BILL ANALYSIS Ó AB 429 Page 1 Date of Hearing: April 29, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 429 (Dahle) - As Amended April 8, 2015 ----------------------------------------------------------------- |Policy |Accountability and |Vote:|9 - 0 | |Committee: |Administrative Review | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires state agencies, when purchasing lumber or other solid wood products, to give a preference, and price and quality are equal, to products harvested pursuant to California statutes and regulations governing this activity-specifically AB 429 Page 2 the Z'berg-Nejedly Forest Practice Act of 1973. FISCAL EFFECT: The Department of General Services (DGS) indicates it would need to conduct a rulemaking to modify existing preference program regulations to reflect that other preferences do not operate when they would result in Forest Practice Act-grown timber over non-Forest Practice Act-grown timber. In addition, DGS would need to update the State Contracting Manual and training materials for the California Procurement and Contracting Academy basic course to reflect the new requirement. These one-time costs should be absorbable. In individual cases where the harvesting practice for the timber became a deciding factor in a contract award, a state agency would need to be able to verify whether the wood products being purchased were made from timber using harvesting practices in compliance with the Forest Practice Act. The bill's provisions would apply to only a very narrow range of state purchase contracts, however. DGS indicates that annual direct spending on lumber and wood products by the state is around $1.4 million, so the cost impact of this bill should not be significant. The requirement that the wood products be harvested consistent with California law, assuming price is equal, could discourage out-of-state suppliers from bidding, thus reducing competition and increasing contracting costs for wood products. COMMENTS: 1)Purchase. The author states this bill would simply encourage state agencies to give preference to California lumber products as long as the price, quality and fitness of products are equal. The problem with existing law, the author AB 429 Page 3 contends, is that there is no recognition of the higher California standards of environmental compliance for California timber companies. Production has fallen due to timberland removals from production for environmental and social benefit; high costs of compliance with regulations; and, competition from out-of-state producers. 2)Prior Legislation. AB 994 (Parra) of 2007, a similar bill, passed the Assembly, but was amended in the Senate to address a different topic. AB 2994 (Frommer) of 2004, another similar bill, was vetoed by Governor Schwarzenegger, who was opposed another preference in state contracts. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081