Ningbo Huaping Metalwork Co.,

The offical AB 1953 bill changes the meaning of term lead free in the Health and Safety Code form eight percent lead for pipes or pipe fittings, and four percent lead for plumbing fittings and fixtures to a weighted average of not more than 0.25 percent lead content within each component that comes into contact with the wetted surfaces of pipes and pipe fittings, plumbing fittings and fixtures effective July 1, 2010.

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          |SENATE RULES COMMITTEE            |                  AB 1953|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
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                                 THIRD READING

          Bill No:  AB 1953
          Author:   Chan (D), et al
          Amended:  6/14/06 in Senate
          Vote:     21
          
          SENATE ENV. QUALITY COMMITTEE :  5-2, 6/19/06
          AYES:  Simitian, Chesbro, Escutia, Kuehl, Lowenthal
          NOES:  Runner, Cox

          SENATE APPROPRIATIONS COMMITTEE :  8-5, 8/17/06
          AYES:  Murray, Alarcon, Alquist, Escutia, Florez, Ortiz, 
            Romero, Torlakson
          NOES:  Aanestad, Ashburn, Battin, Dutton, Poochigian

          ASSEMBLY FLOOR :  41-37, 5/31/06 – See last page for vote

          SUBJECT :    Lead plumbing

          SOURCE :     East Bay Municipal Utility District

          DIGEST :    This bill changes the meaning of term lead free 
          in the Health and Safety Code form eight percent lead for 
          pipes or pipe fittings, and four percent lead for plumbing 
          fittings and fixtures to a weighted average of not more tan 
          0.25 percent lead content within each component that comes 
          into contact with the wetted surfaces of pipes and pipe 
          fittings, plumbing fittings and fixtures effective July 1, 
          2010.

          ANALYSIS :   

          Existing Law

           1.Establishes the Childhood Lead Poisoning Prevention 
            Program in the Department of Health Services to compile 
            information, identify target areas, and implement a 
            program of medical treatment and environmental abatement 
            to reduce childhood lead exposure.

           2.Prohibits the manufacture, sale, or exchange of toys 
            exceeding a certain lead content.

           3.Implements a lead poisoning prevention and protection 
            program for California schools to survey and ascertain 
            risk factors that predict lead contamination in public 
            schools.

           4.Defines “lead free” to mean not more than 8 percent with 
            reference to pipes and pipe fittings.  With reference to 
            plumbing fittings and fixtures, “lead free” means not 
            more than 4 percent by dry weight after August 6, 2002, 
            unless the Department of Health Services has adopted a 
            standard, based on health effects, for the leaching of 
            lead.

          This bill:

           1.Revises the meaning of “lead free” from 8 percent lead 
            for pipes or pipe fittings, and 4 percent lead for 
            plumbing fittings and fixtures to .25 percent lead 
            content within each component that comes into contact 
            with the wetted surfaces of pipes and pipe fittings, 
            plumbing fittings and fixtures effective January 1, 2010.

           2.Prohibits a person from using specified materials that 
            are not lead free in the installation or repair of any 
            public water system or any plumbing in a facility 
            providing water for human consumption, except when 
            necessary for the repair of leaded joints of cast iron 
            pipes.

           3.Prohibits a person from introducing into commerce, for 
            use in California, any specified material intended to 
            convey or dispense water for human consumption that is free.

           4.Exempts plumbing fixtures and related devices that are 
            used in manufacturing, industrial processing, for 
            irrigation purposes, and any other uses where the water 
            is not intended for human consumption.

           5.Prohibits a person engaged in the business of selling 
            plumbing supplies, except manufacturers, from selling 
            solder or flux that is not lead free, unless accompanied 
            by a prominent label stating that it is illegal to use 
            the solder or flux in the installation or repair of any 
            plumbing providing water for human consumption.

           6.Defines “lead free” as materials containing not more 
            than 0.2 percent lead when used with respect to solder 
            and flux and not more than a weighted average of 0.25 
            percent when used with respect to the wetted surfaces of 
            pipes and pipe fittings, plumbing fittings, and fixtures, 
            providing a specified definition and formula for 
            determining “weighted average.”

           7.Provides declaratory language regarding state mandates 
            and the procedure for local agencies to receive 
            reimbursement.

          FISCAL EFFECT :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Senate Appropriations Committee:

          Fiscal Effects . The Department of Health Service, which 
          promulgates regulations to implement the standards, would 
          incur some costs to develop and promulgate new regulations. 
           These General Fund costs, likely to be incurred in 
          1009-10, would be minor.  Local inspectors may incur costs 
          to comply with the new standards, but the costs could be 
          covered by inspection fees and therefore would be 
          non-reimbursable.

          SUPPORT :   (Verified  8/18/06)

          East Bay Municipal Utility District (source)
           East Bay Municipal Utility District (Sponsor)
          Alice Lai-Bitker,  Supervisor of Alameda County
          American Federation of State, County, Municipal Employees 
          (AFSCME)
          Breast Cancer Fund
          California Association of Environmental Health Officers
          California Association of Sanitation Agencies
          California Communities Against Toxics
          California Municipal Utilities Association
          California League of Conservation Voters
          California Rural Legal Assistance Foundation
          California Special Districts Association (Public Policy 
          Advocates)
          City and County of San Francisco
          City of Los Angeles
          Clean Water Action
          Commonweal
          Contra Costa Water District
          County of Alameda
          Defenders of Wildlife
          Environment California
          Environmental Justice Coalition for Water
          Healthy Children Organization Project
          Marin Municipal Water District
          Major Antonio Villaraigosa
          Natural Resources Defense Council (NRDC)
          Orange County Water District
          Physicians for Social Responsibility, San Francisco Bay 
          Area Chapter
          Planning and Conservation League
          San Francisco Public Utilities Commission    
          Santa Clara Valley Water District
          Sierra Club California
          Sonoma County Water Agency

          OPPOSITION :    (Verified  8/18/06)

          Alsons Corporation
          American Faucet & Coating Corporation
          American Standard, Inc.
          Black & Decker
          Building Owners an Managers Association of California
          Buttes Pipe & Supply Company
          California Building Industry Association
          California Business Properties Association
          California Chamber of Commerce
          California Home Builders
          California Professional Association of Specialty 
          Contractors
          California Retailers Association
          Center State Pipe & Supply Co.
          Copper Development Association
          Delta Faucet Company
          Dornbracht USA, Inc.
          ELKAY Manufacturing Company
          Haws Corporation      
          Kohler Company
          Los Angeles Unified School District
          Moen
          Non-Ferrous Founders’ Society
          Pacific Water Quality Association
          Plastic Pipe and Fittings Association
          Plumbing Heating Cooling Contractors National Association
          Plumbing Manufacturers Institute
          Sloan Valve Company
          Southern California Water Committee
          Symmons Industries
          Tempress Ltd.
          T&S Brass and Bronze Works, Inc.
          Water Quality Association

          ARGUMENTS IN SUPPORT :    Proponents contend that the 
          gradual phase-out of the use of lead-containing products 
          within the drinking water system will help to alleviate 
          this ongoing public health risk and that lead-free 
          alternatives will reduce in price as the market expands and 
          manufacturers develop new products as a consequence of the 
          phase-in of lead-free materials.

          ARGUMENTS IN OPPOSITION :    The opponents’ arguments are 
          largely contained in the following points: 

           1.No provision exists for testing or certifying according 
            to a standard.

           2.No method is in place for effectively restricting 
            transshipping of nonconforming products into the state.

           3.The bill ignores issues with respect to machining, metal 
            finishing, and durability of products utilizing the 
            prescribed alloys:

           4.The enactment of AB 1953 would force manufacturers who 
            wish to comply with the letter and spirit of the bill to 
            nationally standardize all products to the California 
            requirements.

          The more general source of opposition, however, focuses on 
          the financial impacts of this bill.  The Copper Development 
          Association, for example, states, “?AB 1953 proposes an 
          unprecedented, artificially low standard that would 
          prohibit virtually all faucets, valves, and backflow 
          preventers currently on the market.  Although low-lead 
          brass casting alloys have been introduced in very limited 
          plumbing applications?they are not widely utilized in most 
          plumbing products.”

          ASSEMBLY FLOOR :
          AYES:  Arambula, Baca, Bass, Berg, Bermudez, Chan, Chu, 
            Coto, De La Torre, Dymally, Evans, Frommer, Goldberg, 
            Hancock, Jerome Horton, Jones, Karnette, Klehs, Koretz, 
            Laird, Leno, Levine, Lieber, Lieu, Liu, Montanez, Mullin, 
            Nation, Nava, Oropeza, Pavley, Ridley-Thomas, Ruskin, 
            Saldana, Salinas, Torrico, Umberg, Vargas, Wolk, Yee, 
            Nunez
          NOES:  Aghazarian, Benoit, Blakeslee, Bogh, Canciamilla, 
            Chavez, Cogdill, Daucher, DeVore, Emmerson, Garcia, 
            Harman, Haynes, Shirley Horton, Houston, Huff, Keene, La 
            Malfa, La Suer, Leslie, Matthews, Maze, McCarthy, 
            Mountjoy, Nakanishi, Negrete McLeod, Niello, Parra, 
            Plescia, Richman, Sharon Runner, Spitzer, Strickland, 
            Tran, Villines, Walters, Wyland
          NO VOTE RECORDED:  Calderon, Cohn

          CTW:do  8/18/06   Senate Floor Analyses

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****

Ningbo Huaping Metalwork Co. Ltd. was seperated from our family company in Year 2003.

With inherited bronze casting advantage from our family company, we share the same supplier source including moulding, foundry, material source, as well as the experience in both casting and machining.

As the largest backflow product manufacturer in the world, our family company has been serving main backflow customers including WATTS, WILKINS, FEBCO, and DANFOSS, etc. In bronze casting line, we have unparalleled profession in mould developing, casting, machining, assembly as well as whole unit test. With top casting quality in China, we are recognized as largest bronze work exporter in China.

With over 15 years experience in bronze casting production, we have offered customers with types of bronze material, including lead free bronze, or even customized bronze material.

Our current bronze products are mainly OEM products for markets in North America, Japan, Europe and Australia. To serve well for our customers, we’ve developed quality components supplier for spring, rubber and plastic, etc, which make us always levels the top position in quality of whole assembly unit.

With current capacity, we are allowed to yield 500 tons of bronze casting as well as 150 tons of brass casting per month.

Resorting to this advantage, Huaping is devoting ourselves in both brass and bronze casting business. Main customers have been developed including SPIROTECH, RELIANCE WORLDWIDE, APOLLO VALVES, CASH ACME and CIRCOR, etc.

NINGBO HUAPING METALWORK CO.,LTD, FOUNDED IN OCTOBER OF YEAR 2003, WAS RUNNING FORMAL PRODUCTION SINCE YEAR OF 2004.

THE HISTORY OF HUAPING CAN BE TRACED BACK FROM ITS FAMILY COMPANY. THE LEGAL REPRESENTATIVE AND GENERAL MANAGER OF HUAPING MR. LU JIEPING CAME OUT FROM THE FAMILY COMPANY WHICH WAS RUNNING MAINLY BY FAMILY MEMBERS—ONE FATHER AND HIS THREE SONS TOGETHER.

OUR FAMILY COMPANY EVER GROWED VERY HEALTHY AND RAPIDLY IN THE FIELED OF VALVE MANUFACTURING IN CHINA, ALWAYS RANKING THE TOP POSITION (THE FIRST OR SECOND PLACE WITHIN THIS FIELD). IT ATTRACTED WATTS ATTENTION TO TRIED TO TAKE OVER THE FAMILY COMPANY 3 TIMES. THAT’S THE REASON WHY FAMILY MEMBERS DECIDED TO SET UP THEIR INDEPENDENT COMPANIES.

THOUGH FINAL TAKEOVER BUSINESS FAILED DUE TO GOVERNMENT’S HIGH TAX, TWO COMPANIES FINALLY EXISTED AFTERWARDS, BOTH INVOLVING IN BRASS&BRONZE VALVE MUNUFACTURING BUSINESS.

RELYING ON THE VALVE PRODUCTION AND DESIGNING EXPERIENCE AVAILABLE FROM FAMILY COMPANY, HUAPING ENTERED US MARKET SINCE YEAR 2004. WE ARE LUCKY TO BE THE SUPPLIER OF CONBRACO IN CHINA, OFFERING PRODUCTION LINE FOR APOLLO VALVE—A VERY FAMOUS BRAND OF VALVE IN USA. 2.5 MILLION US DOLLARS WAS CREATED WITHIN THE FIRST YEAR OF PRODUCTION RUNNING.

WITH THIS GOOD INITIATION, WE’VE CONTINUED THIS INCREASING MOMENTUM IN YEAR OF 2005 AND DOUBLED THE YIELD OF YEAR 2003.

GREAT SUCCESS OF BUSINESS ENCOURAGED HUAPING A PERSISTENT EXPAND IN THE INVESTMENT OF EQUIPMENT AND NEW PRODUCTION DEVELOPMENT. THE OUTPUT OF YEAR 2006 HAS BEEN MADE UPTO 7 MILLION US DOLLARS AND IT INCREASED TO BE 10 MILLION US DOLLARS IN YEAR OF 2007. 

YEAR OF 2007 WAS A CRUCIAL POINT FOR HUAPING. THERE WERE TWO BIG CUSTOMERS—ONE FROM US AND THE OTHER FROM EU, GOT IN TOUCH WITH HUAPING AND FINALLY JOINED TO WORK WITH HUAPING FROM YEAR 2008.

ECONOMY CRISIS FROM YEAR 2009, BROUGHT TO ALL VALVE MANUFACTURERS IN CHINA WITH TREMENDOUS EFFECT IN BOTH RAW MATERIAL AND ORDERS. THERE WAS NO EXCEPTION TO HUAPING. HOWEVER, WITH THE SOLID CAPITAL ADVANTAGE, WE HAD NO LOANING FROM BANK, AND OUR BUSINESS DECREASING RATE WAS ONLY 30%, LOWER THAN MOST OTHER VALVE MANUFACTURERS’ 50% RATE. TO BE MORE POSITIVE, OUR PROFIT OF 2009 DID NOT ACTUALLY REDUCED BUT ALMOST THE SAME AS THAT OF YEAR 2008,WHICH ALSO APPROVED OUR QUALITY CUSTOMERS.

THE PAST EXPERIENCE OF WORKING WITH TOP QUALITY CUSTOMERS ACQUIRED HUAPING OF THE IMPORTANCE OF MANUFACTURING QUALITY PRODUCT AND MEANWHILE MADE US THE POSITIVE POSITION IN CHINA’S BRASS&BRONZE VALVE MANUFACTURING FIELD.

ACTUALLY, THE SUPPLIER HAS INTERACTION WITH CUSTOMER’S GROWTH. FROM THE PAST EXPERIENCE, WITH THE GOOD PRICE AS WELL AS QUALITY PRODUCTS, HUAPING’S CUSTOMER(INCLUDING AMERICAN AND EUROPEAN CUSTOMERS) HAS MADE DISTINCT ACHIEVEMENTS IN SALES. TAKING OUR FIRST BIG CUSTOMER APOLLO VALVE FOR EXAMPLE, THEIR SALES SUCCESS CAN BE PROVED FROM THE SHARP INCREASE OF OUR EXPORT QUANTITY. WE WORKED WITH APOLLO FROM YEAR 2004 WITH MONTHLY EXPORTATION OF 1 TO 2 CONTAINERS. TIL YEAR 2010, THE MONTHLY EXPORTATION OF 5 TO 6 CONTAINERS. SO DOES OUR EUROPEAN CUSTOMER. THEIR DEMAND OF OUR EXPORT FROM JUST 1 TO 2 CONTAINERS PER MONTH FROM THE VERY BEGINNING CO-OPERATION WITH HUAPING TO THE CURRENT 4 CONTAINERS ON AVERAGE PER MONTH.

COMPARED WITH YEAR 2008, WE CAN SEE A PROMINENCE ORDER QUANTITY BOOST FROM YEAR 2010. HUAPING’S SALES REACHED 24 MILLION US DOLLARS IN THIS YEAR 2010.

THIS YEAR OF 2011 WOULD BE A SIGNIFICANT YEAR FOR HUAPING. WE’VE SETTLED OUR TARGET FOR YEAR 2011, THAT IS TO HAVE ANOTHER 30% BASED ON YEAR 2010’S ACHIEVEMENT. WITH THE RAPID DEVELOPMENT AND HEALTH ORDER STATUS, WE ARE ATTRACTING MORE AND MORE NEW CUSTOMERS JOINING IN OUR SALES IMPROVEMENT. AND WE ARE IMPREMENTING JOINT STOCK REFORM, TO BE PREPARED FOR LISTING ON SMALL-AND-MEDIUM-SIZED ENTERPRISES STOCK MARKET.