AMENDED IN SENATE APRIL 16, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

98

Introduced by Senator Stern

(Coauthors: Senators Allen, Durazo, and Gonzalez)

February 20, 2026

An act to amend Section 39719.3 of the Health and Safety Code, relating to high-speed rail, and making an appropriation therefor.

Vote: 2/3   Appropriation: yes   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law creates the High-Speed Rail Authority to develop and implement a high-speed rail system in the state. Existing law requires moneys collected by the State Air Resources Board from the auction or sale of certain allowances as part of a market-based compliance mechanism to be deposited into the Greenhouse Gas Reduction Fund and continuously appropriates a portion of the moneys in the fund for various purposes, including a specified portion to the authority for certain purposes. Existing law prohibits the authority from entering into new funding commitments with those moneys for activities outside of the Merced to Bakersfield segment, until June 30, 2030, or when that segment is fully funded, whichever is sooner. Notwithstanding that prohibition, existing law authorizes the authority to enter into new funding commitments outside of the Merced to Bakersfield segment for certain purposes, including for additional activities, not to cumulatively exceed $500,000,000, that maximize the efficiency of delivering the project, as specified.

This bill would revise and recast that authorization to instead authorize the authority to enter into new funding commitments with the above-described moneys outside of the Merced to Bakersfield segment in any amount for additional activities that activities related to early works, as defined, and for projects developed through public partnership agreements or public-private partnership agreements, subject to the requirements that those funding commitments maximize the efficiency of delivering the project, project and do not delay the completion of the Merced to Bakersfield segment, as specified. By expanding the purposes for which continuously appropriated moneys may be used, the bill would make an appropriation.

The people of the State of California do enact as follows:

SECTION 1.

Section 39719.3 of the Health and Safety Code is amended to read:

39719.3.

(a) For purposes of this section, the following definitions apply:

(2) “Fully funded” means the High-Speed Rail Authority has secured funding to complete the Merced to Bakersfield segment within the timelines identified in the most recent business plan prepared pursuant to Section 185033 of the Public Utilities Code or project update report prepared pursuant to Section 185033.5 of the Public Utilities Code and the High-Speed Rail Authority Office of the Inspector General has confirmed that the High-Speed Rail Authority has secured that funding.

(3) “Merced to Bakersfield segment” means a 171-mile electrified dual-track segment that is usable for high-speed rail service in the central valley from Merced to Bakersfield, with a new combined station in downtown Merced, and connections to the Amtrak San Joaquins and the Altamont Corridor Express.

(b) Notwithstanding paragraph (2) of subdivision (b) of Section 39719, 39719 or paragraph (1) of subdivision (b) of Section 39719.4, beginning with the 2022–23 fiscal year, it is the intent of the Legislature that the High-Speed Rail Authority prioritize use of the funds provided pursuant to Section 39719 or 39719.4 to complete the Merced to Bakersfield segment.

(c) Beginning with the 2022–23 fiscal year, the High-Speed Rail Authority shall not enter into new funding commitments with funds provided pursuant to paragraph (2) of subdivision (b) of Section 39719 or paragraph (1) of subdivision (b) of Section 39719.4 for activities outside the Merced to Bakersfield segment, except for the following purposes:

(1) Completion of environmental clearance activities and planning activities required by federal grant agreements or other existing agreements.

(2) State operations activities related to construction management and project development and enterprisewide capital expenditures.

(C) The High-Speed Rail Authority shall provide advance notification of work described in subparagraph (A) to the High-Speed Rail Authority Office of the Inspector General (OIG) and the chairs of the relevant committees of both houses of the Legislature. The OIG shall conduct a cost-benefit analysis of the proposed work outside the Merced to Bakersfield segment within 60 days of notification and make a finding as to whether or not expenditure of funds for the proposed work will result in a delay in the completion of the Merced to Bakersfield segment. After that time, the OIG shall provide its analysis to chairpersons of the committees of both houses of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees of both houses of the Legislature that consider the State Budget before contracts for projects outside of the Merced to Bakersfield segment are considered by the High-Speed Rail Authority for approval.

(D) Before expenditure of funds pursuant to this paragraph, the High-Speed Rail Authority shall provide notification of grant applications to the chairpersons of the committees of both houses of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees of both houses of the Legislature that consider the State Budget. Approval of the grant application by the Department of Finance may be authorized no sooner than 30 days after notification in writing to the chairpersons of the committees in each house of the Legislature that consider appropriations and the chairpersons of the committees and the appropriate subcommittees in each house of the Legislature that consider the State Budget.

(d) (1) This section shall become inoperative on June 30, 2030, or when the Merced to Bakersfield segment is fully funded, whichever is sooner, and shall be repealed on January 1 of the following year.

(2) The High-Speed Rail Authority shall inform the Legislature when the Merced to Bakersfield segment is fully funded in compliance with Section 9795 of the Government Code.