BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 493| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 493 Author: Padilla (D), et al. Amended: 4/26/11 Vote: 27 - Urgency SENATE GOVERNMENTAL ORG. COMMITTEE : 9-3, 3/22/11 AYES: Wright, Calderon, Cannella, Corbett, De León, Evans, Padilla, Wyland, Yee NOES: Anderson, Berryhill, Strickland NO VOTE RECORDED: Hernandez SENATE APPROPRIATIONS COMMITTEE : 6-2, 5/26/11 AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg NOES: Walters, Runner NO VOTE RECORDED: Emmerson SUBJECT : State surplus property SOURCE : Author DIGEST : This bill specifies that Department of General Services policies and procedures regarding the disposition of state surplus computers, laptops, monitors, and related computer equipment shall do all of the following: (1) facilitate the disposition of state surplus computers to further the state policy of bridging the digital divide, as described in subdivision (d) of Section 709 of the Public Utilities Code (PUC); (2) authorize nonprofit entities that, in partnership with a school district, operate a public computer center to further the state policy of CONTINUED SB 493 Page 2 bridging the digital divide, as described in subdivision (d) of Section 709 of the PUC, to be eligible for receipt of state surplus computers under Section 10389.1 and through approved disposition directly from a state agency; (3) include a procedure enabling state agencies with surplus computers to ascertain whether the nonprofit entities described in #2 are interested in receiving those surplus computers; the procedure shall include a preference for nonprofit entities within the same geographic region as the state agency in order to minimize transportation and disposition costs; (4) require that state agency documentation of the disposition of surplus computers include a certification that all confidential, sensitive, and personal information was removed from the computers prior to disposition; and (5) require DGS, in collaboration with the California Technology Agency, to promote increased awareness among state agency officials of the requirement to remove from all state surplus computers all confidential, sensitive, and personal information prior of any disposition of those computers. ANALYSIS : Under current law, DGS shall first offer appropriate state surplus personal property to school districts prior to offering that property to the public, except for property with public safety uses. DGS may offer school districts state surplus personal property at less than fair market value, if it is determined to be in the best interests of the state pursuant to DGS policies and procedures. When it is not cost effective for state agencies to transport surplus property to Sacramento for auction, or the property is not suitable for sale, authority can be requested to dispose of that property. One disposition method is to donate computers to school programs. The number of state surplus computers may be sold to the grant recipients and at what amount less than fair market value is unknown. If these grant recipients can now purchase retail a new desktop (estimated $500) or laptop (estimated $300) computer with software and warranty, state surplus computers would have to be price competitive before this bill has a fiscal impact. DGS surplus property auctions which were scheduled on a SB 493 Page 3 monthly basis are now being scheduled bi-monthly. The following is data from the January 2011 auction: ---------------------------------------------------------- | | | | | |Hardware |Number |Total |Average price per | |type |sold |sales |unit | | | | | | |------------+-----------+----------+----------------------| | | | | | |CPUs |390 |$15,235.00|$39.06 | | | | | | | | | | | |------------+-----------+----------+----------------------| | | | | | |Laptops |29 |$4,125.00 |$142.24 | | | | | | |------------+-----------+----------+----------------------| | | | | | |Monitors |83 |$4,145.00 |$49.94 | | | | | | | | | | | ---------------------------------------------------------- For CPUs (central processing units) and laptops, the hard drives have been wiped clean to erase any sensitive data and are no longer equipped with any software, including a basic operating system. Each CPU or laptop has been tested for function and each one will boot up to the C prompt. If a state surplus computer (desktop and monitor) had a fair market value of $100, for every 100 computers sold pursuant to this bill, at 10 percent, 50 percent or 90 percent less than fair market value, the loss of revenue would be $1,000 ($100 x 100 = $10,000 x 0.10), $5,000, or $9,000. Assuming surplus sales were made at 50 percent of fair market value, sale of 1,000 computers at this price and configuration would be needed to incur a revenue loss of $50,000 (assuming all computers were purchased by the same fund). As noted, this estimate would be affected by demand from non-school district bidders, retail and wholesale options, and disposition of computers directly to school districts. This bill specifies that DGS policies and procedures SB 493 Page 4 regarding the disposition of state surplus computers, laptops, monitors, and related computer equipment shall do all of the following: 1. Facilitate the disposition of state surplus computers to further the state policy of bridging the digital divide, as described in subdivision (d) of Section 709 of the Public Utilities Code (PUC); 2. Authorize nonprofit entities that, in partnership with a school district, operate a public computer center to further the state policy of bridging the digital divide, as described in subdivision (d) of Section 709 of the PUC, to be eligible for receipt of state surplus computers under Section 10389.1 and through approved disposition directly from a state agency; 3. Include a procedure enabling state agencies with surplus computers to ascertain whether the nonprofit entities described in #2 are interested in receiving those surplus computers; the procedure shall include a preference for nonprofit entities within the same geographic region as the state agency in order to minimize transportation and disposition costs; 4. Require that state agency documentation of the disposition of surplus computers include a certification that all confidential, sensitive, and personal information was removed from the computers prior to disposition; and 5. Require DGS, in collaboration with the California Technology Agency, to promote increased awareness among state agency officials of the requirement to remove from all state surplus computers all confidential, sensitive, and personal information prior of any disposition of those computers. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Fiscal Impact (in thousands) SB 493 Page 5 Major Provisions 2011-12 2012-13 2013-14 Fund State surplus computer Unknown, potentially up to $50 or more General* sales in lost revenue annually, potentially negligible * Service Revolving Fund (a combination of General Funds and special funds) plus minor other General Fund and special fund losses SUPPORT : (Verified 5/31/11) California State Library Computers for Youth ReliaTech The Stride Center Youth Policy Institute PQ:kc 5/31/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****