SENATE BILL REPORT

SHB 20

BYHouse Committee on State Government (originally sponsored by Representatives H. Sommers, B. Williams, Brekke, Sayan, Holland, Wineberry and Belcher; by request of Legislative Budget Committee)

Revising the office of minority and women's business enterprises.

House Committe on State Government

Senate Committee on Governmental Operations

Senate Hearing Date(s):April 1, 1987

Majority Report:  Do pass as amended.

      Signed by Senators Halsan, Chairman; Garrett, Vice Chairman; DeJarnatt, Talmadge.

Senate Staff:Walt Corneille (786-7452); Barbara Howard (786-7410)

                  April 2, 1987

AS REPORTED BY COMMITTEE ON GOVERNMENTAL OPERATIONS, APRIL 1, 1987

BACKGROUND:

In 1983 the Legislature created the Office of Minority and Women's Business Enterprises (OMWBE).  The office is mandated to develop and maintain a central minority and women's business enterprise certification list for all state agencies and educational institutions.  Businesses seeking certification must file an application with OMWBE to demonstrate that they meet the criteria established by the office.  The criteria includes the element of ownership and excludes any consideration of size.

Current law allows imposition of a civil penalty of up to $1,000 if a person, firm, or union provides false information about compliance; interferes or prevents another's compliance; or commits other statutory violations.  Additionally, the state is provided remedies against a person, firm, corporation, or business that does not comply with the provisions of a contract.  The state may withhold payment; debar, suspend, or terminate the contract; or subject the contractor to civil penalties of 10 percent of the amount of the contract or $5,000, whichever is less.  Repeated violations by a contractor may disqualify the contractor from further participation in state contracting for a period of one year.

The Legislative Budget Committee (LBC) conducted a program and fiscal review of the office and recommended that the schedule for terminating the agency under the Sunset Act be changed to 1995; that OMWBE establish standards governing size of businesses eligible for participation; that authority be given to the state to impose increased sanctions for fraud and abuse; and that OMWBE no longer be required to report economic impact information.

SUMMARY:

Control and size of a business are added as criteria for certification of a minority or woman owned business.  In determining what constitutes a small business, the office shall use the same criteria as the Federal Small Business Act and its implementing regulations.

The state may impose sanctions and fines for misrepresentation and fraudulent conduct.  The office shall follow administrative proceedings before imposing sanctions or fines.  Fines may be imposed in an amount up to ten percent of the contract amount.  A contractor who wilfully and repeatedly violates a contract or any provision of this chapter risks debarment for a period of up to three years.  Agencies or institutions of higher education may pursue other statutory or contractual remedies in addition to those provided in this chapter.

The Attorney General may assist in the enforcement of this chapter through use of restraining orders and civil investigative procedures.

The office is no longer required to report to the legislature on the economic impact on the public and private sector of implementing this program.

The office is scheduled for sunset review in 1995.

SUMMARY OF PROPOSED SENATE AMENDMENT:

The office is required to investigate complaints of violations of the chapter and to cooperate with state and other governments and their minority and women's business enterprise programs in carrying out the purposes of the chapter.

Procedures and sanctions may be imposed for violation of an OMWBE rule as well as for violation of a statute or contract provision.  An additional penalty of up to $5,000 for each violation is provided for.

A technical change is made to clarify language on administrative procedures.

Fiscal Note:      none requested

Senate Committee - Testified: Ralph C. Ruff, Director, Office of Minority and Women's Business Enterprises, Jim Bush, WSDOT, Duke Schaub, AGC