BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 892 (Carter)
Hearing Date: 08/15/2011 Amended: 07/13/2011
Consultant: Mark McKenzie Policy Vote: T&H 9-0; EQ 7-0
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BILL SUMMARY: AB 892 would extend a pilot program until January
1, 2017 that allows the Department of Transportation (Caltrans)
to assume the federal government's environmental review
responsibilities under the National Environmental Policy Act
(NEPA). A condition for participation in the program is the
continuation of a waiver of the state's 11th Amendment sovereign
immunity from NEPA lawsuits filed in federal courts. This bill
would also require Caltrans to report to the Legislature on the
pilot program, including its cost-effectiveness, by January 1,
2016.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
NEPA review staff costs$750 $1,500 $1,500 Special*
NEPA lawsuit liability $50 $100-$200 $100-$200 Special*
Project delivery savings unknown, potentially
significant savings Special*
resulting from avoided construction cost
escalation (see staff comments)
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*State Highway Account
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STAFF COMMENTS:
Under federal law, transportation projects in California that
use federal funds or require a federal permit are subject to
environmental review under NEPA. The Federal Highway
Administration (FHWA) has responsibility for reviewing and
approving NEPA documents prepared for federal-aid highway
projects proposed for construction in California. Some projects
also require coordination with other federal agencies under the
federal Endangered Species Act, the National Historic
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Preservation Act and the U.S. Department of Transportation
(U.S.DOT) Act. The U.S. DOT assumes liability for the project
in the event lawsuits are filed under NEPA.
The most recent federal transportation authorization act - the
Safe, Accountable, Flexible, Efficient Transportation Equity
Act: A Legacy for Users (SAFETEA-LU) - established the Surface
Transportation Project Delivery Pilot Program. This program
designates California as one of five states eligible to apply to
participate in a multi-year pilot program that delegates to the
state the responsibilities of U.S. DOT (via FHWA) under NEPA.
The responsibilities delegated to the state are subject to the
same procedural and substantive requirements as if they were
carried out by U.S. DOT. By accepting this authority, the state
accepts the financial costs associated with this authority, as
well as full liability for lawsuits filed under NEPA in federal
court.
AB 1039 (Nunez), Chapter 31 of 2006 authorized Caltrans to
participate in the pilot program until January 1, 2009. That
bill, which was contingent upon passage of a transportation bond
act (Proposition 1B), provided the waiver of sovereign immunity
for purposes of participation in the pilot program, and required
Caltrans to report the Legislature on the program. The
authority for Caltrans to participate in the pilot program, and
the corresponding waiver of sovereign immunity, was extended
until January 1, 2012 by AB 2650 (Carter), Chapter 248 of 2008.
Caltrans' most recent evaluation of the program includes the
following conclusion:
Time was saved during the environmental review and approval
process for Pilot Program projects by eliminating one layer
of government review, removing the exchange of documents
and comments between Caltrans and FHWA, allowing direct
consultations between Caltrans and federal regulatory
agencies, and consolidating all NEPA reviews at Caltrans.
Time was also saved in the overall project delivery
process. Overall project delivery time savings are likely
attributable to Caltrans' recent emphasis on rapid project
delivery, in addition to the environmental approval time
savings of the Pilot Program. It can be concluded that the
time savings achieved during the environmental review
process has had a beneficial effect on Caltrans' project
delivery timeframes.
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The report indicates that pilot program projects have achieved a
time savings averaging over 12 months during the environmental
review process due to NEPA delegation, but that it is impossible
to isolate the direct effect that the program has had on the
delivery of projects. In recent years overlapping the period of
the pilot program, Caltrans has taken steps to accelerate the
delivery of projects in all parts of the organization through a
number of mechanisms including tracking and reporting
commitments for completion of the project delivery process.
Caltrans notes that this renewed focus on efficient project
delivery and meeting project delivery commitments has likely
played a major role in the overall project delivery time saving
achieved under the pilot program.
Caltrans indicates annual administrative costs and staff PYs
dedicated to the pilot program have declined over the three-year
program from 13 PY and $1.9 million in costs in 2007-08 to 11.3
PY and $1.5 million in costs in 2009-10. Staff estimates that
the staffing levels and costs in 2009-10 will continue.
Caltrans initially estimated legal costs associated with the
assumption of liability would be approximately $500,000, but to
date, costs have been less than $100,000 annually for the three
cases in which lawsuits have been filed. One of those lawsuits
was dropped by the plaintiffs and the other two are still
pending. Staff estimates that legal costs could increase as
these cases progress.
Actual project cost savings related to NEPA delegation to
Caltrans would depend upon the reduction in overall project
costs related to the accelerated environmental process.
Caltrans estimates that continued participation in the pilot
program would result in cost savings of over $20 million
annually due to avoided construction cost escalation, based upon
an index that indicates highway construction costs escalate at
an average rate of 2.87 annually. Staff notes that if continued
participation in the program resulted in an average of one month
in overall project delivery time savings, the department's
administrative costs would be more than offset by project cost
savings (assuming a construction costs escalator of 2.87 percent
applies).
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