FINAL BILL REPORT

SB 5529

                                  C 328 L 87

BYSenator Fleming

Providing for certification of minority and women-owned and controlled business enterprises.

Senate Committee on Governmental Operations

House Committe on State Government

SYNOPSIS AS ENACTED

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 the 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.

In order to qualify for OMWBE programs, a business must be certified as a minority or women's owned business.  It has been suggested that provisions be included in the enabling statute to prohibit fraud or misrepresentation in the certification process and establish penalties and sanctions in order to ensure that only businesses which are actually owned and operated by a minority or women become certified.

The certification of businesses for participation in OMWBE programs is performed by several entities separate from OMWBE.  It has been suggested that if the certification process for minority and women's business enterprises were centralized, the burden on affected business would be substantially reduced and unnecessary duplication of efforts would be eliminated.

SUMMARY:

The OMWBE must define a small business concern consistent with the federal small business requirements.  No business is entitled to certification for OMWBE programs if it exceeds the size standards for a small business concern established by the office.  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  The June 30, 1990 sunset requirement is repealed and the chapter is set for sunset termination on June 30, 1995.

The OMWBE is required to consult with the minority and women's business enterprises advisory committee in carrying out any of the specified functions it is authorized to perform.

A business must be owned and controlled by a minority or woman to be certified for OMWBE programs.  It is a violation of this chapter to fraudulently obtain certification or moneys or to knowingly make a false statement regarding certification.  All applications for certification must be sworn under oath.  The penalty for violation of the law or a contract provision is up to 10 percent of the contract amount or up to $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 interrogations.  The Attorney General is authorized to bring a civil action to restrain any prohibited act.  Costs and attorney's 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.

The office is required to investigate complaints of violations 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.

The OMWBE is established as the sole authority for certifying minority, disadvantaged and women's business enterprises for OMWBE programs.  Certification applies for participation in programs with the state or any other political subdivision within the state.  Statewide certification is effective January 1, 1988.  Any business certified by specified governmental bodies prior to January 1, 1988 is deemed certified by OMWBE as of that date.

The Council of Minority and Women's Business Enterprises is created to assist and advise the OMWBE in the certification process.  Membership of the Council is specified.  The section establishing the Council is to expire on June 30, 1991.

If there is a belief that a business should not have been certified, a process is established to petition the office for reconsideration of any certification issued prior to January 1, 1988.  Parties who may initiate a petition are specified.  A certification remains in effect during the petition process.

VOTES ON FINAL PASSAGE:

      Senate    42     7

      House 95   0 (House amended)

      Senate    43     2 (Senate concurred)

EFFECTIVE:May 12, 1987