BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 16
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 16 (Perea) - As Introduced:  December 6, 2010 

          Policy Committee:                              
          TransportationVote:12-1

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill requires the California High-Speed Rail Authority to 
          make every effort to purchase high-speed train rolling stock and 
          related equipment manufactured in California, consistent with 
          federal law and any other applicable provision of state law. 

           FISCAL EFFECT  


          Potential minor administrative costs to the extent the authority 
          conducts enhanced outreach to California suppliers prior to 
          contracting for equipment purchases. The bill, however, does not 
          exempt the authority from following any provisions of applicable 
          state or federal law with respect to awarding purchase 
          contracts.


           COMMENTS  

           1)Purpose  .  The High-Speed Rail Bond Act, approved by the voters 
            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.  
            With the passage of the Bond Act plus California's award 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, 
            sponsored by the California Labor Federation, is intended to 








                                                                  AB 16
                                                                  Page  2

            spur companies to relocate to this state. 

           2)Related Legislation  .  AB 492 (Galgiani), also on today's 
            committee agenda, authorizes the authority, when awarding 
            major contracts or purchasing high-speed trains and related 
            equipment, to consider, to the extent permitted by federal law 
            and all other applicable provisions of state law, the creation 
            of jobs in California.

           3)Prior Legislation  . In 2010, AB 1830 (Galgiani), which was an 
            identical to this bill, was vetoed by Governor Schwarzenegger, 
            who stated, "While I support job creation in the state, this 
            bill could result in unnecessary additional costs and delays 
            in the constructing of high-speed rail in California and for 
            this reason I am unable to sign it."

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081