BILL ANALYSIS Ó
SB 1427
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Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1427 (De Leon) - As Amended: June 11, 2012
Policy Committee: B&P Vote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill provides a 5% preference for bidders on state
contracts for electronic goods if the bidder offers to fulfill
the entire contract only with "refurbished electronics"-any
electronic device that the manufacturer has tested and returned
to a condition meeting factory specifications and that has been
repackaged and labeled as refurbished. This bill also:
1)Stipulates that the maximum preference that may be awarded
pursuant to the above, and any other provision of law, is 15%,
and that the combined cost of preferences granted pursuant to
the above and any other provision of law shall not exceed
$100,000.
2)Requires the Department of General Services to establish a
process for verifying that a bidder is eligible for this
preference.
FISCAL EFFECT
1)To the extent contracts are awarded to other than the lowest
bidder, the state will incur additional costs on contracts.
These costs are unknown, but could total several hundred
thousand dollars annually (General Fund and various special
funds). According to DGS, the state has been spending an
average of $43 million annually on contracts covered by this
bill.
2)DGS will also incur significant one-time costs to establish
specifications and standard contract language for refurbished
electronics.
SB 1427
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COMMENTS
1)Purpose . 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."
2)Background . The 2010 Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank Act) required companies to
annually disclose to the SEC whether they use "conflict
minerals" that are "necessary to the functionality or
production" of a product they manufacture, or contract to
manufacture, and originate from the DRC or adjoining
countries. The term conflict minerals, for purposes of the DRC
Act (those provisions of Dodd-Frank related to the DRC),
includes columbite-tantalite (coltan), cassiterite, gold,
wolframite or their derivatives, or any other mineral or its
derivative determined by the U.S. Secretary of State to be
financing conflict in the DRC or an adjoining country. Last
year, SB 861 (Corbett)/Chapter 715 of 2011, prohibited a
scrutinized company, as defined, using conflict minerals from
the DRC from bidding on a state goods or services contract.
The Democratic Republic of the Congo (DRC) is Africa's third
largest nation. According to the World Fact Book, the DRC's
economy has the potential of generating substantial wealth
based on its reserves of natural resources. The country has,
however, experienced decades of economic decline, brought on
by long-standing internal conflicts and systemic corruption
since its independence in 1960. Since 1998, an estimated five
million people have died as a result of this conflict. Sexual
violence and rape are reportedly used to terrorize and control
communities in the eastern region of the DRC to keep the
mineral trade flowing and financing illegal armed groups and
military forces.
3)Opposition . TechAmerica and the California Manufacturers &
Technology Association argue that (a) the state's e-waste laws
already help to ensure that electronic devices are disposed of
in a safe and environmentally sensitive manner and (b) the
enactment of SB 861 has already provided a structure to
discourage the use of conflict minerals in technology
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products.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081