BILL NUMBER: SB 755 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 6, 2009
INTRODUCED BY Senator Negrete McLeod
FEBRUARY 27, 2009
An act to amend, repeal, and add Sections 14838.5 and 14839 of,
and to add and repeal Chapter 15 (commencing with Section 8899.50) of
Division 1 of Title 2 of, the Government Code, and to amend Section
19404 of the Welfare and Institutions Code, relating to state
contracts.
LEGISLATIVE COUNSEL'S DIGEST
SB 755, as amended, Negrete McLeod. State contracts: participation
goals: persons with developmental disabilities business enterprises.
Existing law establishes participation goals for various
enterprises to participate in contracts with state departments
awarded for construction, services, materials, supplies, equipment,
alterations, repairs, or improvements.
This bill would establish statewide participation goals of not
less than 1% for persons with developmental disabilities business
enterprises to participate in contracts awarded by a state agency for
goods and services, and require, until June 30, 2014, that each
state agency awarding contracts take specified actions to encourage
that participation, as provided.
This bill would impose a specified
civil penalty penalties for
initial the first and subsequent violations of
providing false or fraudulent information with respect to the
qualification of a persons with developmental disabilities business
enterprise, and would prohibit the person or entity that made the
false or fraudulent statement from bidding on or participating in
state contracts for specified periods of time.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 15 (commencing with Section 8899.50) is added
to Division 1 of Title 2 of the Government Code, to read:
CHAPTER 15. PERSONS WITH DEVELOPMENTAL DISABILITIES BUSINESS
ENTERPRISE PARTICIPATION GOALS FOR STATE CONTRACTS
8899.50. (a) This chapter shall be known, and may be cited, as
the Persons with Developmental Disabilities Business Enterprise
Program.
(b) The Legislature finds and declares all of the following:
(1) There were 215,000 persons with developmental disabilities in
California in 2006, and of these persons, 86,265 were persons of
working age, between the ages of 22 and 61 years.
(2) Fewer than 20,000, or 23 percent, of the persons of working
age with developmental disabilities engage in any form of employment.
(3) Many persons with developmental disabilities have expressed
their desire to work and earn wages as productive members of society.
(4) Persons with developmental disabilities include persons whose
disabilities present significant challenges to locate and secure
employment.
(5) Often, larger than the challenge of the disability itself, is
the lack of recognition by employers of the skills, abilities, and
dedication of persons with developmental disabilities to work
effectively.
(6) The State of California has an opportunity to take proactive
steps to contract with companies that are owned, managed, or
controlled by, or that employ, persons with developmental
disabilities.
(c) It is the intent of the Legislature to do all of the
following:
(1) Recognize the potential contribution of persons with
developmental disabilities to the workforce in the state.
(2) Encourage state agencies to contract with companies owned,
managed, or controlled by, or that employ, persons with developmental
disabilities, thereby encouraging greater independence and community
involvement.
(3) Reduce pressure on the state budget by encouraging persons
with developmental disabilities to earn wages, pay taxes, and collect
fewer state benefits.
(4) Have state agencies take all practical actions to meet or
exceed the persons with developmental disabilities business
enterprise participation goals of not less than 1 percent of the
number of contracts for goods or services awarded by state agencies.
8899.51. As used in this chapter:
(a) "Awarding department" means any state agency, department,
governmental entity, or other officer or entity empowered by law to
enter into contracts for, and on behalf of, the State of California.
(b) "Contract" includes any agreement or joint development
agreement to provide goods or services in the performance of a
contract, franchise, concession, or lease granted, let, or awarded
for, and on behalf of, the State of California. "Goods or services"
include labor, services, materials, supplies, equipment, or other
goods.
(c) "Commercially useful function" means a function performed by a
persons with developmental disabilities business enterprise in which
the persons with developmental disabilities business enterprise does
all of the following:
(1) Is responsible for the execution of a distinct element of the
work of the contract for goods or services.
(2) Carries out its obligation by actually performing, managing,
or supervising the work involved.
(3) Performs work that is normal for its business services and
functions.
(4) Is not subcontracting a portion of the work that is greater
than that expected to be subcontracted by normal industry practice.
A persons with developmental disabilities business enterprise
shall not be considered to perform a commercially useful function if
its 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 participation by a persons with
developmental disabilities business enterprise.
(d) "Contractor" means any individual, firm, partnership, joint
venture, corporation, limited liability company, organization, or
other person or entity, or combination thereof, that submits a bid
and enters into a contract. A contractor includes a subcontractor or
a supplier that provides goods or services with respect to a
contract.
(e) "Developmental disability" means a disability, specified in
subdivision (a) of Section 4512 of the Welfare and Institutions Code,
rendering the affected person eligible to participate in programs of
rehabilitation, education, or social services conducted by or on
behalf of a public agency.
(f) "Goal" means a numerically expressed objective that awarding
departments and contractors are required to make efforts to achieve.
(g) "Persons with developmental disabilities business enterprise"
means a business or organization certified pursuant to regulations
described in Section 8899.54 as meeting any of the following:
(1) A business concern at least 51 percent owned by one or more
persons with a developmental disability.
(2) A business concern managed by, and the daily business
operations controlled by, one or more persons with a developmental
disability.
(3) A community-based nonprofit organization that employs persons
with a developmental disability that meets any of the following
conditions:
(A) The organization operates under a special certificate issued
pursuant to Section 1191.5 of Title 29 of the United States Code.
(B) The organization has a special license issued to it under
Section 214 of Title 29 of the United States Code.
(C) The organization meets the criteria of Chapter 13 (commencing
with Section 4850) of Division 4.5 of the Welfare and Institutions
Code for providing habilitation services.
8899.52. Notwithstanding any other law, all contracts awarded by
an awarding department shall have statewide participation goals of
not less than 1 percent for persons with developmental disabilities
business enterprises. These goals apply to the total number of
contracts granted, let, or awarded each year by the awarding
department.
8899.53. In order to encourage the participation of persons with
developmental disabilities business enterprises in state contracts
for goods or services, each awarding department shall, consistent
with Section 14839, do all of the following:
(a) Advertise all upcoming opportunities to bid on competitively
bid contracts in the California State Contracts Register and include
in the advertisement an Internet link to information for prospective
bidders, including, but not limited to, general bidding procedures
and how to properly prepare a bid for those contracts.
(b) Provide information to persons with developmental disabilities
business enterprises regarding training and technical assistance
that is available to assist these persons with developmental
disabilities business enterprises in understanding and bidding on
contracts.
8899.54. (a) The Department of General Services shall adopt
regulations for the purpose of implementing this chapter. The
Department of General Services shall consult with the State
Department of Developmental Services with respect to the
implementation of this chapter and the adoption of these regulations.
Emergency regulations consistent with this section may be adopted
without review and approval by the Office of Administrative Law if
adopted within 90 days of the effective date of this chapter.
(b) The regulations shall include the process and procedures for
certifying persons with developmental disabilities business
enterprises, consistent with and in coordination with the
certification process and procedures for small businesses and
disabled veteran business enterprises in Section 14839.
(c) The regulations shall require a persons with developmental
disabilities business enterprise to provide goods or services that
contribute to the fulfillment of the contract requirements by
performing a commercially useful function.
8899.55. In implementing this chapter, the awarding department
shall utilize existing resources such as the State Department of
Developmental Services.
8899.56. (a) A person or entity shall not:
(1) Knowingly and with intent to defraud, fraudulently obtain,
attempt to obtain, or aid another person or entity in fraudulently
obtaining or attempting to obtain, public moneys, contracts, or funds
expended under a contract, that are awarded by an awarding
department, to which the person or entity is not entitled under this
chapter.
(2) Knowingly and with intent to defraud, fraudulently represent
participation of a persons with developmental disabilities business
enterprise in order to obtain or retain a contract.
(3) Willfully and knowingly make or subscribe to any statement,
declaration, or other document that is fraudulent or false as to any
material matter, whether or not that falsity or fraud is committed
with the knowledge or consent of the person authorized or required to
present the declaration, statement, or document.
(4) Willfully and knowingly aid or assist in, or procure, counsel,
or advise the preparation or presentation of a declaration,
statement, or other document that is fraudulent or false as to any
material matter, regardless of whether that falsity or fraud is
committed with the knowledge or consent of the person authorized or
required to present the declaration, statement, or document.
(5) Willfully and knowingly obstruct, impede, or attempt to
obstruct or impede, any state official or employee who is
investigating the qualifications of a person or entity represented to
be a persons with developmental disabilities business enterprise.
(6) Establish, or knowingly aid in the establishment of, or
exercise control over, a person or entity found to have violated any
of paragraphs (1) to (5), inclusive.
(b) Any person or entity that violates any of the provisions of
subdivision (a) shall be liable for a civil penalty of not less than
ten thousand dollars ($10,000) or more than thirty thousand dollars
($30,000) for the first violation, and a civil penalty of not less
than thirty thousand dollars ($30,000) or more than fifty thousand
dollars ($50,000) for each additional or subsequent violation. A
person or entity that violates any of the provisions of subdivision
(a) shall pay all costs and attorney's fees incurred by the plaintiff
in a civil action brought pursuant to this section, including costs
incurred by the awarding department for any investigations that led
to the finding of the violation.
(c)
(b) (1) A person or entity, participating as either a
contractor, subcontractor, or supplier, that violates any of the
provisions of subdivision (a) shall not bid on a state contract or
project for a period of not less than three years. An additional or
subsequent violation shall extend the periods of suspension for a
period of not less than five years. The suspension shall apply to the
principals of the business and any subsequent business formed or
financed by, or affiliated with, those principals.
(2) A person or entity that fails to satisfy the penalties, costs,
and attorney's fees imposed pursuant to subdivision (b) shall be
prohibited from further contracting with the state until those
amounts are paid.
(d)
(c) The awarding department shall report all alleged
violations of this section to the Attorney General who shall
determine whether to bring a civil action against any person or
entity for violation of this section. Civil penalties shall not
be less than ten thousand dollars ($10,000) or more than thirty
thousand dollars ($30,000) for the first violation, and not less than
thirty thousand dollars ($30,000) or more than fifty thousand
dollars ($50,000) for each additional subsequent violation.
(e)
(d) An awarding department shall not enter into any
contract with a contractor suspended for violating this section
during the period of the contractor's suspension. An awarding
department shall not award a contract to any contractor utilizing the
services of any person or entity suspended for violating this
section during the period of the suspension.
8899.57. (a) Each awarding department shall annually report to
the Department of General Services on the level of participation by
persons with developmental disabilities business enterprises in
contracts. The information reported shall include, but not be limited
to, the following:
(1) The percentage of contracts awarded to persons with
developmental disabilities business enterprises, including the number
of contracts awarded to each type of business enterprise defined in
paragraphs (1) to (3), inclusive, of subdivision (g) of Section
8899.51.
(2) A description of each contract, including the number of
persons with developmental disabilities employed, the nature of the
work performed, the wages paid and other employee benefits provided,
and the work setting, including the extent to which the work
performed by persons with developmental disabilities was in
integrated work as defined in subdivision (o) of Section 4851 of the
Welfare and Institutions Code.
(3) If the established goal is not being met, the reasons for the
awarding department's inability to achieve the standards and the
remedial steps to be taken.
(b) Beginning January 1, 2011, and on January 1 of each year
thereafter, the Department of General Services shall, in consultation
with the Department of Developmental Services, report to the
Governor and the Legislature, by department, on the level of
participation by persons with developmental disabilities business
enterprises under this chapter, including the information required by
subdivision (a).
8899.58. Notwithstanding any other provision of this chapter, the
failure of an awarding department to meet the goals established
under this chapter shall not affect the validity or enforceability of
any contract subject to this chapter.
8899.59. This chapter shall become inoperative on July 1, 2014,
and is repealed as of January 1, 2015.
SEC. 2. Section 14838.5 of the Government Code is amended to read:
14838.5. (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this code and Chapter 2 (commencing with Section 10290) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than one hundred thousand dollars ($100,000), to a certified
small business, including a microbusiness, to a persons with
developmental disabilities business enterprise, or to a disabled
veteran business enterprise, as long as the agency obtains price
quotations from two or more certified small businesses, including
microbusinesses, from two or more persons with developmental
disabilities business enterprises, or from two or more disabled
veterans business enterprises.
(b) In carrying out subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, from a persons with
developmental disabilities business enterprise, or from a disabled
veteran business enterprise.
(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations from responsible suppliers whenever there is reason
to believe a response from a single source is not a fair and
reasonable price.
(d) This section shall become inoperative on July 1, 2014, and is
repealed as of January 1, 2015.
SEC. 3. Section 14838.5 is added to the Government Code, to read:
14838.5. (a) Notwithstanding the advertising, bidding, and
protest provisions of Chapter 6 (commencing with Section 14825) of
this code and Chapter 2 (commencing with Section 10290) and Chapter 3
(commencing with Section 12100) of Part 2 of Division 2 of the
Public Contract Code, a state agency may award a contract for the
acquisition of goods, services, or information technology that has an
estimated value of greater than five thousand dollars ($5,000), but
less than one hundred thousand dollars ($100,000), to a certified
small business, including a microbusiness, or to a disabled veteran
business enterprise, as long as the agency obtains price quotations
from two or more certified small businesses, including
microbusinesses, or from two or more disabled veteran business
enterprises.
(b) In carrying out subdivision (a), state agencies shall consider
a responsive offer timely received from a responsible certified
small business, including a microbusiness, or from a disabled veteran
business enterprise.
(c) If the estimated cost to the state is less than five thousand
dollars ($5,000) for the acquisition of goods, services, or
information technology, or a greater amount as administratively
established by the director, a state agency shall obtain at least two
price quotations from responsible suppliers whenever there is reason
to believe a response from a single source is not a fair and
reasonable price.
(d) This section shall become operative on July 1, 2014.
SEC. 4. Section 14839 of the Government Code is amended to read:
14839. There is hereby established within the department the
Office of Small Business and Disabled Veteran Business Enterprise
Services. The duties of the office shall include:
(a) Compiling and maintaining a comprehensive bidders list of
qualified small businesses, persons with developmental disabilities
business enterprises, and disabled veteran business enterprises, and
noting which small businesses also qualify as microbusinesses.
(b) Coordinating with the Federal Small Business Administration,
the Minority Business Development Agency, and the Office of Small
Business Development of the Department of Economic and Business
Development.
(c) Providing technical and managerial aids to small businesses,
microbusinesses, persons with developmental disabilities business
enterprises, and disabled veteran business enterprises, by conducting
workshops on matters in connection with government procurement and
contracting.
(d) Assisting small businesses, microbusinesses, persons with
developmental disabilities business enterprises, and disabled veteran
business enterprises, in complying with the procedures for bidding
on state contracts.
(e) Working with appropriate state, federal, local, and private
organizations and business enterprises in disseminating information
on bidding procedures and opportunities available to small
businesses, microbusinesses, persons with developmental disabilities
business enterprises, and disabled veteran business enterprises.
(f) Making recommendations to the department and other state
agencies for simplification of specifications and terms in order to
increase the opportunities for small business, microbusiness, persons
with developmental disabilities business enterprise, and disabled
veteran business enterprise participation.
(g) Developing, by regulation, other programs and practices that
are reasonably necessary to aid and protect the interest of small
businesses, microbusinesses, persons with developmental disabilities
business enterprises, and disabled veteran business enterprises in
contracting with the state.
(h) Making efforts to develop, in cooperation with associations
representing counties, cities, and special districts, a core
statewide small business certification application that may be
adopted by all participating entities, with any supplemental
provisions to be added as necessary by the respective entities.
(i) The information furnished by each contractor requesting a
small business or microbusiness preference shall be under penalty of
perjury.
(j) This section shall become inoperative on July 1, 2014, and is
repealed as of January 1, 2015.
SEC. 5. Section 14839 is added to the Government Code, to read:
14839. There is hereby established within the department the
Office of Small Business and Disabled Veteran Business Enterprise
Services. The duties of the office shall include:
(a) Compiling and maintaining a comprehensive bidders list of
qualified small businesses and disabled veteran business enterprises,
and noting which small businesses also qualify as microbusinesses.
(b) Coordinating with the Federal Small Business Administration,
the Minority Business Development Agency, and the Office of Small
Business Development of the Department of Economic and Business
Development.
(c) Providing technical and managerial aids to small businesses,
microbusinesses, and disabled veteran business enterprises, by
conducting workshops on matters in connection with government
procurement and contracting.
(d) Assisting small businesses, microbusinesses, and disabled
veteran business enterprises, in complying with the procedures for
bidding on state contracts.
(e) Working with appropriate state, federal, local, and private
organizations and business enterprises in disseminating information
on bidding procedures and opportunities available to small
businesses, microbusinesses, and disabled veteran business
enterprises.
(f) Making recommendations to the department and other state
agencies for simplification of specifications and terms in order to
increase the opportunities for small business, microbusiness, and
disabled veteran business enterprise participation.
(g) Developing, by regulation, other programs and practices that
are reasonably necessary to aid and protect the interest of small
businesses, microbusinesses, and disabled veteran business
enterprises in contracting with the state.
(h) Making efforts to develop, in cooperation with associations
representing counties, cities, and special districts, a core
statewide small business certification application that may be
adopted by all participating entities, with any supplemental
provisions to be added as necessary by the respective entities.
(i) The information furnished by each contractor requesting a
small business or microbusiness preference shall be under penalty of
perjury.
(j) This section shall become operative on July 1, 2014.
SEC. 6. Section 19404 of the Welfare and Institutions Code is
amended to read:
19404. Any state agency, city or county, political subdivision,
or district of this state may, without advertising or calling for
bids, purchase materials and supplies manufactured and services
provided by public or private nonprofit California corporations
operating community rehabilitation programs serving persons with
disabilities who have indicated an interest in supplying those goods
and services and may, on an equitable basis apportion the business
among the interested community rehabilitation programs, provided the
goods or services meet the specifications and needs of the purchasing
agency and are purchased at a fair market price, as determined
pursuant to Section 14838.5 of the Government Code
by the appropriate state or local agency , and provided
that the public or private nonprofit California corporations comply
with all of the following requirements:
(a) (1) Contract work obtained under this section shall be
performed by a labor force which is comprised primarily of persons
with disabilities, as measured by the percentage of person-hours of
direct labor devoted to the contract work.
(2) For purposes of this subdivision, "primarily" means 75 percent
or greater.
(3) Agree to make those elections permitted of any nonprofit
corporation under the federal Insurance Contributions Act and the
California Unemployment Insurance Code in order to provide social
security and unemployment and disability benefits for its employees
commencing with its first contract or purchase order under this
section and continuing thereafter. In the event that the nonprofit
corporation ceases to provide those benefits, any existing contract
or purchase order under this section with the corporation is
terminated and no further contracts or purchase orders shall be
awarded to that corporation for the period of two years after the
corporation ceases to provide the benefits. For the purposes of this
subdivision, a person with a disability shall be considered an
employee when performing productive work.
(4) Provide in its articles of incorporation that at least two of
the directors of its board of directors shall be comprised of persons
with disabilities or the parents, guardians, or conservators of
individuals with disabilities. Directors who are also employees of
the nonprofit corporation shall not participate in or be present at
discussions of the board of directors concerned with labor-management
contract negotiations.
(5) Provide for disabled employees of the nonprofit corporation
benefits and other employer-employee agreements substantially equal
to those benefits and agreements entered into between each nonprofit
corporation and the representatives designated by a majority of the
employees.
(6) Not commit any unfair labor practices as defined in Section 8
(a) of the National Labor Relations Act.
(7) Abide by the provisions of the Federal Fair Labor Standards
Act, the Walsh-Healy Public Contract Act, the Wagner O'Day Act, and
the regulations of the State Division of Industrial Welfare.
(8) Contract work obtained under this section shall be governed by
the contracting procedures and limitations in Section 14838.5 of the
Government Code.
(b) For purposes of this section a "person with a disability"
means any person, other than a person who is blind, who is so
severely incapacitated by any physical or mental disability that he
or she cannot currently engage in normal competitive employment
because of the disability.