BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 940| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 940 Author: Vidak (R) Amended: 4/12/16 Vote: 27 - Urgency SENATE TRANS. & HOUSING COMMITTEE: 10-0, 4/19/16 AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth NO VOTE RECORDED: Wieckowski SENATE JUDICIARY COMMITTEE: 6-0, 5/3/16 AYES: Jackson, Moorlach, Anderson, Leno, Monning, Wieckowski NO VOTE RECORDED: Hertzberg SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: High-Speed Rail Authority: eminent domain: right of first refusal SOURCE: Author DIGEST: This bill requires the High-Speed Rail Authority (HSRA), when real property is deemed unnecessary and is proposed to be sold or exchanged, to provide notification to the last known landowner, as specified. ANALYSIS: Existing law: 1)Creates the California HSRA to direct development and implementation of intercity high-speed rail service that is SB 940 Page 2 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 real property and rights-of-way for the purpose of constructing the rail system. 2)Allows HSRA to sell or exchange previously acquired real property at fair market value if it's determined that the property is no longer necessary for the completion of the project, as specified. This bill: 1)Requires HSRA to provide notification to the last known landowner of the real property purchased by HSRA that the property is deemed unnecessary and will be sold or exchanged at fair market value. 2)Prohibits HSRA from selling the property within 30 days of sending the notification. 3)Includes an urgency measure. Comments 1)Purpose. The author notes that "in 2013, the legislature passed and the Governor signed AB 481 (Lowenthal, Chapter 132, Statutes of 2013), which stated that the HSRA may dispose of properties that it deems no longer necessary." However, the author further notes, AB 481 did not direct the HSRA to subsequently notify the last known landowner that the property has been deemed unnecessary and will be sold or exchanged at fair market value. SB 940 will provide the last known landowner of the property with a notice that the property will be up for sale just in case they are interested in purchasing back the property. 2)Existing process. Like other governmental agencies, HSRA attempts to purchase any necessary property related to project construction by offering the appraised fair market value of that property to the owner. If the transaction is unable to proceed in this way, the State Public Works Board, on behalf SB 940 Page 3 of HSRA, 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. 3)Is notification necessary? Currently, no example exists of HSRA attempting to sell real property where the prior landowner was reportedly unaware or was denied the opportunity to repurchase the property at fair market value. However, this bill merely sets up a notification process that allows the last known landowner to receive notice that the property will be up for sale or exchanged at fair market value. Upon sending the notification, the HSRA will be able to move forward with the current selling/exchange process set forth in existing law 30 days after sending the notification. 4)Double-referral. This bill was heard in both the Senate Transportation and Housing and Judiciary Committees. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified 5/16/16) Citizens for California High Speed Rail Accountability Kings County Board of Supervisors Southwest California Legislative Council OPPOSITION: (Verified 5/16/16) None received Prepared by:Manny Leon / T. & H. / (916) 651-4121 5/18/16 16:27:49 **** END **** SB 940 Page 4