BILL ANALYSIS Ó AB 2181 Page 1 Date of Hearing: April 13, 2016 ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW Cristina Garcia, Chair AB 2181 (Brown) - As Amended April 11, 2016 SUBJECT: Public contracts: contract specifications SUMMARY: Requires specified state departments, the University of California (UC), and the California State University (CSU) to evaluate the impact of greenhouse gas (GHG) emissions on certain infrastructure projects and incorporate GHG emissions considerations into their procurement processes. Specifically, this bill: 1)Requires specified state departments, UC, and CSU to report to the Legislature by January 1, 2018, on GHG emissions associated with specific emission-intensive sectors for infrastructure projects that cost $1 million or more. 2)Defines the industries to include cement manufacturing, flat glass manufacturing, iron and steel mills, and rolled steel shape manufacturing. 3)Requires by January 1, 2018, specified state departments, UC, and CSU to incorporate GHG information into their procurement AB 2181 Page 2 processes to procure emissions-intensive products with the lowest GHG impacts. EXISTING LAW: 1)Requires the Air Resources Board (ARB), pursuant to the California Global Warming Solutions Act of 2006 (AB 32), to adopt a statewide GHG emissions limit equivalent to 1990 levels by 2020 and adopt regulations to achieve maximum technologically-feasible and cost-effective GHG emission reductions. 2)Requires state agencies, when purchasing specified products in 11 categories, to buy those at specified levels that contain minimum amounts of recycled-content material. FISCAL EFFECT: Unknown COMMENTS: This bill requires state departments, including the Department of Water Resources, Department of Transportation, Department of Boating and Waterways, Department of Corrections and Rehabilitation, Military Department, and Department of General Services, as well as the UC and CSU to report to the Legislature information about GHG emissions impacts of infrastructure projects that cost $1 million or more. Additionally, the entities must incorporate this information into their procurement processes, including bid specifications, to purchase emission-intensive products with the lowest GHG emissions profile that meet state quality or safety standards. Previous unsuccessful legislation would have given a specified bidding preference to companies that provide environmentally AB 2181 Page 3 preferred purchasing. The approach of this bill is different, as it does not set a preference between conventional and environmentally-preferable alternatives. Instead, it requires state entities to consider GHG emissions as a factor in evaluating potential bidders under their procurement processes. According to the author, this bill will "create a green infrastructure/sustainability policy that would reduce the GHG emissions associated with energy-intensive materials used in the construction of large infrastructure projects." The author is focusing on specified industry sectors because products in those areas are considered emission intensive. This bill requires that the emission totals incorporated in procurement processes must account for both the GHG emissions that are produced when the product is manufactured or produced and those associated with transporting the product from where it is made to the job site. Considering GHG impacts beyond just the manufacturing impacts is in line with the Governor's Executive Order B-30-15, which directs state agencies to "employ full life-cycle cost accounting to evaluate and compare infrastructure investments and alternatives." PRIOR LEGISLATION: AB 963 (Levine) of 2013 would have given a preference for a bidder with a record of environmentally preferable purchasing. The bill died in the Assembly Appropriations Committee. DOUBLE REFERRAL: This measure was previously heard in the Assembly Natural Resources Committee on April 4, 2016, with a vote of 6-1. AB 2181 Page 4 REGISTERED SUPPORT / OPPOSITION: Support Gerdau Steel United Steelworkers, District 12 Opposition None on file Analysis Prepared by:Scott Herbstman / A. & A.R. / (916) 319-3600 AB 2181 Page 5