BILL ANALYSIS
AB 1830
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Date of Hearing: April 5, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 1830 (Galgiani) - As Amended: April 8, 2010
SUBJECT : High-Speed Rail Authority: California-made train and
equipment purchases
SUMMARY : Requires the High-speed Rail Authority (Authority) to
make every effort to purchase high-speed train rolling stock and
related equipment that are manufactured in California,
consistent with federal law and any other applicable provision
of state law.
EXISTING LAW :
1)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.
2)Enacts the Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (Bond Act). The 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.
3)Authorizes the Legislature to establish conditions and
criteria on funds appropriated for planning and capital costs;
requires the Authority, prior to expending bond funding for
the construction and acquisition of equipment and property, to
submit concurrently to Department of Finance and the Joint
Legislative Budget Committee a detailed funding plan for each
corridor or usable segment.
4)Requires contracts for the purchase of supplies for state or
local government use to include provisions granting
preferences for 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
the price of the lowest bid for goods and supplies
manufactured out-of-state.
AB 1830
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5)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.
6)Authorizes, through enactment of the federal American Recovery
and Reinvestment Act of 2009 (the recently enacted federal
economic stimulus package referred to as "ARRA"), $2.25
billion for high-speed rail passenger service development in
California.
7)Prohibits, pursuant to ARRA, the use of economic recovery
funds for a project for the construction, alteration,
maintenance, or repair of a public building or public work
unless all of the iron, steel, and manufactured goods used in
the project are produced in the United States. The federal
law requires that this prohibition be applied in a manner
consistent with U.S. obligations under international
agreements (e.g., the government procurement provisions of the
nation's trade agreements). The federal law also establishes
conditions for waivers of the rule.
FISCAL EFFECT : Unknown.
COMMENTS : Following the statewide voter approval of the Bond
Act authorizing $9 billion for the development of a high-speed
rail system in California, the Authority is transitioning from a
small study and planning organization to a multi-billion dollar
engineering and construction entity. With the passage of the
Bond Act and California's approval and pending receipt of $2.25
billion in federal ARRA high-speed rail funds, the Authority
will soon be tasked to approve major purchases of train rolling
stock and equipment. By requiring the Authority to make every
effort to purchase train equipment and rolling stock
manufactured in California, this bill is intended to spur
companies to relocate to this state.
According to the sponsor of this bill, the California Labor
Federation, AFL-CIO, "In 2008, a majority of California voters
approved Proposition 1A, authorizing $9 billion in bond funding
for the construction of a statewide high-speed rail system. The
construction of the system will create more than 600,000 jobs
alone? This bill would require the Authority to make every
AB 1830
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effort to purchase high-speed trains manufactured in California
when they contract for trains. Since no trains are currently
manufactured in California, this consideration would incentivize
train manufacturers from abroad to consider locating new
manufacturing in California."
AB 1830 imposes a requirement upon the Authority to try to buy
California-manufactured rolling stock and equipment. Similar
programs at the federal level-e.g., that require public transit
to buy American-made products-have met with mixed results. In
one instance, for example, a foreign firm brought in foreign
employees to assemble light rail cars built under a "Buy
America" contract because hiring and training United States
workers was too expensive.
Despite suggestions that a "Buy California" requirement may not
be effective, California workers have reason to be concerned
that high-speed rail manufacturing may otherwise be outsourced.
Foreign firms have already begun ramping up their efforts to
secure work for the Authority. China, for example, has
announced plans to build United States high-speed train lines
and is stepping up exports of its rail technology. French,
Spanish, and Japanese firms have also indicated their interests
in securing contracts with the Authority.
Related legislation : The author has a similar bill, AB 1747,
that authorizes the 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. AB 1747 was approved by this committee.
Previous legislation: AB 733 (Galgiani) of 2009, was identical
to this year's AB 1747. That bill passed the Assembly
unanimously and had only four "No" votes in the Senate, but was
vetoed by the Governor. In his veto message, the Governor
wrote, "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."
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1830
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California Labor Federation, AFL-CIO (Sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Conference of Machinists
California Nurses Association
California Teamsters
Communication Workers of America (CWA)
State Building and Construction Trades Council of California
United Steelworkers of America (USWA)
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093