Amended in Assembly March 16, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 413

Introduced by Assembly Member Chávez

February 19, 2015

An act to amend Section begin delete 999.12 end delete begin insert 999 end insert of the Military and Veterans Code, relating to veterans.

LEGISLATIVE COUNSEL’S DIGEST

AB 413, as amended, Chávez. California Disabled Veteran Business Enterprise begin delete Program end delete begin insert Program. end insert

begin insert

The California Disabled Veteran Business Enterprise Program addresses the special needs of disabled veterans by assisting state procurement authorities in meeting or exceeding the disabled veteran enterprise participation goal of 3% for procurement contracts. Existing law, under the program, authorizes a child or spouse to continue to operate a disabled veteran business enterprise for 3 years after the death or the certification of a permanent medical disability of a disabled veteran who was the majority owner of that enterprise, but only for purposes of any contract entered into before his or her death or certification of disability.

end insert begin insert

This bill would delete the provision that only allows a child or spouse to operate the business for purposes of the contracts entered into before death or certification of disability.

end insert begin delete

Existing law requires departments that issue bonds or enter into contracts on behalf of the state to appoint a Disabled Veteran Business Enterprise Program Advocate. Existing law requires this advocate to, among other things, assist certified disabled veteran business enterprises in participating in that agency’s contracting process and serve as an advocate for the disabled veteran business enterprises that are utilized as the agency’s contractors or subcontractors.

end delete begin delete

This bill would make technical, nonsubstantive changes to those provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 999 of the end insert begin insert Military and Veterans Code end insert begin insert is
amended to read: end insert

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 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, begin delete and solely for purposes of any
contract entered into before that death or certification, end delete 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.

begin delete

SECTION 1.  

Section 999.12 of the Military and Veterans Code
is amended to read:

999.12.  

Each awarding department shall appoint an agency
Disabled Veteran Business Enterprise Program Advocate. This
person shall be the same individual appointed pursuant to Section
14846 of the Government Code. The agency Disabled Veteran
Business Enterprise Program Advocate shall do all of the
following:

(a) Assist certified disabled veteran business enterprises in
participating in that agency’s contracting process.

(b) Assist contract officers in seeking disabled veteran business
enterprises to participate in the agency’s contract and procurement
activities by performing outreach efforts to recruit disabled veteran
business enterprises to offer their services, as either a prime
contractor or subcontractor, on any contract proposed by the
awarding department that requires disabled veteran business
enterprise participation, and by other feasible means.

(c)  Meet regularly with the California Disabled Veteran
Business Enterprise Program Advocate and contract and
procurement staffs of their departments to disseminate information
about the California Disabled Veteran Business Enterprise
Program.

(d) Serve as an advocate for the disabled veteran business
enterprises that are utilized as the agency’s contractors or
subcontractors.

(e) Report to the Office of Small Business and Disabled Veteran
Business Enterprise Services regarding any violation of this article.

(f) Coordinate and meet, on a regular basis, with the California
Disabled Veteran Business Enterprise Program Advocate at the
Department of Veterans Affairs, in an effort to meet the statewide
3-percent goal pursuant to Section 999.2.

end delete