(June 10, 2004) A California Chamber-opposed bill that that is particularly harmful to small businesses is moving through the Legislature again after having been stalled for the last year.

AB 1032 (Jackson; D-Santa Barbara) Increases costs to the state by chilling business interest in contracting with the state by requiring those businesses to report unrelated legal information, opening the doors to more frivolous litigation against California employers.

'Federal regulators recently decided that a rule similar to what AB 1032 proposes amounted to needlessly 'blacklisting' businesses that want to provide products or services to the state and withdrew the proposal,” said Julianne Broyles, Chamber director of employee relations and small business. “Placing such requirements in California law would create yet another mandate unique to California that would only damage state's recovering economy and hurt California’s small businesses.'

AB 1032 was originally scheduled to be heard by the Senate Governmental Organizational Committee last July, but was never called.  It is now scheduled to be heard by the committee on June 22.

The bill’s provisions cover the business, any current or former owner, partner, executive officer, or manager, as well as shareholders holding 25 percent or more of a corporation’s stock.  The bill also applies to the conduct of subsidiaries and affiliates of the bidding entity.

AB 1032 requires state contracting officials to pass judgment on issues not in their area of expertise.  For example, state contracting officials would have to decide whether a company could be approved as a prospective bidder on any and all violations within the past five years of the:

• National Labor Relations Act;
• Occupational Safety and Health Act;
• Fair Labor Standards Act;
• Title VII of the 1964 Civil Rights Act;
• Age Discrimination in Employment Act;
• Americans with Disabilities Act;
• Family and Medical Leave Act:
• Immigration Reform and Control Act;
• Davis-Bacon Act;
• Clean Air Act:
• Clean Water Act;
• Endangered Species Act;
• Superfund;
• Resource Conservation Recovery Act; 
• Oil Pollution Act; or the
• Internal Revenue Code.

AB 1032 also requires the disclosure of the details of any “adverse court judgment” -- whether or not work related -- against all of the covered businesses and their current and former executives under of these laws.  

The Chamber believes that AB 1032 will be especially harmful to California’s small businesses because the main source of revenue for small companies comes from contracting with a variety of public agencies. The continued growth of many small businesses depends on the revenue from these current and future contracts.

The Chamber is urging employers to contact member of the Senate Governmental Organization Committee and ask them to oppose AB 1032. 

For more information about AB 1032, please visit the Government Relations section of our website at www.calchamber.com.