BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1206
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 1206 (Galgiani) - As Amended:  March 30, 2011 

          Policy Committee:                              
          TransportationVote:12-1
                        Business and Professions                7-2

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill requires the High-Speed Rail Authority (HSRA) to adopt 
          a small business enterprise program for construction contracts. 
          Specifically, this bill: 

          1)Requires the HSRA to adopt a program to include contractor 
            compliance monitoring and enforcement efforts, tracking and 
            reporting mechanism, and prompt payment, reporting, and 
            project closeout provisions.

          2)Stipulates that the program may include separate elements for 
            small business enterprises, microbusinesses, and disabled 
            veteran business enterprises (DVBEs).

           FISCAL EFFECT  

          The authority is already subject to Executive Order S-02-06, 
          which in part requires all agencies, departments, boards and 
          commissions to achieve a goal of 25% small business 
          participation in state procurements and contracts. To the extent 
          this bill presumes more intensive efforts to ensure attainment 
          of this goal, the authority could require additional staff 
          resources. If only two additional positions were required by the 
          time the high-speed rail program is at its peak, annual costs 
          would be about $180,000.

           COMMENTS  

           1)Purpose  . According to the author, "?California's dominance in 
            many economic areas is based, in part, on the significant role 








                                                                  AB 1206
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            small businesses play in the state's $1.8 trillion economy? 
            However, California's smaller businesses, which have been 
            known to bring real diversity to local economies and the 
            state, are concerned that they will not get their fair share 
            of these �high-speed rail] contracts."  

           2)Concern  . As discussed in the Assembly Transportation Committee 
            analysis of this bill, the authority is already subject to the 
            State Contract Act, including its various provisions regarding 
            contracting with small businesses and DVBEs. It is unclear, 
            therefore, why it would be necessary, or even desirable, to 
            establish a parallel statutory scheme specifically for the 
            HSRA.

           3)Related Legislation  . AB 365 (Galgiani), also on today's 
            committee agenda, enacts penalties and sanctions relative to 
            the certification by the High Speed Rail Authority (HSRA) of 
            any business as a small emerging business enterprise, 
            microbusiness, or DVBEs.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081