BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1830|
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THIRD READING
Bill No: AB 1830
Author: Jones (D), et al
Amended: 8/2/10 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM : 6-2, 6/29/10
AYES: Lowenthal, DeSaulnier, Kehoe, Pavley, Simitian, Wolk
NOES: Huff, Harman
NO VOTE RECORDED: Ashburn
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 53-22, 6/3/10 - See last page for vote
SUBJECT : High-Speed Rail Authority
SOURCE : California Labor Federation
DIGEST : This bill encourages the California High-Speed
Rail Authority to acquire equipment manufactured in
California.
ANALYSIS : SB 1420 (Kopp), Chapter 796, Statutes of 1996,
creates the HSRA with a nine member governing board,
including five members appointed by the governor, two
members appointed by the Senate Rules Committee, and two
members appointed by the Speaker of the Assembly. In 2008,
California voters approved the Safe, Reliable High-Speed
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Passenger Train Bond Act, Chapter 276, Statutes of 2008
(Proposition 1A) placed on the ballot by AB 3034
(Galgiani). The bond measure makes available $9 billion
for the development of a high-speed rail system and $950
million for improvements to existing passenger rail systems
that will offer feeder services to the high-speed rail
service. Proposition 1A identified Phase I of the
high-speed rail (HSR) project as Anaheim-Los
Angeles-Bakersfield-Fresno-San Jose-San Francisco Transbay
Terminal. Although planning can proceed on the San Diego
and Sacramento lines, construction may occur only after
Phase I is under construction and funding is available for
these two additional segments.
Proposition 1A defines the capital cost for which bond
revenues may be used to include acquisition of property,
acquisition and construction of tracks, structures, power
systems, and stations; acquisition of train equipment;
mitigation of direct and indirect environmental impacts;
relocation assistance; and other related capital
facilities, including financing and refinancing if
authorized by a subsequent statute. It also authorizes the
HSRA to contract for services and equipment for developing
and operating the high-speed train service.
In January of 2010, the Federal Railroad Administration
(FRA) awarded the HSRA a $2.25 billion American Recovery
and Reinvestment Act (ARRA) grant, the largest HSR grant
award in the country. Included in the grant is $400
million for the San Francisco Transbay Terminal joint
powers agency, which submitted a separate ARRA application,
but FRA consolidated its grant with the state's. The
actual amount of ARRA funds available to the HSR project is
$1.85 billion. The ARRA grant is for assisting in funding
the preliminary engineering and environmental work on Phase
I and to assist with the construction of the following
Phase I segments: Los Angeles-Anaheim, Fresno-Bakersfield,
Fresno-Merced, and San Jose-San Francisco. As a condition
of the grant, the HSRA must obtain environmental clearances
for the corridors by September 30, 2011, and construction
must be completed by September 30, 2017.
In addition to the Proposition 1A authorization and the
ARRA funds, the HSRA also has $336 million of other public
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funds. The total amount of funding currently available to
the HSRA is $11.2 billion. The HSRA's current estimate for
constructing Phase I is $42.6 billion.
ARRA prohibits the use of grant funds for a project
involving the construction, alteration, maintenance, or
repair of a public building or public facility, unless all
of the iron, steel, and manufactured goods used in the
project are produced in the United States. In addition, it
requires that this prohibition be applied in a manner
consistent with U.S. obligations under international
agreements pertaining to procurement. Lastly, ARRA
establishes conditions for waivers of requirements.
This bill:
1.Authorizes the HSRA to make "every effort" to purchase
high-speed rail equipment manufactured in California,
provide it is consistent with federal law.
2.Requires the HSRA provide a preference for rolling stock
and related equipment manufactured in California. The
preference shall be 5 percent of the lowest responsible
bidder meeting specifications. The preference shall be
provided to the extent consistent with federal law and
any other applicable provision of state law.
3.Defines "manufactured in California" as the rolling stock
and related equipment are manufactured in whole or in
substantial part within California or that the majority
of the component parts of the rolling stock and related
equipment were manufactured in whole or in substantial
part in California.
4.Defines "manufactured" as an activity of converting or
conditioning property by changing the form, composition,
quality, or character of the property for ultimate sale
at retail or use in the manufacturing of a product to be
ultimately sold at retail.
Comments
This bill seeks to maximize the number of California-based
jobs that the construction of the high-speed train system
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will create by encouraging the acquisition of equipment
that is manufactured in the state, provided that the
procurement activity is consistent with federal law. Last
year this committee approved AB 733 (Galgiani) which had
the same objective, although it required the HSRA to give
an explicit preference when evaluating bids to
California-based manufacturing. The governor vetoed AB
733. In his veto message, Governor Schwarzenegger said AB
733 "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."
This bill recognizes the supremacy of federal law in the
matters of international trade.
High-speed rail project will create jobs . According to the
U.S. Department of Commerce econometric models, the number
of construction only jobs created by a heavy engineering
project, such as high-speed rail, is assumed to be between
18,000 and 32,000 direct and indirect jobs for every $1
billion spent. The HSRA is assuming the number of jobs
create by the project could exceed 800,000, which is within
the accepted econometric parameters.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
Bid preference unknown, potentially significant state
costs Bond*
to the extent contracts are not awarded
to Federal**
the lowest bidder due to the preference
Contract administration minor
one-time costs to establish bid
Bond*
preference and minor ongoing costs to
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determine
whether a contractor qualifies for the
preference
* High-Speed Passenger Train Bond Fund
** American Recovery and Reinvestment Act Funds
SUPPORT : (Verified 8/16/10)
California Labor Federation (source)
American Federation of State, County and Municipal
Employees
California Nurses Association
Service Employees International Union
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Bill
Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V. Manuel
Perez, Portantino, Ruskin, Salas, Skinner, Solorio,
Swanson, Torlakson, Torres, Torrico, Yamada, John A.
Perez
NOES: Anderson, Conway, Cook, DeVore, Emmerson, Fletcher,
Gaines, Garrick, Gilmore, Hagman, Harkey, Knight, Logue,
Miller, Nestande, Niello, Nielsen, Norby, Silva, Smyth,
Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Fuller, Saldana, Audra
Strickland, Vacancy
JA:nl 8/16/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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