Senate Bill No. 722

Introduced by Senator Correa

February 22, 2013

An act to amend Section 999 of the Military and Veterans Code, relating to veterans.

LEGISLATIVE COUNSEL’S DIGEST

SB 722, as introduced, Correa. California Disabled Veteran Business Enterprise Program.

Existing law encourages state agencies entering into contracts to establish goals to facilitate the participation of disabled veteran business enterprises, and establishes the California Disabled Veteran Business Enterprise Program for this purpose. Existing law defines “disabled veteran,” for purposes of that program, as a veteran of the military, naval, or air service of the United States, as specified, who has at least 10% service-connected disability and who is domiciled in the state.

This bill would define “disabled veteran,” for purposes of that program, as a veteran of the Armed Forces of the United States, as specified, who has a service-connected disability, as documented by a letter from any branch of the United States Armed Forces or the federal Department of Veterans Affairs, and who is domiciled in the state.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

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) Is responsible for the execution of a distinct element of the
work of the contract.

(II) Carries out the obligation by actually performing, managing,
or supervising the work involved.

(III) Performs work that is normal for its business services and
functions.

(IV) Is responsible, with respect to products, inventories,
materials, and supplies required for the contract, for negotiating
price, determining quality and quantity, ordering, installing, if
applicable, and making payment.

(V) 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 begin delete military, naval,
or air service end delete begin insert Armed Forces end insert 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 begin delete at least a 10-percent end delete begin insert a end insert service-connected
disability begin insert , as documented by a letter from any branch of the United
States Armed Forces or the federal Department of Veterans Affairs, end insert
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.