BP BHEAD INT H

AN ACT Relating to providing entrepreneurial opportunities for disabled persons; amending RCW 39.19.010, 39.19.020, 39.19.030, 39.19.060, 39.19.070, 39.19.080, 39.19.120, 39.19.150, 39.19.170, and 39.19.200; adding new sections to chapter 39.19 RCW; creating new sections; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 39.19.010 and 1987 c 328 s 1 are each amended to read as follows:

The legislature finds that ((~~minority and women-owned~~)) businesses owned by minorities, women, and disabled persons are significantly under-represented and have been denied equitable competitive opportunities in contracting. It is the intent of this chapter to mitigate societal discrimination and other factors in participating in public works and in providing goods and services and to delineate a policy that an increased level of participation by ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons is desirable at all levels of state government. The purpose and intent of this chapter are to provide the maximum practicable opportunity for increased participation by ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons in participating in public works and the process by which goods and services are procured by state agencies and educational institutions from the private sector.

Sec. 2. RCW 39.19.020 and 1987 c 328 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) ((~~"Advisory committee" means the advisory committee on minority and women's business enterprises.~~

~~(2)~~)) "Director" means the director of the office of minority ((~~and~~)), women's, and disabled persons' business enterprises.

(2) "Disabled person" means a person that has a determinable physical or mental impairment that substantially limits a major life activity.

(3) "Educational institutions" means the state universities, the regional universities, The Evergreen State College, and the community colleges.

(4) "Goals" means annual overall agency goals, expressed as a percentage of dollar volume, for participation by ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons and shall not be construed as a minimum goal for any particular contract or for any particular geographical area. It is the intent of this chapter that such overall agency goals shall be achievable and shall be met on a contract-by-contract or class-of-contract basis. The goal for disabled persons' businesses shall be three percent.

(5) "Goods and/or services" includes professional services and all other goods and services.

(6) "Office" means the office of minority ((~~and~~)), women's, and disabled persons' business enterprises.

(7) "Person" includes one or more individuals, partnerships, associations, organizations, corporations, cooperatives, legal representatives, trustees and receivers, or any group of persons.

(8) "Procurement" means the purchase, lease, or rental of any goods or services.

(9) "Public works" means all work, construction, highway and ferry construction, alteration, repair, or improvement other than ordinary maintenance, which a state agency or educational institution is authorized or required by law to undertake.

(10) "State agency" includes the state of Washington and all agencies, departments, offices, divisions, boards, commissions, and correctional and other types of institutions.

Sec. 3. RCW 39.19.030 and 1989 c 175 s 85 are each amended to read as follows:

There is hereby created the office of minority ((~~and~~)), women's, and disabled persons' business enterprises. The governor shall appoint a director for the office, subject to confirmation by the senate. The director may employ a deputy director and a confidential secretary, both of which shall be exempt under chapter 41.06 RCW, and such staff as are necessary to carry out the purposes of this chapter.

The office ((~~shall~~)) may consult with ((~~the~~)) a minority ((~~and~~)), women's, and disabled persons' business enterprises ad hoc advisory committee, established pursuant to RCW 39.19.041, to((:)) accomplish the purpose stated in this section.

The office shall:

(1) Develop, plan, and implement programs to provide an opportunity for participation by qualified ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons in public works and the process by which goods and services are procured by state agencies and educational institutions from the private sector;

(2) Develop a comprehensive plan insuring that qualified ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons are provided an opportunity to participate in public contracts for public works and goods and services;

(3) Identify barriers to equal participation by qualified ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons in all state agency and educational institution contracts;

(4) Establish annual overall goals for participation by qualified ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons for each state agency and educational institution to be administered on a contract-by-contract basis or on a class-of-contracts basis and implement goals for businesses owned and controlled by disabled persons in conformance with this act;

(5) Develop and maintain a central minority ((~~and~~)), women's, and disabled persons' business enterprise certification list for all state agencies and educational institutions. No business is entitled to certification under this chapter unless it meets the definition of small business concern as established by the office. All applications for certification under this chapter shall be sworn under oath;

(6) Develop, implement, and operate a system of monitoring compliance with this chapter;

(7) Adopt rules under chapter 34.05 RCW, the Administrative Procedure Act, governing: (a) Establishment of agency goals; (b) development and maintenance of a central minority ((~~and~~)), women's, and disabled persons' business enterprise certification program, including a definition of "small business concern" which shall be consistent with the small business requirements defined under section 3 of the Small Business Act, 15 U.S.C. Sec. 632, and its implementing regulations as guidance; (c) procedures for monitoring and enforcing compliance with goals, regulations, contract provisions, and this chapter; and (d) utilization of standard clauses by state agencies and educational institutions, as specified in RCW 39.19.050;

(8) Submit an annual report to the governor and the legislature outlining the progress in implementing this chapter;

(9) Investigate complaints of violations of this chapter with the assistance of the involved agency or educational institution; and

(10) Cooperate and act jointly or by division of labor with the United States or other states, and with political subdivisions of the state of Washington and their respective minority, socially and economically disadvantaged ((~~and~~)), women, and disabled persons business enterprise programs to carry out the purposes of this chapter. However, the power which may be exercised by the office under this subsection permits investigation and imposition of sanctions only if the investigation relates to a possible violation of this chapter ((~~39.19 RCW~~)), and not to violation of local ordinances, rules, regulations, however denominated, adopted by political subdivisions of the state.

Sec. 4. RCW 39.19.060 and 1993 c 512 s 9 are each amended to read as follows:

Each state agency and educational institution shall comply with the annual goals established for that agency or institution under this chapter for public works and procuring goods or services. This chapter applies to all public works and procurement by state agencies and educational institutions, including all contracts and other procurement under chapters 28B.10, 39.04, 39.29, 43.19, and 47.28 RCW. Each state agency shall adopt a plan, developed in consultation with the director ((~~and the advisory committee~~)), to insure that ((~~minority and women-owned~~)) businesses owned by minorities, women, and disabled persons are afforded the maximum practicable opportunity to directly and meaningfully participate in the execution of public contracts for public works and goods and services. The plan shall include specific measures the agency will undertake to increase the participation of certified ((~~minority and women-owned~~)) businesses owned by minorities, women, and disabled persons. The office shall annually notify the governor, the state auditor, and the legislative budget committee of all agencies and educational institutions not in compliance with this chapter.

Sec. 5. RCW 39.19.070 and 1994 c 15 s 1 are each amended to read as follows:

It is the intent of this chapter that the goals established under this chapter for participation by ((~~minority and women-owned and controlled~~)) businesses owned and controlled by minorities, women, and disabled persons be achievable. If necessary to accomplish this intent, contracts may be awarded to the next lowest responsible bidder in turn, or all bids may be rejected and new bids obtained, if the lowest responsible bidder does not meet the goals established for a particular contract under this chapter. The dollar value of the total contract used for the calculation of the specific contract goal may be increased or decreased to reflect executed change orders. An apparent low-bidder must be in compliance with the contract provisions required under this chapter as a condition precedent to the granting of a notice of award by any state agency or educational institution.

Sec. 6. RCW 39.19.080 and 1987 c 328 s 5 are each amended to read as follows:

(1) A person, firm, corporation, business, union, or other organization shall not:

(a) Prevent or interfere with a contractor's or subcontractor's compliance with this chapter, or any rule adopted under this chapter;

(b) Submit false or fraudulent information to the state concerning compliance with this chapter or any such rule;

(c) Fraudulently obtain, retain, attempt to obtain or retain, or aid another in fraudulently obtaining or retaining or attempting to obtain or retain certification as a minority ((or)), women's, or disabled persons' business enterprise for the purpose of this chapter;

(d) Knowingly make a false statement, whether by affidavit, verified statement, report, or other representation, to a state official or employee for the purpose of influencing the certification or denial of certification of any entity as a minority ((or)), women's, or disabled persons' business enterprise;

(e) Knowingly obstruct, impede, or attempt to obstruct or impede any state official or employee who is investigating the qualification of a business entity that has requested certification as a minority ((or)), women's, or disabled persons' business enterprise;

(f) Fraudulently obtain, attempt to obtain, or aid another person in fraudulently obtaining or attempting to obtain public moneys to which the person is not entitled under this chapter; or

(g) Knowingly make false statements that any entity is or is not certified as a minority ((or)), women's, or disabled persons' business enterprise for purposes of obtaining a contract governed by this chapter.

(2) Any person or entity violating this chapter or any rule adopted under this chapter shall be subject to the penalties in RCW 39.19.090. Nothing in this section prevents the state agency or educational institution from pursuing such procedures or sanctions as are otherwise provided by statute, rule, or contract provision.

Sec. 7. RCW 39.19.120 and 1987 c 328 s 7 are each amended to read as follows:

The office shall be the sole authority to perform certification of ((~~minority business enterprises, socially and economically disadvantaged business enterprises, and women's~~)) business enterprises owned and controlled by minorities, socially and economically disadvantaged, women, or disabled persons throughout the state of Washington. Certification by the state office will allow these firms to participate in programs for these enterprises administered by the state of Washington, any city, town, county, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation within the state of Washington.

This state-wide certification process will prevent duplication of effort, achieve efficiency, and permit local jurisdictions to further develop, implement, and/or enhance comprehensive systems of monitoring and compliance for contracts issued by their agencies.

Sec. 8. RCW 39.19.150 and 1987 c 328 s 10 are each amended to read as follows:

(1) Any city, county, town, special purpose district, public corporation created by the state, municipal corporation, or quasi-municipal corporation having reason to believe that a particular minority ((~~and~~)), women's, or disabled persons' business enterprise should not have been certified under RCW 39.19.140 may petition the office for reconsideration. The basis for the petition may be one or more of the following:

(a) The office's rules or regulations were improperly applied; or

(b) Material facts relating to the minority ((~~and~~)), women's, or disabled persons' business enterprise's certification application to the office are untrue.

(2) The petitioner shall carry the burden of persuasion. The affected minority ((or)), women's, or disabled persons' business enterprise shall receive notice of the petition and an opportunity to respond.

(3) After reviewing the information presented in support of and in opposition to the petition, the office shall issue a written decision, granting or denying the petition. If the office grants the petition, it may revoke, suspend, or refuse to renew the certification or impose sanctions under this chapter as appropriate.

(4) The office's decision on a petition is administratively final and the rights of appeal set out in the office regulations shall apply. A certification shall remain in effect while a petition is pending.

Sec. 9. RCW 39.19.170 and 1993 c 512 s 10 are each amended to read as follows:

(1) State agencies shall not require a performance bond for any public works project that does not exceed twenty-five thousand dollars awarded to a prequalified and certified ((~~minority or woman-owned~~)) business owned and controlled by minorities, women, and disabled persons that has been prequalified as provided under subsection (2) of this section.

(2) A limited prequalification questionnaire shall be required assuring:

(a) That the bidder has adequate financial resources or the ability to secure such resources;

(b) That the bidder can meet the performance schedule;

(d) That all equipment to be used is adequate and functioning and that all equipment operators are qualified to operate such equipment.

Sec. 10. RCW 39.19.200 and 1993 c 195 s 1 are each amended to read as follows:

The minority ((~~and~~)), women's, and disabled persons' business enterprises account is created in the custody of the state treasurer. All receipts from RCW 39.19.210, 39.19.220, and 39.19.230 shall be deposited in the account. Expenditures from the account may be used only for the purposes defraying all or part of the costs of the office in administering this chapter. Only the director or the director's designee may authorize expenditures from the account. Moneys in the account may be spent only after appropriation.

NEW SECTION. Sec. 11. A new section is added to chapter 39.19 RCW to read as follows:

(1) At five-year intervals from the effective date of this act, the office shall review the progress of the departments in meeting the three percent goal with input from the business community, including disabled persons' businesses, and shall make recommendations to the legislature regarding continuation, increases, or decreases in the percentage goal. The recommendations shall be based upon the number of businesses which are owned by disabled persons and on the continued need to encourage and promote disabled person's entrepreneurial activities.

(2) It shall be the goal of each department or agency which does not meet the established goal to award each year to disabled persons' business enterprises not less than one hundred fifty percent of the actual expenditures it awarded to disabled persons' business enterprises in the preceding year until not less than three percent of the total expenditures is achieved.

NEW SECTION. Sec. 12. A new section is added to chapter 39.19 RCW to read as follows:

(1) A capital "revolving" loan fund program for small loans under one hundred thousand dollars and microloans under ten thousand dollars shall be established by the office to provide reduced interest rate loans to qualified disabled persons for capital assistance. These loans shall emphasize providing funds for business start-up and purchase of accommodations and adaptive equipment. The legislature may authorize the issuance of bonds on behalf of the state of Washington to provide funds for this program.

(2) Disabled persons shall also be provided full access to small business development centers, training seminars, and other assistance programs as other types of minority, disadvantaged, and women's businesses.

NEW SECTION. Sec. 13. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 14. If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. The rules under this act shall meet federal requirements that are a necessary condition to the receipt of federal funds by the state.

NEW SECTION. Sec. 15. Contracts entered into before September 1, 1996, are not subject to this act.

NEW SECTION. Sec. 16. This act shall take effect July 1, 1996.