BILL ANALYSIS Ó
AB 2844
Page 1
ASSEMBLY THIRD READING
AB
2844 (Bloom)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Accountability |5-1 |Lackey, Brough, Beth |Cristina Garcia |
| | |Gaines, Irwin, Medina | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |11-0 |Gonzalez, Bonilla, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
AB 2844
Page 2
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SUMMARY: Requires the Attorney General (AG) to develop,
maintain, and post on its Internet Web site a list of companies
that have engaged in discriminatory business practices in
furtherance of a boycott of another country, as specified, and
report to the Legislature on the constitutionality of
prohibiting a company on the list from contracting with public
entities. Specifically, this bill:
1)Directs the AG to develop, maintain, and post on its Internet
Web site 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.
2)Requires the AG to provide an assessment to the Legislature,
on or before January 1, 2018, of the constitutionality of
prohibiting a company on the list developed pursuant to this
bill from entering into a contract with a public entity.
3)Requires the assessment above to be submitted in accordance
with existing law governing reports to the Legislature.
4)Defines various terms for purposes of this bill, including
"boycott," "discriminatory business practices," and "public
entity."
FISCAL EFFECT: According to the Assembly Appropriations
AB 2844
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Committee:
The AG could have significant one-time costs to research,
develop, and maintain the Web site list of companies, and to
provide the required assessment.
The Department of General Services (DGS) anticipates one-time
costs of several hundred thousand dollars to complete a
rulemaking, considering the complexity of the issues involved,
including constitutional issues, and the likelihood of extensive
public comments from affected businesses and supporters and
opponents of this measure. DGS also identifies unknown ongoing
costs to investigate whether companies are engaged in
discriminatory business practices, to notify those companies of
their ineligibility to bid on state contracts and to request
that the companies take "substantial action" to cease their
discriminatory practices within 90 days, and to determine
whether companies have done so. DGS also notes that agencies
outside DGS' authority may need to conduct their own
rulemakings.
DGS also notes that, in general, exclusion of bidders from
contracts can result in higher contract prices, and thus higher
costs to the state and local government. Finally, DGS cites the
potential for significant costs related to litigation over the
provisions of this bill.
COMMENTS: Current state contracting bans against companies
involved in specified business activities in Iran or Sudan were
enacted under specific circumstances against two countries with
well-documented human rights violations. Specifically,
companies involved in certain business activities in Iran or
Sudan are banned from entering into contracts with state
entities for goods and services and a prospective bidder is
required to certify that his or her company is not engaged in
AB 2844
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such activities. Companies must be given written notice of
their right to challenge their disqualification for prohibited
activities. Those that cease the prohibited activities are
fully eligible to contract with the state and other public
entities. Companies that are found by an awarding entity to
have submitted a false certification incur civil penalties, face
termination of the contract, and are deemed ineligible to bid on
public contracts for three years.
This bill tasks the AG with compiling and maintaining on its
website a list of companies engaged in discriminatory business
practices in furtherance of a boycott of another country. The
AG would also be required to assess the constitutionality of
prohibiting a company on the list from contracting with state
and local public entities and provide that assessment to the
Legislature by January 1, 2018.
Analysis Prepared by:
Cassie Royce / A. & A.R. / (916) 319-3600 FN:
0003319