BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  AB  
          199
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2013-2014 Regular Session
                                 Staff Analysis



          AB 199  Author:  Holden
          As Amended:  July 8, 2013
          Hearing Date:  August 20, 2013
          Consultant:  Paul Donahue


                                     SUBJECT  

           Institutional purchasers: sale of California agricultural  
                                    products

                                   DESCRIPTION
           
          1)Encourages all public universities, public schools, and  
            school districts in California to purchase agricultural  
            products grown in California to the greatest extent  
            possible.

          2)To the extent possible, requires all California  
            state-owned or state-run institutions, except public  
            universities, public schools, or school districts, to  
            purchase agricultural products grown in California from a  
            California company before those that are grown outside  
            the state, provided:

             a)   The bid or price is equal to or less than the bid  
               or price for agricultural products produced outside  
               the state; and

             b)   The availability and delivery schedule of the  
               agricultural products is acceptable.

          3)Removes "grown" from the list of items required to be  
            given preference by state authorized buyers of supplies.

                                   EXISTING LAW




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          1)Requires persons authorized to purchase supplies for  
            California state institutions to give preference to items  
            either wholly or partially grown, manufactured, or  
            produced in California.

          2)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, with specified exceptions. 

          3)Establishes the "Buy California Program" within the  
            Department of Food and Agriculture to encourage consumer  
            nutritional and food awareness and to foster purchases of  
            high-quality California agricultural products. 

                                    BACKGROUND
           
          According to the author, 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  
          gives California businesses that produce agricultural  
          products an advantage over out-of state producers even if  
          the California products are slightly more expensive.  
          According to the author, this 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.

          Supporters state that with the current economic climate, it  
          is important to keep state tax dollars local. Supporters  
          also state that this preference will give local farmers a  
          fair chance to sell their products within the state, and  
          give a boost to the California farming economy. 

          Previous legislative attempts to grant purchasing  
          preference for California grown agricultural commodities,  
          or other California produced products, have either been  
          vetoed or held in the Legislature. Reasons for the  
          Governors' vetoes ranged from cost to the general fund,  
          cost to local governments, and concerns that the  
          legislation "could result in costly legal challenges,  
          retaliation by other states and nations, and bid protests  
          from those claiming the preference should be granted and  
          those objecting to it."




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                            PRIOR/RELATED LEGISLATION
           
          AB 1960 (Ma) 2009-2010 Session. Encouraged state agencies  
          to purchase California produced, or produced and processed,  
          fruit, nuts and vegetables if the price is equal to or less  
          than, imported fruits, nuts and vegetables. (Held in Senate  
          Rules Committee)

          AB 2994 (Frommer) 2003-2004 Session. Would have required  
          state agencies to give preference to the purchase of lumber  
          and certain solid wood products harvested from forests in  
          California when price, fitness and quality are equal.  
          (Vetoed)  

          AB 801 (Salinas) 2001-2002 Session. Required California  
          state-owned or state-run institutions to purchase  
          agricultural products grown in California before those that  
          are grown outside this state, provided the prices for  
          California grown products do not exceed the lowest price of  
          products grown outside California by more than five  
          percent. It also included California public schools, but  
          only when price and quality were equal to products grown  
          outside California. (Vetoed)

          SB 1893 (Perata) 2000-2001 Session. Required state agencies  
          and school districts to purchase agricultural products  
          produced in California if the cost and quality are equal or  
          superior to those produced outside California. If  
          California products were not found to be equal, preference  
          was to be given to products produced in other states over  
          foreign products, if the cost and quality are equal. (Held  
          in Senate Appropriations) 

           SUPPORT:   

          California Apple Commission
          California Association of Recreational Fishing
          California Black Chamber of Commerce
          California Cotton Ginners Association
          California Cotton Growers Association
          California Dairies, Inc.
          California Farm Bureau Federation
          Mt. Lassen Trout Farm, Inc.
          Western Agricultural Processors Association





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           OPPOSE:  

          None on File

           FISCAL COMMITTEE:   Senate Appropriations Committee



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