Amended in Assembly May 31, 2016

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: begin delete California Combating the end delete Boycott, Divestment, and Sanctions of begin delete Israel Act of 2016. end delete begin insert Recognized Sovereign Nations or Peoples. end insert

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 begin delete 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 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 end delete bill would require the Attorney General to develop, maintain, and post on its Internet Web site, a list of companies 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 begin delete 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 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 delete begin insert States. The bill would also require the Attorney General, on or before January 1, 2018, to provide an assessment to the Legislature of the constitutionality of prohibiting a company on the list from entering into a contract with a public entity. end insert

begin delete

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

end delete begin 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.

end delete begin delete

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.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

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

begin delete

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.

end delete

begin delete

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.

end delete

begin delete SEC. 3. end delete

begin insert SECTION 1. end insert   

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. begin delete California Combating the end delete Boycott,
Divestment, and Sanctions of begin delete Israel Act of 2016 end delete begin insert Recognized
Sovereign Nations or Peoples end insert

 

begin delete

2100.  

(a) Notwithstanding any other law, 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 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).

(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 (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.

(d)  (1)

end delete

begin insert

begin insert 2100. end insert   

end insert

begin insert (a) end insert  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 begin delete States,
including, but not limited to, the nation of Israel. end delete begin insert States. end insert

begin delete

(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 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 Attorney General shall provide a company with an
opportunity to comment in writing to the Attorney General that it
is not engaging in a discriminatory business practice described in
subdivision (a). If the company demonstrates to the Attorney
General that the company is not engaging in a 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.

(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 delete begin insert

(b) (1) On or before January 1, 2018, the Attorney General
shall provide an assessment to the Legislature of the
constitutionality of prohibiting a company on the list developed
pursuant to subdivision (a) from entering into a contract with a
public entity.

end insert begin insert

(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2022, pursuant to
Section 10231.5 of the Government Code.

end insert begin insert

(B) A report to be submitted pursuant to paragraph (1) shall
be submitted in compliance with Section 9795 of the Government
Code.

end insert begin delete

(e)

end delete

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

(1) (A)  “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 the boycotted entity for reasons other than business,
investment, or commercial reasons.

(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.

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

begin delete

(f) This section shall not apply to a contract if either of the
following apply:

end delete begin delete

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

end delete begin delete

(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.

end delete

begin 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.

end delete