S3734

An Act concerning the establishment of State business assistance program for socially and economically disadvantaged business enterprises and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

"Contracting agency" means the State or any board, commission, committee, authority, or agency of the State.

"Department" means the Department of the Treasury.

“Division” means the Division of Purchase and Property in the Department of the Treasury.

“Director” means the director of the Division of Purchase and Property.

“Economically disadvantaged” means that the owner or owners of a business enterprise:

demonstrate that the ability to compete in business has been impaired due to diminished capital and credit opportunities, as compared to others in the same or similar line of business who are not socially disadvantaged; or

demonstrate a personal net worth that does not exceed a level established by the director, but does not include equity in any personal residence or business for which the person is applying for certification.

“Qualified business enterprise” means a business which has its principal place of business in the State, is independently owned and operated, meets all other qualifications as established in accordance with this act, and is certified for participation in the business assistance program by the director.

“Socially disadvantaged” means that the owner or owners of a business enterprise:

demonstrate membership in a racial minority group or show personal disadvantage due to color, ethnic origin, gender, physical disability, long-term residence in an environment isolated from the mainstream of American society, or location in an area of high unemployment, with such demonstration creating a presumption that may be rebutted;

demonstrate personal disadvantage not common to other businesses, as determined by the director; or

demonstrate a business location in a qualified census tract having a poverty rate of 20 percent or more; or a census tract in which the median family income for the census tract does not exceed 80 percent of the greater of the Statewide median family income or the median family income of the metropolitan statistical area in which the census tract is situated.

2. The director shall establish a business assistance program for qualified business enterprises that are socially disadvantaged and economically disadvantaged and certified as qualified in accordance with this act, P.L. , c. (C. ) (pending before the Legislature as this bill). The program shall be implemented in addition to any set-aside program established by law. The program shall:

a. establish procedures by which a socially and economically disadvantaged business enterprise may apply for certification as a qualified business enterprise;

b. establish a system of certifying qualified business enterprises based on a requirement that the business owner or owners show both social and economic disadvantages, and the relative wealth of the business seeking certification as well as the personal wealth of the owner or owners of the business;

c. establish standards to determine when a qualified business enterprise no longer qualifies for qualified business enterprise certification;

d. establish a system to evaluate bid proposals to encourage qualified business enterprises to participate in the procurement of professional design and information technology services;

e. establish a process to mediate complaints and to review qualified business enterprise certification appeals;

f. implement an outreach program to educate potential participants about the business assistance program;

g. establish a system to assist contracting agencies in identifying and utilizing qualified business enterprises in their contracting processes;

h. implement a system of self-reporting by qualified business enterprises as well as an on-site inspection process to validate the qualifications of a qualified business enterprise;

i. establish a waiver mechanism to waive program goals or participation requirements for those contracting agencies that, despite their best-documented efforts, are unable to contract with qualified business enterprises;

j. establish a process for monitoring overall program compliance in which equal employment opportunity officers primarily are responsible for monitoring their respective contracting agencies; and

k. establish guidelines for public institutions of higher education for awarding contracts to allow the institutions to establish contracting agency procurement goals for contracting with qualified business enterprises.

3. a. (1) The director shall establish contracting agency procurement goals for contracting with qualified business enterprises in the awarding of contracts. These goals may, where appropriate, be attained by the direct designation of prime contracts for qualified business enterprises or, in the case of a prime contract not directly designated for qualified business enterprises, by requiring that a portion of such a prime contract be subcontracted to a qualified business enterprise. Each contracting agency shall make a good faith effort to attain the goals established in this section.

(2) The director shall develop a process for evaluating and adjusting goals to determine what adjustments are necessary to achieve participation goals.

b. Each contracting agency shall annually develop, in consultation with the department, a plan for achieving its qualified business enterprise goals.

4. a. The department shall establish reasonable regulations appropriate for controlling the designation of socially and economically disadvantaged businesses and shall maintain lists of designated businesses.

b. The department shall establish a procedure whereby businesses may request inclusion on appropriate lists for qualified business enterprises.

c. The department shall establish a procedure for annually reviewing the lists and determining whether the businesses on the lists shall continue to be designated as qualified business enterprises.

d. The department shall establish a procedure whereby the certification of a business as a qualified business enterprise may be challenged by a third party.

e. Any procedures established pursuant to subsections b., c., and d. of this section shall include notice to the business whose certification is at issue and an opportunity for a hearing at the department. The hearing shall not be considered a contested case under the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.).

5. Each contracting agency shall submit an annual report to the department according to a schedule announced by the department. This report shall include the following information:

a. the total dollar value and number of contracts awarded to qualified business enterprises, and the percentage of the total State procurements by the contracting agency that the figure of total dollar value reflects;

b. the types and sizes of businesses receiving contracts and the nature of the purchases and contracts; and

c. the efforts made to publicize and promote the program.

The department shall receive and analyze the reports submitted by the contracting agencies and, utilizing these data, submit an annual report to the Governor, and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), showing the progress being made toward the objectives and goals of this act during the preceding fiscal year.

6. The department shall consult regularly with representatives of the contracting industry for the purpose of implementing the provisions of this act, P.L. , c. (C. ) (pending before the Legislature as this bill). These consultations shall take place not less than once every six months.

7. When the department determines that a business has been certified as a qualified business enterprise on the basis of false information knowingly supplied by the business and has been awarded a contract to which it would not otherwise have been entitled under this act, the department shall:

a. assess the business any difference between the contract amount and what the State's cost would have been if the contract had not been awarded in accordance with the provisions of this act;

b. in addition to the amount due under paragraph a., assess the business a penalty in an amount of not more than 10 percent of the amount of the contract involved;

c. order the business ineligible to transact any business with the State for a period of not less than three months and not more than 24 months; and

d. prior to any final determination, assessment or order under this section, afford the business an opportunity for a contested case hearing pursuant to P.L.1968, c.410 (C.52:14B-1 et seq.).

All payments to the State pursuant to paragraph a. of this section shall be deposited in the fund out of which the contract involved was awarded. All payments to the State pursuant to paragraph b. of this section shall be deposited in the State General Fund.

8. The Department of the Treasury shall promulgate rules and regulations, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to implement the provisions of this act.

9. This act shall take effect immediately.

STATEMENT

This bill creates a State business assistance program to establish contracting agency procurement goals for socially and economically disadvantaged business enterprises.

The business assistance program establishes an annual goal for State contracting agencies, as well as guidelines for public institutions of higher education, in awarding contracts to certified and qualified business enterprises. The program is designed to assist socially and economically disadvantaged businesses in obtaining State government contracts in the following areas: construction, architecture and engineering; professional services; goods and services; and information technology services.

The purpose of this bill is to recognize the need to encourage, nurture, and support the growth of socially and economically disadvantaged businesses, to foster their development, and to increase the number of qualified competitors in the marketplace.