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November 19, 2013 > Judge weighs penalty for $68B high-speed rail plan

Judge weighs penalty for $68B high-speed rail plan

By Juliet Williams Associated Press

SACRAMENTO, Calif. (AP), Attorneys for the California High-Speed Rail Authority argued Friday that Central Valley residents who sued the state over its bullet train plan have no grounds to stop the project, despite a judge's ruling that the state violated the promises made to voters in a 2008 ballot proposition.

Instead, it would be up to the state Legislature to step in if lawmakers believed the $68 billion funding plan does not comply with Proposition 1A, which authorized $10 billion in high-speed rail bonds, Deputy Attorney General Michele Inan said.

``The taxpayers are represented through the legislative process,'' Inan told Sacramento County Superior Court Judge Michael Kenny.

Kenny ruled in August that the California High-Speed Rail Authority ``abused its discretion by approving a funding plan that did not comply with the requirements of the law.'' He further said it had failed to identify ``sources of funds that were more than merely theoretically possible.''

Still, Inan argued that since the Legislature approved spending the money to get started on high-speed rail, only the Legislature can undo it or ask for an updated funding plan.

The 2008 proposition required the rail authority to specify the source of the funding for the first operable segment of the high-speed rail line and have all the necessary environmental clearances in place. Kenny said in his previous ruling that the agency did not comply with either of those mandates, but Proposition 1A appears to leave it up to lawmakers to decide whether the plan is sufficient to warrant funding.

Friday's hearing was held for the judge to consider what penalty, if any, he should impose for the rail authority's failure to comply with the ballot initiative in its initial funding plan. The rail authority argues that the judge's ruling was based on an old funding plan that has since been revised.

Attorneys for affected landowners who are suing the state have asked Kenny to rescind construction contracts, including a $1 billion deal signed this fall, or prevent the state from spending any more of the voter-approved bonds.

Inan said the state is not spending any bond money now, anyway, and instead is relying on about $3.2 billion in federal money from the Obama administration.

But those are matching funds that eventually will require the state to spend an equal amount, meaning the state is committing the bond money now, said attorney Stuart Flashman, representing the plaintiffs.

``Where is the money?'' Flashman asked. ``If they're not using the bond funds, what other funds are they using? What other funds are they promising the feds they are using? There aren't any.''

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