BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 16
Author: Perea (D)
Amended: As introduced
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 7-2, 6/28/11
AYES: DeSaulnier, Huff, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Harman
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 57-19, 6/2/11 - See last page for vote
SUBJECT : High-Speed Rail Authority
SOURCE : California Labor Federation
DIGEST : This bill encourages the California High-Speed
Rail Authority to acquire equipment manufactured in
California.
ANALYSIS : In November 2008, California voters approved
Proposition 1A, the Safe, Reliable High-Speed Passenger
Train Bond Act for the 21st Century of 2008 (Proposition
1A). The $9.95 billion bond measure provides $950 million
for improving conventional rail services connecting to the
high-speed rail line and $9 billion for high-speed rail
development. Of the remaining $9 billion, $900 million is
for the project's planning, environmental analysis, and
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preliminary engineering. Proposition 1A limits the
expenditure of the $8 billion available for construction to
not more than 50 percent of the cost of building the
systems. Proposition 1A identifies the Phase I corridor
for high-speed rail as an alignment from the San Francisco
Transbay Terminal to the Los Angeles Union State and
Anaheim via the San Joaquin Valley. The High-Speed Rail
Authority (Authority) estimates the total cost of Phase I
to be between $43 and $65 billion.
Proposition 1A defines the capital cost for which bond
revenues may be used to include acquisition of property,
acquisition and construction of tracks, structures, power
systems, and stations; acquisition of train equipment;
mitigation of direct and indirect environmental impacts;
relocation assistance; and other related capital
facilities, including financing and refinancing if
authorized by a subsequent statute. It also authorizes the
Authority to contract for services and equipment for
developing and operating the high-speed train service.
In January 2010, the Authority received an American
Recovery and Reinvestment Act (ARRA) grant of $2.25 billion
to aid in the development of the Phase I project. Of that
amount, $400 million is for constructing the basement of
the new Transbay Terminal in San Francisco to accommodate
high-speed trains. According to the Federal Railroad
Administration's (FRA) announcement of its ARRA award, the
remaining $1.85 billion is for purchasing right-of-way,
constructing track, signaling systems, and stations, and
completing environmental reviews and engineering documents
for the Los Angeles/Anaheim segment, the San Francisco/San
Jose segment, the Fresno/Bakersfield segment, and the
Merced/Fresno segment. In a second round of federal
funding the Authority received approximately $1.3 billion,
and in a third round of funding, the Authority received
$300 million from funds declined by Florida. The Authority
and FRA jointly selected a segment from near Fresno to near
Bakersfield as the first construction segment. Between
federal funds and state bond funds, the Authority has
committed about $5.7 billion for the Central Valley
project. As a condition of the ARRA grants, the Authority
must complete construction by September 30, 2017.
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ARRA prohibits the use of grant funds for a project
involving the construction, alteration, maintenance, or
repair of a public building or public facility, unless all
of the iron, steel, and manufactured goods used in the
project are produced in the United States. In addition, it
requires that this prohibition be applied in a manner
consistent with U.S. obligations under international
agreements pertaining to procurement. Lastly, Authority
establishes conditions for waivers of these requirements.
This bill authorizes the Authority to make "every effort"
to purchase high-speed rail equipment manufactured in
California, provided it is consistent with federal law.
Comments
Following the statewide voter approval of Proposition 1A
authorizing $9 billion for the development of a high-speed
rail system in California, the Authority is transitioning
from a small study and planning organization to a
multi-billion dollar engineering and construction entity.
The Authority may soon be tasked to approve major purchases
of train rolling stock and equipment. This bill imposes a
requirement upon the Authority to try to buy California
manufactured rolling stock and equipment.
California workers have reason to be concerned that
high-speed rail manufacturing may otherwise be outsourced.
Foreign firms are lobbying hard to secure work from the
Authority. Foreign firms are lobbying hard to secure work
from the Authority. China, for example, has announced
plans to build United States high-speed train lines and is
steeping up exports of its rail technology. French,
Spanish, and Japanese firms have also indicted their
interests in securing contracts with the Authority.
Prior/Related Legislation
AB 492 (Galgiani), authorizes the Authority to consider, to
the extent permitted by federal and state law, the creation
of jobs in California when awarding major contracts or
purchasing high-speed trains.
AB 1830 (Galgiani), of 2009-10 Session, was identical to
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this bill. It passed Legislature but was vetoed by
Governor Schwarzenegger who wrote: "While I support job
creation in the state, this bill could result in
unnecessary additional costs and delays in the construction
on high-speed rail in California and for this reason I am
unable to sign it."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/13/11)
California Labor Federation (source)
ARGUMENTS IN SUPPORT : The sponsor of this bill, the
California Labor Federation, asserts that, "As construction
progresses, California will need to contract with a company
to purchase a new high-speed trains. Currently all
high-speed rail manufacturers are located overseas. But
California has an opportunity to use public dollars to
attract new manufacturers to California to build high-speed
rail trains here creating new jobs and a new industry."
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon,
Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman,
Jeffries, Lara, Bonnie Lowenthal, Ma, Mendoza, Mitchell,
Monning, Nestande, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Skinner, Smyth, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. Pérez
NOES: Conway, Cook, Donnelly, Fletcher, Beth Gaines,
Garrick, Grove, Hagman, Harkey, Jones, Knight, Logue,
Mansoor, Morrell, Nielsen, Norby, Silva, Valadao, Wagner
NO VOTE RECORDED: Gorell, Halderman, Hall, Miller
JJA:do 7/13/11 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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