BILL ANALYSIS
AB 733
Page 1
GOVERNOR'S VETO
AB 733 (Galgiani)
As Introduced February 26, 2009
2/3 vote
TRANSPORTATION 13-0 APPROPRIATIONS 16-0
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|Ayes:|Eng, Jeffries, |Ayes:|De Leon, Nielsen, |
| |Blumenfield, Hayashi, | |Ammiano, |
| |Conway, Furutani, | |Charles Calderon, |
| |Galgiani, Garrick, Bonnie | |Krekorian, Duvall, |
| |Lowenthal, Niello, | |Fuentes, Monning, Harkey, |
| |John A. Perez, Solorio | |Miller, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Audra Strickland, |
| | | |Torlakson |
|-----+--------------------------+-----+--------------------------|
| | | | |
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|ASSEMBLY: |73-0 |(May 14, 2009) |SENATE: |31-4 |(August 31, |
| | | | | |2009) |
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SUMMARY : Authorizes the California High-Speed Rail Authority
(Authority) to consider, to the extent permitted by federal law
and all other applicable provisions of state law, the creation
of jobs in California when awarding major contracts or
purchasing high-speed trains and related equipment and supplies.
EXISTING LAW :
1)Requires a "Buy California" provision in state contracts for
the purchase of supplies for state or local government use
that prefers supplies grown, manufactured, or produced in
California. Authorizes the use of the preference when
in-state products and supplies do not exceed more than 5% of
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the price of the lowest bid for goods and supplies
manufactured out-of-state.
2)Establishes procedures for competitive bidding of certain
contracts by public entities and requires them to give
California companies preference on construction contracts
against nonresident contractors. The preference is equal to
any preference that the nonresident contractor receives on
public works contracts in its state of residency.
3)Requires state and local governmental entities, for the
construction or repair of public works or for the purchasing
of materials and supplies for public use, to utilize, with
certain exceptions, materials produced in the United States.
4)Establishes the Authority and charges it with the planning,
designing, constructing, operating, and maintaining a
state-of-the-art high-speed train system for California.
5)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (High-Speed Rail Bond Act). The
High-Speed Rail Bond Act, approved as Proposition 1A in
November 2008, provides $9.95 billion in general obligation
bond authority to fund the planning and construction of a
high-speed passenger train system and complementary
improvements to other specified rail systems in the state.
6)Authorizes, through enactment of the American Recovery and
Reinvestment Act of 2009 (the recently enacted federal
economic stimulus package), $8 billion for high-speed rail
passenger services throughout the nation. Also, the federal
stimulus package provides additional intercity and commuter
rail passenger discretionary funding that potentially could
benefit the state.
7)Authorizes, through the passage of Proposition 1B in November,
2006, $100 million for high priority highway-railroad at-grade
separation projects to be selected by the California
Transportation Commission in consultation with the Authority.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, probably no direct fiscal effect, as the bill neither
requires nor allows the authority to award contracts to other
than the lowest bidder, or in the case of negotiated contracts,
to the most qualified firm.
COMMENTS : According to the author, this bill "Seeks to maximize
the number of California-based jobs that will be created by
contracts for the construction of the High-Speed Train (HST)
project and the purchase of materials related to it as a means
to improve and strengthen the California economy and job base.
AB 3034 (Galgiani), Chapter 267, Statutes of 2008 provides that
Proposition 1A (November 2008) bond funds are available to the
HST project subject to conditions and criteria established by
the Legislature, and establishes several such conditions. For
example, the High Speed Train Bond Act requires, among other
things, that no more than 50% of the construction cost in any
corridor or usable segment can come from bond funds; at least
90% of bond funds must be used for construction; and that
detailed financial plans be submitted for each segment, etc.
That legislation also requires the High-Speed Rail Authority
(Authority) to give priority to corridors or segments that
require the least percentage amount of bond funds and authorizes
the Authority to consider and use additional construction
segment criteria, including ridership and revenue projections,
the utility of proposed segments for passenger train services
other than high-speed train service, the extent that facilities
therein will enhance connectivity to the HST system or other
transit modes, and the need to test and certify trainsets at
speeds of 220 miles per hour. AB 733 simply authorizes the
Authority to consider the creation of California jobs as an
additional criterion or factor when awarding major construction,
equipment or supply contracts for the HST project. The
permission would extend only as far as other applicable
provisions of state or federal law permit."
Existing state laws, to some extent, currently authorize the use
of California preferences in the purchase of goods and supplies
as well as in the letting of certain construction contracts by
public entities. Although some could question the legality of
these state laws in terms of interstate commerce and
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competitiveness, these laws, for the most part, have not been
implemented and, therefore, were not consequently subjected to
legal challenge and therefore tested of their constitutional
validity. Furthermore, this bill does not require the Authority
to impose a California preference, it merely authorizes it to
consider, to the extent allowed by federal and state laws, the
creation of California jobs when it awards a contract for the
high-speed rail project. Lastly, this bill could have
unintended consequences resulting from other states' retaliatory
provisions calling for preferences for their in-state jobs as
well as increasing project or equipment costs if out-of-state
estimates are lower.
GOVERNOR'S VETO MESSAGE :
"While I recognize the merits of this measure, it could result
in unnecessary additional costs and delays and may jeopardize
the success of the project in securing the billions of dollars
that are needed to construct this project."
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093
FN: 0003246