BILL ANALYSIS
SENATE HEALTH AND HUMAN SERVICES
COMMITTEE ANALYSIS
Senator Martha M. Escutia, Chair
BILL NO: SB 1509
S
AUTHOR: Haynes et al.
B
AMENDED: March 30, 2000
HEARING DATE: April 5, 2000
1
FISCAL: Governmental Organization / Appropriations
5
0
CONSULTANT:
9
Matosantos/McCarthy / ak
SUBJECT
State contracts: religious organizations
SUMMARY
Changes state contracting law to allow religious
organizations to contract with or receive grants from state
agencies without altering their religious character.
ABSTRACT
Current state and federal law:
Guarantees the free exercise and enjoyment of religion
without discrimination or preference and provides that
the Legislature shall make no law respecting an
establishment of religion.
Current federal law:
Permits but does not require, state agencies operating
the federal TANF (CalWORKs) program to contract with or
award grants to religious organizations on the same basis
as any other nongovernmental provider, without impairing
the religious character of such organizations and in a
manner that is consistent with the Establishment Clause
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
2
of the U.S. Constitution. (Section 104, Public Law
104-93)
Current state law:
Permits contracting with or awarding grants to religious
organizations only to the extent such contracting or
awarding was permitted prior to the passage of CalWORKs
statutes. (Welfare and Institutions Code 10619)
This bill:
1.Declares intent of the Legislature to allow state
agencies to contract with nonprofit educational or social
service religious organizations on the same basis as any
other nongovernmental provider, without impairing the
religious character of the organization or diminishing
the religious freedom of the beneficiaries of a state
funded program.
2.Requires state agencies that contract with or award
grants to nongovernmental entities to consider religious
organizations on the same basis as any other private
organization under any program administered by the state
agency, if the programs are implemented consistent with
the U.S. and California constitutions.
3.Prohibits a state agency from requiring a religious
organization contractor to alter its form of internal
governance or remove religious symbols to be eligible for
a contract or grant. Prohibits state agencies from
discriminating in contracting against an organization on
the basis of the organization's religious character.
4.Authorizes, but does not mandate, that state agencies
require religious organizations with which they are
contracting to agree not to require attendance or
participation in religious activities, as a condition or
part of public services provided by the organization.
5.Requires state agencies, prior to referring individuals
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
3
to a contracted provider, to give individuals the option
of a religious or nonreligious provider. Requires state
agency to provide individuals who receive, or would
receive, state funded assistance from a religious
organization, and have objections to its religious
character, access to an equally valuable alternative
provider within a reasonable time after the date of the
objection.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
Historically, religious institutions have played an
important role in providing health and social services and
caring for the sick and needy. However, in part to
maintain separation of church and state, and also ensure
equal treatment to patients, clients and beneficiaries, the
majority of social services are now provided by county
civil service merit employees. Welfare reform rekindled
debate about the role of faith-based organizations in the
provision of social services. Congress adopted a
"charitable choice" provision in the TANF legislation.
This provision authorizes, but does not require, states to
give equal consideration to religious and nonreligious
organizations whenever they contract with private
organizations for the distribution of welfare benefits.
California did not adopt the charitable choice provision.
Thus, CalWORKs operates according to state and federal laws
that were in effect on the date TANF passed. (Welfare and
Institutions Code 10619) Generally, counties can contract
out for the provision of services or functions that do not
involve determination of eligibility, such as a job
training program, childcare or a parenting class.
California has long contracted with faith-based
organizations to provide social services to its population
as long as contractees meet regulatory criteria pertaining
to the Establishment Clause. Current law permits the state
to contract with faith-based organizations as long as these
religiously affiliated organizations establish divisions
between their social services and their sectarian programs.
Organizations like Catholic Charities, Lutheran Social
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
4
Services, Jewish Federation and Salvation Army have
received government funding to operate a variety of social
service programs. These separately incorporated,
religiously affiliated organizations have played an
essential role in combating poverty and providing housing,
education and health care services to the poor, elderly,
homeless, and other people in need. These organizations
have established separately incorporated agencies, offer
services to all without regard to religious belief, hire
qualified staff without regard to their faith, and do not
require clients to attend participation in religious
activities.
Regulations to implement the charitable choice provision
are being developed.
In 1999, California enacted SB 516 (Chapter 551, Statutes
of 1999, Section 10006 of the Unemployment Insurance Code)
which directed the Department of Social Services and the
Employment Development Department to adopt regulations
interpreting the "charitable choice" or state option
provisions contained in federal law. SB 516 required the
regulations to be consistent with federal law and the
federal and state constitutions. These regulations are
currently being developed by the two departments and are
required to be completed by July 1, 2000.
SB 1509:
This bill would apply the federal "charitable choice"
provision to any state agency contracting or awarding
grants. SB 1509 would prohibit discrimination on the basis
of religion in the awarding of state public contracts and
prohibit a state agency from requiring a religious
organization to alter its form of internal governance or
remove religious symbols to be eligible for a grant. It
authorizes a state agency to require religious
organizations to agree not to require attendance or
participation in religious activity, as a condition or part
of services provided. SB 1509 also requires a state
agency, prior to referral to a contracted provider, to
provide individuals with the option of a religious or
nonreligious provider. Finally, it requires state agencies
to provide individuals who receive, or would receive, state
funded assistance from an organization and have objections
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
5
to the religious character of the organization, access to
an equally valuable alternative provider within a
reasonable time after the date of the objection.
SB 1509 potentially conflicts with federal and state
Establishment Clauses
SB 1509 potentially conflicts with the U.S. and California
Constitutions' Establishment Clauses, despite its provision
that the programs be implemented in a manner consistent
with the Establishment Clauses. The California
Constitution states that "Neither the Legislature, nor any
county, city and county, township, school district or other
municipal corporation, shall ever make an appropriation, or
pay from any public fund whatever, or grant anything to or
in aid of any religious sect, church, creed, or sectarian
purpose." (California Constitution, Article XVI, Section 5)
SB 1509 does not provide a definition of "religious
organizations". Therefore, it may permit a "pervasively
sectarian" organization to sue the state for not
contracting with it, though the U.S. Supreme Court has
ruled that "pervasively sectarian" institutions can not
receive public funding. (Bowen v. Kendrick, 487 U.S. 589,
612 (1988))
SB 1509 prohibits a state agency from requiring a religious
organization to alter its form of internal governance or
remove religious symbols to be eligible for a grant.
However, this provision may be in conflict with U.S.
Supreme Court case law, which establishes that "pervasively
sectarian" institutions can not receive public funding.
The court has established a list of factors that can be
considered to determine if an institution is "pervasively
sectarian". These factors include: location near a house
of worship; an abundance of religious symbols on the
premises; religious discrimination in the institution's
hiring practices; the presence of religious activities; and
the purposeful articulation of a religious mission.
(Wolman v. Water, 433 U.S. 229, 234 (1977); Grand Rapids,
473 U.S. at 384 n.6; Hunt, 413 U.S. at 743; Roemer v.
Maryland Public Works Board, 426 U.S. 736, 755 (1976)).
Arguments in support
Supporters of charitable choice believe religious
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
6
organizations should be more involved in the provision of
social services. They believe religious organizations are
uniquely situated to provide a combination of social
services and spiritual guidance to disadvantaged families
and people. Proponents argue that government regulation,
centralization and intrusion has led to fewer government
resources going to faith-based charitable groups to serve
the most needy. They argue that skepticism about the
interest of faith-based groups in providing social
services, lack of expertise among faith-based groups
regarding the social services system rules and regulations,
occasional actively prejudicial treatment of faith-based
organizations and confusion among government officials
about the legal implications of contracting with
faith-based organizations, impact the ability of faith
based organizations to provide social services to
California citizens. Proponents of SB 1509 see a need for
statutory language that clarifies government's authority to
contract with faith based organizations.
Arguments in opposition
Opponents of SB 1509 argue that charitable choice programs
plainly violate the First Amendment's prohibition against
funding that promotes religious beliefs. They are not
opposed to religiously affiliated organizations providing
publicly funded social services. However, opponents
believe this bill is unnecessary since current law allows
the state to contract with religiously affiliated
organizations as long as religious organizations set up
firewalls between their social services functions and their
sectarian mission programs; this ensures services are
provided without specific religious messages and with
appropriate constitutional safeguards. Opponents argue
that SB 1509 would delete important constitutional
safeguards, allow religious institutions to contract with
the state to provide services that promote religious
beliefs, subject a large segment of Californians to
religious coercion and create state-funded employment
discrimination.
Opponents also argue that this measure creates additional
potential state liability because it conflicts with
anti-discrimination laws and because it does not does not
establish standards for choosing between competing
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
7
religious organizations in the awarding of contracts.
State and federal laws prohibit discrimination on the basis
of religion, either by the state and/or by entities that
receive state and federal funds. Religious organizations
have specific exemptions from these laws. Notwithstanding
these provisions, the state, and entities receiving state
funds, cannot discriminate on the basis of a number of
protected categories, including religion. Thus, if state
funded religious organizations employ discriminatory hiring
practices, the state as well as the organization would be
liable. Opponents also argue that SB 1509 may result in
additional liability because it does not include adequate
limits on religious organizations' use of their own funds;
thus these organizations could use their own funds to
proselytize to individuals participating in government
funded activities.
Opponents further argue that SB 1509 will create
alternative means for providing government services,
bypassing the civil service system, resulting in lower
wages for California's workers. Finally, opponents argue
that SB 1509 threatens the health of California religious
institutions by subjecting their religious ministries to
intrusive government regulation, including audits,
reporting requirements, and compliance reviews.
QUESTIONS AND COMMENTS
Continued---
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
8
1.Is there a qualitative or quantitative benefit to
expanding the pool of eligible state grantees or
contractors to include faith-based organizations,
regardless of their internal governance or the presence
of religious symbols in their facility, that would
outweigh the client's right to receive services free of
religious coercion?
2.What are the primary obstacles to faith-based
organizations participating in state government contracts
under current law?
3.What types of services do proponents of the bill want
faith-based organizations to provide (i.e. social
services, health, transportation, etc.) through contracts
contemplated by this bill? What types of state agency
grants do proponents propose to qualify for under this
bill, that they cannot qualify for under current law?
4.Are service needs going unfulfilled because the state is
unable to find qualified providers who meet current
eligibility criteria?
5.SB 1509 allows, but does not require, state agencies to
specify that religious organizations contracting or
receiving grants from the state agree not to require
attendance or participation in religious activities as a
condition of receiving services. This measure may result
in beneficiaries being required to participate in
religious activities.
6.SB 1509 declares that its intent is to allow state
agencies to contract with or award grants to nonprofit
"educational or social service" religious organizations
but applies its requirement that state agencies contract
with religious organizations on the same basis as other
private organizations to any state agency authorized to
contract with private non-governmental entities. Thus,
the scope of SB 1509 would be broader than defined in its
intent section and may affect any state funded programs.
7.SB 1509 requires a state agency, prior to a referral to a
"contracted provider", to offer beneficiaries the option
of a religious or non-religious service provider. The
STAFF ANALYSIS OF SENATE BILL 1509 (HAYNES) Page
9
bill also requires referral to an alternative provider in
a "reasonable period of time" if an individual objects to
the religious character of the organization providing
services. The bill does not currently define what is a
reasonable period of time. Also, the bill does not
ensure that the alternative provider will be accessible,
equally convenient, etc.
POSITIONS
Support: Businessmens Fellowship International -
Antioch-Pittsburg Chapter
Catholic Charities of California
Coalition California Welfare Rights
Organizations, Inc.
JMC Ministry Team Unlimited
My Friend's House
Oppose:American Civil Liberties Union
American Federation of State, County and
Municipal Employees
California Labor Federation, AFL-CIO
Americans United for Separation of Church and
State
Anti-Defamation League
California National Organization for Women
Planned Parenthood Affiliates of California
Service Employees International Union
-- END --