BILL ANALYSIS AB 619 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 619 (Blumenfield) As Amended July 15, 2010 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(May 14, 2009) |SENATE: |22-0 |(August 12, | | | | | | |2010) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: TRANS . SUMMARY : Requires any entity that intends to contract with the California High-Speed Rail Authority (HSRA) to disclose any direct involvement in the deportation of individuals to extermination camps, work camps, concentration camps, prisoner of war camps, or any similar camps, from 1942 through 1944. Would require HSRA to note the importance of compliance with these requirements in its procurement solicitation documents, and acknowledge disclosed information when awarding contracts. The Senate amendments delete the Assembly version of this bill, and instead: 1)Make findings and declarations relative to the California high-speed rail passenger proposed system. 2)Require any entity that intends to contract with HSRA to affirmatively certify in advance of submitting a formal bid for contracted work any direct involvement in the deportation of individuals to extermination camps, work camps, concentration camps, prisoner of war camps, or any similar camps, from 1942 through 1944. 3)Require entities responding in the affirmative to certify the following: a) Whether it has any records (whenever created) in its possession, custody, or control related to those deportations; and, b) Whether the entity has taken remedial action concerning those deportations, including restitution to all identifiable victims subject to deportation; AB 619 Page 2 4)Allow an entity certifying direct involvement in deportations to provide HSRA with any mitigating circumstances in narrative and documentary form. 5)Require HSRA to acknowledge the information provided when awarding contracts and to note the importance of complying with the information requests in its procurement solicitation documents. 6)Define "direct involvement" to mean ownership or operation of the trains on which persons were deported to extermination camps, work camps, concentration camps, prisoner of war camps, or any similar camps during the period from January 1, 1942, through December 31, 1944. 7)Define "entity" to mean any corporation, affiliate, or other entity that controls, is controlled by, or is under common control with, or that is a member of a partnership or a consortium with an entity affected by this bill. 8)Require that any contract bids or proposals submitted to HSRA for goods or services conform with state public contract procedures. EXISTING LAW : 1)Establishes the HSRA and charges it with the planning, designing, constructing, operating, and maintaining 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 (High-Speed Rail Bond Act). The High-Speed Rail Bond 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, through enactment of the American Recovery and Reinvestment Act of 2009 (the recently enacted federal economic stimulus package), $8 billion for high-speed rail passenger services throughout the nation. 4)Establishes contracting procedures for the procurement of AB 619 Page 3 goods and services by public entities. AS PASSED BY THE ASSEMBLY , this bill required the California Department of Transportation to notify the Legislature within 30 days of making a determination that a project will be delayed beyond its scheduled completion date because of cash flow or other funding issues if the delay places receipt of federal funds at risk. FISCAL EFFECT : According to the Senate Appropriations Committee, unknown costs potentially over $50,000. COMMENTS : This bill is intended to create a public record of the involvement of entities contracting with HSRA in the deportation of persons to specified camps during World War II. According to the author, "although hundreds of companies are known to have profited from activities supporting the Holocaust, most of them have admitted their wrongdoing, and in the decades since, have made reparations to victims and their families. Only a very few have not done so, but chief among them is one company that is expected to compete for California's high speed rail contract, SNCF. This company has never admitted its actions, disclosed its records or been held accountable to victims. By requiring companies seeking to be awarded the high speed rail contract to publicly disclose their involvement, AB 619 seeks to ensure that companies that benefit from the high speed rail system take responsibility for their involvement in the horrific actions related to deportations to Nazi concentration camps." Background: The author's focus of this bill is the deportation of persons to the various categories of camps in Europe. The period covered by the bill begins with January 1, 1942, the month in which the Nazi Regime decided at the Wannsee Conference that Jews would be deported from their countries of residence in Europe to concentration camps for extermination. December 31, 1944 is when the deportation of Jews was stopped. During this time of the Holocaust, millions of Jews were transported by railroad to extermination camps. All the national railroads in Europe were involved in wartime activities, including transporting people to concentration and other camps. The author has focused attention on Soci?t? Nationale des Chemins de Fer Fran?ais (French National Railway Corporation - SNCF), which was created as a state enterprise in 1938, when the French government nationalized five private railroad companies. It has AB 619 Page 4 been documented that SNCF transported 75,000 Jews from France east to concentration camps. Today, SNCF remains a state owned company. Other railroads were also involved in the transportation of Jews in Europe, most notably the Deutsche Reichsbahn, the German national railroad. It was created in 1924 and was placed under the control of the Nazi government in 1937. During the period covered by this bill it is well documented that it carried Jews to concentration and other kinds of camps. Both SNCF and Deutsche Reichsbahn were paid to carry persons to the camps. In 1949, the Deutsche Bundesbahn, was created as the successor to the Deutsche Reichsbahn and was owned by German government until 1994. The successor to Deutsche Bundesbahn is Deutsche Bahn AG, a private railroad operating company. Although the discussion around AB 619 has focused on Europe, this bill applies to all firms, including participants in partnerships, consortium or other business relationships, who may submit bids for contracts with HSRA. It, therefore, applies to the Asian-Pacific Theatre of WW II. In Asia, the Japanese Government Railways operated trains on the main islands of Japan between 1907 and 1949. This operation transported prisoners of war to various kinds of camps in Japan. In addition, about 670,000 Koreans were brought to Japan against their will by the government to work in factories and mines often under appalling conditions. These individuals were moved about Japan by rail. In 1949, the Japanese Government Railroad was reorganized into a state owned public corporation referred to as the Japanese National Railroad. In 1987, the Japanese National Railroad was privatized and the Japanese Rail Group was formed as its successor. Seven for-profit firms were created during the privatization. One of the companies, the JR Central, operates Japan's Shinkansen high-speed train service, the most heavily patronized high-speed rail passenger service in the world. In regard to the United States, privately owned railroads transported American citizens of Japanese ancestry as well as Japanese who were legal residents in the country to internment camps throughout the West. The railroads also transported prisoners of war to incarceration facilities in the country. In 1970, Congress enacted legislation creating a government corporation, the National Railroad Passenger Corporation, which operates Amtrak services. The enabling act permitted railroad AB 619 Page 5 corporations operating passenger service to transfer their service to Amtrak and to allow Amtrak to operate over their private rail freight lines. This freed the rail freight companies from any legal obligations to provide rail passenger services. Amtrak was allowed to terminate existing rail passenger services and decide how to organize the services it wanted to provide. Amtrak is not a corporate successor in interest of the corporations that previously provided passenger rail services. Foreign firms and the high-speed rail project: The California high-speed rail project cannot be developed and operated without the involvement of foreign firms, since no U.S. firm can match the experience of foreign companies in developing and operating high-speed service. For example, SNCF, which has indicated an interest in participating in the project, operates 1,100 miles of high-speed lines in France. Representatives of Japanese business firms also have shown an interest in participating in the project. The JR Central operates the most heavily traveled high-speed service in the world, the Tokaido Shinkansen, operating between Tokyo and Osaka. If Deutsche Bahn AG, as well as SNCF and JR Central, were interested in the participating in the high-speed rail program, they would likely be affected by the provisions of AB 619. According to internet sources, "preceding World War II Siemens was involved in funding the rise of the Nazi Party and the secret rearmament of Germany. During World War II, Siemens supported the Hitler regime, contributed to the war effort and participated in the "Nazification" of the economy. Siemens had many factories in and around notorious concentration camps to build electric switches for military uses. In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the camp, supplying the electricity to the camp." Although not the focus of the bill or subject to the bill's provisions, Siemens is likely to be interested in manufacturing high-speed rail cars for California as it has purchased additional area adjacent to it light-rail car manufacturing facility in Sacramento County. California's previous experience addressing Holocaust issues: AB 600 (Knox), Chapter 827, Statutes of 1999, enacted the Holocaust Victim Insurance Relief Act of 1999, that required the State Insurance Commissioner to establish and maintain a registry of Holocaust victims to whom insurance policies were AB 619 Page 6 issued in Europe between 1920 and 1945. In addition, AB 600 authorized Holocaust victims who are residents of the state and to whom policies were sold during that period, beneficiaries of the policies, or heirs of beneficiaries to bring legal action against such firms, if they believe they are entitled to unpaid benefits. The United Statutes Supreme Court held AB 600 to be unconstitutional, since it infringed upon the power of the President to resolve foreign policy issues, such as Holocaust-era claims. To be sure, AB 619 is not seeking economic restitution, only acknowledgement of wrong doing, but it is addressing a matter that may be viewed as within the scope of presidential foreign policy making. Moreover, there is a possibility that HSRA may require information that firms are not obliged to disclose under terms of agreements to which the United States is a signatory. This could engender legal action. Support: Writing in support of this bill, the Los Angeles Museum of the Holocaust indicates that "The governing board of the HSRA will begin awarding contracts as early as next year to spearhead the construction of the high-speed rail system. The construction of the high-speed rail network will be paid for by state and federal taxpayer dollars and bond sales. Due to this, we believe that the residents of California have a direct interest in making sure that companies that are awarded the contracts publicly disclose their involvement in the deportations of California residents and families of California residents prior to being awarded any high-speed rail construction contract. Moreover, we believe it's important to require companies seeking the contracts to provide transparency and take responsibility for actions that have so tragically affected the lives of many Californians and thousands of others." Opposition: Writing in opposition to this bill, the California Chamber of Commerce indicates that "While amendments have been taken to the bill, AB 619 still places the HSRA in the position of having to take into consideration the role a company played in the Holocaust. For example, a company was involved in the deportation but doesn't want to acknowledge it or provide the information on remedial actions because it hasn't taken any wants to bid for a contract. Under this circumstance, will the HSRA merely acknowledge this and seriously consider this company as a bidder? Or would the HSRA cast that company's bid aside, even though they are not required to but will face negative PR AB 619 Page 7 if that company received the bid? Though the bill no longer requires the HSRA from excluding such a company, the prospect that the authority would face negative PR implies that the authority would do so even if the company is qualified. It is our belief that this has protectionist effects." Current bill: This bill in its current form has not been considered by the Assembly Transportation Committee. Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093 FN: 0005582