BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 615 (Lowenthal)
          
          Hearing Date: 08/25/2011        Amended: 07/13/2011
          Consultant: Mark McKenzie       Policy Vote: T&H 6-2
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          ____
          BILL SUMMARY: AB 615 would provide the High-Speed Rail Authority 
          (HSRA) with independent authority over property acquisition and 
          management of lands for the high-speed rail project through 
          contracts with the Department of Transportation (Caltrans).  
          Specifically, this bill would:
           Exempt HSRA from various statutory provisions related to the 
            acquisition and disposal of property, rights-of-way, and 
            easements that otherwise require approval of the Department of 
            General Services, the State Public Works Board, or the 
            Department of Finance.  These provisions provide the HSRA with 
            similar statutory authority granted to Caltrans and several 
            other state agencies in property matters.
           Provide HSRA with authority over disposal, leasing, rental, 
            and management of property, and specify that any revenues 
            derived from these activities would be deposited with the HSRA 
            for use on the high-speed rail system.
           Require HSRA to contract with Caltrans for all of the 
            independent powers and duties provided in the bill.
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                            Fiscal Impact (in thousands)

          Major Provisions         2011-12      2012-13       2013-14     Fund
           HSRA independence      Potential cost savings as a result of 
          stream-                Bond*
                                 lined property-related administrative 
          procedures

          Caltrans contracts     Potential loss of 100s of millions in 
          federal                Federal
                                 and local funds to the extent that use of 

                                 resources on HSRA projects delays 
          Caltrans
                                 projects
          ____________                                                
          * High-Speed Passenger Train Bond Fund








          AB 615 (Lowenthal)
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          STAFF COMMENTS:  SUSPENSE FILE. 

          AB 615 would provide the HSRA with certain authority related to 
          the acquisition and disposal of property, rights-of way, and 
          easements.  Under current law, these activities generally 
          require the involvement and approval of the Department of 
          General Services (DGS), the State Public Works Board (SPWB), or 
          the Department of Finance (DOF) in order to take certain actions 
          regarding property or the contracting of professional and 
          construction services.  Caltrans, the University of California, 
          the Department of Water Resources and other large agencies that 
          manage their own larger scale construction projects are exempt 
          from this body of law and follow other procedures.  This bill 
          would essentially provide the HSRA with the same exemptions that 
          are provided to these other agencies, but would require HSRA's 
          independent activities to be conducted through a contract with 
          Caltrans.  

          Staff notes that HSRA would need to contract with Caltrans for 
          legal and right-of-way (ROW) staff for activities related to the 
          acquisition, management, and disposal of property rather than 
          conducting activities with oversight from DGS, SPWD, or DOF.  
          There would likely be corresponding savings, however, to the 
          extent that other state agencies would be relieved of oversight 
          and administrative responsibilities.  Staff estimates the 
          provisions related to property management may result in overall 
          project savings to the extent that procedures are more 
          streamlined than the current process that requires approvals 
          from DGS, SPWD, or DOF.

          The HSRA and the Federal Railroad Administration jointly 
          selected a segment from near Fresno to near Bakersfield as the 
          first construction segment of the high-speed rail system.  
          Between federal funds and state bond funds, the HSRA has 
          committed about $5.7 billion for this Central Valley project.  
          As a condition of the $1.85 billion in ARRA grants for the 
          project, the HSRA must complete construction by September 30, 
          2017.

          The HSRA has identified the need to acquire 1100 right of way 
          parcels in the Central Valley over the next two years.  This 








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          workload is equivalent to the average number of acquisitions 
          that Caltrans completes in a year for its projects.  Caltrans 
          does not have capacity in the right-of-way function to assist 
          the HSRA without severe impacts to project delivery commitments 
          for 2011-12.  Caltrans would be required to redirect existing 
          staff to meet the anticipated HSRA needs.  Since the right of 
          way function is currently understaffed and environmental 
          analysis, design, construction, and legal services have no 
          capacity to assist HSRA, the additional workload would result in 
          delays to highway projects.  This impact on delivery could 
          jeopardize the state's ability to use all available Federal 
          Highway Administration funding for transportation projects and 
          impact the use of local measure funding from local agency 
          partners.  Caltrans is unable to contract out right-of-way 
          activities so any movement of staff to HSRA projects could not 
          be replaced through the use of Caltrans consultant resources.  
          Caltrans indicates that this bill could result in the loss of 
          over a hundred million dollars in federal and local measure 
          funding for state highway projects, to the extent that 
          redirecting resources to HSRA projects significantly delays 
          highway projects.

          Staff notes that the bill currently specifies that funds derived 
          from leases and other payments related to access to high-speed 
          rail rights-of-way would be "deposited with the authority for 
          use in the development, improvement, and maintenance of the 
          high-speed rail system."  Staff recommends an amendment to 
          require that these funds be deposited into a new or existing 
          fund in the Treasury, and make use of those funds contingent 
          upon an appropriation by the Legislature to ensure proper 
          oversight.