BILL ANALYSIS Ó
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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