Current Status Introducing Body:
SenateBill Number: 1405Primary Sponsor: JacksonCommittee Number: 11Type of Legislation: GBSubject: Minority and women's business enterprisesResiding Body: SenateCurrent Committee: JudiciaryComputer Document Number: GJK/20858SD.94Introduced Date: 19940509Last History Body: SenateLast History Date: 19940509Last History Type: Introduced, read first time, referred to CommitteeScope of Legislation: StatewideAll Sponsors: JacksonType of Legislation: General Bill
Bill Body Date Action Description CMN Leg Involved ____ ______ ____________ ______________________________ ___ ____________ 1405 Senate 19940509 Introduced, read first time, 11 referred to CommitteeView additional legislative information at the LPITS web site.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 11-11-145 SO AS TO PROVIDE THAT THE STATE BUDGET AND CONTROL BOARD SHALL ESTABLISH GOALS WHICH EACH STATE AGENCY AND DEPARTMENT ARE ENCOURAGED TO MEET IN TERMS OF MAKING PROCUREMENTS FROM MINORITY BUSINESS ENTERPRISES (MBE'S) AND WOMEN'S BUSINESS ENTERPRISES (WBE'S) AND TO PROVIDE FOR AN INCREASE IN THE APPROPRIATION AN AGENCY OR DEPARTMENT RECEIVES IN THE ANNUAL GENERAL APPROPRIATIONS ACT IF IT MEETS OR EXCEEDS THE GOALS ESTABLISHED; TO AMEND SECTION 11-35-1520, AS AMENDED, RELATING TO COMPETITIVE SEALED BIDDING UNDER THE CONSOLIDATED PROCUREMENT CODE, SO AS TO PROVIDE THAT MBE'S AND WBE'S SHALL RECEIVE A FIVE PERCENT "DISADVANTAGED" PREFERENCE IN THESE BIDS; TO AMEND SECTION 11-35-1550, AS AMENDED, RELATING TO SMALL PURCHASE PROCUREMENT PROCEDURES, SO AS TO PROVIDE THAT THE BUDGET AND CONTROL BOARD SHALL ESTABLISH PROCEDURES WHEREBY SMALL PURCHASES NOT EXCEEDING ONE THOUSAND FIVE HUNDRED DOLLARS SHALL BE PROCURED FROM MBE'S AND WBE'S ON A RECURRING BASIS WHERE THE DISADVANTAGED VENDOR CAN SUPPLY THE NEEDED ITEMS; TO AMEND SECTION 11-35-3020, AS AMENDED, RELATING TO CONSTRUCTION PROCUREMENT PROCEDURES, SO AS TO REQUIRE PRIME CONTRACTORS SUBMITTING A BID TO INCLUDE A PLAN FOR UTILIZATION OF MBE'S AND WBE'S AS SUBCONTRACTORS ON THAT CONTRACT OR PROCUREMENT AND TO PROVIDE THAT ANY BID WHICH DOES NOT CONTAIN SUCH A UTILIZATION PLAN MAY NOT BE ACCEPTED BY THE PROCURING AGENCY; AND TO AMEND ARTICLE 21, CHAPTER 35 OF TITLE 11 OF THE 1976 CODE, RELATING TO ASSISTANCE TO MINORITY BUSINESSES UNDER THE CONSOLIDATED PROCUREMENT CODE, SO AS TO DEFINE THE TERMS "MINORITY BUSINESS ENTERPRISE" (MBE'S) AND "WOMEN'S BUSINESS ENTERPRISE" (WBE'S), AND FURTHER PROVIDE FOR PROCUREMENT PROCEDURES APPLICABLE TO MBE'S AND WBE'S, TO PROVIDE THAT THE TOTAL DOLLAR VALUE OF SUCH PROCUREMENTS SHALL BE SEPARATELY STATED AS TO PROCUREMENTS BY MBE'S AND BY WBE'S, TO INCREASE THE INCOME TAX CREDIT THAT FIRMS WITH STATE CONTRACTS THAT SUBCONTRACT WITH MINORITY OR FEMALE FIRMS ARE ENTITLED TO RECEIVE, TO PROVIDE THAT ANY FIRM CERTIFIED BY THE FEDERAL SMALL BUSINESS ADMINISTRATION UNDER SECTION 8(A) OF THE SMALL BUSINESS ACT AS AN ETHNIC OR FEMALE MINORITY FIRM AUTOMATICALLY SHALL BE CERTIFIED BY THE STATE SMALL AND MINORITY BUSINESS ASSISTANCE OFFICE AS A MINORITY OR WOMEN'S BUSINESS ENTERPRISE RESPECTIVELY, AND TO REQUIRE THE STATE SMALL AND MINORITY BUSINESS ASSISTANCE OFFICE TO COMPLETE A STATEWIDE DISPARITY STUDY TO DETERMINE THE REASONS WHY MBE'S AND WBE'S ARE NOT ABLE TO MORE FULLY PARTICIPATE IN THE STATE'S PROCUREMENT PROCESS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 11-11-145. The State Budget and Control Board on a fiscal year basis shall establish goals in percentage and dollar terms which each state agency and department shall be encouraged to meet in terms of making procurements from Minority Business Enterprises and Women's Business Enterprises as these terms are defined in Section 11-35-5010. Agencies or departments which meet or exceed these goals in a fiscal year as determined by the Small and Minority Business Assistance Office shall receive an additional unrestricted appropriation in the annual general appropriations act for the next fiscal year equal to one percent of its general fund appropriations for the previous year not to exceed one hundred thousand dollars if additional general fund revenues in such amounts will be available based on the recurring general fund revenue estimate of the Board of Economic Advisors for that year. These additional unrestricted appropriations must be made if additional revenue is available before any other general fund appropriations from this additional revenue may be made."
SECTION 2. Section 11-35-1520(9)(e) of the 1976 Code is amended by adding:
"(iii) bids of certified in-state Minority Business Enterprises (MBE's) and Women's Business Enterprises (WBE's) regardless of the amount of the procurement shall receive a five percent `disadvantaged' preference."
SECTION 3. Section 11-35-1550(2)(a) of the 1976 Code, as last amended by Act 178 of 1993, is further amended to read:
"(a) Purchases Not in Excess of $1,500.00. Small purchases not exceeding $1,500.00 may be accomplished without securing competitive quotations if the prices are considered to be reasonable. The purchasing office shall annotate the purchase requisition: `Price is fair and reasonable' and sign. Such purchases shall be distributed equitably among qualified suppliers. When practical, a quotation will be solicited from other than the previous supplier prior to placing a repeat order. The administrative cost of verifying the reasonableness of the price of purchase `not in excess of' may more than offset potential savings in detecting instances of overpricing. Therefore, action to verify the reasonableness of the price need be taken only when the procurement officer of the governmental body suspects that the price may not be reasonable, e.g., comparison to previous price paid, personal knowledge of the item involved. The Budget and Control Board by regulation shall establish procedures whereby small purchases not exceeding $1,500 shall be procured from Minority Business Enterprises and Women's Business Enterprises as these terms are defined in Section 11-35-5010 on a recurring regular basis where the disadvantaged vendor can supply the needed items."
SECTION 4. Section 11-35-3020 of the 1976 Code, as last amended by Act 178 of 1993, is further amended by adding:
"(3) For any construction procurement under this section, any prime contractor submitting a bid as a part thereof must include a plan for the utilization of Minority Business Enterprises (MBE's) and Women's Business Enterprises (WBE's) as subcontractors on that contract or procurement. Any bid which does not contain such a utilization plan may not be accepted by the procuring agency."
SECTION 5. Article 21, Chapter 35 of Title 11 of the 1976 Code is amended to read:
Section 11-35-5010. The board may promulgate regulations establishing detailed definitions of the following terms using, in addition to the criteria set forth in this section, such other criteria as it may deem considers desirable.
(1) `Minority person' for the purpose of this article, means a United States citizen who is economically and socially disadvantaged.
(a) `Socially disadvantaged individuals' means those individuals who have been subject to racial or ethnic prejudice or cultural bias because of their identification as members of a certain group, without regard to their individual qualities. Such groups include, but are not limited to, Black Americans, Hispanic Americans, Native Americans (including American Indians, Eskimos, Aleuts, and Native Hawaiians), Asian Pacific Americans, and other minorities to be designated by the board or designated agency.
(b) `Economically disadvantaged individuals' means those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.
(2) A `socially and economically disadvantaged small business' means any small business concern which:
(a) is at least fifty-one percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged.;
(b) in the case of a concern which is a corporation, fifty-one percent of all classes of voting stock of such corporation must be owned by an individual determined to be socially and economically disadvantaged.;
(c) in the case of a concern which is a partnership, fifty-one percent of the partnership interest must be owned by an individual or individuals determined to be socially and economically disadvantaged and whose management and daily business operations are controlled by individuals determined to be socially and economically disadvantaged. Such individuals must be involved in the daily management and operations of the business concerned.
(3) `Minority Business Enterprise' means an individual who is a socially and economically disadvantaged ethnic minority or a business corporation or other entity owned and controlled by socially and economically disadvantaged ethnic minorities (MBE's).
(4) `Women's Business Enterprise' means a female who is an economically disadvantaged individual or a business corporation or other entity owned and controlled by economically disadvantaged females (WBE'S). A Women's Business Enterprise may not be considered a Minority Business Enterprise unless it is owned and controlled by economically disadvantaged females who are also considered socially disadvantaged as this term is defined in this section.
Section 11-35-5210. (1) The South Carolina General Assembly declares that business firms owned and operated by minority and female persons historically have been historically restricted from full participation in our free enterprise system to a degree disproportionate to other businesses. The General Assembly believes that it is in the state's best interest to assist minority-owned and female-owned businesses to develop fully as a part of the state's policies and programs which are designed to promote balanced economic and community growth throughout the State.
The General Assembly, therefore, wishes to ensure that those businesses owned and operated by minorities and females are afforded the opportunity fully to fully participate in the overall procurement process of the State. The General Assembly, therefore, takes this leadership role in setting procedures that will result in awarding contracts and subcontracts to minority and female business firms in order to enhance minority or female capital ownership, overall state economic development and reduce dependency on the part of minorities and females.
(2) Chief procurement officers shall implement the policy set forth in subsection (1) of this section in accordance with the provisions of Section 11-35-5220.
Section 11-35-5220. (1) The chief procurement officers shall provide appropriate staffs to assist minority and female businesses with the procurement procedures developed pursuant to this code.
(2) The chief procurement officers in cooperation with other appropriate private and state agencies may issue supplementary instructions designed to assist minority and female businesses with the state procurement procedures.
(3) Chief procurement officers shall maintain special source lists of minority and female business firms detailing the products and services which they provide. These lists shall be made available to agency purchasing personnel.
(4) The chief procurement officers shall include and identify minority or female business on the state's bidders' list and shall ensure that these firms are solicited on an equal basis within nonminority firms.
(5) The chief procurement officers shall work with other appropriate state offices and minority and female groups in conducting seminars to assist minority and female business owners in learning how to do business with the State.
Section 11-35-5230. (A) The board shall promulgate regulations that designate such procurement contracts as it may deem consider appropriate for negotiation with certified, South Carolina-based minority and female firms, as defined by this subarticle.
Among the criteria that shall be used to determine such the designations are:
(1) the total dollar value of procurement in South Carolina. to Minority Business Enterprises and separately stated to Women's Business Enterprises;
(2) the availability of South Carolina-based minority and female firms.;
(3) the potential for breaking the contracts into smaller units, where necessary, to accommodate such firms.;
(4) insuring ensuring that the State shall is not be required to sacrifice quality of goods or services.;
(5) insuring ensuring that the price shall have been determined to be fair and reasonable, and competitive both to the State and to the contractor and results in no loss to the State.
(B) (1) Firms with state contracts that subcontract with minority and female firms shall be eligible for an income tax credit equal to four five percent of the payments to minority or female subcontractors for work pursuant to a state contract. Such These subcontractors must be certified as to the criteria of a minority or female firm as defined in Section 11-35-5010 of this code and any regulations which may be promulgated thereunder under it.
(2) The tax credit is limited to a maximum of twenty-five fifty thousand dollars annually. A firm shall be eligible to claim a tax credit for a period of five years from the date the first income tax credit is claimed.
(3) Any firm desiring to be certified as a minority or female firm shall make application to the Small and Minority Business Assistance Office (SMBAO) as defined by Section 11-35-5270, on such forms as may be prescribed by that office. Any firm certified by the federal Small Business Administration under Section 8(A) of the Small Business Act of 1953 as an ethnic minority or female firm qualified to perform federal set-aside contracts must be automatically certified by the Small and Minority Business Assistance Office as minority business enterprise or female business enterprise, respectively, for purposes of the Consolidated Procurement Code and other procurement provisions of state law. The Small and Minority Business Assistance Office shall certify these firms as either a Women's Business Enterprise or a Minority Business Enterprise as these terms are defined in Section 11-35-5010.
(4) Firms claiming the income tax credit shall maintain evidence of work performed for a state contract by minority or female subcontractors and shall present such evidence on a form and in a manner prescribed by the Department of Revenue and Taxation at the time of filing its state income tax return and claim such the credit at the time of filing. All records shall be available for audit by the Department of Revenue and Taxation in accordance with prevailing tax statutes.
Section 11-35-5240. (1) In order to emphasize the use of minority and female small businesses, each agency director shall develop a Minority Business Enterprise (MBE) and a separate Women's Business Enterprise (WBE) Utilization Plan. The MBE and WBE Utilization Plan Plans shall include, but not be limited to:
(a) the name of the governmental body;
(b) a policy statement expressing a commitment by the governmental body to use MBE's and WBE's in all aspects of procurement;
(c) the name of the coordinator responsible for monitoring the MBE and WBE Utilization Plan Plans;
(d) goals that include a reasonable percentage of each governmental body's total procurements directed toward minority and female vendors.;
(e) solicitation of qualified minority and female vendors, a current list of which shall be supplied by the Division of General Services, in each commodity category for which such minority or female vendor is qualified. The current listing of qualified minority and female vendors shall be made available by the Division of General Services on a timely basis.;
(f) procedures to be used when it is necessary to divide total project requirements into smaller tasks which will permit increased MBE and WBE participation;
(g) procedures to be used when the governmental body subcontracts the scope of service to another governmental body; the responsible governmental body may set goals for the subcontractor in accordance with the MBE or WBE goal and the responsible governmental body may allow the subcontractor to present a MBE or WBE Utilization Plan detailing its procedure to obtain minority or female business enterprise participation.
(2) MBE and WBE utilization plans shall be submitted to the SMBAO for approval not later than July thirtieth, annually. Progress reports shall be submitted to the SMBAO not later than ten days after the end of each fiscal quarter.
(a) number of minority or female firms solicited, separately stated;
(b) number of minority or female bids received, separately stated;
(c) dollar amount of minority or female bids awarded, separately stated.
Section 11-35-5250. (1) The chief procurement officers may make special provisions for progress payments, and letters of credit, as deemed considered reasonable to assist minority and female businesses to carry out the terms of a state contract pursuant to regulations which may be promulgated by the board.
(2) When a minority or female business firm certified by the Department of Revenue and Taxation receives a contract with the State, the appropriate chief procurement officer shall furnish a letter, upon request, stating the dollar value and duration of, and other information about the contract, which may be used by the minority or female firm in negotiating lines of credit with lending institutions.
Section 11-35-5260. Each governmental body shall report annually in writing to the board concerning the number and dollar value of contracts awarded to eligible minority businesses and separately stated to female businesses during the preceding fiscal year. These records shall be maintained to evaluate the progress of this program.
Section 11-35-5270. A Small and Minority Business Assistance Office (SMBAO) shall be established to assist the board and the Department of Revenue and Taxation in carrying out the intent of this article. The responsibilities of the office shall include, but not be limited to the following:
(1) assist the chief procurement officers and governmental bodies in developing policies and procedures which will facilitate awarding contracts to small and minority firms;
(2) assist the chief procurement officers in aiding small and minority-owned firms and community-based business in developing organizations to provide technical assistance to minority firms;
(3) assist with the procurement and management training for small and minority firm owners;
(4) assist in the identification of responsive small and minority firms;
(5) receive and process applications to be registered as a minority firm in accordance with Section 11-35-5230(B);
(6) the SMBAO may revoke the certification of any firm which has been found to have engaged in any of the following:
(a) fraud or deceit in obtaining the certification;
(b) furnishing of substantially inaccurate or incomplete information concerning ownership or financial status;
(c) failure to report changes which affect the requirements for certification;
(d) gross negligence, incompetence, financial irresponsibility, or misconduct in the practice of his business; or
(e) wilful violation of any provision of this article.
(7) After a period of one year, the SMBAO may reissue a certificate of eligibility provided acceptable evidence has been presented to the commission that the conditions which caused the revocation have been corrected.
(8) The Small and Minority Business Assistance Office during the year 1995 shall complete a statewide disparity study for the State of South Carolina to determine the reasons why Minority Business Enterprises (MBE's) and Women's Business Enterprises (WBE's) are not able to participate fully in the state's procurement process and why state agency spending with minority and female business enterprises has decreased. The study shall be completed by January 1, 1996, and shall be submitted to the State Budget and Control Board and the General Assembly together with a list of recommendations to improve Minority Business Enterprise and Women's Business Enterprise participation in the state procurement process. The results of the study beginning in 1997 shall be updated annually and the results reported in the same manner as the initial study results. The study may be performed by the Small and Minority Business Assistance Office or through an entity contracted by the Small and Minority Business Assistance Office and state appropriated funds, federal funds, grants from the private sector or any other funds available to the Small and Minority Business Assistance Office may be used to pay for the cost of the study.
The Governor shall evaluate the role of this office within two years from the date of its creation and shall request recommendations of the State Reorganization Commission. The Governor may propose a more appropriate location of the office should the findings warrant change."
SECTION 6. This act takes effect July 1, 1994.