BILL ANALYSIS Ó
SB 1427
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Date of Hearing: June 19, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 1427 (De León) - As Amended: June 11, 2012
SENATE VOTE : 25-14
SUBJECT : State contracts: electronic goods: bid preference for
refurbished electronics.
SUMMARY : Requires state agencies to provide a 5% bid
preference for electronic goods contracts to bidders who fulfill
the entire contract with refurbished electronics. Specifically,
this bill :
1)Requires state agencies to provide a 5% bid preference for
electronic goods contracts to bidders who fulfill the entire
contract with refurbished electronics. The preference shall
be provided to compliant bidders as follows:
a) For contracts awarded to the lowest responsible bidder,
the preference shall be 5% of bid price; or,
b) For contracts awarded to the highest scored bidder based
on evaluation factors in addition to price, the preference
shall be 5% of the total scored bidder.
2)Requires a bidder to submit substantiating documentation to
the state agency to be eligible for the 5% bid preference.
3)Requires the Department of General Services (DGS) to establish
a process to verify that a bidder meets the criteria to
receive a 5% bid preference.
4)Defines "refurbished electronics" to mean any electronic
device that the manufacturer has tested and returned to a
condition that meets factory specifications for the device,
has been repackaged, and has been labeled as refurbished.
EXISTING LAW :
1)Declares legislative intent, related to the state pursuing all
feasible measures to improve markets for recycled products
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including, but not limited to the following:
a) Bid evaluation preferences for purchases made by the
state; and,
b) If fitness and quality are equal, each state agency
shall purchase recycled products instead of non-recycled
products whenever recycled products are available at the
same or a lesser total cost than non-recycled products.
2)Requires the DGS, in consultation with the California
Environmental Protection Agency (CalEPA), and other specified
groups, to provide state agencies with information and
assistance regarding environmentally preferable purchasing.
3)Authorizes contracting between state agencies and private
contractors and sets forth the requirements for the
procurement of goods and services and for the solicitation and
evaluation of bids and the awarding of contracts by public
entities. Authorizes the DGS to procure goods and services
contracts on behalf of state agencies.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, this
bill would, "encourage the state's use of refurbished
electronics to help local economies by increasing the demand for
electronics recycling and refurbished products, reduce the
amount of toxins in our environment, and lessen the demand for
newly-mined conflict minerals which fuel violence against
women."
Background . The Democratic Republic of Congo (DRC) is Africa's
third largest nation, and it is the eastern portion, Kivu, that
has been the site of conflict. Illegally armed militia groups
have been responsible for human rights abuses, sexual
exploitation, acts of violence, and other atrocities in order to
mine the mineral-rich Kivu. The Act defines "conflict
materials" as columbite-tantalite (coltan), cassiterite, gold,
wolframite, or their derivatives. These materials, in turn, are
used to produce tungsten, tin, steel, or some other component
that results in the manufacture of light bulb filaments,
electrical components, computer chips and processors, cell
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phones, and other technology products. China is the largest
foreign market for DRC minerals, importing 47% of all DRC
minerals to manufacture many of the products that make up the
world's $150 billion consumer-electronics industry. According
to the author's office, reusing these minerals in refurbished
electronics products lessens the demand for newly mined conflict
materials and keeps electronic waste from going to landfills.
Support . According to actor Ryan Gosling, "The first goal of
this bill is to encourage the state's use of refurbished
electronics to reduce waste and toxins in our environment. The
EPA estimates that only 15-20% of used electronics are collected
for reuse or recycling, while the remaining materials are
primarily sent to landfills in the United States. Electronics
often contain toxic substances, such as lead and mercury, and
their end-of-life management has created a worldwide
catastrophe. These toxins cause known adverse impacts on human
health and the environment.
"Further, by reusing rare earth minerals in refurbished
electronics via recycling, this bill would help lessen the
demand for newly mined conflict minerals which fuel violence
against women. The greed for mineral wealth in the DRC and its
adjoining countries has been a prime cause of the atrocities and
conflict in Africa's third largest nation. Multiple armed
forces use sexual violence and mass rape as a strategy to
intimidate and control communities in order to keep the mineral
trade flowing and financial illegal armed groups and militias.
The United Nations has also discovered Rwandan rebels sending
prisoners of war and children into the mines."
Opposition . According to the TechAmerica and the California
Manufacturers & Technology Association, "First, in addition to
the State's existing e-waste laws which help ensure the safe and
environmentally sound disposal of covered electronic devices,
California was one of the earliest - and largest - states to
adopt the Electronic Product Environmental Assessment Tool
(EPEAT) as part of its purchasing guidelines in order to buy
greener electronic products. Under this framework, companies
have an existing incentive to register their products with EPEAT
- which takes into account product refurbishment, among many
other environmental criteria - in order to receive preferential
treatment from the State.
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"Second, with regard to the stated concerns over conflict
minerals, we believe SB 1427 is unnecessary in light of the
passage last year of SB 861 (Corbett), Chapter 715, Statutes of
2011, which has already provided a structure to discourage use
of conflict minerals in technology products sold in California.
SB 861 requires companies that do business with the State to
fulfill the public reporting obligations outlined in the
forthcoming Securities and Exchange Commission regulations.
Failing to meet these obligations will mean a company is
prohibited from seeking procurement contracts with the state.
Thus, a powerful disincentive is already in place in California
law to reduce the demand for conflict minerals in electronics
and other products."
Previous Legislation . SB 861 (Corbett), Chapter 715, Statutes
of 2011, prohibited a scrutinized company, as defined, using
conflict minerals from the DRC from bidding on a state goods or
services contract.
REGISTERED SUPPORT / OPPOSITION :
Support
Ryan Gosling, Actor
Opposition
TechAmerica
California Manufacturers & Technology Association
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301