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AB-1397 Public contracts: California Lithium Economy Act.(2021-2022)



Current Version: 02/19/21 - Introduced         Compare Versions information image


AB1397:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1397


Introduced by Assembly Member Eduardo Garcia

February 19, 2021


An act to amend Section 3501 of, and to add Section 3503.5 to, the Public Contract Code, relating to public contracts.


LEGISLATIVE COUNSEL'S DIGEST


AB 1397, as introduced, Eduardo Garcia. Public contracts: California Lithium Economy Act.
Existing law, the Buy Clean California Act, requires the Department of General Services to establish and publish a maximum acceptable global warming potential for categories of eligible materials, in accordance with specified requirements. Existing law further requires the department to review the maximum acceptable global warming potential for each category of eligible materials and adjust that number based on specified criteria.
Existing law requires an awarding authority, as defined, to require a successful bidder for a contract for an eligible product, to submit a current Environmental Product Declaration, developed in accordance with specified standards, for that type of product. Existing law further requires an awarding authority to include in a specification for a bid for an eligible project, as defined, that the facility-specific global warming potential for any eligible materials does not exceed the maximum global warming potential for that material determined by the department. Existing law also prohibits a successful bidder from installing any eligible materials on an eligible project until that bidder submits an Environmental Product Declaration to the awarding authority for that project. Existing law defines “awarding authority” for purposes of the act to include state departments and entities subject to the State Contract Act, the Regents of the University of California, and the Trustees of the California State University. Existing law also defines “eligible materials” for purposes of the act to mean carbon steel rebar, flat glass, mineral wood board insulation, and structural steel.
This bill, entitled the California Lithium Economy Act, would revise the definition of “eligible materials” to include lithium, commencing January 1, 2023. The bill would require an awarding authority, by January 1, 2025, to require the successful bidder for a contract that includes electric vehicles to be provided as part of that contract, to disclose the sources of lithium used in the manufacture of the electric vehicles’ batteries. The bill would also require, by January 1, 2035, that at least 35% of the lithium used in electric vehicle batteries pursuant to a contract under the act be produced in California. The bill would include related findings and declarations.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) This act shall be known and may be cited, as the California Lithium Economy Act.
(b) The Legislature finds and declares all of the following:
(1) The transportation sector is responsible for more than one-half of all of California’s carbon pollution, 80 percent of smog-forming pollution, and 95 percent of toxic diesel emissions, all while communities in the Los Angeles Basin and central valley experience some of the dirtiest and most toxic air in the country.
(2) Passenger rail, transit, bicycle, and pedestrian infrastructure and micro-mobility options are critical components to the state achieving carbon neutrality and connecting communities, requiring coordination of investments and work with all levels of governments, including rail and transit agencies, to support these mobility options.
(3) Executive Order No. N-79-20 (2020) set goals for 100 percent of in-state sales of new passenger cars and trucks to be zero emission by 2035, and for 100 percent of medium- and heavy-duty vehicles in the state to be zero emission by 2045 for all operations where feasible, and, by 2035, for drayage trucks.
(4) As California transitions to a clean transportation economy, its heavy reliance on importing lithium from foreign countries robs the state of the opportunity to pair its transportation goals with the creation of high-quality, green jobs.
(5) The Salton Sea Known Geothermal Resource Area is home to the largest deposits of lithium in North America, with the potential to supply more than one-third of worldwide lithium demand, according to experts.
(6) Accelerating lithium development at the Salton Sea Known Geothermal Resource Area could anchor a domestic battery supply chain that will not only create thousands of middle-class-sustaining union jobs, but would also inject billions of dollars into a high-need community while also moving the United States and California closer to its climate and energy goals.
(7) Developing lithium from the Salton Sea Known Geothermal Resources Area could also enable the creation of numerous revenue streams from California’s enormous purchasing power, part of which, could be used to offset the state’s legal obligation to restore the Salton Sea.
(c) It is the intent of the Legislature to accelerate its greenhouse gas and energy goals, protect the public health and the environment, and build a sustainable domestic battery supply chain.

SEC. 2.

 Section 3501 of the Public Contract Code is amended to read:

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).
(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.
(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).
(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.
(5) Lithium, commencing January 1, 2023.
(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.

SEC. 3.

 Section 3503.5 is added to the Public Contract Code, to read:

3503.5.
 (a) By January 1, 2025, an awarding authority shall require the successful bidder for a contract, as described in Section 3503, which includes electric vehicles to be provided as part of that contract, to disclose the sources of lithium used in the manufacture of the electric vehicles’ batteries.
(b) By January 1, 2035, at least 35 percent of the lithium used in electric vehicle batteries pursuant to a contract described in subdivision (a), shall be produced in California.
(c) This section shall be construed so as to not conflict with, and be applied consistent with, applicable federal law.

SEC. 4.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.