28 June 2005

SB 4 amended - Big Changes

SB 4 was referred to the Senate's Appropriations Committee yesterday, but not before it was amended. There isn't much strikethrough or italics in the amended version, but what was changed was very important. The Appropriations Committee has four Bay Area members: Senators Johan Klehs (Pleasanton), Leland Yee (San Francisco), Mark Leno (San Francisco), and Joe Nation (Marin/Sonoma). All are Democrats.

A hearing has not yet been scheduled in the Appropriations Committee, but it should happen soon.

Major changes:

  • Eminent domain powers have been eliminated from the bill.
  • The Authority will only deal with another public agency to raise funds if a plan has been approved by the appropriate local powers such a City Council, County Board of Supervisors, City or County Planning Commissions, Redevelopment Agencies, etc.
  • The Senate President pro Tem (currently Don Perata, D-Oakland) no longer has the task of appointing two members. The task now falls to the Senate Rules Committee. The only Bay Area member of the Rules Committee is Joe Coto (D - San Jose).
  • The Authority will not have the power to issue bonds. It will have the power to enter agreements with the California Infrastructure and Economic Development Bank (I-Bank), which would then issue the bonds.
  • In keeping with the last change, only the I-Bank's Board of Directors will have the final approval to issue bonds. This means the I-Bank will also have final determination over the bond repayment plan's fiscal soundness.

These are all important changes that sap much of the power from the original Authority design. It shouldn't stop projects from moving forward as long as they are responsibly drawn up, but it will provide a built-in check-and-balance system for everything that goes through the Authority.

The removal of eminent domain, in light of the Supreme Court decision handed down last Thursday, is significant. It means that residents and business in potential project areas wouldn't have to worry as much about being evicted just for the development of a stadium project. Local powers would still have the ability to use eminent domain, but the Authority itself would have nothing to do with the eminent domain effort.

Lastly, taking Don Perata out of the equation has future ramifications. The Rules Committee is made up of mostly Southern and Central California Senators, The Assembly Speaker is from Los Angeles, and the Governor's real home is in Orange County. That makes the possibility of having a nine member Authority Board with a heavy SoCal bent quite high. Time, and the eventual makeup of the first Authority Board, will tell whether that translates into priority for SoCal projects.