BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 323
                                                                  Page  1

          Date of Hearing:  August 13, 2013

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
                     SB 323 (Lara) - As Amended:  April 16, 2013
           
          SUBJECT  :  TAXES: EXEMPTIONS: PROHIBITED DISCRIMINATION

           KEY ISSUE  :  CONSISTENT WITH ITS LONGSTANDING COMMITMENT TO STAMP  
          OUT DISCRIMINATION, SHOULD THE LEGISLATURE REVOKE THE TAX EXEMPT  
          STATUS AFFORDED TO YOUTH ORGANIZATIONS INCLUDING THE BOY SCOUTS  
          OF AMERICA WHO CONTINUE TO ADHERE TO DISCRIMINATORY MEMBERSHIP  
          POLICIES, SINCE SUCH DISCRIMINATION IS COMPLETELY CONTRARY TO  
          CALIFORNIA'S VIGOROUS AND LONGSTANDING PUBLIC POLICY OF ENDING  
          DISCRIMINATION?

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      SYNOPSIS
          
          This bill seeks to stop allowing organizations that discriminate  
          on the basis of gender identity, sexual orientation, and  
          religious affiliation from being considered a nonprofit  
          organization entitled to tax-exempt status.  Organizations that  
          so discriminate would be considered retailers, not consumers,  
          for purposes of the Sales and Use Tax Law, obligating them to  
          obtain seller's permits, and collect and remit the sales and use  
          tax on sales on currently exempt items of tangible personal  
          property.  Although California has articulated a  
          non-discrimination policy for state-supported programs and  
          activities, some youth organizations, including the Boy Scouts  
          of America (BSA), still exclude potential participants on the  
          basis of sexual orientation and religious belief. According to  
          the author, rather than being penalized, these youth groups  
          continue to be rewarded with tax breaks in the form of  
          exemptions from taxes on their income and on items they sell.   
          The BSA's recent decision to end its ban on gay scouts-not  
          effective until 2014-merely emphasizes the arbitrary and  
          illogical nature of the organization's continued policy of  
          discrimination against gay adults.  An openly gay 17 year-old  
          Eagle Scout, for instance, could be abruptly forced to resign  
          his membership the day of his eighteenth birthday for no reason  
          other than his sexual orientation.  This bill makes clear that,  
          in accordance with existing California law prohibiting  
          discrimination in state-supported programs and activities, youth  








                                                                  SB 323
                                                                  Page  2

          organizations that exclude potential participants based on their  
          sexual orientation, gender identity, or religious affiliation  
          will no longer be rewarded with state support in the form of  
          these special tax exemptions.  Organizations in support include  
          a broad coalition of employee and civil rights groups.  Various  
          religious organizations are opposed to the measure.  The bill  
          recently passed the Assembly Revenue and Taxation Committee and  
          technical amendments were accepted in that Committee to be  
          adopted in Appropriations which address technical taxation  
          issues.

           SUMMARY  :  Seeks to prohibit discrimination on the basis of  
          sexual orientation, gender identity, or religious affiliation  
          among youth organizations exempt from sales and use tax or  
          corporate income tax by eliminating that state benefit.   
          Specifically,  this bill  :  

          1)Revises the Sales and Use Tax Law exemption for such  
            organizations, as provided.

          2)Provides that a public charity youth organization that  
            discriminates on the basis of gender identity, race, sexual  
            orientation, nationality, religion, or religious affiliation  
            is not exempt from the taxes imposed by the Sales and Use Tax  
            Law.  

           EXISTING LAW  :

          1)Exempts the sales of food products, nonalcoholic beverages,  
            and other tangible personal property made or produced by an  
            organization, as defined, but only if sold on an irregular or  
            intermittent basis and the organization's profits from the  
            sales are used exclusively in furtherance of the purposes of  
            the organization.  (Revenue and Taxation Code section 6361.)

          2)Exempts the income of various types of organizations from  
            taxes imposed by the Corporation Tax Law.  (Revenue and  
            Taxation Code section 23701.)

          3)Provides, under the Unruh Civil Rights Act, that "[a]ll  
            persons within the state are free and equal and, no matter  
            what their sex, race, color, religion, ancestry, national  
            origin, disability or medical condition are entitled to the  
            full and equal accommodations, advantages, facilities,  
            privileges, or services in all business establishments of  








                                                                  SB 323
                                                                  Page  3

            every kind whatsoever."  (Civil Code section 51.)

          4)Construes the protection of the Unruh Act broadly, holding  
            that its protections also cover gay men and lesbians, families  
            with children, persons under 18, and individuals who associate  
            with members of a protected class.  (See,  Rolon v. Kulwitzky   
            (1984) 153 Cal.App.3d 289;  Hubert v. Williams  (1982) 133  
            Cal.App.3d Supp. 1;  Marina Point, Ltd. v. Wolfson  (1982) 30  
            Cal. 3d 721;  O'Connor v. Village Green Owners Assn.  (1983) 33  
            Cal.3d 790;  Winchell v. English  (1976) 62 Cal. App. 3d 125.)

          5)Provides, under the First Amendment and the California State  
            Constitution, a right to expressive association.  (U.S. Const.  
            Amend. 1 and Cal. Const. Art. I. Sect. 3.)

          6)Provides that requiring the Boy Scouts to admit openly gay  
            people violates the group's First Amendment right of  
            expressive association (  Boy Scouts of America v. Dale  (2000)  
            530 U.S. 640) and provides that the Boy Scouts are not a  
            "business establishment" under the Unruh Civil Rights Act with  
            respect to their membership policies and decisions.  (  Curran  
            v. Mount Diablo Council of Boy Scouts of America  (1998) 17  
            Cal.4th 670.)

          7)Provides that a state does not violate the Boy Scouts' First  
            Amendment rights by terminating its participation in a state  
            workplace charitable campaign due to its discriminatory  
            membership policy.  (  Boy Scouts of America v. Wyman  (2003) 335  
            F.3d 80.) The United States Supreme Court declined to review  
            the case. 

          8)Provides that governmental entities in California may withhold  
            support from non-profit organizations that practice  
            discrimination on the basis of sexual orientation and  
            religion.  (  Evans v. City of Berkeley  (2006) 38 Cal.4th 1; cf.  
             Christian Legal Society v. Martinez  (2010) 130 S. Ct. 2971.)

           COMMENTS  :  This bill amends the Sales and Use Tax Law to  
          preclude organizations that discriminate on the basis of gender  
          identity, sexual orientation, and religious affiliation from  
          being considered a nonprofit organization.  Organizations that  
          so discriminate would be considered retailers, not consumers,  
          for purposes of the Sales and Use Tax Law, obligating them to  
          obtain sellers' permits, and collect and remit the sales and use  
          tax on their sales of currently exempt items of tangible  








                                                                  SB 323
                                                                  Page  4

          personal property.  The measure also provides that any nonprofit  
          private educational institution that sponsors a currently exempt  
          youth group also may not discriminate on the basis of gender  
          identity, sexual orientation, or religious affiliation for its  
          sponsored group to retain exempt status.  This bill thus  
          presents a clear social policy question: should the tax exempt  
          status long afforded to the BSA be revoked by the state because  
          of its longstanding policy to deny membership to openly gay  
          individuals because such policy is directly contrary to  
          California's public policy of ending such discrimination?

          According to the author:

            Youth organizations are vital to bringing our communities  
            together and making our communities stronger. In recognition  
            of the great work they do, California provides youth groups  
            like the Girl Scouts, 4H, and YMCA with special state  
            subsidies in the form of tax exemptions?State-supported  
            programs and activities, under current law, are prohibited  
            from excluding potential participants on the basis of sexual  
            orientation, gender identity, or religious affiliation, among  
            other characteristics?Many youth organizations that receive  
            special state supported tax exemptions follow California's  
            non-discrimination laws and are truly inclusive in their  
            membership. Unfortunately, however, there are youth  
            organizations that are side-stepping California's  
            non-discrimination laws by receiving state subsidies in the  
            form of special state tax exemptions while blatantly  
            discriminating and excluding membership on the bases of sexual  
            orientation, gender identify, and religious affiliation. One  
            such youth organization is the Boy Scouts of America  
            (BSA)?Earlier this year BSA voted to allow gay youth as  
            members, however, maintained a discriminatory policy of  
            excluding LGBT adults. As a result, BSA's policies fall short  
            of being truly inclusive and are in violation of California's  
            non-discrimination laws?Youth organizations like the BSA that  
            maintain discriminatory policies are out of step with  
            California's non-discrimination laws and, therefore, should  
            not receive special tax benefits that are subsidized by all  
            Californians, including LGBT taxpayers?SB 323 brings our tax  
            laws into line with our values by ensuring that  
            state-subsidized youth organizations are inclusive in their  
            membership. 

           Tax-exempt Organizations.   Tax law has appropriately treated  








                                                                  SB 323
                                                                 Page  5

          organizations that serve charitable purposes differently from  
          profit-oriented businesses, at least since 1894.  The Federal  
          Tariff Act of 1894 levied a corporate income tax but excluded  
          "corporations, companies, or associations organized and  
          conducted solely for charitable, religious, or educational  
          purposes, including fraternal beneficiary associations."  The  
          distinction was drawn on the rationale that these entities  
          filled a gap in social welfare programs not provided by the  
          government, and the taxation of such entities would unduly  
          divert needed resources for beneficial social activities.  

          Internal Revenue Code Section 501(c) lists organizations that  
          are currently exempt from the federal income tax.  Most  
          charities, churches, and other tax-exempt organizations operate  
          under 501(c)(3).  As such, the IRS requires the organization to:  
          (1) be organized and operated exclusively for purposes set forth  
          in the code, (2) refrain from political action or substantial  
          attempts to influence legislation, (3) operate so that its  
          earnings do not inure to the benefit of private individuals or  
          shareholders, and (4) not act illegally or in a way contrary to  
          public policy.

          In California, nonprofit corporations are not necessarily  
          tax-exempt regardless of their federal status. Under our state  
          law, all nonprofits must specifically apply to the Franchise Tax  
          Board (FTB) for tax-exempt status, or provide FTB with a copy of  
          the IRS' determination that the organization is tax-exempt under  
          the Internal Revenue Code. FTB then notifies the organization of  
          its determination, or its acknowledgement of the IRS  
          determination, either of which presently entitles the  
          organization to an exemption from both the state income tax and  
          the corporation tax.  Nonprofits that do not obtain approval  
          from FTB for their tax-exempt application are subject to tax  
          regardless of their use of funds.  

           Sales and Use Tax Law.   The Sales and Use Tax Law deems  
          non-profit organizations that intermittently or irregularly sell  
          food, nonalcoholic beverages, and other property made by the  
          organization's members as consumers, not retailers.  The  
          organization must use the proceeds from the sale to further its  
          objectives, and also: (1) qualify under IRC 501(c) as  
          tax-exempt, (2) have as its primary purpose a supervised program  
          of competitive sports for youth or promote good citizenship  
          among youth, (3) not discriminate on the basis of race, sex,  
          nationality or religion, (4) be any youth group sponsored by or  








                                                                  SB 323
                                                                  Page  6

          affiliated with a qualified educational institution, subject to  
          the requirement that the affiliated institution does not  
          discriminate on the basis of race, sex, nationality or religion,  
          or (5) be one of a list of enumerated groups, currently  
          including, among others: Little League, Boy Scouts, Girl Scouts,  
          Young Men's Christian Association, Young Women's Christian  
          Association, Future Farmers of America, 4-H Clubs, Boys' Clubs,  
          Girls' Clubs, American Youth Soccer Organization, and Pop Warner  
          Football.  Thus, under current state law these organizations  
          need not hold seller's permits or collect and remit the sales or  
          use tax when reselling tangible personal property under the  
          exemption.  Instead, the tax is deemed paid when the  
          organization initially buys the items it subsequently plans to  
          sell on resale.  

           Boy Scouts of America.   The Boy Scouts of America operates under  
          a statutory charter enacted by Congress in 1916 and is one of  
          the largest youth organizations in the United States, with 2.7  
          million youth members and over 1 million adult volunteers.   
          According to its mission statement, the BSA exists "to prepare  
          young people to make ethical and moral choices over their  
          lifetimes by instilling in them the values of the Scout Oath and  
          Law."  In relevant part, the Scout Oath states "On my honor I  
          will do my best to keep myself morally straight."  Additionally,  
          Scout Law provides that a Scout is, among other things, "clean"  
          and a Scout "goes around with those who believe in living by  
          these same ideals."  Scout Law also provides that a Scout "treat  
          others as he wants to be treated."

          The governing body of the scouting program, the BSA National  
          Council, sets policy, including standards for membership.  BSA  
          National Council controls total revenues of over $500 million,  
          derived mostly from private donations, membership dues,  
          corporate sponsorship, and revenues from events, and is  
          considered a tax-exempt organization under Section 501(c)(3).   
          However, this tax-exempt status extends only to BSA local  
          councils and their trust funds, and not to smaller units.  

           Organizational Structure of BSA  :  The BSA is organized in four  
          regions: central, northeast, southern, and western.  BSA groups  
          approximately 300 local councils to form 26 geographical areas  
          within the four regions.  BSA National Council must issue an  
          annual charter to the local council, which are generally  
          organized as charitable organizations and oversee smaller  
          scouting units in their areas.  Local councils are funded  








                                                                  SB 323
                                                                  Page  7

          through private donations, special events, popcorn sales, and  
          summer camp activity fees.  Councils also determine the  
          boundaries for districts, which are directly responsible for the  
          smallest scouting units, including packs, troops, teams, crews,  
          and ships.  Organizations awarded a charter from BSA National  
          Council to use the scouting program, known as "chartered  
          organizations," approve the leadership of the troop, provide a  
          meeting place, admit members, and operate the unit within the  
          guidelines and policies of both the chartered organization and  
          the BSA.  "Chartered organizations" are generally religious or  
          civic organizations such as churches, schools, service clubs, or  
          other youth groups, and their tax-exempt status may apply to the  
          scout unit.  Member dues, chartered organization contributions,  
          and unit-level fundraising are the primary sources of income for  
          the smallest scout units.   

           BSA Membership Policy  :  The BSA membership policy is set by the  
          BSA National Council.  BSA Position Statements in 1978 and 1991  
          state that the BSA believes that homosexuality is inconsistent  
          with requirements in the Scout Oath and in the Scout Law,  
          important tenets for the BSA.  BSA won a United States Supreme  
          Court case in which the Court upheld BSA's denial of readmission  
          for an openly gay scoutmaster, stating that the organization's  
          First Amendment right of expressive association trumped New  
          Jersey antidiscrimination law.  (  Boy Scouts of America et al. v.  
          Dale  , 530 U.S. 640 (2000).)  

           The Rehnquist Supreme Court Decision  .  In  Boy Scouts of America  
          v. Dale  , supra., the U.S. Supreme Court, in an opinion by Chief  
          Justice William Rehnquist, ruled on whether requiring the Boy  
          Scouts to approve James Dale, a gay man, as an assistant  
          scoutmaster would significantly affect the Boy Scouts' ability  
          to advocate its viewpoints.  In this case, the nation's highest  
          court held that requiring the Boy Scouts to admit openly gay  
          people violates the group's First Amendment right of expressive  
          association.  In its ruling, the Court noted the following  
          position statement promulgated by the Boy Scouts in 1991:  "We  
          believe that homosexual conduct is inconsistent with the  
          requirement in the Scout Oath that a Scout be morally straight  
          and in the Scout Law that a Scout be clean in word and deed, and  
          that homosexuals do not provide a desirable role model for  
          Scouts."  (  Dale  at 652.)  The Court also noted a 1993 position  
          statement which read "The Boy Scouts of America has always  
          reflected the expectations that Scouting families have had for  
          the organization.  We do not believe that homosexuals provide a  








                                                                  SB 323
                                                                  Page  8

          role model consistent with these expectations.  Accordingly, we  
          do not allow for the registration of avowed homosexuals as  
          members or as leaders of the BSA."  (  Id.  )  The Court held that  
          the First Amendment association rights of the Boy Scouts of  
          America permitted this express discriminatory policy.  

          Of course the issue raised by the bill is not whether the Boy  
          Scouts of America may legally discriminate against gay and  
          lesbian individuals.  The issue is whether the state of  
          California should continue to grant tax reductions to an  
          organization which continues to discriminate in direct violation  
          of California's many anti-discrimination laws. 

           BSA's Repeated Reaffirmations of Its Discriminatory Membership  
          Policy.   On February 6, 2002, the National Executive Board of  
          the BSA "reaffirmed its traditional leadership standards" in  
          rejecting proposals by individual Scout Councils seeking  
          flexibility to determine their own membership and leadership.  A  
          press release announcing the Board's reaffirmation which  
          rejected gays and atheists as members and leaders of the Boy  
          Scouts stated: 

               The board received three resolutions suggesting  
               changes in leadership standards in order to permit  
               avowed homosexuals to serve as Boy Scout leaders.  The  
               board referred the resolutions to the appropriate  
               committee, which formed a diverse task force composed  
               of chartered organization representatives to consider  
               the resolutions.  The BSA reaffirmed its view that an  
               avowed homosexual cannot serve as a role model for the  
               traditional moral values espoused in the Scout Oath  
               and Law and that these values cannot be subject to  
               local option choices.  In affirming its existing  
               standards of leadership, the board also agreed that  
               duty to God is not a mere ideal for those choosing to  
               associate with the Boy Scouts of America; it is an  
               obligation, which has defined good character  
               throughout the BSA's [then] 92-year history.


          In 2004, the BSA once again reaffirmined its discriminatory  
          policy, including the following as a "Youth Leadership" policy:


               "[We] believe that homosexual conduct is inconsistent with  








                                                                  SB 323
                                                                  Page  9

               the obligations in the Scout Oath and Scout Law to be  
               morally straight and clean in thought, word, and deed. The  
               conduct of youth members must be in compliance with the  
               Scout Oath and Law, and membership in Boy Scouts of America  
               is contingent upon the willingness to accept Scouting's  
               values and beliefs. Most boys join Scouting when they are  
               10 or 11 years old. As they continue in the program, all  
               Scouts are expected to take leadership positions. In the  
               unlikely event that an older boy were to hold himself out  
               as homosexual, he would not be able to continue in a youth  
               leadership position."

          This express policy of discrimination has reportedly been  
          strictly enforced against Scouts up until this year.  In 2005,  
          for example, a high-level employee of BSA was reportedly fired  
          by the National Council after the organization received a copy  
          of his bill from a gay resort at which he had vacationed. And In  
          2009, the parents of a Vermont Scout were reportedly prohibited  
          from volunteering for his pack when it was discovered that they  
          were gay.
           
          Public Withdrawal Of Support For The Boy Scouts Demonstrates  
          Intolerance For Discrimination.   Since the Rehnquist opinion in  
           Dale  , many parents, religious groups, corporations, cities,  
          schools and non-profit entities alike have reportedly responded  
          by withdrawing their support, including financial support, from  
          the BSA.  As Lambda Legal Defense and Education Fund Executive  
          Director Kevin M. Cathcart stated, "Parents, religious groups,  
          corporations, cities, and schools agree: the Boy Scouts may have  
          a legal right to discriminate, but that doesn't make  
          discrimination right."  

          And strikingly, one of the most famous Eagle Scouts of all,  
          filmmaker Steven Spielberg, stepped down from an advisory board  
          of the Boy Scouts years ago, stating "The last few years in  
          Scouting have deeply saddened me to see the Boy Scouts of  
          America actively and publicly participating in discrimination.   
          It's a real shame." ("Supreme Court Ruling Yields Unexpected  
          Lesson for Boy Scouts of America," Lambda Legal Defense and  
          Education Fund, Press Release, June 21, 2001.)  Individual  
          troops have also this past decade made similar appeals, leading  
           to the expulsion of some troops, including seven different  
          troops in Oak Park, IL because of their refusal to comply with  
          the anti-gay policy.  ("Boy Scout Policy Sparks Impassioned  
          Debate on Gays," Gannett News Service, by Fredereka Schouten,  








                                                                  SB 323
                                                                  Page  10

          March 12, 2001.)  

           Continued Unabated Discrimination Against Gay Adults in the Boy  
          Scouts of America.   On July 17, 2012, the BSA stated in a news  
          release that after an internal review, its membership policy  
          would continue to exclude from membership "open or avowed  
          homosexuals."  BSA then announced this past January 28th that it  
          is "discussing potentially removing the national membership  
          policy regarding sexual orientation."  Then on May 23rd of this  
          year, 1400 local BSA leaders -- acting as national delegates --  
          approved a resolution allowing openly gay boys to join, but  
          strictly maintaining its ban on all gay adults.  Roughly 61 % of  
          delegates voted to support the resolution, which read, "no youth  
          may be denied membership in the Boy Scouts of America on the  
          basis of sexual orientation or preference alone."  ("The Boy  
          Scouts Halfhearted Shift on Gay Rights," The Wall Street  
          Journal, May 24, 2013.  Emphasis added.)  

          According to the BSA statement when announcing the changed  
          policy vis-a-vis youth only:

               Today, following this review, the most comprehensive  
               listening exercise in Scouting's history, the  
               approximate 1,400 voting members of the Boy Scouts of  
               America's National Council approved a resolution to  
               remove the restriction denying membership to youth on  
               the basis of sexual orientation alone. The resolution  
               also reinforces that Scouting is a youth program, and  
               any sexual conduct, whether heterosexual or  
               homosexual, by youth of Scouting age is contrary to  
               the virtues of Scouting?the policy for adults remains  
               in place. . . . 
               This policy change is effective Jan. 1, 2014, allowing  
               the Boy Scouts of America the transition time needed  
               to communicate and implement this policy to its  
               approximately 116,000 Scouting units.

               The Boy Scouts of America will not sacrifice its  
               mission, or the youth served by the movement, by  
               allowing the organization to be consumed by a single,  
               divisive, and unresolved societal issue. As the  
               National Executive Committee just completed a lengthy  
               review process, there are no plans for further review  
               on this matter.









                                                                  SB 323
                                                                  Page  11

          Despite this seeming potential "step in the right direction,"  
          this inconsistent and continuing discriminatory half-measure  
          reflects a continuing atmosphere - and actuality - of deep and  
          continuing discrimination within the BSA.  Even in regard to gay  
          youth, under the new Scout "half" policy, gay scouts remain  
          banned in the organization until 2014 - even though there was no  
          apparent need not to halt the practice immediately and urgently  
          due to its admitted painful discriminatory affect.

          More importantly, adult Eagle Scouts, scout leaders, and scout  
          parents all remain excluded from the new policy indefinitely -  
          meaning discrimination on the basis of sexual orientation  
          remains rampant in the Boy Scouts of America.  And many  
          conservative elements that comprise a major component of the  
          Scouts, including many of the churches that sponsor local units,  
          are now threatening to defect from the BSA solely based on this  
          partial future roll-back of its longstanding express policy of  
          discrimination.  The president of the Southern Baptist  
          Convention's executive committee, for example, reportedly  
          stated, "Homosexual behavior is incompatible with the principles  
          enshrined in the Scout oath and Scout law."  Interestingly, the  
          conservative Assemblies of God, in opposition to the resolution  
          made the prescient argument that "the change would make the BSA  
          vulnerable to lawsuits seeking to end the ban on gay adults."   
          ("Boy Scouts Approve Plan to Accept Openly Gay Boys," San Jose  
          Mercury News, May 23, 2013.) 

          Sadly, in an op-ed published on the eve of the national  
          delegates' vote on gay scouts, BSA president Wayne Perry made  
          clear that discrimination against gay adults remained the  
          prevalent attitude within the organization: "it was clear from  
          our listening phase that changing adult standards would have  
          conflicted with the majority of our partners, 70% of which are  
          religious organizations, and would have disrupted our ability to  
          deliver Scouting.  Conversely, some have asserted that the  
          proposed change for youth runs counter to the values of, and  
          raises concerns among, Scouting's religious chartered  
          organizations."  ("Boy Scouts President: Let Gays In," USA  
          Today, May 23, 2013.) 

          Thus the rationale behind the BSA's new "half" policy seems  
          undeniably contradictory and offensive.  For example, under the  
          new future "half" policy," a 17-year old scout stunningly would  
          be forced to resign on his 18th birthday simply because of his  
          sexual orientation.  This pernicious attempted distinction by  








                                                                  SB 323
                                                                  Page  12

          the Boy Scouts of America between gay boys and gay adults  
          ironically may actually only continue to reinforce stigmas  
          against gay individuals.  In addition, the new policy subjects  
          the BSA to renewed constitutional challenges because the dual  
          nature of the policy renders suspect as the basis for exclusion  
          the BSA's expressed viewpoint that homosexuality is inconsistent  
          with the values embodied in the Scout Oath and Law.  
           
          This continued and contradictory discrimination has exposed the  
          BSA to disapprobation from various sources.  Prior to the BSA  
          vote in May, an Ohio branch of United Way, a national volunteer  
          and charity network, moved to pull $100,000 in funding from a  
          local BSA outreach program because the ban violates their equal  
          opportunity and diversity policies.  ("United Way of Greater  
          Cleveland Moves to Pull Funding in 2013 for Boy Scouts Over  
          Group's Prohibition of Gay Members," Cleveland Plain Dealer,  
          September 25, 2012.)  Subsequently, Caterpillar, Inc., the  
          world's leading manufacturer of construction equipment, has  
          withdrawn its financial support from BSA, saying, "[the  
          organization's] ban of gay adult leaders does not align with  
          Caterpillar's enterprise policies on discrimination against  
          sexual minorities." ("Caterpillar Stops Funding Boy Scouts Over  
          Gay Ban," Chicago Tribune, June 13, 2013.)

          Thus though the Boy Scouts of America has attempted to have it  
          both ways (continuing to seriously discriminate against some on  
          the basis of their sexual orientation (adults and young people  
          who turn 18) while potentially ending their express policy of  
          discrimination against others (scouts under the age of 18), this  
          effort - and the comments of its leaders like current BSA  
          president Wayne Perry - patently expose the organization's  
          continuing commitment to discrimination contrary to so many  
          expressed policies of the State of California.  

          Unfortunately, sexual orientation is not the only lamentable  
          basis for discrimination within the BSA.  The organization  
          continues to practice religious discrimination by excluding  
          atheists and agnostics from participation on the ground that "no  
          member can grow into the best kind of citizen without  
          recognizing an obligation to God."  ("Duty to God,"  
          BSALegal.org, May 9, 2008.)  This discrimination against  
          atheists and agnostics further illustrates the atmosphere of  
          intolerance embodied by the BSA's official membership policies.

          This legislation therefore seeks to revoke the tax exempt status  








                                                                  SB 323
                                                                  Page  13

          afforded to youth organizations by the state such as the BSA if  
          their policies deny membership to any (be it youth or adult  
          members) openly gay individuals, since such policies are  
          completely and painfully contrary to California's longstanding  
          and vigorous public policy of ending discrimination against  
          lesbian, gay, bisexual and transgender persons.     

           PRIOR RELTED LEGISLATION:   ACR 119 (Garrick and Hagman) of 2010  
          sought to congratulate and commend the Boy Scouts of America on  
          their 100th anniversary and centennial celebration without  
          encouraging the organization to halt its discriminatory policies  
          that regrettably harm individuals seeking to be scouts and  
          excluded from this opportunity solely due to their personal  
          characteristics, died in Committee.

          ACR 128 (Feuer et al.) of 2010, like ACR 119 above recognized  
          the valuable role that the Boy Scouts of America has played for  
          millions of Americans and commemorated them on their 102nd  
          Anniversary.  Unlike ACR 119, however, this resolution,  
          consistent with the Committee's unwavering commitment to  
          nondiscrimination, additionally urges the BSA to accept for  
          membership and leadership positions all qualified boys and men  
          without discrimination on the basis of sexual orientation or  
          religious belief, passed this Committee and was held on the  
          Assembly Floor.  

          ACR 155 (Cogdill) of 2006 sought to recognize the efforts of Boy  
          Scouts who earn the rank of Eagle Scout without encouraging the  
          organization to halt its discriminatory policies that  
          regrettably harm individuals seeking to be scouts and excluded  
          from this opportunity solely due to their personal  
          characteristics, died in Committee.

          ACR 38 (Cogdill) of 2005 sought to recognize the efforts of Boy  
          Scouts who earn the rank of Eagle Scout without encouraging the  
          organization to halt its discriminatory policies that  
          regrettably harm individuals seeking to be scouts and excluded  
          from this opportunity solely due to their personal  
          characteristics, died in Committee.  

          ACR 69 (Goldberg) of 2005 (Ch. 82, Stats of 2005) similarly  
          recognized the achievements of the Boy Scouts but additionally  
          encouraged the BSA to accept for membership and leadership  
          positions all qualified boys and men without discriminating on  
          the basis of sexual orientation or religious belief.  








                                                                  SB 323
                                                                  Page  14


          ACR 170 (Robert Pacheco) of 2004, which would have recognized  
          various youth organizations including the Boy Scouts of America,  
          died in this Committee.

          ACR 59 (Robert Pacheco) of 2004, which would have recognized the  
          outstanding efforts of the Boy Scouts who, through persistence  
          and hard work, earn the rank of Eagle Scout, promote the  
          brotherhood of scouting across international boundaries as a  
          model of leadership, character, and honor, failed passage in  
          this Committee.

          ACR 89 (Goldberg) of 2003, Resolution Chapter 118, Statutes of  
          2003, recognized the achievements of the Boy Scouts and  
          acknowledged the important contributions individual Boy Scouts  
          make in their communities.  The resolution also encouraged the  
          BSA to accept for membership and leadership positions, including  
          the rank of Eagle Scout, all qualified boys and men without  
          discriminating on the basis of sexual orientation or religious  
          belief.

          ACR 90 (Robert Pacheco) of 2001, which would have made various  
          findings in congratulating the Boy Scouts of America on the 85th  
          anniversary of the granting of its federal charter by Congress,  
          failed passage on the Assembly Floor. 

          ACR 140 (Robert Pacheco) of 2001, which would have made various  
          findings in congratulating the Boy Scouts of America on the  
          anniversary of the granting of its Federal Congressional  
          Charter, failed passage in this Committee.

          SR 15 (Knight) of 2001, which congratulated the Boy Scouts of  
          America on the occasion of the 85th anniversary of its  
          congressional charter, was adopted by the Senate.

          AB 1592 (Wyman) of 2001, which would have allowed a charitable,  
          expressive, and social organization, such as the Boy Scouts of  
          America (the Boy Scouts), to discriminate in its membership  
          decisions by exempting such organizations from the Unruh Civil  
          Rights Act, died in this Committee.

          AJR 72 (Thompson) of 2000, which would have urged the U.S.  
          Congress to affirm the charter of the Boy Scouts of America and  
          the President to reaffirm his support for the Boy Scouts of  
          America, died in this Committee.








                                                                  SB 323
                                                                  Page  15


           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Equality California (sponsor)
          ACLU
          AFSCME
          Anti-Defamation League
          California Immigrant Policy Center
          California National Organization for Women
          California Tax Reform Association
          City of West Hollywood
          Courage Campaign
          Gay and Lesbian Community Services Center of Orange County
          Gay-Straight Alliance Network
          HONOR PAC
          Humboldt County Board of Supervisors
          Los Angeles Gay and Lesbian Center
          SEIU California

           Opposition 
           
          Cavalry Assembly of God
          Capitol Resource Institute
          First Christian Church
          Lighthouse Baptist Church
          Pacific Justice Institute
          Traditional Values Coalition
           
          Analysis Prepared by  :   Drew Liebert and Alexander Nowinski /  
          JUD. / (916) 319-2334