BILL ANALYSIS Ó
SB 703
Page 1
SENATE THIRD READING
SB
703 (Leno)
As Amended August 31, 2015
Majority vote
SENATE VOTE: 25-13
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Accountability |6-3 |Salas, Burke, |Lackey, Brough, |
| | |Frazier, Irwin, | |
| | |Medina, Rodriguez | |
| | | |Beth Gaines |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |12-5 |Gomez, Bloom, Bonta, |Bigelow, Chang, |
| | |Calderon, Nazarian, |Gallagher, Jones, |
| | |Eggman, Eduardo |Wagner |
| | |Garcia, Holden, | |
| | |Quirk, Rendon, Weber, | |
| | |Wood | |
| | | | |
| | | | |
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SB 703
Page 2
SUMMARY: Prohibits 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.
Specifically, this bill:
1) Prohibits a state agency from entering into a contract for
the acquisition of goods or services in the amount of
$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) Provides that the term "contract" includes contracts with a
cumulative amount of $100,000 or more per contractor in each
fiscal year.
3) Provides that an employee health plan is discriminatory if
the plan is not consistent with existing law governing health
plan and health insurance non-discriminatory practices
(Health and Safety Code Section 1365.5 and Insurance Code
Section 10140).
4) Stipulates that the transgender nondiscrimination
requirements referenced above shall apply only to those
portions of a contractor's operations that occur under any of
the following conditions:
a) Within the State of California;
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; or,
c) Elsewhere in the United States where work related to a
state contract is being performed.
SB 703
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5) Requires contractors to 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.
6) Provides that the requirements of this bill may be waived
under any of the following circumstances:
a) There is only one prospective contractor willing to
enter into a specific contract with the state agency;
b) The contract is necessary to respond to an emergency
that endangers public health, welfare, or safety, or the
contract is necessary for the provision of essential
services and no entity that complies with the requirements
is capable of immediately responding to the emergency;
c) The requirements violate, or are inconsistent with,
the terms and conditions of a grant, subvention, or
agreement and the agency has made a good faith effort to
change those terms and conditions; or,
d) The contractor is providing wholesale or bulk water,
power, or natural gas, or ancillary services, as required
for ensuring reliable services in accordance with good
utility practice, if the purchase of the same cannot
practicably be accomplished through standard competitive
bidding procedures and the contractor is not providing
direct retail services to end users.
7) Stipulates that a contractor shall not be deemed to
discriminate in the provision of benefits if: a) the
contractor, in providing the benefits, pays the actual costs
incurred in obtaining the benefit or b) the contractor is
unable to provide a certain benefit, despite taking
SB 703
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reasonable measures to do so.
8) Requires every contract subject to this bill to contain a
statement by which the contractor certifies that the
contractor complies with this bill's provisions. If a
contractor falsely certifies compliance, the contract with
that contractor shall be subject to certain penalties and
remedies unless, within a time period specified by the
Department of General Services (DGS) or other contracting
agency, the contractor provides proof that it has complied,
or is in the process of complying.
9) Stipulates that this bill's provisions shall be construed so
as not to conflict with applicable federal laws, rules, or
regulations. Also, contains a severability provision, as
specified.
10)Makes it explicit that this bill's provisions do not create
any new enforcement responsibility for DGS or any other
contracting agency.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, by adding contracting requirements on bidders, this
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 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.
COMMENTS: 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
SB 703
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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 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.
The author's office contends that, despite these advances in
prohibiting discrimination, companies that contract with the
State of California that self-insure under federal law, or that
are based out-of-state, may offer insurance plans that don't
comply with the same gender nondiscrimination requirements
applied to other companies operating in California. Transgender
employees at these companies are unfairly denied health coverage
afforded to other employees.
Analysis Prepared by:
William Herms / A. & A.R. / (916) 319-3600 FN:
0001706