BILL ANALYSIS Ó AB 413 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 413 (Chávez) As Amended June 30, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |78-0 |(May 14, 2015) |SENATE: |39-0 |(September 1, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: J., E.D., & E. SUMMARY: Authorizes a spouse or child to enter into additional state contracts during the existing three-year designation extension following the death or permanent disability of an owner of a certified disabled veteran-owned business enterprise (DVBE). Existing law limits business activities to the completion of contracts entered into prior to death or permanent disability of the veteran owner. The Senate amendments add legislative intent as to the purposes of the bill and clarify that all existing contracts at the time of the disabled veteran's death or permanent disability may be completed and that all new state contracts are also required to be completed within the three-year time period. EXISTING LAW: AB 413 Page 2 1)Establishes the California Disabled Veteran Business Enterprise Program for the purpose of addressing the special needs of disabled veterans seeking rehabilitation and training through entrepreneurship and to recognize the sacrifices California's disabled veterans made during their military service. 2)Designates the Department of General Services (DGS) as the administrator of the state Small Business Procurement and Contract Act (Small Business Procurement Act), including the oversight of the California Disabled Veteran Business Enterprise Program and the certification of the DVBEs. FISCAL EFFECT: According to the Senate Appropriations Committee, the aggregate impact of this bill is unknown. Some of these factors would potentially increase state costs, while others would likely lead to a reduction in state costs. DGS would incur minor and absorbable costs related to rulemaking. COMMENTS: California is home to 1.8 million veterans, representing 8% of the total United States veteran population. This bill proposes to extend new contracting authority for a previously certified DVBE, which is owned and operated by a spouse or child of a qualifying disabled veteran following their death or permanent disability. Current law only allows the business to complete existing contracts during the three-year DBVE designation extension period. This bill authorizes the family to bid on and complete additional state contracts during the same three-year period. Background: California, Texas, and Florida have the highest number of veterans among the 50 states. Approximately 1.8 million veterans live in California, with an additional 30,000 being discharged into the state each year. The veteran populations in Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, and Ventura Counties are among the highest in the United States. Based on age, the AB 413 Page 3 United States Department of Veterans Affairs (VA) reports that California has a greater percentage of veterans under the age of 25 than the rest of the country, as well as the largest overall number of older veterans. The federal Small Business Administration estimates that the most common industry sector in which veterans participate is the professional, science, and technology services sector, with 20.4% of all veteran-owned businesses being within the industry sector. California veterans also tend to be entrepreneurs at higher rates than the national average, 13.2% vs. 10.9%. Approximately four million California veterans receive some level of VA disability compensation, with about 500,000 of those individuals certified as 100% disabled. Given the aging population of the veterans who served in Vietnam, and the significant nature of the medical challenges faced by the younger veteran population, the number of DVBEs potentially impacted by this bill is likely to increase in the coming decade. Analysis Prepared by: Toni Symonds / J., E.D., & E. / (916) 319-2090 FN: 0001689