BILL ANALYSIS �
AB 16
Page 1
ASSEMBLY THIRD READING
AB 16 (Perea)
As Introduced December 6, 2010
Majority vote
TRANSPORTATION 12-1 APPROPRIATIONS 12-5
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|Ayes:|Bonnie Lowenthal, |Ayes:|Fuentes, Blumenfield, |
| |Jeffries, Achadjian, | |Bradford, Charles |
| |Blumenfield, Bonilla, | |Calderon, Campos, Davis, |
| |Buchanan, Eng, Mitchell, | |Gatto, Hall, Hill, Lara, |
| |Galgiani, Miller, | |Mitchell, Solorio |
| |Portantino, Solorio | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Norby |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires the High-Speed Rail Authority (Authority) to make
every effort to purchase high-speed train rolling stock and related
equipment that is 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 responsibility
to plan, design, construct, operate, and maintain 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 (Act). The 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
the use of funds appropriated for planning and capital costs.
4)Requires the Authority, prior to seeking an initial appropriation
for capital expenditures and prior to expending bond funding for
the construction and acquisition of equipment and property, to
AB 16
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submit detailed funding plans to the Legislature.
5)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.
6)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.
7)Prohibits, generally, the use of American Recovery and
Reinvestment Act of 2009 (ARRA) funds for a project unless all of
the iron, steel, and manufactured goods used in the project are
produced in the United States.
FISCAL EFFECT : According to Assembly Appropriations Committee,
potential minor administrative costs to the extent the Authority
conducts enhanced outreach to California suppliers prior to
contracting for equipment purchases.
COMMENTS : Following the statewide voter approval of Proposition 1A
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. The Authority may soon be
tasked to approve major purchases of train rolling stock and
equipment. This bill imposes a requirement upon the Authority to
try to buy California manufactured rolling stock and equipment.
California workers have reason to be concerned that high-speed rail
manufacturing may otherwise be outsourced. Foreign firms are
lobbying hard to secure work from 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.
The sponsor of this bill, the California Labor Federation, asserts
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that, "As construction progresses, California will need to contract
with a company to purchase new high-speed trains. Currently all
high-speed rail manufacturers are located overseas. But California
has an opportunity to use public dollars to attract new
manufacturers to California to build high-speed rail trains here,
creating new jobs and a new industry."
Related legislation: AB 492 (Galgiani) authorizes the Authority to
consider, to the extent permitted by federal and state law, the
creation of jobs in California when awarding major contracts or
purchasing high-speed trains. AB 492 (Galgiani) is currently in the
Assembly Appropriations Committee.
Previous legislation: AB 1830 (Galgiani) of 2010 was identical to
this bill. It passed the Legislature but was vetoed by Governor
Schwarzenegger who wrote: "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 : Janet Dawson / TRANS. / (916) 319-2093
FN: 0000498