BILL ANALYSIS Ó
AB 2181
Page 1
Date of Hearing: May 25, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2181 (Brown) - As Amended April 11, 2016
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|Policy |Natural Resources |Vote:|6 - 1 |
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| |Accountability and | |8 - 0 |
| |Administrative Review | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill 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:
AB 2181
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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 products for
infrastructure projects costing $1 million or more.
2)Defines the emissions-intensive products to be one produced by
the following industries:
a) cement manufacturing;
b) flat glass manufacturing;
c) iron and steel mills; and
d) rolled steel shape manufacturing.
1)Requires by January 1, 2018, specified state departments, UC,
and CSU to incorporate GHG information into their procurement
processes to procure emissions-intensive products with the
lowest GHG impacts.
FISCAL EFFECT:
1)The Department of Water Resources (DWR) anticipates a 3-5%
increase in costs which translates to an additional $3 to $5
AB 2181
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million increase on an annual construction budget of $100
million.
2)The Department of Parks and Recreation (which now includes the
Department of Boating and Waterways) estimates costs would be
absorbable. However, this assumes the science exists to
determine emissions of concrete development and
transportation, but they note they will not be able to
identify or report on this information unless it is provided
by the concrete companies.
3)The California Department of Corrections and Rehabilitation
(CDCR) uses large amounts of the materials identified in this
bill and anticipates unknown increased project costs if the
costs of the materials increase. CDCR also notes their lack
of ability to quantify or monetize GHG emissions across
project lines will result in verification difficulties. This
may require the need to contract out for such expertise which
would also increase costs.
4)UC estimates $2 million per year in reporting costs and
unknown increases in material costs and potential project
delays. UC also notes this bill contradicts existing state
requirements for competitive bidding and selection of products
at the lowest cost.
5)CSU estimates increased costs of $560,000 to $840,000 to
develop the data and tools necessary to integrate GHG as part
of selection criteria developed over a 5 to 7 year period.
Additionally, CSU estimates annual construction cost increases
of $35 million for a $1 billion construction spending budget
resulting from higher cost bidders receiving contracts.
6)Unknown, potentially significant cost increases to the
AB 2181
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Department of Transportation, Military Department and
Department of General Services.
COMMENTS:
1)Purpose. 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. 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.
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2)Background. The Air Resources Board (ARB), pursuant to the
California Global Warming Solutions Act of 2006 (AB 32), is
required 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.
Governor's Executive Order B-30-15 directs state agencies to
employ full life-cycle cost accounting to evaluate and compare
infrastructure investments and alternatives. Considering GHG
impacts beyond just the manufacturing impacts is in line with
this executive order.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081