BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2675 (Lowenthal) - State agency public contracts: recycled
products.
Amended: As Introduced Policy Vote: GO 7-3
Urgency: No Mandate: No
Hearing Date: August 11, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2675 would require state agencies to increase
purchases of recycled materials, from 50% to 75% of reportable
purchases by 2020, in specified product categories under the
State Agency Buy Recycled Campaign (SABRC).
Fiscal Impact: Unknown increased state agency procurement costs
or cost pressures by 2020, potentially in the hundreds of
thousands of dollars annually, to the extent additional virgin
materials are unavailable or purchases of additional recycled
materials are more expensive than virgin materials in five
product categories for which agencies' reportable purchases fall
under the 75% threshold (General fund and special funds).
----see staff comments----
Background: Existing law requires each state agency to purchase
recycled products instead of non-recycled products, if fitness
and quality are equal, whenever recycled products are available
at the same or lesser cost than non-recycled products. Existing
law, under the SABRC, requires state agencies to ensure that at
least 50% of reportable purchases, by dollar amount, from the
following product categories are recycled products:
Paper products, including boxes, toweling, packaging,
and janitorial supplies.
Printing and writing materials, including computer
paper, envelopes, and writing pads.
Mulch, compost, and co-compost products, including
erosion controls and ground cover.
Glass products, including windows, laboratory supplies,
fiberglass insulation, and construction blocks.
Lubricating oils, including engine, gearbox, hydraulic,
and transformer oils.
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Plastic products, including printer cartridges, carpet,
specified office products, containers, and other materials.
Paint, including water-based paint, graffiti abatement,
and interior and exterior.
Antifreeze, as specified.
Tires, including those used on trucks, buses, fleet
vehicles, and passenger cars.
Tire-derived products, including flooring, mats,
bumpers, bedliners, walkways, road surfacing, and
playground cover.
Metal, including office supplies, furniture, rebar,
pipe, plumbing fixtures, shelving, and construction
materials.
If a recycled product costs more than the same product made with
virgin material, existing law requires a state agency, to the
extent feasible, to purchase fewer of those more costly products
or apply any cost savings gained from buying other recycled
products towards the purchase of those more costly products.
Proposed Law: AB 2675 would require state agencies to ensure
that at least 75% of reportable purchases by January 1, 2020 in
specified product categories are purchases of recycled products.
Staff Comments: DGS indicates that this bill would primarily
impact purchases in the following five categories where
compliant spending is less than 75% of reportable purchases:
glass products, lubricating oils, paper products, plastic
products, and printing and writing materials. In order to meet
the higher threshold, state agencies would need to spend an
additional $13.4 million on purchasing recycled products, which
represents a shift in spending of this amount from purchases of
non-recycled products to recycled products. The overall impact
of this shift in spending on state agency procurement costs is
unknown. Generally, however, since existing law currently
requires state agencies to purchase recycled content products of
equal quality and fitness that are less expensive or cost the
same as non-recycled products, increasing the proportion of
recycled content purchases is likely to result in increased
costs or reduced quality, or some combination thereof.
The cost differential between recycled products and virgin
materials varies widely among the various product categories;
some recycled-content products are available at the same or
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lower price than those made from virgin content, while
recycled-content versions of other products are more expensive.
To the extent equivalent quality recycled products are not
available, or those products are more expensive than products
without recycled content, this bill could result in increased
costs or cost pressures of an unknown magnitude. For
illustrative purposes, if recycled content products are 1%-5%
more expensive, this bill could result in increased costs in the
hundreds of thousands of dollars annually by 2020.