[Federal Register Volume 78, Number 236 (Monday, December 9, 2013)]
[Notices]
[Pages 73921-73923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-29281]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35724 (Sub-No. 1)]


California High-Speed Rail Authority--Construction Exemption--In 
Fresno, Kings, Tulare, and Kern Counties, California

    By petition filed on September 26, 2013, California High-Speed Rail 
Authority (Authority), a state agency formed in 1996, seeks an 
exemption under 49 U.S.C. 10502 from the prior approval requirements of 
49 U.S.C. 10901 for authority to construct an approximately 114-mile 
high-speed passenger rail line between Fresno and Bakersfield, Cal. 
(the Line).
    The Line is the second of nine segments of the planned California 
High-Speed Train System (HST System), which would, when completed, 
provide high-speed intercity passenger rail service over more than 800 
miles of new rail line throughout California.\1\ The complete system 
would connect the major population centers of Sacramento, the San 
Francisco Bay Area, the Central Valley, Los Angeles, the ``Inland 
Empire'' (i.e., the region east of the Los Angeles metropolitan area), 
Orange County, and San Diego. The Authority states that it plans to 
contract with a

[[Page 73922]]

passenger rail operator to commence HST System operations once it has 
completed construction of the portion of the HST system between Merced 
and the San Fernando Valley, which includes the Line.
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    \1\ Earlier this year the Board granted an exemption for 
construction of the first segment of the HST System, between Merced 
and Fresno, Cal. (Merced-to-Fresno segment). See Cal. High-Speed 
Rail Auth.--Constr. Exemption--in Merced, Madera & Fresno Cntys., 
Cal., FD 35724 (STB served June 13, 2013) (June Decision).
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    Request for Conditional Approval. The Authority requests that the 
Board conditionally grant the exemption authority by addressing the 
transportation aspects of the project in advance of the environmental 
issues. The Authority states that its design-build contract for a 29-
mile segment of the HST System, which is composed of a five-mile 
portion of the Line and a 24-mile portion of the Merced-to-Fresno 
segment, requires the Authority to give its contractor a notice to 
proceed with construction of the five-mile Line segment by July 12, 
2014. The Authority asserts that if it cannot issue the notice to 
proceed by then, the five-mile segment will be removed from the 
contract and the Authority will need to renegotiate the price for the 
construction of the 24-mile segment and the price and timetable for the 
five-mile segment, which could result in a substantial aggregate 
increase in the cost of construction of the two segments. The Authority 
also expresses concern regarding a possible Board member vacancy after 
January 1, 2014, and thus asks that the requested conditional grant of 
authority be effective by year's end. A Board vacancy, however, would 
not prevent the Board from carrying out its functions.
    Although the Board has sometimes made conditional grants of 
construction exemption authority in the past, it has not done so in 
several years. It has also questioned the benefits to a construction 
applicant given that the Board must consider the environmental effects 
of the construction proposal before any final approval can be given and 
before any construction may begin.\2\ Therefore, in the absence of a 
showing of some unique or compelling circumstances, it is our policy to 
determine the transportation merits of a construction proposal based on 
a complete record, including the environmental record.\3\
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    \2\ See Alaska R.R.--Constr. & Operation Exemption--Rail Line 
Between Eielson Air Force Base (N. Pole) & Fort Greely (Delta 
Junction), Alaska, FD 34658 (STB served Oct. 4, 2007).
    \3\ See id.
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    The Authority has not presented any unique or compelling 
circumstances that demonstrate that a two-step decisional process is 
warranted. We have an independent statutory obligation to review 
thoroughly transactions brought before the agency for authorization 
under the Interstate Commerce Act. The fact that the Authority 
contractually agreed to notify its contractor by a certain date that 
construction can proceed is not a sufficient basis for the Board to 
carry out its independent statutory obligation in a piecemeal fashion. 
Moreover, no construction may begin until after the environmental 
review is completed and the Board issues its final decision.\4\ Neither 
a contractual obligation nor a notice to proceed can change that fact. 
There is also the possibility that the Board could deny the petition 
for exemption notwithstanding a prior conditional grant. Accordingly, 
the Authority's request for a conditional grant of the requested 
exemption authority, subject to the completion of the environmental 
review process, will be denied.
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    \4\ As the Board noted in its decision approving the Merced-to-
Fresno segment of the HST System, there is a controversy regarding 
California's bond funding process. See June Decision, slip op. at 20 
n.104. Since the Board's June Decision, the bond issue has continued 
to be litigated in state court. See High Speed Rail Auth. v. All 
Persons Interested in re the Validity of the Authorization & 
Issuance of Gen. Obligation Bonds to be Issued Pursuant to the Safe, 
Reliable High-Speed Passenger Train Bond Act for the 21st Century, 
Case No. 34-2013-00140689-CU-MC-GDS (Sup. Ct. Cal., Sacramento, Nov. 
25, 2013).
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    Replies to the Petition for Exemption. Given that the original 
deadline for replies to the petition fell during the recent Federal 
government shutdown, during which the Board did not accept any 
filings,\5\ we will extend the period for replies to December 24, 2013, 
to permit sufficient time for interested persons to prepare and file 
responses.\6\ Such replies should address the transportation merits of 
the petition.
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    \5\ Replies were due October 16, 2013. See 49 CFR 1104.13(a).
    \6\ On November 27, 2013, Michael E. LaSalle filed a letter 
requesting that the Board give notice of the Authority's petition in 
this sub-docket to all parties of record in the main docket and 
provide adequate time for interested parties to reply. This decision 
will be published in the Federal Register, which will serve as 
public notice of this proceeding and of the extended deadline for 
replies to the petition.
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    Environmental Review. Currently, the Federal Railroad 
Administration (FRA) and the Authority are jointly leading a project-
level environmental review of the Line.\7\ In August 2011, FRA and the 
Authority issued a Draft Environmental Impact Report/Environmental 
Impact Statement (EIR/EIS), an analysis of the environmental impacts 
and benefits of implementing the high-speed train between Fresno and 
Bakersfield. Public comments on the Draft EIR/EIS were due in September 
2011. Thereafter, FRA and the Authority issued a Revised Draft EIR/EIS 
in July 2012, on which public comments were due in October 2012. 
Preparation of the Final EIR/EIS is underway.
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    \7\ FRA and the Authority jointly began the environmental review 
related to the entire HST System in 2000, and in 2005 they finalized 
a Program EIR/EIS, a programmatic analysis on implementing the 
entire HST System.
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    In August 2013, the Board became a cooperating agency, as defined 
by 40 CFR 1508.5, for the preparation of the project-level EIR/EIS for 
the Line, as well as for the other remaining segments of the HST 
System. As a cooperating agency, the Board, through its Office of 
Environmental Analysis (OEA), will work with the Authority and FRA to 
fulfill its obligations under the National Environmental Policy Act, 42 
U.S.C. 4321 et seq. OEA is currently working with FRA and the Authority 
in the preparation of the Final EIR/EIS for the Line. The entire 
environmental record for the Line, including the Draft EIR/EIS, Revised 
Draft EIR/EIS, public comments on those draft documents, and the Final 
EIR/EIS will serve as the basis for OEA's recommendation to the Board 
regarding whether, from an environmental perspective, the Authority's 
construction exemption should be granted, denied, or granted with 
environmental conditions. Because the public comment periods on the 
project-level Draft EIR/EIS and Revised Draft EIR/EIS have closed, the 
Board is not soliciting additional comments on environmental matters in 
this proceeding.
    By this decision, we are instituting a proceeding under 49 U.S.C. 
10502(b).
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. A proceeding is instituted under 49 U.S.C. 10502(b).
    2. Replies to the petition for exemption are due by December 24, 
2013.
    3. The Authority's request for a conditional construction exemption 
is denied.
    4. This decision will be published in the Federal Register.
    5. This decision is effective on its service date.
    Decided: December 3, 2013.
    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey. Vice Chairman Begeman concurred with a separate 
expression.
    Vice Chairman Begeman, concurring:
    I support the Board's decision to reject the California High-Speed 
Rail Authority's request for a decision on the transportation aspects 
of the project before the environmental review of the project is 
completed. The Board should not approve any segment of this enormous 
public works project unless it first carries out a comprehensive

[[Page 73923]]

analysis of the segment at issue, including its financial fitness.
    Earlier this year, the Board rushed to meet the Authority's request 
for expedited action on the first segment of the project. 
Unfortunately, in order to do so and over my objections, the Board 
chose to ignore key components of the project's viability--its 
projected costs and funding. The Board reached a decision without 
looking at the project's financial fitness. For this and other reasons 
that I explained at the time, I could not fully support the Board's 
decision.
    Today's decision acknowledges the growing controversy regarding 
California's bond funding process. Considerable federal taxpayers' 
dollars are already at stake and the recent state court decisions may 
very likely impact construction timing and costs.
    Just as we need to consider the environmental aspects along with 
the transportation merits of this project before granting further 
approval, we should also understand its funding aspects, and then make 
a decision on a full record. The Authority's current petition fails to 
include any details about the project's finances. That void needs to be 
corrected before the Board acts further.

Derrick A. Gardner,
Clearance Clerk.
[FR Doc. 2013-29281 Filed 12-6-13; 8:45 am]
BILLING CODE 4915-01-P