BILL ANALYSIS Ó AB 2181 Page 1 ASSEMBLY THIRD READING AB 2181 (Galgiani) As Introduced February 23, 2012 Majority vote BUSINESS & PROFESSIONS 9-0 APPROPRIATIONS 12-4 ----------------------------------------------------------------- |Ayes:|Hayashi, Bill Berryhill, |Ayes:|Fuentes, Blumenfield, | | |Allen, Butler, | |Bradford, | | |Eng, Hagman, Hill, Ma, | |Charles Calderon, Campos, | | |Smyth | |Davis, | | | | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, | | | | |Solorio | | | | | | |-----+--------------------------+-----+--------------------------| | | |Nays:|Donnelly, Nielsen, Norby, | | | | |Wagner | ----------------------------------------------------------------- SUMMARY : Clarifies that the California High-Speed Rail Authority (Authority) must promptly pay certified small businesses engaged in the development, design, and construction of California's high-speed rail system or pay a late payment penalty under the California Prompt Payment Act (Act). EXISTING LAW : 1)Establishes the Act, which requires state agencies acquiring property or services pursuant to a business contract, including any change order or contract amendment, to pay the person or business on the date required by the contract, or be subject to a late payment penalty. 2)Defines "State" to mean the State and any office, officer, department, division, bureau, board, commission or agency of the State claims for money against which are paid by warrants drawn by the Controller. FISCAL EFFECT : According to the Assembly Appropriations Committee, As this language is simply clarifying, costs associated with this legislation should be minor and absorbable within existing resources. AB 2181 Page 2 COMMENTS : According to the author's office, "This bill seeks to clarify the prompt payment act to include small businesses contracting with the Authority. The current language for Government Code Section 927 states that the Act applies to all state agencies." The Act requires state agencies to submit payment for items or services contractually delivered by a person or business no later than the date required by contract between the agency and entity being contracted with. The author's office contends that language clarifies that state agencies would include the Authority. The Controller's office, which makes payments to vendors on behalf of state agencies, has already begun making payments on behalf of the Authority for design services and land parcels and has stated that the Act would extend to the Authority and that small businesses entering into a contract with the Authority would be paid late penalty fees, if applicable. Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916) 319-3301 FN: 0003393