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AB-262 Public contracts: bid specifications: Buy Clean California Act.(2017-2018)



Current Version: 10/15/17 - Chaptered         Compare Versions information image


SECTION 1.
 The Legislature finds and declares all the following:
(a) Climate change will have devastating global impacts.
(b) All scientific evidence points to the need for California and the world to reduce greenhouse gas emissions to avert the worst effects of climate change. Climate change impacts are already apparent in California, where scientists have determined that annual temperature increases and a long-term drought are consequences of human-induced climate change.
(c) The Legislature has committed to reduce greenhouse gases, through numerous statutes requiring regulatory and other action by public agencies. Those regulations and actions do not currently encourage public dollars for infrastructure projects to be spent in a way that is consistent with the state’s goals to reduce greenhouse gas emissions.
(d) Executive Order B-30-15 issued by Governor Edmund G. Brown, Jr. stipulates that “State agencies shall take climate change into account in their planning and investment decisions and employ full life-cycle cost accounting to evaluate and compare infrastructure investments and alternatives.” Full life-cycle  life cycle  cost accounting in this instance also refers to accounting for the impacts across the life-cycle  life cycle  of a product, or life cycle analysis. assessment. 
(e) Great quantities of emissions are released during the manufacture and transport of products used in public infrastructure projects.
(f) California, through its extensive purchasing power, can improve environmental outcomes and accelerate necessary greenhouse gas reductions to protect public health, the environment, and conserve a livable climate by incorporating emissions information from throughout the supply chain and product life cycle into procurement decisions, and using that information to help direct expenditure.
(g) Incorporating emissions information will acknowledge those companies that have invested in emissions reduction technologies and practices. It will encourage other companies to take action to reduce emissions to become more competitive in the California bidding process.

SEC. 2.

 The heading of Article 5 (commencing with Section 3400) of Chapter 3 of Part 1 of Division 2 of the Public Contract Code is amended and renumbered to read:

Article  4. Preference for Materials

SEC. 3.

 Article 5 (commencing with Section 3500) is added to Chapter 3 of Part 1 of Division 2 of the Public Contract Code, to read:

Article  5. Buy Clean California Act
3500.
 This article shall be known, and may be cited, as the Buy Clean California Act.
3501.
 For purposes of this section:
(a) “Awarding authority” means any of the following:
(1) A state agency for a contract for a public works project that is subject to the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2).
(2) The Regents of the University of California for a contract for a public works project that is subject to Chapter 2.1 (commencing with Section 10500) of Part 2 of Division 2.
(3) The Trustees of the California State University for a contract for a public works project that is subject to the California State University Contract Law (Chapter 2.5 (commencing with Section 10700) of Part 2 of Division 2).
(b) “Department” means the Department of General Services.
(c) “Eligible materials” means any of the following:
(1) Carbon steel rebar.
(2) Flat glass.
(3) Mineral wool board insulation.
(4) Structural steel.
(d) “Eligible project” means a project that the awarding authority determines will require eligible materials.
(e) “Greenhouse gas emissions” has the same meaning as defined in subdivision (g) of Section 38505 of the Health and Safety Code.
3502.
 (a) By January 1, 2019, the department shall establish, and publish in the State Contracting Manual, a maximum acceptable global warming potential for each category of eligible materials in accordance with both of the following requirements:
(1) The department shall set the maximum acceptable global warming potential at the industry average of facility-specific global warming potential emissions for that material. The department shall determine the industry average by consulting nationally or internationally recognized databases of environmental product declarations.
(2) The department shall express the maximum acceptable global warming potential as a number that states the maximum acceptable facility-specific global warming potential for each category of eligible materials. The global warming potential shall be provided in a manner that is consistent with criteria in an Environmental Product Declaration.
(b) The department, by January 1, 2019, shall submit a report to the Legislature that describes the method that the department used to develop the maximum global warming potential for each category of eligible materials pursuant to subdivision (a). The report required by this subdivision shall be submitted in compliance with Section 9795 of the Government Code.
(c) By January 1, 2022, and every three years thereafter, the department shall review the maximum acceptable global warming potential for each category of eligible materials established pursuant to subdivision (a), and may adjust that number downward for any eligible material to reflect industry improvements if the department, based on the process described in paragraph (1) of subdivision (a), determines that the industry average has changed, but the department shall not adjust that number upward for any eligible material. At that time, the department shall update the State Contracting Manual to reflect that adjustment.
3503.
 (a) An awarding authority shall require the successful bidder for a contract described in subdivision (b) to submit a current facility-specific Environmental Product Declaration, Type III, as defined by the International Organization for Standardization (ISO) standard 14025, or similarly robust life cycle assessment methods that have uniform standards in data collection consistent with ISO standard 14025, industry acceptance, and integrity, for each eligible material proposed to be used.
(b) An awarding authority shall include in a specification for bids for an eligible project that the facility-specific global warming potential for any eligible material does not exceed the maximum acceptable global warming potential for that material determined pursuant to Section 3502. An awarding authority may include in a specification for bids for an eligible project a facility-specific global warming potential for any eligible material that is lower than the maximum acceptable global warming potential for that material determined pursuant to Section 3502.
(c) A successful bidder for a contract described in subdivision (b) shall not install any eligible materials on the project until that bidder submits a facility-specific Environmental Product Declaration for that material pursuant to subdivision (a).
(d) This section shall only apply to a contract entered into on or after July 1, 2019.
3504.
 In carrying out its duties under this article, an awarding authority shall strive to achieve a continuous reduction of emissions over time.
3505.
 The department, by January 1, 2022, shall submit a report to the Legislature on any obstacles to the implementation of this article, and the effectiveness of this article to reduce global warming potential. The report required by this section shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 2.

 Section 10130 is added to the Public Contract Code, to read:

10130.
 (a) Notwithstanding subdivision (c) of Section 10126, in awarding contracts described in Section 10170, the department shall calculate the lowest bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10170 to incorporate the value of social cost of those materials. The department shall calculate the social cost by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b).
(b) The Secretary of Government Operations shall establish a formula to calculate the social cost of the eligible materials, as follows:
(1) The secretary shall quantify the social cost for the emission of a unit of Scope 1, Scope 2, and Scope 3 greenhouse gases in a number. In making this calculation, the secretary shall consult with the State Air Resources Board.
(2) The secretary shall develop a formula to quantify the emissions associated with transporting the eligible materials from manufacturer to project site. That formula shall be calculated by multiplying the fuels used or miles transported from the manufacturing location to the project site by a standard emissions factor for fuel type or distance for the particular form of transportation used in the transportation.
(3) The formula shall then take the number developed pursuant to paragraph (1) and multiply it by the amount of greenhouse gases that were emitted in the manufacturing of the materials, as listed in the Environmental Product Declaration that the prospective bidder submitted pursuant to subdivision (a) of Section 10170, and by the greenhouse gas emissions that will be produced in the transportation of those materials from the manufacturer to the project site.
(c) (1) On or before January 1, 2019, and annually thereafter, a department that awards a contract by calculating the lowest bid pursuant to this section shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with those projects.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(d) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.

SEC. 3.

 Section 10170 is added to the Public Contract Code, to read:

10170.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the department shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current Environmental Product Declaration, Type III, as defined by International Standard ISO 14025, 14040, and 14044, for each eligible product proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, flat glass, manufacture wool, or steel. Beginning on January 1, 2021, or on the date that the International Organization of Standardization develops an Environmental Product Declaration for asphalt, whichever is earlier, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.

SEC. 4.

 Section 10503.5 is added to the Public Contract Code, to read:

10503.5.
 (a) Notwithstanding Section 10501, in awarding contracts described in Section 10504.10, the Regents of the University of California shall calculate the lowest responsible bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10504.10 to incorporate the value of the social cost of those materials. The regents shall calculate the social cost of the materials by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b) of Section 10130.
(b) (1) On or before January 1, 2019, and annually thereafter, the Regents of the University of California shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with any project that is awarded under this section.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code.

SEC. 5.

 Section 10504.10 is added to the Public Contract Code, to read:

10504.10.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the Regents of the University of California shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current Environmental Product Declaration, Type III, as defined by International Standard ISO 14025, 14040, and 14044, for each eligible product proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, flat glass, manufacture wool, or steel. Beginning on January 1, 2021, or on the date that the International Organization of Standardization develops an Environmental Product Declaration for asphalt, whichever is earlier, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.

SEC. 6.

 Section 10727 is added to the Public Contract Code, to read:

10727.
 (a) Notwithstanding Section 10722, in awarding contracts described in Section 10768, the trustees shall calculate the lowest responsible bid by adjusting that portion of the bid on the base contract that represents the cost of the eligible materials listed in subdivision (b) of Section 10768 to incorporate the value of the social cost of those materials. The trustees shall calculate the social cost of the materials by using the formula developed by the Secretary of Government Operations pursuant to subdivision (b) of Section 10130.
(b) (1) On or before January 1, 2019, and annually thereafter, the trustees shall prepare and submit to the Legislature and the Governor, as well as make available on its Internet Web site, a report that details the greenhouse gas emissions associated with any project that is awarded under this section.
(2) The report shall be submitted to the Legislature pursuant to Section 9795 of the Government Code.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code.

SEC. 7.

 Section 10768 is added to the Public Contract Code, to read:

10768.
 (a) If the contract involves a project that uses eligible materials listed in subdivision (b), the trustees shall require from all prospective bidders the completion of a standard form stating the cumulative amount of Scope 1, Scope 2, and Scope 3 greenhouse gas emissions that were produced in the manufacturing of the eligible materials to be used on the project. A prospective bidder shall satisfy this standard by attaching to that form a current Environmental Product Declaration, Type III, as defined by International Standard ISO 14025, 14040, and 14044, for each eligible product proposed to be used.
(b) For purposes of this section, “eligible materials” means cement, flat glass, manufacture wool, or steel. Beginning on January 1, 2021, or on the date that the International Organization of Standardization develops an Environmental Product Declaration for asphalt, whichever is earlier, “eligible materials” also includes asphalt.
(c) For purposes of this section, “greenhouse gas” has the same meaning as provided in subdivision (g) of Section 38505 of the Health and Safety Code. For purposes of this section, “Scope 1” greenhouse gas emissions means all direct emissions; “Scope 2” greenhouse gas emissions means all indirect emissions from consumption of purchased electricity, heat, or steam; and “Scope 3” means other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities not covered in Scope 2, outsourced activities, or waste disposal.