BILL ANALYSIS Ó AB 2181 Page 1 Date of Hearing: April 25, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2181 (Galgiani) - As Introduced: February 23, 2012 Policy Committee: Business and Professions Vote: 9 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill clarifies that the California High-Speed Rail Authority must comply with the California Prompt Payment Act, which requires that state agencies promptly pay small businesses conducting business with the state or pay a late payment penalty. FISCAL EFFECT As this language is simply clarifying, costs associated with this legislation should be minor and absorbable within existing resources. COMMENTS 1)Rationale . The Prompt Payment Act currently requires all state agencies to comply with the provisions of the act. The intent of this legislation is to clarify that the High-Speed Rail Authority falls under that requirement. 2)The Prompt Payment Act requires the state to pay amounts due on the date specified in a contract or within 45 days of a properly submitted, undisputed invoice, or pay a penalty of 0.25% per day if the contractor is a small business or nonprofit organization, or 1% above the Pooled Money Investment Account rate for all other businesses. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081 AB 2181 Page 2