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San Mateo County

Chamber of Commerce Alliance

New Issues:

1. AB 1065 (Lieber) Public Resources: Building Standards

2. AB 2046 (Jones) Water Supply Assessments: Groundwater

3. AB 2279 (Leno) Medical Marijuana: Qualified Patients and Caregivers

4. AB 2359 (Jones) Loans

5. AB 2473 (Niello) Accountancy: Licensure

6. SB 691 (Calderon) Junk Dealers and Recyclers: Nonferrous Material

7. June 3, 2008 Election Update

Updated Issues:

8. Legislative Bill Updates

9. High-Speed Passenger Train Bond UPDATE

June 2008

Legislative Report #6

Prepared by:

Shaun Lumachi

shaun@chamberadvocacy.biz

562.843.0947

1. AB 1065 (Lieber) Public Resources: Building Standards

Summary

1. AB 1065 requires the California Energy Commission (CEC) to revise its building energy efficiency standards to decrease energy usage from offsite sources by 80% by 2030.

2. Substantially increases the cost of housing and development in California by implementing significant energy efficiency measures for all new residential and commercial buildings without regard for the additional costs that will be passed on to consumers.

Background

3. Existing law requires the State Energy Resources Conservation and Development Commission to prescribe, by regulation, various building design and construction standards and energy conservation standards for new residential and nonresidential buildings to reduce wasteful, uneconomic, inefficient, or unnecessary consumption of energy.

4. The standards adopted must be cost effective, when taken in their entirety, and when amortized over the economic life of the structure when compared with historic practice.

5. The commission may periodically update and revise the standards. The commission is required to adopt a public domain computer program that will enable various specified entities to estimate the energy consumption by residential and nonresidential buildings.

6. This bill would require the commission to adopt standards that would reduce the energy consumption per gross square foot of floor space of a new residential and new nonresidential buildings, from offsite sources, on a specified schedule using the standards adopted in 2003 as the baseline for comparison purposes.

7. When compared to the standards adopted on November 5, 2003, the regulations adopted by the commission shall decrease the energy consumption of new residential and new nonresidential buildings, from offsite sources, on a per gross square foot of floor space basis, by the following schedule:

(A) Not less than 20 percent no later than 2015.

(B) Not less than 50 percent no later than 2020.

8. The commission would be required to review and or approve one or more computer programs for use in demonstrating compliance with the commission prescribed energy standards.

9. The commission would also be required to prescribe other specified requirements for compliance software and to review and approve software for use in demonstrating compliance with the adopted building design and construction standards.

10. This bill would also delete an obsolete provision and would make other technical, non-substantive changes.

Arguments in Support

11. Buildings account for more than one-third of U.S. energy use, which accounts for approximately 700 million metric tons of greenhouse gas emissions each year. Current forecasts indicate that energy usage in residential and commercial buildings will increase nearly 20% by 2010.

12. Although the state has achieved nationally-recognized strides in energy conservation, it is believed that "in order to meet greenhouse gas reduction targets, slow our growing energy needs, and realize the full energy efficiency potential that exists in California we must continue to make progress on energy efficiency."

Arguments in Opposition

13. It is believed that this bill is effectively a mandate to install expensive photovoltaic (PV) solar energy systems on all new structures.

14. The cost of PV systems is currently more than a consumer saves in reduced energy expenditures over the lifetime of the system (i.e., non-cost-effective), and the price of PV systems, rather than falling as predicted, has risen 25% since 2005 due to a worldwide shortage of processed silica.

15. It is believed, that these mandates will increase demand significantly, likely leading to further price increases.

4. AB 2359 (Jones) Loans

Summary

1. Provides that an originator, beneficiary, trustee or assignee shall not require as a condition of an agreement regarding a covered loan, subprime loan, or non-traditional loan that the applicant waive any duties, remedies, or forums of California law with respect to a residential mortgage or mortgage foreclosure.

Background

2. Specifically, this bill:

3. Makes various legislative findings and declarations relative to the rights of homeowners and mortgage loans.

4. Requires that any waiver of rights must be knowing and voluntary.

5. Provides that the originator, beneficiary, trustee or assignee shall have the burden of proof in proving that an agreement to arbitrate a dispute is voluntary.

6. Provides the originator of a mortgage loan or a trustee, beneficiary, or assignee shall not refuse to enter into an agreement with a borrower solely because the borrower refuses to waive their rights, remedies, or access to legal forums.

7. Defines "points and fees" as:

a. All items required to be disclosed as finance charges under Sections 226.4(a) and 226.4(b) of Title 12 of the Code of Federal Regulations (CFR), including the Official Staff Commentary, as amended from time to time, except interest;

b. All compensation paid directly or indirectly to a mortgage broker from any source, including, but not limited to, any payment of a yield spread premium, and including a payment to a mortgage broker that originates a loan in its own name in a table-funded transaction;

c. All items listed in Section 226.4(c)(7) of Title 12 of CFR, only if the person originating the covered loan receives direct compensation in connection with the charge; and,

d. The maximum prepayment penalties and fees that may be charged.

8. Provides that "points and fees" shall not include any of the following:

a. Taxes, filing fees, recording fees, and other charges and fees paid, or to be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest; or,

b. Bona fide and reasonable fees paid to a person other than the creditor or an affiliate of the creditor for fees for tax payment services, flood certification, or pest infestation and flood determination, appraisal fees, fees for inspections performed prior to closing, credit report fees, survey fees, attorneys' fees if the borrower has the right to select the attorney from an approved list or otherwise, notary fees, escrow charges, title insurance premiums, and fire and hazard insurance and flood insurance premiums.

9. Defines "subprime loan" as a consumer loan in which:

a. If the loan is a closed-end loan, the difference between the APR for the loan and the yield on Treasury securities having comparable periods of maturity is either equal to or greater than 3 percentage points if the loan is secured by a first lien mortgage or deed of trust; or,

b. Five percentage points if the loan is secured by a subordinate lien mortgage or deed of trust.

c. The difference between the annual percentage rate for the loan and the annual yield on conventional mortgages published by the Board of Governors of the Federal Reserve System, as published in statistical release H.15 or any publication that may supersede it, is either equal to or greater than: i) 1.75 percentage points, if the loan is secured by a first lien mortgage or deed of trust; or, ii) 3.75 percentage points, if the loan is secured by a subordinate lien mortgage or deed of trust.

10. Defines "nontraditional loan" as a consumer loan that allows borrowers to defer payment of principal and, sometimes, interest, as set forth in the "Interagency Guidance on Nontraditional Mortgage Products Risk" (Guidance).

Arguments in Support

11. This bill prohibits a lender from forcing a consumer to involuntary waive their legal rights and remedies.

12. It is argued that homeowners may voluntarily agree to waive their rights, if such waiver should be knowing and voluntary, and not be made a condition of the agreement.

13. AB 2359 prevents lenders from forcing homeowners to accept involuntary contractual waivers of their legal rights, remedies or access to legal forums as part of the terms of the loan.

Arguments in Opposition

14. By imposing liability on assignees, AB 2359 carries dire consequences for the lending industry and capital makers that support it.

15. Mortgage investors will likely turn their back on the California market if they are forced to pay for flaws in loans written by other lenders and brokers.

16. This measure may worsen our liquidity crisis thereby reducing finance options for borrower and/or increasing the cost of loans to borrowers.

5. AB 2473 (Niello) Accountancy: Licensure

Summary

1. AB 2473 makes several changes to how certified public accountants are regulated by the Department of Consumer Affairs.

2. Eliminates the experience-based pathway for qualification to take the certified public accountant examination (CPA), and the requirement that out-of-state and foreign CPAs hold a practice privilege from the California Board of Accountancy (CBA) prior to practicing public accountancy in California.

Background

3. This bill is a continuation of a decade long effort by the accounting profession and the CBA to bring about uniformity in state licensing requirements in order to facilitate "cross-border practice."

4. This conformity, or "substantial equivalency," is a reference to uniformity with the Uniform Accountancy Act (UAA), as developed by the American Society of Certified Public Accountants (AICPA), an organization that serves as a federation for state CPA societies.

5. This bill can be divided in to two parts:

a. Eliminating the experience-based pathway for qualification to take the CPA examination that allows individuals to substitute 2 years of accounting or financial work experience instead of the UAA-preferred pathway of 1 year of additional college level courses in any subject and 1 year of accounting-related coursework; and

b. Eliminating the limitations on out-of-state CPAs practicing in California either through the "temporary and incidental" exemption or the requirement that they hold a practice privilege from the CBA.

Arguments in Support

6. The CBA, as sponsor of this bill, writes: "Unlike other professions, the accounting profession is near achieving national uniformity in the licensure requirements for Certified Public Accountants (CPA) in order to enhance practice mobility between jurisdictions.

7. Currently, to become a CPA in any jurisdiction requires the passage of a uniform national examination. Prior to sitting for the national examination the candidate must have at least a baccalaureate degree and completion of 120-semester unit and, for licensure, 48 jurisdictions require completion of 150-semester units. Additionally, professional standards and rules that CPAs must follow are uniform across the country.

8. The CBA believes strongly that AB 2473 will provide increased mobility to out-of-state CPAs by eliminating notification barriers created two years ago with the implementation of SB 1543 and allow out-of-state CPAs to continue to pursue a livelihood in their chosen profession in California.

9. AB 2473 will additionally preserve the ability of the board to provide consumer protection by providing enforcement procedures that CPAs automatically subject to the jurisdictions and discipline of the CBA and provide the authority to directly discipline any CPA or public accountancy firm that provides services in this state.

10. Finally, this legislation brings the CBA's educational requirements into parity with other state boards of accountancy, thereby promoting mobility opportunities for California licensees."

11. The California Society of Certified Public Accountants writes: "The changes brought about by this bill are necessary for consumers, businesses and CPAs in the United States-and especially California-to remain competitive in the global marketplace.

12. In today's economy, it is imperative that consumers and businesses be able to adjust strategies quickly by relying on CPAs to provide expert advice regarding tax laws and accounting issues around the world.

Arguments in Opposition

13. The Center for Public Interest Law writes: "Enron, Tyco, WorldCom, and the many other accounting fraud scandals were all at bottom failures of the accounting profession to abide by its essential role as independent auditors of the financial statements of publicly-traded companies.

14. Having devastated the pensions of millions of working families, it now appears that the accounting profession has played a significant role in ruining the equity in their homes as well while pushing the nation into a credit-crunch driven recession.

15. Against this tragic legacy of persistent, widespread and illegal conduct by the most prestigious accounting firms, there are three reasons why AB 2473 is poor public policy:

a. "It revives a proposal that disproportionately hurts people of color while erecting a barrier to entry into the profession that studies have found to be without merit. The Legislature in 2001 requested that the Board not bring this proposal back to the Legislature without first studying its impact. The study has never been done. The Board is pursuing legislation nevertheless.

b. "The proposals in AB 2473, in the words of the California Board of Accountancy's own staff, "would permit unrestricted practice [in California] by practitioners who have been convicted of a crime until the state of principal place of business takes appropriate discipline."

c. "And, while the proposal seeks to rely on the disclosure, enforcement policies, and enforcement vigor of the other 49 states in determining the fitness of out-of-state CPAs to practice here before they potentially harm Californians, the Board has not actually looked at the disclosure policies or enforcement record of even a single state, let alone 49. Not a single one.

16. Under current law, if a CPA from another state, wants to practice here, he or she can fill out a four-page form (mostly consisting of check boxes), pay at most $100, and they are allowed to practice here without limitation for a full year.

17. California law already provides many flexible options for out-of-state CPAs to practice here even assuming:

1) An out-of-state firm has one of its employees file the four page form, the entire firm can practice in California through that one employee.

2) If an out-of-state CPA needs to be here temporarily incident to a service provided in their home state, nothing at all is required.

3) No notice is required if the out-of-state CPA is preparing tax returns for individuals and does not solicit business here.

18. Under AB 2473, in contrast, California consumers will not be able to consult their own state regulator to distinguish between those who are here legally and those who are not because everyone will appear to be here legally.

19. Felons, fakes, those with revoked licenses, and those with disciplinary proceedings pending will be invisible to the Board and hence the consumers the Board is supposed to protect.

6. SB 691 (Calderon) Junk Dealers and Recyclers: Nonferrous Material

Summary

1. SB 691 would require a junk dealer or recycler to report the information included in those written records to the chief of police or sheriff, as specified, upon request and on a monthly basis.

2. SB 691 would authorize the chief of police or sheriff to request weekly reports for no more than a 2-month period, except as specified, if there is an ongoing investigation of the junk dealer or recycler concerning possible criminal activity.

3. Upon each transaction the following would be required:

a. Thumbprints would be required.

b. Cash payments are restricted only to the most frequent sellers (after first three consecutive months of five transactions each month).

c. Payment to be made by check three days after the transaction

d. Valid ID to be recorded and photo or video for every transaction

e. Monthly and weekly reporting to local law enforcement

f. Extra fines for those who violate law

g. Third offense by a scrap metal or junk dealer loses license for a year

Background

4. Existing law requires junk dealers and recyclers, as defined, to keep written records of all sales and purchases made in the course of their business.

5. Existing law requires these records to include, among other things, the place and date of each sale or purchase of junk, a description of the item of junk, and the personal and vehicle information of the person purchasing or transporting the junk.

6. Existing law exempts certain purchases of scrap metals by a junk dealer or recycler from these provisions. A violation of the provisions regulating junk dealers and recyclers is a crime.

7. Every junk dealer or recycler shall, during normal business hours, allow periodic inspection of any premises maintained and any junk thereon for the purpose of determining compliance with the recordkeeping requirements of this article, and shall during those hours produce his or her records of sales and purchases and all property purchased incident to those transactions which is in the possession of the junk dealer or recycler for inspection by any of the following persons:

a. An officer holding a warrant authorizing him or her to search for personal property.

b. A person appointed by the sheriff of a county or appointed by the head of the police department of any city.
An officer holding a court order directing him or her to examine the records or property.

Arguments in Support

8. SB 691 addresses the current problem related to the theft of certain metals, such as copper and aluminum that are occurring throughout the state.

9. The sponsors assert that it will strengthen current law by preventing cash transactions, but is drafted in a manner that will not hinder transactions between sellers and buyers who have an ongoing and well documented business relationship that can be used by law enforcement agencies to trace stolen materials.

Arguments in Opposition

10. SB 691 may lead to a more stringent process of selling items of value by individuals who have no malicious intent or are conducting business honestly.

Supporting

California Business Properties Association

Atlas Iron & metal Company

Sun-Lite Metals

Institute of Scrap Recycling Industries

Opposing

None at this time

7. June 3, 2008 Election Update

State Ballot Measures

1. Proposition 98: Government Acquisition, Regulation of Private Property – FAILED

YES 39.1%

NO 60.9%

With the failure of Proposition 98, voters rejected the phasing out of rent control and barring government agencies from taking homes, businesses and farms for private development.

It is widely believed that the failure of Proposition 98 was due to deception – selling the Proposition 98 as eminent domain reform when, as it could be argued, the real purpose was to eliminate rent control.

Proposition 98, which was backed and supported mostly by landlord groups, would have changed the state Constitution to phase out rent control in addition to barring public agencies from forcing property owners to sell their property for use by private developers.

The Proposition would have allowed the use of eminent domain to take property for public uses, such as schools and roads.

2. Proposition 99: Eminent Domain. Acquisition of Owner-Occupied Residence – PASSED

YES 62.4%

NO 37.6%

Proposition 99 was placed on the ballot as a competing measure by associations representing cities, counties and renters.

Proposition 99 eminent domain provisions are very similar, but are more narrowly focused than Proposition 98. Proposition 99 forbids the use of eminent domain to force the sale of owner-occupied residences for private projects. An exemption on public works projects is also written into the Proposition.

Proposition 99 will make no changes to rent control.

If Proposition 98 had passed, along with Proposition 99 passing, a clause was written into Proposition 99 superseding Proposition 98, rendering it null and void.

Candidate Results

State Senate seats

District 8 (San Mateo, Burlingame, Milbrea, San Bruno, Half Moon Bay, Pacifica)

No election held. Only odd-numbered Senate districts held election in 2008.

Assembly seats

District 19 (San Mateo, Burlingame, Milbrea, San Bruno, Half Moon Bay, Pacifica)

Democratic Candidates: Total Votes % of the Vote

Gerald A. Hill 11,630 36.9 %

Richard Holober 8,625 27.3 %

Gina Papan 11,333 35.8 %

Republican Candidate:

Catherine Brinkman 7,553 78.2 %

Elsie Gufler 2,111 21.8 %

Gerald A. Hill and Catherine Brinkman will challenge each other for the District 19 Assembly seat on the November ballot.

District 21 (Redwood City, Palo Alto, Menlo Park, parts of San Carlos, parts of Foster City)

Democratic Candidate:

Ira Ruskin 27,281 total votes 100.0 % of the vote

Republican Candidate:

Annalisa Yenne 12,250 total votes 100.0% of the vote

Both of these candidates did not have challengers in their respective parties and will challenge each other for the District 21 Assembly seat on the November ballot.

U.S. Congressional seats

Congressional District 12

Democratic Candidates: Total Votes % of the Vote

Robert M. Barrows 1,277 2.4 %

Michelle Taylor McMurry 3,068 5.9 %

Jackie Speier 46,450 89.1 %

Frank Henry Wade 1,346 2.6 %

Republican Candidates:

Phillip G Conlon 9,195 64.1 %

Michael J Moloney 5,170 35.9 %

Jackie Speier and Phillip G Conlon will challenge each other, amongst other third party candidates, for the Congrssional District 12 seat on the November ballot.

Congressional District 14

Democratic Candidate:

Anna G. Eshoo 43,682 100.0%

Republican Candidate:

Ronny Santana 17,055 100.0%

Both of these candidates did not have challengers in their respective parties and will challenge each other , amongst other third party candidates for the Congressional District 14 seat on the November ballot.

8. Legislative Bill Updates

AB 1370 (Lieber) Income and Corporation Taxes: Net Operating Losses

Status:

Summary

Amends Personal Income Tax Law and Corporation Tax Law provisions that allow 100% of net operating losses in the case of a taxpayer who operates a new business with respect to losses incurred during the first 3 taxable years of operating the new business, and that define new business as any taxpayer that is engaged in biopharmaceutical and other biotechnology activities. Allows those losses to be carried forward for the 20-year period following the year in which the net operating loss was deducted.

AB 1840 Calderon Sales and Use Taxes: Retailers

Status:

Summary

Amends the Sales and Use Tax Law. Revises those provisions relating to the definition of a "retailer engaged in business in this state" clarify existing law by providing that a retailer is deemed to be engaged in business in this state if a retailer has substantial nexus with this state, as provided by applicable federal and state law.

AB 1956 Calderon Tangible Personal Property: Digital Property Report

Status:

Summary

Requires the State Board of Equalization to submit a report to the Legislature on transactions involving digital property within this state, that includes, but is not limited to, a proposed regulation that would provide that sales of digital property are subject to tax, for purposes of the Sales and Use Tax Law and the revenue impact of that regulation. Makes findings and declarations regarding the taxation of electronic transmissions of information.

AB 1991 Mullin Subdivisions: Tentative Maps

Status:

Summary

Declares specified approved tentative maps in the City of Half Moon Bay to be in full force and effect as of a specified date. Provides the approved tentative maps confer a vest right to the owner and any successor owner of the property that is the subject of the maps to proceed with specified development of the property in compliance with the city's ordinances, policies and standards. Requires the city to take all reasonable steps to allow expeditious construction of specified development.

AB 2127 (Benoit) Employment: Alternative Workweek Schedules

Status:

Summary

Authorizes an employee employed by an employer with 25 or fewer employees to request a work schedule of up to 10 hours per day within a 40-hour workweek. Authorizes an employer to implement such schedule without any obligation to pay overtime compensation.

AB 2716 (Ma) Employment: Paid Sick Leave

Status:

Summary

Requires employers to provide paid sick time, upon request of employee, for diagnosis, care, or treatment of health conditions of the employee or an employees family member, or for leave related to domestic violence or sexual assault. Provides that an employer would be prohibited from discriminating or retaliating against an employee who requests paid sick time. Exempts construction employees covered by a collective bargaining agreement if the agreement expressly waives the requirements of these provisions.

AB 3025 (Lieber) Polystyrene Packaging

Status:

Summary

Prohibits a wholesale or manufacturer from selling or offering for sale, expanded polystyrene loose fill packaging in this state, unless it is comprised of a specified amount of recycled material as provided in a schedule that would increase the percentage until a specified date, when the amount would be required to be 100% recycled material.

SB 1057 (Migden) Mobile home Parks

Status: FAILED/ Now a gut and amend bill

Summary

Sets forth legislative findings and declarations regarding the establishment of local rent and price regulations on mobilehome parks relating to the rental of mobilehome park spaces.

SB 1165 (Kuehl) Environment: Environmental Impact Report

Status:

Summary

Authorizes a person to submit certain project information to the lead agency for preparation of an environmental

impact report (EIR) and for that agency to consider and retain such communications. Makes administrative drafts of the environmental impact report, negative declaration, or mitigated negative declarations available to the public; prohibits a lead agency from relying on certain older EIRs for projects that involve the issuance of a lease, permit, license, certificate, or other use entitlement.

SB 1240 (Kehoe) Air Pollution: Low-Carbon Fuel Standards

Status:

Summary

Requires the Air Resources Board to adopt, implement, and enforce a low-carbon fuel standard by regulation that achieves the maximum technologically feasible and cost-effective reductions in carbon intensity of transportation fuels, and at least a 10% reduction in the carbon intensity of transportation fuels by a specified date. Provides that fuel standard would apply to all refiners, blenders, producers and importers of transportation fuels. Provides that reporting requirements be imposed.

SB 1539 (Calderon) Meal Periods

Status: Gut and Amend bill

Summary

Declares the intent of the Legislature to enact legislation to address issues related to meal periods in employment.

SB 1608 (Corbett) Disabled Persons: Equal Access Rights: Civil Actions

Status:

Summary

Requires a licensed architect, as a condition of license renewal, to complete coursework regarding disability access requirements. Requires certain notice to a building owner or tenant with each demand for money or complaint for a construction-related accessibility violation. Enacts the Construction-Related Accessibility Standards Compliance Act. Relates to continuing education requirements for construction inspectors, plans examiners, and building officials. Relates to civil actions regarding equal access.

SB 1717 (Perata) Workers' Compensation: Permanent Partial Disability

Status:

Summary

Eliminates provisions in Workers' Compensation Law requiring an employer to pay an injured employee a decreased amount of permanent disability benefits if, within a specified time period of a disability becoming permanent and stationary, the employer offers the injured employee regular work, modified work or alternative work, within specified time periods in existing law, regardless of whether the injured employee accepts or rejects the offer. Revises the formula for permanent disability benefits.

9. High-Speed Passenger Train Bond UPDATE

Proposed L.A.-to-S.F. bullet train hits a snag

Union Pacific railroad is declining to share its right-of-way, saying it has safety and operational concerns about a bullet train running close to freight trains.

By Eric Bailey, Los Angeles Times Staff Writer
8:43 PM PDT, June 4, 2008

SACRAMENTO -- -- At a time of skyrocketing gas costs, soaring airline fares and global-warming fears, the timing would seem perfect for a statewide vote on a 200-mph bullet train.

But five months before voters decide whether to approve bonds for the high-speed rail line from Los Angeles to San Francisco, the $30-billion project has hit a new obstacle.

An old-guard railroad is declining to share its right-of-way.

Officials at Union Pacific railroad recently told the California High Speed Rail Authority that they have safety and operational concerns about running a bullet train close to lumbering freight trains.

"Just look at what happened in L.A. a few years ago," said Scott Moore, a Union Pacific vice president, citing the 2005 crash of a Metrolink passenger train that killed 11 and hampered rail operations.

"Those accidents happen."

High-speed rail promoters say the freight hauler's hard-line stand may simply be a bargaining ploy, and could be overcome in any case by buying adjacent land.

"Some are saying 'the sky is falling, the sky is falling,' but it is not," said Mehdi Morshed, executive director of the rail authority.

A prominent environmental group and several railroad advocacy organizations, however, contend that Union Pacific's refusal will prove a formidable challenge to the project at a key moment. California voters will be asked in November to approve nearly $10 billion in bonds to help finance construction.

Stuart Flashman, an attorney representing those groups, said a shift away from running the bullet train in Union Pacific's right of way would require a new environmental analysis for affected sections of the route -- a process that could add time and dollars.

"Just the fact there's a delay will shoot the prices up again," he said. "This makes infeasible major portions of the high-speed route."

The bullet train line is designed to run alongside Union Pacific tracks for many miles in Southern California, the Central Valley and the Bay Area. Flashman said the biggest problems could be on the leg from the Central Valley across the Pacheco Pass to San Jose, and on the route from Bakersfield through Palmdale into Los Angeles.

"It's hard to back up and simply say: 'You can't use that,' " said Flashman, who represents the Planning and Conservation League, the California Rail Foundation and the Transportation Legal Defense and Education Fund.

Flashman said the organizations he represents support the high-speed rail line but also want safety concerns more fully addressed. Freight-car derailments occur "fairly often," he said.

"You can imagine if you have a high-speed train zooming through there and it hits one of those freight cars. It's not a pretty picture."

Critics question why the California High Speed Rail Authority didn't negotiate a deal long ago with Union Pacific.

Until a meeting last month, high-speed rail officials had not held formal discussions with Union Pacific in "a couple of years," said Moore of Union Pacific. "There's been no circumstance where we've indicated we felt this might be workable."

Morshed of the high-speed rail authority, however, insisted the process of planning and constructing what would be among the biggest public works projects in California history -- and the first high-speed rail line in the U.S. -- could overcome the obstacles.

He said miles of the high-speed route in some urban areas have already been purchased by the state to accommodate existing commuter trains. Along swaths under Union Pacific control, adjacent land held by private property owners could be purchased for tracks, he said.

But it isn't so easy, said Dan McNamara of the California Rail Foundation. In some areas, scores of houses would have to be uprooted, and the train would zoom past existing neighborhoods, he said. "I think they're remiss to say this isn't a problem that needs to be addressed."

McNamara said he believes the bond vote, already canceled by the Legislature on two previous occasions, should be delayed once again, and the planning should be put under the aegis of the Department of Transportation, "where there's some checks and balances."

"This is not ready for prime time," he said. "It needs to be done right."

Morshed, however, said the project was ready to go. A bigger worry, he said, could be the rising cost of raw materials such as steel and concrete. Aside from miles of new steel rails, the project would feature 650 steel and concrete highway bridges, which account for up to 40% of the entire project cost, Morshed said.

If voters approve the November ballot measure, project backers hope to get another $10 billion in financing from the federal government and an equal amount from private investors. Construction then could start in two to three years, and the first high-speed trains might be rolling within a decade, Morshed said.

In areas where the bullet train would run near freight trains, a stout barrier would separate the two sets of tracks, he said, adding that during decades of high-speed rail operations in France and Japan there have been no fatalities.

"We don't want to sacrifice the safety of our passengers any more than the railroad wants to sacrifice its freight," Morshed said. "We have much more valuable cargo."