BILL ANALYSIS Ó SB 1442 Page 1 Date of Hearing: June 28, 2016 ASSEMBLY COMMITTEE ON JUDICIARY Mark Stone, Chair SB 1442 (Liu) - As Amended June 21, 2016 As Proposed to be Amended SENATE VOTE: 39-0 SUBJECT: Discrimination: regulations and enforcement KEY ISSUE: should the statutes prohibiting discriminaiton in various contexts be reorganized in order to clarify and consolidate rulemaking, investigatory, and enforcement powers within the department of Fair Employment and Housing? SYNOPSIS Although the Unruh Civil Rights Act and the Fair Employment and Housing Act (FEHA) are the state's primary statutes prohibiting discrimination on the basis of race, gender, religion, sexual orientation, and other protected characteristics, many other statutes prohibit other forms of discrimination in programs administered by other state agencies. Most notably for purposes of this bill, Government Code Section 11135 provides that no person shall be denied equal access to the benefits of, or SB 1442 Page 2 subjected to discrimination by, any program administered or funded by the state, on the basis of sex, race, religion, sexual orientation or any other protected characteristic. While the Unruh Act prohibits discrimination in business establishments and FEHA prohibits discrimination in employment and housing, Section 11135 prohibits discrimination related to government programs and benefits. A subsequent provision of the Government Code requires each state agency that administers a state-funded program to develop rules and regulations consistent with the purpose of Section 11335. Another provision requires the California Health and Human Services Agency (CHSSA), in concurrence with the Department of Fair Employment and Housing (DFEH), to develop standards for determining which persons are protected by Section 11135 and which practices constitute discrimination. According to DFEH, the sponsor of this legislation, the existing framework has created a patchwork of overlapping and redundant administrative rules and regulations spread across different codes. This bill seeks to maintain the substance of these rules and regulations while reorganizing various anti-discrimination provisions and consolidating rule-making, investigation, and enforcement within DFEH. Because DFEH is "the state entity with the most expertise in enforcing anti-discrimination laws," the author believes that it is also "the most logical choice to administer Section 11135." Although the bill has not faced any absolute or unqualified opposition, a number of groups have expressed concern that certain anti-discrimination rules may be lost in translation and have conditioned their support on the author taking amendments to ensure the continuity of existing regulations. The bill was recently amended to address these concerns; however, the author will take additional amendments in this Committee to further ensure continuity of existing laws and regulations. In is unclear whether these amendments will address the concerns of all groups. The amendments are reflected in the summary and analysis below. SUMMARY: Reorganizes, replaces, and relocates various anti-discrimination statutes and moves the authority to SB 1442 Page 3 promulgate regulations that implement those statutes from various state agencies to the Department of Fair Employment and Housing. Specifically this bill: 1)Repeals and reorganizes various anti-discrimination statutes and transfers the authority to promulgate the rules and regulations that implement those statutes from the California Health and Human Services Agency (CHHSA) and other state agencies to the Department of Fair Employment and Housing (DFEH). 2)Specifies that, as of January 1, 2017, certain portions of the California Code of Regulations under the authority of the California Health and Human Services Agency shall be transferred to the portions of the California Code of Regulations under the jurisdiction of FEHA and specifies that, upon transfer, those regulations shall be deemed adopted by the Fair Employment and Housing Council of the DFEH (Council). 3)Requires the Council, within existing resources, to adopt additional regulations, as necessary, and to amend or repeal, as necessary, the regulations transferred to the DFEH from CHHSA, as specified. 4)Clarifies, consistent with other statutes, that discrimination based on a person's "disability" includes discrimination based on either a mental or physical disability. 5)Changes "ethnic group identification" in one section of the Government Code to "ancestry" in order to be consistent with all other anti-discrimination statutes. SB 1442 Page 4 EXISTING LAW: 1)Provides, under the Unruh Civil Rights Act, that persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status, are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. (Civil Code Section 51.) 2)Provides that no person in this state shall, on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability, be unlawfully denied full and equal access to the benefits of, or be unlawfully be subject to discrimination under, any program or activity that is conducted, operated, or administered by the state or by any state agency, is funded directly by the state, or receives any financial assistance from the state. (Government Code Section 11135.) 3)Requires each state agency that administers a program or activity that is funded directly by the state or receives any financial assistance from the state and provides services to the public, as specified, to adopt such rules and regulations as are necessary to carry out the purpose and provisions of specified anti-discrimination provisions in the Government Code. (Government Code Section 11138.) 4)Requires the Secretary of California Health and Human Services (Secretary), with the advice and concurrence of Fair Employment and Housing Council of the Department of Fair Employment and Housing (Council), to establish standards for determining which persons are protected by anti-discrimination SB 1442 Page 5 provisions in the Government Code and standards for determining what practices are discriminatory. Specifies that the Secretary and the Council shall assist state agencies in coordinating their programs and activities as necessary so that consistent policies, practices, and procedures are adopted with respect to the anti-discrimination provisions of the Government Code. (Government Code Section 11139.5.) 5)Makes it an unlawful employment practice, subject to certain exceptions, for an employer because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status of any person, to refuse to hire or employ the person or to refuse to select the person for a training program leading to employment, or to bar or to discharge the person from employment or from a training program leading to employment, or to discriminate against the person in compensation or in terms, conditions, or privileges of employment. (Government Code Section 12940.) FISCAL EFFECT: As currently in print this bill is keyed fiscal. COMMENTS: This bill, which is sponsored by the Department of Fair Employment and Housing (DFEH), seeks to reorganize various anti-discrimination statutes in California and consolidate the authority to promulgate rules and regulations pursuant to these statutes within DFEH, and more specifically within the Fair Employment and Housing Council of DFEH (Council), which, under existing law, is given the power and duty to adopt, promulgate, amend, and rescind rules and regulations consistent with the anti-discrimination provisions in Fair Employment and Housing Act (FEHA). According to the author, the problem with existing law is that that anti-discrimination provisions are spread SB 1442 Page 6 across different statutes and "nearly each state agency [is required] to adopt its own implementing regulations." The author points out that DFEH is "the state entity with the expertise in enforcing anti-discrimination laws . . . which makes it the more logical choice" to administer the anti-discrimination statutes relating to state-funded programs. This bill will correct this deficiency in existing law by centralizing rule-making, investigation, and enforcement power squarely within the jurisdiction of DFEH. Background: California has an array of statutes that prohibit discrimination based on certain enumerated "protected characteristics" (e.g. sex, race, religion, sexual orientation, etc.) in various spheres of social and political life. For example, the Unruh Civil Rights Act prohibits discrimination based on protected characteristics in business establishments. FEHA prohibits discrimination in employment and housing. The Government Code, commencing with Section 11135, prohibits discrimination in government-operated and state-funded program and services. Originally, these statutes prohibited discrimination primarily on the basis of sex, race, color, national origin, and religion. In more recent years, the list of protected characteristics has expanded to include discrimination based on mental or physical disability, medical condition, genetic information, marital status, sexual orientation, gender identity, citizenship, primary language, or immigration status. In addition to the fact that the anti-discrimination laws are spread across multiple statutes, the provisions relating to discrimination in government-operated and state-funded programs (Government Code Section 11135 et seq.), requires every state agency that administers a government-operated or state-funded program to develop its own rules and regulations so that those programs are administered consistent with state anti-discrimination law. According DFEH - the sponsor - this measure will create an effective and efficient mechanism for implementing the state's anti-discrimination goals by consolidating rule-making and enforcement authority within DFEH. SB 1442 Page 7 Interactions of Different Anti-Discrimination Laws: In theory, the Unruh Act, FEHA, and Government Section 11135 target different forms of discrimination in different contexts: business establishments, employment and housing, and government programs and services. In reality, the lines are not always so clearly drawn. For example, Section 11135 was added in 1977 in order to prevent discrimination in state-funded programs and activities. Most directly, Section 11135 is implicated where, for example, a public welfare agency discriminates against a person because of his or her religion, but it would also apply to a private, non-profit entity that received a state grant that discriminated against a program participant because of his or her race. Another example might include a private college that benefits from state assistance in the form Cal Grants and discriminates against students based on sexual orientation. But Section 11135 could apply to forms of discrimination that are also prohibited under the Unruh Act or FEHA. For example, to cite an example provided by DFEH, if a state agency contracted with a private commercial vendor that discriminated against employees or subcontractors on the basis of race or gender, the employees could have a claim under FEHA; the subcontractor would have claims under the Unruh Act; and the state could take action against the contractor (such as cancelling the contract) under Government Section 11135. The complexities of such interactions and the mushiness of statutory boundaries illustrate, according to the author and sponsor, the value of a centralized mechanism for rule-making and enforcement over conduct that will not always neatly fall under the jurisdiction of a single agency or even implicate a single anti-discrimination statute. Bill Does not Change Substantive Law or Create Any New Rights: The author and sponsor point out that SB 1442 "does not create a new right of action or expand existing rights." That is, the purpose of this measure is simply to reorganize the statutory framework and transfer portions of the Code of Regulations from one jurisdiction to another, but the bill seeks to do that by SB 1442 Page 8 keeping the substance of existing rights, remedies, and regulations intact. The bill does change language in two instances, but these are merely clarifications of existing law. For example, some anti-discrimination statutes list "disability" as one of the protected characteristics, while others list both "mental disability" and "physical disability." Substantively this does not make a difference, because "disability" has generally been construed as a broader term that encompasses both mental and physical disabilities. Indeed, subdivision (a) of Government Code Section 11135 uses the term "disability" in its list of protected characteristics, but a later subdivision in the same section defines "disability" to mean "any mental or physical disability, as defined in Section 12926." Similarly, the bill changes the term "ethnic group identification" to "ancestry" in one section, but this is not meant to entail a substantive change but rather the use of the term that is used in all of the other statutes. (One might argue that "ethnic group identification" is more meaningful and current than "ancestry," but, be that as it may, "ethnic group identification" is used in only one section while "ancestry" is used in all others. Indeed, there is an inherent vagueness in all of these socially and historically constructed concepts, and throughout the anti-discrimination statutes multiple terms are used in a single section even though they overlap in practice and have no clear meanings or boundaries between them; for example, "race," "ethnicity," "color," "national origin," and "ancestry" might mean virtually the same thing in one context, but have different meanings and connotations in another context.). ARGUMENTS IN SUPPORT: According to the sponsor, DFEH, this measure will "delete obsolete and redundant provisions from the California Code and create an effective, centralized mechanism for implementing laws prohibiting discrimination in state-funded programs." DFEH notes that, under existing law, while DFEH is the state agency with primary responsibility for enforcing California's anti-discrimination and civil rights laws, Government Code Section 1135 et seq. requires the Secretary of SB 1442 Page 9 Health and Human Services to administer certain anti-discrimination provisions and "requires nearly each state department to adopt its own regulations implementing Section 1135." According to DFEH, this "structure is inefficient because [those other agencies are] not otherwise charged with civil rights enforcement and because departments are required to create duplicative regulatory schemes to interpret their 11135 obligations." DFEH believes, however, that SB 1442 "creates a logical and efficient mechanism for implementing the laws prohibiting discrimination in state-funded programs by giving [DFEH] authority to investigate, mediate and prosecute Section 11135 complaints in the same manner it handles other discrimination claims." CONCERNS AND ARGUMENTS IN OPPOSITION UNLESS AMENDED: Although no group has taken an absolute or unqualified "oppose" position on this bill, a number of groups have expressed concerns that have caused them to take either a "support if amended" position or "oppose unless amended" position. All of the groups share a common concern with the fate of existing rules and regulations during any transitionary period. For example Disability Rights California and the Legal Aid Society-Employment Law Center both generally support this bill, but only if amended to ensure that no existing protections will be lost and to create "an orderly process to transition from existing regulations to new ones." Although the most recent amendment to this bill addressed this issue, it did not, apparently, remove all concern. The bill, as proposed to be amended today in this Committee, will make it clear that, as of January 1, 2017, upon transfer of the regulations from CHHSA and other state agencies to DFEH, the transferred regulations shall be "deemed to be adopted" by the Council. The Council could then, as it is empowered to do under existing law, adopt additional regulations, or amend or repeal the transferred and adopted regulations, in the manner provided under existing law. This amendment will ensure that the transferred regulations will be "deemed adopted" automatically upon transfer, by operation of the statute, which should prevent any gap in which no regulations are in effect. Any regulations SB 1442 Page 10 that are not transferred to DFEH will remain in effect. That is, this bill will not - indeed it cannot - delete anything from the Code of Regulations. Only a state agency authorized by statute can do that. It is unclear whether these amendments will address this concern or change the position of the groups that raised it. The Center on Race, Poverty, & the Environment (CRPE) opposes this bill unless amended to address the continuity issue, but it also raises several additional concerns as well. CRPE's letter primarily stresses the important role that Section 11135, in conjunction with other civil rights and environmental statutes, is "such a critical component in helping to achieve environmental justice in our state." CPRE argues that "unlike other areas of civil rights, such as employment and housing discrimination, environmental justice has no backstop or duplicative statutory authority upon which to rely for the protections afforded by Government Code Section 11135. Therefore, any roll-back of protections in [Section 11135] . . . will have a direct and negative impact on communities of color and the ability of environmental justice advocates to enforce compliance with California's civil rights protections." Although CRPE does not identify specifically what parts of Section 11135 further the cause of environmental justice. Rather, similar to concerns expressed by other groups, CRPE fears that this bill will remove authority of some state agencies, including Cal EPA, to implement Section 11135 in the environmental justice context. CRPE apparently believes that centralizing investigation and enforcement powers within DFEH could weaken or undermine work being done by other agencies. The crux of CRPE's concern seems to be that beneficial regulations adopted by other agencies might not be subsequently adopted by DFEH. It is not clear whether the recent amendments, including the refinements to those amendments that the author will take today, will be sufficient to remove CRPE's opposition. Finally, CRPE also objects to changing "ethnic group identification" to "ancestry" in Section 11135. CRPE argues that "ethnic group identification" is a broader term that SB 1442 Page 11 includes "ancestry," but that it also connotes other "racial, cultural, and linguistic characteristics" that apparently could be the basis of discrimination but that are not covered by existing protected characteristics. Proposed Author Amendments: In order to make it clear that when regulations are transferred to DFEH, they will automatically be "deemed adopted" by the Council of the DFEH, the author will take the following amendments in this Committee: - On page 9 beginning on line 37 amend sub-paragraph (A) to read as follows: (A) As of January 1, 2017, Chapter 1 (commencing with Section 98000), Chapter 2 (commencing with Section 98100), and Chapter 3 (commencing with Section 98200) of Division 8 of Title 22 of the California Code of Regulations shall be transferred from the portion of the California Code of Regulations that is under the authority of the California Health and Human Services Agency to the portion of the California Code of Regulations that is under the authority of the department, and upon transfer shall be deemed adopted by the council. - On page 10 beginning on line 5 amend sub-paragraph (B) to read as follows: (B) The council shall, within existing resources, adopt additional regulations, as necessary, and amend,or repeal, as necessary , regulations transferred to the department from the California Health and Human Services Agency relating to Article 9.5 (commencing with Section 11135) of Chapter 1 of Part 1. REGISTERED SUPPORT / OPPOSITION: SB 1442 Page 12 Support California Department of Fair Employment and Housing (sponsor) California Health and Human Services Agency Disability Rights California (if amended, to previous version) Legal Aid Society - Employment Law Center (if amended, to previous version) Opposition Center on Race, Poverty, & the Environment (unless amended, to previous version) Analysis Prepared by:Thomas Clark / JUD. / (916) 319-2334 SB 1442 Page 13