Bill Text: CA AB2844 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public contracts: discrimination.

Spectrum: Slight Partisan Bill (Democrat 15-6)

Status: (Passed) 2016-09-24 - Chaptered by Secretary of State - Chapter 581, Statutes of 2016. [AB2844 Detail]

Download: California-2015-AB2844-Amended.html

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BILL NUMBER: AB 2844	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 11, 2016
	AMENDED IN ASSEMBLY  MARCH 28, 2016
	AMENDED IN ASSEMBLY  MARCH 17, 2016

INTRODUCED BY   Assembly Member Bloom
    (   Principal   coauthors:  
Assembly Members   Levine,   Medina,   and
Nazarian   ) 
    (   Principal   coauthors:  
Senators   Allen,   Block,   Glazer, 
 Hertzberg,   Jackson,   and Wolk   )

    (   Coauthors:   Assembly Members 
 Campos,   Dababneh,   and Olsen   )


                        FEBRUARY 19, 2016

   An act to add Chapter 2.6 (commencing with Section 2100) to Part 1
of Division 2 of the Public Contract Code, relating to public
contracts.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2844, as amended, Bloom. Public contracts: California Combating
the Boycott, Divestment, and Sanctions of Israel Act of 2016.
   Existing law governs the procurement process for contracts of
specified public entities. Existing law prohibits a person that, at
the time of bid or proposal for a new contract or renewal of an
existing contract, engages in investment activities in Iran from
bidding on, submitting a proposal for, or entering into, a contract
with a public entity for goods or services of $1,000,000 or more.
   This bill, with certain exceptions, would prohibit a public
entity, which includes state and local entities, from entering into a
contract, on or after January 1, 2017, with a company that is
participating in the boycott of Israel, as provided.  The bill
would require the Attorney General to develop, or contract to
develop, a list of companies it determines are engaging in a 
 boycott of Israel. The bill would prohibit a company that, at
the time of bid or proposal for a new contract or renewal of an
existing contract, is identified on that list from bidding on,
submitting a proposal for, or entering into or renewing a contract
with a public entity to acquire or dispose of goods, services,
information technology, or construction for $10,000 or more. The bill
would require a public entity to require a company that submits a
bid or proposal to, or otherwise proposes to enter into or renew a
contract with, the public entity with respect to a contract for goods
or services for $10,000 or more to certify, at the time the bid is
submitted or the contract is renewed, that the company is not
identified on the list. The bill would provide that if a public
entity or the Department of General Services determines that a
company has submitted a false certification, and the company fails to
demonstrate to the local public entity or the Department of General
Services that the company has ceased   engaging in a boycott
of Israel within 90 days after the determination o   f a
false certification, the company would be subject to a civil penalty
of $250,000 or twice the amount of the contract for which the false
certification was made, whichever is greater, termination of an
existing contract with the awarding body at the option of the
awarding body or the Department of General Services, and
ineligibility to bid on a contract for a period of 3 years from the
date of the determination that the company submitted the false
certification.  The bill would find and declare that these
provisions of this bill are a matter of statewide concern due to the
political nature of contracting with a company that is participating
in the boycott of Israel, and therefore, these provisions apply to
charter cities, charter counties, and a charter city and county and
supersede any inconsistent charter provision.
   By imposing additional duties with respect to local public
contracting, this bill would impose a state-mandated local program.

   This bill also would require the Governor's Office of Business and
Economic Development to incentivize specified activities between
Israel and California and to disincentivize barriers hindering those
activities. 
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  This act shall be known and may be cited as the
California Combating the Boycott, Divestment, and Sanctions of Israel
Act of 2016.
  SEC. 2.  The Legislature finds and declares the following:
   (a) The United States and Israel have a unique bond based on their
shared, enduring values, which are reflected in the virtues and
principles of freedom and democracy, and have stood together as
allies since Israel was first formed as a nation.
   (b) California and Israel have established business partnerships
and trade relations with each other, and those partnerships have
helped enhance the agricultural, educational, energy, entertainment,
health, medical, scientific, and water policies in California,
Israel, and the United States.
   (c) On March 5, 2014, as the culmination of an effort started as
Assembly Bill 1032 of the 2009-10 Regular Session, the Governor of
California and the Prime Minister of Israel signed a memorandum of
understanding (MOU) for strategic partnerships for joint innovation,
exchanges, and cooperation between California and Israel.
   (d) In July 2015, the Legislature affirmed its support for the MOU
by passing Senate Concurrent Resolution 25, noting that participants
in the MOU had already expanded cooperation between Israel and
California in areas such as alternative energy, agriculture, business
innovation, and academia, and declaring that collaboration with
Israel will foster peace and democracy in the Middle East.
   (e) Boycotts of Israel by companies doing business in California
undermine the aforesaid express policy and purpose of encouraging
trade, business, and academic cooperation between California and
Israel. Therefore, it is in the best interests of the State of
California that it not contract with any company participating in a
boycott of Israel.
   (f) Notwithstanding any other law, including, but not limited to,
Section 1100.7 of the Public Contract Code, the provisions of this
measure address the political nature of contracting with a company
that is participating in the boycott of Israel and the need for the
government of this state to respond to the policies of Israel in a
uniform fashion, a matter of statewide concern, and therefore, shall
apply to charter cities, charter counties, and a charter city and
county.
  SEC. 3.  Chapter 2.6 (commencing with Section 2100) is added to
Part 1 of Division 2 of the Public Contract Code, to read:
      CHAPTER 2.6.  CALIFORNIA COMBATING THE BOYCOTT, DIVESTMENT, AND
SANCTIONS OF ISRAEL ACT OF 2016


   2100.  (a) Notwithstanding any other law, and except as provided
in subdivision (d), a public entity shall not enter into a contract
on or after January 1, 2017, to acquire or dispose of goods,
services, information technology, or for construction if the
contracting company is participating in a boycott of Israel. 

   (b) A public entity shall notify any company determined to be
participating in a boycott of Israel that the public entity is
prohibited from contracting with the company and permit that company
to respond to the notification. The public entity shall request that
the company take substantial action to cease its boycott of Israel no
later than 90 days from the date the public entity notified the
company under this subdivision. If the public entity determines that
a company has taken substantial action to cease its boycott of Israel
before the expiration of that 90-day period, that company shall not
be subject to subdivision (a).  
   (b) A company that, at the time of bid or proposal for a new
contract or renewal of an existing contract, is identified on a list
created pursuant to subdivision (c) as a company engaging in a
boycott of Israel is ineligible to, and shall not, bid on, submit a
proposal for, or enter into or renew a contract with a public entity
to acquire or dispose of goods, services, information technology, or
construction for ten thousand dollars ($10,000) or more.  
   (c) (1) The Department of General Services shall, using
information available to the public contained in the report presented
to the Congress pursuant to Section 909 of the Federal Trade
Facilitation and Trade Enforcement Act of 2015, develop, or contract
to develop, a list of companies it determines are engaging in a
boycott of Israel.  
   (2) The Department of General Services shall update the list every
180 days.  
   (3) Before finalizing an initial list pursuant to paragraph (1) or
an updated list pursuant to paragraph (2), the Department of General
Services shall do all of the following before a company is included
on the list:  
   (A) Provide 90 days' written notice of its intent to include the
company on the list. The notice shall inform the company that
inclusion on the list would make the company ineligible to bid on,
submit a proposal for, or enter into or renew a contract for goods,
services, information technology, or construction for ten thousand
dollars ($10,000) or more with a public entity. The notice shall
specify that the company, if it ceases engaging in a boycott of
Israel and is removed from the list, may become eligible for a future
contract, or contract renewal, for goods, services, information
technology, or construction for ten thousand dollars ($10,000) or
more with a public entity.  
   (B) The Department of General Services shall provide a company
with an opportunity to comment in writing to the Department of
General Services that it is not engaging in a boycott of Israel. If
the company demonstrates to the Department of General Services that
the company is not engaging in a boycott of Israel, the company shall
not be included on the list and shall be eligible to enter into or
renew a contract for goods, services, information technology, or
construction for ten thousand dollars ($10,000) or more with a public
entity, unless the company is otherwise ineligible to bid on a
contract pursuant to subparagraph (C) of paragraph (2) of subdivision
(d).  
   (4) The Department of General Services shall make every effort to
avoid erroneously including a company on the list.  
   (d) (1) A public entity shall require a company that submits a bid
or proposal to, or otherwise proposes to enter into or renew a
contract with, the public entity with respect to a contract for goods
or services for ten thousand dollars ($10,000) or more to certify,
at the time the bid is submitted or the contract is renewed, that the
company is not identified on a list created pursuant to subdivision
(c) as a company that is engaging in a boycott of Israel. A state
agency shall submit the certification information to the Department
of General Services.  
   (2) If a public entity, or the Department of General Services in
the case of a state agency, determines, using credible information
available to the public and after providing 90 days' written notice
and an opportunity to comment in writing to the company for it to
demonstrate that it is not engaging in a boycott of Israel, that a
company has submitted a false certification, and the company fails to
demonstrate to the local public entity or the Department of General
Services that the company has ceased engaging in a boycott of Israel
within 90 days after the determination of a false certification, the
company shall be subject to all of the following:  
   (A) Pursuant to an action under subdivision (e), a civil penalty
in an amount that is equal to the greater of two hundred fifty
thousand dollars ($250,000) or twice the amount of the contract for
which the false certification was made. Only one civil penalty may be
imposed with respect to one or more certifications made to any
public entity that are false as a result of a particular contract.
 
   (B) Termination of an existing contract with the awarding body at
the option of the awarding body or the Department of General
Services.  
   (C) Ineligibility to bid on a contract for a period of three years
from the date of the determination that the company submitted the
false certification.  
   (e) (1) A local public entity, or the Department of General
Services in the case of a state agency, shall report to the Attorney
General the name of a company that the local public entity or the
Department of General Services has determined has submitted a false
certification under paragraph (2) of subdivision (d), together with
its information as to the false certification, and the Attorney
General shall determine whether to bring a civil action against the
company to collect the penalty described in subparagraph (A) of
paragraph (2) of subdivision (d).  
   (2) The awarding body of a local public entity may report to the
city attorney, county counsel, or district attorney the name of a
company that the awarding body determines has submitted a false
certification under paragraph (2) of subdivision (d), together with
its information as to the false certification, and the city attorney,
county counsel, or district attorney may determine whether to bring
a civil action against the company to collect the penalty described
in subparagraph (A) of paragraph (2) of subdivision (d).  
   (3) If it is determined in an action under this subdivision that a
company submitted a false certification, the company shall pay all
reasonable costs and fees incurred in a civil action, including costs
incurred by the awarding body for investigations that led to the
finding of the false certification and all reasonable costs and fees
incurred by the Attorney General, city attorney, county counsel, or
district attorney.  
   (4) Only one civil action against a company to collect the penalty
described in subparagraph (A) of paragraph (2) of subdivision (d)
may be brought for a false certification on a contract.  
   (5) A civil action to collect the penalty described in
subparagraph (A) of paragraph (2) of subdivision (d) must commence
within three years from the date the certification was made. 

   (f) An unsuccessful bidder, or any other company other than the
awarding body, shall have no right to protest the award of a
contractor contract renewal on the basis of a false certification.
 
   (g) This section does not create or authorize a private right of
action or enforcement of the penalties provided for in subparagraph
(A) of paragraph (2) of subdivision (d).  
   (c) 
    (h)  For the purposes of this section, the following
definitions shall apply:
   (1) (A) "Boycott Israel" or "boycott of Israel" means refusing to
deal with, terminating business activities with, or taking other
actions that are intended to penalize, inflict economic harm, or
otherwise limit commercial relations with Israel or persons or
entities incorporated in Israel or doing business in Israel for
reasons other than business, investment, or commercial reasons. A
statement by a company that it is participating in a boycott of
Israel, or that it has initiated a boycott in response to a request
for a boycott of Israel or in compliance with, or in furtherance of,
calls for a boycott of Israel, may be considered by a public entity
to be evidence that a company is participating in a boycott of
Israel.
   (B) "Boycott" does not include any of the following:
   (i) A decision based on business or economic reasons.
   (ii) Termination or prohibition of commercial activity within a
particular jurisdiction that is required by federal or state law.
   (2) "Company" means a sole proprietorship, organization,
association, corporation, partnership, joint venture, limited
partnership, limited liability partnership, limited liability
company, or other entity or business association, including all
wholly owned subsidiaries, majority-owned subsidiaries, and parent
companies, that exists for the purpose of making profit.
   (3) "Public entity" shall have the same meaning as defined in
subdivision (a) of Section 5100. 
   (d) 
    (i)  This section shall not apply to a contract if
either of the following apply:
   (1) The total value of the contract is less than ten thousand
dollars ($10,000).
   (2) The public entity makes a formal, written determination that
the goods, services, information technology, or other matters that
are the subject of the contract are necessary for the public entity
to perform its functions and that, absent this exemption, the public
entity would be unable to obtain said goods, services, information
technology, or other matters for which the contract is offered.

   2101.  The provisions of this chapter shall supersede any
inconsistent provisions in the charter of a charter city, charter
county, or charter city and county.  
   2102.  The Governor's Office of Business and Economic Development
shall recommend tools to incentivize business and academic
collaboration, trade, and partnership between Israel and California
and to disincentivize any and all barriers hindering that
collaboration, trade, and partnership, pursuant to Senate Concurrent
Resolution 121 of the 2014 Regular Session and Senate Concurrent
Resolution 25 of the 2015 Regular Session. These incentives may
include, but not be limited to, tax credits, partnership subsidies,
innovative grant programs, job creation initiatives, and contracting
preferences. 
  SEC. 4.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.