BILL ANALYSIS
AB 2249
Page 1
Date of Hearing: May 19, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2249 (Ruskin) - As Amended: May 11, 2010
Policy Committee: Jobs, Econ.
Development and the Economy Vote: 6 - 0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill makes changes to the laws governing state contracting
and disabled veterans business enterprises (DVBE). Specifically,
this bill:
1)Requires that a small business enterprise or a DVBE submit a
written declaration, under penalty of perjury, that the
information submitted for a state procurement contract is true
and correct.
2)Requires that a DVBE seeking certification with the state
submit completed copies of the enterprise's federal tax
returns, for the three previous years.
3)States that a DVBE that fails to comply with the federal tax
return requirement shall be prohibited from participating in
any state contract until the requirements are met.
4)Requires DVBEs to file a completed Internal Revenue Service
tax form 4506-T to the contracting agency under certain
circumstances.
5)Restates provisions related to the 3% participation goal for
DVBEs.
FISCAL EFFECT
There are no significant costs associated with this legislation.
COMMENTS
AB 2249
Page 2
1)Rationale . This bill is intended to strengthen the provisions
surrounding the rules pertaining to the 3% DVBE state
contracting requirement, in order to provide the Department of
General Services (DGS) with the tools they need to determine
whether or not a business claiming to be a DVBE is legitimate.
The author has expressed concern that some DVBE applicants are
being certified when there are indications that they should
not be, such as the applicant not being domiciled in
California or the applicant for certification not being the
true owner of certain equipment.
2)DVBE Certification . Under the provisions of the DBVE program,
each state agency is required, when awarding contracts
throughout the year, to include DVBEs by taking all practical
actions necessary to meet or exceed the annual 3% DVBE
participation goal. In order to become a certified DVBE, the
business must adhere to several requirements. For example,
businesses must be owned, at a minimum of 51% by a disabled
veteran, must be a California resident and the DVBEs home
office must be located in the U.S.
As part of the DVBE certification process, DVBE businesses
must re-apply for certification on a yearly basis. At the
time of re-certification, the business must submit an
application along with copies of the DVBE's income tax returns
for the previous three years.
3)Related Legislation . AB 2627 (Nielsen) limits the portion of
state funds that count toward the Disabled Veteran Business
Enterprise (DVBE) goal to a broker's commission fees, if the
funds were awarded through a broker. That bill is currently
pending on the Assembly Floor.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081