BILL ANALYSIS                                                                                                                                                                                                    



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          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  








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          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  








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          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. 










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          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  








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            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  








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          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.  








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          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  








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          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  








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          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  








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          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  








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          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:








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          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














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