CHAPTER 14. SAN FRANCISCO HEALTH CARE SECURITY ORDINANCE

•  Sec. 14.1. Short Title; Definitions.
•  Sec. 14.2. San Francisco Health Access Program and Reimbursement Accounts.
•  Sec. 14.3. Required Health Care Expenditures.
•  Sec. 14.4. Administration and Enforcement.
•  Sec. 14.5. Severability.
•  Sec. 14.6. Preemption.
•  Sec. 14.7. General Welfare.
•  Sec. 14.8. Operative Date.

SEC. 14.1. SHORT TITLE; DEFINITIONS.

(a) Short title. This Chapter shall be known and may be cited as the "San Francisco Health Care Security Ordinance."

(b) Definitions. For purposes of this Chapter, the following terms shall have the following meanings:

(1) "City" means the City and County of San Francisco.

(2) "Covered employee" means any person who works in the City where such person qualifies as an employee entitled to payment of a minimum wage from an employer under the Minimum Wage Ordinance as provided under Chapter 12R of the San Francisco Administrative Code and has performed work for compensation for his or her employer for ninety (90) days, provided, however, that:

(a) From the effective date of this Chapter through December 31, 2007, "at least twelve (12) hours" shall be substituted for "at least two (2) hours" where such term appears in Section 12R.3(a);

(b) From January 1, 2008 through December 31, 2008, "at least ten (10) hours" shall be substituted for "at least two (2) hours" where such term appears in Section 12R.3(a);

(c) Beginning January 1, 2009, "at least eight (8) hours" shall be substituted for "at least two (2) hours" where such term appears in Section 12R.3(a);

(d) The term "employee" shall not include persons who are managerial, supervisorial, or confidential employees, unless such employees earn annually under $72,450.00 or in 2007 and for subsequent years, the figure as set by the administering agency;

(e) The term "employee" shall not include those persons who are eligible to receive benefits under Medicare or TRICARE/CHAMPUS;

(f) The term "covered employees" shall not include those persons who are "covered employees" as defined in Section 12Q.2.9 of the Health Care Accountability Ordinance, Chapter 12Q of the San Francisco Administrative Code, if the employer meets the requirements set forth in Section 12Q.3 for those employees; and

(g) The term "covered employees" shall not include those persons who are employed by a nonprofit corporation for up to one year as trainees in a bona fide training program consistent with Federal law, which training program enables the trainee to advance into a permanent position, provided that the trainee does not replace, displace, or lower the wage or benefits of any existing position or employee.

(h) Nor shall "covered employees" include those persons whose employers verify that they are receiving health care services through another employer, either as an employee or by virtue of being the spouse, domestic partner, or child of another person; provided that the employer obtains from those persons a voluntary written waiver of the health care expenditure requirements of this Chapter and that such waiver is revocable by those persons at any time.

(3) "Covered employer" means any medium-sized or large business as defined below engaging in business within the City that is required to obtain a valid San Francisco business registration certificate from the San Francisco Tax Collector's office or, in the case of a nonprofit corporation. an employer for which an average of fifty  (50) or more persons per week perform work for compensation during a quarter. Small businesses are not "covered employers" and are exempt from the health care spending requirements under Section 14.3.

(4) "Employer" means an employing unit as defined in Section 135 of the California Unemployment Insurance Code or any person defined in Section 18 of the California Labor Code. "Employer" shall include all members of a "controlled group of corporations" as defined in Section 1563(a) of the United States Internal Revenue Code, and the determination shall be made without regard to Sections 1563(a)(4) and 1563(e)(3)(C) of the Internal Revenue Code.

(5) "Health Access Program" means a San Francisco Department of Public Health program to provide health care for uninsured San Francisco residents.

(6) "Health Access Program participant" means any uninsured San Francisco resident, regardless of employment or immigration status or pre-existing condition, who is enrolled by his or her employer or who enrolls as an individual in the Health Access Program under the terms established by the Department of Public Health.

(7) "Health care expenditure" means any amount paid by a covered employer to its covered employees or to a third party on behalf of its covered employees for the purpose of providing health care services for covered employees or reimbursing the cost of such services for its covered employees, including, but not limited to

(a) contributions by such employer on behalf of its covered employees to a health savings account as defined under section 223 of the United States Internal Revenue Code or to any other account having substantially the same purpose or effect without regard to whether such contributions qualify for a tax deduction or are excludable from employee income; (b) reimbursement by such covered employer to its covered employees for expenses incurred in the purchase of health care services; (c) payments by a covered employer to a third party for the purpose of providing health care services for covered employees; (d) costs incurred by a covered employer in the direct delivery of health care services to its covered employees; and (e) payments by a covered employer to the City to be used on behalf of covered employees. The City may use these payments to: (i) fund membership in the Health Access Program for uninsured San Francisco residents; and (ii) establish and maintain reimbursement accounts for covered employees, whether or not those covered employees are San Francisco residents. Notwithstanding any other provision of this subsection, "health care expenditure" shall not include any payment made directly or indirectly for workers' compensation or Medicare benefits.

(8) "Health care expenditure rate" means the amount of health care expenditure that a covered employer shall be required to make for each hour paid for each of its covered employees each quarter. The "health care expenditure rate" shall be computed as follows:

(a) From the effective date of this Chapter through June 30, 2007, $1.60 per hour for large businesses and $1.06 per hour for medium-sized businesses;

(b) From July 1, 2007 through December 31, 2007, January 1, 2008 through December 31, 2008, and January 1, 2009 through December 31, 2009, the rates for large and medium-sized businesses shall increase five (5) percent over the expenditure rate calculated for the preceding year;

(c) From January 1, 2010 and each year thereafter, the "health care expenditure rate" shall be determined annually based on the "average contribution" for a full-time employee to the City Health Service System pursuant to Section A8.423 of the San Francisco Charter based on the annual ten county survey amount for the applicable fiscal year, with such average contribution prorated on an hourly basis by dividing the monthly average contribution by one hundred seventy-two (172) (the number of hours worked in a month by a full-time employee). The "health care expenditure rate" shall be seventy-five percent (75%) of the annual ten county survey amount for the applicable fiscal year for large businesses and fifty percent (50%) for medium-sized businesses.

(9) "Health care services" means medical care, services, or goods that may qualify as tax deductible medical care expenses under Section 213 of the Internal Revenue Code, or medical care, services, or goods having substantially the same purpose or effect as such deductible expenses.

(10) "Hour paid" or "hours paid" means a work hour or work hours for which a person is paid wages or is entitled to be paid wages for work performed within the City, including paid vacation hours and paid sick leave hours, but not exceeding 172 hours in a single month. For salaried persons, "hours paid" shall be calculated based on a 40-hour work week for a full-time employee.

(11) "Large business" means an employer for which an average of one hundred (100) or more persons per week perform work for compensation during a quarter.

(12) "Medium-sized business" means an employer for which an average of between twenty (20) and ninety-nine (99) persons per week perform work for compensation during a quarter.

(13) "Person" means any natural person, corporation, sole proprietorship, partnership, association, joint venture, limited liability company, or other legal entity.

(14) "Required health care expenditure" means the total health care expenditure that a covered employer is required to make every quarter for all its covered employees.

(15) "Small business" means an employer for which an average of fewer than twenty (20) persons per week perform work for compensation during a quarter.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006; Ord. 69-07, File No. 070255, App. 4/2/2007)

SEC. 14.2. SAN FRANCISCO HEALTH ACCESS PROGRAM AND REIMBURSEMENT ACCOUNTS.

(a) The San Francisco Department of Public Health shall administer the Health Access Program. Under the Health Access Program, uninsured San Francisco residents may obtain health care from a network consisting of San Francisco General Hospital and the Department of Public Health's clinics, and other community non-profit and private providers that meet the program's quality and other criteria for participation. The Health Access Program is not an insurance plan for Health Access Program participants.

(b) The Department of Public Health shall coordinate with a third party vendor to administer program operations, including basic customer services, enrollment, tracking service utilization, billing, and communication with the participants.

(c) The Health Access Program shall be open to uninsured San Francisco residents, regardless of employment status. Eligibility criteria shall be established by the Department of Public Health, but no person shall be excluded from the Health Access Program based on a pre-existing condition. Participants may enroll themselves as individuals, with the terms of enrollment to be determined pursuant to Section 14.4(a).

(d) The Health Access Program may be funded from a variety of sources, including payments from covered employers pursuant to Section 14.3, from individuals, and from the City. Funding from the City shall prioritize services for low and moderate income persons, with costs based on the Health Access Program participant's ability to pay.

(e) The Health Access Program shall use the "Medical Home" model in which a primary care physician, nurse practitioner, or physician assistant develop and direct a plan of care for each Health Access Program participant, coordinate referrals for testing and specialty services, and monitor management of chronic conditions and diseases. Health Access Program participants shall be assigned to a primary care physician, nurse practitioner, or physician assistant.

(f) The Health Access Program shall provide medical services with an emphasis on wellness, preventive care and innovative service delivery. The Program shall provide medical services for the prevention, diagnosis, and treatment of medical conditions, excluding vision, dental, infertility, and cosmetic services. The Department of Public Health may further define the services to be provided, except that such services must, at a minimum, include: professional medical services by doctors, nurse practitioners, physician assistants, and other licensed health care providers, including preventive, primary, diagnostic and specialty services; inpatient and outpatient hospital services, including acute inpatient mental health services; diagnostic and laboratory services, including therapeutic radiological services; prescription drugs, excluding drugs for excluded services; home health care; and emergency care provided in San Francisco by contracted providers, including emergency medical transportation if needed.

(g) The Department of Public Health shall also be authorized to use payments made to the City by employers to satisfy their expenditure requirements as set forth in Section 14.3 to establish and maintain reimbursement accounts from which covered employees may obtain reimbursement of health care expenditures.

(h) The City Controller shall ensure any required health care expenditures made by an employer to the City are kept separate and apart from general funds and shall limit use of the expenditures to the Health Access Program or to the establishment and maintenance of reimbursement accounts from which covered employees may obtain reimbursement of health care expenditures. If any covered employee fails to enroll in the Health Access Program or establish a reimbursement account with the Department of Public Health within a reasonable time, as determined by the Department of Public Health, the City may use the funds paid to the City and County of San Francisco on behalf of that employee for the benefit of the health care programs created by this Ordinance, but the City may not transfer these funds to the City's general fund.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006; Ord. 69-07, File No. 070255, App. 4/2/2007)

SEC. 14.3. REQUIRED HEALTH CARE EXPENDITURES.

  (a) Required Expenditures. Covered employers shall make required health care expenditures to or on behalf of their covered employees each quarter. The required health care expenditure for a covered employer shall be calculated by multiplying the total number of hours paid for each of its covered employees during the quarter (including only hours starting on the first day of the calendar month following ninety (90) calendar days after a covered employee's date of hire) by the applicable health care expenditure rate. In determining whether a covered employer has made its required health care expenditures, payments to or on behalf of a covered employee shall not be considered if they exceed the following amount: the number of hours paid for the covered employee during the quarter multiplied by the applicable health care expenditure rate. The City's Office of Labor Standards Enforcement (OLSE) shall enforce the health expenditure requirements under this Section.

(b) Additional Employer Responsibilities. A covered employer shall: (i) maintain accurate records of health care expenditures, required health care expenditures, and proof of such expenditures made each quarter each year, and allow OLSE reasonable access to such records, provided, however, that covered employers shall not be required to maintain such records in any particular form; and (ii) provide information to the OLSE, or the OLSE's designee, on an annual basis containing such other information as OLSE shall require, but OLSE may not require an employer to provide information in violation of State or federal privacy laws. Where an employer does not maintain or retain adequate records documenting the health expenditures made, or does not allow OLSE reasonable access to such records, it shall be presumed that the employer did not make the required health expenditures for the quarter for which records are lacking, absent clear and convincing evidence otherwise. The Office of Treasurer and Tax Collector shall have the authority to provide any and all nonfinancial information to OLSE necessary to fulfill the OLSE's responsibilities as the enforcing agency under this Ordinance. With regard to all such information provided by the Office of Treasurer and Tax Collector, OLSE shall be subject to the confidentiality provisions of Subsection (a) of Section 6.22-1 of the San Francisco Business and Tax Regulations Code.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006; Ord. 69-07, File No. 070255, App. 4/2/2007)

SEC. 14.4. ADMINISTRATION AND ENFORCEMENT.

(a) The City shall develop and promulgate rules to govern the operation of this Chapter. The regulations shall include specific rules by the Department of Public Health on the operation of both the Health Access Program and the reimbursement accounts identified in Section 14.2(g), including but not limited to eligibility for enrollment in the Health Access Program and establishment of reimbursement accounts and rules by the OLSE for enforcement of the obligations of the employers under this Chapter. The rules shall also establish procedures for covered employers to maintain accurate records of health care expenditures and required health care expenditures and provide a report to the City without requiring any disclosures of information that would violate State or Federal privacy laws. The rules shall further establish procedures for providing employers notice that they may have violated this Chapter, a right to respond to the notice, a procedure for notification of the final determination of a violation, and an appeal procedure before a hearing officer appointed by the City Controller. The sole means of review of the hearing officer's decision shall be by filing in the San Francisco Superior Court a petition for a writ of mandate under Section 1094.5 of the California Code of Civil Procedure. No rules shall be adopted finally until after a public hearing.

(b) During implementation of this Chapter and on an ongoing basis thereafter, the City shall maintain an education and advice program to assist employers with meeting the requirements of this Chapter.

(c) Any employer that reduces the number of employees below the number that would have resulted in the employer being considered a "covered employer," or below the number that would have resulted in the employer being considered a medium-sized or large business, shall demonstrate that such reduction was not done for the purpose of evading the obligations of this Chapter or shall be in violation of the Chapter.

(d) It shall be unlawful for any employer or covered employer to deprive or threaten to deprive any person of employment, take or threaten to take any reprisal or retaliatory action against any person, or directly or indirectly intimidate, threaten, coerce, command or influence or attempt to intimidate, threaten, coerce, command or influence any person because such person has cooperated or otherwise participated in an action to enforce, inquire about, or inform others about the requirements of this Chapter. Taking adverse action against a person within ninety (90) days of the person's exercise of rights protected under this Chapter shall raise a rebuttable presumption of having done so in retaliation for the exercise of such rights.

(e) (1) The City shall enforce the obligations of employers and covered employers under this Chapter, and may impose administrative penalties upon employers and covered employers who fail to make required health care expenditures on behalf of their employees. The amount of the penalty shall be up to one-and-one-half times the total expenditures that a covered employer failed to make plus simple annual interest of up to ten (10) percent from the date payment should have been made, but in any event the total penalty for this violation shall not exceed $1,000.00 for each employee for each week that such expenditures are not made.

(2) For other violations of this Chapter by employers and covered employers, the administrative penalties shall be as follows: For refusing to allow access to records, pursuant to Section 14.3(b), $25.00 as to each worker whose records are in issue for each day that the violation occurs; for the failure to maintain or retain accurate and adequate records pursuant to Section 14.3(b) and for the failure to make the annual report of information required by OLSE pursuant to Section 14.3(b). $500.00; for violation of Section 14.4(d) (retaliation), $100.00 as to each person who is the target of the prohibited action for each day that the violation occurs; and for any other violation not specified in this subsection (e)(2), $25.00 per day for each day that the violation occurs.

(3) The City Attorney may bring a civil action to recover civil penalties for the violations set forth in subsections (e)(1) and (e)(2) in the same amounts set forth in those subsections, and to recover the City's enforcement costs, including attorneys' fees.

(4) Amounts recovered under this Section shall be deposited in the City's General Fund.

(f) The City Controller shall coordinate with the Department of Public Health and OLSE to prepare periodic reports on the implementation of this Chapter including participant rates, any effect on services provided by the Department of Public Health, the cost of providing services to the Health Access Program participants and the economic impact of the Chapter's provisions. Reports shall be provided to the Board of Supervisors on a quarterly basis for quarters beginning July 1, 2007 through June 30, 2008, then every six months through June 30, 2010. Reports shall include specific information on any significant event affecting the implementation of this Chapter and also include recommendations for improvement where needed, in which case the Board of Supervisors or a committee thereof shall hold a hearing within thirty (30) days of receiving the report to consider responsive action.

(g) The Director of Public Health shall convene an advisory Health Access Working Group to provide the Department of Public Health and the Health Access Program with expert consultation and direction, with input on members from the Mayor and the Board of Supervisors. The Health Access Working Group shall be advisory in nature and may provide the Health Access Program with input on matters including: setting membership rates; designing the range of benefits and health care services for participants; and researching utilization, actuaries, and costs.

(h) The Department of Public Health and the OLSE shall report to the Board of Supervisors by July 1, 2007, on the development of rules for the Health Access Program and for the enforcement and administration of the employer obligations under this Chapter. The Board of Supervisors or a committee thereof shall hold a hearing on the proposed rules to ensure that participants in the Health Access Program shall have access to high quality and culturally competent services.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006; Ord. 69-07, File No. 070255, App. 4/2/2007)

SEC. 14.5. SEVERABILITY.

If any section, subsection, clause, phrase, or portion of this Chapter is for any reason held invalid or unconstitutional by any court or Federal or State agency of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereof. To this end, the provisions of this ordinance shall be deemed severable.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006)

SEC. 14.6. PREEMPTION.

Nothing in this Chapter shall be interpreted or applied so as to create any power, duty or obligation in conflict with, or preempted by, any Federal or State law.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006)

SEC. 14.7. GENERAL WELFARE.

By this Chapter, the City is assuming an undertaking only to promote the general welfare and otherwise satisfy its obligations to provide health care under applicable law. This Chapter should in no way be construed as an expansion of the City's existing obligations to provide health care under State and Federal law, and the City shall set all necessary criteria for enrollment consistent with its legal obligations. The City is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury. To the fullest extent permitted by law, the City shall assume no liability whatsoever. To the fullest extent permitted by law, any actions taken by a public officer or employee under the provisions of this Chapter shall not become a personal liability of any public officer or employee of the City.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006)

SEC. 14.8. OPERATIVE DATE.

This Chapter shall become operative in three phases. The day this Chapter becomes effective, implementation of the Chapter shall commence. The Health Access Program shall become operative on July 1, 2007. Any requirements on employers for which an average of fifty (50) or more persons per week perform work for compensation during a quarter shall become operative on January 1, 2008. Any requirements on employers for which an average of from twenty (20) to forty-nine (49) persons per week perform work for compensation during a quarter shall become operative on April 1, 2008. This Chapter is intended to have prospective effect only.

(Added by Ord. 218-06, File No. 051919, App. 8/4/2006; Ord. 72-07, File No. 070354, App. 4/2/2007)

 

     

      CHAPTER 12Q: HEALTH CARE ACCOUNTABILITY

 

    *

    *

 

    Sec. 12Q.1. Title.

 

    Sec. 12Q.2. Definitions.

 

    Sec. 12Q.2.1. Agency.

 

    Sec. 12Q.2.2. Agency Director.

 

    Sec. 12Q.2.3. City.

 

    Sec. 12Q.2.4. Contract.

 

    Sec. 12Q.2.5. Contract Amendment.

 

    Sec. 12Q.2.6. Contracting Department.

 

    Sec. 12Q.2.7. Contracting Parties.

 

    Sec. 12Q.2.8. Contractor.

 

    Sec. 12Q.2.9. Covered Employee.

 

    Sec. 12Q.2.10. Effective Date.

 

    Sec. 12Q.2.11. Employee.

 

    Sec. 12Q.2.12. Health Director.

 

    Sec. 12Q.2.13. Lease.

 

    Sec. 12Q.2.14. Lease Amendment.

 

    Sec. 12Q.2.15. Nonprofit Corporation.

 

    Sec. 12Q.2.16. Week.

 

    Sec. 12Q.2.17. Subcontract.

 

    Sec. 12Q.2.18. Subcontractor.

 

    Sec. 12Q.2.19. Sublease.

 

    Sec. 12Q.2.20. Subtenant.

 

    Sec. 12Q.2.21. Tenant.

 

    Sec. 12Q.3. Health Care Accountability Components.

 

    Sec. 12Q.4. Contractual Obligations.

 

    Sec. 12Q.5. Administration and Enforcement.

 

    Sec. 12Q.5.1. Additional Contract Requirements; Liquidated Damages.

 

    Sec. 12Q.5.2. Investigation and Determination of Violations.

 

    Sec. 12Q.6. Waivers by the Agency Director.

 

    Sec. 12Q.7. Special Waiver by the Public Utilities Commission.

 

    Sec. 12Q.8. Waiver Through Collective Bargaining.

 

    Sec. 12Q.9. Preemption.

 

    Sec. 12Q.10. Effective Date.

 

    Sec. 12Q.11. Period of Suspension.

 

    Sec. 12Q.12. Severability.

 

    *SEC. 12Q.1. TITLE.*

 

    This Chapter shall be known as the "San Francisco Health Care

    Accountability Ordinance."

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2. DEFINITIONS.*

 

    As used in this Chapter, the following capitalized terms shall have

    the meanings set forth in the following provisions.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.1. AGENCY.*

 

    "Agency" shall mean the Office of Labor Standards Enforcement.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.2.2. AGENCY DIRECTOR.*

 

    "Agency Director" shall mean the Director of the Office of Labor

    Standards Enforcement or his or her designee.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.2.3. CITY.*

 

    "City" shall mean the City and County of San Francisco.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.4. CONTRACT.*

 

    (a) "Contract" shall mean an agreement between a Contracting

    Department and any person or entity that provides for public works

    or public improvements to be purchased, or for services to be

    performed, at the expense of the City. The term "Contract" also

    means an agreement between a Tenant or Subtenant and any person or

    entity to perform services on property covered by a Lease. The term

    "Contract" includes "Contract Amendment."

 

    (b) Notwithstanding the foregoing, the term "Contract" does not

    include the following:

 

    (1) Agreements for a duration of less than one (1) year. Contracting

    Departments and Tenants and Subtenants are prohibited from entering

    into multiple contracts of short duration with the proposed

    Contractor in order to evade the requirements of this Chapter;

 

    (2) Agreements for the purchase or lease of goods, or for

    guarantees, warranties, shipping, delivery, installation or

    maintenance of such goods. Where an agreement is for the purchase or

    lease of both goods and other services, the agreement shall not be

    deemed a "Contract" if a preponderance of the contract amount is for

    goods;

 

    (3) Agreements entered into pursuant to settlement of legal

    proceedings;

 

    (4) Agreements for urgent or specialized advice, consultation or

    litigation services for the City Attorney's Office where the City

    Attorney finds that it would be in the best interests of the City

    not to include the requirements of this Chapter;

 

    (5) Agreements with any person or entity if the amount of the

    agreement is less than $25,000 (in the case of a for-profit entity

    or person) or less than $50,000 (in the case of a Nonprofit

    Corporation). However, if the Contracting Party has multiple

    agreements with the City in a given fiscal year (which agreements

    would be considered "Contracts" under this Chapter except that the

    individual dollar amounts are below the thresholds set forth in the

    preceding sentence) and the cumulative amount of such agreements is

    $75,000 or more, the provisions of this Chapter shall apply to each

    such agreement from the date on which the triggering Contract is

    executed;

 

    (6) Agreements for the investment, management or use of trust assets

    where compliance would violate the fiduciary duties of the trustee;

 

    (7) Agreements executed prior to the Effective Date (unless and

    until a Contract Amendment is executed);

 

    (8) Agreements executed after the Effective Date (unless and until a

    Contract Amendment is entered into) pursuant to, and within the

    scope of, bid packages or requests for proposals advertised and made

    available to the public prior to the Effective Date, unless the bid

    packages or requests for proposals are materially amended on or

    after the Effective Date;

 

    (9) Agreements involving the expenditure by the City of special

    funds or other non-General Fund revenues to the extent that

    application of this Chapter would require the City to use General

    Fund monies to supplement the special funds or other non-General

    Fund revenues to maintain the current level of services;

 

    (10) Agreements that require the expenditure of grant funds awarded

    to the City by another entity. If a Contract is funded both by grant

    funds and non-grant funds, the entire Contract is exempt; provided

    that, if the use of the grant funds is severable from the non-grant

    funds, the Contract is exempt only with respect to the use of the

    grant funds;

 

    (11) Agreements pursuant to which the City awards a grant to a

    Nonprofit Corporation;

 

    (12) Agreements with a public entity, unless the public entity is

    the San Francisco Redevelopment Agency, the San Francisco LAFCO, the

    San Francisco Transportation Authority, the San Francisco Parking

    Authority or the San Francisco Health Authority;

 

    (13) Agreements for employee benefits to be provided to City

    employees, where the Director of Human Resources finds that no

    person or entity is willing to comply with this Chapter and is

    capable of providing the required employee benefits;

 

    (14) Agreements for the investment, management or use of City monies

    where the Treasurer finds that requiring compliance with this

    Chapter will violate the Treasurer's fiduciary duties and for the

    investment of retirement, health or other funds held in trust

    pursuant to Charter, statute, ordinance or MOU where the official or

    officials responsible for investing or managing such funds find that

    requiring compliance with this Chapter will violate their fiduciary

    duties;

 

    (15) Loan agreements and agreements made in connection with loans or

    grants under which the City, as creditor or grantor, is providing

    funds to be used by the debtor or grantee to

 

    (A) Acquire an interest in real property on which residential

    improvements for low- or moderate-income households will be

    constructed;

 

    (B) Construct improvements owned or leased by the debtor or grantee,

    on condition that residents of the improvements qualify as low- or

    moderate-income households; or

 

    (C) Rehabilitate improvements owned or leased by the debtor or

    grantee; and

 

    (16) Agreements between a Tenant or Subtenant and a Contractor to

    perform services on property covered by a Lease if the Contractor

    does not provide such services on a regular and on-going basis. For

    purposes of this exemption, if employees of the Contractor I and any

    Subcontractors cumulatively work on the Lease property less than 130

    days within a 12-month period, the agreement shall not be considered

    regular and on-going.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.5. CONTRACT AMENDMENT.*

 

    (a) "Contract Amendment" shall mean a modification to an agreement

    which extends the term, increases the total amount of payments due

    from the City (except where such increase is due solely to cost of

    living adjustments), or modifies the scope of services to be

    performed by the Contractor; provided that the resulting agreement

    falls within the definition of "Contract."

 

    (b) Notwithstanding the foregoing, "Contract Amendment" does not

    include a onetime extension of the term of a Contract for up to 6

    months, or a construction change order, modification or amendment to

    a Contract executed by the City for its benefit (as determined by

    the Agency Director).

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.6. CONTRACTING DEPARTMENT.*

 

    "Contracting Department" shall mean the City department, office,

    board, commission or other City agency that enters into the

    applicable Contract or Lease on behalf of the City.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.7. CONTRACTING PARTIES.*

 

    "Contracting Parties" shall mean Contractors, Subcontractors,

    Tenants, and Subtenants.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.8. CONTRACTOR.*

 

    "Contractor" shall mean the person or entity that enters into a

    Contract with the City. The term "Contractor" also means any person

    or entity that enters into a Contract with a Tenant or Subtenant to

    perform services on property covered by a Lease.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.9. COVERED EMPLOYEE.*

 

    (a) "Covered Employee" shall mean:

 

    (1) An Employee of a Contractor or Subcontractor who works on a City

    Contract or Subcontract for 20 hours or more per Week:

 

    (A) Within the geographic boundaries of the City; or

 

    (B) On real property owned or controlled by the City, but outside

    the geographic boundaries of the City; or

 

    (C) Elsewhere in the United States; and

 

    (2) An Employee of a Tenant or Subtenant who works 20 hours or more

    per Week on property that is covered by a Lease or Sublease; and

 

    (3) An Employee of a Contractor or Subcontractor that has a Contract

    or Subcontract to perform services on property covered by a Lease or

    Sublease if the Employee works 20 hours or more per Week on the

    property.

 

    (4) A Contractor or Subcontractor may not divide an employee's time

    between working on a City contract and working on other duties with

    the intent of reducing the number of Covered Employees working on

    the Contract to evade compliance with this Chapter. Such action

    shall constitute a violation of this Chapter. Beginning on July 1,

    2002, the number of hours an employee must work per Week in order to

    be considered a "Covered Employee" pursuant to this Subsection

    (a)(1), (2) and (3) shall be 15 or more.

 

    (b) Notwithstanding the foregoing, the term "Covered Employee" does

    not include the following:

 

    (1) Any Employee (A) under the age of eighteen (18) who is a

    student, provided that the Employee does not replace, displace or

    lower the wage or benefits of any existing position or Employee, or

    (B) who is (i) a temporary Employee hired for a time-limited period,

    and (ii) for that period is receiving academic credit or completing

    mandatory hours for professional licensure or certification, and

    (iii) the Employee does not replace, displace or lower the wage or

    benefits of an existing position or Employee; or

 

    (2) Any Employee employed as a trainee in a bona fide training

    program consistent with Federal law, which training program enables

    the Employee to advance into a permanent position, provided that the

    Employee does not replace, displace or lower the wage or benefits of

    any existing position or Employee; or

 

    (3) Any Employee that the Contracting Party is required to pay no

    less than the "prevailing rate of wage" in accordance with Section

    A7.204 of Appendix A to the City's Charter or any provision of the

    San Francisco Administrative Code; or

 

    (4) Any disabled Employee who:

 

    (A) Is covered by a current sub-minimum wage certificate issued to

    the employer by the U.S. Department of Labor; or

 

    (B) Would be covered by such a certificate but for the fact that the

    employer is paying a wage equal to or higher than the minimum wage.

 

    (5) Any Employee of a Nonprofit Corporation who is a temporary

    employee, hired on an hourly or per diem basis to replace a regular

    employee during a temporary absence from the workplace.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.2.10. EFFECTIVE DATE.*

 

    "Effective Date" shall mean the applicable effective date specified

    in Section 12Q.9 of this Chapter.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.11. EMPLOYEE.*

 

    "Employee" shall mean any person who is employed by a Contracting

    Party, including part-time and temporary employees.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.12. HEALTH DIRECTOR.*

 

    "Health Director" shall mean the Director of the Department of

    Public Health.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.13. LEASE.*

 

    (a) "Lease" shall mean a written agreement (including, without

    limitation, any lease, concession or license) in which the City

    gives to another party the exclusive use of City Property for a term

    exceeding twenty-nine (29) consecutive days in any calendar year,

    whether by single or cumulative instruments. "City Property" means

    real property that is owned by the City or of which the City has

    exclusive use, if such property is located within the City or is

    under the jurisdiction of the San Francisco Airport Commission. If

    cumulative instruments cause the term of the agreement to exceed

    twenty-nine (29) consecutive days, the agreement in question shall

    be subject to this Chapter only on and after the effective date of

    the instrument which causes the term to exceed twenty-nine (29)

    consecutive days. For the purposes of this definition and the

    definition of Sublease, "exclusive use" means the right to use or

    occupy real property to the exclusion of others, subject to the

    rights reserved by the party granting such exclusive use. "Lease"

    includes "Lease Amendment."

 

    (b) Notwithstanding the foregoing, the term "Lease" does not include

    the following:

 

    (1) Agreements granting a franchise or easement;

 

    (2) Agreements with a public entity, unless the public entity is the

    San Francisco Redevelopment Agency, the San Francisco LAFCO, the San

    Francisco Transportation Authority, the San Francisco Parking

    Authority or the San Francisco Health Authority;

 

    (3) Agreements entered into pursuant to settlement of legal

    proceedings;

 

    (4) Revocable at-will use or encroachment permits for the use of or

    encroachment on City Property, regardless of the ultimate duration

    of such permits;

 

    (5) Street excavation, street construction or street use permits or

    other regulatory permits;

 

    (6) Agreements for the use of a City right-of-way, including

    circumstances where a contracting utility has the power of eminent

    domain;

 

    (7) Agreements governing the use of City Property under the

    jurisdiction of the Recreation and Park Department primarily for

    recreational activities.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.14. LEASE AMENDMENT.*

 

    (a) "Lease Amendment" shall mean a modification to a Lease that

    extends the term or materially changes any other provision of the

    Lease.

 

    (b) Notwithstanding the foregoing, "Lease Amendment" does not

    include a one-time extension of the term of a Lease for up to 6

    months, or relocation of the leased premises at the request of the

    City for its benefit or convenience (as determined by the Agency

    Director).

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.15. NONPROFIT CORPORATION.*

 

    "Nonprofit Corporation" shall mean a nonprofit corporation, duly

    organized, validly existing and in good standing under the laws of

    the jurisdiction of its incorporation and (if a foreign corporation)

    in good standing under the laws of the State of California, which

    corporation has established and maintains valid nonprofit status

    under Section 501(c)(3) of the United States Internal Revenue Code

    of 1986, as amended, and all rules and regulations promulgated under

    such Section.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.16. WEEK.*

 

    "Week" shall mean a consecutive seven-day period. If the Contracting

    Party's regular pay period is other than a seven-day period, the

    number of hours worked by an employee during a seven-day Week for

    purposes of this Chapter; shall be calculated by adjusting the

    number of hours actually worked during the Contracting Party's

    regular pay period to determine the average over a seven-day Week.

    However, such period of averaging shall not exceed a duration of one

    month.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.17. SUBCONTRACT.*

 

    (a) "Subcontract" shall mean an agreement between a Contractor and a

    person or entity pursuant to which the person or entity agrees to

    perform all or a portion of the services covered by a Contract.

 

    (b) Notwithstanding the foregoing, the term "Subcontract" does not

    include:

 

    (1) Agreements for the purchase or lease of goods, or for

    guarantees, warranties, shipping, delivery, installation or

    maintenance of such goods. When an agreement is for the purchase or

    lease of both goods and other services, the agreement shall not be

    deemed a "Subcontract" if a preponderance of the Contract amount is

    for goods;

 

    (2) Agreements with a public entity, unless the public entity is the

    San Francisco Redevelopment Agency, the San Francisco LAFCO, the San

    Francisco Transportation Authority, the San Francisco Parking

    Authority or the San Francisco Health Authority.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.18. SUBCONTRACTOR.*

 

    "Subcontractor" shall mean a person or entity that enters into a

    Subcontract.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.19. SUBLEASE.*

 

    (a) "Sublease" shall mean any agreement with any person or entity

    for the exclusive right to occupy or use all or any portion of City

    Property covered by a Lease.

 

    (b) Notwithstanding the foregoing, the term "Sublease" does not

    include each of the circumstances set forth in Section 12Q.2.13(b)

    that constitutes an exclusion from the definition of "Lease."

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.20. SUBTENANT.*

 

    "Subtenant" shall mean a person or entity that enters into a Sublease.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.2.21. TENANT.*

 

    "Tenant" shall mean the person or entity that enters into a Lease

    with the City.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.3. COMPONENTS.*

 

    (a) With respect to each Covered Employee who either resides in San

    Francisco (regardless of where the Covered Employee provides

    services) or provides services covered by this Chapter in San

    Francisco, each Contracting Party shall do one of the following, at

    the Contracting Party's option:

 

    (1) Offer to the Covered Employee health plan benefits that meet

    minimum standards prepared by the Health Director and approved by

    the Health Commission. The minimum standards shall provide for a

    maximum period for each Covered Employee's health benefits to become

    effective, no later than the first of the month that begins after 30

    days from the start of employment on a covered Contract,

    Subcontract, Lease or Sublease. The Health Commission shall review

    such standards at least once every two years to ensure that the

    standards stay current with State and Federal regulations and

    existing health benefits practices; or

 

    (2) For each Week in which the Covered Employee works the applicable

    minimum number of hours set forth in Section 12Q.2.9(a) (definition

    of "Covered Employee"), pay to the City $2.00 per hour for each hour

    the Covered Employee is employed by the Contracting Party on the

    Contract or Subcontract or on property covered by a Lease, but not

    to exceed $80 in any Week. The City shall appropriate money received

    pursuant to this Subsection (a)(2) for the use of the Department of

    Public Health. The Department of Public Health shall use the monies

    appropriated for staffing and other resources to provide medical

    care for the uninsured. The Health Commission may increase this

    hourly rate and Weekly maximum in accordance with either the Bureau

    of Labor Statistics Consumer Price Index for Medical Care in the San

    Francisco Bay Area or the increase in average Health Maintenance

    Organization (HMO) premiums in California, depending on which the

    Health Commission determines better reflects the cost of providing

    health care in the Bay Area; provided, however, the Health

    Commission shall take this action no more than once a year and any

    adjustments in such hourly rate or Weekly maximum must be approved

    by the Board of Supervisors by resolution; or

 

    (3) Participate in a health benefits program developed by the Health

    Director in consultation with the Agency. The Health Director shall

    obtain Health Commission approval of the program before implementing

    it. The Health Director shall seek such approval within twelve (12)

    months after this Chapter is finally approved. Prior to

    implementation of the health benefits program provided in this

    Subsection (a)(3), each Contracting Party shall comply with

    Subsection (a)(1) or (a)(2). After the Health Director implements

    the program, in addition to the options provided in Subsections

    (a)(1) and (a)(2), Contracting Parties may satisfy their obligations

    under this Chapter by complying with the requirements of the health

    benefits program. In developing the program, the Health Director

    shall (i) attempt to make health coverage available for uninsured

    Covered Employees and, if feasible, any other person employed by a

    Contracting Party who works less than 20 hours per week on a City

    contract, or other uninsured City residents; (ii) use public health

    facilities to the maximum extent practicable; (iii) make the program

    economically viable; and (iv) provide a mechanism for funding which

    relies, as much as possible, on contributions by participating

    employers and employees.

 

    (b) With respect to each Covered Employee who does not reside in San

    Francisco, but who provides services covered by this Chapter at the

    San Francisco Airport or at the San Bruno Jail, each Contracting

    Party shall do one of the options set forth in Subsection (a), at

    the Contracting Party's option.

 

    (c) With respect to each Covered Employee who does not reside in San

    Francisco, and does not provide services covered by this Chapter in

    San Francisco, at the San Francisco Airport or at the San Bruno

    Jail, each Contracting Party shall do one of the following, at the

    Contracting Party's option:

 

    (1) Offer to the Covered Employee health plan benefits that meet

    minimum standards prepared by the Health Director and approved by

    the Health Commission pursuant to Subsection 12Q.3(a)(1) above; or

 

    (2) For each Week in which the Covered Employee works the applicable

    minimum number of hours set forth in Section 12Q.2.9(a) (definition

    of "Covered Employee"), pay to the Covered Employee an additional

    $2.00 per hour for each hour the Covered Employee is employed by the

    Contracting Party on the Contract or Subcontract or on property

    covered by a Lease, but not to exceed $80 in any Week, to enable the

    employee to obtain health insurance coverage. This represents the

    City's current estimate of the average cost of obtaining individual

    health insurance benefits. The Health Commission may increase this

    hourly rate and Weekly maximum in accordance with either the Bureau

    of Labor Statistics Consumer Price Index for Medical Care in the San

    Francisco Bay Area or the increase in average Health Maintenance

    Organization (HMO) premiums in California, depending on which the

    Health Commission determines better reflects the cost of providing

    health care in the Bay Area; provided, however, the Health

    Commission shall take this action no more than once a year and any

    adjustments in such hourly rate or Weekly maximum must be approved

    by the Board of Supervisors by resolution.

 

    (d) When preparing proposed budgets and requests for supplemental

    appropriations for contract services, City departments that

    regularly enter into agreements for the provision of services by

    nonprofit corporations shall transmit with their proposal a written

    confirmation that the department has considered in its calculation

    the costs that the nonprofit corporations calculate that they will

    incur in complying with the Health Care Accountability Ordinance.

 

    (e) Notwithstanding the above, if, at the time a Contract,

    Subcontract, Lease or Sublease is executed, the Contracting Party

    has 20 or fewer employees (or, in the case of a Nonprofit

    Corporation, 50 or fewer employees), including any employees the

    Contracting Party plans to hire to implement the Contract,

    Subcontract, Lease or Sublease, the Contracting Party shall not be

    obligated to provide the Health Care Accountability Components set

    forth in this Section 12Q.3 to its Covered Employees. In determining

    the number of employees had by a Contracting Party, all employees of

    all entities that own or control the Contracting Party and that the

    Contracting Party owns or controls, shall be included.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.4. CONTRACTUAL OBLIGATIONS.*

 

    (a) Each Contracting Party that enters into a Contract, Subcontract,

    Lease, or Sublease shall agree:

 

    (1) To comply with the requirements of this Chapter, including the

    requirement to choose and perform one of the Health Care

    Accountability Components set forth in Section 120.3;

 

    (2) To comply with regulations adopted by the Agency pursuant to

    this Chapter;

 

    (3) To maintain employee and payroll records in compliance with the

    California Labor Code and Industrial Welfare Commission orders,

    including the number of hours each employee has worked on the City

    Contract or Subcontract. If the Contracting Party fails to maintain

    records that accurately reflect the number of hours each employee

    has worked on the City Contract or Subcontract, it shall be presumed

    that any employee who has worked on a City Contract or Subcontract

    is a Covered Employee as defined in Section 12Q.2.9.

 

    (4) To provide information and reports to the City in accordance

    with any reporting standards promulgated by the Agency in

    consultation with the Director of Health;

 

    (5) To provide the City with access to pertinent payroll records

    relating to the number of employees employed and terms of medical

    coverage after receiving a written request to do so and being

    provided at least ten (10) business days to respond;

 

    (6) To allow the City to inspect Contracting Parties' job sites and

    have access to Contracting Parties' employees in order to monitor

    and determine compliance with this Chapter;

 

    (7) To cooperate with the Agency when it conducts audits;

 

    (8) To include in every Contract, Subcontract, Lease, or Sublease

    subject to this Chapter provisions requiring compliance with this

    Chapter, consistent with any directives or standards adopted by the

    Agency;

 

    (9) To notify the Contracting Department promptly of any

    Subcontractors performing services covered by this Chapter and

    certify to the Contracting Department that it has notified the

    Subcontractors of their obligations under this Chapter; and

 

    (10) To represent and warrant that it is not an entity that was set

    up, or is being used, for the purpose of evading the intent of this

    Chapter.

 

    (b) A Contracting Party shall not discharge, reduce in compensation,

    or otherwise discriminate against any Employee for notifying the

    City regarding the Contracting Party's noncompliance or anticipated

    noncompliance with this Chapter, for opposing any practice

    proscribed by this Chapter, for participating in proceedings related

    to this Chapter, or for seeking to assert or enforce any rights

    under this Chapter by any lawful means.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.5. ADMINISTRATION AND ENFORCEMENT.*

 

    (a) The Agency, in consultation with the Department of Public

    Health, shall promulgate regulations for the interpretation and

    administration of this Chapter, which regulations shall be adopted

    only after public hearing. The regulations shall establish

    procedures for monitoring Contractors, receiving and investigating

    complaints, and providing administrative hearings to determine

    whether a Contractor has breached a Contract, Subcontract, Lease or

    Sublease based on the requirements of this Chapter.

 

    (b) The Agency shall monitor Contracting Parties for compliance and

    investigate complaints of violations. The Agency, in consultation

    with the City Attorney, shall develop contractual provisions for use

    by Contracting Departments designed to enable the City to pursue the

    remedies set forth in this Section against every person or entity

    required to comply with this Chapter.

 

    (c) The Agency, in consultation with the Department of Public

    Health, may conduct audits of Contracting Parties, although such

    audits shall be conducted through an examination of records at a

    mutually agreed upon time and location within ten (10) days of

    written notice.

 

    (d) The Agency and the Department of Public Health shall provide an

    annual joint report to the Board of Supervisors on compliance with

    this Chapter. Such report shall include cumulative information

    regarding the number of waivers granted pursuant to this Chapter.

 

    (e) A Covered Employee may report to the Agency in writing any

    alleged violation of this Chapter by a Contracting Party or other

    person or entity subject to this Chapter. The Agency shall

    investigate any such report. If the Agency determines that any

    person or entity has violated this Chapter, the Agency shall notify

    the Contracting Department of its, findings. In order to ensure

    compliance with this Chapter and to enhance the monitoring

    activities of the Agency, the City encourages reporting by Covered

    Employees pursuant to this Subsection. The Agency shall keep

    confidential the Covered Employee's name and other identifying

    information, to the maximum extent permitted by applicable law.

 

    (f) In addition to any other rights or remedies available to the

    City under the terms of any agreement of a Contracting Party or

    under applicable law, the City shall have the following rights:

 

    (1) The right, at the discretion of the Agency, to charge the

    Contracting Party for any amounts that the Contracting Party should

    have paid to the City for hours worked by Covered Employees pursuant

    to Section 12Q.3(a)(2) and (b), or to Covered Employees pursuant to

    Section 12Q.3(c)(2), together with simple annual interest of 10% on

    such amount from the date payment was due;

 

    (2) The right, at the discretion of the Agency, to assess liquidated

    damages as provided in Section 12Q.5.1 and 12Q.5.2;

 

    (3) The right, at the discretion of the Agency, to set off all or

    any portion of the amount that a Contracting Party is required to

    pay to the City pursuant to preceding Subsections (g)(1) and (2)

    against amounts due to a Contracting Party;

 

    (4) The right, at the discretion of the Contracting Department, to

    terminate the Contract or Lease in whole or in part;

 

    (5) The right, at the discretion of either the Contracting

    Department or the Agency, to bar a Contracting Party from entering

    into future Contracts or Leases with the City for three (3) years.

 

    (6) The right to bring a civil action against the Contractor to

    pursue the remedies provided by this Chapter and other applicable

    law. The prevailing party shall be entitled to all costs and

    expenses, including reasonable attorney's fees.

 

    (g) Each Contractor shall be responsible for its Subcontractors with

    respect to compliance with this Chapter. If a Subcontractor fails to

    comply, the City may pursue the remedies set forth in this Section

    against the Contractor based on the Subcontractor's failure to

    comply, provided that the Contracting Department has first provided

    the Contractor with notice and an opportunity to obtain a cure of

    the violation.

 

    (h) Each Tenant shall be responsible for each Subtenant, Contractor

    and Subcontractor performing services on property covered by the

    Tenant's Lease, with respect to compliance with this Chapter. If any

    Subtenant, Contractor or Subcontractor fails to comply, the City may

    pursue the remedies set forth in this Section against the Tenant

    based on the Subtenant's, Contractor's or Subcontractor's failure to

    comply, provided that the Contracting Department has first provided

    the Tenant with notice and an opportunity to obtain a cure of the

    violation.

 

    (i) Each of the rights set forth in this Section 12Q.5 shall be

    exercisable individually or in combination with any other rights or

    remedies available to the City. Any amounts realized by the City

    pursuant to this Section shall be used first to cover the costs of

    enforcing this Chapter and thereafter appropriated for the use of

    the Department of Public Health.

 

    (j) The Agency may compromise and settle unlitigated claims against

    Contracting Parties for violations of contractual provisions

    required by this Chapter.

 

    (k) All Contracting Parties and Contracting Departments shall

    cooperate fully with the Agency in connection with any investigation

    of an alleged violation of this Chapter or with any inspection

    conducted by the Agency.

 

    (l) When this Chapter authorizes the Agency to charge interest (not

    to exceed 10%), in determining whether to charge the interest, the

    Agency shall give due consideration to the size of the Contractor's

    business, the Contractor's good faith, the gravity of the violation,

    and the history of previous violations.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.5.1. ADDITIONAL CONTRACT REQUIREMENTS; LIQUIDATED DAMAGES.*

 

    Every Contract, Contract Amendment, Lease and Lease Amendment

    entered after January 1, 2006 shall contain provisions in which the

    Contracting Party agrees:

 

    (1) To be liable to the City for liquidated damages as provided in

    this Section;

 

    (2) To be subject to the procedures governing enforcement of a

    breach of the terms of a Contract, Contract Amendment, Lease or

    Lease Amendment which terms are required by this Chapter, as set

    forth in Section 12Q.5.2;

 

    (3) That the commitment of Contracting Parties to comply with the

    requirements of this Chapter is a material element of the City's

    consideration for the agreement and that the failure of a

    Contracting Party to comply will cause significant and substantial

    harm to the City and the public, which is extremely difficult to

    determine or quantify, and that the liquidated damages set forth in

    this Section are reasonable amounts to pay for the harm caused by

    the Contracting Party's non-compliance;

 

    (4) That for failure to comply with the requirements of this

    Chapter, the Agency may require the Contracting Party to pay the

    City liquidated damages of up to one hundred dollars ($100) for each

    one-week pay period for each employee for whom the Contracting Party

    has either not offered health plan benefits or made payments as

    required by Section 12Q.3. The Agency shall adjust this amount

    proportionately for Contracting Parties that use a pay period other

    than one week;

 

    (5) That for any failure to provide reports to the City or access to

    pertinent records, or any failure to cooperate with any audit,

    inspection or investigation conducted by the Agency, the Agency may

    require the Contracting Party to pay the City liquidated damages of

    up to one thousand dollars ($1000); and

 

    (6) That while liquidated damages in the maximum amounts set forth

    in this Section are a reasonable estimate of the harm caused by the

    Contracting Party's non-compliance with contractual provisions

    required by this Chapter, the Agency may determine that less than

    the full amount is warranted depending on the circumstances of each

    case. The Agency shall give due consideration to the following

    factors in determining the amount of liquidated damages: the size of

    the Contracting Party's business, the Contracting Party's good

    faith, the gravity of the violation, the history of previous

    violations, the failure to comply with record-keeping, reporting and

    anti-retaliation requirements, and the extent to which the

    imposition of liquidated damages would undermine the purpose of this

    Chapter by imposing unreasonable financial burdens on the

    Contracting Party, thereby restricting its ability to fulfill its

    obligations under this Chapter.

 

    (Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.5.2. INVESTIGATION AND DETERMINATION OF VIOLATIONS.*

 

    (a) Determination of Violation. Upon determining that a Contracting

    Party may have violated the terms of a Contract, Contract Amendment,

    Lease or Lease Amendment required under this Chapter, the Agency

    shall send written notice to the Contracting Party of the possible

    violation and of the Contracting Party's right to respond to the

    Agency's initial determination by submitting pertinent documents and

    other information. The written notice shall also notify the

    Contracting Party that the Agency is authorized to direct the

    Controller to withhold payment otherwise due to the Contracting

    Party pursuant to the provisions of Subsection (d). If after

    providing the Contracting Party with a reasonable opportunity to

    respond to the allegations the Agency makes a final determination

    that a violation has occurred, the Agency shall provide a written

    notice of violation to the Contracting Party.

 

    (b) Right to Appeal. The Contracting Party may appeal the Agency's

    final determination. The Contracting Party must file an appeal with

    the Agency in writing, specifying the basis for contesting the

    determination, no later than 15 days after the date of the notice of

    determination. Failure to file an appeal in writing with the

    Controller within 15 days shall cause the Agency's determination to

    be deemed a final administrative decision by the City.

 

    (c) Administrative Hearing.

 

    (1) Within 15 days after the Agency receives an appeal, the

    Controller shall appoint a hearing officer and shall notify the

    Agency and the Contracting Party.

 

    (2) The hearing officer shall promptly set a date for a hearing. The

    hearing shall commence within 45 days of the notification of the

    appointment of the hearing officer and conclude within 75 days of

    such notification unless all parties agree to an extended period.

 

    (3) The Agency shall have the burden of producing evidence that the

    Contracting Party has violated the requirements of this Chapter and

    the burden of proving the violation.

 

    (d) Hearing Officer's Decision.

 

    (1) Within 30 days of the conclusion of the hearing, the hearing

    officer shall issue a written decision affirming, modifying, or

    vacating the Agency's determination. If the hearing officer vacates

    the Agency's determination in its entirety, that decision shall also

    vacate any assessment of liquidated damages. If the hearing officer

    affirms the Agency's determination, the hearing officer shall issue

    a decision upholding the Agency's determination, including the

    amount of the liquidated damages assessed by the Agency. With

    respect to liquidated damages, the hearing officer's jurisdiction to

    modify the Agency's assessment is limited and the following

    procedures apply. If the hearing officer modifies the Agency's

    determination, the hearing officer shall transmit the decision to

    the Agency, which shall within five business days modify the

    assessment of liquidated damages consistent with the hearing

    officer's decision based on the criteria set forth in Section

    12.Q.5.1(6) and transmit the modified assessment to the hearing

    officer. Upon receiving the modified assessment from the Agency, the

    hearing officer shall within three business days issue a final

    decision, which shall include the amount of the liquidated damages

    assessment as modified by the Agency.

 

    (2) The hearing officer's decision shall consist of findings and a

    determination, which shall be final. The Contracting Party may seek

    review of the hearing officer's decision only by filing in the San

    Francisco Superior Court a petition for a writ of mandate under

    California Code of Civil Procedure, section 1094.5, as may be

    amended from time to time.

 

    (3) The failure of the Controller or hearing officer to comply with

    the time requirements of this Section shall not cause the Controller

    or the hearing officer to lose jurisdiction over an appeal from the

    Agency's determination filed under this Section.

 

    (4) Upon the hearing officer's decision affirming or modifying the

    Agency's determination, the Contracting Party shall take the

    corrective action, including the payment of liquidated damages, if

    any, within 14 days of receiving the hearing officer's decision.

    When a Contracting Party fails to take corrective action within the

    time required by the provisions of this Section, the City may

    immediately pursue all available remedies against the Contracting

    Party.

 

    (e) Withholding of Payments by Controller.

 

    (1) When the Agency sends notice to a Contracting Party of its final

    determination that the Contracting Party has violated the

    requirements of this Chapter and of the Contracting Party's right of

    appeal to the Controller, the Agency may direct the Contracting

    Department and the Controller to deduct from the payments otherwise

    due to the Contracting Party the amounts that the Agency has

    determined the Contracting Party must pay to the City under Section

    12Q.3(a)(2) and as liquidated damages. The Controller, in issuing

    any warrant for any such payment, shall deduct the amounts specified

    by the Agency.

 

    (2) The Controller shall withhold these funds until (A) the hearing

    officer issues a decision finding that the Contracting Party does

    not owe all or a portion of the amount withheld, in which case the

    Controller shall release funds to the Contracting Party consistent

    with the hearing officer's decision or (B) the Contracting Party

    consents to the use of the funds to pay the City the amounts that

    the Agency or hearing officer found due. As to any funds being

    withheld for which neither (A) nor (B) applies, the Controller shall

    retain the funds until the hearing officer's decision is no longer

    subject to judicial review, at which time the Controller shall

    distribute amounts owed under Section 12Q.3(a)(2) in the appropriate

    account for the use of the Department of Public Health and amounts

    due as liquidated damages in the General Fund, provided that this

    action is consistent with any final determination of a court of

    competent jurisdiction. Notwithstanding the provisions of this

    subsection, the Agency may authorize the release of payments

    withheld from the Contracting Party under this Section if the Agency

    determines that the continued withholding of funds imposes a

    substantial risk of endangering public health or safety, interfering

    with a service or project that is essential to the City, or having

    an unreasonable adverse financial impact on the City.

 

    (Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.6. WAIVERS BY THE AGENCY DIRECTOR.*

 

    (a) The Agency Director or designee, in consultation with the

    Department of Public Health, shall waive the requirements of this

    Chapter when the Contracting Department has provided justification

    to the Agency Director, and the Agency Director has found that one

    of the following circumstances exists:

 

    (1) The needed service, project or property arrangement under the

    Contract or Lease is available only from a sole source;

 

    (2) Pursuant to Chapter 6 or 21 of the Administrative Code, the

    Contract or Lease is necessary to respond to an emergency that

    endangers the public health or safety;

 

    (3) There are no qualified responsive bidders or prospective vendors

    or tenants that comply with the requirements of this Chapter and the

    agreement is for a service, lease or project that is essential to

    the City or the public;

 

    (4) The public interest warrants the granting of a waiver because

    application of this Chapter would constitute an adverse impact on

    services or an unreasonable adverse financial impact on the City; or

 

    (5) (A) The services to be purchased are available under a bulk

    purchasing arrangement with a federal, state or local governmental

    entity;

 

    (B) Purchase under such arrangement will substantially reduce the

    City's cost of purchasing such services; and

 

    (C) Purchase under such an arrangement is in the best interest of

    the City or the public.

 

    (b) Each waiver shall be effective for the duration of the Contract

    or Lease. Subsequent waivers may be requested and either granted or

    denied.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Ord. 49-06,

    File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.7. SPECIAL WAIVER BY THE PUBLIC UTILITIES COMMISSION.*

 

    The General Manager of the Public Utilities Commission may waive the

    requirements of this Chapter where the Contractor or Subcontractor

    is providing to or on behalf of the San Francisco Public Utilities

    Commission services relating to:

 

    (a) The provision, conveyance or transmission of wholesale or bulk

    water, electricity or natural gas; or

 

    (b) Ancillary requirements such as spinning reserve, voltage

    control, or loading scheduling, as required for ensuring reliable

    services in accordance with good utility practice; provided, however:

 

    (1) The purchase of such services may not practically be

    accomplished through the City's standard competitive bidding

    procedures; and

 

    (2) The Contractor or Subcontractor is not providing direct, retail

    services to end users within the geographic boundaries of the City.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001)

 

    *SEC. 12Q.8. WAIVER THROUGH COLLECTIVE BARGAINING.*

 

    All or any portion of the applicable requirements of this Chapter

    may be waived in a bona fide collective bargaining agreement,

    provided that such waiver is explicitly set forth in such agreement

    in clear and unambiguous terms.

 

    (Added by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.9. PREEMPTION.*

 

    Nothing in this Chapter shall be interpreted or applied so as to

    create any power or duty in conflict with any Federal or State law.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered

    by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.10. EFFECTIVE DATE.*

 

    This Chapter shall become effective, and its requirements shall be

    included in all covered Contracts, Subcontracts, Leases and

    Subleases, 30 days after it is adopted or July 1, 2001, whichever

    occurs later. This Chapter is intended to have prospective effect only.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered

    by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.11. PERIOD OF SUSPENSION.*

 

    Contracting Parties shall not be required to provide any of the

    Health Care Accountability Components provided in Section 12Q.3 to

    their Covered Employees until such time as the Health Director has

    prepared, and the Health Commission has approved, minimum standards

    for health plan benefits pursuant to Section 12Q.3(a)(1). The Health

    Director and Health Commission shall proceed promptly to take these

    actions. From the date upon which the Health Commission approves

    such minimum standards forward, Contracting Parties shall provide

    the Health Care Accountability Components set forth in Section 12Q.3

    to their Covered Employees.

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered

    by Ord. 49-06, File No. 051908, App. 3/24/2006)

 

    *SEC. 12Q.12. SEVERABILITY.*

 

    If any part or provision of this Chapter, or the application of this

    Chapter to any person, location or circumstance, is enjoined or held

    invalid by a court of law, the remainder of this Chapter, including

    the application of such part or provisions to other persons,

    locations or circumstances, shall not be affected by such action and

    shall continue in full force and effect. To this end, the provisions

    of this Chapter are severable. Further, to the extent Section

    12Q.3(a)(2) may be enjoined or held invalid by a court of law, the

    Contracting Party may alternatively comply in accordance with

    Section 12Q.3(c)(2).

 

    (Added by Ord. 116-01, File No. 010848, App. 5/31/2001; Renumbered

    by Ord. 49-06, File No. 051908, App. 3/24/2006)