BILL ANALYSIS Ó
AB 199
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Date of Hearing: April 3, 2013
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 199 (Holden) - As Introduced: January 29, 2013
SUBJECT : Institutional Purchasers: Sale of California Produce
SUMMARY : Requires state agencies to purchase agricultural
products that are grown, manufactured, or produced in California
even if the products cost slightly more than the lowest costs of
out-of-state products:
Specifically, this bill :
1)Requires that state-owned and state-run institutions, except
for schools, purchase agriculture products that are grown in
California instead of those grown elsewhere only if the costs
of California products do not exceed by more than 5 percent
the costs of the lowest bid or price quoted for out-of-state
products.
2)If no California-grown agriculture products meet the above
criteria, the bid shall go to the California company that
packs or processes its products in the state, as long as the
costs do not exceed by more than 5 percent the cost of the
lowest bid or price quoted for out-of-state products.
3)California public schools and school districts shall purchase
agriculture products grown in California instead of
out-of-state products if the costs of the California products
do not exceed the lowest bid or price quoted for out-of-state
products.
4)Changes the definition of "supplies" in the Government Code
section about California-Made materials to remove "produce"
from what is considered supplies.
EXISTING LAW : Government Code Section 4303 generally requires
state and local governments to contract only with companies that
use American produced or manufactured material regardless of the
cost of foreign products. Some exceptions apply.
Current Law also provides a purchasing preference to California
products over out-of-state products if other factors like price
and quality are the same. Government Code Section 4331 states
that " Price, fitness and quality being equal, any body,
AB 199
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officer, or other person charged with the purchase, or permitted
or authorized to purchase supplies for the use of the State, or
of any of its institutions or offices, or for the use of any
county or city shall always prefer supplies grown, manufactured,
or produced in the State, and shall next prefer supplies
partially manufactured, grown, or produced in the State."
Existing law does not allow for a preference when California
products are more expensive than out-of-state products.
FISCAL EFFECT : Unknown
COMMENTS : Agriculture is a key California industry that employs
more than 330,000 workers and generated $47.4 billion in annual
output in 2011. The bill, known as the Choose California Act,
gives California businesses that produce agricultural products
an advantage over out-of -state producers even if the California
products are slightly more expensive.
The pricing advantage would likely mean an increase in the
state's purchases of California-grown and California-processed
agricultural products. Such an increase could positively impact
the state's agricultural economy.
The Department of General Services negotiates and enters into
Leveraged Procurement Agreements (LPAs) with various suppliers
for the purchase of food. State departments, as well as county,
city, special district, education, and other government
entities, can purchase directly through these LPAs and these
agencies benefit from the discounted prices that DGS negotiated.
Some types of businesses currently receive preferences when
bidding for state contracts. For example, DGS has a process to
certify businesses as "small." Under Government Code Section
14838, "in solicitations where an award is to be made to the
lowest responsible bidder meeting specifications, the preference
to small business and microbusiness shall be 5 percent of the
lowest responsible bidder meeting specifications."
The type of preference provided for small businesses is in line
with the type of preference that would be provided for
California-produced agricultural products under this bill.
AB 199
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REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Recreational Fishing
California Black Chamber of Commerce
California Farm Bureau Federation
Mt. Lassen Trout Farm, Inc.
Opposition
None on file
Analysis Prepared by : Scott Herbstman / A. & A.R. / (916)
319-3600