BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 175|
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THIRD READING
Bill No: SB 175
Author: Corbett (D), et al
Amended: 4/26/11
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 7-3, 4/12/11
AYES: Wright, Calderon, Corbett, De Le�n, Hernandez,
Padilla, Yee
NOES: Anderson, Strickland, Wyland
NO VOTE RECORDED: Berryhill, Cannella, Evans
SENATE APPROPRIATIONS COMMITTEE : 6-3, 5/26/11
AYES: Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
NOES: Walters, Emmerson, Runner
SUBJECT : Public contracts: bid preferences: solar
photovoltaic system
SOURCE : Author
DIGEST : This bill requires a state agency that accepts
bids or proposals for a contract for the purchase or
installation of a solar photovoltaic system, as defined, to
provide a five percent preference to a business that
certifies that all of the solar panels installed as part of
the solar photovoltaic system have been manufactured or
assembled in California, in accordance with specified
criteria.
ANALYSIS :
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Existing law :
1. Establishes rules governing the awarding of contracts by
state agencies, including general requirements for
competitive bidding on contracts for
construction projects, goods, services, and information
technology.
2. Requires the California Energy Commission to give
priority to "California-based" entities in making awards
under the Public Interest Research, Development and
Demonstration Fund program.
3. Entitles California disabled veteran businesses and
small businesses certified by the Department of General
Services (DGS) to a 5 percent preference in bidding on
state contracts for goods, services, information
technology and for state public construction contracts.
4. Requires the state to award a 5 percent preference in
contracts for goods and services to California based
firms that demonstrate and certify that at least 50
percent of the total labor hours for manufactured goods
or 90 percent of the total labor hours for services will
be performed in qualifying areas.
5. Establishes a Self-Generation Incentive Program to
provide subsidies for customer-owned electric generation
facilities, with an additional 20 percent incentive for
installation of eligible distributed generation
resources from "California suppliers."
This bill requires a state agency that accepts bids or
proposals for a contract for the purchase or installation
of a solar photovoltaic system, as defined, to provide a
five percent preference to a business that certifies that
all of the solar panels installed as part of the solar
photovoltaic system have been manufactured or assembled in
California, in accordance with specified criteria.
Comments
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Preferences can currently be given for small business in
general, disabled veteran owned business enterprises, for
small businesses in economically targeted areas, and for
businesses, regardless of size, located in economically
distressed areas. The maximum amount provided for each
qualifying bidding preference is $50,000 with a total bid
maximum of $100,000. Thus, a contractor with a bid of up
to $100,000 higher than the lowest bid can be awarded the
contract if he/she qualifies for two bidding preferences.
Related legislation
SB 967 (Correa), of 2009-10 Session, would have required
state agencies that accept bids on contracts for goods or
services, or for the distribution of funds pursuant to the
federal American Recovery and Reinvestment Act of 2009, to
provide a credit of five percent of the bid price or
quotation to a business if 90 percent of its employees
reside in the state. (Vetoed)
SB 1249 (Ducheny), of 2009-10 Session, would have
authorized DGS to use an additional criterion in the
bidding and procurement process that takes into
consideration the relative economic benefit to California
in considering bids for goods and services. (Held in
Assembly)
AB 2267 (Fuentes), Chapter 537, Statutes of 08 Session,
requires the California Energy Commission to give priority
to California-based entities when making Public Interest
Energy Research, Demonstration and Development awards.
Provides an additional 20 percent incentive from the Public
Utilities Commission's Self Generation Incentive Program
funds, for the installation of eligible distributed
generation resources from a California supplier.
AB 608 (De La Torre), of 2007-08 Session, would have
increased the procurement contract bid preference from five
percent to 10 percent for small businesses. (Vetoed)
AB 1654 (De La Torre), of 2005-06, is similar to SB 967
(Correa) of 2010. (Held in Assembly Appropriations
Committee)
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Bid preference Unknown, but potentially major annual
General/
costs, to the extent state contracts
are Special
awarded to other than the lowest bidder
due to the preference. To the extent
the residency requirement dissuades
contractors from bidding, costs may
increase due to reduced competition
Contract administrationUnknown, minor to significant costs
to General/
determine compliance with residency
requirement; potential increase in bid
protests
SUPPORT : (Verified 5/25/11)
California Labor Federation
City of Fremont
Clean Economy Network
Fremont Chamber of Commerce
NanoSolar
Sierra Club California
Solaria
Solyndra
State Building and Construction Trades Council of
California
OPPOSITION : (Verified 5/25/11)
California Chamber of Commerce
California Manufacturers and Technology Association
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ARGUMENTS IN SUPPORT : According to the author's office,
"California has several companies that manufacture solar
panels in the state, employing Californians and helping our
economy. Other states and countries are using tax
incentives, low interest loans, cheap labor, and cheap
dirty energy to lure California clean tech manufacturers
away from California. Many other states have preferences
for state-manufactured goods, such as Alaska, Idaho,
Montana, and West Virginia. If California is going to
install solar panels on state property, it should attempt
to support California manufacturers."
The California Labor Federation notes that investment in
manufacturing is a smart way to get California on the road
to recovery and lay a foundation for a robust economy.
Manufacturing jobs have the highest multiplier effect of
any job classification in any industry for every
manufacturing job created an additional 2.5 jobs are
created in the broader economy. The state should make
every effort to make sure that the products invented here
are built here.
ARGUMENTS IN OPPOSITION : Opponents argue that bidding
preferences ultimately limit choice and drive up prices,
including the cost of energy for consumers and for the
state. Moreover, opponents argue, protectionist
legislation causes a net loss of jobs in related
industries, retaliation by our trading partners, and
violates provisions of the WTO and bilateral free trade
agreements.
PQ:do 5/27/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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