BILL ANALYSIS                                                                                                                                                                                                    

          SENATOR MARK DESAULNIER, CHAIRMAN              AUTHOR:  Lowenthal
                                                         VERSION: 4/1/13
          Analysis by:  Eric Thronson                    FISCAL:  yes
          Hearing date:  June 11, 2013


          High-speed rail rights-of-way management


          This bill grants the High-Speed Rail Authority similar property  
          management authority as that granted to the California  
          Department of Transportation.


          Existing law grants the California Department of General  
          Services (DGS) broad real estate acquisition and management  
          authority for state-owned property.  For example, the DGS  
          Director may acquire easements deemed necessary for the proper  
          utilization of state-owned real estate, as well as grant  
          easements across state-owned property.  Further, the DGS  
          Director can negotiate the lease of access to state-owned  
          property, for example, for telecommunication companies to run  
          buried cable.  DGS' property management authority does not  
          generally include highway rights-of-way, which are instead  
          managed by the California Department of Transportation  

          In managing state highway rights-of-way, existing law provides  
          Caltrans a number of options related to the use or disposal of  
          excess property.  For example, Caltrans can lease to public  
          agencies or private entities the airspace above or ground below  
          highway rights-of-way as long as the lease does not impact road  
          safety.  In addition, Caltrans can classify portions of highway  
          rights-of-way as non-operating and can lease those areas to  
          local governments for public purposes such as for parks or other  
          recreational facilities.  Finally, Caltrans can sell excess  
          rights-of-way through a competitive process, or without seeking  
          competitive bids under the following conditions:

                 To adjacent landowners if not doing so would deprive the  


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               landowner of an existing right of access, or if the parcel  
               is less valuable as a separate sale than it would be in  
               conjunction with the neighboring parcel;
                 To local governments at their request; or
                 To a former owner or long-time residential tenant who  
               continues to reside on the parcel.

          Caltrans deposits all revenues from managing the highway  
          rights-of-way in the state highway account.

          Existing law created the California High-Speed Rail Authority  
          (HSRA) in 1996 to direct development and implementation of  
          intercity high-speed rail service that is fully coordinated with  
          other public transportation services.  In 2008, voters approved  
          Proposition 1A (Prop 1A) authorizing $9.95 billion in general  
          obligation bonds for the high-speed rail project.  Prop 1A  
          authorizes HSRA to use bond funds for, among other things,  
          acquisition of interests in real property and rights-of-way.   
          Prop 1A also authorizes HSRA to either contract with Caltrans  
          for right-of-way activities or otherwise use DGS processes for  
          right-of-way acquisition pursuant to the state's public  
          acquisition law.

           This bill  grants HSRA similar property management authority as  
          that granted to Caltrans.  Specifically, this bill:

                 Excludes high-speed rail rights-of-way from DGS'  
               property management authority and instead provides for HSRA  
               to manage the property;
                 Enables the Executive Director of HSRA to lease to  
               public agencies or private entities the airspace above or  
               area below high-speed rail rights-of-way as long as these  
               leases do not impact safety;
                 Allows HSRA to sell excess high-speed rail rights-of-way  
               through a competitive process, or without seeking  
               competitive bids under the same conditions as Caltrans;
                 Requires HSRA to deposit revenues from the lease or sale  
               of high-speed rail rights-of-way into the High-Speed Rail  
               Property Fund; and 
                 Restricts the use of these revenues to the development,  
               improvement, and maintenance of the high-speed rail system,  
               upon appropriation by the Legislature.

           1.Purpose  .  According to the author, this bill allows HSRA to  


          AB 481 (LOWENTHAL)                                     Page 3


            address the high-speed rail project's short and long-term  
            needs by granting HSRA authority to manage property related to  
            the project.  This bill mirrors provisions of existing law,  
            regulation, and policy governing Caltrans' authority to manage  
            its properties and to sell its excess land.  The author  
            contends that this bill will enable HSRA to more effectively  
            manage property acquired for the high-speed rail project by  
            allowing it to negotiate with impacted landowners for  
            continued access, exchange property between adjoining  
            landowners to help mitigate impacts to existing uses, sell  
            excess property no longer required for the project, and lease  
            property to interested parties as a means of creating  
            additional revenue sources for the project.

           2.Why exempt HSRA rights-of-way from DGS management  ?  Generally,  
            it is more efficient to consolidate property management  
            responsibilities in one state department than to let every  
            department manage its own properties.  There are a couple of  
            good reasons, however, for why the Legislature exempted  
            Caltrans from DGS' property management authority and granted  
            Caltrans its own managing abilities.  DGS manages much of the  
            state's real estate, including mostly "vertical" properties  
            like office buildings and the surrounding grounds.  These  
            properties provide different challenges and opportunities than  
            the "horizontal" rights-of-way managed by Caltrans, and  
            presumably require different skillsets to manage.  For  
            example, purchasing or selling portions of numerous contiguous  
            parcels adjacent to miles of highway is a very different task  
            than negotiating the purchase or sale of one full parcel  
            occupied by an existing building or other structure.  In  
            addition, Caltrans has the ability to deal with disputed deals  
            in a public forum at regularly-scheduled meetings of the  
            California Transportation Commission and therefore does not  
            need to go through the typical state acquisition process  
            involving the California Public Works Board.

            HSRA will experience similar challenges and opportunities as  
            Caltrans with the high-speed rail rights-of-way.  Caltrans has  
            indicated that it does not have the capacity to manage HSRA's  
            properties, and, because DGS doesn't deal with many  
            rights-of-way, DGS is not well-suited for the management of  
            horizontal properties.  In addition, HSRA has the similar  
            ability as Caltrans to deal with land disputes in a public  
            forum at the HSRA board meetings.  Therefore, it seems  
            reasonable for HSRA to have the same property management  
            authority granted Caltrans.  Finally, given the need to be as  


          AB 481 (LOWENTHAL)                                     Page 4


            efficient as possible and to find additional funding for the  
            project, HSRA indicates that it intends to manage the project  
            rights-of-way to maximize revenues.  For example, HSRA could  
            pursue leasing rights-of-way easements to utilities and  
            telecommunications companies in order to generate revenues to  
            help fund the overall project.

           3.Technical amendments  .

                 On page 10, line 22, after "The" insert "Chief Executive  
               Officer of the"
                 On page 10, line 25, strike out "authority" and insert  
               "Chief Executive Officer of the High-Speed Rail Authority"
                 On page 10, line 27, strike out "authority" and insert  
               "Chief Executive Officer of the High-Speed Rail Authority"
          Assembly Votes:
               Floor:                            51-21
               Appr:     12-5
               A and AR:                           9-2
               Trans:                            11-5

          POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,                                             June 5,  

               SUPPORT:  None received.

               OPPOSED:  None received.