House File 783 - Introduced HOUSE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO HF 582) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to small business concerns regarding contracts 2 with the department of transportation, and providing an 3 applicability date. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2504HV 83 6 ak/nh/5 PAG LIN 1 1 Section 1. Section 314.14, Code 2009, is amended to read 1 2 as follows: 1 3 314.14 CONTRACTS SET ASIDE FORDISADVANTAGEDSMALL 1 4 BUSINESSENTERPRISESCONCERNS. 1 5 1. DEFINITIONS. As used in this section: 1 6 a. "Small business" means any enterprise, which is 1 7 operated for profit and under a single management, and which 1 8 has either fewer than twenty employees or an annual gross 1 9 income of less than four million dollars computed as the 1 10 average of the three business's preceding fiscal years. This 1 11 definition does not apply to any program or activity for which 1 12 a definition for small business is provided for the program or 1 13 activity by federal law or regulation or other state law. 1 14a.b."Disadvantaged business enterprise" means a small1 15 "Small businessconcernconcern" means a small business which 1 16 meets either of the following: 1 17 (1) Is at least fifty=one percent owned by one or more 1 18 socially and economically disadvantaged individuals. 1 19 (2) Whose management and daily business operations are 1 20 controlled by one or more of the socially and economically 1 21 disadvantaged individuals who own it. 1 22b. "Small business concern" means a business which is 1 23 independently owned and operated and which is not dominant in 1 24 its field of operation.1 25 c. "Socially and economically disadvantaged individuals" 1 26 means those individuals who are citizens of the United States 1 27 or who are lawfully admitted permanent residents and who are 1 28 women, Black Americans, Hispanic Americans, Native Americans, 1 29 Asian=Pacific Americans, Asian=Indian Americans, or any other 1 30 minority or individuals found to be disadvantaged by the 1 31 United States small business administration. However, the 1 32 department may also determine, on a case=by=case basis, that 1 33 an individual who is not a member of one of the enumerated 1 34 groups is socially and economically disadvantaged. A 1 35 rebuttable presumption exists that individuals in the 2 1 following groups are socially and economically disadvantaged: 2 2 (1) "Black Americans" which includes persons having 2 3 origins in any of the black racial groups of Africa. 2 4 (2) "Hispanic Americans" which includes persons of 2 5 Mexican, Puerto Rican, Cuban, Central or South American, or 2 6 other Spanish culture or origin, regardless of race. 2 7 (3) "Native Americans" which includes persons who are 2 8 American Indians, Eskimos, Aleuts, or Native Hawaiians. 2 9 (4) "Asian=Pacific Americans" which includes persons whose 2 10 origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, 2 11 Cambodia, the Philippines, Samoa, Guam, the United States 2 12 Trust Territories of the Pacific, and the Northern Marianas. 2 13 (5) "Asian=Indian Americans" which includes persons whose 2 14 origins are from India, Pakistan, and Bangladesh. 2 15 d. "Prequalified" means that thedisadvantaged business 2 16 enterprisesmall business concern is currently approved by the 2 17 department as adisadvantaged business enterprisesmall 2 18 business concern, is a recognized contractor engaged in the 2 19 class of work provided for in the plans and specifications, 2 20 possesses sufficient resources to complete the work, and is 2 21 able to furnish a performance bond for one hundred percent of 2 22 the contract. 2 23 2. SET=ASIDE. Notwithstanding section 314.1, there may be 2 24 set aside for bidding by prequalifieddisadvantaged business 2 25 enterprisessmall business concerns a percentage of the total 2 26 annual dollar amount of public contracts let by the 2 27 department. The annual dollar amount set aside for bidding by 2 28 prequalifieddisadvantaged business enterprisessmall business 2 29 concerns shall not exceed ten percent of the total dollar 2 30 amount offederal aidhighway construction contracts let by 2 31 the department andfederal aidtransit dollars administered by 2 32 the department. The director may estimate the set=aside 2 33 amount at the beginning of each fiscal year and a suit shall 2 34 not be brought by any party as a result of this estimate. 2 35 Set=aside contracts will be awarded to the lowest responsible 3 1 prequalifieddisadvantaged business enterprisesmall business 3 2 concern. This section shall not be construed as limiting the 3 3 department's right to refuse any or alldisadvantaged business 3 4 enterprisesmall business concern bids. 3 5 Sec. 2. NEW SECTION. 314.14A SMALL BUSINESS CONCERNS == 3 6 NONFEDERAL PROJECTS. 3 7 1. Each bid submitted for a contract for a nonfederal aid 3 8 project with the department shall include a small business 3 9 concern assistance form that contains documents that 3 10 demonstrate one of the following: 3 11 a. The contractor obtained enough participation from small 3 12 business concerns, as established by the department, in the 3 13 project to meet the participation goal in order to be awarded 3 14 the contract. 3 15 b. The contractor demonstrated adequate effort to meet the 3 16 participation goal for small business concerns, as established 3 17 by the department, in the project in order to be awarded the 3 18 contract, although the contractor did not meet the 3 19 participation goal. 3 20 2. The department shall review the small business concern 3 21 participation achievements of each contractor who was awarded 3 22 a contract for a nonfederal aid project with the department. 3 23 The department shall establish an increasing participation 3 24 goal for contractors in order to raise small business concern 3 25 participation. The department may establish rules in 3 26 accordance with this section that deny or restrict the 3 27 awarding of contracts to contractors who fail to improve small 3 28 business concern participation after multiple years. 3 29 3. The department shall create and include with notices 3 30 for bids for a contract a small business concern assistance 3 31 form. 3 32 4. The directives of this section shall be carried out to 3 33 the extent consistent with federal law. 3 34 Sec. 3. APPLICABILITY. This Act applies to notices for 3 35 bids for contracts with the department posted on and after 4 1 July 1, 2009. 4 2 EXPLANATION 4 3 This bill relates to small business concerns involved with 4 4 the awarding of contracts by the department of transportation. 4 5 In Code section 314.14(1), disadvantaged enterprises 4 6 language is replaced with definitions of small business and 4 7 small business concern. Women are now included in the 4 8 socially and economically disadvantaged individuals 4 9 definition. In Code section 314.14(2), all references to 4 10 federal projects are removed, making this section relevant to 4 11 nonfederal projects that the department is funding. 4 12 New Code section 314.14A lays out the requirements for the 4 13 department to ensure that small business concerns are included 4 14 in contractor bids for nonfederal projects. The bill requires 4 15 that each bid submitted for a contract includes a small 4 16 business concern assistance form that contains documents that 4 17 show that the contractor submitting a bid did one of the 4 18 following: obtained enough participation from small business 4 19 concerns, as established by the department, in the project to 4 20 meet the participation goal in order to be awarded the 4 21 contract or demonstrated adequate effort to meet the 4 22 participation goal for small business concerns despite not 4 23 meeting the goal. 4 24 The bill requires the department to review the small 4 25 business concern participation achievements of each contractor 4 26 who was awarded a contract. The department must establish an 4 27 increasing participation goal for contractors in order to 4 28 increase small business concern participation. The department 4 29 has the authority to establish rules to deny or restrict the 4 30 awarding of contracts to contractors who fail to improve their 4 31 small business concern participation over multiple years. 4 32 The bill also requires that the department create the small 4 33 business assistance form. 4 34 The bill applies to notices for bids for contracts with the 4 35 department posted on or after July 1, 2009. 5 1 LSB 2504HV 83 5 2 ak/nh/5