Cap-and-Trade Funds Targeted for High-Speed Rail Project

Bills being introduced that monitor or change terms for the state’s high-speed rail project are a rarity. However, there are two bills brewing in the Legislature.

One has a shot at passing. The other doesn’t.

Senate Bill 400 would require the California High-Speed Rail Authority to use at least 25 percent of its cap-and-trade funds for projects to reduce or offset construction emissions. The bill comes as two groups have brought legal challenges to the state’s cap-and-trade program and the state’s plan for measuring emissions from the high-speed rail project. The bill traces its origins to the powerful Hispanic caucus and is expected to pass in the largely pro-rail legislature.

SB400, introduced by Sen. Ricardo Lara, D-Bell Gardens, has been approved in the Senate and is moving through committees in the Assembly.

Last year the Legislature appropriated 25 percent of the state’s revenues from cap-and-trade auctions to the high-speed rail project. SB400 would reduce construction funds to 18.75 percent of the revenues, with the remainder going to “reduce or offset greenhouse gas (GHG) emissions directly associated with the construction of the high-speed rail project and provide a co-benefit of improving air quality,” according to a Senate analysis of the bill.

The analysis suggests that this bill might save the cap-and-trade program, which is being challenged by two lawsuits.

Lawsuits against AB32 and HSR

A suit brought by the Pacific Legal Foundation, which favors limited government and “sensible environmental policies,” claims that the very existence of the cap-and-trade program is an illegal tax. The case is on appeal and expected to be heard in the fall.

A second suit asserts that a state plan to reduce emissions improperly calculated the impact of the high-speed rail project — which the plaintiffs allege will actually contribute to greenhouse gases instead of reduce them.

The plaintiffs in their complaint say that the state’s estimates “were neither real, permanent, quantifiable or verifiable but were instead illusory because in reality the construction of the (rail) project would result in a significant increase in (greenhouse gas) emissions prior to 2030 or beyond.”

The suit is being brought by the Transportation Solutions Defense and Education Fund, a nonprofit environmental group.

Cap and trade bailing out high-speed rail project

The rail project is not slated to be operational by 2020, which is the deadline in state law to reduce the state’s greenhouse gas emissions to 1990 levels.

The Senate analysis points out that state law restricts the use of cap-and-trade funds.

“The Constitution requires that a clear nexus exist between an activity for which a mitigation fee is used and the adverse effects related to the activity on which that fee is levied. …

“It is important that legislation allocating cap-and-trade revenues ensure that the funds are being used to reduce (greenhouse gas) emissions. If opponents of the program can convince the courts that the revenues are not being used appropriately, the entire cap-and-trade program could be jeopardized.”

The analysis hints that the rail program’s use of cap-and-trade funds, as currently outlined, doesn’t meet legal standards, and that passage of the bill would shore up the legal standing of the program and help the state win the pending court cases.

Via: California Political Review

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California: High Speed Rail Takes More Punches

If the California high speed rail project were a boxer you’d wonder how it could still be standing. It has been pounded by both left hooks and right jabs.  With the powerful governor of California in its corner it has managed to stay upright in the ring, but it may not be too long before project supporters cry, “No mas.”

Following Judge Michael P. Kenny’s ruling last November that the high speed rail funding plan does not meet the requirements demanded by the bond measure passed by voters, state Senate leader, Darrell Steinberg said that the governor’s budget spending on the proposal would be subject to debate.

The Legislative analyst threw another haymaker at the governor’s bullet train funding proposal saying the $250 million the governor wants to use from the cap and trade fees from business is “legally risky.” The reason: the fees are supposed to reduce greenhouse gases by 2020. The train will not be completed by then and may even add to the greenhouse gases problem. Environmental groups who don’t like the use of cap and trade fees for the train project are applying those left hooks to the project.

The right jabs are coming from Republicans in Congress. The bullet train has relied on federal funds so far but now some influential members are questioning the use of additional federal tax dollars.  At a congressional committee hearing yesterday, warnings were made by Republicans, who hold the majority, that federal funds could be cut off.

Another punch at the bullet train came in the form of a recently filed initiative proposal to ask voters to reconsider the project they barely passed in 2008. Assemblyman Jeff Gorell filed the initiative to stop funding the train project and instead dedicate money designated for the bullet train to educational purposes. How strong a blow against the train this is remains to be seen. Who will fund the initiative? And who will lead the fight as Gorell spends his time running for congress?

Even from across the country the bullet train took a shot a couple of days ago from an editorial columnist in the Washington Post. Charles Lane wrote,  “As it happens, Kenny’s ruling on the California rail plan was almost certainly correct; the Brown and Obama administrations have never plausibly explained where they would get the $68 billion needed to build the whole California system. Even if completed, high-speed rail would not enhance productivity; rather, it would consume subsidies, as it does in other countries. With teleconferencing a reality and driverless cars on the way, bullet trains don’t seem so cutting-edge anymore, anyway.”

Via: California Political Review

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California high speed rail boondoggle blocked by judge

SOMEBODY FINALLY GOT IT RIGHT!!!

California's plan to squander potentially hundreds of billions of dollars on a "high speed" rail line that would achieve average speeds no higher than railroads routinely achieved a century ago has hit a serious roadblock. Melody Gutierrez of the San Francisco Chronicle reports:

A Sacramento judge put the brakes on California's plans to build a bullet train after dual rulings Monday blocked the sale of $8 billion in bonds and ordered the rail authority to rewrite it sfunding plans for the huge project.

Sacramento County Superior Court Judge Michael Kenny ruled that there was "no evidence in the record" to support theCalifornia High-Speed Rail Authority's request in March to sell the bonds from Proposition 1A, a $10 billion measure approved by voters in 2008 that allowed the bullet train project to move ahead.

In a separate but related case, the judge sided with the Kings County Board of Supervisorsand two homeowners who sued the rail agency, saying it had failed to detail how the project will be financed, as legally required, before seeking bond money to begin construction.

The judge's rulings leave the future of the $68 billion project in question. The state has been trying to get the first 130-mile segment in the Central Valley built using $3.24 billion in federal funds and $2.61 billion in Prop. 1A bond money. The rail authority has already signed a construction contract to build the first 29 miles of track from Madera to Fresno.

The judge rejected opponents' calls for that contract to be rescinded.

Via: American Thinker

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