BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 153
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          Date of Hearing:   April 14, 2009

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                  Mike Feuer, Chair
                    AB 153 (Ma) - As Introduced:  January 23, 2009
           
          SUBJECT  :   HIGH-SPEED RAIL AUTHORITY

           KEY ISSUE  :  SHOULD THE HIGH-SPEED RAIL AUTHORITY BE ABLE TO  
          EMPLOY ITS OWN LEGAL STAFF, OR CONTRACT WITH OTHER STATE  
          AGENCIES FOR LEGAL SERVICES, OR BOTH? 

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      SYNOPSIS
          
          This bill, sponsored by the California High-Speed Rail  
          Authority, would authorize the Authority to employ its own legal  
          staff or to contract with other state agencies for legal  
          services, and would make various clarifying changes to  
          provisions regarding the powers and duties of the Authority,  
          including the power to exercise eminent domain.  According to  
          the sponsor, the Authority currently contracts with the Attorney  
          General's office for legal counsel, but anticipates that its  
          need for legal services will soon outgrow this arrangement.  The  
          Authority reasonably contends that by authorizing the hiring of  
          in-house legal counsel, this bill will ensure the Authority has  
          immediate availability to legal counsel as well as continuity of  
          representation in litigation or other legal matters.  In  
          addition, the Authority states that it would benefit from having  
          in-house legal counsel who, over time, would develop special  
          knowledge and expertise of the areas of law unique to the  
          mission of the Authority and the high-speed train project.  The  
          relevant provisions of this bill mirror those that authorize the  
          California Transportation Commission (CTC) to hire its own legal  
          counsel.

          This bill contains various provisions that clarify the  
          Authority's ability to exercise eminent domain power to acquire  
          property, although the bill does not expand the eminent domain  
          power already held by the Authority, nor does it substantively  
          change any of the standard eminent domain requirements that the  
          Authority must follow under current law.  The bill also extends  
          the Authority's existing ability to enter into contracts with  
          private or public entities to include contracts for the  








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          financing and maintenance of high-speed trains.  There is no  
          known opposition.
            
           SUMMARY  :  Authorizes the California High-Speed Rail Authority  
          (Authority) to employ its own legal staff or to contract with  
          other state agencies for legal services, and makes various  
          clarifying changes to provisions regarding the powers and duties  
          of the Authority.  Specifically,  this bill  :   

          1)Adds language authorizing the Authority to employ its own  
            legal staff or to contract with other state agencies for legal  
            services, or both.

          2)Clarifies that, with respect to commencing eminent domain  
            proceedings, a certain cross-reference to the "governing body"  
            of the High Speed Rail Authority means the Board of the  
            Authority.

          3)Extends to the Authority a statutory exclusion, currently held  
            by several other state agencies, from the requirement that  
            real property interests acquired for or by state agencies be  
            acquired by the State Public Works Board.

          4)Makes a conforming change clarifying that the Authority is  
            excluded from provisions that direct the State Public Works  
            Board to acquire property on behalf of agencies that lack  
            their own authority to acquire property, and also clarifies  
            that the Authority is among those agencies already able to  
            exercise eminent domain for property acquisition.

          5)Deletes obsolete contingency language and extends the  
            Authority's existing ability to enter into contracts with  
            private or public entities to include contracts for the  
            financing and maintenance of high-speed trains.  

           EXISTING LAW  :  

          1)Prohibits a state agency from employing legal counsel other  
            than the Attorney General, unless specifically authorized by  
            law to do so.  (Government Code Sections 11041-11042.)

          2)Authorizes the California Transportation Commission to employ  
            its own legal staff or contract with other state agencies for  
            legal services, or both.  (Government Code Section 14513.)









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          3)Authorizes the California High-Speed Rail Authority to acquire  
            rights-of-way through purchase or eminent domain.  (Public  
            Utilities Code Section 185036(b).)

          4)Prevents a public entity from commencing an eminent domain  
            proceeding until its governing body has adopted a resolution  
            of necessity meeting certain requirements.  (Code of Civil  
            Procedure Section 1245.220.)  Specifies the name of the  
            "governing body" with respect to taking of property by various  
            state departments and agencies.  (Code of Civil Procedure  
            Section 1245.210.)

          5)Provides that all land or other real property to be acquired  
            by or for any state agency shall be acquired by the State  
            Public Works Board, with certain exceptions for specified  
            state agencies.  (Government Code Section 15853.)

          6)Provides that the State Public Works Board is the only state  
            agency that may exercise the power of eminent domain to  
            acquire property needed by any state agency for an official  
            purpose, with certain exceptions for specified state agencies.  
             (Government Code Section 15855.)

          7)Provides that, upon an appropriation in the Budget Act for  
            such purpose, the Authority shall prepare a plan for the  
            construction and operation of a high-speed train network for  
            the state, and that the plan, upon completion, shall be  
            submitted to the Legislature and the Governor for approval by  
            enactment of a statute.  (Public Utilities Code Section  
            185032.)

          8)Permits the Authority, upon appropriate approval of a  
            financial plan by the Legislature or the voters, to enter into  
            contracts for the design, construction, and operation of  
            high-speed trains and to set fares and schedules.  (Public  
            Utilities Code Section 185036.)

           COMMENTS  :  This bill, sponsored by the California High-Speed  
          Rail Authority (Authority), authorizes the Authority to employ  
          its own legal staff or to contract with other state agencies for  
          legal services, and makes various clarifying changes to  
          provisions regarding the powers and duties of the Authority,  
          including the power to exercise eminent domain. 

           In-House Legal Counsel  :  According to the sponsor, with approval  








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          of Proposition 1A in the November 2008 election, the Authority  
          will now begin transitioning into a more traditional state  
          agency.  The Authority anticipates a greater need for legal  
          counsel when, for example, it decides to exercise its eminent  
          domain power to acquire rights-of-way for train tracks,  
          maintenance facilities, storage yards, and related structures.   
          These ongoing activities will only grow in size and complexity,  
          thus necessitating the availability of legal services on a more  
          regular basis. 

          The Authority reports that it currently contracts with the  
          Attorney General's office for legal counsel, and shares the  
          services of a deputy Attorney General who also serves the  
          California Transportation Commission.  According to the sponsor,  
          the ability to employ dedicated, in-house legal staff would  
          benefit the Authority in several ways.  First, the Authority  
          would benefit by having legal counsel who would be immediately  
          available and could ensure continuity of representation in  
          litigation or other legal matters.  In addition, the Authority  
          would best be served by having in-house legal counsel who, over  
          time, would develop special knowledge and expertise of the areas  
          of law unique to the mission of the Authority and the high-speed  
          train project.  At the same time, the Authority wishes to retain  
          the ability to contract with other state agencies, such as the  
          Attorney General, for legal services when appropriate.

          The proposed legal counsel provisions of this bill mirror those  
          that grant such authority to the California Transportation  
          Commission (CTC).  According to the sponsor, the CTC is an  
          appropriate model in this case because, like the High-Speed Rail  
          Authority, the CTC is a regulatory policy body that oversees  
          transportation projects and programs, and makes decisions on  
          project funding allocations, scheduling, and similar matters.   
          The sponsor also notes that the Department of Transportation has  
          its own in-house counsel due to the volume and substance of its  
          transportation-related legal activities.

           Eminent Domain  :  Although this bill proposes several changes to  
          current law regarding the exercise of eminent domain, the bill  
          does not expand the eminent domain power already held by the  
          High Speed Rail Authority, nor does it substantively change any  
          of the standard eminent domain requirements that the Authority  
          must follow under current law.  

          The power of eminent domain may be exercised to acquire property  








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          for a particular purpose only by a person authorized by statute  
          to do so.  (Code of Civil Procedure Section 1240.020.)  Current  
          law specifically grants the Authority the power to acquire  
          rights-of-way through purchase or eminent domain.  (Public  
          Utilities Code Section 185036.)  There are a number of other  
          state departments and agencies that also possess this  
          independent power of eminent domain, including the Department of  
          Transportation, Department of Water Resources, and the Regents  
          of the University of California.  Although current law provides  
          that the State Public Works Board is the only state agency that  
          may exercise the power of eminent domain to acquire property  
          needed by any state agency for any state purpose of function,  
          the law also exempts from this requirement those specified state  
          departments and agencies having eminent domain power (Government  
          Code Section 15855(b).)  By extending this exemption to the High  
          Speed Rail Authority, this bill would clarify that the Authority  
          may independently exercise its power of eminent domain to  
          acquire property for its official purpose, rather than having to  
          rely on the Public Works Board to do so.

          Extensive procedural and legal requirements govern the actual  
          exercise of the eminent domain power by an authorized state  
          agency.  (Title 7 of Part 3 of the Code of Civil Procedure.)   
          This bill does not change or otherwise affect the application of  
          these requirements to the California High-Speed Rail Authority.

           Prior Legislation  :  Several provisions of this bill first  
          appeared in version 98 of AB 981 (Ma) of 2007-2008, including  
          authorization of the California High-Speed Rail Authority to  
          employ its own legal staff.  However, the provisions relating to  
          the Authority's exercise of eminent domain and its authority to  
          enter into contracts for the financing and maintenance of  
          high-speed trains did not appear in last year's bill.  Although  
          version 98 of AB 981 passed off the Assembly Floor, the author  
          later amended the bill in Senate committee to reflect a  
          different subject matter.
           
          Pending Related Legislation:   AB 733 (Galgiani) would allow the  
          High-Speed Rail Authority to consider, to the extent permitted  
          by federal and state law, the creation of jobs in California  
          when awarding major contracts or purchasing high-speed trains  
          and related equipment and supplies.  The statutory authority  
          sought under AB 733 does not conflict with the additional  
          authorizations sought under this bill.
           








                                                                 AB 153
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           AB 1375 (Galgiani) proposes to repeal and reenact the California  
          High-Speed Train Act (Division 19.5 of the Public Utilities  
          Code), the enabling legislation for the High-Speed Rail  
          Authority.  Under AB 1375, the Authority would continue to  
          exist, but would operate primarily as a policy-making body.  AB  
          1375 would instead create the Department of High-Speed Trains  
          and charge it with responsibility for implementing the policy  
          decisions of the Authority.  Under the structural reorganization  
          proposed by AB 1375, this bill would become unnecessary to the  
          extent that it seeks to grant the High-Speed Rail Authority with  
          powers needed for implementation of the high-speed rail system.
           
          REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California High-Speed Rail Authority (sponsor)
          American Federation of State, County and Municipal Employees  
          (AFSCME)
          State Building and Construction Trades Council of California

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Anthony Lew / JUD. / (916) 319-2334