Appeals Court Lifts Bond Restrictions on CAHSR, Funding Picture Clears

German and Frence high speed trains in Paris. Photo by Ryan Stern
German and French high speed trains in Paris. Photo by Ryan Stern

A California Court of Appeals has removed the most significant legal impediment threatening California’s High Speed Rail project. The unanimous decision of the three-judge panel, rendered on Thursday, reversed Judge Michael Kenny’s Nov. 25, 2013 ruling, which had blocked the state from issuing bonds under Prop. 1A, the High Speed Rail Act of 2008.

California High Speed Rail breaks ground in Fresno.
California High Speed Rail breaks ground in Fresno.

Justice Vance Ray, the presiding justice on the Third District of the California Courts of Appeal, writes that Kenny overstepped by injecting the judiciary into the role of the legislature.

While Proposition 1A authorized the state to issue $9.95 billion worth of bonds, the legislature had to approve them based on an evaluation of the project and its business plan. An extensive debate took place in the California Assembly and Senate and the issuance was approved in 2012. It passed in the State Senate with no votes to spare.

So everything appeared to be moving smoothly until Kenny’s decision last year which seemed to imperil the High Speed Rail project. Yesterday’s ruling paved the ground for the project to continue planning and construction as enough funds to complete the route are sought.

The appeals court agreed with the California Attorney General’s argument that Judge Kenny’s decision last year “…jeopardizes the financing of public infrastructure throughout the state by interfering with the Legislature’s exercise of its appropriation authority, invents judicial remedies where none are provided by law, and subverts the very purpose of the validation statutes.”

“Moreover,” adds the court, “such an intrusive standard would offend the fundamental separation of powers between the legislative and judicial branches of government.”

A former deputy Attorney General and expert on state legal proceedings who spoke to Streetsblog on anonymity said that the appellate decision is intentionally detailed and long. “They want to put an end to this nonsense,” he said, referring to the court’s desire to stop future legal proceedings from delaying the project.

Of course, there are plenty of High Speed Rail opponents who were unhappy with the ruling.

“Justices lowered the bar for agencies to provide evidence of need for funding,” said Aaron Fukuda, a party in the case and co-chairman of Citizens for California High Speed Rail Accountability, a Kings County-based group. “Essentially the Authority could have written on a post-it ‘give me money’ and that is good enough.”

Citizens for High Speed Rail Accountability claimed in their suit that changes in the project, both in cost and estimated speed of the finished rail line, invalidated the voters decision to partially fund the project in 2008.

Funding Picture Clears, But Isn’t Complete

Last November, after the initial court ruling, the San Francisco Chronicle ran the headline “California High-Speed rail Plans Stopped in Tracks.”

This was a fairly typical interpretation, even though the Authority still had $3.4 billion available from Federal sources. However, that money required matching funds or it would eventually have to be paid back from California’s general fund. Last June the state set aside $250 million in cap-and-trade funds for high-speed trains. With this appellate decision, the Authority can now match the federal contribution and it has an ongoing revenue stream from cap-and-trade.

Could the appellate decision go to the California Supreme Court? “They generally hear cases where there is a conflict in the district court–which this is not–or if there’s broad societal importance or death penalty cases,” said the former Deputy Attorney General.

Members of the California High Speed Rail board were, of course, ebullient. Chairman Dan Richard said the court validated that they are doing “…precisely as the voters called for when they passed Proposition 1A.”

Construction is underway in the Central Valley, including structural testing and demolition work over a 29-mile stretch from Madera to Fresno. The vacant Annie’s Hollywood Inn bar on Fresno’s Golden State Boulevard was demolished on July 14, as seen in the accompanying photo. Contractor Tutor-Perini/Zachry/Parsons is load testing structures that will become part of the train alignment.

This prep work will go towards a 180-mile Central Valley spine. The California High Speed Rail Authority is now focusing planning efforts on a segment from Palmdale to Los Angeles. The build-out of the project, from Los Angeles to San Francisco, is expected to cost $68 billion and take some 15 years to complete. To put that in perspective, Caltrans will spend over $200 billion over the same period…mostly on highway expansion and fix-it projects.

By 2029 California High Speed Rail will run from San Francisco to the Los Angeles basin in under three hours at speeds capable of over 200 miles per hour. The system will eventually extend to Sacramento and San Diego, totaling 800 miles with up to 24 stations.

  • Here is the ruling: http://www.courts.ca.gov/opinions/documents/C075668.PDF

    Editor, please include such links in future stories so readers can read the original document in addition to your analysis.

  • Dan W.

    Full, er, “steam”, ahead!

  • davistrain

    We electric railway enthusiasts would say, “On the brass” or “”Full parallel.”

  • Miguel Torres

    CA is $850 BILLION in debt. That is $87K per household that we have to pay our state government. This is what they do???

  • Kid Carles

    If we don’t build HSR then $150 billion will have to be spent on car and airport infrastructure, which is $82 billion more (http://www.latimes.com/opinion/op-ed/la-oe-kelly-california-high-speed-rail-20140129-story.html). By arguing against HSR you are working to thrust us deeper into debt! Why would you do such a thing? Why do you hate California?

  • FakerBreaker

    That $850 billion figure is malarkey, brought to us by the California Policy Center, an anti-union group masquerading as a “think tank.” It combines obligations of all the local governments of California with the state government which, in this context, is totally inappropriate, since HSR is a state project. Thanks to Governor Brown’s sound fiscal strategy, the state now has a surplus in hand which is going to pay down the debt while still funding initial construction of HSR. http://www.nytimes.com/2014/01/10/us/with-surplus-in-hand-california-eyes-debt.html. That said, we certainly could save money, by immediately stopping idiotic and pointless projects such as widening the 99, the 405, the 5, etc. Do that and we can fund rail modernization, HSR, etc. and still have billions left over for paying down the debt.

  • CNB30

    It’s such a shame that there are so many politically backwards
    reactionaries and NIMBYS living in the central valley whom apparently
    only understand how to yell “boondoggle” and “Moonbeam Brown”. Honestly,
    I do love my country, but I’m scared, and ashamed of it at the same
    time. That is, scared of the fact that half of the country votes for a
    party that pretty much does anything for big oil, even coming up with BS
    arguments against things like HSR.

    Furthermore, ever since I first traveled by train in Europe, I have
    wished that the U.S. could actually could actually continue to be the
    great nation that we used to be and not stuck in some 1950s car land
    suburban hell. We need to see the U.S. actually move forward, and the
    fact that we have virtually no true HSR while the more civilized parts
    of the world span the globe with truly 21st century environmentally
    friendly High-Speed rail networks. Honestly, I remember being so excited
    when I first heard about the CAHSR plan a Few Years back, literally
    only a week after cruising some 180 mph on the Euro-star in France.
    However, I am horrified by the backwardness of the fact that there is so
    much opposition amongst the far-right in the nation for the project to
    simply move forward. It disgusts me that all the right simply cares
    about is that the thing is going to raise taxes while they simply ignore
    the benefits of having the U.S. finally catch up to the rest of the
    world, let alone the environmental, and traffic benefits from the
    project.

    Over the past couple of years, I have watched the project only to cringe
    so much at how easy it is for the reactionaries, even in a forward
    thinking state like California to to Hack away at CAHSR, throwing up
    constant lawsuits, and worst of all, the temporarily derailing Lawsuit
    from November 2013, and yet after throwing up so many roadblocks, the
    right attempts to drag more people down to their own reactionary level,
    by blaming the slowness of the project on “inefficiencies” rather than
    their own lawsuits (kinda like if somebody torched your house, and
    blamed it on the fact that the house was wooden, and you weren’t there
    to stop them. Honestly, at this time a year ago, I really had began to
    give up entirely on CAHSR.

    However, I am so excited that the project has come out of the dark,
    simply passing the reactionaries by and defeating them, as first Jerry
    Brown was able to find new ways to fund the project, and then the
    miracle: the 10 billion dollar bonds were re-authorized. Since July, I
    have been ecstatic to see the project only pick up steam, first as the
    non right wing articles became more positive and hopeful about the
    project, to the point where its path through Fresno was finally cleared,
    to Gov. Jerry Brown heavily defeating his anti HSR opponent (and being
    tho only Democrat to defeat his opponent as much as the polls
    predicted), and finally;and finally and most recently, to the future,
    in which in less than two weeks, the project does what I have been
    dreaming it will do for the past few years, go beyond the 3d renderings,
    and ideas designs, and theories; to break ground, and become a reality.
    I am with out words, and hope that this becomes the turning point for
    HSR in America. Ladies and Gentlemen, I close my rant on California High
    Speed Rail.

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