BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2052
                                                                  Page  1

          Date of Hearing:   May 5, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                AB 2052 (Hayashi) - As Introduced:  February 18, 2010 

          Policy Committee:                              Business and  
          Professions  Vote:                            11-0 (Consent)

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill:


          1)Requires the Department of General Services (DGS) to establish  
            a program to centralize the sale of state surplus personal  
            property using the best available technology, including, but  
            not limited to, the Internet.



          2)Requires DGS to recover its costs through a surcharge on each  
            item sold.


           FISCAL EFFECT  

          Little fiscal impact, as DGS reports it has already centralized  
          and employed an online auction site through a contract with a  
          vendor for disposition of state surplus assets.  The department  
          indicates that, as a fee-for-service agency, it already has the  
          authority to cover its costs.  The department also indicates  
          that it has not seen significant saving in warehousing,  
          shipping, and handling costs.

          Revenues from state surplus personal property sales totaled  
          about $550,000 in 2004-05 and $860,000 in 2006-07, and exceeded  
          $1 million in 2007-08.  The department states that revenues have  
          been down recently due to reductions in state purchases of new  
          property such as furnishings.  The department's recent emphasis  
          has been on disposing of surplus vehicles.








                                                                  AB 2052
                                                                  Page  2


           COMMENTS  

           1)Background and Purpose  . In 2004, the final report of the  
            California Performance Review (CPR) recommended the state  
            pursue innovative techniques to improve the sale of state  
            surplus property (e.g., office equipment) to increase  
            efficiency and revenues. DGS-one of the major sellers of such  
            property-receives about 16,000 shipments each year, with each  
            shipment containing anywhere from 1 up to 200 different items.  


            The traditional method for disposing of such property has been  
            through public warehouse sales. It is believed that broadening  
            the customer base through the use of the Internet could  
            produce more sales and revenue.

           2)Prior Legislation  . In 2007, AB 240 (Eng), which was  
            substantially similar to this bill, passed the Assembly 78-1  
            but was never heard in the Senate. In 2005, AB 302 (Negrete  
            McLeod), which was substantially similar to this bill, passed  
            the Assembly but was subsequently amended in the Senate to  
            address an unrelated issue.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081