BILL ANALYSIS �
SB 1225
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Date of Hearing: August 29, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1225 (Padilla) - As Amended: August 24, 2012
SENATE VOTE : 38-0
SUMMARY : Authorizes, until June 30, 2015, the California
Department of Transportation (Caltrans) to enter into an
interagency transfer of services agreement (ITA) with the Los
Angeles-San Diego-San Luis Obispo (LOSSAN) corridor agency for
the administration of intercity passenger rail service.
Specifically, this bill :
1)Makes various findings and declarations regarding the
importance of intercity rail as an element of the state's
transportation system, the state's historical investment in
capital improvements and operation support for intercity rail
service, and the importance of protecting that investment.
2)Makes various statements of legislative intent, including
that:
a) The Secretary of Business, Transportation and Housing
Agency (Secretary) has responsibility for the overall
planning, coordination, and budgeting of the intercity
passenger rail service;
b) The Secretary is authorized to allow Caltrans to enter
into an ITA upon a determination that the transfer would
result in administrative or operating cost reductions;
c) The intercity passenger rail corridor is to remain a
component of the statewide system of intercity passenger
rail corridors upon transfer from the state; and
d) The level of state funding is to be maintained at a
level equal to at least the level of service funded by the
state as of the effective date of the ITA, for a minimum
three-year period.
1)States that the following provisions apply only to the LOSSAN
corridor and only if the corridor is subject to an approved
ITA:
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a) Requires the Secretary to establish through the annual
budget process the level of funding for the LOSSAN corridor
operations, including associated feeder bus services;
b) Requires the Secretary to allocate funds in accordance
with the ITA for the mutually- agreed upon rail services as
well as funds for marketing and administration;
c) Authorizes the LOSSAN corridor agency or local or
regional entities to augment state-provided resources or to
fund shortfalls when agreed upon performance standards are
not reached but prohibits a mandate for them to do so.
d) Authorizes the LOSSAN corridor agency or local or
regional agencies to identify and secure new supplemental
sources of funding for the purpose of expanding or
maintaining intercity rail passenger service levels,
including state and federal intercity rail resources.
e) Authorizes local resources to be available to fund
operating deficiencies only if the local resources are
dedicated by a vote of the local agency providing the
funds, with the concurrence of the LOSSAN corridor agency.
f) Authorizes Caltrans to provide support services as
agreed upon by it and the LOSSAN corridor agency.
g) Requires operating costs to be controlled by using the
Amtrak cost allocation formula and the ability to contract
out to Amtrak or other rail operators.
h) Requires the Secretary to establish performance
standards by June 30, 2014, and, to the extent necessary,
to revise the standards by July 30, 2015, or the effective
date of the ITA, whichever comes first.
i) Prohibits the termination of feeder bus services unless
the services are not cost-effective.
1)Authorizes Caltrans, pursuant to the Secretary-approved ITA,
to transfer to the LOSSAN corridor agency the responsibility
for administering the state-funded intercity passenger rail
services, including associated feeder bus service, within the
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corridor. Requires Caltrans to retain responsibility for
developing budget requests for the corridor, consistent with
the annual business plan as approved by the Secretary, through
the state budget process. Requires the budget request to be
developed in consultation with the LOSSAN corridor agency and
in coordinating with other intercity passenger services in the
state.
2)Establishes a deadline of June 30, 2015, for execution of the
ITA that is to cover an initial three-year period that may be
extended by mutual agreement. Requires the Secretary to
report to the Governor and the Legislature by June 30, 2016,
if an agreement is not met by the deadline, explaining why
agreement was not reached along with specific recommendations
on how to develop and acceptable ITA.
3)Mandates the Secretary to require the LOSSAN corridor agency
to demonstrate its ability to meet the performance standards.
4)Requires the ITA to:
a) Include the date and conditions of transfer, including
the annual funding level for the initial three years
following the transfer.
b) Identify the funds to be transferred with the amounts
adjusted annually for inflation and in accordance with the
business plan.
c) Specify the level of service to be provided, the
Caltrans methods to ensure coordination of services with
other rail passenger services including feeder bus
services, and the methods for the annual review of the
business plan and annual funding and appropriation
proposals.
d) Describe the terms of use by the LOSSAN corridor agency
for the car and locomotive train sets and other equipment
and property owned by Caltrans.
e) Describe auditing responsibilities and process
requirements as well as reimbursement and billing
procedures.
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1)Requires the LOSSAN corridor agency to describe how it will
use the state funds allocated annually in its business plan
that is to be submitted to the Secretary for review and
recommendation by April 1 of every year. Deems the business
plan accepted by the state when approved by the Secretary.
Prescribes the requirements for the business plan. Requires
the LOSSAN corridor initial business plan to be consistent
with the immediately previous State Rail Plan as developed by
Caltrans and the January 2014 business plan developed by the
California High-Speed Rail Authority (Authority).
2)Requires the Secretary to allocate state funds annually to the
LOSSAN corridor agency based upon the annual business plan and
appropriation by the Legislature. Pursuant to the ITA,
indicates that any additional funds that are needed to operate
the passenger rail service during a fiscal year are required
to be provided by entities within the LOSSAN corridor that
receive service. Authorizes cost savings or farebox revenues
to be used for service improvements related to intercity
service. Requires the LOSSAN corridor agency to report the
fiscal results of the previous year's operations as part of
its annual business plan.
3)Requires that the level of service funded by the state to be
no less than the number of intercity round trips operated at
the effective date of the ITA, for a minimum three-year
period.
4)Establishes the level of funding provided by the state for
feeder bus service at substantially the same number of route
miles as the current feeder system at the effective date of
the ITA. Prohibits the ITA from not allowing the LOSSAN
corridor agency from reducing the number of feeder bus route
miles upon its determination that a route is not cost
effective.
5)States that the bill's provisions do not preclude expansion of
state-approved intercity passenger rail service.
6)Authorizes the use of local resources to offset any
redirection, elimination, reduction, or reclassification by
the state of state resources for operating intercity rail
services only if the local resources are dedicated by a vote
of the local agency providing the funds, with the concurrence
of the LOSSAN corridor agency.
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7)Authorizes Caltrans and the LOSSAN corridor agency to
contract, through competitive bids, with Amtrak or with
organizations authorized to provide intercity rail services.
Deems the LOSSAN corridor agency as an entity of the state,
allowing it to be a direct recipient federal public
transportation grants.
8)Requires a contractor operating the LOSSAN corridor services,
as a contractual condition, to agree to abide by federal
railway labor laws.
9)Repeals provisions authorizing the Southern California
Regional Rail Authority (SCRRA) to be a party to the ITA and
replaces it with the LOSSAN corridor agency.
10)Stipulates that this bill is only operative if the members of
the LOSSAN corridor agency enter into an amended joint powers
agreement to expand the authority of the existing agreement.
EXISTING LAW :
1) Authorizes Caltrans, in cooperation with local
transportation officials, to develop guidelines to
implement the intercity rail program and defines the
intercity rail corridors within which rail projects are
eligible for funding, and requires Caltrans to develop a
comprehensive statewide rail passenger and freight system
plan.
2) Authorizes Caltrans to contract with Amtrak for
intercity rail passenger services and provides funding for
these services from the Public Transportation Account.
3) Authorizes, until December 31, 1996, Caltrans, subject
to approval of the Secretary, to enter into an ITA under
which a Joint Powers Agency (JPA) assumed responsibility
for administering a state-funded intercity rail corridor
service. Authorized an expanded SCRRA, a JPA of five
member agencies representing the counties of Los Angeles,
Orange, Riverside, San Bernardino and Ventura, to be a
party to an ITA for assuming operational authority for
intercity rail passenger services in southern California.
4) Establishes the terms of the ITA to include various
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elements, including the date and conditions of transfer;
the funds to be transferred; the level of service to be
provided and Caltrans' methods for coordination of
services, annual review of the business plan, annual
proposals on funding and appropriations; the terms for
transferring car and locomotive train sets; and, auditing
and other procedures.
5) Provides for the allocation of state funds by the
Secretary to a JPA under the terms of the ITA and based on
the annual business plan that includes the level of service
to be operated. As provided in the ITA, authorizes the JPA
to provide any additional funds that are needed to operate
the passenger rail service during a fiscal year from
jurisdictions that receive service.
6) Authorizes Caltrans and any entity that assumes
administrative responsibility for passenger rail services
through an ITA to contract with specified entities for the
use of tracks and other facilities and for the provision of
passenger rail services.
7) Requires a JPA to submit an annual business plan which
is the basis of a budget request for service.
8) Pursuant to federal law:
a) Authorizes states or state-created entities to contract
with Amtrak for intercity passenger rail service.
b) Beginning in October 1, 2013, requires states, according
to a national cost allocation process adopted by the
Service Transportation Board, to pay the full operating and
capital cost for intercity passenger rail service in which
the service is less than 750 miles in length. Interstate
service is exempt from this provision.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time special fund cost to Caltrans in the range
of $200,000 to implement a transfer agreement with the LOSSAN
corridor agency, including supporting the transition of
Caltrans' equipment and facilities. Caltrans also indicates a
one-time payment of $300,000 to $400,000 would be made to the
LOSSAN corridor agency associated with the transfer of
operational and capital projects. Caltrans would thereafter
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realize ongoing administrative savings of about $300,000.
COMMENTS : This bill would authorize a locally-controlled JPA,
the LOSSAN corridor agency, until June 30, 2015, to assume
administrative responsibilities for the state-supported LOSSAN
rail passenger corridor. The author cites the LOSSAN corridor
as one of the most important segments of California's rail
system and indicates that, despite its vital importance to
California, "current law has stifled corridor improvements. A
JPA modeled after the highly successful Capitol Corridor JPA
would allow for greater administrative, procurement and
operational efficiencies that come with integration."
The 351-mile-long LOSSAN rail corridor (San Diego to Los Angeles
to San Luis Obispo) is the second busiest passenger rail
corridor in the nation, second only to the Boston-to-Washington
D.C. Northeast Corridor. More than nine million passenger
riders make trips on LOSSAN corridor commuter and intercity
trains annually. The corridor runs through a six-county area,
connecting major metropolitan areas of Southern California and
the Central Coast. The LOSSAN rail corridor includes 41
stations and more than 100 daily passenger trains. Since the
1970s, the state has provided more than $1 billion in
improvements to the corridor, Amtrak has contributed $220
million, and local passenger rail agencies have contributed $400
million.
Within the LOSSAN corridor, there are three passenger rail
carriers along this corridor, Amtrak's intercity Pacific
Surfliner and the Metrolink and Coaster commuter lines as
follows:
1)Amtrak operates both the long distance intercity Coast
Starlight and the Pacific Surfliner passenger trains. The
Pacific Surfliner route (essentially comprising the LOSSAN
rail corridor), under the administration of Caltrans, is
wholly within California and operates between San Diego and
San Luis Obispo. It receives financial support from Caltrans
that pays 70% of Pacific Surfliner costs above fare revenue.
Amtrak contributes the remaining 30% of the operating deficit
as the service is considered a part of Amtrak's basic
intercity service. More than 2.8 million intercity rail
passengers annually use the Pacific Surfliner service.
Amtrak's other long-distance service, Coast Starlight,
provides daily service connections between Seattle and Los
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Angeles, passing through Portland, Sacramento, the San
Francisco Bay Area and Santa Barbara.
2)Metrolink is the Los Angeles area commuter rail service,
operated by the SCRRA. The Metrolink operations encompass six
rail lines and 55 stations using 512 miles of track. The
system operates within the counties of Los Angeles, Orange,
Riverside, San Bernardino, San Diego, and Ventura. It
connects with the Metro Rail system which serves Los Angeles
County, with the San Diego Coaster and Sprinter commuter rail
services which serves San Diego County, and with Amtrak's
Pacific Surfliner, Coast Starlight, Southwest Chief and Sunset
Limited intercity rail services.
3)Coaster commuter rail service, between the City of Oceanside
and the City of San Diego, is operated by the North County
Transit District (NCTD). The Coaster operations include seven
locomotives covering the 41-mile route. It reports about 1.4
million boardings annually. The Sprinter commuter rail
service also operates within the corridor with a station
located at Oceanside continuing eastward to Escondido.
To coordinate these various passenger rail services within the
LOSSAN corridor, a JPA was formed in 1989. Metro, Orange County
Transportation Authority, NCTD, San Diego Association of
Governments, San Diego Metropolitan Transit System, San Luis
Obispo Council of Governments, Santa Barbara County Association
of Governments, Ventura County Transportation Commission, and
Caltrans are voting members of the JPA. The Southern California
Association of Governments, Amtrak, and the California
High-Speed Rail Authority are non-voting, ex-officio members of
the JPA. Further, there are four additional non-voting
technical advisory committee members on the JPA representing the
BNSF, the California Public Utilities Commission, SCRRA, and UP.
This LOSSAN corridor agency advises Caltrans, as administrator
of the corridor, on Amtrak services and facility improvements
within the corridor. Legislation enacted in 1996 provided an
opportunity for the LOSSAN corridor agency to create a JPA to
assume responsibility for the LOSSAN intercity passenger service
by December 31, 1996. As an agreement with Caltrans could not
be reached because the local agencies were unable to reach a
consensus on the structure of the corridor agency, the
responsibility for operating the rail passenger service within
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the corridor remains with Caltrans
This bill is the second attempt for the separate agencies to
reach consensus on forming a joint powers agreement and to
become an agent of the state by entering into an ITA with
Caltrans to manage the operation of Amtrak services. Upon
formation, it is envisioned that the LOSSAN corridor agency will
be able to better coordinate schedules and other operating
matters with the commuter rail services provided by Metrolink
and Coaster.
State-supported intercity rail passenger services : In
California, there are three state-supported intercity rail
passenger services within three distinct corridor routes. In
addition to the LOSSAN corridor described earlier, the state has
funded Amtrak service from Bakersfield to Oakland via Stockton
and Martinez since 1979 (San Joaquins), and the state contracted
with Amtrak to operate Capitol Corridor service from Sacramento
to Oakland/San Jose in 1991. The management of the latter
service was transferred to the Capitol Corridor JPA (CCJPA) in
1998 by an ITA.
Prior to 1976, Amtrak supported three round trips along the
present Pacific Surfliner route from San Diego to Los Angeles.
Under Caltrans management since 1976, the Pacific Surfliner
route has been expanded to current service level of 11 daily
round trips from San Diego to Los Angeles, five daily round
trips continuing to Santa Barbara, and two daily round trips
continuing to San Luis Obispo. The current LOSSAN farebox
recovery ratio (ratio of revenues to expenses) in state fiscal
year 2010-11 was 54%. In contrast, the farebox ratio for the
San Joaquin service was 49%, and the Capitol Corridor, under
transferred administration from the state since 1998, was 39%,
the lowest of the three intercity passenger train services.
State's remaining role in intercity rail passenger services :
This bill requires, upon implementation of the ITA, Caltrans to
continue coordinating rail corridor services with other
intercity passenger services in the state. With the possible
transfer of state administration of all three state-supported
intercity rail passenger services - the San Joaquin (under
reauthorization pursuant to AB 1779 (Galgiani), of 2012),
Capitol Corridor, and the Pacific Surfliner - to
locally-approved JPAs, what will be the state's residual role in
overseeing the operations and interconnectivity of these
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separate services?
Arguments in support :
1)Proponents contend that placing passenger rail service in the
LOSSAN corridor under local management will result in a more
efficient and effective allocation of resources and decision
making related to service expansion, frequencies, extensions,
connectivity, and schedules. They further contend that a
unified voice will be more effective at the state and federal
level when advocating on passenger rail issues, including
funding for capital improvements.
2)The author indicates that, to meet the demands of the region,
about $6-8 billion in capital improvements are needed by 2025
to modernize the LOSSAN corridor and by not providing for the
creation of a JPA, the future sustainability of the corridor
is uncertain.
3)Writing in support of this bill, Amtrak indicates that it
"will work collaboratively with the proposed JPA, provided the
entity demonstrates an understanding of the criticality of
preserving, and enhancing, intercity utility along the entire
corridor. Not only do the Pacific Surfliners provide vital
access to communities within the corridor, but the route is an
important part of Amtrak's national network, and the JPA's
actions must reflect this."
4)The terms of the ITA, as specified under existing law, serve
to protect the interests of the JPA as well as the state.
Further, as an element of the ITA, the requirement for the JPA
business plan will provide a roadmap on how the entity will
proceed and provide some level of confidence to state decision
makers.
Arguments in Opposition :
1)Transfer of the management of this corridor to a JPA, along
with the similar potential transfer of the San Joaquin
corridor pursuant to AB 1779 (Galgiani), could make statewide
coordination of scheduling and other operations difficult.
2)This bill makes several changes to the original legislative
statutes (SB 457 (Kelley), Chapter 263, Statutes of 1996),
relative to transferring operations of a state-supported route
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to a JPA. If the current authorizing statutes have proven
adequate as evidenced with transfer of the Capitol Corridor to
a JPA, why are changes as proposed by this bill necessary?
Furthermore, some of the proposed changes in the bill may be
disadvantageous to the state. For example, existing law
requires the JPA to augment state funding to address operating
funding shortfalls. However, this bill requires local
approval prior to local funds being used for funding operating
deficiencies. Upon transfer of the state-administered Pacific
Surfliner route to the LOSSAN JPA, should operating costs
outpace revenues, it is unclear how any shortfalls will be
managed if local entities choose not to fund operating
deficiencies.
3)Although proponents cite the "highly successful" performance
record of the Capitol Corridor, actual farebox ratios of its
performance are below that of the currently state-administered
Pacific Surfliner and San Joaquin intercity rail passenger
services. Therefore, the LOSSAN JPA will be tasked to
maintain the state's effective past management efforts.
4)Unlike the legislation forming the CCJPA, this bill would not
codify the structure or membership of the JPA that would
assume management of the LOSSAN rail corridor. This raises
doubts about the capacity of the JPA to manage the corridor
because if its prospective members cannot even agree on the
representational makeup and structure of the JPA it is unclear
that they could effectively manage the more complex task of
corridor operations.
Proposed amendments : The author is proposing amendments to make
the bill's provisions non-specific to a particular rail corridor
by removing references to LOSSAN. Also, the amendments will
align this bill's provisions with AB 1779 (Galgiani, 2012),
currently pending hearing on the Senate floor. Lastly, the
amendments will restore intent language pertaining to LOSSAN
rail corridor operations maintaining a 58% farebox recovery
ratio that was inadvertently deleted.
Support :
LOSSAN rail corridor agency (co-sponsor)
Los Angeles County Metropolitan Transportation Authority
(co-sponsor)
Orange County Transportation Authority (co-sponsor)
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California Transit Association
CH2M HILL
Los Angeles County Business Federation
Los Angeles Division of the California League of Cities
Mobility 21
Orange County Business Council
Sacramento Regional Transit District
San Joaquin Regional Rail Commission
San Joaquin Valley Regional Policy Council
Santa Barbara County Association of Governments
Southern California Association of Governments
Ventura County Transportation Commission (support in concept)
Oppose :
California Department of Finance
North County Transit District (oppose unless amended)
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093