CA Legislators’ Art of Making Sausage: Bill AB1889

CA Legislators’ Art of Making Sausage: Bill AB1889

The art of making of sausage: The questionable way California’s Legislators move bills forward

Late last month the California Senate Transportation and Housing committee approved Bill AB1889 clearing the way for it to move forward, next to the Appropriations committee for approval before the bill travels to the Legislature for a vote that would change Prop 1A, the voter initiative that governs the high-speed rail project.  This is a voter bond measure and the Legislature may not change voter initiatives.   If it passed, the result would be that a segment does not have to be ready for high-speed rail trains in order to spend bond funds on projects in Northern and Southern California. These funds were previously allocated in SB 1029 in July 2012. However being allocated it not the same as receiving spending authorization.   Prop 1A requirements have not been met therefore, the funds have been unavailable for spending.   A bit more than $8 billion remains after planning and administration expenses were spent.

What does the bill do?

Here’s an analysis done by the state legislature:
This bill intends to provide clarification on the approval process for funding plans CHSRA is required to prepare prior to committing bond funds for a specified corridor or usable segment. While Prop 1A required funding plans to be submitted for both an initial appropriation of bond funds by the Legislature and prior to the commitment of bond funds to corridor-specific projects, Prop 1A is unclear on a number of provisions specified in the funding plan requirements. This has created some ambiguity in how HSRA is to proceed with submitting funding plans in order to commit bond funds for the project.

They go on to say: “funding for bookend improvement projects that will ultimately be suitable and ready for high-speed rail operation could also provide immediate mobility benefits to a specific corridor (i.e., Caltrain electrification) while other high-speed rail improvements are made within the corridor. This bill aims to remedy this ambiguity by allowing HSRA to proceed with submitting funding plans to commit bond funds to high-speed rail projects, while ensuring HSRA is in compliance with the provisions specified in Prop 1A.”

According to Attorney Stuart Flashman, expert attorney when it comes to Prop 1A compliance, the bill violates the California state constitution. He submitted an opposition letter, which was not mentioned during the proceeding, which is highly unusual. The committee usually states those in favor and those opposed.

In regard to the hearing itself, frankly they didn’t even finish the hearing, it just sort of stopped and they moved on to another subject.  There weren’t enough senators there to vote.   At 5 pm, well after the hearing on AB 1889 had stopped, there was a vote 5/4 and then later when an absentee vote was counted it ended up 6/4 in favor of the bill despite strong opposition stated earlier in the day from one of the original authors of Prop 1A, Senator Cathleen Galgiani.

Galgiani-warned to be careful how you amend the bond act which says, to release the bonds, the system has to be planned to be “suitable and ready for high-speed rail.” She was concerned that the amount of funding available could not support improvements for both bookend projects since so little bond money remained to build an actual portion of the system. Her point was if you built one way plus funded both north and south bookend improvements, it could impede the building of a system.  The result could be that the system would connect to nothing, leaving the middle section stranded. In short, she would not support the bill.

Note: Galgiani’s fears are real, there is a scarcity of funding. As the years that have gone by, none of the funds that were expected to materialize have appeared. What was supposed to be a 1/3  investment shared by the federal government, the state in the form of bond funds and private investor investment has not materialized. So all that’s available are federal funds in the amount of  $2,552,556,231 in American Recovery and Reconstruction dollars (ARRA)  and $928,620,000 in FY 10 Grant money. Even with the most conservative capital building estimate of $68 billion, it’s far way from being a viable project.

Strangely a High-Speed Rail representative said the agency was neutral on the bill, however, they seemed to be supportive from the comments they made at the hearing. It would also seem odd that the board who runs the project would not outright support a bill that affected the building of the project they are in charge of managing.

Hear the 15 minute YouTube of the entire hearing.

Members of the Senate’s Transportation and Housing Committee and their vote are as follows:
Senator Jim Beall (Chair)-D- (yes)
Senator Anthony Cannella (Vice Chair) R. (Abstained- Note: In the past had a contract for engineering work with high-speed. It is unknown if he has a current contract)
Senator Benjamin Allen-D_ (yes)
Senator Patricia C. Bates –R. (no)
Senator Ted Gaines R. (no)
Senator Cathleen Galgiani-D (no)
Senator Connie M. Leyva –D- (yes)
Senator Mike McGuire-D- (yes)
Senator Tony Mendoza-D_ (yes)
Senator Richard D. Roth -D. (no)
Senator Bob Wieckowski –D- (yes)

Caltrain has urgent need for the funding:

The bill was advocated by Caltrain commuter service through Assembly Member Kevin Mullins because it desperately needs the $600 million for their electrification that was promised to them in the July 2012 appropriation bill for high-speed rail.

Note: The Caltrain route from San Jose to 4th and King in San Francisco, does not go to Transbay Terminal required by Prop 1A, that would add almost another $3 billion to the project cost for the most northern segment.  Bottom line they are counting on the money since they are way short of their original estimates to build their electrification project. The cost is up from $1.2 billion to nearly $2 billion now. Not widely known, they are in process of being sued for an incomplete environmental report. Here’s the link for the suit.

Caltrain purports its electrification project is an independent project that has been planned for years. Think about it though, logic says if Caltrain is dependent on a $600 million dollars contribution, the Rail Authority would expect that they not do anything that would be in conflict with their plan. Therefore this contribution by the Rail Authority did not allow Caltrain to have a totally independent environmental process such as considering non-electric train cars even though they may be far less damaging to the environment and close to as efficient. Another problem is high-speed rail project does not have the environmental work complete so the total environmental impact is unknown at this time.   Therefore project opponents say Caltrain’s EIR is inadequate since it doesn’t have impacts disclosed for the entire project, which includes high-speed rail.

What happens next:

Even if this bill passes, another wrinkle would prevent the spending of bond funds and that is the Rail Authority has never submitted a funding plan by an independent financial expert that certifies any construction plan submitted by the Authority is financially viable and that it fulfills all the requirements of Prop 1A.   And if they file this erroneously or prematurely they just may find themselves back in court since the last lawsuit said the court could not determine whether or not the Authority was following Prop 1A.  It was premature. The filing of this second funding plan would signal they had a final plan and in fact ready to be reviewed by the court.

There are two requirements that are as plain as the nose on your face which is that full environmental work must be complete and funding is in place or committed by the time it’s needed for the usable segment the Authority is proposing to build.  The Authority cannot meet either of these requirements and that is why they have not completed this special construction funding plan called the second funding plan.

Stuart Flashman explains, “under Proposition 1A, the voters’ intent was that the final funding plan fortify the Authority’s initial certification with the certification of an independent financial consultant. AB 1889 would fundamentally change that statutory scheme by making the Authority’s initial certification conclusive.”

Flashman goes on, “this would destroy the voters’ purpose in having an independent consultant separately certify the Authority’s determination in the final funding plan. In making this fundamental change, AB 1889 would alter the voter-approved provisions of a bond act without having that change approved by the voters. This would violate Article 16 §1 of the California Constitution. The Legislature therefore may not enact this law as currently written unless it at the same time places it on the ballot, by a 2/3 majority of both houses, and has the provision ratified by the voters.”

Bottom line: If the Legislature passes this bill, it would in fact be violating the people’s ballot measure and would be subject to court action. Tried several times before, it seems that the High-Speed Rail Authority is intent on clouding the issues and making court challenges about the separation of powers between the Legislature and the Courts.

The Rail Authority has been unable to access state bond funds for construction since they have not been able to achieve Prop1A hurdles once described by an Appellate court as an intentional “financial straight-jacket.” This law attempts to undo this provision.

AB 1889 is now out of the Senate’s Transportation and Housing committee which means the proposed law is one step closer for a vote before the entire Legislature. But first it has to make it through the Appropriations committee, which is scheduled this week.

The public’s approval of a bond initiative and its terms should be sacred whether you agree with this initiative or not. Tell your Legislative representatives how you feel.

Kathy Hamilton