BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 619
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 619 (Blumenfield)
          As Amended  July 15, 2010
          Majority vote
           
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          |ASSEMBLY:  |     |(May 14, 2009)  |SENATE: |22-0 |(August 12,    |
          |           |     |                |        |     |2010)          |
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                     (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;  








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          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  








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            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  








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          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  








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          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  








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          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  








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          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 


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