HB396 By Representatives Drummond, Jackson, Clarke, Warren, Daniels, Gray, Lawrence, McCampbell and Hall RFD State Government Rd 1 05-MAR-20

SYNOPSIS: Under current law, there is no priority for women- or minority-owned businesses within the law governing state contracts for goods or services.

This bill would create a statewide disadvantaged business enterprise program. The Chief Procurement Officer would create a disadvantaged business enterprise certification process, and would identify programs designed to assist small and disadvantaged businesses.

This bill would create a priority for disadvantaged business enterprises in bids for state contracts for goods or services.

This bill would also create a Study Commission on Disadvantaged Business Enterprises.

A BILL TO BE ENTITLED AN ACT

Relating to state contracts for goods or services; to create a statewide disadvantaged business enterprise program; to direct the Chief Procurement Officer to establish a certification process by which a business may qualify as a disadvantaged business enterprise; to create a bidding priority for disadvantaged business enterprises; and to establish a study commission on disadvantaged business enterprises.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. Statement of Legislative Intent.

The Legislature hereby finds and declares all of the following:

(1) It is the policy and continual commitment of the State of Alabama to insure that all citizens, including Blacks, Hispanics, Asians, Native Americans, women, and all other minorities, are given equal participation opportunities in all aspects of American life, and particularly in the workings of the State of Alabama.

(2) Blacks, Hispanics, Asians, Native Americans, women, and other minorities may not be proportionately represented throughout state government in state contracts for goods and services and a plan to reduce the imbalance is desirable; however, business opportunity programs that favor the use of quotas and preferential treatment have been determined by the courts to be unconstitutional absent an express finding of past discrimination and a program narrowly tailored to address the effects of that past discrimination.

(3) The recognition and certification of an entity as a minority business enterprise would promote involvement and increase the level of minority participation in state procurement and the contracting of goods and services.

(4) For the above reasons, it is the policy of the State that the Chief Procurement Officer should provide reasonable procurement assistance to small and disadvantaged business in this state.

Section 2. This act shall be known and may be cited as the "Equity in State Contracting Act of 2020."

Section 3. Definitions.

(1) ADECA. The Alabama Department of Economic and Community Affairs.

(2) CHIEF PROCUREMENT OFFICER. The Director of the Division of Purchasing of the Alabama Department of Finance.

(3) CONTROLLED. Exercising the power to make policy decisions in a business.

(4) DISADVANTAGED BUSINESS ENTERPRISE. A business of which more than 50 percent of the voting shares or interest in the business is owned, controlled, and operated by a woman or a minority person and with respect to which more than 50 percent of the net profit or loss attributable to the business accrues to the women or minority shareholders.

(5) DEPARTMENT. The Alabama Department of Finance.

(6) DIVISION. The Division of Purchasing of the Alabama Department of Finance.

(7) ENTITY. Any natural person or entity organized under the laws of Alabama or the United States with the legal power to enter into a binding contract which bids or applies to bid on contracts let by a public entity, or which otherwise transacts or applies to transact business with a public entity.

(8) MINORITY. A person who is Black, Hispanic, Asian, an American Indian as recognized by the Bureau of Indian Affairs of the United States Department of the Interior, or is a member of another demographic group which is not a statistical majority.

(9) OPERATE. The activity of being involved in the day-to-day management of a business.

(10) PERSON. An individual, sole proprietorship, partnership, association, corporation, or other legal entity.

Section 4. (a) The Chief Procurement Officer shall identify programs designed to assist disadvantaged business enterprises in procurement activities governed by Chapter 16 of Title 41, Code of Alabama 1975. These programs may include, but are not limited to, staff assistance, special publications, source lists, solicitation mailing lists, and training programs.

(b) The Chief Procurement Officer, in his or her sole discretion, may make special provisions for progress payments as he or she may deem reasonably necessary to encourage procurement from disadvantaged business enterprises.

(c) The Chief Procurement Officer shall develop and implement a certification process by which an entity may qualify through the division as a disadvantaged business enterprise, and shall publish state certification criteria, once established, as well as the names and dates of certification of certified disadvantaged business enterprises.

(d) The Chief Procurement Officer shall identify and implement programs and initiatives with the goal of ensuring that 15% of all state contracts for goods and services are awarded to disadvantaged business enterprises.Section 5. Section 41-16-20, Code of Alabama 1975, is amended to read as follows:

§41-16-20.

"(a) With the exception of contracts for public works whose competitive bidding requirements are governed exclusively by Title 39, all contracts of whatever nature for labor, services, work, or for the purchase or lease of materials, equipment, supplies, other personal property or other nonprofessional services, involving fifteen thousand dollars ($15,000) or more, made by or on behalf of any state department, board, bureau, commission, committee, institution, corporation, authority, or office shall, except as otherwise provided in this article, be let by free and open competitive bidding, on sealed bids, to the lowest responsible bidder.

"(b) A "preferred vendor" shall be a person, firm, or corporation which is granted preference priority according to the following, in no particular order:

"(1) PRIORITY #1. Produces or manufactures the product within the state.

"(2) PRIORITY #2. Has an assembly plant or distribution facility for the product within the state.

"(3) PRIORITY #3. Is organized for business under the applicable laws of the state as a corporation, partnership, or professional association and has maintained at least one retail outlet or service center for the product or service within the state for not less than one year prior to the deadline date for the competitive bid.

"(4) PRIORITY #4. A business that is physically located in the state and that is more than 50 percent owned by a person who was discharged or released under conditions other than dishonorable and who has at least 24 months' active service in the United States' military, naval, or air service, or who has less than 24 months of active service in any of the foregoing and was separated with a service-connected disability, or a national guardsman or reservist who completed active federal service for purposes other than training or who served at least 180 days of continuous service for purposes other than training.

"(5) PRIORITY #5. A business that is physically located in the state and that has been certified by the Chief Procurement Officer as a disadvantaged business enterprise as defined in Section 2 of the act adding this amendatory language.

"(c) In the event a bid is received for the product or service from a person, firm, or corporation deemed to be a responsible bidder and a preferred vendor where any state higher education institution, department, board, bureau, commission, committee, institution, corporation, authority, or office is the awarding authority and the bid is no more than five percent greater than the bid of the lowest responsible bidder, the awarding authority may shall award the contract to the preferred vendor with the lowest bid."

Section 6. Study Commission; composition; duties.

(a) There is created a Study Commission on Disadvantaged Business Enterprises in the State of Alabama, to assess on what state initiatives could assist business enterprises owned by women or members of a social or economic minority.

(b) The commission shall consist of one members appointed or designated by each of the following:

(1) The Chief Procurement Officer.

(2) The Speaker of the House of Representatives.

(3) The President of the Senate.

(4) The Director of ADECA.

(5) The Governor's Office of Minority Affairs.

(c) The commission shall hold its initial meeting no later than three months following the effective date of this act. At the first meeting, to be called by the Governor's Office of Minority Affairs, the commission shall elect a chair and other officers as determined by the commission, and shall set dates, times, and locations for subsequent meetings.

(d) The members of the commission shall serve without compensation other than travel reimbursement that may be paid by the appointing authority according to state law or existing policies or rules.

(e) The members of the commission shall meet at least four times in the two years following the effective date of this act. At the conclusion of that two-year period, the commission shall report to the Legislature its findings regarding actions desired or necessary for promoting participation of disadvantaged business enterprises in contracts awarded by the state for goods or services.

(f) Upon reporting its findings, the commission shall be dissolved.

Section 7. The Division of Purchasing within the Department of Finance may adopt rules to implement this act.

Section 8. This act, except for Section 5, shall become effective on October 1, 2020, following its passage and approval by the Governor, or its otherwise becoming law. Section 5 shall become effective on October 1, 2022, following the passage and approval by the Governor of this act, or its otherwise becoming law.

State Contracts

Minorities

Business and Commerce

Finance Department

Boards and Commissions