SAN FRANCISCO (TheBlaze/AP) — Furor over the Boy Scouts of America’s stance on gays continues to rage. Now, California lawmakers are considering taking some tax exemptions away from youth groups that do not accept gay, transgender or atheist members — a move intended to pressure the Scouts to lift its ban on gay Scouts and troop leaders.

Some cities have withdrawn free rent and other subsidies from the Boy Scouts over the years, but legislation introduced by state Sen. Ricardo Lara would make California the first state to target the Scouts for its anti-gay policy.

The Long Beach Democrat’s bill, SB 323, is scheduled for its first committee hearing on Wednesday.

“Our state values the important role that youth groups play in the empowerment of our next generation; this is demonstrated by rewarding organizations with tax exemptions supported financially by all Californians,” Lara said. “SB 323 seeks to end the unfortunate discriminatory and outdated practices by certain youth groups.”

Calif. Tax Bill Seeks to Punish Boy Scouts for Gay Ban | Sen. Ricardo Lara, Youth Equality Act

In this Feb 6, 2013 file photo, from left, Joshua Kusterer, 12, Nach Mitschke, 6, and Wyatt Mitschke, 4, salute as they recite the pledge of allegiance during the Save Our Scouts Prayer Vigil and Rally in front of the Boy Scouts of America National Headquarters in Dallas, Texas. Credit: AP

The Boy Scouts of America reaffirmed the Texas-based organization’s ban on openly gay members last summer then announced in January that it was revisiting the decision.

In February, the group said it would submit a resolution on rescinding the policy to the 1,400 members of Scouting’s National Council in May.

Deron Smith, a spokesman for the Boy Scouts of America, told The Associated Press on Tuesday that the organization was aware of Lara’s bill and would provide feedback on it to the Senate Governance and Finance Committee before Wednesday’s hearing.

“Beyond that, and our previous statements on membership standards, we don’t have anything to add at this time,” Smith said.

The legislation, also known as the Youth Equality Act, would deny tax-exempt status to nonprofit youth groups that discriminate on the basis of gender identity, race, sexual orientation, nationality, religion or religious affiliation.

As a result, it would require those organizations to pay corporate taxes on donations, membership dues, camp fees and other sources of income, and to obtain sellers permits and pay sales taxes on food, beverages and homemade items sold at fundraisers. Because all tax returns are private in California, supporters do not know how big a tax hit the Boy Scouts would take if the proposal passes.

Calif. Tax Bill Seeks to Punish Boy Scouts for Gay Ban | Sen. Ricardo Lara, Youth Equality Act

In this Feb. 4, 2013 file photo James Oliver, left, hugs his brother and fellow Eagle Scout, Will Oliver, who is gay, as Will and other supporters carry four boxes filled with a petition in front of the Boy Scouts of America headquarters, in Dallas, Texas. Credit: AP 

Churches that sponsor Boy Scouts troops would not lose their underlying tax-exempt status, but an array of nonprofits, ranging from the Young Men’s Christian Association and Pop Warner football to the American Youth Soccer Association and 4-H clubs would have their tax returns and membership policies scrutinized by the state Franchise Tax Board, according to the nonpartisan Legislative Analyst’s Office.

As a tax measure, the bill requires a two-thirds vote instead of a simple majority from both houses of the Legislature and the signature of Gov. Jerry Brown to become law.

“We would consider all legal options, including litigation, should SB 323 be enacted, but right now we are focusing on the legislative front,” Pacific Justice Institute staff attorney Matthew McReynolds said. “We’re not convinced that moderates will support, or the governor will sign, a tax increase that targets organizations based on ideology. ”

The institute and other legal aid groups that represent religious conservatives have cautioned lawmakers that the measure conflicts with a 2000 U.S. Supreme Court ruling that upheld the right of private groups such as the Boy Scouts to exclude gays and lesbians from serving as adult leaders.

“SB 323′s primary purpose is to penalize BSA based on its constitutionally protected membership policy and the values that underlie it,” lawyers for the Arizona-based Alliance Defending Freedom wrote in a letter to lawmakers last week. “This type of targeted punishment of a group based on how it exercises its associational and free speech rights violates the First Amendment.”

Calif. Tax Bill Seeks to Punish Boy Scouts for Gay Ban | Sen. Ricardo Lara, Youth Equality Act

A sign for the National Office outside the Boy Scouts of America Headquarters on February 4, 2013 in Irving, Texas. The BSA national council announced they were considering to leave the decision of inclusion of gays to the local unit level. U.S. President Barack Obama urged the organization to end a ban on gays. Credit: Getty Images 

The Legislative Analyst’s Office, however, has assured the Legislature it has authority to decide which organizations qualify for tax breaks.

An analysis of the bill points to a 2006 ruling in which the California Supreme Court said the city of Berkeley could end its half-century-old practice of giving a nautical-themed offshoot of the Boy Scouts free rent at the city marina because of its gay ban.

The California Association of Nonprofits also has expressed concerns about the bill but is not taking an official position opposing it, Public Policy Director Kris Lev-Twombly said.

“In general, we think the place for ruling on discrimination should be in the courts rather than through the tax code,” Lev-Twombly said.

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