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  • Analysis of AB 3034 (Galgiani and Ma)
    High-Speed Trains Bond Act
    (As introduced 2/22/08)

    Summary: AB 3034 revises provisions in the existing High-Speed Trains Bond Act to be submitted to state voters on November 4, 2008. The bill amends and expands descriptions of route segments of the high-speed train (HST) system, makes the $9 billion for high-speed trains available on all of the 800 mile High-Speed Trains route, limits the amount of bond funds that can be spent on preconstruction activities, requires detailed funding plans for each system segment and establishes priorities and financial criteria for selecting construction segments that require the least amount of bond funds as a percentage of total segment costs. AB 3034 also makes related technical and clarifying changes to existing bond act provisions and would take effect immediately as an urgency statute.

    Background: SB 1856 (Costa, 2002) and subsequent legislation provide for submission of the Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st Century to state voters for approval at the November 4, 2008 general election. Approval of the bond act is intended to provide state funding to initiate the construction of the 800 mile statewide intercity high-speed passenger train system. The new high-speed train network will serve the major population centers in the state and link regional and local transit systems to form an integrated transportation network throughout California.
    The bond act will provide for the issuance of $9.95 billion of general obligation bonds, $9 billion of which will be made available in conjunction with federal and private funds for the planning and construction of a high-speed train system consistent with the adopted business plan of the High-Speed Rail Authority, and $950 million of which will be available for capital projects on other passenger rail lines to provide connectivity to the high-speed train system and for capacity enhancements and safety improvements to those lines.

    Provisions of the bill: AB 3034 updates and expands upon provisions of the bond proposal enacted in the original 2002 legislation and establishes additional fiscal controls on the expenditure of state bond funds to ensure that they are directed to construction activities in the most cost effective and efficient way. Specifically, the bill does the following:

    • States the Legislature's intent that construction of the HST system be consistent with the High-Speed Trains Authority's more recent November 2005 certified environmental impact report rather than the Authority's June 2000 Final Business Plan.
    • Ensures that the $9 billion in bond proceeds are available and are to be used for expenditure for planning and eligible capital costs on the system's entire 800 mile route. Also extends this system wide availability to federal and other revenues, consistent with federal and other fund source conditions.
    • Places a limit on the use of bond funds for preconstruction activities in order to maximize the amount of funds available for HST system construction, by limiting to 10% or less the amount that can be used for environmental studies, planning and engineering activities.
    • Requires that in selecting each specific segment for construction and prior to awarding a construction contract, the Authority must have a detailed funding plan identifying the full cost of constructing the segment and the sources of all revenues needed to complete the segment's construction.
    • Provides also that in selecting each segment for construction, the Authority must a) give priority to those segments requiring the smallest amount of bond funds as a percentage of the total construction cost, b) consider the utility of that segment for other passenger rail services, and c) ensure that any other passenger services provided on that segment will not result in operating or maintenance costs to the Authority.
    • Ensures that complementary rail capital improvements funded from the $950 million in bond funds allocated to intercity, commuter and urban rail systems shall provide direct connectivity and benefits to the HST system and its facilities or be part of the construction of the system.
    • Requires that net operating revenues, above and beyond operating, maintenance and construction completion costs of the HST system, must be deposited in the state's General Fund.
    • Revises and updates findings of the Legislature to reference the need for high-speed trains to accommodate California's economic and population growth, and offset increasing traffic congestion, air pollution and greenhouse gas emissions and loss of prime land. Also references the low cost of the train system as compared to highway and air travel alternatives and states the need to quickly construct the train in a manner that maximizes benefits consistent with available revenues.
    • Takes effect immediately to make the changes operative in time for the November 4, 2008 vote on the bond act.
    • Makes conforming and related technical and clarifying changes.