Amended in Assembly April 26, 2016

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

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

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

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

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 begin delete participating in the boycott of Israel, as provided. end delete begin insert engaging in discriminatory business practices in furtherance of a boycott of any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation of Israel. end insert The bill would require the Attorney General to develop, begin delete or contract to develop, end delete begin insert maintain, and post on its Internet Web site, end insert a list of companies begin delete it determines are engaging in a boycott of Israel. end delete begin insert that are end insert begin insert engaging in discriminatory business practices in furtherance of a boycott of any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation of Israel. end insert 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 begin delete 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. 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. end delete begin insert notify any company that bids on or submits a proposal for a contract with the public entity for $10,000 or more, that is determined to be engaging in discriminatory business practices in furtherance of a boycott of any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation of Israel, that the public entity is prohibited from contracting with the company and to request that the company take substantial action to cease its discriminatory business practices. end insert

By imposing additional duties with respect to local public contracting, 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, 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.

begin delete

(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.

end delete

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, begin delete and except as
provided in subdivision (d), end delete 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 begin delete participating in a boycott of Israel. end delete

begin insert engaging in discriminatory business practices in furtherance of a
boycott of any sovereign nation or peoples recognized by the
government of the United States, including, but not limited to, the
nation of Israel. end insert

begin insert

(b) A public entity shall notify any company that bids on or
submits a proposal for a contract with the public entity for ten
thousand dollars ($10,000) or more, that is determined to be
engaging in discriminatory business practices, as described in
subdivision (a), that the public entity is prohibited from contracting
with the company, and permit the company to respond to the
notification. The public entity shall request that the company take
substantial action to cease its discriminatory business practices
no later than 90 days from the date that the public entity notified
the company under this subdivision. If the public entity determines
that a company has taken substantial action to cease its
discriminatory business practices before the expiration of the
90-day period, that company shall not be subject to subdivision
(a).

end insert begin delete

(b)

end delete

begin insert (c) end insert  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 begin delete (c) as a company engaging in a
boycott of Israel end delete begin insert (d), end insert 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.

begin delete

(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.

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

(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 delete begin insert

(d) (1) The Attorney General shall develop, maintain, and post
on the Internet Web site of the Office of the Attorney General a
list of companies that have engaged in discriminatory business
practices in furtherance of a boycott of any sovereign nation or
peoples recognized by the government of the United States,
including, but not limited to, the nation of Israel.

end insert begin delete

(A) Provide

end delete

begin insert (2) end insert begin insert   end insert begin insert (A) end insert begin insert   end insert begin insert The Attorney General shall provide end insert 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 begin delete engaging in a boycott of Israel end delete begin insert the
discriminatory business practice described in subdivision (a) end insert and
is removed from the list, begin insert it end insert 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.

(B) The begin delete Department of General Services end delete begin insert Attorney General end insert shall
provide a company with an opportunity to comment in writing to
the begin delete Department of General Services end delete begin insert Attorney General end insert that it is not
engaging in a begin delete boycott of Israel. end delete begin insert discriminatory business practice
described in subdivision (a). end insert If the company demonstrates to the
begin delete Department of General Services end delete begin insert Attorney General end insert that the company
is not engaging in a begin delete boycott of Israel, end delete begin insert discriminatory business
practice described in subdivision (a), end insert 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 begin delete entity, unless the company is otherwise ineligible to bid on
a contract pursuant to subparagraph (C) of paragraph (2) of
subdivision (d). end delete begin insert entity. end insert

begin insert

(3) If a company submits a comment in writing as authorized
in subparagraph (B) of paragraph (2) and the Attorney General
refuses to remove the company from the list, and the company
continues to believe that it is not engaging in a discriminatory
practice a described in subdivision (a), the company may seek
appropriate relief in superior court.

end insert begin delete

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

(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.

(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:

(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.

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

(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.

(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).

(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).

(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.

(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.

(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.

(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.

(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 delete begin delete

(h)

end delete

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

(1) (A)  begin delete “Boycott Israel” or “boycott of Israel” end delete begin insert “Boycott” end insert 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 begin delete Israel or persons or
entities incorporated in Israel or doing business in Israel end delete begin insert the
boycotted entity end insert for reasons other than business, investment, or
commercial reasons. begin delete 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. end delete

(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.

begin insert

(3) “Discriminatory business practices” means business
arrangements that are prohibited by Sections 16721 and 16721.5
of the Business and Professions Code.

end insert begin delete

(3) “Public

end delete

begin insert (4) end insert begin insert   end insert begin insert “Public end insert entity” shall have the same meaning as defined in
subdivision (a) of Section 5100.

begin delete

(i)

end delete

begin insert (f) 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.

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.