Amended in Assembly April 11, 2016

Amended in Assembly March 28, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2844

Introduced by Assembly Member Bloom

begin insert

(Principal coauthors: Assembly Members Levine, Medina, and Nazarian)

end insert begin insert

(Principal coauthors: Senators Allen, Block, Glazer, Hertzberg, Jackson, and Wolk)

end insert begin insert

(Coauthors: Assembly Members Campos, Dababneh, and Olsen)

end insert

February 19, 2016

An act to add Chapter 2.6 (commencing with Section 2100) to Part 1 of Division 2 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 2844, as amended, Bloom. Public contracts: California Combating the Boycott, Divestment, and Sanctions of Israel Act of 2016.

Existing law governs the procurement process for contracts of specified public entities. Existing law prohibits a person that, at the time of bid or proposal for a new contract or renewal of an existing contract, engages in investment activities in Iran from bidding on, submitting a proposal for, or entering into, a contract with a public entity for goods or services of $1,000,000 or more.

This bill, with certain exceptions, would prohibit a public entity, which includes state and local entities, from entering into a contract, on or after January 1, 2017, with a company that is participating in the boycott of Israel, as provided. begin insert The bill would require the Attorney General to develop, or contract to develop, a list of companies it determines are engaging in a boycott of Israel. The bill would prohibit a company that, at the time of bid or proposal for a new contract or renewal of an existing contract, is identified on that list from bidding on, submitting a proposal for, or entering into or renewing a contract with a public entity to acquire or dispose of goods, services, information technology, or construction for $10,000 or more. The bill would require a public entity to require a company that submits a bid or proposal to, or otherwise proposes to enter into or renew a contract with, the public entity with respect to a contract for goods or services for $10,000 or more to certify, at the time the bid is submitted or the contract is renewed, that the company is not identified on the list. The bill would provide that if a public entity or the Department of General Services determines that a company has submitted a false certification, and the company fails to demonstrate to the local public entity or the Department of General Services that the company has ceased engaging in a boycott of Israel within 90 days after the determination of a false certification, the company would be subject to a civil penalty of $250,000 or twice the amount of the contract for which the false certification was made, whichever is greater, termination of an existing contract with the awarding body at the option of the awarding body or the Department of General Services, and ineligibility to bid on a contract for a period of 3 years from the date of the determination that the company submitted the false certification. end insert The bill would find and declare that these provisions of this bill are a matter of statewide concern due to the political nature of contracting with a company that is participating in the boycott of Israel, and therefore, these provisions apply to charter cities, charter counties, and a charter city and county and supersede any inconsistent charter provision.

By imposing additional duties with respect to local public contracting, this bill would impose a state-mandated local program.

begin delete

This bill also would require the Governor’s Office of Business and Economic Development to incentivize specified activities between Israel and California and to disincentivize barriers hindering those activities.

end delete

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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known and may be cited as the
California Combating the Boycott, Divestment, and Sanctions of
Israel Act of 2016.

SEC. 2.  

The Legislature finds and declares the following:

(a) The United States and Israel have a unique bond based on
their shared, enduring values, which are reflected in the virtues
and principles of freedom and democracy, and have stood together
as allies since Israel was first formed as a nation.

(b) California and Israel have established business partnerships
and trade relations with each other, and those partnerships have
helped enhance the agricultural, educational, energy, entertainment,
health, medical, scientific, and water policies in California, Israel,
and the United States.

(c) On March 5, 2014, as the culmination of an effort started as
Assembly Bill 1032 of the 2009-10 Regular Session, the Governor
of California and the Prime Minister of Israel signed a
memorandum of understanding (MOU) for strategic partnerships
for joint innovation, exchanges, and cooperation between California
and Israel.

(d) In July 2015, the Legislature affirmed its support for the
MOU by passing Senate Concurrent Resolution 25, noting that
participants in the MOU had already expanded cooperation between
Israel and California in areas such as alternative energy, agriculture,
business innovation, and academia, and declaring that collaboration
with Israel will foster peace and democracy in the Middle East.

(e) Boycotts of Israel by companies doing business in California
undermine the aforesaid express policy and purpose of encouraging
trade, business, and academic cooperation between California and
Israel. Therefore, it is in the best interests of the State of California
that it not contract with any company participating in a boycott of
Israel.

(f) Notwithstanding any other law, including, but not limited
to, Section 1100.7 of the Public Contract Code, the provisions of
this measure address the political nature of contracting with a
company that is participating in the boycott of Israel and the need
for the government of this state to respond to the policies of Israel
in a uniform fashion, a matter of statewide concern, and therefore,
shall apply to charter cities, charter counties, and a charter city
and county.

SEC. 3.  

Chapter 2.6 (commencing with Section 2100) is added
to Part 1 of Division 2 of the Public Contract Code, to read:

 

Chapter  2.6. California Combating the Boycott,
Divestment, and Sanctions of Israel Act of 2016

 

2100.  

(a) Notwithstanding any other law, and except as
provided in subdivision (d), a public entity shall not enter into a
contract on or after January 1, 2017, to acquire or dispose of goods,
services, information technology, or for construction if the
contracting company is participating in a boycott of Israel.

begin delete

(b) A public entity shall notify any company determined to be
participating in a boycott of Israel that the public entity is
prohibited from contracting with the company and permit that
company to respond to the notification. The public entity shall
request that the company take substantial action to cease its boycott
of Israel no later than 90 days from the date the public entity
notified the company under this subdivision. If the public entity
determines that a company has taken substantial action to cease
its boycott of Israel before the expiration of that 90-day period,
that company shall not be subject to subdivision (a).

end delete begin insert

(b) A company that, at the time of bid or proposal for a new
contract or renewal of an existing contract, is identified on a list
created pursuant to subdivision (c) as a company engaging in a
boycott of Israel is ineligible to, and shall not, bid on, submit a
proposal for, or enter into or renew a contract with a public entity
to acquire or dispose of goods, services, information technology,
or construction for ten thousand dollars ($10,000) or more.

end insert begin insert

(c) (1) The Department of General Services shall, using
information available to the public contained in the report
presented to the Congress pursuant to Section 909 of the Federal
Trade Facilitation and Trade Enforcement Act of 2015, develop,
or contract to develop, a list of companies it determines are
engaging in a boycott of Israel.

end insert begin insert

(2) The Department of General Services shall update the list
every 180 days.

end insert begin insert

(3) Before finalizing an initial list pursuant to paragraph (1)
or an updated list pursuant to paragraph (2), the Department of
General Services shall do all of the following before a company
is included on the list:

end insert begin insert

(A) Provide 90 days’ written notice of its intent to include the
company on the list. The notice shall inform the company that
inclusion on the list would make the company ineligible to bid on,
submit a proposal for, or enter into or renew a contract for goods,
services, information technology, or construction for ten thousand
dollars ($10,000) or more with a public entity. The notice shall
specify that the company, if it ceases engaging in a boycott of
Israel and is removed from the list, may become eligible for a
future contract, or contract renewal, for goods, services,
information technology, or construction for ten thousand dollars
($10,000) or more with a public entity.

end insert begin insert

(B) The Department of General Services shall provide a
company with an opportunity to comment in writing to the
Department of General Services that it is not engaging in a boycott
of Israel. If the company demonstrates to the Department of
General Services that the company is not engaging in a boycott
of Israel, the company shall not be included on the list and shall
be eligible to enter into or renew a contract for goods, services,
information technology, or construction for ten thousand dollars
($10,000) or more with a public entity, unless the company is
otherwise ineligible to bid on a contract pursuant to subparagraph
(C) of paragraph (2) of subdivision (d).

end insert begin insert

(4) The Department of General Services shall make every effort
to avoid erroneously including a company on the list.

end insert begin insert

(d) (1) A public entity shall require a company that submits a
bid or proposal to, or otherwise proposes to enter into or renew
a contract with, the public entity with respect to a contract for
goods or services for ten thousand dollars ($10,000) or more to
certify, at the time the bid is submitted or the contract is renewed,
that the company is not identified on a list created pursuant to
subdivision (c) as a company that is engaging in a boycott of Israel.
A state agency shall submit the certification information to the
Department of General Services.

end insert begin insert

(2) If a public entity, or the Department of General Services in
the case of a state agency, determines, using credible information
available to the public and after providing 90 days’ written notice
and an opportunity to comment in writing to the company for it to
demonstrate that it is not engaging in a boycott of Israel, that a
company has submitted a false certification, and the company fails
to demonstrate to the local public entity or the Department of
General Services that the company has ceased engaging in a
boycott of Israel within 90 days after the determination of a false
certification, the company shall be subject to all of the following:

end insert begin insert

(A) Pursuant to an action under subdivision (e), a civil penalty
in an amount that is equal to the greater of two hundred fifty
thousand dollars ($250,000) or twice the amount of the contract
for which the false certification was made. Only one civil penalty
may be imposed with respect to one or more certifications made
to any public entity that are false as a result of a particular
contract.

end insert begin insert

(B) Termination of an existing contract with the awarding body
at the option of the awarding body or the Department of General
Services.

end insert begin insert

(C) Ineligibility to bid on a contract for a period of three years
from the date of the determination that the company submitted the
false certification.

end insert begin insert

(e) (1) A local public entity, or the Department of General
Services in the case of a state agency, shall report to the Attorney
General the name of a company that the local public entity or the
Department of General Services has determined has submitted a
false certification under paragraph (2) of subdivision (d), together
with its information as to the false certification, and the Attorney
General shall determine whether to bring a civil action against
the company to collect the penalty described in subparagraph (A)
of paragraph (2) of subdivision (d).

end insert begin insert

(2) The awarding body of a local public entity may report to
the city attorney, county counsel, or district attorney the name of
a company that the awarding body determines has submitted a
false certification under paragraph (2) of subdivision (d), together
with its information as to the false certification, and the city
attorney, county counsel, or district attorney may determine
whether to bring a civil action against the company to collect the
penalty described in subparagraph (A) of paragraph (2) of
subdivision (d).

end insert begin insert

(3) If it is determined in an action under this subdivision that
a company submitted a false certification, the company shall pay
all reasonable costs and fees incurred in a civil action, including
costs incurred by the awarding body for investigations that led to
the finding of the false certification and all reasonable costs and
fees incurred by the Attorney General, city attorney, county
counsel, or district attorney.

end insert begin insert

(4) Only one civil action against a company to collect the
penalty described in subparagraph (A) of paragraph (2) of
subdivision (d) may be brought for a false certification on a
contract.

end insert begin insert

(5) A civil action to collect the penalty described in
subparagraph (A) of paragraph (2) of subdivision (d) must
commence within three years from the date the certification was
made.

end insert begin insert

(f) An unsuccessful bidder, or any other company other than
the awarding body, shall have no right to protest the award of a
contractor contract renewal on the basis of a false certification.

end insert begin insert

(g) This section does not create or authorize a private right of
action or enforcement of the penalties provided for in
subparagraph (A) of paragraph (2) of subdivision (d).

end insert begin delete

(c)

end delete

begin insert (h) end insert  For the purposes of this section, the following definitions
shall apply:

(1) (A) “Boycott Israel” or “boycott of Israel” means refusing
to deal with, terminating business activities with, or taking other
actions that are intended to penalize, inflict economic harm, or
otherwise limit commercial relations with Israel or persons or
entities incorporated in Israel or doing business in Israel for reasons
other than business, investment, or commercial reasons. A
statement by a company that it is participating in a boycott of
Israel, or that it has initiated a boycott in response to a request for
a boycott of Israel or in compliance with, or in furtherance of, calls
for a boycott of Israel, may be considered by a public entity to be
evidence that a company is participating in a boycott of Israel.

(B) “Boycott” does not include any of the following:

(i) A decision based on business or economic reasons.

(ii) Termination or prohibition of commercial activity within a
particular jurisdiction that is required by federal or state law.

(2) “Company” means a sole proprietorship, organization,
association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, limited liability company,
or other entity or business association, including all wholly owned
subsidiaries, majority-owned subsidiaries, and parent companies,
that exists for the purpose of making profit.

(3) “Public entity” shall have the same meaning as defined in
subdivision (a) of Section 5100.

begin delete

(d)

end delete

begin insert (i) end insert  This section shall not apply to a contract if either of the
following apply:

(1) The total value of the contract is less than ten thousand
dollars ($10,000).

(2) The public entity makes a formal, written determination that
the goods, services, information technology, or other matters that
are the subject of the contract are necessary for the public entity
to perform its functions and that, absent this exemption, the public
entity would be unable to obtain said goods, services, information
technology, or other matters for which the contract is offered.

begin delete

2101.  

The provisions of this chapter shall supersede any
inconsistent provisions in the charter of a charter city, charter
county, or charter city and county.

end delete begin delete

2102.  

The Governor’s Office of Business and Economic
Development shall recommend tools to incentivize business and
academic collaboration, trade, and partnership between Israel and
California and to disincentivize any and all barriers hindering that
collaboration, trade, and partnership, pursuant to Senate Concurrent
Resolution 121 of the 2014 Regular Session and Senate Concurrent
Resolution 25 of the 2015 Regular Session. These incentives may
include, but not be limited to, tax credits, partnership subsidies,
innovative grant programs, job creation initiatives, and contracting
preferences.

end delete

SEC. 4.  

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.