BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           548 (Huff)
          
          Hearing Date:  4/27/09          Amended: 4/13/09
          Consultant:  Maureen Ortiz      Policy Vote: V. A. 7-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   SB 548 requires an awarding department to  
          require any prime contractor that subcontracts with a Disabled  
          Veteran Business Enterprise (DVBE) to certify that all payments  
          under the contract have been made to the DVBE.  Additionally,  
          the bill provides that any person or entity that knowingly  
          provides false information will be subjected to a civil penalty  
          of between $2,500 to a maximum of $25,000.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                                                  
          Admin expenses                         $80                    
          $150                $300           General 
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  This bill meets the criteria for referral to  
          the Suspense file. 
          
          SB 548 also requires the awarding department to keep that  
          certification on file.  The Department of General Services (DGS)  
          indicates one-time costs of between $80,000 and $100,000 to  
          develop regulations, and $150,000 in expenses associated with  
          overseeing implementation of the program and data base upgrades.  
           DGS also indicates the need for additional staff to assist with  
          the awarding of the contracts which will result in about  
          $150,000 annually.  

          The Disabled Veteran Business Enterprise Program was established  
          in 1989 and gives preference points to qualifying businesses  
          when awarding state contracts.  Prime contractors are required  
          to include DVBEs in at least 3% of their work in order to meet  
          participation goals.  This bill is intended to ensure that  
          contractors do not list a DVBE as a subcontractor for purposes  
          of gaining a preference during the awards phase of bidding, and  










          then not using that DVBE on the project.

          Current law defines a DVBE as a business certified to have 51%  
          of its ownership held by one or more disabled veterans, or in  
          the case of a publicly owned business, at least 51% of the stock  
          is owned by disabled veterans.  The Department of General  
          Services is the state entity responsible for certifying  
          businesses and meeting the definition of DVBE.