BILL ANALYSIS �
SB 969
Page 1
SENATE THIRD READING
SB 969 (DeSaulnier)
As Amended June 11, 2014
Majority vote
SENATE VOTE :35-0
ADMINISTRATIVE REVIEW 11-1
APPROPRIATIONS 17-0
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|Ayes:|Frazier, Achadjian, |Ayes:|Gatto, Bigelow, |
| |Buchanan, | |Bocanegra, Bradford, Ian |
| |Ian Calderon, Cooley, | |Calderon, Campos, |
| |Gorell, Hagman, | |Donnelly, Eggman, Gomez, |
| |Lowenthal, Medina, Olsen, | |Holden, Jones, Linder, |
| |Salas | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
|Nays:|Quirk-Silva | | |
| | | | |
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SUMMARY : Requires an agency administering a transportation
megaproject, as defined, to develop a comprehensive risk
management plan and establish a peer review group to review the
project's plans and finances. Specifically, this bill :
1)Defines a transportation megaproject to mean a project with
total estimated development and construction costs exceeding
$2.5 billion.
2)Requires an administering agency to establish a comprehensive
risk management plan and comply with various financial
requirements related to the megaproject.
3)Directs an administering agency to establish a peer review
group to review the megaproject's plans and finances and issue
an analysis to the agency's governing board or the
Legislature.
4)Requires an administering agency to post a list of all
engineers in charge of any work related to the megaproject,
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and their qualifications, on its Web site.
5)Exempts the California High Speed Rail Authority, which
already has a peer review group, from the requirements of this
bill.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Potential reimbursable General Fund costs exceeding $150,000
per megaproject for local transportation entities to establish
and administer peer review groups and risk management plans.
The California Department of Transportation (Caltrans)
indicates that there is about one new local megaproject each
year.
To the extent the peer review groups and risk management plans
lead to better project outcomes, agencies could realize
significant unknown cost savings. (Each one percent saved on
a $2.5 billion project would be $25 million.)
2)Any costs to Caltrans would be minor and absorbable. The
department, which rarely has jurisdiction over projects of
this magnitude, already applies the proscribed activities on
large projects.
COMMENTS : Current law permits local administering agencies to
establish a peer review group to provide expert advice on the
scientific and technical aspects of public works projects. If
an agency chooses to create a peer review group for this
purpose, it must develop a transparent process for selecting
members of the group, draft a charter, and post the charter on
its Web site.
This bill requires agencies that administer transportation
megaprojects to establish both a peer review group and a
comprehensive risk management plan. According to the author,
this bill is intended to improve the state's delivery of large
projects by applying best practice principles of oversight and
risk management to all future transportation megaprojects.
The Department of Finance opposes this bill because it may
create a state-reimbursable mandate on local agencies
administering megaprojects. The Orange County Transportation
Authority contends that this bill is unnecessary and duplicative
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of existing federal risk reporting requirements for projects
over $500 million that receive federal funding.
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600
FN: 0004784