BILL ANALYSIS Ó
SB 703
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 703
(Leno) - As Amended June 1, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill prohibits state agencies from entering into certain
contracts with a contractor that discriminates between their
employees on the basis of gender identity. Specifically, this
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bill:
1)Prohibits state agencies from entering into contracts
exceeding $100,000 for goods or services 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 identification as
transgender.
2)Provides specific exceptions to the contracting requirement in
(1), including when there is only one prospective contractor
willing to enter into a contract with the state or as
necessary to respond to an emergency situation.
3)Requires every contract subject to (1) to include a statement
for the contractor to certify compliance with the requirement
in (1). A contractor falsely certifying compliance shall be
subject to certain penalties and remedies unless, within a
time period specified by DGS or other state contracting
agency, the contractor provides proof that it has complied or
is in the process of complying.
4)Requires the Department of General Services (DGS) to maintain
an easily accessible list on its website of contracts for the
acquisition of goods or services in the amount $100,000 or
more that are entered into on or after January 1, 2016.
FISCAL EFFECT:
1)By adding contracting requirements on bidders, the bill would
to some extent reduce the number of bidders on state
contracts, thus reducing competition and possibly increasing
costs. The cost of these impacts is unknown, but given that
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the state contracts for several billion dollars for goods and
services exceeding $100,000 annually, costs could be in the
hundreds of thousands to millions of dollars annually.
[General Fund and numerous special funds] Over time, assuming
more contractors come into compliance, the cost impact of this
bill would diminish.
2)DGS would incur minor one-time administrative costs to update
standard contract terms, and minor absorbable costs to include
the listing of contracts on its website.
COMMENTS:
1)Purpose. According to the author's office, this bill is simply
intended to prohibit state agencies from doing business with
companies that discriminate between the benefits offered to
transgender employees and other employees. The author's
office notes that discrimination in the provision of employee
benefits has a tremendous economic cost impact. For example,
when workers are denied health coverage or are excluded from
medically necessary procedures, costs are pushed on to state
funded programs and services. One mechanism that has been
used to combat these costs, and to reduce discrimination, is
the state's market power through the contracting it does with
the private sector.
2)Prior Legislation. This bill is modeled after AB 17 (Kehoe),
Chapter 752, Statutes of 2003, which prohibited state
contracts with firms that discriminate, in the provision of
benefits, between employees with spouses and employees with
registered domestic partners.
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3)Comment. Since the state's FI$Cal public transparency website
will list all contracts for goods and services and will enable
users to run search queries, including queries for contracts
over $100,000, it seems unnecessary to require DGS to post,
and continually update, information that members of the public
could obtain on their own through FI$CAL.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081