BILL NUMBER: AB 2249 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 9, 2010
PASSED THE ASSEMBLY AUGUST 12, 2010
AMENDED IN SENATE JULY 15, 2010
AMENDED IN SENATE JUNE 24, 2010
AMENDED IN ASSEMBLY MAY 11, 2010
AMENDED IN ASSEMBLY APRIL 28, 2010
AMENDED IN ASSEMBLY APRIL 13, 2010
INTRODUCED BY Assembly Member Ruskin
FEBRUARY 18, 2010
An act to add Section 14840 to the Government Code, and to amend
Section 999 of the Military and Veterans Code, relating to state
government.
LEGISLATIVE COUNSEL'S DIGEST
AB 2249, Ruskin. State government: small business or disabled
veteran business enterprise certification.
Existing law, the Small Business Procurement and Contract Act,
encourages the participation of a small business enterprise,
including, but not limited to, a microbusiness, or a disabled veteran
business enterprise that is certified by the Department of General
Services, in state contracts. Existing law requires those business
enterprises to submit certain information under penalty of perjury.
This bill would, during the process of certifying and determining
the eligibility of a small business or a disabled veteran business
enterprise, require an applicant or certified firm to submit to the
department a written declaration, under penalty of perjury, that all
information submitted, including the additional information for
disabled veteran business enterprises, is true and correct, and would
authorize the department to require, in certain cases, the owner of
the enterprise or small business, the applicant, or the certified
firm to complete and submit to the department a specified federal tax
form requesting a transcript of a tax return. By expanding the
definition of the existing crime of perjury, this bill would impose a
state-mandated local program.
Existing law defines "disabled veteran business enterprise" for
purposes of the California Disabled Veterans Business Enterprise
Program to mean a business certified by the administering agency as
meeting specified requirements, including, among other things, in the
case of a publicly owned business, that at least 51% of its stock be
owned by one or more disabled veterans, or in the case of a
subsidiary that is wholly owned by a parent corporation, that at
least 51% of the voting stock of the parent corporation be owned by
one or more disabled veterans.
This bill would instead specify that at least 51% of the stock or
voting stock be unconditionally owned by one or more disabled
veterans.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 14840 is added to the Government Code, to read:
14840. (a) In the process of certifying and determining the
eligibility of a disabled veteran business enterprise or a small
business enterprise, including a microbusiness, the department shall
require the applicant or certified firm to submit a written
declaration, under penalty of perjury, that the information submitted
to the department pursuant to this chapter, and in the case of a
disabled veteran enterprise all information submitted to the
department pursuant to Section 999.2 of the Military and Veterans
Code, is true and correct.
(b) (1) If the department determines that just cause exists, it
may require the owner of the disabled veteran business enterprise,
microbusiness, or small business, the applicant, or the certified
firm to complete and submit to the department a federal Form 4506-T
from the Internal Revenue Service, United States Department of the
Treasury, requesting a transcript of a tax return.
(2) For the purposes of this subdivision, "just cause" means
either of the following circumstances exists:
(A) The department receives a complaint regarding the certified
firm.
(B) The department determines, based on its findings during the
course of any certification eligibility review of the applicant or
certified firm, that the action described in paragraph (1) is
necessary.
SEC. 2. Section 999 of the Military and Veterans Code is amended
to read:
999. (a) This article shall be known as, and may be cited as, the
California Disabled Veteran Business Enterprise Program. The
California Disabled Veteran Business Enterprise Program is
established to address the special needs of disabled veterans seeking
rehabilitation and training through entrepreneurship and to
recognize the sacrifices of Californians disabled during military
service. It is the intent of the Legislature that every state
procurement authority honor California's disabled veterans by taking
all practical actions necessary to meet or exceed the disabled
veteran business enterprise participation goal of a minimum of 3
percent of total contract value.
(b) As used in this article, the following definitions apply:
(1) "Administering agency" means the Treasurer in the case of
contracts for professional bond services, and the Department of
General Services' Office of Small Business and Disabled Veteran
Business Enterprise Services, in the case of contracts governed by
Section 999.2.
(2) "Awarding department" means a state agency, department,
governmental entity, or other officer or entity empowered by law to
issue bonds or enter into contracts on behalf of the state.
(3) "Bonds" means bonds, notes, warrants, certificates of
participation, and other evidences of indebtedness issued by, or on
behalf of, the state.
(4) "Contract" includes any agreement or joint agreement to
provide professional bond services to the State of California or an
awarding department. "Contract" also includes any agreement or joint
development agreement to provide labor, services, materials,
supplies, or equipment in the performance of a contract, franchise,
concession, or lease granted, let, or awarded for, and on behalf of,
the state.
(5) (A) "Contractor" means any person or persons, regardless of
race, color, creed, national origin, ancestry, sex, marital status,
disability, religious or political affiliation, age, or any sole
proprietorship, firm, partnership, joint venture, corporation, or
combination thereof that submits a bid and enters into a contract
with a representative of a state agency, department, governmental
entity, or other officer empowered by law to enter into contracts on
behalf of the state. "Contractor" includes any provider of
professional bond services who enters into a contract with an
awarding department.
(B) "Disabled veteran business enterprise contractor,
subcontractor, or supplier" means any person or entity that has been
certified by the administering agency pursuant to this article and
that performs a "commercially useful function," as defined below, in
providing services or goods that contribute to the fulfillment of the
contract requirements:
(i) A person or an entity is deemed to perform a "commercially
useful function" if a person or entity does all of the following:
(I) (aa) Is responsible for the execution of a distinct element of
the work of the contract.
(ab) Carries out the obligation by actually performing, managing,
or supervising the work involved.
(ac) Performs work that is normal for its business services and
functions.
(II) Is not further subcontracting a portion of the work that is
greater than that expected to be subcontracted by normal industry
practices.
(ii) A contractor, subcontractor, or supplier will not be
considered to perform a "commercially useful function" if the
contractor's, subcontractor's, or supplier's role is limited to that
of an extra participant in a transaction, contract, or project
through which funds are passed in order to obtain the appearance of a
disabled veteran business enterprise participation.
(6) "Disabled veteran" means a veteran of the military, naval, or
air service of the United States, including, but not limited to, the
Philippine Commonwealth Army, the Regular Scouts, "Old Scouts," and
the Special Philippine Scouts, "New Scouts," who has at least a
10-percent service-connected disability and who is domiciled in the
state.
(7) (A) "Disabled veteran business enterprise" means a business
certified by the administering agency as meeting all of the following
requirements:
(i) It is a sole proprietorship at least 51 percent owned by one
or more disabled veterans or, in the case of a publicly owned
business, at least 51 percent of its stock is unconditionally owned
by one or more disabled veterans; a subsidiary that is wholly owned
by a parent corporation, but only if at least 51 percent of the
voting stock of the parent corporation is unconditionally owned by
one or more disabled veterans; or a joint venture in which at least
51 percent of the joint venture's management, control, and earnings
are held by one or more disabled veterans.
(ii) The management and control of the daily business operations
are by one or more disabled veterans. The disabled veterans who
exercise management and control are not required to be the same
disabled veterans as the owners of the business.
(iii) It is a sole proprietorship, corporation, or partnership
with its home office located in the United States, which is not a
branch or subsidiary of a foreign corporation, foreign firm, or other
foreign-based business.
(B) Notwithstanding subparagraph (A), after the death or the
certification of a permanent medical disability of a disabled veteran
who is a majority owner of a business that qualified as a disabled
veteran business enterprise prior to that death or certification of a
permanent medical disability, and solely for purposes of any
contract entered into before that death or certification, that
business shall be deemed to be a disabled veteran business enterprise
for a period not to exceed three years after the date of that death
or certification of a permanent medical disability, if the business
is inherited or controlled by the spouse or child of that majority
owner, or by both of those persons.
(8) "Foreign corporation," "foreign firm," or "foreign-based
business" means a business entity that is incorporated or has its
principal headquarters located outside the United States of America.
(9) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
(10) "Management and control" means effective and demonstrable
management of the business entity.
(11) "Professional bond services" include services as financial
advisers, bond counsel, underwriters in negotiated transactions,
underwriter's counsel, financial printers, feasibility consultants,
and other professional services related to the issuance and sale of
bonds.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.