BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           548 (Huff)
          
          Hearing Date:  5/28/09          Amended: 5/18/09
          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.   
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
                                                                  
          Admin expenses                         $40                       
          $0                    $0             General 
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  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 about $40,000 to develop  
          regulations, and to develop bid language that requires the  
          primary contractor who makes a commitment to use a DVBE to  
          either a) certify that all payments have been made to the DVBE  
          subcontractor, or b) document why there was no subcontract with  
          the DVBE.  SB 548 also 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.

          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.