BILL ANALYSIS �
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THIRD READING
Bill No: AB 1097
Author: Skinner (D)
Amended: 6/13/11 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM : 7-0, 06/21/11
AYES: DeSaulnier, Gaines, Huff, Kehoe, Lowenthal, Rubio,
Simitian
NO VOTE RECORDED: Harman, Pavley
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 05/19/11 - See last page for vote
SUBJECT : Transit projects: domestic content
SOURCE : Author
DIGEST : This bill requires the Secretary of Business,
Transportation and Housing to authorize a state or local
agency receiving federal funds for transit purposes to
provide a bidding preference to a bidder if the bidder
exceeds Buy American requirements applicable to
federally-funded transit projects.
ANALYSIS : The federal American Recovery and Reinvestment
Act (ARRA) was an economic stimulus package enacted by the
111th United States Congress in February 2009. ARRA had
the following purposes: 1) Preserve and create jobs and
promote economic recovery; 2) Assist those most impacted by
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the recession; 3) Provide investments needed to increase
economic efficiency by spurring technological advances in
science and health; 4) Invest in transportation,
environmental protection, and other infrastructure that
will provide long-term economic benefits; and 5) Stabilize
state and local government budgets, in order to minimize
and avoid reductions in essential services and
counterproductive state and local tax increases. The Buy
American program was an ARRA initiative intended to serve
these purposes.
The Buy American program provides that, unless one of three
listed exceptions applies, nonavailability, unreasonable
cost, or inconsistency with the public interest, and a
waiver is granted, none of the funds appropriated or
otherwise made available by the Act may be used for the
construction, alteration, maintenance, or repair of a
public building or public work unless all the iron, steel,
and manufactured goods used are produced in the United
States. These three exceptions were incorporated into the
Code of Federal Regulations (CFR) for transportation.
Additionally, the CFR provides an exception for rolling
stock, such as buses, vans, cars, railcars, locomotives,
trolley cars and buses, and ferry boats, as well as
vehicles used for support services. That exception is that
the cost of rolling stock components and subcomponents
produced in the United States be at least 60% of the total
cost of components but that final assembly of the rolling
stock must occur in the United States. The cost of a
component or a subcomponent is the price that a bidder must
pay to a subcontractor or supplier for that component or
subcomponent. Transportation costs to the final assembly
location must be included in calculating the cost of
foreign components and subcomponents.
The CFR also has a provision for state Buy American
programs. The provision allows states to impose more
stringent Buy American requirements than those set forth in
the federal law, but the Federal Transit Administration
(FTA) will not participate in state and local Buy National
or Buy American preference provisions that are not
explicitly set out under state law. California currently
has no such preference law.
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This bill requires the Secretary of Business,
Transportation and Housing to authorize a state or local
agency receiving federal funds for transit purposes to
provide a bidding preference to a bidder if the bidder
exceeds Buy American requirements applicable to
federally-funded transit projects.
Comments
According to the author's office, this bill allows a
transit agency receiving federal funds for transit purposes
to provide a preference to bidders that exceed the federal
Buy American requirements. The federal Buy American
regulation defers to stricter state Buy American laws if
there is an explicit state law. This bill provides that
state law. The author calls this a permissive bill that
will promote domestic manufacturing and encourage
California-based transit agencies to seek a higher level of
American products, which will ultimately support transit
needs and create jobs in America and California.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 7/11/11)
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
ASSEMBLY FLOOR : 78-0, 05/19/11
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
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Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel P�rez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Alejo, Gorell
JJA:nl 7/11/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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