[Congressional Record (Bound Edition), Volume 160 (2014), Part 1]
[House]
[Pages 616-623]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      CALIFORNIA'S HIGH-SPEED RAIL

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2013, the gentleman from California (Mr. LaMalfa) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. LaMALFA. Mr. Speaker, our subject here tonight is about 
California's high-speed rail project, a project that was voted in in 
2008 by the voters of California with approximately $9 billion worth of 
bonds to help fund what would be a project that would seek outside 
private investment as well, a project that would link San Francisco to 
Los Angeles with possible additional spurs to Sacramento and San Diego. 
It has run into large funding problems and such. So the subject of our 
time tonight is that we see that there are huge problems with the 
funding and where will the funding come from.
  I have my colleagues here from California, as well, who would like to 
speak on this subject. First of all, I would like to yield to my good 
friend and colleague from the north San Joaquin Valley, Congressman 
Jeff Denham, who has been a leader on this issue here in Congress as 
well as chairs the Subcommittee on Transportation and Infrastructure, 
which deals directly with rail and this issue. So, Congressman Denham, 
I would love to hear from you tonight.
  Mr. DENHAM. I thank the gentleman from California.
  I, as many other Californians at one time, supported the California 
high-speed rail project. It was initially supposed to be a $33 billion 
project with equal amounts coming not only from the California 
taxpayers, in the form of a bond, but also private investors and the 
Federal Government.
  Yet this $33 billion project has ballooned up to $100 billion. So 
what do they do for cost controls? They cut off the very legs that Mr. 
LaMalfa talked about, the section going to Sacramento, the section 
going to San Diego; but, still, it is a $68 billion project with a more 
than $26 billion hole just in the first initial operating segment 
alone.
  Tomorrow, as chair of the Subcommittee on Railroads, we will be 
discussing a review of the challenges facing California's high-speed 
rail.
  I want to reiterate I believe that high-speed rail is our future. I 
believe that as a growing economy, with more trucks and goods movement 
on the road, with more goods movement on rail that we have to look at 
alternative opportunities to move people. High-speed rail is one of 
those opportunities.
  But in Florida, a project that is being done by private investors 
will have no ongoing subsidy. They need no Federal dollars. Texas will 
have its own high-speed rail system, again, with private dollars, no 
ongoing subsidy. Yet here in California, you have a $68 billion project 
with no private investor, with huge subsidies and overruns, and a 
project that cannot even get out of the initial gate.
  So where we are today: California has no money to meet its Federal 
obligation. On November 14, we had a court decision that came back and 
said that they cannot spend the $9.95 billion that was approved by 
voters because they had failed to complete a full business plan. So 
with no dollars available, the Governor came out this week and said 
that we are going to use $250 million of the cap-and-trade dollars, 
cap-and-trade dollars that were supposed to be used for environmentally 
friendly projects. Yet this project is going to be a net polluter, a 
net polluter for at least the next 30 years. So how he could come up 
with a legality of using these cap-and-trade dollars I think is in 
question.
  But I think a bigger issue is a timing issue: $180 million is due 
April 1. The Antideficiency Act says that the State has to have its 
first set of matches, and that 50/50 match is due April 1. Yet the 
legislature is not even going to vote on this new budget and this 
theoretical $250 million in funds until, at the earliest, late June. 
California budgets usually come in in August, and I think it is a real 
question on whether liberals and conservatives can agree on whether or 
not this environmental money will be used on high-speed rail.
  But specifically on the operating segment, itself, the judge has said 
not only that they need to come up with the money on this initial 
construction segment, which stops in Bakersfield--so now we are going 
to have two sets of rail that stop in Bakersfield, and then you have to 
get on a bus to get across the Tehachapis. But they don't even have the 
funding for the initial operating section, which goes all the way to 
Palmdale. You won't be able to get the speed that they need going 
around, instead of through, the Tehachapis; and they have a $20 billion 
funding gap in that first segment.

[[Page 617]]

  So some real questions: Are they going to meet the timeline of April 
1? Is using the cap-and-trade dollars actually legal? And, third, this 
huge funding gap, where does that money come from? I think the Federal 
taxpayers across the Nation need to be asking the question, If you are 
going to subsidize all of California's high-speed rail projects, where 
do the matching dollars come from? If they could use the $9.95 billion, 
it is still not enough money. So if California can't come up with the 
Federal match, what are the teeth that the Federal Government has to be 
able to hold California up to that Federal obligation?
  We have some real questions that are going to be coming out tomorrow. 
The FRA has altered its approach. Once they realized that they couldn't 
do a 50/50 match, they went to a tapered match. That means that the 
Federal Government is going to come in with their money first, and 
then, hopefully, someday the State will come up with its matching 
dollars in a tapered manner. That tapered manner is coming through 
April 1. That is when that first $180 million is obligated.
  But I think the real question is, Who is making these decisions? Did 
this go all the way up to the President? Was the past Department of 
Transportation Secretary or the new Department of Transportation 
Secretary involved in this decision? And if California can't come up 
with this tapered match, will they, once again, adjust this outside of 
Congress a second time?
  So we have some real questions on what those legalities are. The next 
question would be the contingencies. What are the contingencies for the 
Federal Government to recoup its taxpayer dollars if California 
defaults on its obligations?
  We have some real priorities in California. And as the Central Valley 
continues to suffer with a drought, as our schools continue to lag 
behind, as our public safety dollars continue to get robbed, is this 
the best use of our money? And should we be investing in something 
that, unlike Texas and Florida, has no private investors, has no State 
match, has a lot of funding questions that need to be answered before 
we move forward?
  Mr. LaMALFA. Thank you, Congressman Denham.
  Indeed, the more time that goes by on this issue, the more problems 
and flaws are exposed in this. This is a measure that passed in 2008, 
was put in front of the voters, known as ``Prop 1(a)'' at the time that 
passed by a 52-48 margin. I think the voters were sold something 
completely different than what we are actually seeing as Californians 
in the project.
  Congressman Denham mentioned that the price has ballooned from 
approximately what people saw on the ballot, $33 billion for that 
initial San Francisco to L.A. segment; and just 1 year later, it was 
revised up after the voters had voted on it to $42 billion. And then we 
saw that the Sacramento segments, the San Diego segments were dropped 
off as even options.
  Interestingly, we have all been in the State legislature--Congressman 
Denham and myself and another gentleman who will be speaking here in a 
moment--and we saw these numbers go past us at a time. And at a hearing 
that was held in the California State Senate in November of 2011, it 
was finally exposed that their numbers were way off, and they admitted 
that the project that voters expected would be right near $100 billion 
to do the San Francisco to Los Angeles segment if it was going to be 
truly a high-speed rail from port to port. And also during that time, 
in order to build up and say what an economic boom it would be, they 
were advertising that 1 million jobs would be created by this.

                              {time}  1900

  We pinned them down in that Senate hearing that it wasn't really 1 
million jobs. It was a term called 1 million job years, which really 
translates out to perhaps 20,000 jobs of building the entire system. So 
we have seen a lot of very creative--I would say phony--numbers on 
costs, on benefits, and even some of the very highly optimistic 
ridership numbers as well.
  So, Congressman Denham, what does that mean in your district here as 
far as what you really think the jobs would translate out to? And then 
what are some of the impacts on the property involved, as well?
  Mr. DENHAM. Well, certainly, one of the big concerns right now is 
where are these jobs? These were stimulus dollars that were supposed to 
be ready for shovel-ready projects 5 years ago--5 years ago--and still 
not one shovel is in the ground. Not one job is created. Now, unlike 
Texas and Florida that are creating jobs, that are putting the 
infrastructure in, certainly in California they could come up with a 
better plan. They could go along the I-5 corridor. They could use the 
existing rail corridor that has been abandoned. There are other 
opportunities if they truly want to cut costs. But if they don't want 
to change, they don't want to revise their budget and they have no 
private investor, the question still remains, what obligation do you 
have to go back to the California taxpayer? You are obligating the 
California taxpayer for nearly $10 billion, and you are not fulfilling 
the Prop 1A guarantee that they voted on.
  So, at a certain point, I believe that we have to force the 
California High-Speed Rail Authority to go back to the voters and seek 
approval. Change your plans. Go back to the voters and let the voters 
decide.
  Mr. LaMALFA. Indeed, I attempted that in 2012 with legislation at the 
time called SB 95 in California to place that back in front of the 
voters, give people the option, now that they have more information, to 
say do they really want to go through with this with California's other 
issues. You mentioned, Mr. Denham, the challenges we have had with 
water supply. Even our Governor is saying that this is a huge priority 
and a huge problem for California to face in 2014, and yet we have a 
very difficult time allocating a few billion dollars to enhance our 
water storage in California and instead are faced with this.
  What would that mean for jobs in the valley if we are able to turn 
the water, turn the tap back on to agriculture at a fraction of the 
price of high-speed rail?
  I yield to my friend.
  Mr. DENHAM. It would be a fraction of the price, tens of thousands of 
jobs that would be lost of seeing farmland that goes by without being 
planted this year.
  We have a huge drought. There are huge issues. And what everybody is 
trying to say is a high-speed rail--keep in mind, this initial segment, 
this initial operating segment which has a $20 billion funding gap, is 
not going to be electrified. It will not be high-speed. By their 
numbers, by their plan, this is another set of track that will not be 
electrified, that will run as it is being run today, with a $20 billion 
gap. So even if you came up with the entire $32 billion of this initial 
segment, we are still stuck in the same situation that we are. We are 
just that much further in the hole.
  Now, I know some of my colleagues would say, well, just spend the 
money as quickly as you can. Let's just spend some of it, and like 
other projects, once you have started it, some day the money will come. 
I don't think we can deal with that type of pie-in-the-sky rhetoric. I 
believe we have got to have a full funding plan that makes sense, one 
that has a private investor that was promised to us.
  We have heard several times that, if you just write the legislation, 
we will have a private investor; if you just put it on the ballot and 
approve it by the legislature before it actually goes to the voters, we 
will have private investors that will sign on to this. Then it was 
right after the ballot passed, we have nearly $10 billion committed to 
by the taxpayers, for sure we are going to have a private investor now.
  Five years later, after the Federal Government has come up with 
several billion dollars, after the voters are now on the hook for $10 
billion, and still today there is no private investor. You would be a 
fool to invest in this. This isn't Florida's project. This isn't Texas' 
project. This is a project with a huge funding gap that still is not 
going to be electrified--by their plan.
  Mr. LaMALFA. Indeed, when we look at the project in totality here, 
what

[[Page 618]]

ended up being $100 billion to be legal under Proposition 1A, to have a 
true high-speed rail--which is required--to go from San Francisco to 
L.A. at a high speed, 2 hours and 40 minutes, a $100 billion project 
was revised now down to a $68 billion project, which does not include 
high-speed all the way to San Francisco in the north. It would stop at 
the San Jose area, and then you are required to use local 
transportation, local light rail, what have you, to get all the way up 
to San Francisco. And at the southern end, you have, in L.A. County, it 
doesn't go to downtown Los Angeles under the new plan. It would stop 
somewhere in the north, remote north L.A. County portion. So it isn't 
truly high-speed rail anymore.
  As you mentioned, too, Mr. Denham, on that, if they take the Palmdale 
route, they probably can't even sustain those speeds. So it is illegal 
on that count that it probably can't make a 2-hour-and-40-minute ride. 
And with that, you have three different segments. So if you have to buy 
three different tickets, I don't know how the customers are being 
suited by three different stops like that, as well.
  We were told back in the day that the price of a ticket would somehow 
be tied to 85 percent of what an airline ticket was to go from north to 
south or south to north; and a real estimate, if this were self-
sustaining, it would be somewhere maybe triple of that.
  So the impacts of that, again, California agriculturally with water 
supply is struggling this year. So for a fraction of the amount of 
money it would take to bolster California's storage, we are going to 
spend perhaps what would have been $100 billion--in the revised number, 
$68 billion--to do an illegal Prop 1A version from south San Jose to 
north Los Angeles. That is a $55 billion gap on the entire project 
right there.
  We can only point to $13 billion worth of funding, the 9.9 from the 
bond. Bonds have consequences. They have to be paid back by an already 
financially strapped State. As well, the 3.5 billion or so that is 
promised from the Federal Government under the 2009 stimulus has 
strings, too. It has an expiration period.
  Please embellish on that a little bit, Mr. Denham, because we know 
there are some very important deadlines coming on that as well, if we 
can.
  Mr. DENHAM. There are important deadlines. Again, this is part of the 
Antideficiency Act that says the 50/50 match now is coming due for the 
State. So April 1, $180 million is due. The question for the Governor 
is: Where is that money going to come from? We can't just continue to 
change deadlines. And the question to the administration is: Are you 
going to continue to allow California not to guarantee its matching 
funds? It is going against the Antideficiency Act, the reason that is 
put into law.
  Mr. LaMALFA. California just passed a recent tax known as Prop 30 
last year, 2012, that was going to pay for a whole lot of things, go 
for a lot of different measures with perhaps schools and other 
infrastructure. We had talked about cap-and-trade. You can even point 
to truck fees, that they are all now trying to be shifted towards high-
speed rail instead of other priorities. I wonder if that is what the 
voters' intentions were on Prop 30 or on their truck fees or weight 
fees, et cetera.
  So I think there has been a lot of deception around this, again, on 
cost and on ridership. As I mentioned a minute ago, if it has been 
revised down to a $68 billion plan, we can only point to, for sure, 
approximately $13 billion from Fed stimulus and the State bond. Where 
does the other $55 billion go to build what is really an illegal plan? 
Where is it going to come from?
  Mr. Denham, you mentioned we haven't seen the private-sector money 
from anywhere, yet you can point to, recently, a proposal came out for 
an east coast plan to build a maglev, magnetic levitation train, that 
would link east coast urban centers, and there are already interested 
investors from Japan on that with much more modern technology. You can 
say that rail isn't new technology because it is wheels still running 
on a steel rail. And in California, which is supposed to lead the way 
in technology and innovation, we are really not leading on this at all.
  So what do you see as far as the problems with that bigger funding 
gap? And then, bringing that back, what is that going to do for our 
economy?
  Mr. DENHAM. Well, certainly, we are falling way behind the rest of 
the world. Other technologies are starting to flourish in other parts 
of the world, yet here this project will take at least 30 years but, 
more likely, 50 to 60 based on where they are currently standing on the 
project. So this is something that will be far outdated technology if 
it ever gets completed.
  But the real question is on the funding. Where is the commitment? 
This President certainly could look for or come up with other money. He 
could propose other money to fulfill this project. Not even Democrats 
will support that. That is not a Republican issue. This is an issue 
across the Nation saying, why would we come up with money, when we are 
starved across the Nation, to throw at a project in California that is 
being mismanaged?
  I think that there are real questions there not only for the 
administration but private investors that are not willing to sink money 
into a failing project. They don't know what they are on the hook for. 
They don't know how long of a commute this will be or what the 
ridership numbers will ever be.
  Even by this entire plan, there are too many stops. Whether you talk 
to the Rail Authority or whether you talk to investors around the 
world, with that many stops in those locations, you will never get to 
the 220-miles-per-hour speed, and you will never get to 2 hours and 40 
minutes.
  This thing is full of holes. It makes no sense for voters, and voters 
should have a say-so on whether or not they are going to commit any 
initial money or any further money as we move forward. This is about 
our future, not yours and mine, but our kids, our grandkids, and the 
type of debt that we saddle them with. At a certain point, I think that 
not only Californians, but Americans, need to wake up and say whether 
or not this is a project that deserves an investment.
  Can we do things smarter? Can we do things like Florida and Texas? I 
don't think Florida and Texas are going to be alone. I think there will 
be other States that step up and find ways to do high-speed rail and 
find ways to make a commonsense solution in their States.
  But in this State, this project is flawed. It is initially flawed by 
$20 billion, but certainly by more than $55 billion if we decide to 
move forward. At a certain point, you have to ask, how much is enough? 
I would say that now is enough.
  Mr. LaMALFA. Indeed, when the stimulus money first started coming 
available, there were other States that applied for high-speed rail 
money, such as Florida, Ohio, and Wisconsin. I believe that after they 
looked at their numbers, ran the figures on projects that were eligible 
for that stimulus money, they turned that money back and went back into 
this pool. Of course, California said it wants it; but interestingly, 
it would have been a much smaller portion had California been sharing 
with those other States what Federal money would have come to the 
State. So the other ones said, We have looked at the numbers, and we 
are turning that money back in.
  I think we ought to apply some of the same logic as the other States 
looked at when they had Federal money available, eligible funds, that 
they indeed turned back.
  So I really appreciate your leadership on this, Congressman Denham, 
and we will be doing a lot more to make sure this is held accountable 
to the public here. I look forward to your hearing tomorrow on this 
matter.
  Mr. DENHAM. I thank the gentleman for yielding.
  Mr. LaMALFA. We are also joined by a colleague from the lower San 
Joaquin Valley area of the State for whom this issue is very important, 
very key to his district as well, on the impact of the rail route as 
well as the economy, as well as what it means for the taxpayers

[[Page 619]]

of the State and the entire country. Indeed, this has an effect on 
national taxpayers and the budget as well. So people in other 49 States 
are looking at what is going on here and saying, Why is our Federal 
money going into something that can't possibly work out?
  And so I know we are all willing to help people in other States with 
sensible infrastructure projects. That is the way it works in this 
country with our interstate system that President Eisenhower had the 
vision for back in the day. And yes, there might have been naysayers 
there, but you could actually point to positive results in something 
that works long term and other infrastructure projects that were 
invested in, but this one here, the numbers just don't run.
  So my colleague, David Valadao from the valley, has got very great 
concerns and has been very strong in leading in his area too, as well, 
on what are the impacts going to be, what are the costs.
  I would like to yield to Congressman David Valadao.
  Mr. VALADAO. I thank the gentleman rice farmer from northern 
California for the opportunity to speak here today.
  Where do you start with something like this? I grew up a dairy farmer 
in Kings County and continue to be a dairy farmer in Kings County to 
this day. I spent my first 2 years in elected office in the California 
State Legislature on a budget subcommittee and watched as this project 
moved along; and right before election when this was passed back in '08 
and up until my election in 2010, the project didn't seem that bad. It 
seemed like something that was just voted on and put on the shelf and 
they would continue to build on it. Then, at the last minute, some 
money showed up and it basically put this project in high gear, and the 
project wasn't ready for it.
  As the Congressman from the northern part of the valley mentioned 
earlier, there is no real plan. When you show up at the last minute and 
say, ``Here. Here is some money. Start building right away,'' as if it 
is shovel ready, it set this project up for a really, really tough 
time.

                              {time}  1915

  What we are facing now today, we see a train system being built, a 
high-speed rail, and like was mentioned earlier, older technology. 
Forty years ago, rail with wheels was the technology. Now maglev is the 
new technology. So to see a project that is starting today with 
technology that is already 40 years old that probably won't be running 
for another 30 years, I think we are setting ourselves up for failure.
  When you look at what else has been going on with this project, as 
far as what the opportunities are, when you look at my district 
specifically, California District 21, you have got communities like 
Hanford, Corcoran, Wasco, who all rely on a system that we have today, 
Amtrak. Amtrak doesn't really pay its bills, but it gets people from A 
to B, and it serves its purpose. You have got a system there where 
people who live in those communities are able to get to the doctor in 
Fresno or get to the doctor in Bakersfield or get to work, but a small, 
commuter train that gets them where they need to be for relatively low 
cost.
  You look at high-speed rail, and as the map that was up on the screen 
earlier showed, what we have there is a track that will basically pass 
from Hanford, if Hanford ever gets built, but for sure Fresno to 
Bakersfield, and it leaves all of the people in California 21 basically 
out to dry. That is sad. I mean, when you see a project that was 
supposed to help those less fortunate, or those people who need it the 
most, you have a project now that is actually going to hurt them and 
put potentially at risk what they have today, Amtrak, their mode of 
transportation.
  Because this project lacks so much money, that is why it puts us in 
that position. We have a system in place that is built on someone 
else's train tracks. It is on Burlington Northern's train tracks in my 
area, and I am sure it is on other tracks in other parts of the State, 
but if the project that they have today starts to move forward and they 
run out of money like we expect them to do, part of the plan is to move 
Amtrak over there. So what happens to those stations in my district? 
That is just one of the issues I see.
  In California 21, like I mentioned earlier, and a good portion of the 
valley, we face a water shortage, a drought. Some of that is natural, 
but a lot of that is regulatory. We have also got a severe lack of 
infrastructure to deliver water. We have Tempered Flats and we have 
Pikes Reservoir, we have a lot of infrastructure that needs to be 
built, and that is infrastructure that would benefit not just 
California but the whole State in general.
  When you look at a project like high-speed rail, if that project was 
to go forward and be built, you would have a high-speed rail that most 
people couldn't afford to ride.
  If you build water infrastructure, you now have water to grow 
products, water to feed families, water for our communities, and once 
you have that, you start to grow crops and produce product. You start 
to improve an economy and produce a product that you actually can sell 
and bring dollars back into your community. That, in my opinion, makes 
a lot more sense.
  Education. California has struggled with funding for education for 
years. We have seen plenty of programs that were cut out or cut back or 
just flat out gotten rid of. If you have a project like high-speed rail 
spending money when they are not prepared for it, when we should be 
investing in our future, education, making sure our kids have the best 
opportunities, the best foundation to bring, to improve our economy, to 
be good, productive members of our society and to make a real 
difference--I think education should be our first priority.
  You look at everything we could be spending money on. Right now in 
California, we have been letting prisoners out of prisons because we 
don't have enough money to build facilities for them and to keep some 
of the community correctional facilities open. There is a lot going on, 
and we have to be spending money on a project like this when we should 
be focusing on something that helps keep our communities safe.
  Those are all things that we should be paying attention to that we 
are not because of this project. They are in a hurry to build this 
project right now because they say it creates jobs, but, like was 
pointed out earlier, those numbers are all bogus. They were pushed up. 
They were not honest numbers. We are starting to see this project that 
will put our children and grandchildren into debt for a long time for a 
small amount of jobs that we really can't account for and we can't 
ensure will be our own community jobs.
  So this is something that has had me concerned my whole time in the 
legislature, and I have talked about it for a long time. It is 
something that I am going to continue to fight. It needs to be talked 
about and pushed out there.
  The more people who get involved--you take groups like my Kings 
County group of residents who have sued the State and sued the Federal 
Government over this project. When they first got involved, they looked 
at this project and said this is going to affect our families and 
homes, let's fight it. Once they started getting into the details and 
saw where the funding was coming from, or the lack of funding, the 
amount of deceit that goes into this project just to get it rammed down 
our throats, they decided to keep fighting no matter what, even though 
the alignment was moved off their property across town to another part 
of town. The high-speed rail people thought all of these people will 
back off now because it doesn't affect them personally, but once they 
knew what was really in this project, they thought there is no way we 
can let this fight go. So the group actually grew.
  Now that the new constituents were affected by the new alignment, the 
new guys joined with the old guys and the group grew. Now they have 
moved the alignment back. The first group is continuing to fight, and 
the second group is in it as well. It is just amazing how the more you 
get to know about this project and how it is being pushed and how it is 
being run, the more you want

[[Page 620]]

to fight it, and the more you want to shut this thing down.
  Just to close, California high-speed rail comes at a tremendous cost 
to taxpayers while delivering no benefit to my constituents. This 
project will destroy homes and businesses throughout California's 21st 
Congressional District and divert precious tax dollars away from water 
infrastructure, public safety, and education.
  I will continue to uphold my promise to my constituents and do 
whatever I have in my power to stop this project as fast as possible.
  Mr. LaMALFA. One question: a commission, a board in California, 
recently moved to the three-person board to authorize the rail 
authority to start condemning property under eminent domain. Of course, 
there is going to be a lot of resistance. Kings County is a hot bed of 
resistance to this project. The eminent domain procedures are not easy 
or cheap to get through a court process. They are already moved to 
condemn two pieces of property, I believe, in Fresno County, and I 
believe there are at least 380 that may have to go through this 
process. How do your constituents feel about the forced taking of land 
and an alignment that doesn't make a lot of sense and some of the 
infrastructure that might be lost in these communities?
  Mr. VALADAO. Over the years, there have been a lot of things built in 
the valley--freeways, just different things that obviously needed to be 
built for the good of the State. Farmers, and constituents in general, 
if they understand why it is being taken and it makes sense for the 
State, usually it is an easy deal.
  But once they get involved in the details of this project and start 
to see how they are being treated themselves and how the project is 
going to end up looking, because it is pretty apparent with the lack of 
funding and with the rest of the Federal Government looking at this 
project and understanding that it is pretty much ruined now because of 
the management, they are not happy. They are fighting this thing tooth 
and nail.
  When it comes down to their own personal property, obviously they are 
offended with some of the prices and some of the numbers they are 
seeing. If they owned the property or if their family owned it, if it 
is a generational thing, or just in general an eyesore running 
alongside their home, affecting how they drive to work or how they move 
around the district in general, it is just offensive to many of them, 
depending on the different route or how you want to approach it.
  Mr. LaMALFA. Indeed. Let me ask you, too: How easy is to relocate a 
rendering plant? A rendering plant, that is a facility that processes 
dead agricultural animals, which happens, and so they need to be taken 
to be processed, and one of those is right in your district, I 
understand.
  Mr. VALADAO. We have a rendering plant that is right in the middle of 
the alignment as the alignment is today. Obviously, the alignment moves 
on a weekly basis, but the rendering plant has been in the alignment 
twice now. The first time, and we are back in there again.
  As far as permitting for a new rendering plant, back in 2006 during 
the heat wave, we struggled in the Central Valley to handle the amount 
of animals that were needing to be processed at that time. Permitting 
for a new facility was nearly impossible, and we were never able to 
upgrade or expand the facilities. So to actually build a new one today 
I would say is nearly impossible.
  Mr. LaMALFA. Is the high-speed rail authority guaranteeing to help or 
see through as part of the environmental documents to help make sure 
this is replaced or other infrastructure is replaced? There are dairies 
in line. Again, in California, securing a permit for a new dairy has 
become nearly an impossibility, as my colleague in the dairy industry 
would probably report. So there are a lot of people weighing in on 
that. Relocating the dairy, these are facilities and lands that have 
been for generations of families that have been there. Is anything 
being taken into account on the authority helping with these processes 
as part of the impact they are having?
  Mr. VALADAO. We have no guarantees on any of that. Some of the things 
that affect some of our constituents, somebody that has a restaurant 
and the high-speed rail goes through their property, they go in and 
give them what they assume is the value of that, but no one takes into 
account replacement value. Or they bought their first home when prices 
were high, and now prices have come down, and now it is an opportunity 
for high-speed rail to come in and offer them market price, which 
basically leaves that person homeless and in debt. So there are a lot 
of situations.
  We have farmers with long-term leases on property who do not own the 
property, but own the permanent crop on top of that. High-speed rail 
hasn't taken into account the value of that crop on top. People will 
invest $10,000 to $15,000 an acre to get trees planted, and if they are 
only buying the land for the value of the land but not what is on top 
of that land, that obviously will put a lot of people upside down in a 
really bad position and affect a lot of jobs.
  One of the biggest economic drivers in the valley, and in California, 
we export a lot of agricultural products. That brings a lot of dollars 
in. That will have an impact on our economy as well.
  Mr. LaMALFA. Indeed. We are both from long time farming families. I 
think when you are a farmer, or any business that is multi-
generational, but especially on the land, you develop a bond. You 
develop a love of the land that you don't really put a price on. I 
think most farmers will farm until they can't farm any more, either due 
to age or regulations taking it away from them, or whatever. So how do 
you put a price on my family, raising the fifth generation, and you and 
your neighbors, you have multi-generations as well. How do you put a 
market price on your legacy? Someone is coming in from Sacramento or 
Washington saying we think it is worth that. It may be worth infinitely 
more to you and your family and the generations behind you. How do you 
quantify that?
  Mr. VALADAO. Well, you can't. When it is a project necessary for the 
benefit of the country, benefit of the State, one that actually makes 
sense with a good plan behind it, it is a little easier to swallow, but 
when you see this project in general and how big of a disaster it has 
been and how little information has been out to the public, how they 
plan on funding it, how they plan on moving forward, if people are 
going to be able to actually afford to ride this thing, it makes it 
that much worse. This is important. I mean, when you look at how hard 
some people have worked to build their homes and build their farms and 
companies, we have restaurants and we have a little bit of everything 
that is being affected by this. When you see their blood, sweat and 
tears, you can't put a price on that.
  Mr. LaMALFA. Certainly. Eminent domain is something that governments 
should use very reluctantly, very rarely, and only when there is no 
other option available. My farm has been affected by that as well with 
the large towers, the power lines that move basically from 
hydroelectric projects in the northeast part of the State down to the 
San Francisco Bay area. It is something that affects our fields, but it 
is part of the greater good. Our tractors have to drive around those 
now and figure out how to still keep straight lines going through 
towers running at an angle, and you have ag aircraft that have to 
tangle with avoiding wires and flying over the towers at 200 feet and 
trying to drop seed or fertilizer, things like that. So we get some 
pretty strange streaks in our fields because of that infrastructure, 
but it is important. We want the folks in the Bay area to have that.
  Eminent domain isn't always very fair. What I am seeing here is the 
promises, if there are any promises made by the high-speed rail 
authority, to truly keep people whole on this and give them options, 
and as you mentioned, the alignment changes frequently. We are not even 
sure if they have a full 520-mile alignment decided yet. They could 
have gone for a more

[[Page 621]]

low-impact route, perhaps putting it down the middle of Interstate 5 or 
adjacent to it, using parts of 99, perhaps.
  Mr. VALADAO. Or maybe fill in gaps where Amtrak doesn't serve today. 
Currently, if you want to go from Bakersfield to L.A., you get on a 
bus. There is no connection there. That would have been a great place 
to start this project.

                              {time}  1930

  That is one of the arguments we have. When you have got a project of 
this size and such a percentage of the money that is needed to build 
this project, you can see the failure coming. But you have to make sure 
that whatever resources are spent are spent in a way that benefits the 
overall majority of the people.
  Right now, if you are riding Amtrak from Fresno to L.A. and you get 
off at Bakersfield and you get on that Greyhound bus and ride over the 
hill, I am sure Greyhound does a great job, but that would be a great 
place to fill in the hole and build a rail, and build it up to today's 
standards and put something in place that we can build on in the future 
that makes sense.
  Mr. LaMALFA. Certainly you can make an argument that the first places 
you should look are the urban areas where you can have the potential 
ridership. Here on the east coast, you have a lot of ridership between 
Washington, D.C., on up all the way to Boston. I don't know about the 
financial viability of that, but at least you can make a case there. 
Here, as was reported just a couple of years ago, they wanted to start 
in the Valley because, as was quoted, they had the least amount of 
resistance to building the rail starting in the rural Valley as opposed 
to what it was going to take to run through the South Bay area, places 
like Palo Alto and others, that some people are feverishly opposed to 
what that would do and what that infrastructure tends to bring to high-
value communities like that as well.
  But, again, the promise lies in the Central Valley for us in what we 
do well already. My portion in northern Sacramento Valley, San Joaquin 
Valley, these are strong agricultural areas.
  I am wondering--and maybe you can touch on this as well--we have had 
different ideas for water projects that for a fraction of the money we 
are talking about with the high-speed rail system, how far could we go 
to do one or two water storage projects and what would that mean for 
especially communities like you have down there that have seen a huge 
economic impact with the cutoff of water due to the delta smelt and 
those other problems? What would that mean in real jobs for the people 
that have the skills and education level that likely aren't going to be 
working on a high-speed rail project, but have a strong background in 
agriculture? What do you see that doing to help your area?
  Mr. VALADAO. Well, when we look at a company that wants to invest in 
the Valley, if they are in agriculture, obviously they are attracted to 
the area for those reasons. But if they are looking for an affordable 
place that makes sense between L.A. and San Francisco because of access 
to larger populations, they look at the Central Valley, but they also 
want to make sure that there is security there. If you are going to 
build a company, you are going to make sure it is in a great place for 
your employees.
  I think the focus should be right now making sure that people have 
affordable energy to live there because obviously it gets hot in the 
summer, and the water situation. Are you going to move your family into 
an area where the water isn't safe to drink, which is commonplace in 
some of those communities that we have been fighting for funding for 
some of the water treatment facilities that are so necessary.
  Then when you get into the infrastructure itself, if you are going to 
build a plant or anything or a processing facility for the type of 
commodities we grow, water is a necessity. It starts from growing the 
crop, to cleaning the crop, to making sure that the facilities are up 
to code and that we've got some treatment in place and that we have a 
product that we can sell and bring dollars to those communities.
  That is how you create jobs, that is the right way to do it, and that 
is something that we should be focusing on and investing our limited 
resources on today. Obviously, we have been making some really tough 
decisions in the last few months over spending and budgets and 
everything else that we have got going on. Not just on the national 
level, but at the State level there are going to be some tough 
decisions as well.
  Those decisions should be based on priorities, and those priorities 
should be making sure we have the resources, and resources today means 
water. Water is the number one priority, and that is where it should be 
focused at.
  Mr. LaMALFA. I think everybody in California in the midst of this 
drought probably find agreement with that. Our own Governor was 
underlying that in a speech the other day, and yet still so wedded to 
this high-speed rail project, which the funding for is highly 
questionable. Indeed, a judge handed down a decision the other day 
ordering California not to spend any of the State bond money because it 
wouldn't be legal to do so under the lack of a plan they have.
  We both served in the State legislature. And is California's 
financial situation such that it can get out there on its own somehow 
with new funding? If the Federal money falls short or no private 
investment comes out, where will it come from?
  Mr. VALADAO. Well, we have got a lot of priorities here in 
Washington, D.C. The different Members from different parts of the 
State are not looking at California's high-speed rail project the way 
it is being rolled out today and thinking that is a good place to 
invest the resources that the taxpayers in their district want to see 
them spend the money on.
  It is not going to be an easy lift. As this project seems to move 
forward and the press gets worse and worse, and when you've got judges 
involved saying that they are not following the letter of the law, what 
was asked of the voters when they voted for it, it just makes it that 
much harder to come up with the rest of the money they are going to 
need to finish this project.
  So to get it started, just to build a big berm, or maybe even a berm 
with some metal on top to hopefully throw some older-style Amtrak 
trains on top, doesn't make a lot of sense, especially when you are 
going to cut off communities that need it today, need what we have got 
in place today and not put that in jeopardy.
  Mr. LaMALFA. What doesn't get talked about much are different impacts 
like the high-speed rail. In order to sustain a high-speed, you have 
got to build a very long elliptical form in order to make turns with a 
train going 220 miles per hour. It is kind of like the angled towers 
running at angled lines on my property that we farm. It doesn't fit in 
real well with a grid that is set up on straight lines and squares like 
that.
  So when an elliptical-shaped rail comes through your community 
through agricultural zones, as well as high-speed rail having to cut 
off all the crossings, can you build enough overpasses to not stop the 
flow of traffic, whether that is cars or trucks or even a farmer on a 
tractor who now may have to drive his tractor instead of just across 6 
miles down the road and back up to get around. I mean, there are a lot 
of impacts that are really not meeting the eye here when you line them 
out.
  Mr. VALADAO. Like I mentioned earlier, when this project was started, 
it was started as a long-term project; but then $3 billion showed up 
from the Federal Government and the project managers basically said put 
this thing in high gear, start breaking ground.
  You have got a project of this type that affects so many people in so 
many different communities--how they travel around their homes to work, 
around their farms, around their businesses, transporting products 
between warehouses and processing facilities. You have so much going 
on, and you have got this project now that is going to disrupt all of 
that just because they have got a timeline that they have got to spend.

[[Page 622]]

  The timeline is really on a small portion of it. We are talking a 
couple percentages of the total cost of the project. It is not worth 
risking a project of this size over such a small amount of money.
  That is probably one of the worst things that has happened to this 
project since its inception. It could have been something great. It 
could have been a project that could have made a big difference if it 
was given the time to be designed and planned in a way that benefited 
the State, didn't burden the State with debt forever, and actually 
helped the constituents of that State.
  It is too bad this project has gone down the path it has; but, again, 
we are going to try to stop this thing so that this doesn't happen and 
doesn't affect our communities.
  Mr. LaMALFA. Well, indeed, it does appear that they are hell-bent on 
spending that approximately $3.5 billion that has Federal deadlines on 
it in order to get the project started; and then at that point, well, 
we are invested in the project, we can't stop now, even though the 
judge ruled it is illegal to spend the State dollars because it is not 
fulfilling the plan. So, indeed, big impact on the Valley and on 
taxpayers.
  Mr. Valadao, I really appreciate your time and your leadership on 
this here tonight. Let's keep putting the message out that there are 
better ways. Most anything might be better than investing in this at 
this point. So I thank you for your help here tonight.
  Mr. VALADAO. Thank you.
  Mr. LaMALFA. So, indeed, the investors that were supposed to come in, 
private investment for what had been billed to voters as a $33 billion 
project, up to $45 billion if you built the San Diego and Sacramento 
link, they have not materialized. When you see that the price for a 
time went up to $98.5 billion--hence California's Senate bill 985--it 
scared everybody away from this.
  You see, in a Baltimore to Washington proposal to do a maglev project 
here locally that has outside investors that want to come in on that, 
nobody is touching California's high-speed rail.
  So in the absence of this outside investment, California has moved in 
many different ways to try and find other pots of money. The Governor 
plans on diverting truck weight fees that are collected from commercial 
truckers away from repairing California's aging roads.
  Just try and drive in the right-hand lane of any freeway--I get to 
enjoy Interstate 5 a lot--and see what the condition of that road is. 
Some areas have been repaired. Caltrans had a pretty good year last 
year. Other areas it is still pretty rough. Interstate 80, near 
Sacramento, they are doing repairs now; but the potholes on that were 
pretty bad.
  Yet we are seeing the effort by the State to shift funding away from 
repairing roads that everybody uses versus a project that maybe few can 
afford to actually use. My colleagues from the Valley here would 
probably tell you that there is not going to be a whole lot of people 
that jump on high-speed rail to ride from Bakersfield to Fresno because 
it doesn't make any sense for them.
  The promise of a low-cost ticket being 85 percent initially of an 
airline ticket from L.A. to San Francisco or vice versa, how can that 
be met without having the tickets subsidized at these costs? $85 we 
were told, $90. It was revised later maybe $120 when we had a hearing 
about it. Try $300 if it is not going to be underwritten by the 
taxpayers for ridership on this.
  How many people are going to spend $300 on that trip? Other than 
those that might do it for the novelty of the train ride from north to 
south or south to north. We saw pie-in-the-sky numbers on what the 
amount of ridership would be, numbers that at one time were greater 
than the entirety of Amtrak across the 48 continental States. They have 
had to revise them down to some other vague number.
  So there is not a lot of trust in anything being put forward by the 
California High-Speed Rail Authority on costs, on ridership, on impact, 
promises made or not made to those that are impacted in the line of 
many different proposals of where the route is. Yet they are still 
trying to move forward and start condemning people's property, at who-
knows-what price of reimbursement, in order to spend as quickly as they 
can this $3 billion-plus of Federal stimulus money put in place almost 
5 years ago.
  It is really looking more like a fraudulent enterprise from what the 
voters saw in 2008 to now. Indeed, polling out there shows that now 
that people have heard about this the last couple of years and what it 
really means and the other choices they have to make on schools, on 
water, on their actual highways, that they have a whole lot of 
different opinion on it. A lot of editorial pages around the State are 
saying at the very least if you are not going to stop it, you should 
put it back on the ballot.
  I attempted that in 2012. The mood wasn't there in the State 
legislature to do that. My former colleague there that I served with, 
Assemblyman Jeff Gorell from the Santa Barbara area, he is putting 
forward legislation to put it back on the ballot and re-vote the rail. 
So I hope that catches fire and that the legislature will look at this 
project and decide maybe that would be worth a vote of the people of 
California to decide if this is still a priority at these prices.
  So Assemblyman Gorell has got a pretty big task to put that in front 
of the legislature and achieve the votes. But interestingly--still 
talking State politics here--but in the State Senate, to put forward 
the first segment of funding in late 2012, it received the bare 
majority of votes to fund that. In our California State Senate, there 
are 40 Members. They have got a vote of 21-19. All the Republicans 
voted ``no'' and four of the Democrats, who up to that point had been 
pretty favorable on high-speed rail. It barely got out of the State 
Senate floor.
  I think that is saying a lot, that the opinions have changed, 
certainly amongst the voters. Now we just have to put the State 
legislature in a figurative headlock and get them to think about it and 
do that.
  So I hope Assemblyman Gorell is successful in this measure because it 
would be proper to put this back in front of the voters and ask them 
again: would you rather have this or water projects, highway projects, 
school projects, any number of things that could be done to help move 
California forward instead of this boondoggle that has no way of paying 
for itself or sustaining itself?
  We see, again, with the court handing down a ruling, that the plan is 
diverted so far from what was initially voted on and approved by the 
voters that it is now illegal. Why should State government be doing 
things that are illegal? Because they are right now in such a hurry to 
get the money spent, the Federal money. If the Federal money was to 
stop, the State money also has to. They both have to have a match with 
each other; but if there is not the match happening, then there are 
giant legal problems.

                              {time}  1945

  Congressman Denham mentioned a while ago: What is the payback 
procedure if Federal money is misspent, improperly spent? Because 
California had the capacity to do that if it doesn't meet its 
timelines, it doesn't meet the goals, it doesn't meet the tenets laid 
out in proposition 1(a). It would be in a true high-speed rail system 
all the way from San Francisco to Los Angeles, which so far that plan 
is not. You have to ride three different train types to accomplish that 
under this current plan.
  Now we know the folks in the Bay Area and parts of Los Angeles are 
interested in seeing some of their tracks electrified as beneficiaries 
of some of the money that will be coming from this. I get that, I 
understand that. That probably would be a benefit for them, some 
upgrades in their local infrastructure. I don't know why you could not 
support that separately from this. If it helps to get Caltrain in the 
Bay Area electrified, then that should be a separate question, a 
separate set of funding, because right now this is illegal.
  The people in the Bay Area do not want to be part of an illegal 
project,

[[Page 623]]

likely, and maybe perhaps lose that funding they are depending on to 
electrify and upgrade their system. I don't think so. That is a lot of 
money when it gets around to doing that above what is going on in the 
valley, with the condemnation of the land, and building in an area 
where they said would have the least amount of resistance for the 
project, let alone the Bay Area and perhaps parts of north L.A. County.
  So it is very problematic. It is really time, as I proposed back in 
my senate days, to slow down the project and really get some real 
numbers. That was my first bill in the State Senate, SB 22. It was a no 
spending, no doing anything, until we have fully vetted and thought out 
a plan.
  Honestly, this reminds me of ObamaCare. I have been calling this 
around my neighbors ObamaCare, Jr., because it is so poorly thought 
out; and the plan for funding it looks largely the same, pie in the 
sky. Investors won't touch it. Federal Government, are they going to 
come in and bridge the gap of the other $55 billion that is missing, if 
we believe a $68 billion plan, or on up to the approximately 100, let 
alone the inflation things that might drive a real project all the way 
to $150 billion? All for what?
  What could really be seen as an outdated technology and something 
that a lot of people can't afford to assess, nor even make sense for 
them to use in short segments within the valley. Yes, it may make sense 
possibly if you had a fast train that could go all the way from San 
Francisco to L.A. and complete that.
  One of the things brought up is that in order for the project to be 
technically legal, they would only have to send one train per day in 
each direction at full, nonstop length. They would have other trains 
perhaps that are making all these stops, stopping at every little burg 
along the way. That is not high-speed rail. That is glorified Amtrak, 
glorified local commuters. That is not the intent of voters or anybody 
on this measure, or for that funding which is scarce money these days 
in California. The huge problems we have in trying to get a budget done 
and move eventually towards the balance in our Federal budget, it isn't 
a priority that we should be doing.
  So, Mr. Speaker, I just want to note that again Congressman Denham 
will be having a hearing tomorrow in his Transportation and 
Infrastructure subcommittee on rail that will be at 10 a.m. in 
Washington time, developing more on this situation. So I would invite 
you to participate, or watch that, and expose what really needs to 
happen with Federal funding as well as maybe perhaps the people in 
California have an opportunity to weigh in on Assemblyman Gorell's 
proposal to have this back on the ballot and maybe perhaps shift our 
scarce funds to other things.
  With that, Mr. Speaker, I thank you for the time here tonight, and I 
yield back the balance of my time.

                          ____________________