BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 1138


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          Date of Hearing:  April 20, 2015


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 1138  
          (Patterson) - As Introduced February 27, 2015


          SUBJECT:  High-speed rail:  eminent domain


          SUMMARY:  Restricts the High-Speed Rail Authority (Authority),  
          or the State Public Works Board (PWB) acting on behalf of the  
          Authority, from adopting a resolution of necessity to commence  
          an eminent domain proceeding unless the resolution meets certain  
          requirements. Specifically, this bill:  


          1)Prohibits the Authority, or PWB acting on behalf of the  
            Authority, from adopting a resolution of necessity to commence  
            an eminent domain proceeding to acquire a parcel of real  
            property on a corridor or a usable segment of a corridor for  
            the high-speed train system unless the resolution:



             a)   Identifies the sources of all funds to be invested in  
               the corridor or usable segment of the corridor and the  
               anticipated time of receipt of those funds based on  
               expected commitments, authorizations, agreements,  
               allocations, or other means.











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             b)   Certifies that the Authority has completed all necessary  
               project-level environmental clearances necessary to proceed  
               to construction of the corridor or usable segment.



          2)Defines "corridor" to mean a portion of the high-speed train  
            system.



          3)Defines usable segment to mean a portion of a corridor that  
            includes at least two stations and that, upon completion, will  
            be used to operate high-speed train service between those  
            stations.
          EXISTING LAW:


          1)Establishes the Authority and vests with it the responsibility  
            to develop and implement a high-speed rail system in  
            California.


          2)Authorizes the Authority to use bond proceeds for, among other  
            things, the acquisition of real property and rights-of-way for  
            the purpose of constructing the system.  


          FISCAL EFFECT:  Unknown


          COMMENTS:  Current law created the Authority in 1996 to direct  
          the development and implementation of intercity high-speed rail  
          service that is fully coordinated with other public  
          transportation services.  In 2008, voters approved Proposition  
          1A authorizing $9.95 billion in general obligation bonds for the  
          high-speed rail project.  Proposition 1A authorizes the  
          Authority to use bond funds to acquire real property and  
          rights-of-way for the purpose of constructing the system.  








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          Like other governmental agencies, the Authority attempts to  
          purchase any necessary property by offering the appraised fair  
          market value of that property to the owner.  If the transaction  
          is unable to proceed in this way, PWB, on behalf of the  
          Authority, may use the state's eminent domain authority to  
          acquire the property.  Property acquisition processes, including  
          eminent domain proceedings, generally result in a settlement  
          transferring the ownership of private property to a governmental  
          entity for public use, typically at a justified and documented  
          price based on sound business practices.  In order to commence  
          an eminent domain proceeding, PWB must adopt a resolution of  
          necessity explaining why the state needs to acquire the  
          property.


          This bill requires the Authority to identify all sources of  
          funds to be invested in a corridor or segment of the high-speed  
          rail system and certify that it has completed all necessary  
          project-level environmental clearances to proceed to  
          construction of the corridor or segment before beginning an  
          eminent domain proceeding.  According to the author, there is  
          "grave concern - especially among residential, farm, and  
          business owners - that their property will be taken through the  
          use of eminent domain for the purpose of high speed rail but the  
          project will fail to be completed. Root causes of concern lie in  
          the availability or interest in private funding, skyrocketing  
          estimates for project completion and operation, along with  
          highly criticized business models and ridership projections.  If  
          the Authority were to take property yet be unable to complete  
          the project, many farmers', residents', and Californians'  
          property will have been taken for naught."


          Committee concerns:  It is not clear why the Authority should be  
          subject to different rules with respect to eminent domain than  
          any other governmental entity. If there is a problem with the  
          eminent domain process generally, then the author may wish to  








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          pursue changes that apply equally across all governmental  
          entities rather than singling out the Authority. 


          Additionally, requiring the Authority to identify all funds to  
          be invested in a corridor could be construed to mean that the  
          Authority must identify the source of all funds necessary to  
          construct, maintain, and operate the high-speed rail system in  
          that corridor over time.  It is very difficult to predict all  
          future investment.  According to the Authority's business plan,  
          once the initial operating segment is complete and high-speed  
          trains begin operating on the system, the state will likely turn  
          the maintenance and operation over to a private concessionaire.   
          That will not occur for many years, maybe decades.  It seems  
          unreasonable to expect the Authority to be able to identify the  
          sources of all funds ever to be invested in a corridor.


          Double-referral:  This bill will be referred to the Assembly  
          Judiciary Committee should it pass out of this committee.


          Related legislation: AB 6 (Wilk) prohibits the sale of any  
          additional bonds for high-speed rail and redirects the remaining  
          bonding authority to fund the construction of school facilities.  
           AB 6 is scheduled to be heard by this committee on April 20,  
          2015.


          AB 397 (Mathis) prohibits the sale of any additional bonds for  
          high-speed rail and redirects the remaining bonding authority to  
          fund the construction of water-related infrastructure.  AB 397  
          is scheduled to be heard by this committee on April 20, 2015.


          AB 1087 (Grove) provides that the cap-and-trade funds that have  
          been continuously appropriated to high-speed rail are for  
          specified components of the initial operating segment and Phase  
          1 blended system, as described in the Authority's 2012 business  








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          plan.  AB 1087 is scheduled to be heard by this committee on  
          April 20, 2015.


          Previous legislation: SB 902 (Vidak) of 2014, would have  
          prohibited the Authority, or PWB acting on behalf of the  
          Authority, from commencing an eminent domain proceeding to  
          acquire property for high-speed rail purposes unless it  
          identified the sources of all funds to be invested in that  
          property and the anticipated time of receipt of those funds and  
          certified that the offer to the property owner was either the  
          Authority's approved appraisal of the fair market value of the  
          property or the amount necessary to discharge any liens against  
          the property, whichever is greater. The bill failed passage in  
          the Senate Transportation and Housing Committee. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Agua Dulce Town Council


          California Citizens for High Speed Rail Accountability


          Fresno County Supervisor Buddy Mendes


          Howard Jarvis Taxpayers Association


          Kings County Board of Supervisors









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          Thermo King Fresno/Modesto


          57 Individual letters




          Opposition


          California Labor Federation


          California Teamsters Public Affairs Council


          State Building and Construction Trades Council







          Analysis Prepared by:Anya Lawler / TRANS. / (916) 319-2093




















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