BILL ANALYSIS �
SB 1029
Page 1
SENATE THIRD READING
SB 1029 (Budget and Fiscal Review Committee)
As Amended July 3, 2012
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
SENATE VOTE :Vote not relevant
SUMMARY : Appropriates funding for construction, planning, and
design for the High-Speed Rail System. Specifically, this bill:
1)Appropriates $5.8 billion to begin construction of the Initial
Operating Segment (IOS) of the High-Speed Rail System in the
Central Valley. Of this amount, $3.2 billion of these funds
are Federal Funds and $2.6 billion are Proposition 1A bond
funding.
2)Appropriates $1.1 billion of Proposition 1A bond funding for
"Bookend" funding for improvements associated with the blended
approach in the San Francisco Peninsula and the Los Angeles
Basin.
3)Appropriates $819 million of Proposition 1A bond funding for
"Connectivity" funding for improvements on existing rail
regional and inter-city systems to improve connectivity to the
High-Speed Rail System.
4)Includes $252.5 million for design, planning, and right-of-way
acquisition activities for the High-Speed Rail System.
5)Includes provisions that join the funding for the IOS, the
"Bookends" allocation, and the "Connectivity" funding
contingent upon the appropriation of all three elements.
6)Requires funding for the IOS be subject to oversight by the
Public Works Board.
7)Includes oversight extensive reporting language, including:
a) A semi-annual update report that will provide an update
on project milestones, expenditures, risks, and schedule.
This report must be approved by the Secretary of Business,
Transportation and Housing;
SB 1029
Page 2
b) A periodically required management plan report regarding
High-Speed Rail Authority (Authority) staffing and
management approach. This report must first be received by
October 1, 2012, prior to the award of a contract to
commence construction and must be approved by the Secretary
of Business, Transportation and Housing;
c) A risk management plan report, including quantification
of the effect of identified risks in financial terms, an
assessment of the reserves for claims, and the plans for
integrating estimates for capital and support costs. This
report must first be received prior to the award of
contracts and must be approved by the Secretary of
Business, Transportation and Housing.
d) Expands the scope of the 2014 High-Speed Rail Business
Plan by requiring an improved demand projects,
cost-benefits, and operation and maintenance cost models.
This includes the submission of a study by the Union
Internationale de Chemins de Fer to compare the costs of
California's High-Speed Rail System operations to other
countries. This report must be approved by the Secretary
of Business, Transportation and Housing;
e) An analysis of the net impact of the High-Speed Rail
Program on the state's greenhouse gas emissions. This
report must be approved by the Secretary of Business,
Transportation and Housing; and,
f) A copy of the valid memorandum of understanding with
regional transportation agencies relative to the Northern
California Unified Services, within 10 days of the
approval.
8)Prohibits the use of funding in the San Francisco to San Jose
corridor to expand the blended system to a dedicated
four-track system.
9)Requires the authority to fill the positions of chief
executive officer, risk manager, chief program manager, and
chief financial officer prior to the award of construction
contracts.
10)Requires the High-Speed Rail Authority be subject to existing
SB 1029
Page 3
Government Code Sections 13332.11 and 13332.19 regarding
safeguards and oversight rules.
FISCAL EFFECT : No State General Fund is appropriated in this
bill, only Proposition 1A bond funds and federal funds.
However, when all of the bond funds associated with this bill
have been issued it will result in debt-service payments of
approximately $330 million per year. These debt service
payments are already assumed in the out-year expenditures
projections of the 2012-13 budget package.
COMMENT : This bill amends the 2012-13 Budget Act to include
appropriations for the construction, planning, design, and
right-of-way acquisition activities for the High-Speed Rail
Authority.
In April 2012, the High-Speed Rail Authority approved a Final
Business Plan that stipulated the approach for constructing the
project. One of the major changes to the Plan from previous
versions was adoption of a "blended" approach for the project,
which would have the High-Speed Rail Authority share
right-of-way and tracks with existing rail systems in the
densely populated urban Los Angeles Basin and along the San
Francisco Peninsula. The adoption of this new strategy had two
major impacts upon the overall plan, it reduced the total
expected construction costs substantially, and it prioritized
improvements along these existing blended sections in the short
run.
This bill funds the three components envisioned in the April
2012 High-Speed Rail Authority Final Business Plan.
1)Initial Operating Section . Provides $5.8 billion to all funds
to begin construction of the High Speed Rail "backbone" in the
Central Valley. The Authority expects that the funds will
allow approximately 130 miles of right-of-way and track bed
from Madera to the northern outskirts of Bakersfield to be
constructed.
2)Connectivity . Appropriates $819 million of Proposition 1A
funding that is set aside to improve connectivity and
improvements to existing regional and inter-city rail systems
throughout California.
SB 1029
Page 4
3)Bookends . Appropriates $1.1 billion of Proposition 1A funds
for improvements to the "blended" sections of the system.
These improvements will make near-term improvements to these
existing rail segments that will facilitate the eventual use
of the segment for High-Speed Rail but will also improve
service for existing riders. Of this amount, $500 million is
provided to begin improvements to the Los Angeles Basin and
$600 million is provided to electrify the Caltrain system.
This bill would appropriate funds that would be spent over the
next six years, which allows the Authority flexibility to plan
the project and award contracts for construction. This bill
contains extensive reporting language to provide oversight to
the system as these funds are expended to allow the Legislature
to conduct oversight. In addition, the Public Works Board and
the Department of Finance will need to approve performance
criteria and concept drawings prior allowing expenditures.
This bill also clarifies that funds cannot be used to construct
a dedicated four-track system in the San Francisco to San Jose
segment of the project. With the adoption of a "blended"
approach to the project along this segment, such an expansion
was not being considered by the Authority. However, provisional
language in this bill expressly prohibits the use of funds for
such an expansion.
Analysis Prepared by : Christian Griffith / BUDGET / (916)
319-2099
FN: 0004412