California Senate Bill SB1249 Latest Draft

 BILL NUMBER: SB 1249AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 28, 2010 AMENDED IN SENATE JUNE 1, 2010 AMENDED IN SENATE APRIL 20, 2010 AMENDED IN SENATE APRIL 5, 2010 INTRODUCED BY Senator  Ducheny   Cedillo  FEBRUARY 19, 2010  An act to add Chapter 2.01 (commencing with Section 10490.10) to Part 2 of Division 2 of the Public Contract Code, relating to state contracts.   An act to amend Section 350 of the Penal Code, relating to crimes.  LEGISLATIVE COUNSEL'S DIGEST SB 1249, as amended,  Ducheny   Cedillo  .  Contracting by state agencies: best value competitive bid contracts.   Counterfeit marks: donations.   Existing law makes it a misdemeanor or a felony for a person to willfully manufacture, intentionally sell, or knowingly possess for sale any counterfeit registered trademark, as specified. Existing law also requires the court, in any action under those provisions resulting in a conviction or a plea of nolo contendere, to order the forfeiture and destruction of all of those marks and matter bearing the marks, and order the disposition of all devices for manufacturing, reproducing, transporting, or assembling those marks, used in connection thereof. Existing law authorizes the court, upon law enforcement request and consent from the specific registrants, to consider a motion to have the goods, not including recordings or audiovisual works, as defined, donated to a nonprofit organization for the purpose of distributing the goods to persons living in poverty at no charge to the persons served by the organization.   This bill would provide that no person shall be liable for costs, damages, or other claims or expenses as a result of actions taken or omitted in good faith in the course of donating goods to a nonprofit organization pursuant to these provisions, and that no person shall be criminally prosecuted or be subjected to any criminal penalty as a result of any action taken or omitted in good faith in the course of donating those goods.   Existing law governs contracting between state agencies and private contractors, sets forth requirements for the bidding, awarding, and overseeing of contracts for construction projects, and regulates the awarding of contracts for the purchase of goods and services.   This bill would permit competitive bid contracts for construction projects, including, but not limited to, projects of the California State University, contracts for goods and services, and contracts for information technology acquisition, to be awarded as best value competitive bid contracts, as defined, taking into consideration, when awarding the contract, the total direct and indirect economic benefit to the state of the proposed contract, as prescribed. The bill would prohibit the award of a contract to a bidder pursuant to these provisions if the Director of General Services determines that the award of the contract to that bidder would result in a net loss of revenues to the General Fund based on estimates of the total direct and indirect economic benefit to the state under the contract. The bill would authorize the Director of General Services to adopt regulations to assist state agencies in implementing these provisions.  Vote: majority. Appropriation: no. Fiscal committee:  yes   no  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 350 of the   Penal Code   is amended to read:  350. (a) Any person who willfully manufactures, intentionally sells, or knowingly possesses for sale any counterfeit mark registered with the Secretary of State or registered on the Principal Register of the United States Patent and Trademark Office, shall, upon conviction, be punishable as follows: (1) When the offense involves less than 1,000 of the articles described in this subdivision, with a total retail or fair market value less than that required for grand theft as defined in Section 487, and if the person is an individual, he or she shall be punished by a fine of not more than five thousand dollars ($5,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment; or, if the person is a business entity, by a fine of not more than one hundred thousand dollars ($100,000). (2) When the offense involves 1,000 or more of the articles described in this subdivision, or has a total retail or fair market value equal to or greater than that required for grand theft as defined in Section 487, and if the person is an individual, he or she shall be punished by imprisonment in a county jail not to exceed one year, or in the state prison for 16 months, or two or three years, or by a fine not to exceed two hundred fifty thousand dollars ($250,000), or by both that imprisonment and fine; or, if the person is a business entity, by a fine not to exceed five hundred thousand dollars ($500,000). (b) Any person who has been convicted of a violation of either paragraph (1) or (2) of subdivision (a) shall, upon a subsequent conviction of paragraph (1) of subdivision (a), if the person is an individual, be punished by a fine of not more than fifty thousand dollars ($50,000), or by imprisonment in a county jail for not more than one year, or in the state prison for 16 months, or two or three years, or by both that fine and imprisonment; or, if the person is a business entity, by a fine of not more than two hundred thousand dollars ($200,000). (c) Any person who has been convicted of a violation of subdivision (a) and who, by virtue of the conduct that was the basis of the conviction, has directly and foreseeably caused death or great bodily injury to another through reliance on the counterfeited item for its intended purpose shall, if the person is an individual, be punished by a fine of not more than fifty thousand dollars ($50,000), or by imprisonment in the state prison for two, three, or four years, or by both that fine and imprisonment; or, if the person is a business entity, by a fine of not more than two hundred thousand dollars ($200,000). (d) (1) Except as provided in paragraph (2), in any action brought under this section resulting in a conviction or a plea of nolo contendere, the court shall order the forfeiture and destruction of all of those marks and of all goods, articles, or other matter bearing the marks, and the forfeiture and destruction or other disposition of all means of making the marks, and any and all electrical, mechanical, or other devices for manufacturing, reproducing, transporting, or assembling these marks, that were used in connection with, or were part of, any violation of this section. (2) Upon request of any law enforcement agency and consent from the specific registrants, the court may consider a motion to have the items described in paragraph (1), not including recordings or audiovisual works as defined in Section 653w, donated to a nonprofit organization for the purpose of distributing the goods to persons living in poverty at no charge to the persons served by the organization.  No person, including, but not limited to, a requesting law   enforcement agency or   a   specific registrant, shall be liable under the laws of the state to any person for costs, damages, or other claims or expenses as a result of actions taken or omitted in good faith in the course of donating goods pursuant to this paragraph. No person who is granted immunity by this paragraph shall be criminally prosecuted or be subjected to any criminal penalty for or on account of any action taken or omitted in good faith in the course of donating goods pursuant to this paragraph.  (3) Forfeiture of the proceeds of the crime shall be subject to Chapter 9 (commencing with Section 186) of Title 7 of Part 1. However, no vehicle shall be forfeited under this section that may be lawfully driven on the highway with a class 3 or 4 license, as prescribed in Section 12804 of the Vehicle Code, and that is any of the following: (A) A community property asset of a person other than the defendant. (B) The sole class 3 or 4 vehicle available to the immediate family of that person or of the defendant. (C) Reasonably necessary to be retained by the defendant for the purpose of lawfully earning a living, or for any other reasonable and lawful purpose. (e) For the purposes of this section, the following definitions shall apply: (1) When counterfeited but unassembled components of computer software packages are recovered, including, but not limited to, counterfeited computer diskettes, instruction manuals, or licensing envelopes, the number of "articles" shall be equivalent to the number of completed computer software packages that could have been made from those components. (2) "Business entity" includes, but is not limited to, a corporation, limited liability company, or partnership. "Business entity" does not include a sole proprietorship. (3) "Counterfeit mark" means a spurious mark that is identical with, or confusingly similar to, a registered mark and is used, or intended to be used, on or in connection with the same type of goods or services for which the genuine mark is registered. It is not necessary for the mark to be displayed on the outside of an article for there to be a violation. For articles containing digitally stored information, it shall be sufficient to constitute a violation if the counterfeit mark appears on a video display when the information is retrieved from the article. The term "spurious mark" includes genuine marks used on or in connection with spurious articles and includes identical articles containing identical marks, where the goods or marks were reproduced without authorization of, or in excess of any authorization granted by, the registrant. When counterfeited but unassembled components of any articles described under subdivision (a) are recovered, including, but not limited to, labels, patches, fabric, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging, or any other components of any type or nature that are designed, marketed, or otherwise intended to be used on or in connection with any articles described under subdivision (a), the number of "articles" shall be equivalent to the number of completed articles that could have been made from those components. (4) "Knowingly possess" means that the person possessing an article knew or had reason to believe that it was spurious, or that it was used on or in connection with spurious articles, or that it was reproduced without authorization of, or in excess of any authorization granted by, the registrant. (5) Notwithstanding Section 7, "person" includes, but is not limited to, a business entity. (6) "Registrant" means any person to whom the registration of a mark is issued and that person's legal representatives, successors, or assigns. (7) "Sale" includes resale. (8) "Value" has the following meanings: (A) When counterfeit items of computer software are manufactured or possessed for sale, the "value" of those items shall be equivalent to the retail price or fair market price of the true items that are counterfeited. (B) When counterfeited but unassembled components of computer software packages or any other articles described under subdivision (a) are recovered, including, but not limited to, counterfeited digital disks, instruction manuals, licensing envelopes, labels, patches, fabric, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging, or any other components of any type or nature that are designed, marketed, or otherwise intended to be used on or in connection with any articles described under subdivision (a), the "value" of those components shall be equivalent to the retail price or fair market value of the number of completed computer software packages or other completed articles described under subdivision (a) that could have been made from those components. (C) "Retail or fair market value" of a counterfeit article means a value equivalent to the retail price or fair market value, as of the last day of the charged crime, of a completed similar genuine article containing a genuine mark. (f) This section shall not be enforced against any party who has adopted and lawfully used the same or confusingly similar mark in the rendition of like services or the manufacture or sale of like goods in this state from a date prior to the earliest effective date of registration of the service mark or trademark either with the Secretary of State or on the Principle Register of the United States Patent and Trademark Office. (g) An owner, officer, employee, or agent who provides, rents, leases, licenses, or sells real property upon which a violation of subdivision (a) occurs shall not be subject to a criminal penalty pursuant to this section, unless he or she sells, or possesses for sale, articles bearing a counterfeit mark in violation of this section. This subdivision shall not be construed to abrogate or limit any civil rights or remedies for a trademark violation. (h) This section shall not be enforced against any party who engages in fair uses of a mark, as specified in Section 14247 of the Business and Professions Code. (i) When a person is convicted of an offense under this section, the court shall order the person to pay restitution to the trademark owner and any other victim of the offense pursuant to Section 1202.4.  SECTION 1.   It is the intent of the Legislature to do both of the following: (a) Permit a contract entered into between the state and outside entities to reflect the true costs, both direct and indirect, of the contract to the state. (b) Permit the method established for calculating the actual cost of any contract entered into to include both direct and indirect economic benefits to the state through the employment of individuals or companies or both or the purchase of goods or services or both that generate revenues to the state, including personal or corporate, or both personal and corporate, income taxes, property taxes, or sales and use taxes.   SEC. 2.   Chapter 2.01 (commencing with Section 10490.10) is added to Part 2 of Division 2 of the Public Contract Code, immediately following Chapter 2 (commencing with Section 10290), to read: CHAPTER 2.01. BEST VALUE COMPETITIVE BID CONTRACTS 10490.10. (a) Notwithstanding any provision of law, commencing January 1, 2011, every contract that would otherwise be required to be awarded on a competitive basis pursuant to Chapter 1 (commencing with Section 10100), Chapter 2 (commencing with Section 10290), Chapter 2.5 (commencing with Section 10700), Chapter 3 (commencing with Section 12100), and any other applicable state statute governing state contracts, may be awarded, instead, as a best value competitive bid contract to the bid or proposal that presents the best overall value to the state. (b) For purposes of this chapter, "best value competitive bid contract" means a contract that is awarded on a competitive process that is not based merely on the lowest direct cost to the state under the contract, but rather is awarded to the bidder that presents the overall best value to the state after consideration of the total direct and indirect economic benefit to the state under the contract, including, but not limited to, all of the following: (1) The direct cost of the contract, including, but not limited to, materials, goods, and services. (2) Indirect value to the state generated by the contract, including, but not limited to, an analysis of the proposed contract to determine all of the following: (A) (i) The total projected indirect revenue to the state generated by the wages that the contractor and subcontractors, if any, propose to pay their workers in performing under the contract. (ii) The total projected indirect revenue to California local governments generated by the wages that the contractor and subcontractors, if any, propose to pay their workers in performing under the contract and the indirect revenue to the state generated thereby. (B) (i) The total projected indirect revenue to the state generated from the goods and materials that the contractor and subcontractors, if any, propose to purchase or provide in performing under the contract. (ii) The total projected indirect revenue to California local governments generated by the goods and materials that the contractor and subcontractors, if any, propose to purchase or deliver in performing under the contract and the indirect revenue to the state generated thereby. (iii) The indirect economic benefit to the state generated by the economic activity related to the production of the goods and materials to be purchased or delivered under the contract. (c) The Director of General Services shall adopt regulations that shall take effect immediately and are exempt from the rulemaking provisions of the Administrative Procedure Act to provide guidance to state agencies on best methods and practices and a related matrix to assist those agencies in determining the overall best value. (d) In determining the overall economic benefit to the state of a proposed contract pursuant to this section, state agencies shall consider, to the extent not prohibited under federal law, the location where the wages are to be paid and the location where the products or materials are to be manufactured or produced. (e) No contract shall be awarded to a bidder pursuant to this chapter if the Director of General Services determines that the award of the contract to that bidder would result in a net loss of revenues to the General Fund based on estimates of the total direct and indirect economic benefit to the state under the contract.