BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1231|
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                                 THIRD READING


          Bill No:  SB 1231
          Author:   Corbett (D), et al
          Amended:  5/17/10
          Vote:     21

           
           SENATE GOVERNMENTAL ORG. COMMITTEE  :  7-1, 4/13/10
          AYES:  Wright, Calderon, Florez, Oropeza, Padilla, Price,  
            Yee
          NOES:  Denham
          NO VOTE RECORDED:  Harman, Negrete McLeod, Wyland

           SENATE APPROPRIATIONS COMMITTEE  : 7-3, 05/27/10
          AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
          NOES: Denham, Walters, Wyland
          NO VOTE RECORDED: Cox


           SUBJECT  :    Public contracts:  sweatshop labor:  slave and  
          sweat free code 
                      of conduct

           SOURCE  :     Author


          DIGEST  :    This bill makes various substantive and  
          clarifying changes to existing provisions of the Public  
          Contract Code (Section 6108) related to sweatfree"  
          procurement policy and code of conduct.

           ANALYSIS  :    

           Existing law
                                                           CONTINUED





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          1. Provides the Department of General Services (DGS) with  
             the governing authority related to state procurement  
             activities, including acquisition of materials, supplies  
             and services.

          2. Requires 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 sweatshop labor,  
             forced labor, convict labor, indentured labor under  
             penal sanction, abusive forms of child labor, or  
             exploitation of children in sweatshop labor.  The law  
             provides for misdemeanor liability in the case of a  
             knowing false certification.

          3. Provides that if a contractor knew or should have known  
             the specified products furnished to the state were  
             laundered or produced by the specified types of  
             prohibited labor, the contractor may be removed from the  
             bidder's list for 360 days. 

          4. Requires the Department of Industrial Relations to  
             establish a contractor responsibility program, on or  
             before February 1, 2004, including a Sweatfree Code of  
             Conduct. 

          5. Requires the appropriate procurement agency, in  
             consultation with the Director of Industrial Relations,  
             to employ an approach to implement the Sweatfree

          This bill:

          1. Renames the Sweat Free Code of Conduct as the Slave and  
             Sweat Free Code of Conduct.

          2. Requires every contract entered nto 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,  







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             supplies, apparel, garments, or accessories provided  
             under the contract are produced by abusive forms of  
             labor performed by all persons.

          3. Extends the period that the contractor is removed from  
             the bidder's list from 360 days to tow years, if the  
             contractor knew or should have known the specified  
             products were laundered or produced by the specified  
             prohibited labor.

          4. Requires the Department of Industrial Relations to  
             establish a contractor responsibility program by January  
             1, 2012 and requires actions by DIR and DGS with regard  
             to the code of conduct.

          5. Requires contractors whose manufacturing and assembly  
             locations are outside the United State to comply with  
             international laws or treaties binding on their  
             countries.

          Note:  Please refer to the Senate Governmental Organization  
             Committee 
                analysis for further information on this subject.

          FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee analysis:

                          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 posing
           processes (Bidsync)      $40 - $200

          Oversight of contracts                            Minor to  
          major increase in                            General/







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                                   Oversight costs, depending on       
                         Bond
                                   the state entity; potentially       
                                                                       
                                                Special*
                                   significant increase in  
                              significant
                                   contract costs if vendors increase  
                              prices
                                   to cover additional compliance  
                              costs

          *Service Revolving Account

           SUPPORT  :   (Verified  5/27/10)

          Alliance to Stop Slavery and End Trafficking
          California Conference Board of the Amalgamated Transit  
          Union
          California Conference of Machinists
          California Employment Lawyers Association
          California Labor Federation
          California Teamsters Public Affairs Council
          Coalition to Abolish Slavery & Trafficking
          Engineers and Scientists of California, IFPTE Local 20
          International Longshore and Warehouse Union 
          Professional and Technical Engineers, IFPTE Local 21
          United Food and Commercial Workers Western States Council
          UNITE-HERE

          OPPOSITION  :    (Verified  5/27/10)

          California Chamber of Commerce
          American Council of Engineering Companies - Companies
          Associated Builders and Contractors of California
          California Business Properties Association
          California Chapter of the American Fence Association
          California Fence Contractors Association
          California Independent Grocers Association
          California Manufacturers and Technology Association
          California Retailers Association
          Engineerng Contractors Association
          Flasher Barricade Association
          Marin Builders Association







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          Western Electrical Contractors Association

          ARGUMENTS IN SUPPORT  :    According to the author's office,  
          this bill expands the scope of the Sweatfree Code of  
          Conduct to prohibit the abusive labor of all persons, not  
          just children.  It is modified to include slavery and  
          sweatshop labor, and the procurement of all raw materials  
          used in the supply chain.  The author's office has chosen  
          to include such materials and supplies because bricks,  
          glass and other such materials used in public works  
          projects appear on the U.S. Department of Labor's list of  
          tainted goods (goods produced through child labor).

          The author's office emphasizes that businesses have  
          asserted in the past that it is too burdensome and  
          difficult to monitor supply chains.  However, the author's  
          office contends that there are a number of businesses which  
          already monitor supply chains in order to promote good  
          labor practices with their subcontractors.  

           ARGUMENTS IN OPPOSITION  :    Opponents believe that this  
          bill results in new and expensive compliance burdens for  
          small business, create new opportunities for protesting and  
          delaying construction project awards and encourage more  
          litigation against contractors.
           
           
          TSM:do  5/28/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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