BILL ANALYSIS �
AB 1097
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Date of Hearing: May 2, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 1097 (Skinner) - As Amended: April 25, 2011
SUBJECT : Transit project contracts: domestic content of
materials
SUMMARY : Requires the Secretary of the Business, Transportation
and Housing Agency to specifically authorize a state or local
agency receiving federal funds for transit purposes to provide a
bidding preference to a bidder if the bidder meets or exceeds
Buy America requirements applicable to federally funded transit
projects. Makes findings and declarations as specified.
EXISTING LAW :
1)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.
2)Under federal "Buy America" laws applicable to rolling stock,
including rail vehicles, requires that the cost of components
and subcomponents produced in the United States total at least
60% of the cost of all components in the rolling stock, and
that final assembly of the rolling stock occur in the United
States.
3)Under federal "Buy America" regulations, allows states to
impose contracting preference provisions based on more
stringent domestic content requirements than those set forth
in the federal law, but the Federal Transit Administration
(FTA) will not participate in the funding of state and local
contracts with those preference provisions if they are not
explicitly set out under state law. (49 C.F.R. 661.21). The
State of California currently has no such preference law.
4)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
the price of the lowest bid for goods and supplies
AB 1097
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manufactured out-of-state.
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)Under the federal American Resource and Recovery and
Reinvestment Act of 2009 (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.
FISCAL EFFECT : Unknown
COMMENTS : The federal government's "Buy American" policy
requires the awarding of federal funds to prioritize products
that are made in the United States. The FTA specifically
requires that transit agencies receiving federal funds procure
products, such as new vehicles, with 60% domestic content and
that are assembled in the United States. However, the absence
of American-based manufacturers has resulted in little choice
for transit and public works agencies, who must buy trains and
other products from companies headquartered overseas. Further,
FTA guidelines make it difficult to encourage a greater-than 60%
level for American-made products because the FTA prohibits
agencies from assigning more credit (in a bidding situation) to
domestic products unless a higher "Buy American" provision is
explicitly spelled out in statute.
According to the author, "this is a permissive bill that would
allow and encourage state transit agencies to seek greater
American made products by rewarding those contractors who can
provide products with high domestic content. By encouraging
state transit agencies to seek a higher level of American
products, AB 1097 would assist in stimulating more manufacturing
in this country in ways that will ultimately support transit
needs and create jobs in America and California."
AB 1097
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Supporters of this bill indicate that projects that promote
domestic manufacturing will put people back to work and
contribute to the healing of our economy and support the use of
federal transportation monies as a vehicle for job creation.
REGISTERED SUPPORT / OPPOSITION :
Support
Alameda-Contra Costa Transit District
California Conference Board of Amalgamated Transit Union
California Conference of Machinists
California Teamsters Public Affairs Council
California Transit Association
San Francisco Bay Area Rapid Transit District
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093