BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1231 (Corbett)
Hearing Date: 5/27/2010 Amended: 5/17/2010
Consultant: Bob Franzoia Policy Vote: G O 7-1
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BILL SUMMARY: SB 1231 would do the following:
- Rename the Sweat Free Code of Conduct as the Slave and Sweat
Free Code of Conduct.
- Require every contract entered into by a state agency for the
procurement of equipment, materials, supplies, apparel, garments
and accessories and the laundering thereof, excluding public
works contracts, to require a contractor to certify that no
equipment, materials, supplies, apparel, garments, or
accessories provided under the contract are produced by abusive
forms of labor performed by all persons.
- Extend the period that the contractor is removed from the
bidder's list from 360 days to two years, if the contractor knew
or should have known the specified products were laundered or
produced by the specified prohibited labor.
- Require the Department of Industrial Relations (DIR) to
establish a contractor responsibility program by January 1, 2012
and would require actions by DIR and the Department of General
Services (DGS) with regard to the code of conduct.
- Require contractors whose manufacturing and assembly locations
are outside the United States to comply with international laws
or treaties binding on their countries.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Contractor responsibility $30 $60 $60
General
program (DIR/DGS) (administration/enforcement)
- regulations Up to $150
- update contracting terms Up to $150
- revise Web posting
processes (Bidsync) $40 - $200
Oversight of contracts Minor to major increase in
oversight costs, General/
depending on the state entity;
potentially Bond/
significant increase in contract
costs if Special*
vendors increase prices to cover
additional
compliance costs
* Service Revolving Account
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STAFF COMMENTS: SUSPENSE FILE.
Until it is fully understood how DIR and DGS may enforce the
provisions of this bill, the fiscal impacts remain unclear. For
entities subject to the provisions of the bill, but authorized
to independently contract, for example, California State
University (CSU),
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SB 1231 (Corbett)
this bill could result in minor, ongoing costs to have
contractors and subcontractors
certify they are in compliance with the provisions of the bill.
However, if compliance and monitoring is required, costs could
increase significantly. If CSU has to document compliance, the
process could be costly and uncertain as it can be very
difficult to secure evidence of the source of all products.
For example, if CSU issues a contract for computer equipment,
the contractor or the subcontractor may not know the sources of
all the parts in that equipment. It is unlikely CSU has that
knowledge and if the contractor or subcontractor, or CSU, has to
certify compliance multiple vendors deep into a supply chain,
either contract costs will increase or equipment may become
unavailable. Additionally, it is unclear what may occur if CSU
had to void a contract after being notified by DIR of a
compliance problem.