BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2844


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2844 (Bloom)


          As Amended  August 19, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |64-0  |(June 2, 2016) |SENATE: |34-1  |(August 24,      |
          |           |      |               |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  A. & A.R.


          SUMMARY:  Requires a person who submits a bid or proposal to  
          enter into, or renew, a contract of $100,000 or more with a  
          state agency to certify the following, under penalty of perjury:


          1)They are in compliance with the California Fair Employment and  
            Housing Act (FEHA) and the Unruh Civil Rights Act (Unruh Act)  
            and,  


          2)Any policy that they have against any sovereign nation or  
            peoples recognized by the government of the United States,  
            including, but not limited to, the nation and people of  
            Israel, is not used to discriminate in violation of the FEHA  
            or the Unruh Act. 


          The Senate amendments: 








                                                                    AB 2844


                                                                    Page  2




          1)Delete provisions requiring 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 and  
            report to the Legislature on the constitutionality of  
            prohibiting a company on the list from contracting with public  
            entities.


          2)Make a number of findings and declarations relating to  
            California's robust nondiscrimination laws and California's  
            influence in the marketplace as a market participant.


          3)Express legislative intent to ensure that taxpayer funds are  
            not used to do business with or otherwise support any state or  
            private entity that engages in discriminatory actions against  
            individuals under the pretext of exercising First Amendment  
            rights.


          4)Require specified contractors to self-certify, under penalty  
            of perjury, that they are in compliance with the FEHA and the  
            Unruh Act; and that any policy that they have adopted against  
            any sovereign nation or peoples recognized by the United  
            States (U.S.) government is not used to discriminate in  
            violation of the FEHA or the Unruh Act.


          5)Clarify that any policy adopted by a person or actions taken  
            thereunder that are reasonably necessary to comply with  
            federal or state sanctions laws affecting sovereign nations or  
            their nationals shall not be construed as unlawful  
            discrimination in violation of this bill. 


          EXISTING LAW protects individuals against discrimination under  
          numerous statutes, covering a variety of contexts.  FEHA,  
          established in Government Code Section 12920, and the Unruh Act,  
          specified in Civil Code Section 51, prohibit discrimination in  








                                                                    AB 2844


                                                                    Page  3


          employment, housing, public accommodation, and services provided  
          by business establishments on the basis of specified personal  
          characteristics, such as sex, race, color, religion, ancestry,  
          national origin, age, disability, medical condition, genetic  
          information, marital status, or sexual orientation.  
          Additionally, Government Code Section 11135 specifically  
          prohibits discrimination on the basis of many of these same  
          protected characteristics in the conduct, operation, or  
          administration of any program or activity that is by the state  
          or by any state agency, funded directly by the state, or  
          receives any financial assistance from the state.  


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee:


          1)Department of General Services (DGS):  Unquantifiable but  
            potentially major future increase in ongoing operating costs  
            due to higher contract costs (General Fund) resulting from the  
            exclusion of otherwise qualified bidders that may no longer  
            submit bids under the required certification.  The DGS  
            administers over 9,000 contracts with a value of $100,000 or  
            more with a combined value of $27.9 billion.  In the absence  
            of any exceptions for situations involving a sole source or  
            for cases in which all otherwise qualified bidders are  
            excluded, the costs to obtain alternative goods and/or  
            services may increase costs to the state.  Additionally, to  
            the extent exercising an option to extend a contract, which  
            oftentimes provides for advantageous rates or prices, is  
            deemed a renewal under the provisions of this bill could  
            likewise result in additional administrative workload and  
            higher costs to the state for goods and services.  While the  
            magnitude of the impact cannot be quantified, for context,  
            even a 0.5% increase to overall contract costs would result in  
            increased costs to the state of about $140 million.  


          2)Perjury violations:  Unknown; potential increase in local  
            enforcement and incarceration costs (Local Funds) to the  
            extent felony arrests and convictions for the offense of  
            perjury are pursued under the provisions of this measure.  








                                                                    AB 2844


                                                                    Page  4




          3)Other state agencies:  In addition to the DGS, numerous other  
            state agencies that enter into contracts of over $100,000  
            would be impacted by an unquantifiable but potentially  
            significant amount due to the contract certification  
            requirement established in this bill.


          4)Department of Fair Employment and Housing (DFEH):  Potential  
            workload increase to receive and respond to complaints, and  
            potentially conduct investigations.  The actual workload  
            impact of this measure is largely unknown and would be  
            dependent on the volume and nature of complaints received and  
            subsequently investigated.  Although this bill does not  
            directly specify DFEH to field complaints or investigate  
            potential violations, the receipt of violations of the Unruh  
            Act and FEHA do fall under the purview of DFEH.


          COMMENTS:  Senate amendments delete an earlier Assembly-approved  
          version of this bill that would have required the Attorney  
          General to maintain a list of companies that engage in  
          discriminatory business practices in furtherance of a boycott  
          and provide a related constitutional assessment.  Instead, the  
          Senate amendments limit this bill to contractor  
          self-certification.  Specifically, the amendments require a  
          contractor seeking to enter into, or renew, a state contract  
          with a value of $100,000 or more to certify under penalty of  
          perjury that they are complying with the state's existing  
          anti-discrimination laws.  The amendments further require the  
          contractor to certify that any policy that they have adopted  
          against a sovereign nation or peoples recognized by the U.S.  
          government is not used to discriminate in violation of the  
          state's anti-discrimination laws.   


          Analysis Prepared by:                        Cassie Royce / A. &  
          A.R. / (916) 319-3600                                 FN:  
          0004801










                                                                    AB 2844


                                                                    Page  5