BILL ANALYSIS                                                                                                                                                                                                    



                                                                           
           AB 1650
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 1650 (Feuer, Blumenfield and Huffman)
          As Amended  August 31, 2010
          Majority vote
           
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          |ASSEMBLY:  |74-0 |(June 1, 2010)  |SENATE: |29-3 |(August 31,    |
          |           |     |                |        |     |2010)          |
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           Original Committee Reference:    B. P. & C.P.  

           SUMMARY  :  Prohibits persons engaging in investment activities in  
          Iran's energy sector, as specified, from bidding or entering  
          into contracts with a public entity for goods or services.  

           The Senate amendments  : 

          1)Delete the requirement for individuals to certify that they  
            have not invested in Iran in the previous three years, and  
            instead require that a person who has engaged in business  
            outside the United States to certify that he or she does not  
            engage in investment activities in Iran's energy sector, when  
            bidding or entering into a contract. 
           
          2)Add a delayed implementation date of 90 days after this bill  
            becomes effective, for prohibiting a person that engages in  
            investment activities in Iran from bidding on, submitting a  
            proposal for, or entering into a contract with a public entity  
            for goods or services with the public entity; and,
             
          3)Require the Department of General Services (DGS), by June 1,  
            2011, to develop a list of persons investing in Iran, and: 

             a)   Prohibit persons identified on the list from biding on,  
               submitting a proposal for, or entering into a contract with  
               a public entity for goods or services of $1 million or  
               more, beginning June 1, 2011; 

             b)   Require individuals and financial institutions to  
               certify that they are not on the list, beginning June 1,  
               2011, unless otherwise specified; 

             c)   Require DGS to update the list every 180 days; 








                                                                           
           AB 1650
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             d)   Require DGS to provide 90 days' notice to persons prior  
               to putting their name on the list, and an opportunity to  
               subsequently appeal their inclusion on the list; and,

             e)   Allow DGS to charge a fee to those who use the list,  
               except to any public entity and the Legislature, to cover  
               administrative costs. 

          4)Prohibit a financial institution that extends $20 million or  
            more in credit, for 45 days or more, to a person who provides  
            goods or services to Iran's energy sector and is identified on  
            DGS' list as investing in Iran, from bidding on, submitting a  
            proposal for, or entering into a contract with a public entity  
            for goods or services of $1 million or more, beginning July 1,  
            2010.
           
          5)Allow a financial institution investing in Iran to bid on,  
            submit a proposal for, or enter into a contract for goods or  
            services of $1 million or more with a public entity if the  
            person using the credit to provide goods or services in Iran's  
            energy sector is allowed on a case-by-case basis.  

          6)Exempt California Public Employees' Retirement System or State  
            Teachers' Retirement System contracts from the provision of  
            this bill. 

          7)Limit the imposition of a civil penalty to one per public  
            entity and particular investment, and add a statute of  
            limitations to collect the penalties three years from the date  
            the false certification was made. 

          8)Prohibit an unsuccessful bidder, or any person other than the  
            awarding body, from protesting a contract award or renewal  
            based on a false certification.

          9)Authorize a pubic entity to permit, on a case-by-case basis,  
            individuals investing in Iran, to bid on, submit a proposal  
            for, or enter into a contract for goods or services of $1  
            million or more if either of the following are true:

             a)   The investments in Iran were made before July 1, 2010,  
               and have not been expanded or renewed, the awarding body  
               determines that it is in the state's best interests, and  








                                                                           
           AB 1650
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               the person has a formal plan to cease investments in Iran;  
               or, 

             b)   One of the following occurs: 

               i)     The local entity finds that it would be unable to  
                 otherwise obtain the goods or services for local  
                 contracts; 

               ii)    The Governor finds that a state agency would be  
                 unable to otherwise obtain the goods or services for  
                 state contracts; or, 

               iii)   A constitutional officer finds that a state  
                 constitutional office would be unable to otherwise obtain  
                 the goods or services for state contracts. 

          10)Recast the definition of a person as engaging in the  
            "investment activities in Iran" to include: 
          
             a)   The person provides goods or services of $20 million to  
               Iran's energy sector; and, 

             b)   The person is a financial institution that extends $20  
               million or more in credit to another person, for 45 days or  
               more, if that person provides goods or services to Iran's  
               energy sector and is identified on DGS' list as investing  
               in Iran. 

          11)Delete the contingency that this bill is operative upon the  
            enactment of federal legislation authorizing states to adopt  
            and enforce contracting prohibitions provided for in this  
            bill.

          12)Revise the term "Iran" to include the Government of Iran (in  
            addition to any agency of instrumentality of Iran).

          13)Define the term "awarding body" as the following: 

             a)   DGS, for state goods and service contracts of $1 million  
               or more; and, 

             b)   The representative of the local entity awarding the  
               contract, for local goods and service contracts of $1  








                                                                           
           AB 1650
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               million or more. 

          14)Delete and add findings and declaration relating to federal  
            legislation on divesting from Iran. 

          15)Make technical and clarifying amendments.

           AS PASSED BY THE ASSEMBLY  , this bill prohibited persons engaging  
          in investment activities in Iran's energy sector, as specified,  
          from bidding or entering into contracts with a public entity for  
          goods or services.  
          
           FISCAL EFFECT  :  According to Senate Appropriations Committee,  
          this bill authorizes DGS to assess a fee in order to pay the  
          costs of creating and maintaining the list.  Certification of  
          eligibility to submit a proposal for, or enter into or renew, a  
          contract in this manner is likely less costly to implement and  
          administer when compared to a by-department certification  
          process set for in the August 4 version of this bill.  The new  
          state contracting requirements and restrictions will in unknown  
          potential increased costs for state goods, services and  
          borrowing. 

           COMMENTS  :   This bill was amended in the Senate and is  
          consistent with Assembly actions.


           Analysis Prepared by  :    Joanna Gin / B., P. & C.P. / (916)  
          319-3301 


          FN: 0006901