SENATE BILL REPORT

SB 5202

BYSenators Talmadge, Zimmerman, Wojahn and Lee; by request of Legislative Budget Committee

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

Senate Committee on Governmental Operations

Senate Hearing Date(s):February 2, 1987; February 9, 1987

Majority Report:  That Substitute Senate Bill No. 5202 be substituted therefor, and the substitute bill do pass.

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

Senate Staff:Walt Corneille (786-7452); Barbara Howard (786-7410)  February 10, 1987

AS REPORTED BY COMMITTEE ON GOVERNMENTAL OPERATIONS, FEBRUARY 9, 1987

BACKGROUND:

The Office of Minority and Women's Business Enterprises (OMWBE) was created in 1983 to increase opportunities for participation of minority and women's business enterprises in state contracting and purchasing.  In September 1986, the required initial program and fiscal review and report was completed by the Legislative Budget Committee (LBC) and the Office of Financial Management.  The report noted several recommendations requiring statutory changes.

The LBC recommended that standards be adopted governing the size of businesses entitled to certification and that OMWBE not be required to provide economic impact information in its annual report.  The LBC also suggested cancelling the preliminary report by the Joint Committee on Sunset due June 30, 1990, and scheduling the chapter for sunset termination in 1995.

SUMMARY:

No business is entitled to certification for OMWBE programs if it exceeds the federal size standards for a small business.  The OMWBE is not required to provide information regarding the economic impact of its programs on the public and private sector.  The June 30, 1990 sunset requirement is repealed and the office is set for sunset termination on June 30, 1995.

EFFECT OF PROPOSED SUBSTITUTE:

Although the original bill was not discussed in committee, new provisions are added providing sanctions for violation of the certification process .

A business must be owned and controlled by a minority or woman to be certified for OMWBE programs.  All applications for certification must be sworn under oath.

It is a violation of this chapter to fraudulently obtain certification or moneys or to knowingly make a false statement regarding certification.  The penalty for violation of the law or a contract provision is up to 10 percent of the contract amount or $5,000 for each violation.  The OMWBE may adopt rules implementing the imposition of penalties.

The Attorney General is authorized to conduct investigations prior to instituting a civil action and is given powers to compel the production of documents, oral testimony and answers to interrogatories.  The Attorney General is also authorized to bring a civil action to restrain any prohibited act.  Costs and attorneys' fees may be recovered.

An agency or educational institution is not limited to procedures or sanctions under this chapter but may pursue any other action provided by statute or contract.

Fiscal Note:      none requested

Senate Committee - Testified: Rob Krell, LBC; Larry Stevens, NECA