BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        SB 940|
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                                   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  








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            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  







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            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


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