BILL ANALYSIS Ó AB 2675 Page 1 Date of Hearing: April 30, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 2675 (Lowenthal) - As Introduced: February 21, 2014 Policy Committee: AccountabilityVote:8-2 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires state agencies that purchase products in 11 different categories as specified in the State Agency Buy Recycled Campaign (SABRC) to increase the threshold of recycled purchases from 50% to 75% by 2020. FISCAL EFFECT According to DGS, there are five categories-glass products, lubricating oils, paper products, plastic products, and printing and writing paper-that would be most impacted by this bill because they currently meet or are close to meeting the 50% recycled purchase requirement, but have not yet met the 75% requirement proposed by this bill. In 2011-12, state agencies spent $73.9 million on these categories, including $42 million on recycled products compliant with SABRC. Assuming the same purchase volume in 2020, 75% of the total amount would be $55.4 million, or $13.4 million more in spending on recycled products. To the extent the recycled products are, on average, more costly, the state will spend more to meet the higher threshold. An average 5% higher product cost would yield about $670,000 among the General Fund and numerous special funds. Of the remaining six categories, state agencies as a whole already exceed 75% in three categories: compost (98%), metal products (86%), and tire-derived products (78%). In the remaining three categories with a low proportion of recycled purchases-antifreeze (7%), paint (12%), and tires (12%)-it is assumed that the higher threshold will not impact purchasing AB 2675 Page 2 behavior. COMMENTS 1)Background . AB 4 (Eastin)/Statutes of 1989, established SABRC, which requires agencies to buy recycled items for at least 50% of their purchases in the following product categories. a) Paper products. b) Printing and writing papers. c) Mulch, compost, co-compost. d) Glass products. e) Lubricating oils. f) Plastic products. g) Paint. h) Antifreeze. i) Tires. j) Tire-derived products. aa) Metal products. Agencies are required to purchase recycled products whenever available, if fitness and quality are equal and the products cost the same or less than non-recycled products. If fitness and quality are equal and the products cost more, agencies may still purchase the recycled products. Agencies annually report information about their purchases in these categories to the California Department of Resources Recycling and Recovery (CalRecycle), which compiles this information and reports on SABRC compliance by product category and department. 2)Purpose . This bill increases the requirements for recycled purchases to 75% by January 1, 2020. According to the author, this aligns with the statewide goal set by AB 341 (Chesbro)/Statutes of 2011, to divert at least 75% of solid waste by 2020 through reduction, recycling, and composting. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081