BILL NUMBER: AB 2505	CHAPTERED
	BILL TEXT

	CHAPTER   821
	FILED WITH SECRETARY OF STATE   SEPTEMBER 25, 1998
	APPROVED BY GOVERNOR   SEPTEMBER 24, 1998
	PASSED THE SENATE   AUGUST 31, 1998
	PASSED THE ASSEMBLY   AUGUST 31, 1998
	AMENDED IN SENATE   AUGUST 31, 1998
	AMENDED IN SENATE   AUGUST 26, 1998
	AMENDED IN SENATE   AUGUST 24, 1998
	AMENDED IN SENATE   AUGUST 6, 1998
	AMENDED IN SENATE   JUNE 16, 1998
	AMENDED IN ASSEMBLY   MAY 22, 1998
	AMENDED IN ASSEMBLY   APRIL 28, 1998

INTRODUCED BY   Assembly Members Olberg and Machado
   (Principal coauthor:  Senator Kopp)

                        FEBRUARY 20, 1998

   An act to amend Section 14837 of the Government Code, relating to
state contracts.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2505, Olberg.  State contracts.
   The Small Business Procurement and Contract Act requires the
Director of General Services and the directors of other state
agencies to perform various activities to assist small businesses to
participate in state contracts.  "Small business" is defined for
these purposes as a business in which the principal office is located
in California and the officers of the business are domiciled in
California, which is independently owned and operated, and which is
not dominant in its field of operation.  The director is authorized
to use various criteria in making a detailed definition under these
provisions.
   This bill would additionally specify that a "small business,"
within this definition, has 100 or fewer employees, and average
annual gross receipts of $10,000,000 or less over the previous three
years or is a manufacturer, as defined, with 100 or fewer employees.
It would require that standards adopted by the director preclude the
qualification of businesses that are dominant in their industry.  It
would revise the criteria to be used by the director in defining the
term "small business," and require that standards applied in the
definition be adopted by regulation.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 14837 of the Government Code is amended to
read:
   14837.  As used in this chapter:
   (a) "Department" means the Department of General Services.
   (b) "Director" means the Director of General Services.
   (c) "Manufacturer" means a business that is both of the following:

   (1) Primarily engaged in the chemical or mechanical transformation
of raw materials or processed substances into new products.
   (2) Classified between Codes 2000 to 3999, inclusive, of the
Standard Industrial Classification (SIC) Manual published by the
United States Office of Management and Budget, 1987 edition.
   (d) (1) "Small business" means an independently owned and operated
business, which is not dominant in its field of operation, the
principal office of which is located in California, the officers of
which are domiciled in California, and which, together with
affiliates, has 100 or fewer employees, and average annual gross
receipts of ten million dollars ($10,000,000) or less over the
previous three years, or is a manufacturer, as defined in subdivision
(c), with 100 or fewer employees.
   (2) The director shall conduct a biennial review of the average
annual gross receipt level specified in this subdivision and may
adjust that level to reflect changes in the California Consumer Price
Index for all items.  To reflect unique variations or
characteristics of different industries, the director may establish,
to the extent necessary, higher qualifying standards than those
specified in this subdivision, or alternative standards based on
other applicable criteria.
   (3) Standards applied under this subdivision shall be established
by regulation, in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1, and shall preclude the qualification of
businesses that are dominant in their industry.