BILL ANALYSIS SENATE JUDICIARY COMMITTEE Senator Ellen M. Corbett, Chair 2009-2010 Regular Session SB 1252 (Corbett) As Amended: March 25, 2010 Hearing Date: April 13, 2010 Fiscal: Yes Urgency: No KB/GW:jd SUBJECT Housing: Discrimination DESCRIPTION This bill, sponsored by the Department of Fair Employment and Housing (DFEH), would amend the Fair Employment and Housing Act (FEHA) to make technical revisions to several provisions pertaining to housing discrimination. Specifically, this bill would: (1) amend FEHA's civil penalty caps to conform with those imposed in violation of the federal Fair Housing Amendments Act (FHAA); (2) make technical revisions to consistently include "source of income" as a characteristic which is protected from housing discrimination; and (3) clarify that admission preferences based on age, imposed in connection with a federally-approved housing program, do not constitute age discrimination in housing. BACKGROUND The Department of Fair Employment and Housing (DFEH) is the state agency which is responsible for enforcing the FEHA and other civil rights laws. FEHA prohibits employment and housing discrimination based on the protected classes of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability. The FEHA further provides that it is a civil right to be able to pursue and maintain housing or employment without facing discrimination. According to a work-share agreement between the DFEH and the (more) SB 1252 (Corbett) Page 2 of ? U.S. Department of Housing and Urban Development (HUD), the FEHA must remain substantially similar to the Fair Housing Amendments Act (FHAA) in order for the DFEH to receive complaint referrals and funding from HUD. The FHAA is the federal counterpart to the FEHA, making it unlawful for both public and private businesses to discriminate in the sale or rental of housing on the grounds of race, color, religion, national origin, gender, familial status, or disability. In its continued effort to keep the FEHA and the FHAA substantially equivalent, the DFEH has identified various FEHA related issues which need clarifying and revision. This bill would make a number of those revisions. CHANGES TO EXISTING LAW Existing law , the Unruh Civil Rights Act, outlaws discrimination based on sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation. This applies to all businesses, including housing accommodations. Businesses may not discriminate in the sale or rental of housing accommodations based on age, with the exception of establishments which are designed to accommodate the unique social and physical needs of senior citizens. (Civ. Code Secs. 51, 51.2.) Existing federal law prohibits the refusal to sell or rent a housing accommodation to any person because of race, floor, religion, sex, familial status, or national origin. (42 U.S.C. Sec. 3604.) Existing law , the Fair Employment and Housing Act, declares it to be against public policy to discriminate on the grounds of race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, or disability; and that every person has a civil right to be given the opportunity to seek, obtain, or hold employment and housing without facing discrimination based on these protected classes. (Gov. Code Secs. 12920, 12921.) Existing law provides that a person intends to unlawfully discriminate if one of the protected classes played a motivating factor in committing a discriminatory housing practice. A violation can be found when the act has the effect of unlawfully discriminating, regardless of the intent. (Gov. Code Sec. 12955.8.) Existing law declares it unlawful for any housing accommodation SB 1252 (Corbett) Page 3 of ? owner to inquire about; make known any preference or limitation as to; discriminate; or harass a person based on the person's race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability. (Gov. Code Sec. 12955.) Existing law provides that an owner may be subject to a civil penalty of up to $10,000 for his or her first violation of FEHA. If it is the offender's second violation within five years, a civil penalty may be assessed of up to $25,000. If it is the offender's third violation within seven years, a civil penalty may be assessed of up to $50,000. (Gov. Code Sec. 12987.) Existing federal law provides that an administrative law judge may impose a civil penalty of up to $16,000 for a violation of a Fair Housing Act. If it is the offender's second violation within five years, a civil penalty may be assessed up of up $37,500. If the offender has violated the Fair Housing Act three or more times within seven years, a civil penalty may be assessed of up to $65,000. (24 C.F.R. 180.671.) This bill would clarify that admission preferences based on age, imposed in connection with a federally-approved housing program, do not constitute age discrimination in housing. This bill would make technical revisions to add "source of income" to the list of classes protected under Government Code Sections 12920, 12921, and 12955.8. This bill would increase the maximum civil penalties that may be assessed for a violation of the FEHA to $16,000, $37,500, and $65,000 for a person's first, second, and third violations, respectively. COMMENT 1.Stated need for the bill : According to the sponsor, the Department of Fair Employment and Housing, SB 1252 would make several technical and clarifying revisions necessary for the Fair Employment and Housing Act to remain substantially compliant with the Fair Housing Amendments Act. This would ensure that the Department continues to receive referrals and funding from the U.S. Department of Housing and Urban Development for the purposes of enforcing state laws prohibiting housing discrimination. SB 1252 (Corbett) Page 4 of ? 2.Adding "source of income" to the list of protected classes in existing law would help to create consistency The Fair Employment and Housing Act (Gov. Code Sec. 12900, et. seq.) declares that it is unlawful to discriminate on the basis of race, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, and disability. In 1999, SB 1098 (Burton, Chapter 590, Statutes of 1999) amended Government Code Section 12955 to prohibit housing discrimination on the basis of a person's "source of income." "Source of income" was defined as "lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant." (Gov. Code Sec. 12955(p)(1).) Therefore, after the enactment of SB 1098, any owner of a housing accommodation was prohibited from discriminating against; harassing; or making any preference or limitation based on a person's membership of a protected class, including: race, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability. (Gov. Code Sec. 12955.) SB 1098 contained a sunset of January 1, 2005. In 2004, SB 1145 (Burton, Chapter 568, Statutes of 2004) removed the sunset provision, permanently adding "source of income" to the protected classes listed in Section 12955. However, at the time the sunset was removed, the lists of protected characteristics in related FEHA housing provisions were not amended to also include "source of income." SB 1252 would add "source of income" to the list of protected classes in Government Code Section 12920 and 12921 in order to create consistency among these provisions. As previously stated, because "source of income" has already been established by the Legislature to be a protected characteristic for the purposes of housing discrimination, this change would be technical, and not substantive in nature. However, in order to address concerns that this bill would broaden substantive rights under the FEHA, this Committee may wish to consider creating a new subdivision defining "source of income" in Government Code Section 12927, which contains definitions pertaining to housing. The definition of "source of income" would be the same as currently existing in Section 12955(p)(i). This would help ensure that the term is not interpreted to encompass more than what the Legislature has already approved. SB 1252 (Corbett) Page 5 of ? Suggested amendment Create subdivision (i) in Government Code Section 12927 to define "source of income" as follows: "'Source of income' means lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. For the purposes of this section, a landlord is not considered a representative of a tenant." 3.This bill would increase the cap on civil penalties administered in housing discrimination cases so that state penalties are identical to those in the federal FHAA As discussed above, the state FEHA must remain substantially equivalent to the federal FHAA in order to receive complaint referrals and funding from HUD. (See Background.) Government Code Section 12987 provides that if a person is found to have engaged in unlawful discriminatory practices, a civil penalty may be assessed against that party. Currently, the FEHA states that a civil penalty of up to $10,000 may be assessed against a violator for a first time offense. If it is the second violation in five years, a maximum civil penalty may be imposed of $25,000. If it is the third violation in seven years, a maximum civil penalty of $50,000 may be imposed. However, federal law has recently increased its cap on civil penalties in housing discrimination cases, imposing caps of $16,000, $37,500, and $65,000, for a person's first, second, and third violations, respectively. (24 C.F.R. Sec. 180.671.) For the current contract period, the DFEH anticipates receiving over $3 million dollars from HUD. This extremely important funding source could be at risk if the cap on the FEHA's civil penalties is not also raised to conform to the maximum amount that may be imposed on violators at the federal level. In order to keep the FEHA substantially equal to the FHAA, SB 1252 proposes to increase the FEHA's civil penalty caps to be equal to that of the FHAA. Specifically, SB 1252 proposes to increase the FEHA's civil penalty caps for first, second, and third violations to $16,000; $37,500; and $65,000 respectively. 4.SB 1252 would reconcile differences between federal law and state law regarding housing selection preferences and age SB 1252 (Corbett) Page 6 of ? The FEHA prohibits housing discrimination based on age, with the exception of housing accommodations specifically designed for senior citizens. However, FHAA does not expressly prohibit age discrimination in housing. Instead, the FHAA prohibits the refusal to sell or rent "?a dwelling to any person because of race, color, religion, sex, familial status, or national origin."(42 U.S.C. Sec. 3604.) This discrepancy becomes problematic because some federal housing programs have renter eligibility criteria requiring that at least one member of the household be 62 years old or older. Other members of the household may be any age, and the provider may not refuse to rent to a family with minor children, as long as one household member is at least 62. This type of requirement violates California law, which only provides an exemption for senior housing accommodations to make housing selections based on a minimum age requirement. Therefore, a failure to comply with the federal regulation will result in a loss of funding for housing providers, but compliance with the federal regulation will result in violation of state law and a potential DFEH complaint. SB 1252 would clarify that admission preferences based on age, imposed in connection with a federally-approved housing program, do not constitute age discrimination in housing. This clarification would allow for both FHAA and FEHA to operate simultaneously and without conflict with one another. 5.Opposition The opposition has expressed concerns regarding the addition of "source of income" to Government Code Sections 12920, 12921, and 12955.8. The opponents argue that adding "source of income," without a limiting definition like the one contained in Government Code Section 12955, would unintentionally result in new liability for housing discrimination claims. The opposition also argues that the addition of "source of income" to Government Code Sections 12920 and 12921 is not needed to protect discriminatory actions. However, the author and sponsor assert that adding "source of income" to the Government Code Sections would not make any substantive changes to law, nor would it expand the rights or liberties which are already afforded to individuals through case and statutory law. Support : None Known SB 1252 (Corbett) Page 7 of ? Opposition : Apartment Association California Southern Cities, Orange County Apartment Association HISTORY Source : Department of Fair Employment and Housing Related Pending Legislation : None Known Prior Legislation : SB 1098 (Burton, Chapter 590, Statutes of 1999) (See Comment 2.) SB 1145 (Burton, Chapter 568, Statutes of 2004) (See Comment 2.) **************