century, approved by the voters as Proposition 1A at the
November 4, 2008, general election, provides for the issuance of
$9.95 billion in general obligation bonds for high-speed rail and
related purposes.
   This bill would repeal all of the provisions of the California
High-Speed Rail Act. The bill would enact a new California High-Speed
Rail Act. The bill would continue the High-Speed Rail Authority in
existence with limited responsibilities and would place the authority
within the Business, Transportation and Housing Agency. The 5
members of the authority appointed by the Governor would be subject
to Senate confirmation, but existing members could continue to serve
the remainder of their terms. The bill would authorize the authority
to appoint an executive director, and would provide for the Governor
to appoint up to 6 additional individuals exempt from civil service
as authority staff. The bill would require the authority to adopt
policies directing the development and implementation of high-speed
rail, prepare and adopt a business plan and high-speed train capital
program, establish a peer review group, select alignments for the
routes of the high-speed train system established by law, adopt
criteria for the award of franchises, and set fares or establish
guidelines for the setting of fares. The bill would enact other
related provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  (a) It is the intent of the Legislature to do all of
the following:
   (1) Further the transportation system of the state through the
successful development and construction of the 800-mile high-speed
train system described in Proposition 1A, approved by the voters on
November 4, 2008.
   (2) Protect the state's interests and provide for the exercise of
continuing oversight of the funds to be invested in the high-speed
train project following voter approval of Proposition 1A.
   (3) Ensure that an adequate public forum maintains the
transparency of the development of the high-speed train project.
   (4) Provide an efficient governmental structure for the
development of high-speed train operations in the state.
   (b) This act continues in existence the High-Speed Rail Authority
and places the authority within the Business, Transportation and
Housing Agency.
  SEC. 2.  Section 13975 of the Government Code is amended to read:
   13975.  The Business and Transportation Agency in state government
is hereby renamed the Business, Transportation and Housing Agency.
The agency consists of the State Department of Alcoholic Beverage
Control, the Department of the California Highway Patrol, the
Department of Corporations, the Department of Housing and Community
Development, the Department of Motor Vehicles, the Department of Real
Estate, the Department of Transportation, the Department of
Financial Institutions,  and  the Board of Pilot
Commissioners for the Bays of San Francisco, San Pablo, and Suisun
 , and the High-Speed Rail Authority  . The California
Housing Finance Agency is also located within the Business,
Transportation and Housing Agency, as specified in Division 31
(commencing with Section 50000) of the Health and Safety Code.
  SEC. 3.  Division 19.5 (commencing with Section 185000) of the
Public Utilities Code is repealed.
  SEC. 4.  Division 19.5 (commencing with Section 185000) is added to
the Public Utilities Code, to read:

      DIVISION 19.5.  CALIFORNIA HIGH-SPEED RAIL ACT


      CHAPTER 1.  GENERAL PROVISIONS, FINDINGS, AND DEFINITIONS


   185000.  This division shall be known, and may be cited, as the
California High-Speed Rail Act.
   185002.  The Legislature hereby finds and declares all of the
following:
   (a) California, over the past decades, has built an extensive
network of freeways and airports to meet the state's growing
transportation needs.
   (b) These facilities are not adequate to meet the mobility needs
of the current population.
   (c) The population of the state and the travel demands of its
citizens are expected to continue to grow at a rapid rate.
   (d) The cost of expanding the current network of highways and
airports fully to meet current and future transportation needs is
prohibitive, and a total expansion strategy would be detrimental to
air quality.
   (e) Intercity train service, when coordinated with urban transit
and airports, is an efficient, practical, and less polluting
transportation mode that can fill the gap between future demand and
present capacity.
   (f) Advances in rail and train technologies have allowed intercity
train systems in Europe and Japan to attain speeds of up to 220
miles per hour and compete effectively with air travel for trips in
the 200- to 500-mile range.
   (g) Development of a high-speed train system is a necessary and
viable alternative to automobile and air travel in the state.
   (h) In order for the state to have a comprehensive network of
high-speed intercity train systems by the year 2020, similar to
California's former freeway plan, it is necessary to designate an
entity with stable and predictable funding sources to implement the
plan.
   (i) Utilizing existing human and manufacturing resources to build
a large network of high-speed trains will generate jobs and economic
growth for today's population and produce a transportation network
for future generations.
   (j) Upon confirmation of the need and costs by detailed studies,
the private sector, together with the state, can build and operate
new high-speed intercity train systems utilizing private and public
financing.
   185004.  As used in this division, unless the context requires
otherwise, the following terms have the following meanings:
   (a) "Authority" means the High-Speed Rail Authority. The members
of the authority constitute the board of the authority.
   (b) "High-speed train" means intercity passenger train service
that utilizes an alignment and technology that makes it capable of
sustained speeds of 200 miles per hour or greater.
   (c) "Secretary" means the Secretary of Business, Transportation
and Housing.
      CHAPTER 2.  THE HIGH-SPEED RAIL AUTHORITY



      Article 1.  Members of the Authority


   185110.  (a) The High-Speed Rail Authority in state government is
hereby continued in existence.
   (b) (1) The authority is composed of nine members as follows:
   (A) Five members appointed by the Governor, with the advice and
consent of the Senate.
   (B) Two members appointed by the Senate Committee on Rules.
   (C) Two members appointed by the Speaker of the Assembly.
   (2) For the purposes of making appointments to the authority, the
Governor, the Senate Committee on Rules, and the Speaker of the
Assembly shall take into consideration geographical diversity to
ensure that all regions of the state are adequately represented.
   (c) Members of the authority shall hold office for terms of four
years, and until their successors are appointed. A vacancy shall be
filled by the appointing power making the original appointment, by
appointing a member to serve the remainder of the term.
   (d) The term of a member shall expire on December 31 of the fourth
year of the member's term.
   (e) Members of the authority are subject to the Political Reform
Act of 1974 (Title 9 (commencing with Section 81000)).
   (f) From among its members, the authority shall elect a
chairperson, who shall preside at all meetings of the authority, and
a vice chairperson to preside in the absence of the chairperson. The
chairperson shall serve a term of one year.
   (g) Five members of the authority constitute a quorum for taking
any action by the authority. Nothing in the foregoing shall limit any
law requiring a vote of more than a simple majority for the taking
of any action by the authority.
   (h) Nothing in this section shall require the existing membership
of the authority on the effective date of this section to be
reconstituted as of that date.
   185112.  (a) Each member of the authority shall receive
compensation of one hundred dollars ($100) for each day that the
member is attending to the business of the authority, but shall not
receive more than five hundred dollars ($500) in any calendar month.
   (b) Members of the authority shall be reimbursed for their actual
travel expenses incurred in attending to the business of the
authority.
   185114.  (a) The authority shall appoint an executive director,
exempt from civil service, who shall serve at the pleasure of the
authority, to administer the affairs of the authority as directed by
the authority.
   (b) For purposes of managing and administering the ongoing work of
the authority in implementing the high-speed train project, the
Governor, upon the recommendation of the executive director, may
appoint up to six additional individuals, exempt from civil service,
who shall serve at the pleasure of the executive director. Pursuant
to this subdivision, the Governor may appoint persons only for the
following positions:
   (1) Chief program manager.
   (2) Up to three regional directors.
   (3) Chief financial officer.
   (4) Director of risk management and project controls.
   (c) The compensation of the executive director and the additional
persons authorized by subdivision (b) shall be established by the
authority, and approved by the Department of Personnel
Administration, in an amount that is reasonably necessary, in the
discretion of the authority, to attract and hold a person of superior
qualifications. The authority shall cause to be conducted, through
the use of independent outside advisers, a salary survey to determine
the compensation for the positions under this subdivision. The
Department of Personnel Administration may, in its discretion, accept
a previously completed salary survey that meets the requirements of
this subdivision, and shall review the methodology used in the
survey. The salary survey shall consider both of the following:
   (1) Other state, regional, and local transportation agencies that
are most comparable to the authority and its responsibilities.
   (2) Other relevant labor pools.
   The compensation set by the authority shall not exceed the highest
comparable compensation for a position of that type, as determined
by the salary survey. Based on the salary survey, these positions
shall be paid a salary established by the authority and approved by
the Department of Personnel Administration.
   (d) The executive director may, as authorized by the authority,
appoint necessary staff to carry out the provisions of this part.
   185117.  The authority may sue or be sued.

      Article 2.  Policies of the Authority


   185120.  The authority shall establish policies directing the
development and implementation of intercity high-speed train service
that is fully integrated with the state's existing intercity rail and
bus network, consisting of interlinked conventional and high-speed
train lines and associated feeder buses. The intercity network in
turn shall be fully coordinated and connected with commuter train
lines and urban transit lines developed by local agencies, as well as
other transit services, through the use of common station facilities
whenever possible.
   185122.  (a) The authority shall establish an independent peer
review group for the purpose of reviewing the planning, engineering,
financing, and other elements of the authority's plans and issuing an
analysis of appropriateness and accuracy of the authority's
assumptions and an analysis of the viability of the authority's
financing plan, including the funding plan for each corridor required
pursuant to subdivision (c) of Section 2704.08 of the Streets and
Highways Code.
   (b) The peer review group shall include all of the following:
   (1) Two individuals with experience in the construction or
operation of high-speed trains in Europe, Asia, or both, designated
by the Treasurer.
   (2) Two individuals, one with experience in engineering and
construction of high-speed trains and one with experience in project
finance, designated by the Controller.
   (3) One representative from a financial services or financial
consulting firm who shall not have been a contractor or subcontractor
of the authority for the previous three years, designated by the
Director of Finance.
   (4) One representative with experience in environmental planning,
designated by the secretary.
   (5) Two expert representatives from agencies providing intercity
or commuter passenger train services in California, designated by the
secretary.
   (c) The peer review group shall evaluate the authority's funding
plans and prepare its independent judgment as to the feasibility and
reasonableness of the plans, appropriateness of assumptions,
analyses, and estimates, and any other observations or evaluations it
deems necessary.
   (d) The authority shall provide the peer review group any and all
information that the peer review group may request to carry out its
responsibilities.
   (e) The peer review group shall report its findings and
conclusions to the Legislature no later than 60 days after receiving
the plans.

      Article 3.  Powers, Duties, and Responsibilities of the
Authority


   185130.  The authority has all of the following powers, duties,
and responsibilities:
   (a) The authority shall select the alignments for the routes of
the high-speed train system established pursuant to Section 2704.04
of the Streets and Highways Code.
   (b) The authority shall serve as the governing body, within the
meaning of Section 1245.210 of the Code of Civil Procedure, for
purposes of the adoption of resolutions of necessity.
   (c) The authority shall advise the secretary concerning high-speed
rail matters.
   (d) The authority shall adopt criteria for the award of
franchises.
   (e) The authority shall set fares or establish guidelines for the
setting of fares.
   185131.  (a) The authority shall prepare, publish, adopt, and
submit to the Legislature, not later than January 1, 2014, and every
two years thereafter, a business plan. At least 60 days prior to the
publication of the plan, the authority shall publish a draft business
plan for public review and comment. The draft plan shall also be
submitted to the Senate Committee on Transportation and Housing, the
Assembly Committee on Transportation, the Senate Committee on Budget
and Fiscal Review, and the Assembly Committee on Budget. The business
plan shall identify all of the following: the type of service the
authority anticipates it will develop, such as local, express,
commuter, regional, or interregional; a description of the primary
benefits the system will provide; a forecast of the anticipated
patronage, operating and maintenance costs, and capital costs for the
system; an estimate and description of the total anticipated
federal, state, local, and other funds the authority intends to
access to fund the construction and operation of the system; and the
proposed chronology for the construction of the eligible corridors of
the statewide high-speed train system. The business plan shall also
include a discussion of all reasonably foreseeable risks the project
may encounter, including, but not limited to, risks associated with
the project's finances, patronage, right-of-way acquisition,
environmental clearances, construction, equipment, and technology,
and other risks associated with the project's development. The plan
shall describe the authority's strategies, processes, or other
actions it intends to utilize to manage those risks.
   (b) (1) In addition to the requirements of subdivision (a), the
business plan shall include, but need not be limited to, all of the
following elements:
   (A) Using the most recent patronage forecast for the system,
develop a forecast of the expected patronage and service levels for
the Phase 1 corridor as identified in paragraph (2) of subdivision
(b) of Section 2704.04 of the Streets and Highways Code and by each
segment or combination of segments for which a project-level
environmental analysis is being prepared for Phase 1. The forecast
shall assume a high, medium, and low level of patronage and a
realistic operating planning scenario for each level of service.
Alternative fare structures shall be considered when determining the
level of patronage.
   (B) Based on the patronage forecast in subparagraph (A), develop
alternative financial pro formas for the different levels of service,
and identify the operating break-even points for each alternative.
Each pro forma shall assume the terms of subparagraph (J) of
paragraph (2) of subdivision (c) of Section 2704.08 of the Streets
and Highways Code.
   (C) Identify the expected schedule for completing environmental
review, and initiating and completing construction for each segment
of Phase 1.
   (D) Identify the source of federal, state, and local funds
available for the project that will augment funds from the bond act
and the level of confidence for obtaining each type of funding.
   (E) Identify written agreements with public or private entities to
fund components of the high-speed rail system, including stations
and terminals, any impediments to the completion of the system, such
as the inability to gain access to existing railroad rights-of-way.
   (F) Identify alternative public-private development strategies for
the implementation of Phase 1.
   (2) To the extent feasible, the business plan should draw upon
information and material developed according to other requirements,
including, but not limited to, the preappropriation review process
and the preexpenditure review process in the Safe, Reliable
High-Speed Passenger Train Bond Act for the 21st Century pursuant to
Section 2704.08 of the Streets and Highways Code. The authority shall
hold at least one public hearing on the business plan and shall
adopt the plan at a regularly scheduled meeting. When adopting the
plan, the authority shall take into consideration comments from the
public hearing and written comments that it receives in that regard,
and any hearings that the Legislature may hold prior to adoption of
the plan.
   185132.  The authority shall hold at least one public hearing on
the business plan. The authority shall adopt the plan at a regularly
scheduled meeting. When reviewing and adopting the plan, the
authority shall take into consideration comments from the public at
the public hearing, written comments that it receives in that regard,
and comments from any hearings that the Legislature may hold prior
to adoption by the authority.
   185133.  (a) The authority shall prepare, publish, and adopt, and
subsequently submit to the Legislature and the Governor, not later
than November 1 of each even-numbered year, a high-speed train
capital program. The program shall cover a period of six fiscal
years, beginning July 1 of the year following the year it is
submitted, and shall be a statement of intent by the authority to
request funding in the annual Budget Act for the following six years.
The program shall be submitted pursuant to this section
notwithstanding Section 10231.5 of the Government Code.
   (b) The high-speed train capital program shall include a listing
of all capital improvement projects that are expected to require
appropriation in the annual Budget Act, including state, federal,
local, and private funds, during the following six fiscal years.
   (c) For each segment, the program shall specify the expenditure
amount and the expenditure year for each of the following project
components:
   (1) Completion of all permits and environmental studies.
   (2) Preparation of plans, specifications, and estimates.
   (3) The acquisition of rights-of-way, including, but not limited
to, support activities.
   (4) Construction and construction management and engineering,
including surveys and inspection.
   (5) Any additional components the authority may deem appropriate.
   185134.  The authority shall hold at least one public hearing on
the high-speed train capital program. The authority shall adopt the
program at a regularly scheduled meeting. When reviewing and adopting
the program, the authority shall take into consideration comments
from the public at the public hearing and written comments that it
receives in that regard.
      CHAPTER 3.  LEGAL MATTERS


   185300.  Any legal or equitable action brought against the
authority shall be brought in a court of competent jurisdiction in
the County of Sacramento. For purposes of this section, subdivision
(1) of Section 401 of the Code of Civil Procedure does not apply.