BILL NUMBER: AB 619 AMENDED
AMENDED IN SENATE JUNE 17, 2010
INTRODUCED BY Assembly Member Blumenfield
FEBRUARY 25, 2009
An act to add Section 2303 to the Streets and Highways
Code, relating to highways. An act to add Article 14
(commencing with Section 10482) to Chapter 2 of Part 2 of Division 2
of the Public Contract Code, and to add Section 185034.5
to the Public Utilities Code, relating to transportation.
LEGISLATIVE COUNSEL'S DIGEST
AB 619, as amended, Blumenfield. Transportation projects:
federal funds: delays. high-speed rail.
Existing law, the California High-Speed Rail Act, creates the
High-Speed Rail Authority to develop and implement a high-speed train
system in the state, with specified powers and duties. Existing law
gives the authority the power to, among other things, enter into
contracts with private or public entities for the design,
construction, and operation of high-speed trains. Existing law, the
Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st
Century, approved by the voters as Proposition 1A at the November 4,
2008, general election, provides for the issuance of $9.95 billion in
general obligation bonds for high-speed rail and related purposes.
This bill would establish procedures to be followed by entities
that intend to bid or submit a proposal to contract with the
authority for goods or services related to the high-speed train
network, as specified. Among other provisions, the bill would require
any entity applying for a contract with the authority to
affirmatively certify whether it had any direct involvement in the
deportation of any individuals to extermination camps, work camps,
concentration camps, prisoner of war camps, or any similar camps
between specified dates during World War II. The bill would also
authorize the authority to disqualify an entity from bidding on a
contract based on its disclosures and would authorize civil penalties
to be imposed on an entity that submits a false certification under
those provisions, as provided.
Existing law provides that the Department of Transportation has
full possession and control of the state highway system. Existing law
provides for allocation of federal transportation funds made
available to the state.
This bill would require the department to notify the Legislature
within 30 days of making a determination that a project, including a
project designated in the National Corridor Infrastructure
Improvement Program, will be delayed beyond its scheduled completion
date due to state cashflow or other funding issues, if the delay
places at risk federal funds, including funds earmarked for the
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the
(a) In November 2008, California voters approved Proposition 1A,
the Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st
Century. Proposition 1A provided $9 billion for high-speed rail
development. In January 2010, California was awarded $2.25 billion by
the federal government to construct the statewide high-speed rail
(b) High-speed rail will reduce travel time between population
centers; remove millions of tons of carbon and other greenhouse
gasses from the atmosphere; provide jobs in engineering,
construction, operations, and maintenance; and allow California to
maintain its leadership as a national model for policy and social
(c) California's high-speed rail network will be funded with
public moneys provided by federal and state taxpayers, and with bond
sales, and private partnerships. Design, engineering, operation, and
maintenance of the rail lines will be provided by any number of
entities following competitive bidding processes.
(d) The citizens of California and the State of California as a
whole have a legitimate and substantial interest in assessing the
character of the entities to be entrusted with the implementation of
the state's high-speed rail network and further in ensuring that
public moneys allocated to entities for such projects be awarded in a
fashion that promotes corporate responsibility and governance.
(e) To that end, the California High-Speed Rail Authority and the
citizens of California should have the benefit of appropriate and
complete disclosure by all entities competing for high-speed rail
grants. Such disclosure and related due diligence is essential to
California's regulation and oversight of the contracting process and
expenditure of state funds.
(f) It has come to the Legislature's attention that certain
entities that have expressed interest in competing for high-speed
rail grants in California have engaged in conduct which the
Legislature believes requires public disclosures. For instance,
between 1942 and 1944, many thousands of persons, including current
residents of California, were deported to concentration camps on
trains operated for profit by certain companies. United States airmen
who were shot down over France, as well as other United States
citizens, were among the persons deported on these trains to those
concentration camps, including Auschwitz and Buchenwald, where they
were systematically murdered.
(g) Given this record, it is important, in connection with the
bidding and review process for California high-speed rail grants,
that adequate certification of a contractor's fitness be required, as
described in Section 10485 of the Public Contract Code, as added by
this act, as those findings are potentially relevant to the state's
legitimate concern with the present character of applicants, as well
as to the quality of their corporate governance, corporate
accountability, corporate responsibility, and trustworthiness.
(h) This bill is not intended to remedy historical wrongs. It is
intended to ensure that public moneys provided by the taxpayers and
bondholders of the State of California are used in a manner
consistent with our shared values of respect for human rights. The
certification and disclosure provisions of this bill are intended to
provide to the California High-Speed Rail Authority the
representations necessary to assess properly and fully the
qualifications of companies competing for high-speed rail grants.
(i) This bill is not intended to be limited to the conduct
described in subdivision (f). Accordingly, should the Legislature
become aware of any potential contractor competing for public funds
that has engaged in conduct of similarly problematic moral or ethical
character, and should there be a similar nexus between this conduct
and the present quality of the applicant's character, corporate
governance, responsibility, and accountability, full disclosure of
the conduct is essential to the contracting and bidding process and
it is the opinion of the Legislature that similar legislation should
be adopted in similar circumstances.
(j) This bill is intended solely to further these ends, and it is
not a punitive measure.
SEC. 2. Article 14 (commencing with Section 10482)
is added to Chapter 2 of Part 2 of Division 2 of the
Public Contract Code , to read:
Article 14. California High-Speed Rail Act Procedures
10482. This article establishes proper procedures for entities
that intend to bid or submit a proposal to contract with the
California High-Speed Rail Authority for goods or services related to
the high-speed train network, as contemplated by the California High
Speed Rail Act (Division 19.5 (commencing with Section 185000) of
the Public Utilities Code).
10483. (a) Notwithstanding any other law, any entity applying for
a contract with the authority related to the high-speed train
network, including, but not limited to, the engineering,
construction, manufacture, or operation of a high-speed rail network
or any components thereof, shall affirmatively certify in advance of
submitting a formal bid the following:
(1) Whether it had any direct involvement in the deportation of
any individuals to extermination camps, work camps, concentration
camps, prisoner of war camps, or any similar camps during the period
from January 1, 1942, through December 31, 1944.
(2) If an entity responds that it has had a direct involvement in
the deportation of any individuals, as described in paragraph (1),
the entity shall certify all of the following:
(A) Whether the entity has any records (whenever created) in its
possession, custody, or control related to those deportations.
(B) Whether the entity has taken any remedial action concerning
those deportations, and whether the entity has provided restitution
to all identifiable victims of those deportations.
(3) An entity that certifies to its direct involvement under this
subdivision may, at its own discretion, provide any mitigating
circumstances in narrative and documentary form. If, at its own
discretion, an entity, in order to better inform the authority's
decision concerning these mitigating circumstances, produces
documentary and narrative explanatory materials, those materials
provided to the authority shall include one or more of the following:
(A) All records in the possession, custody, or control of that
entity relating to deportations. This requirement includes, but is
not limited to, all records related to the origination and
destination of the deportation trains, the fees collected for the
deportations, and any internal or external discussions or
communications regarding those deportations.
(B) A narrative summary describing all of the records provided in
response to subparagraph (A). This summary shall include sufficient
detail to describe the content of each document or record.
(C) A detailed description of any remedial action taken or
restitution that an entity has provided to all identifiable victims
of the deportations.
(b) All disclosures made pursuant to this section shall be made to
the authority contemporaneously with, or in advance of, and in no
event subsequent to, the entity's application for the award of
high-speed rail grants. All disclosures are a matter of public
10484. (a) Notwithstanding Section 10180, the authority, upon
determination that an entity's disclosures under Section 10483 raise
significant concerns about that entity's corporate character and
responsibility, may disqualify the entity from bidding on a contract
related to the high-speed train network within the State of
California, including, but not limited to, the engineering,
construction, manufacture, or operation of a high-speed rail network
or any components thereof.
(b) In making its determination to disqualify an entity pursuant
to subdivision (a), the authority shall consider all disclosures,
including any mitigating information provided under Section 10483.
10485. (a) The second or third lowest bidder, and any person,
firm, association, trust, partnership, labor organization,
corporation, or other legal entity which has, prior to the letting of
the bids on the project in question, entered into a contract with
the second or third lowest bidder, may bring an action in superior
court if that entity suffers damages for any contract as a result of
the successful bidder's false certification pursuant to Section
(b) Nothing in this section shall affect the right of the Attorney
General to bring a civil action against an entity that has made a
(c) If it is determined that an entity has submitted a false
certification under Section 10483 an or all of the following may
(1) The court may impose a civil penalty upon the entity in an
amount that is equal to the greater of two hundred fifty thousand
dollars ($250,000) or twice the amount of the contract for which a
bid or proposal was submitted.
(2) The authority may terminate the contract with the entity.
(3) The entity shall be ineligible to, and shall not, bid on a
state contract for a period of not less than three years from the
date the authority determines that the entity submitted the false
(d) In an action brought pursuant to this section, the court may
award costs and reasonable attorney's fees, in an amount to be
determined in the court's discretion, to the prevailing party.
10486. For the purposes of this article, the following
(a) "Authority" means the California High-Speed Rail Authority.
(b) "Direct involvement" means ownership or operation of the
trains on which persons were deported to extermination camps, work
camps, concentration camps, prisoner of war camps, or any similar
camps during the period from January 1, 1942, through December 31,
(c) "Entity" means any corporation, affiliate, or other entity
that controls, is controlled by, or is under common control with, or
that is a member of a partnership or a consortium with, an entity
affected by this article. An entity shall be presumed to be in
control of another corporation or entity if it owns or directly or
indirectly controls more than 50 percent of the voting securities or
more than 50 percent of any other ownership interest of the other
corporation or entity. This definition of "entity" shall apply
irrespective of whether or not the equity interest in the entity was
owned by a foreign state.
(d) "Second lowest bidder" means the second lowest qualified
bidder deemed responsive by the authority, which includes any person,
firm, association, corporation, or legal entity.
(e) "Third lowest bidder" means the third lowest qualified bidder
deemed responsive by the authority, which includes any person, firm,
association, corporation, or legal entity.
10487. The provisions of this article are severable. If any
provision of this article or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
SEC. 3. Section 185034.5 is added to the
Public Utilities Code , to read:
185034.5. Any bids or proposals submitted to the authority for a
goods or services contract related to the high-speed train network
shall conform to the procedures set forth in Article 14 (commencing
with Section 10482) of Chapter 2 of Part 2 of Division 2 of the
Public Contracts Code.
SECTION 1. Section 2303 is added to the Streets
and Highways Code, to read:
2303. The department shall notify the Legislature within 30 days
of making a determination that a project, including a project
designated in the National Corridor Infrastructure Improvement
Program, as established in Section 1302 of the Safe, Accountable,
Flexible, Efficient Transportation Equity Act-A Legacy for Users
(SAFETEA-LU; Public Law 109-059), will be delayed beyond its
scheduled completion date due to state cashflow or other funding
issues, if the delay places at risk federal funds, including funds
earmarked for the project.