BILL NUMBER: AB 2844 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 26, 2016
AMENDED IN ASSEMBLY APRIL 11, 2016
AMENDED IN ASSEMBLY MARCH 28, 2016
AMENDED IN ASSEMBLY MARCH 17, 2016
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
participating in the boycott of Israel, as provided.
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. The bill would require the
Attorney General to develop, or contract to develop,
maintain, and post on its Internet Web site, a
list of companies it determines are engaging in a boycott of
Israel. that are 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.
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. 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. 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.
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.
(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. 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.
(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).
(b)
(c) 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 (d), 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.
(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:
(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.
(A) Provide
(2) (A) The
Attorney General shall 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 the
discriminatory business practice described in subdivision (a)
and is removed from the list, it 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 Department of General Services
Attorney General shall provide a company with an opportunity to
comment in writing to the Department of General Services
Attorney General that it is not engaging in a
boycott of Israel. discriminatory business
practice described in subdivision (a). If the company
demonstrates to the Department of General Services
Attorney General that the company is not engaging in a
boycott of Israel, discriminatory business
practice described in subdivision (a), 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). entity.
(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.
(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).
(h)
(e) For the purposes of this section, the following
definitions shall apply:
(1) (A) "Boycott Israel" or "boycott of Israel"
"Boycott" 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 the boycotted
entity 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) "Discriminatory business practices" means business
arrangements that are prohibited by Sections 16721 and 16721.5 of the
Business and Professions Code.
(3) "Public
(4) "Public entity" shall have
the same meaning as defined in subdivision (a) of Section 5100.
(i)
(f) 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.