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 Page 2 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 Page 3 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 Page 4 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