BILL ANALYSIS �
SB 325
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Date of Hearing: June 15, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 325 (Rubio) - As Amended: June 9, 2011
SENATE VOTE : 38-1
SUBJECT : Central California Railroad Authority.
SUMMARY : Creates the Central California Railroad Authority to
provide rail freight service within Kern, Kings, Tulare, Fresno,
and Merced Counties. Specifically, this bill :
1)Creates the Central California Railroad Authority (CCRA) to
provide rail freight service within Kern, Kings, Tulare,
Fresno, and Merced Counties.
2)Authorizes the Counties of Madera, Stanislaus, and San Joaquin
to elect to join CCRA and, states that if that election is
made, the service area of CCRA is expanded to include those
counties.
3)Requires CCRA to be governed by a board of directors
(directors), composed as follows:
a) One member appointed by the Kern Council of
Governments;
b) One member appointed by the Kings County Association of
Governments;
c) One member appointed by the Tulare Association of
Governments;
d) One member appointed by the Council of Fresno County
Governments; and,
e) One member appointed by the Merced County Association of
Governments.
4)Requires all members of CCRA to be elected officials of a city
or a county member who belongs to the regional transportation
planning agency or council of government who is appointing
them.
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5)Requires all directors serve for terms of two years and until
their successors have qualified.
6)Requires CCRA to conduct its first meeting no later than 120
days after abandonment or discontinuance of service on any
railroad line, provided the member regional transportation
agencies or councils of government have formed a joint
exercise of powers agreement to implement and manage CCRA.
7)Specifies that the regional transportation planning agencies
or council of government for the Counties of Fresno, Merced,
Kern, Kings, and Tulare, and any regional transportation
planning agencies of other counties that may elect to join
CCRA, may operate freight rail service within the area of
jurisdiction of CCRA.
8)Requires CCRA to do all of the following:
a) Adopt rules for proceedings;
b) Use the established quorum requirement;
c) Act by motion, resolution, or ordinance;
d) Conduct meetings under the Ralph M. Brown Act;
e) Adopt a budget;
f) Adopt an administrative code; and,
g) Conduct a financial audit annually.
9)Authorizes directors to provide, by motion, ordinance or
resolution, that each of its members may receive compensation
in an amount not to exceed $100 for each day of service with a
maximum of six days of service per month and defines "day of
service".
10)States that CCRA may sue and be sued.
11)States that CCRA has all of the following powers:
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a) To acquire, own, operate, and lease real and personal
property reasonably related to the operation and
maintenance of railroads;
b) To issue revenue bonds;
c) To acquire property by purchase, lease, gift, or through
exercise of the power of eminent domain, within its area of
jurisdiction;
d) To operate railroads, including those outside its
boundaries in order to connect its lines with the lines of
another railroad corporation, provided the service begins
within CCRA's area of jurisdiction;
e) To accept grants or loans from federal agencies; and,
f) To select a franchisee, which may be a public or private
entity, to acquire or operate a rail transportation system
within the area of CCRA's jurisdiction.
12)Allows CCRA to acquire, own, lease, and operate railroad
lines and equipment, including, but not limited to, real and
personal property, tracks, rights-of-way, equipment, and
facilities.
13)Allows CCRA to prepare a plan for the acquisition and
operation of any railroad line.
14)Authorizes CCRA, after preparation of a plan, to do any of
the following:
a) Conduct engineering and other studies related to the
acquisition of any railroad line;
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b) Evaluate alternative plans from the private sector to
acquire, finance, and operate a railroad system;
c) Establish criteria for the award of a franchise;
d) Select a franchisee to acquire, finance, and operate the
railroad system;
e) Accept grants, gifts, fees, or allocations from other
entities, including private and public sources; and,
f) Employ an executive officer, other staff, and
consultants deemed appropriate for support of the
activities of CCRA.
15)States that an election is not required when the board of
directors authorizes revenue bonds to be issued for railroad
facilities and all other facilities authorized to be acquired,
constructed, or completed by CCRA.
16)Provides that the state is not liable for any contracts,
debts, or other obligations of CCRA.
17)Requires agencies forming the joint powers agreement (JPA)
implementing CCRA to be liable for all debts and obligations
of CCRA.
18)Prohibits CCRA utilizing or be a claimant for Transportation
Development Act funds.
19)Prohibits CCRA from being entitled to receive funds from the
Public Transportation Account.
EXISTING LAW authorizes the creation of railroad authorities in
various parts of the state.
FISCAL EFFECT : Unknown
COMMENTS :
1)In June 2008, the Surface Transportation Board (STB), the
federal agency that oversees the United States' railroad
industry, authorized the abandonment of 30.6 miles of service
operated by the San Joaquin Valley Railroad (SJVRR) between
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Strathmore and Jovista in Tulare County. In the same
decision, STB denied a request to abandon the rail line from
Strathmore to near Exeter. STB documents show that SJVRR
sought authority to abandon the line because "there is
insufficient traffic available to justify the cost of
maintaining and operating the line, and that investing capital
in the line would not be a prudent use of carrier resources."
During the abandonment process, Tulare County sought to
acquire the section being abandoned and asked STB to set terms
and conditions for the sale of the right-of-way. STB set the
purchase price at $3.3 million. Tulare County declined to
purchase the line at that price.
Matters related to railroad operations, corporate structure,
ownership, service provision, and other aspects of the
railroad business are preempted by the federal government. In
fact, states and local governments cannot exercise the right
of eminent domain to obtain railroad property and are unable
to regulate shipping rates and other aspects of railroad
operations.
2)According to the author's office, communities heavily reliant
on short rail services stand to lose access to goods movement
and shipping services if an alternative is not developed to
ensure dependable rail service for Kern, King, Tulare, Fresno,
and Merced Counties. Unemployment in these counties hovers
around 18% and includes many communities with jobless rates
exceeding 40%. Small and large businesses alike throughout
California, particularly in the Central Valley, stand to lose
greatly if short rail operations decline or cease to exist.
3)SB 325 creates CCRA to ensure the continuation of short line
rail service in the San Joaquin Valley for shippers and
receivers and to provide passenger rail service. CCRA is
created in statute to be comprised of members appointed from
the councils of government (COG) in Kern, King, Tulare,
Fresno, and Merced Counties. The bill also requires that the
member regional transportation agencies or councils of
government from a joint exercise of powers agreement to
implement and manage CCRA. The Committee may wish to ask the
author why CCRA is not explicitly being formed using the
authority authorized under the Joint Exercise of Powers Act?
There is nothing in existing law that does not already allow
the regional transportation planning agencies and COGs in the
area to form CCRA through a JPA.
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4)Support arguments: Supporters argue that CCRA would help
preserve the rail lines for goods movement which are an
intricate part of the San Joaquin Valley economy.
Opposition arguments: Opposition could argue that rail lines
have not been abandoned yet and that this bill may be
premature and the effort to form CCRA could be done locally
through a JPA when needed.
5)This bill is double-referred to the Committee on
Transportation.
REGISTERED SUPPORT / OPPOSITION :
Support
Kern Council of Governments �SPONSOR]
California Partnership for the San Joaquin Valley
Central Valley of California
Cities of Blythe, Huron, Lemoore, Lindsay, Parlier, San Joaquin,
Taft, Wasco
Counties of Kern and Tulare
Fresno Council of Governments
Golden Empire Transit District
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Kings Canyon Unified School District
Madera County Transportation Commission
Merced County Association of Governments
Richard Best Transfer, Inc.
San Joaquin Refining Co., Inc.
Superior Soil Supplements
The Greater Merced Chamber of Commerce
Tricor Refining, LLC
Tulare County Association of Governments
Tulare Frozen Foods, LLC
Opposition
None on file
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958