Public contracts: nonprofit organizations.

Existing law establishes procedures for state agencies to enter into contracts for goods and services, including generally requiring that certain contracts by a state agency be approved by the Department of General Services. This bill would establish the California Nonprofit Fairness in Contracting Act and would define, among other terms, "covered contract" to mean a contract for goods or services by a state or local agency using state funds, including a grant made by a state or local agency using state funds. The bill would require a state or local agency to, among other things, establish a preference for covered contracts that last longer than one year when awarding a covered contract to a nonprofit, and would require those contracts to include a provision allowing for automatic cost of doing business increases. The bill would require a covered contract to provide the full cost of delivering services and projects, including paying at least state minimum wage and allowing for compensation and employee benefit packages that support competitive salaries and annual cost of living increases, as specified. By imposing new contracting requirements on local agencies, the bill would impose a state-mandated local program. 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 the statutory provisions noted above.