BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 429


                                                                      Page  1





          ASSEMBLY THIRD READING


          AB  
          429 (Dahle)


          As Amended  April 8, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Accountability  |9-0   |Salas, Lackey,       |                     |
          |                |      |Brough, Burke,       |                     |
          |                |      |Frazier, Beth        |                     |
          |                |      |Gaines, Irwin,       |                     |
          |                |      |Medina, Rodriguez    |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,      |                     |
          |                |      |Bloom, Bonta,        |                     |
          |                |      |Calderon, Chang,     |                     |
          |                |      |Daly, Eggman,        |                     |
          |                |      |Gallagher, Eduardo   |                     |
          |                |      |Garcia, Holden,      |                     |
          |                |      |Jones, Quirk,        |                     |
          |                |      |Rendon, Wagner,      |                     |
          |                |      |Weber, Wood          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 










                                                                       AB 429


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          SUMMARY:  Directs state agencies to provide a preference when  
          acquiring or contracting for lumber or other solid wood products.   
          Specifically, this bill:


          1)Requires price, fitness and quality to be equal among bidders  
            for the preference to apply.


          2)Requires lumber or other solid wood products to be produced  
            consistent with the Z'berg-Nejedly Forest Practice Act of 1973  
            (Act) of the California Public Resources Code.


          EXISTING LAW:  


          1)Declares in the Act that forest lands are among the most  
            valuable natural resources in the state.


          2)Recognizes that the state's forests currently are an annual net  
            sequester of five million metric tons of carbon dioxide.


          3)Expresses legislative intent to achieve the goal of maximum  
            sustained production of high-quality timber products while  
            giving consideration to values relating to sequestration of  
            carbon dioxide, recreation, watershed, wildlife, range and  
            forage, fisheries, regional economic vitality, employment, and  
            aesthetic enjoyment.


          4)Provides for the regulatory review and approval of timber  
            harvest plans.


          FISCAL EFFECT:









                                                                       AB 429


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          According to the Assembly Appropriations Committee, 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 Act-grown timber over non-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 Act.  This 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:  The state has various programs that provide bid  
          preferences to specific types of contractors or for projects in  
          certain areas.  Generally, various Government Code sections  
          establish the programs and the DGS' State Contracting Manual  
          specifies program parameters and compliance requirements. 


          The two main bid preference programs are the Disabled Veteran  
          Business Enterprise Program and the Certified Small and  
          Microbusiness Program.  DGS oversees these programs and certifies  








                                                                       AB 429


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          these businesses so they are eligible for the preferences when  
          bidding for state contracts.  Additional smaller bid preferences  
          are also overseen by DGS.


          This bill would add a preference for lumber or other solid wood  
          products that are produced in an environmentally preferred process  
          as set out in the Act.  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 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.




          Analysis Prepared by:                                               
                          William Herms / A. & A.R. / (916) 319-3600  FN:  
          0000356