BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                       AB 2675|
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                                    THIRD READING


          Bill No:  AB 2675
          Author:   Lowenthal (D)
          Amended:  8/22/14 in Senate
          Vote:     21

           
           SENATE GOVERNMENTAL ORGANIZATION COMMITTEE  :  7-3, 6/24/14
          AYES:  Correa, De León, Galgiani, Hernandez, Lieu, Padilla,  
            Torres
          NOES:  Berryhill, Cannella, Vidak
          NO VOTE RECORDED:  Vacancy

           SENATE APPROPRIATIONS COMMITTEE  :  5-0, 8/14/14
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NO VOTE RECORDED:  Walters, Gaines
           
          ASSEMBLY FLOOR  :  52-23, 5/28/14 - See last page for vote


           SUBJECT  :    State agency:  public contracts

           SOURCE :     Author


           DIGEST  :    This bill requires, by January 1, 2020, state  
          agencies that purchase products specified in the State Agency  
          Buy Recycled Campaign (SABRC) to increase the threshold of  
          recycled purchases from 50% to 75%, except for paint,  
          antifreeze, and tires.

           Senate Floor Amendments  of 8/22/14 exempt paint, antifreeze, and  
          tires from the proposed increased threshold of recycled  
          purchases; and delete an existing SABRC reporting requirement  
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          exemption applicable to the Department of Forestry and Fire  
          Protection (CAL FIRE).  

           ANALYSIS  :    

          Existing law:

           1. Requires state agencies to purchase products that contain  
             specified minimum amounts of postconsumer recycled-content  
             material in 11 reportable product categories defined in  
             statute.

           2. Requires state agencies to ensure that at least 50% of the  
             purchases in the 11 categories are for recycled products. 

           3. Directs agencies to report annually to the Department of  
             Resources Recycling and Recovery (CalRecycle) dollars spent  
             on recycled and non-recycled products purchased in the 11  
             categories.

          This bill:

           1. Requires state agencies that purchase products specified in  
             SABRC to increase the threshold of recycled purchases from  
             50% to 75% by January 1, 2020.

           2. Exempts paint, antifreeze, and tires from the proposed  
             increased threshold of recycled purchases.  

           3. Deletes an existing SABRC reporting requirement exemption  
             applicable to CAL FIRE.  

           Background
           
          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.  Agencies  
          annually report information about their purchases in these  
          categories to CalRecycle.  CalRecycle then compiles this  
          information and produces reports about SABRC compliance by  
          product category and department.  The 11 reportable categories  
          are (1) paper products; (2) printing and writing papers; (3)  
          mulch, compost, co-compost; (4) glass products; (5) lubricating  
          oils; (6) plastic products; (7) tire-derived products; (8) metal  

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          products; (9) paint; (10) antifreeze; and (11) tires.

          This bill increases the requirement for recycled purchases in  
          categories (1)-(9) above to 75% by January 1, 2020.  In the most  
          recent SABRC report for Fiscal Year 2011-12, agencies spent  
          about $130 million on recycled products.  This accounted for 70%  
          of purchase amounts for the 11 categories.  Additionally,  
          purchases in the three product categories of mulch, compost,  
          co-compost; metal products; and tire-derived products exceeded  
          the 75% mark.  However, some product categories fell short of  
          the current 50% mandate.

           Comments
           
          According to the author's office, SABRC requires California  
          agencies to ensure that at least 50% of their purchases in 11  
          designated categories are of post-consumer recycled content  
          (PCRC) products.  Goods manufactured with recycled materials  
          save native resources, produce less greenhouse gas emissions  
          than their virgin counterparts, and divert waste that would  
          otherwise end up in a landfill. 

          In the average fiscal year, the State of California spends more  
          than $1 billion dollars on the direct purchase of goods, and  
          more than $10 billion dollars on the purchase of services which  
          include goods.  Components of SABRC have been in place at least  
          as far back as the California Integrated Waste Management Act of  
          1989.  To date, state agencies have purchased more than $1  
          billion of SABRC-compliant post-consumer recycled content  
          products.

          According to the author's office, the existing exemption  
          applicable to CAL FIRE was a drafting error in a Budget trailer  
          bill and CAL FIRE has agreed it should not be exempted.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee, unknown  
          increased state agency procurement costs or cost pressures by  
          2020, potentially in the hundreds of thousands of dollars  
          annually, to the extent additional virgin materials are  
          unavailable or purchases of additional recycled materials are  
          more expensive than virgin materials in five product categories  

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          (glass products, lubricating oils, paper products, plastic  
          products, and printing and writing materials) for which  
          agencies' reportable purchases fall under the 75% threshold  
          (General Fund and special funds).  

          In order to meet the higher threshold, state agencies will need  
          to spend an additional $13.4 million on purchasing recycled  
          products, which represents a shift in spending of this amount  
          from purchases of non-recycled products to recycled products.   
          The overall impact of this shift in spending on state agency  
          procurement costs is unknown.  

           SUPPORT  :   (Verified  8/11/14)

          California Refuse Recycling Council

           ARGUMENTS IN SUPPORT  :    By requiring that agencies procure an  
          increased percentage of goods from PCRC sources, this bill  
          harnesses our state's considerable purchasing power to more  
          forcefully support a market that helps California meet both the  
          greenhouse gas reduction goals of the California Global Warming  
          Solutions Act of 2006 (AB 32, Nunez, Chapter 488, Statutes of  
          2006) and the solid waste diversion goals of AB 341 (Chesbro,  
          Chapter 476, Statutes of 2011).  It is a responsible and wise  
          use of taxpayer dollars that will benefit Californians for  
          generations to come.


           ASSEMBLY FLOOR  :  52-23, 5/28/14
          AYES:  Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,  
            Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,  
            Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong,  
            Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger  
            Hernández, Holden, Jones-Sawyer, Levine, Lowenthal, Medina,  
            Mullin, Muratsuchi, Nazarian, Pan, Perea, John A. Pérez, V.  
            Manuel Pérez, Quirk, Quirk-Silva, Ridley-Thomas, Rodriguez,  
            Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams,  
            Yamada, Atkins
          NOES:  Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,  
            Donnelly, Fox, Beth Gaines, Grove, Hagman, Harkey, Jones,  
            Logue, Maienschein, Mansoor, Melendez, Nestande, Olsen,  
            Patterson, Wagner, Waldron, Wilk
          NO VOTE RECORDED:  Frazier, Gorell, Linder, Rendon, Vacancy


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          MW:k  8/25/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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