BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 703 (Leno) - Public contracts: prohibitions: discrimination
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|Version: February 27, 2015 |Policy Vote: G.O. 7 - 3, JUD. 5 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 28, 2015 |Consultant: Mark McKenzie |
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SUSPENSE FILE. AS AMENDED.
Bill
Summary: SB 703 would prohibit state agencies from entering
into a contract for goods or services in the amount of $100,000
or more with a contractor that, in the provision of benefits,
discriminates on the basis of actual or perceived gender
identity, with specified exceptions. The bill would also
require the Department of General Services (DGS) to maintain a
list of contracts for goods and services in the amount of
$100,000 or more on its website.
Fiscal Impact (as approved on May 28, 2015):
Minor costs to DGS to compile, update, and post a list of
contracts for goods and services valued at $100,000 or more.
This information is readily available on the FISCal website
(General Fund).
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Minor one-time administrative costs to DGS to update the State
Contracting Manual and update standard bid and contract
language to incorporate a certification of compliance (General
Fund).
Background: Existing law, the Unruh Civil Rights Act, generally prohibits
discrimination on the basis of sex, race, color, religion,
ancestry, national origin, disability, medical condition,
marital status, or sexual orientation, and provides civil
remedies for violations of its provisions. Existing law also
prohibits discrimination in the provision of health care and
insurance benefits on the basis of numerous factors, including
sex, domestic partner status, or gender, gender identity, and
gender expression.
Existing law authorizes state agencies to enter into contracts
for the acquisition of goods or services upon approval by DGS,
and establishes rules governing the awarding of contracts by
state agencies, including general requirements for competitive
bidding. Existing law prescribes 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. A
contract that is in violation of those requirements and
prohibitions is void. Existing law 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. A willful violation of these requirements and
prohibitions is a misdemeanor.
Proposed Law:
SB 703 would prohibit state agencies from contracting for
goods and services with entities that discriminate on the basis
of gender identity in the provision of benefits. Specifically,
this bill would, among other things, do the following:
Prohibit state agencies from entering into contracts for
the acquisition of goods and services in an amount of
$100,000 or more with a contractor that, in the provision
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of benefits, discriminates on the basis of an employee's or
dependent's actual or perceived gender identity, including
identification as transgender, as specified.
Authorize a state agency, after taking all reasonable
measures to find a compliant contractor, to waive these
requirements under the following circumstances: (1) there
is only one available contractor; (2) the contract is
necessary to respond to an emergency and compliant
contractors are unavailable; (3) the requirements would
violate conditions of a grant, subvention, or agreement;
and (4) the contract is for wholesale or bulk water, power,
or natural gas, as specified.
Requires every contract to contain a statement by which
the contractor self-certifies compliance with these
requirements.
Require DGS or other contracting agency to enforce these
provisions pursuant to its existing enforcement powers.
Authorize any person to file a complaint with DGS
alleging contractor violations, or alleging that a contract
or transaction has been entered into in violation of these
provisions.
Require DGS to investigate any complaints it receives
regarding these provisions.
Require DGS to maintain an easily accessible list on its
website of contracts for the acquisition of goods and
services in the amount of $100,000 or more that are entered
into on or after January 1, 2016.
Staff
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Comments: Although California prohibits discrimination on the
basis of gender or gender identity in the provision of employee
benefits, there could be circumstances in which an out-of-state
entity or an entity that self-insures under federal law is
contracting with the state for goods and services. SB 703 would
ensure that contracting entities do not discriminate against
employees or their dependents on the basis of gender identity.
The prohibitions in this bill are similar to provisions in
existing law that prohibit contracting with entities that
discriminate in the provision of benefits to domestic partners.
DGS indicates that it would incur minor costs to update the
State Contracting Manual and to update standard bid and contract
language to incorporate a statement by which a contractor
certifies compliance.
SB 703 includes a provision to require DGS to maintain an
accessible list of goods and services contracts with a value of
$100,000 or more on its website. Staff notes that the FISCal
Project will have functionality on its website that allows users
to generate sortable lists of state contracts for goods and
services. As such, DGS indicates that any costs to pull the
data from FISCaL and post it on the DGS website would be minor.
The bill also authorizes any person to file complaints with DGS
alleging violations of these provisions, and requires DGS to
investigate any complaints it receives. These requirements
would result in unknown, but likely significant costs to DGS.
The department has not yet determined the full scope of duties
that would be necessary to investigate complaints, and DGS does
not currently have expertise in health insurance regulation and
has only limited experience with investigating employment issues
with contractors. Most of DGS' current investigative roles
pertain to procurement and construction contract performance
issues. In addition, it is likely that a larger proportion of
complaints would involve out-of-state employers that are not
subject to California law, which would likely drive additional
costs and complications for travel and interpretation of
out-of-state insurance and benefit plans. Costs related to
complaint-driven investigations are unquantifiable, but likely
significant, and would depend upon the number and complexity of
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complaints received.
Author amendments (as adopted on May 28, 2015): Author's
amendments would delete provisions authorizing any person to
file a complaint under the bill, and requiring DGS to
investigate any complaints it receives. The amendments would
also clarify that the bill does not create any new enforcement
responsibility for DGS or any other contracting agency.
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