BILL ANALYSIS Ó Bill No: SB 493 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2011-2012 Regular Session Staff Analysis SB 493 Author: Padilla As Introduced: February 17, 2011 Hearing Date: March 22, 2011 Consultant: Art Terzakis SUBJECT State Surplus Personal Property: computers DESCRIPTION SB 493 is an urgency measure that requires the Department of General Services (DGS) to first offer state surplus computers, at less than fair market value, to public computer centers and digital literacy programs that received broadband grants under the American Recovery and Reinvestment Act (ARRA). Specifically, this measure: 1. Requires DGS, notwithstanding existing provisions of law, to first offer state surplus computers at less than fair market value to California ARRA broadband grantees for use with an approved broadband adoption project involving a public computer center or digital literacy training. 2. Requires DGS, on or before January 15, 2012, to report to the Legislature on its implementation of the above referenced provision and recommend whether other nonprofits organizations working to close the "digital divide" among low-income households should be eligible for state surplus computers at less than fair market value. 3. Contains two boiler plate provisions relative to reporting parameters pursuant to the requirements of AB SB 493 (Padilla) continued Page 2 1585, Chapter 7, Statutes of 2010. EXISTING LAW Existing law requires DGS to perform various functions and duties with respect to state real and personal property. Existing law (Public Contract Code Section 10389.1) provides that, if feasible and consistent with existing law, DGS shall first offer appropriate state surplus personal property to school districts prior to offering that property to the public, except for property more appropriately suited for public safety uses. The law also authorizes DGS to offer school districts state surplus personal property at less than fair market value if DGS determines it's in the state's best interest. Existing law (Government Code Section 10231.5) provides that any bill introduced or amended in either house of the Legislature requiring a state agency to submit a report on any subject to either house of the Legislature, a committee or office of either house of the Legislature, or Legislative Counsel must include a provision repealing or making inoperative the operating requirement no later than a date four years following the operative date of the bill or four years after the date of any report required every four or more years. (Reports are due on different schedules Ýe.g., two, three, four or even five and ten year cycles]. This sunset requirement is intended to ensure that a report due, for example, every five years will not be repealed until four or more years after the due date in order to provide ample time to effect obtaining the information via budget or legislative means.) Existing law (Government Code Section 9795) provides that any report required or requested by law to be submitted by a state or local agency to the members of either house of the Legislature must be submitted as a printed copy to Legislative Counsel and the Secretary of the Senate and as an "electronic copy" to the Chief Clerk of the Assembly. The law also requires an agency to provide a one-page electronic summary directly to each member of the Legislature rather than a full copy now that reports are available electronically. SB 493 (Padilla) continued Page 3 Existing law, (AB 855 - Firebaugh, Chapter 820 of 2003), established the Digital Divide Grant Program with a funding mechanism of 15% of the proceeds from wireless telecommunications facility leases of state property, excluding Caltrans, that were entered into after January 1, 2004. The law requires the California Public Utilities Commission (PUC) to deposit the proceeds of these leases into a Digital Divide Account of the California Teleconnect Fund (CTF) to be used to finance digital divide projects. BACKGROUND Purpose of SB 493: The author's office points out that last year, numerous California nonprofit organizations were awarded ARRA broadband grants to help fund public computer centers and digital literacy programs specifically aimed at those populations least likely to have their own computers, subscribe to Internet service, or have skills to navigate "on-line." The purpose of these projects is to provide public access to computers with Internet service at libraries, workforce centers, parks and youth and family centers in various locations throughout the state especially for low-income and non-English speaking communities. The expectation is that such projects will enable individuals without a personal computer to be able to apply for jobs, get online training, access health care and government services, or engage in the activities that are now available only with Internet access. Several of the grant recipients are implementing these projects in partnership with school districts. The author's office notes that DGS receives and disposes of surplus computers no longer used by state agencies. The most recent auction of surplus personal property conducted by DGS was in January of 2011. That auction listed hundreds of surplus state computers (including monitors and printers) - the next auction is scheduled for May 2011. DGS currently is required to make surplus state computers available first to public schools prior to disposing of the property at an auction. The law also permits DGS to offer the surplus computers to school districts for less than fair market value provided it's in the state's best interest. The author's office claims that while this requirement was aimed at giving students access to SB 493 (Padilla) continued Page 4 affordable computers to enhance digital literacy, very few schools have chosen to obtain used computers from DGS. The ARRA broadband grantees, on the other hand, are currently seeking low-cost computers so that they can provide Internet access and digital literacy skills to as many Californians as possible. The author's office emphasizes that access to high-speed Internet connections - broadband - and basic digital literacy skills are essential to virtually every aspect of daily life in our 21st century digital economy. California has been a national leader in efforts to close the digital divide and bring broadband to citizens from every background and in all parts of the state. Arguments in Support: Writing in support of SB 493 proponents state that, "A computer has been shown to have a huge positive impact on a child's ability to do schoolwork, an outof work adults ability to find a job, and everyones ability to access online healthcare information. For so many of Californias citizens to be unable to afford computers, keeping them out of touch and unable to fully participate in society, is a tremendous waste of human resources. The state's surplus computer can help eliminate this barrier to full citizenship at virtually no cost to taxpayers." Staff Comment: SB 493 requires DGS to submit a report to the Legislature no later than January 1, 2012. This relatively short reporting time-frame may not allow DGS sufficient time to fully evaluate the program. Thus, the author may wish to consider amending the reporting due date to June 30, 2012 or even December 31, 2012. As noted above, existing law permits DGS to offer surplus personal computers to school districts for less than fair market value. SB 493 would, regardless of existing provisions, require DGS to first offer surplus computers to public computer centers and digital literacy programs for less than fair market value if DGS determines it's in the state's best interest. Although this proposal is indeed a noble one, due to the current state Budget crisis and all the proposed cuts in funding to education and numerous existing social programs, the state should be seeking to maximize its return on surplus computers, monitors, printers and the like. Thus, the author may wish to SB 493 (Padilla) continued Page 5 consider amending this proposal to simply grant DGS the authority to offer surplus computers to public computer centers and digital literacy centers at less than fair market value. PRIOR/RELATED LEGISLATION AB 1585 (Accountability & Administrative Review Committee) Chapter 7, Statutes of 2010. Among other things, deleted hundreds of obsolete reports and revised the procedure for mandatory reporting requirements by state agencies. SB 909 (Bowen) Chapter 870, Statutes of 2006. Authorized the PUC to expend up to $2 million of the unencumbered amount for the nonrecurring installation costs of high-speed broadband services, as defined, for community organizations that are eligible for discounted rates pursuant to the teleconnect program. SB 1645 (Mountjoy) Chapter 731, Statutes of 1998. Among other things, authorized DGS to first offer appropriate surplus state personal property, at less than fair market value, to school districts prior to offering that property to the public, except for equipment more appropriately suited for public safety uses. SUPPORT: As of March 18, 2011: California State Library Computers for Youth ReliaTech The Stride Center Youth Policy Institute OPPOSE: None on file as of March 18, 2011. FISCAL COMMITTEE: Senate Appropriations Committee **********