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