BILL NUMBER: SB 1231	ENROLLED
	BILL TEXT

	PASSED THE SENATE  JUNE 2, 2010
	PASSED THE ASSEMBLY  AUGUST 19, 2010
	AMENDED IN SENATE  MAY 17, 2010
	AMENDED IN SENATE  APRIL 8, 2010

INTRODUCED BY   Senator Corbett
   (Principal coauthor: Senator DeSaulnier)
   (Coauthor: Senator Price)

                        FEBRUARY 19, 2010

   An act to amend Section 6108 of the Public Contract Code, relating
to public contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1231, Corbett. Public contracts: state agency: sweatshop labor:
slave and sweat free code of conduct.
   Existing law requires every contract entered into by a state
agency for the procurement of equipment, materials, supplies,
apparel, garments, and accessories and the laundering thereof,
excluding public works contracts, to require a contractor to certify
that no equipment, materials, supplies, apparel, garments, or
accessories provided under the contract are produced by sweatshop
labor, forced labor, convict labor, indentured labor under penal
sanction, abusive forms of child labor, or exploitation of children
in sweatshop labor. If a contractor knew or should have known the
specified products furnished to the state were laundered or produced
by the specified types of prohibited labor, the contractor may be
removed from the bidder's list for 360 days. Existing law provides
for misdemeanor liability in the case of a knowing false
certification.
   Existing law requires the Department of Industrial Relations to
establish a contractor responsibility program, on or before February
1, 2004, including a Sweat Free Code of Conduct. Existing law also
requires the appropriate procurement agency, in consultation with the
Director of Industrial Relations, to employ an approach to implement
the Sweat Free Code of Conduct, as specified. Existing law requires
the Department of Industrial Relations to explore mechanisms to
ensure that businesses that contract with state agencies are in
compliance with those provisions.
   This bill would rename the code of conduct as the Slave and Sweat
Free Code of Conduct and would require every contract entered into by
a state agency for the procurement of equipment, materials,
supplies, apparel, garments, and accessories and the laundering
thereof, excluding public works contracts, to require a contractor to
certify that no equipment, materials, supplies, apparel, garments,
or accessories provided under the contract are produced by abusive
forms of labor performed by all persons, not only abusive forms of
child labor, as prescribed.
   The bill would additionally extend the period that the contractor
is removed from the bidder's list to 2 years, if the contractor knew
or should have known the specified products were laundered or
produced by the specified prohibited labor. This bill would require
the Department of Industrial Relations to establish a contractor
responsibility program on or before January 1, 2012, and would
require specified actions by the Department of Industrial Relations
and the Department of General Services with regard to the code of
conduct.
   This bill would additionally require contractors whose
manufacturing and assembly locations are outside the United States to
comply with international laws or treaties binding on their
countries and would require a subcontractor to sign a certification
regarding the code of conduct under the penalty of perjury. By
changing the definition of existing crimes, this bill would impose a
state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 6108 of the Public Contract Code is amended to
read:
   6108.  (a) (1) Every contract entered into by any state agency for
the procurement or laundering of apparel, garments, or corresponding
accessories, or the procurement of equipment, materials, or
supplies, other than procurement related to a public works contract,
shall require that a contractor certify that no apparel, garments,
corresponding accessories, equipment, materials, or supplies
furnished to the state pursuant to the contract have been laundered
or produced in whole or in part by sweatshop labor, forced labor,
convict labor, indentured labor under penal sanction, abusive forms
of labor, or exploitation of children in sweatshop labor, or with the
benefit of sweatshop labor, forced labor, convict labor, indentured
labor under penal sanction, abusive forms of labor, or exploitation
of children in sweatshop labor. The contractor shall agree to comply
with this provision of the contract.
   (2) The contract shall specify that the contractor is required to
cooperate fully in providing reasonable access to the contractor's
records, documents, agents, employees, or premises if reasonably
required by authorized officials of the contracting agency, the
Department of Industrial Relations, or the Department of Justice to
determine the contractor's compliance with the requirements under
paragraph (1).
   (3) Contractors shall exercise due diligence in ensuring that
their subcontractors comply with the Slave and Sweat Free Code of
Conduct. Contractors shall attach a copy of the Slave and Sweat Free
Code of Conduct to the certification required by this subdivision and
require each subcontractor to sign the certification under penalty
of perjury.
   (b) (1) Any contractor contracting with the state who knew or
should have known that the apparel, garments, corresponding
accessories, equipment, materials, or supplies furnished to the state
were laundered or produced in violation of the conditions specified
in subdivision (a) when entering into a contract pursuant to
subdivision (a), may, subject to subdivision (c), have any or all of
the following sanctions imposed:
   (A) The contract under which the prohibited apparel, garments, or
corresponding accessories, equipment, materials, or supplies were
laundered or provided may be voided at the option of the state agency
to which the equipment, materials, or supplies were provided.
   (B) The contractor may be assessed a penalty that shall be the
greater of one thousand dollars ($1,000) or an amount equaling 20
percent of the value of the apparel, garments, corresponding
accessories, equipment, materials, or supplies that the state agency
demonstrates were produced in violation of the conditions specified
in paragraph (1) of subdivision (a) and that were supplied to the
state agency under the contract.
   (C) The contractor may be removed from the bidder's list for a
period not to exceed two years.
   (2) Any moneys collected pursuant to this subdivision shall be
deposited into the General Fund.
   (c) Notwithstanding subdivision (b), a contractor that has
complied with the provisions of paragraph (3) of subdivision (a)
shall not be subject to sanctions for violations, of which the
contractor had no knowledge, of the Slave and Sweat Free Code of
Conduct that were committed solely by a subcontractor. Sanctions
shall instead be imposed against the subcontractor that committed the
violation.
   (d) (1) When imposing the sanctions described in subdivision (b),
the contracting agency shall notify the contractor of the right to a
hearing, if requested, within 15 days of the date of the notice. The
hearing shall be before an administrative law judge of the Office of
Administrative Hearings in accordance with the procedures specified
in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3
of Title 2 of the Government Code. The administrative law judge shall
take into consideration any measures the contractor has taken to
ensure compliance with this section, and may waive any or all of the
sanctions if it is determined that the contractor has acted in good
faith.
   (2) The agency shall be assessed the cost of the administrative
hearing, unless the agency has prevailed in the hearing, in which
case the contractor shall be assessed the cost of the hearing.
   (e) (1) Any state agency that investigates a complaint against a
contractor for violation of this section may limit its investigation
to evaluating the information provided by the person or entity
submitting the complaint and the information provided by the
contractor.
   (2) Whenever a contracting officer of the contracting agency has
reason to believe that the contractor failed to comply with paragraph
(1) of subdivision (a), the agency shall refer the matter for
investigation to the head of the agency and, as the head of the
agency determines appropriate, to either the Director of Industrial
Relations or the Department of Justice.
   (f) (1) For purposes of this section, "forced labor" shall have
the same meaning as in Section 1307 of Title 19 of the United States
Code.
   (2) "Abusive forms of labor" means any of the following:
   (A) All forms of slavery or practices similar to slavery, such as
the sale and trafficking of children or adults, debt bondage, and
serfdom and forced or compulsory labor, including forced or
compulsory recruitment of children or adults for use in armed
conflict.
   (B) The use, procuring, or offering of a child for prostitution,
for the production of pornography, or for pornographic performances.
   (C) The use, procuring, or offering of a child or adult for
illicit activities, in particular for the production and trafficking
of illicit drugs.
   (D) All work or service exacted from or performed by any person
under the age of 18 years either under the menace of any penalty for
its nonperformance and for which the worker does not offer oneself
voluntarily, or under a contract, the enforcement of which can be
accomplished by process or penalties.
   (E) All work or service exacted from or performed by a child in
violation of all applicable laws of the country of manufacture
governing the minimum age of employment, compulsory education, and
occupational health and safety.
   (3) "Exploitation of children in sweatshop labor" means all work
or service exacted from or performed by any person under the age of
18 years in violation of more than one law of the country of
manufacture governing wage and benefits, occupational health and
safety, nondiscrimination, and freedom of association.
   (4) "Sweatshop labor" means all work or service exacted from or
performed by any person in violation of more than one law of the
country of manufacture governing wages, employee benefits,
occupational health, occupational safety, nondiscrimination, or
freedom of association.
   (5) "Apparel, garments, or corresponding accessories" includes,
but is not limited to, uniforms.
   (6) Notwithstanding any other provision of this section, "forced
labor" and "convict labor" do not include work or services performed
by an inmate or a person employed by the Prison Industry Authority.
   (7) "State agency" means any state agency in this state.
   (g) (1) On or before January 1, 2012, the Department of Industrial
Relations shall establish a contractor responsibility program,
including a Slave and Sweat Free Code of Conduct, to be signed by all
bidders on state contracts and subcontracts. Any state agency
responsible for procurement shall ensure that the Slave and Sweat
Free Code of Conduct is available for public review at least 30
calendar days between the dates of receipt and the final award of the
contract. The Slave and Sweat Free Code of Conduct shall list the
requirements that contractors are required to meet, as set forth in
subdivision (g).
   (2) Every contract entered into by any state agency for the
procurement or laundering of apparel, garments, or corresponding
accessories, or for the procurement of equipment or supplies, shall
require that the contractor certify in accordance with the Slave and
Sweat Free Code of Conduct that no apparel, garments, or
corresponding accessories, or equipment, materials, or supplies,
furnished to the state pursuant to the contract have been laundered
or produced, in whole or in part, by slave or sweatshop labor.
   (3) The appropriate procurement agency, in consultation with the
Director of Industrial Relations, shall employ a phased and targeted
approach to implementing the Slave and Sweat Free Code of Conduct.
Slave and Sweat Free Code of Conduct procurement policies involving
apparel, garments, and corresponding accessories may be permitted a
phase-in period of up to one year for purposes of feasibility and
providing sufficient notice to contractors and the general public.
The appropriate procurement agency, in consultation with the Director
of Industrial Relations, shall target other procurement categories
based on the magnitude of verified sweatshop conditions and the
feasibility of implementation, and may set phase-in goals and
timetables of up to three years to achieve compliance with the
principles of the Slave and Sweat Free Code of Conduct. The
appropriate procurement agency and the Department of Industrial
Relations may use the United States Department of Labor's List of
Goods Produced by Child Labor or Forced Labor, as it may be updated
from time to time, in identifying procurement categories appropriate
for phased implementation.
   (4) In order to facilitate compliance with the Slave and Sweat
Free Code of Conduct, the Department of Industrial Relations shall
explore mechanisms employed by other governmental entities to ensure
that businesses that contract with this state are in compliance with
this section, and any regulations or rules promulgated with regard to
this section, as amended by Section 2 of Chapter 711 of the Statutes
of 2003. The mechanisms may include, but not be limited to,
authorization to contract with a competent nonprofit organization
that is neither funded nor controlled, in whole or in part, by a
corporation that is engaged in the procurement or laundering of
apparel, garments, or corresponding accessories, or the procurement
of equipment, materials, or supplies.
   (5) The Department of Industrial Relations, in complying with this
subdivision, shall also consider any feasible and cost-effective
monitoring measures that will encourage compliance with the Slave and
Sweat Free Code of Conduct.
   (6)  The Department of Industrial Relations shall ensure public
awareness and access to proposed contracts by postings on the
Internet and through communication to advocates for garment workers,
unions, and other interested parties. The Director of Industrial
Relations and the Department of General Services shall establish a
mechanism for soliciting and reviewing any information indicating
violations of the Slave and Sweat Free Code of Conduct by prospective
or current bidders, contractors, or subcontractors. The procedures
and contact information for filing complaints shall be posted on the
departments' respective Internet Web sites. Agencies shall make their
findings public when they reject allegations against bidding or
contracting parties.
   (h) No state agency may enter into a contract with any contractor
unless the contractor meets the following requirements:
   (1) Contractors and subcontractors in California shall comply with
all appropriate state laws concerning wages, workplace safety,
rights to association and assembly, and nondiscrimination standards
as well as appropriate federal laws. Contractors based in other
states in the United States shall comply with all appropriate laws of
their states and appropriate federal laws. For contractors whose
locations for manufacture or assembly are outside the United States,
those contractors shall ensure that their subcontractors comply with
the appropriate laws of countries where the facilities are located or
international laws or treaties binding upon those countries.
   (2) Contractors and subcontractors shall maintain a policy of not
terminating any employee except for just cause, and employees shall
have access to a mediator or to a mediation process to resolve
certain workplace disputes that are not regulated by the National
Labor Relations Board.
   (3) Contractors and subcontractors shall ensure that workers are
paid, at a minimum, wages and benefits in compliance with applicable
local, state, and national laws of the jurisdiction in which the
labor, on behalf of the contractor or subcontractor, is performed.
Whenever a state agency expends funds for the procurement or
laundering of apparel, garments, or corresponding accessories, or the
procurement of equipment, materials, or supplies, other than
procurement related to a public works contract, the applicable labor
standards established by the local jurisdiction through the exercise
of either local police powers or local spending powers in which the
labor, in compliance with the contract or purchase order for which
the expenditure is made, is performed shall apply with regard to the
contract or purchase order for which the expenditure is made, unless
the applicable local standards are in conflict with, or are
explicitly preempted by, state law. A state agency may not require,
as a condition for the receipt of state funds or assistance, that a
local jurisdiction refrain from applying the labor standards that are
otherwise applicable to that local jurisdiction. The Department of
Industrial Relations may, without incurring additional expenses,
access information from any nonprofit organization, including, but
not limited to, the World Bank, that gathers and disseminates data
with respect to wages paid throughout the world, to allow the
Department of Industrial Relations to determine whether contractors
and subcontractors are compensating their employees at a level that
enables those employees to live above the applicable poverty level.
   (4) All contractors and subcontractors shall comply with the
overtime laws and regulations of the country in which their employees
are working.
   (5) All overtime hours shall be worked voluntarily. Workers shall
be compensated for overtime at either (A) the rate of compensation
for regular hours of work, or (B) as legally required in the country
of manufacture, whichever is greater.
   (6) No person may be employed who is younger than the legal age
for children to work in the country in which the facility is located.
In no case may children under the age of 15 years be employed in the
manufacturing process. Where the age for completing compulsory
education is higher than the standard for the minimum age of
employment, the age for completing education shall apply to this
section.
   (7) There may be no form of forced labor of any kind, including
slave labor, prison labor, indentured labor, or bonded labor,
including forced overtime hours.
   (8) The work environment shall be safe and healthy and, at a
minimum, be in compliance with relevant local, state, and national
laws. If residential facilities are provided to workers, those
facilities shall be safe and healthy as well.
   (9) There may be no discrimination in hiring, salary, benefits,
performance evaluation, discipline, promotion, retirement, or
dismissal on the basis of age, sex, pregnancy, maternity leave
status, marital status, race, nationality, country of origin, ethnic
origin, disability, sexual orientation, gender identity, religion, or
political opinion.
   (10) No worker may be subjected to any physical, sexual,
psychological, or verbal harassment or abuse, including corporal
punishment, under any circumstances, including, but not limited to,
retaliation for exercising his or her right to free speech and
assembly.
   (11) No worker may be forced to use contraceptives or take
pregnancy tests. No worker may be exposed to chemicals, including
glues and solvents, that endanger reproductive health.
   (12) Contractors and bidders shall maintain a list of the names
and addresses of each subcontractor to be utilized in the performance
of the contract, and include each manufacturing or other facility or
operation of the contractor or subcontractor for performance of the
contract. The list, shall be updated to show any changes in
subcontractors during the term of the contract, shall provide company
names, owners or officers, addresses, telephone numbers, e-mail
addresses, and the nature of the business association.
   (i) Any person who certifies as true any material matter pursuant
to this section that he or she knows to be false is guilty of a
misdemeanor.
   (j) The provisions of this section, as amended by Section 2 of
Chapter 711 of the Statutes of 2003, shall be in addition to any
other provisions that authorize the prosecution and enforcement of
local labor laws and may not be interpreted to prohibit a local
prosecutor from bringing a criminal or civil action against an
individual or business that violates the provisions of this section.
   (k) (1) The certification requirements set forth in subdivisions
(a) and (f) do not apply to a credit card purchase of goods of two
thousand five hundred dollars ($2,500) or less.
   (2) The total amount of exemption authorized herein shall not
exceed seven thousand five hundred dollars ($7,500) per year for each
company from which a state agency is purchasing goods by credit
card. It shall be the responsibility of each state agency to monitor
the use of this exemption and adhere to these restrictions on these
purchases.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.