SENATE BILL No. 901 Introduced by Senator Vidak January 16, 2014 An act to add Sections 2704.045 and 2704.096 to, and to add and repeal Section 2704.78 of, the Streets and Highways Code, relating to high-speed rail, and declaring the urgency thereof, to take effect immediately. legislative counsel’s digest SB 901, as introduced, Vidak. High-speed rail: funding. (1)  Article XVI of the California Constitution requires a general obligation bond act to specify the single object or work to be funded by the bonds, and further requires a bond act to be approved by a 2⁄3 vote of each house of the Legislature and by a majority of the voters. Article XVI authorizes the Legislature, at any time after the approval of a general obligation bond act by the voters, to reduce the amount of the indebtedness authorized by the act to an amount not less than the amount contracted at the time of the reduction. Existing law, the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century, approved by the voters as Proposition 1A at the November 4, 2008, statewide general election, provides for the issuance of $9.95 billion in general obligation bonds for high-speed rail and related rail purposes. This bill, subject to voter approval, would amend the bond act to provide that no further bonds shall be sold for high-speed rail and related rail purposes, and would also explicitly authorize the net proceeds received from outstanding bonds issued and sold prior to the effective date of these provisions, upon appropriation, to be redirected from those high-speed rail purposes to retiring the debt incurred from the issuance and sale of those outstanding bonds. The bill would direct the Secretary 99 SB 901 —2— of State to submit these provisions to the voters on the ballot of the November 4, 2014, statewide general election. The bill would also provide that, until November 5, 2014, bond funds made available pursuant to the bond act shall not be expended for high-speed rail purposes, and no additional bonds shall be issued or sold pursuant to the bond act. (2)  This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: line 1 line 2 line 3 line 4 line 5 line 6 line 7 line 8 line 9 line 10 line 11 line 12 line 13 line 14 line 15 line 16 line 17 line 18 line 19 line 20 line 21 line 22 line 23 line 24 line 25 line 26 SECTION 1. The Legislature finds and declares all of the following: (a)  In 2008, the voters approved Proposition 1A, which authorized the State of California to issue up to $9.95 billion in bonds to construct a high-speed train system and established the framework and requirements that the system would be required to achieve. (b)  Since the passage of Proposition 1A, the voters have learned that the high-speed train system will not be able to meet any of the requirements of that measure, as follows: (1)  In Proposition 1A, voters were told that the travel time from Los Angeles to San Francisco would be two hours, 40 minutes. Current estimates now show that high-speed trains will not be able to meet this requirement. Instead, it is believed it will take more than three hours for the high-speed train to travel between Los Angeles and San Francisco. (2)  Voters were told that the high-speed train would be able to maintain a constant speed of 220 miles per hour throughout its journey. The plan adopted by the High-Speed Rail Authority now shows that the high-speed train service will have to travel at dramatically lower speeds on tracks shared by regional rail systems. (3)  A commitment was made that high-speed rail would reduce the impacts on communities and the environment by following existing transportation or utility corridors. The routes that have been released by the High-Speed Rail Authority show that the high-speed trains will be going through the middle of family farms, 99 —3— line 1 line 2 line 3 line 4 line 5 line 6 line 7 line 8 line 9 line 10 line 11 line 12 line 13 line 14 line 15 line 16 line 17 line 18 line 19 line 20 line 21 line 22 line 23 line 24 line 25 line 26 line 27 line 28 line 29 line 30 line 31 line 32 line 33 line 34 line 35 line 36 line 37 line 38 line 39 SB 901 small businesses, and residential communities that are nowhere near existing transportation or utility corridors. (4)  The voters were told that the high-speed train system would be financially viable and would obtain private and public funds for construction and operation. The cost of the project has continued to increase and no private funds have been identified. (c)  In November 2013, a superior court judge ruled that the state could not authorize the issuance of $8 billion in Proposition 1A bonds and required the High-Speed Rail Authority to rework its funding plan to identify the funding sources for the project. (d)  The attitude of voters toward the high-speed rail project has changed dramatically since 2008. A recent USC Dornsife/Los Angeles Times poll found that 52 percent of Californians are now opposed to the project and that over 70 percent want the project put back on the ballot for a revote. SEC. 2. Section 2704.045 is added to the Streets and Highways Code, to read: 2704.045. Notwithstanding Section 2704.04, it is the intent of the Legislature and the people of California that no further bonds shall be issued and sold for purposes of Sections 2704.06 and 2704.095. SEC. 3. Section 2704.096 is added to the Streets and Highways Code, to read: 2704.096. (a)  Notwithstanding any other provision of this chapter, no further bonds shall be issued and sold for purposes of Sections 2704.06 and 2704.095 on and after the effective date of this section. (b)  Notwithstanding any other provision of this chapter, the net proceeds received from outstanding bonds issued and sold pursuant to Sections 2704.06 and 2704.095 prior to the effective date of this section may, upon appropriation by the Legislature, be redirected from those high-speed rail purposes for use in retiring the debt incurred from the issuance and sale of those outstanding bonds. SEC. 4. Section 2704.78 is added to the Streets and Highways Code, to read: 2704.78. (a)  (1)  Notwithstanding any other provision of law, bond funds made available pursuant to Chapter 20 (commencing with Section 2704) shall not be expended for high-speed rail 99 SB 901 line 1 line 2 line 3 line 4 line 5 line 6 line 7 line 8 line 9 line 10 line 11 line 12 line 13 line 14 line 15 line 16 line 17 line 18 line 19 line 20 line 21 line 22 line 23 line 24 line 25 line 26 line 27 line 28 line 29 —4— purposes, and no additional bonds shall be issued or sold pursuant to that chapter, on and after the effective date of this section. (2)  This subdivision shall not preclude the use of bond proceeds to retire high-speed rail bond debt to the extent authorized by law. (b)  This section shall become inoperative on November 5, 2014, and as of January 1, 2015, is repealed unless a later enacted statute, that is enacted before January 1, 2015, deletes or extends the dates on which it becomes inoperative and is repealed. SEC. 5. Sections 2 and 3 of this act, adding Sections 2704.045 and 2704.096 to the Streets and Highways Code, would modify the single object or work of a general obligation bond act previously submitted to the voters by the Legislature pursuant to Section 1 of Article XVI of the California Constitution, and subsequently approved by the voters as Proposition 1A at the November 4, 2008, statewide general election. Accordingly, Sections 2 and 3 of this act shall become effective only upon approval by the voters. The Secretary of State shall submit Sections 2 and 3 of this act to the voters on the ballot of the next statewide general election. SEC. 6. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to make necessary amendments to the Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century as quickly as possible to prevent any further funding of a high-speed passenger train system that differs in both cost and substance from the project approved by the voters in 2008, it is necessary that this act take effect immediately. O 99