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
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