BILL ANALYSIS Ó
SB 1427
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: SB 1427
AUTHOR: de León
AMENDED: April 17, 2012
FISCAL: Yes HEARING DATE: April 23, 2012
URGENCY: No CONSULTANT: Rebecca Newhouse
SUBJECT : BID PREFERENCES: REFURBISHED ELECTRONICS
SUMMARY :
Existing law :
1) Under the Electronic Waste Recycling Act of 2003 (Public
Resources Code §42460 et seq.):
a) Defines the following terms (§42463):
i) "Refurbished," when describing a covered
electronic device (CED), means a device that the
manufacturer has tested and returned to a condition
that meets factory specifications for the device, has
repackaged and has labeled as refurbished.
ii) "Covered electronic device" means a video
display device containing a screen greater than four
inches, measured diagonally, excluding certain
specified electronic devices with video displays of
the requisite length.
b) Requires a consumer to pay a Covered Electronic Waste
(CEW) recycling fee upon the purchase of a new or
refurbished CED and requires all fees collected pursuant
to the Act to be deposited in the Electronic Waste and
Recovery and Recycling Account, and authorizes those
monies to be appropriated for specified purposes (§42464).
c) Requires the Department of Resources Recycling and
Recovery (DRRR) to review payment claims made by CEW
collectors and recyclers and determine if a payment is due
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under the Act. DRRR may deny or adjust payment for an
incomplete or deficient payment claim.
d) Requires a person who exports CEW to a foreign country
follow specific guidelines and reporting requirements.
e) Prohibits manufacturers from selling new or refurbished
CEW unless the device is labeled with the name of the
manufacturer or the manufacturer's brand label, so that it
is readily visible.
f) Requires manufacturers of a CEW to submit a report to
DRRR which includes an estimate of the number of covered
electronic devices sold in the previous year, total
estimated amount of recyclable materials used in the
manufacturer of CEW, total estimated amounts of mercury,
cadmium, lead, hexavalent chromium, and PBB's used in
covered electronic devices manufactured in that year,
efforts to design covered electronic devices for recycling
and plans for further increasing design for recycling.
g) Requires manufacturers to make information available to
consumers that describes where and how to return, recycle,
and dispose of the CED and opportunities and locations for
the collection or return of the device.
h) Requires a manufacturer of a CED to provide a notice to
the retailer that identifies the CED and informs the
retailer that the CED is subject to a fee.
2) Under the Recycled Product Procurement Mandates Pertaining to
Local Governments Law (Public Contracts Code §22151):
a) Requires local public entities to purchase recycled
products when recycled products are available at the same
or lesser total cost of nonrecycled products, if fitness
and quality are equal.
b) Authorizes local public entities to give a preference
to suppliers of recycled products and specify the amount
of the preference.
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This bill :
1) Requires a state agency, when accepting bids or proposals for
a contract for electronic goods, give a preference to a
business that offers to fulfill a contract with refurbished
electronics. Specifically, for contracts awarded to the
lowest responsible bidder meeting specifications, the
preference will be five percent of the bid price. For
contracts awarded to the highest scored bidder based on
evaluation factors in addition to price, the preference will
be five percent of the total score of the highest responsible
bidder.
2) Prohibits the above preference from being awarded to a
noncompliant bidder and from being used to satisfy any
applicable minimum requirements.
3) Requires that a business, in order to be eligible for the
preference, submit all necessary substantiating documentation
and information required by the state agency to determine if
they are eligible for the preference.
4) Requires the Department of General Services to establish a
process to verify that a business meets the criteria for the
preference.
5) Prohibits the refurbished electronics preference from being
construed to require a state agency to compromise its
immediate mission or ability to function and carry out
existing responsibilities.
COMMENTS :
1) Purpose of Bill . According to the author, "SB 1427 will
require state agencies that accept bids or proposals for
electronic goods contracts to provide a preference of five
percent to a company that offers to fulfill the contract with
refurbished electronics. The goal of SB 1427 is to increase
the state's use of refurbished electronics to help our local
economies by increasing the demand for electronics recycling,
reduce the amount of toxins in our environment and lessen the
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demand for newly-mined conflict minerals which fuels violence
against women."
2) Background . Electronic waste (e-waste) refers to any unwanted
electronic device or cathode ray tube (CRT) and is an
ever-growing global problem; as technology continues to
become more affordable and widely adopted, the incredible
speed of development of more advanced technologies ensures
that previous electronic designs and models quickly become
obsolete. A 2012 Pike Research report estimates that the
total volume of e-waste will grow from 6 million tons (the
2010 figure), to 14.9 million tons by 2025.
According to CalRecycle, e-waste makes up 0.5 percent of the
total waste stream in California, which equates to over
200,000 tons that ends up in landfills. It is currently
illegal to dispose of CRTs and many electronic devices with
ordinary wastes due to the fact they contain toxic materials,
such as mercury and lead, which can leach into the
environment when improperly discarded.
The increasing demand for electronics has social as well as
environmental implications; newly-mined minerals including
columbite-tantalite (coltan), cassiterite, wolframite, and
gold, and used to manufacture many electronic devices has
fueled slave labor, mass rape and other atrocities in the
Democratic Republic of Congo, giving rise to the term
"conflict-minerals."
Policies encouraging or requiring the recycling and reuse of
e-waste, as well as laws requiring manufacturers to take
responsibility for end-of-life electronics (generally
referred to as extended producer responsibility or product
stewardship), are making significant progress in reducing the
impacts of end-of-life electronics. In California, the
Hazardous Electronic Recycling Act (Act) of 2003 requires
that consumers pay a fee for covered electronic devices (see
comment #3 below), which is used to collect and recycle those
devices. In June of 2011, the LA Times reported that the
state's electronic waste recycling program collected its 1
billionth pound of unwanted electronics. The Act also
includes requirements for the exportation of covered
electronic devices for recycling or disposal, although there
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is controversy over improper and unsafe recycling and
disposal practices in countries like China and India.
3) Covered vs. non-covered electronic waste . Covered electronic
wastes are electronic devices that have a diagonal screen
length greater than four inches and include CRT containing
devices, such as televisions and computer monitors, laptop
computers and desktop monitors with liquid crystal displays
(LCD), certain mobile phones, electronic tablets and other
electronic devices. Although the Act has increased recycling
and reuse efforts for these electronics, there are many
electronic goods that are not covered by the Act, including
computer towers, printers, fax machines, stereo equipment,
computer peripherals, calculators, microwaves, telephones and
many others. This bill currently applies to CED and non CED,
but the definition of refurbished, when applied to
electronics, only refers to covered electronic devices. The
committee may wish to suggest that the definition of
"refurbished" be amended to include non-covered electronics
as well.
4) What are the effects of increased use of refurbished
electronics ? For California, increasing the use of
refurbished electronics would ultimately mean that fewer
electronic devices end up in landfills or exported overseas.
On a global scale, using refurbished electronics ultimately
reduces the need to mine and process new materials, including
conflict minerals, for electronic devices which in turn helps
conserve natural resources, avoid air and water pollution and
reduce greenhouse gas emissions. Some governments have
already taken action to address the use of conflict minerals
in new electronic devices. Both California, with the
California Supply Chain Transparency Act, passed in 2010, and
the federal government, as part of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, are requiring new
reporting requirements and supply chain transparency for
companies that use conflict minerals for product
manufacturing. In California, SB 861 (Corbett) Chapter 715,
Statutes of 2011, prohibits companies that fail to comply
with the Dodd-Frank Act regarding conflict mineral reporting,
from bidding on California state contracts for goods or
services.
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5) What is the effect of a five percent preference ? By granting
a preference for businesses that fulfill electronic goods
contracts with refurbished electronics, the bill seeks to
improve the large scale competitiveness of refurbished goods,
which are typically less expensive on the individual scale,
but may be more expensive in bulk than new electronics. It
is unclear how many, if any, businesses are bidding for state
agency electronic goods contracts that supply refurbished
electronics. If there are businesses bidding for state
agency electronic goods contracts with refurbished
electronics, it is unclear whether a five percent preference
would currently help those businesses compete in a
significant way with companies supplying new electronics.
Even so, providing preferences for refurbished goods for
state contracts may encourage businesses and manufacturers to
develop the necessary infrastructure to refurbish their
electronic devices on the bulk scale. As manufacturing
processes are streamlined, costs will come down, and in the
future, it is feasible that a five percent preference could
make a substantial difference in determining whether
businesses supplying refurbished electronics are granted
state contracts. Also, lower costs would mean better
penetration of refurbished electronics into the private
sector, which could have a much more significant effect in
the long term on mitigating environmental and social impacts
of end-of-life electronics.
6) Related Legislation . The following legislation relates to
electronic device reuse and recycling, or conflict minerals:
a) SB 657 (Steinberg) Chapter 556, Statutes of 2010,
requires retail sellers and manufacturers doing business
in the state and with more than $1 million in annual
worldwide gross receipts, to disclose their efforts to
eradicate slavery and human trafficking from their direct
supply chains for tangible goods offered for sale.
b) SB 861 (Corbett) Chapter 715, Statutes of 2011, prohibits
a scrutinized company, as defined, that uses conflict
minerals from the Democratic Republic of the Congo, from
bidding on a state contract for goods or
services.
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c) AB 549 (Carter) of 2011 seeks to require, as a
condition of making e-waste recycling or recovery payments
by DRRR, that the covered electronic device for which the
payment is claimed was used in California. AB 549 is
currently in the Environmental Quality Committee.
d) AB 583 (Knight) of 2011 would transfer the duties,
powers, and authority of the DTSC under the Electronic
Waste Recycling Act to DRRR. A hearing in the Assembly
Environmental Safety and Toxic Materials Committee was
canceled at the author's request.
e) AB 960 (Lowenthal) of 2011 requires a person who
exports non-covered electronic waste to a foreign country
to comply with the same requirements imposed on an
exporter of covered electronic waste (CEW) under the
provisions of the Hazardous Electronic Recycling Act. AB
960 is currently on the Senate Appropriations Committee
Suspense file.
SOURCE : Global Green
SUPPORT : ecoATM, Inc.
California National Organization for Women
One Individual
OPPOSITION : None on file