BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 734|
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THIRD READING
Bill No: SB 734
Author: Price (D), et al
Amended: 5/31/11
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 6-3, 5/3/11
AYES: DeSaulnier, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Harman, Huff
SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Runner
NO VOTE RECORDED: Emmerson
SUBJECT : High-Speed Rail Authority: small business
program:
bidding preferences
SOURCE : Author
DIGEST : This bill mandates that the High-Speed Rail
Authority develop an outreach and retention plan for small
businesses, microbusinesses, and disable veteran
enterprises.
ANALYSIS : SB 1420 (Kopp), Chapter 796, Statutes of 1996,
created the High-Speed Rail Authority (HSRA) with a
nine-member governing board, including five members
appointed by the governor, two members appointed by the
CONTINUED
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Senate Rules Committee, and two members appointed by the
Speaker of the Assembly.
AB 3034 (Galgiani), Chapter 267, Statutes of 2008,
authorizes the Safe, Reliable High-Speed Passenger Train
Bond Act for the 21st Century (Proposition 1A), which
allows the HSRA to develop a high-speed rail system
extending from San Diego to Sacramento with Phase I
connecting Anaheim-Los Angeles Union
Station-Bakersfield-Fresno-San Jose-San Francisco Transbay
Terminal, authorizes $9.95 billion in general obligation
bonds to support the project, and requires the HSRA to
prepare a draft business plan by October 1, 2011 and a
final plan by January 1, 2012, with updated plans due every
two years. The bill also authorizes the HSRA to enter into
contracts with private or public entities for the design,
construction, and operation of high-speed trains. In
November 2008, the people passed Proposition 1A.
California's Small Business and Procurement Act defines a
California-certified small business, and the Department of
General Services Office of Small Business and Disabled
Veteran Business Enterprise Services (DGS-OSDS) oversees
their certification. To be certified, a
California-certified small business cannot be dominant in
its field. Furthermore, regulation establishes that a
certified small business is one that meets each of the
following requirements:
Is independently-owned and operated.
Has its principal office located in California.
Has an owner or officers who are domiciled in
California.
Is either a business with 100 or fewer employees
and an average annual gross receipts of $14 million or
less over the last three tax years; a manufacturer
with 100 or fewer employees, or a microbusiness,
defined as a small business with gross annual receipts
less than $3,500,000; or a manufacturer with 25 or
fewer employees.
In addition, existing law establishes a state government
small business participation goal of 25 percent for
contracts awarded by the state.
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When a state agency awards a low-cost contract, state law
grants a preference of five percent of the lowest
responsible bid to a small firm, if the low bid has been
submitted by a firm other than a small business. Further,
existing law provides that the five percent preference is
given to a nonsmall business contractor, if the contractor
commits 25 percent of the bid price to an eligible small
business that is included in the bid as a subcontractor.
When a state agency awards a contract to the highest scored
bidder based on specified evaluation criteria in addition
to price, existing law provides a small business preference
of five percent of the highest scored bidder, if the low
score bid has been submitted by a firm other than a small
business. Further, existing law provides that the five
percent preference is given to a nonsmall business
contractor, if the contractor commits 25 percent of the bid
price to an eligible small business is included in the bid
as a subcontractor.
This bill:
1. Makes findings and declarations related to the
importance of small businesses to California's economy.
2. Requires the HSRA, in its business plan to include a
strategy for ensuring the participation of
California-certified small businesses in contracts it
awards.
3. Mandates that the HSRA, with the assistance of the
Department of General Services (DGS), prepare and adopt
a small business, microbusiness, and disabled veteran
business enterprise outreach and retention plan which
the HSRA is to adopt by July 31, 2012.
4. Requires the HSRA to hold a public hearing on the draft
plan at a monthly board meeting at least one month
before the plan's adoption. The draft plan and the
final plan shall be posted on the HSRA's website.
5. Mandates that all procurement documents include a
summary of the plan and a link to the plan on HSRA's Web
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site.
6. Affirms that HSRA is subject to the provisions of the
Small Business Procurement and Contract Act, including
all contract preferences included in the act.
7. Mandates that the HSRA shall include at all bidders
conferences a presentation of the plan and the state's
small business participation goals and shall request a
DGS representative attend to explain the state's small
business program.
8. Establishes an additional price preference or score of
2.5 percent of the bid amount to state-qualified
microbusinesses.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
HSRA small business $50 $100 $100Bond*
outreach plan, and
ongoing admin.
DGS admin. assist. Minor
costs to assist HSRA prepare General
outreach and retention plan, minor
to attend bidders' conferences
Microbusiness bid Unknown,
potentially significant Bond*/
Preference increased
costs to the extent that Federal
contracts are awarded to other than
bidder due to preference.
*High-speed Passenger Train Bond Fund
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SUPPORT : (Verified 5/31/11)
Asian American Architects/Engineers Association
Asian Business Association
Axiom Corporation
California Black Chamber of Commerce
California Small Business Association
California Small Business Entrepreneurs
Ditec Supply Co., Inc.
Latin Business Association
Merriwether & Williams Insurance Services, Inc.
National Black Contractors Association
National Concilio of America
Sacramento Black Chamber of Commerce
SCI Pavement Services
Structus Consulting Engineers
Testing Services & Inspection Inc.
The Wallace Group
WAU and Company
ARGUMENTS IN SUPPORT : The author's office points out
that small businesses employ 6.8 million persons with fifty
percent of California's work force and 98 percent of all
business enterprises. The High-Speed Rail project will
have a positive economic impact throughout the state. The
author's office believes that it is important that the HSRA
have a small business outreach and retention program that
will provide "opportunities for California's small
businesses, including its certified qualified
microbusinesses."
JJA:do 5/31/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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