Amended in Senate June 1, 2015

Senate Bill No. 703

Introduced by Senator Leno

February 27, 2015

An act to add Sections begin delete 10295.35, 10421.5, end delete begin insert 10295.35 end insert and 10427 to the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

SB 703, as amended, Leno. Public contracts: prohibitions: discrimination.

Existing law authorizes state agencies to enter into contracts for the acquisition of goods or services upon approval by the Department of General Services. Existing law sets forth various requirements and prohibitions for those contracts, including, but not limited to, a prohibition on entering into contracts for the acquisition of goods or services of $100,000 or more with a contractor that discriminates between spouses and domestic partners or same-sex and different-sex couples in the provision of benefits. Existing law provides that a contract entered into in violation of those requirements and prohibitions is void and authorizes the state or any person acting on behalf of the state to bring a civil action seeking a determination that a contract is in violation and therefore void. Under existing law, a willful violation of those requirements and prohibitions is a misdemeanor.

This bill would also prohibit a state agency from entering into contracts for the acquisition of goods or services of $100,000 or more with a contractor that discriminates between employees on the basis of gender identity in the provision of benefits, as specified. The bill would require the department to maintain an easily accessible list on its Internet Web site of contracts for the acquisition of goods or services of $100,000 or more entered into on or after January 1, 2016. begin delete The bill would authorize a person to file a complaint with the department alleging that a contractor is in violation of, or a contract has been entered into in violation of, a state contracting requirement or prohibition and would require the department to investigate each complaint. end delete By expanding the scope of a crime, 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 no reimbursement is required by this act for a specified reason.

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.  

Section 10295.35 is added to the Public Contract
Code, to read:

10295.35.  

(a) (1) Notwithstanding any other law, a state
agency shall not enter into any contract for the acquisition of goods
or services in the amount of one hundred thousand dollars
($100,000) or more with a contractor that, in the provision of
benefits, discriminates between employees on the basis of an
employee’s or dependent’s actual or perceived gender identity,
including, but not limited to, the employee’s or dependent’s
identification as transgender.

(2) For purposes of this section, “contract” includes contracts
with a cumulative amount of one hundred thousand dollars
($100,000) or more per contractor in each fiscal year.

(3) For purposes of this section, an employee health plan is
discriminatory if the plan is not consistent with Section 1365.5 of
the Health and Safety Code and Section 10140 of the Insurance
Code.

(4) The requirements of this section shall apply only to those
portions of a contractor’s operations that occur under any of the
following conditions:

(A) Within the state.

(B) On real property outside the state if the property is owned
by the state or if the state has a right to occupy the property, and
if the contractor’s presence at that location is connected to a
contract with the state.

(C) Elsewhere in the United States where work related to a state
contract is being performed.

(b) Contractors shall treat as confidential, to the maximum extent
allowed by law or by the requirement of the contractor’s insurance
provider, any request by an employee or applicant for employment
benefits or any documentation of eligibility for benefits submitted
by an employee or applicant for employment.

(c) After taking all reasonable measures to find a contractor that
complies with this section, as determined by the state agency, the
requirements of this section may be waived under any of the
following circumstances:

(1) There is only one prospective contractor willing to enter
into a specific contract with the state agency.

(2) The contract is necessary to respond to an emergency, as
determined by the state agency, that endangers the public health,
welfare, or safety, or the contract is necessary for the provision of
essential services, and no entity that complies with the requirements
of this section capable of responding to the emergency is
immediately available.

(3) The requirements of this section violate, or are inconsistent
with, the terms or conditions of a grant, subvention, or agreement,
if the agency has made a good faith attempt to change the terms
or conditions of any grant, subvention, or agreement to authorize
application of this section.

(4) The contractor is providing wholesale or bulk water, power,
or natural gas, the conveyance or transmission of the same, or
ancillary services, as required for begin delete assuring end delete begin insert ensuring end insert reliable
services in accordance with good utility practice, if the purchase
of the same cannot practically be accomplished through the
standard competitive bidding procedures and the contractor is not
providing direct retail services to end users.

(d) (1) A contractor shall not be deemed to discriminate in the
provision of benefits if the contractor, in providing the benefits,
pays the actual costs incurred in obtaining the benefit.

(2) If a contractor is unable to provide a certain benefit, despite
taking reasonable measures to do so, the contractor shall not be
deemed to discriminate in the provision of benefits.

(e) (1) Every contract subject to this chapter shall contain a
statement by which the contractor certifies that the contractor is
in compliance with this section.

(2) The department or other contracting agency shall enforce
this section pursuant to its existing enforcement powers.

(3) (A) If a contractor falsely certifies that it is in compliance
with this section, the contract with that contractor shall be subject
to Article 9 (commencing with Section 10420), unless, within a
time period specified by the department or other contracting
agency, the contractor provides to the department or agency proof
that it has complied, or is in the process of complying, with this
section.

(B) The application of the remedies or penalties contained in
Article 9 (commencing with Section 10420) to a contract subject
to this chapter shall not preclude the application of any existing
remedies otherwise available to the department or other contracting
agency under its existing enforcement powers.

(f) Nothing in this section is intended to regulate the contracting
practices of any local jurisdiction.

(g) This section shall be construed so as not to conflict with
applicable federal laws, rules, or regulations. In the event that a
court or agency of competent jurisdiction holds that federal law,
rule, or regulation invalidates any clause, sentence, paragraph, or
section of this code or the application thereof to any person or
circumstances, it is the intent of the state that the court or agency
sever that clause, sentence, paragraph, or section so that the
remainder of this section shall remain in effect.

begin delete

SEC. 2.  

Section 10421.5 is added to the Public Contract Code,
to read:

10421.5.  

(a) Any person may file a complaint with the
department alleging that a contractor is in violation of, or a contract
or other transaction has been entered into in violation of, any
provision of this chapter.

(b) The department shall investigate any complaints it receives
pursuant to this section.

end delete

begin delete SEC. 3. end delete
begin insert SEC. 2. end insert   

Section 10427 is added to the Public Contract Code,
to read:

10427.  

The department shall maintain an easily accessible list
on the department’s Internet Web site of contracts for the
acquisition of goods or services in the amount of one hundred
thousand dollars ($100,000) or more that are entered into on or
after January 1, 2016.

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

Section 10295.35 of the Public Contract Code shall
not be construed to create any new enforcement authority or
responsibility in the Department of General Services or any other
contracting agency.

end insert

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.