A377

ASSEMBLY, No. 377

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblymen T. SMITH and BROWN

An Act creating a Public Contract Oversight Office, supplementing Title 52 of the Revised Statutes and revising various parts of the statutory law.

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

1. (New section) As used in sections 1 through 6 of P.L. , c. (C. )(now pending before the Legislature as this bill):

"contracting agency" means the State or any board, commission, committee, authority or agency of the State;

"director" means the Director of the Public Contract Oversight Office;

"minority" means a person who is:

a. African-American, which is a person having origins in any of the Black racial groups in Africa; or

b. Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean Islands, regardless of race; or

c. Asian-American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, and Indian Subcontinent, Hawaii or the Pacific Islands;

"minority business" means a business which has its principal place of business in this State, is independently owned and operated and at least 51% of which is owned and controlled by minorities;

"office" means the Public Contract Oversight Office;

"State contract" means any purchase, contract or agreement the cost or contract price of which is to be paid, in whole or in part, out of State funds;

"women" means a woman, regardless of race;

"women's business" means a business which has its principal place of business in this State, is independently owned and operated and at least 51% of which is owned and controlled by women.

2. (New section) There is established the public Contract Oversight Office. For the purpose of complying with the provisions of Article V, Section IV, paragraph 1 of the New Jersey Constitution, the office shall be allocated to the Department of State Commerce and Economic Development but, notwithstanding that allocation, the office shall be independent of any supervision or control of the department or any board or officer thereof. It shall be the mission of the office to implement measures intended to eliminate discrimination against minorities and women in the awarding of public contracts and to include minority businesses and women's businesses in the economic life of the State.

3. (New section) The office shall be under the immediate supervision of a director who shall administer and enforce the provisions of P.L. c. (C. )(now pending before the Legislature as this bill), subject to the supervision and control of the Governor. The director shall be appointed by the Governor and shall serve at the pleasure of the Governor. The director shall be in the unclassified service, shall devote full-time to the duties of the office and shall receive a salary as shall be provided by law.

4. (New section) The director shall:

a. administer and cause the work of the office to be performed in such manner and pursuant to such program as may be required or appropriate;

b. organize and reorganize the office and establish such sections as may be required or appropriate;

c. appoint, pursuant to the provisions of Title 11A of the New Jersey Statutes, such personnel as may be required for the conduct of the office; and

d. assign and reassign personnel to employment within the office.

5. (New section) Notwithstanding the provisions of any other law to the contrary, the office shall:

a. be responsible for monitoring and ensuring compliance with the State's set-aside laws by contracting agencies and parties to State contracts;

b. determine the availability of minority businesses or women's businesses to provide specific types of goods and services under set-aside contracts;

c. set goals for the participation of minority businesses and women's businesses in State contracts based upon the availability of these businesses;

d. review, monitor and approve the purchasing plans and set-aside goals adopted by each contracting agency for the purpose of meeting the agency's set-aside obligations;

e. develop and monitor, for the purpose of evaluating the utilization of minority businesses and women's businesses, a uniform reporting system applicable to each contracting agency which requires the agency to report to the office the race, gender and ethnicity of all parties to contracts awarded by the agency and any subcontracts thereto;

f. determine, on the basis of documented discrimination, which minority groups are eligible for inclusion in the State's set-aside programs and make recommendations to the Legislature for changes in the law to include these groups;

g. serve as a resource to units of local government in the development and implementation of set-aside programs for minority businesses and women's businesses;

h. based upon the available data, identify specific racial and ethnic groups participating in set-aside programs and modify the programs as necessary and consistent with the data and relevant laws; and

i. determine how and when set-aside programs shall be modified or discontinued.

6. (New section) Each contracting agency shall:

a. cooperate fully with the office in the establishment and implementation of public contract set-aside goals;

b. provide the office with such information and data as it shall request and as shall be necessary to enable the office to fulfill its mission;

c. record and report to the office the race, gender and ethnicity of any person awarded a contract by the agency or performing under a subcontract thereto; and

d. develop, under the supervision of the office, an annual purchasing plan which includes the setting aside of an appropriate number of contracts for minority businesses and women's businesses.

7. Section 2 of P.L.1985, c.539 (C.5:12-185) is amended to read as follows:

2. As used in this act:

a. "Casino licensee" means any entity which holds or is an applicant for a casino license pursuant to section 87 of P.L.1977, c. 110 (C. 5:12-87).

b. "Minority business enterprise" means a business that is:

(1) A sole proprietorship, owned and controlled by a minority;

(2) A partnership or joint venture owned and controlled by minorities in which at least 51% of the ownership interest is held by minorities and the management and daily business operations of which are controlled by one or more of the minorities who own it; or

(3) A corporation or other entity whose management and daily business operations are controlled by one or more minorities who own it, and which is at least 51% owned by one or more minorities, or if stock is issued, at least 51% of the stock is owned by one or more minorities.

c. "Minority" means a person who is:

(1) Black, which is a person having origins in any of the black racial groups in Africa; or

(2) Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean Islands, regardless of race; or

(3) Asian American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, Indian Subcontinent, Hawaii, or the Pacific Islands; or

(4) American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America.

d. "Women's business enterprise" means a business that is:

(1) A sole proprietorship owned and controlled by a woman; or

(2) A partnership or joint venture owned and controlled by women in which at least 51% of the ownership is held by women and the management and daily business operations of which are controlled by one or more women who own it; or

(3) A corporation or other entity whose management and daily business operations are controlled by one or more women who own it, and which is at least 51% owned by women, or if stock is issued, at least 51% of the stock is owned by one or more women.

(cf: P.L.1987, c.137, s.1)

8. Section 2 of P.L.1985, c.386 (C.34:1B-48) is amended to read as follows:

2. For the purposes of this act:

a. "Authority" means the New Jersey Development Authority for Small Businesses, Minorities and Women's Enterprises established pursuant to the provisions of this act;

b. "Board" means the board of directors of the New Jersey Development Authority for Small Businesses, Minorities and Women's Enterprises established pursuant to the provisions of this act;

c. "Eligible business" means a small business or a minority or women's business determined to be eligible to receive assistance and participate in programs according to the standards established pursuant to this act;

d. "Minority" means a person who is:

(1) Black, which is a person having origins in any of the black racial groups in Africa; or

(2) Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean islands, regardless of race; or

(3) Asian-American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, and Indian subcontinent, Hawaii, or the Pacific Islands; or

(4) American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America;

e. "Minority business" means a business in which at least 51% of the beneficial ownership of the business is held by minorities, and in which the majority of the management are minorities;

f. "Small business" means a business in which at least 51% of the beneficial ownership of the business is held by persons other than minorities or women and the majority of the management of which is other than minorities or women, and which business is of a type and size defined by the Commissioner of the Department of Commerce and Economic Development as a small business, which definition shall be similar to that of the federal Small Business Administration;

g. "Women" means a woman, regardless of race;

h. "Women's business" means a business in which at least 51% of the beneficial ownership of the business is held by women, and in which the majority of the management are women.

(cf: P.L.1985, c.386, s.2)

9. Section 2 of P.L.1987, c.55 (C.52:27H-21.8) is amended to read as follows:

2. For the purposes of this act:

a. "Authority" means the New Jersey Development Authority for Small Businesses, Minorities and Women's Enterprises established pursuant to the provisions of P.L.1985, c.386 (C.34:1B-47 et seq.);

b. "Commissioner" means the Commissioner of the Department of Commerce and Economic Development;

c. "Division" means the Division of Development for Small Businesses and Women's and Minority Businesses;

d. "Eligible business" means a small business or a minority or women's business certified by the division and determined to be eligible to receive assistance and to participate in programs according to the standards established pursuant to this act;

e. "Minority" means a person who is:

(1) Black, which is a person having origins in any of the black racial groups in Africa;

(2) Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean islands, regardless of race;

(3) Asian American, which is a person having origins in any of the original people of the Far East, Southeast Asia, the Indian Subcontinent, Hawaii, or the Pacific Islands; or

(4) American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America;

f. "Minority business" means a business which is:

(1) A sole proprietorship, owned and controlled by a minority;

(2) A partnership or joint venture owned and controlled by minorities in which at least 51% of the ownership interest is held by minorities and whose management and daily business operations are controlled by one or more of the minorities who own it; or

(3) A corporation or other entity the management and daily business operations of which are controlled by one or more minorities who own it, and which is at least 51% owned by one or more minorities, or, if stock is issued, at least 51% of the stock of which is owned by one or more minorities;

g. "Small business" means a sole proprietorship, partnership or corporation which is a size and type defined by the commissioner;

h. "Women's business" means a business which is:

(1) A sole proprietorship owned and controlled by a woman; or

(2) A partnership or joint venture owned and controlled by women in which at least 51% of the ownership is held by women; or

(3) A corporation or other entity the management and daily business operations of which are controlled by one or more women who own it, and which is at least 51% owned by women, or, if stock is issued, at least 51% of the stock of which is owned by one or more women.

(cf: P.L.1987, c.55, s.2)

10. Section 2 of P.L.1986, c.195 (C.52:27H-21.18) is amended to read as follows:

2. As used in this act:

a. "Control" means authority over the affairs of a business, including, but not limited to, capital investment, property acquisition, employee hiring, contract negotiations, legal matters, officer and director selection, operating responsibility, financial transactions and the rights of other shareholders or joint partners; except that control shall not include absentee ownership, nor shall it be deemed to exist where an owner or employee who is not a minority, in the case of a minority business; or a male owner or employee, in the case of a women's business, is disproportionately responsible for the operation of the business or for policy and contractual decisions.

b. "Commissioner" means the Commissioner of the Department of Commerce and Economic Development.

c. "Director" means the Director of the Division of Development for Small Businesses and Women's and Minority Businesses in the Department of Commerce and Economic Development, created pursuant to P.L.1987, c.55 (C.52:27H-21.7 et seq.) , (now pending before the Legislature as Senate Bill No. 1709 of 1986).

d. "Division" means the Division of Development for Small Businesses and Women's and Minority Businesses in the Department of Commerce and Economic Development, created pursuant to P.L.1987, c.55 (C.52:27H-21.7 et seq.) , (now pending before the Legislature as Senate Bill No. 1709 of 1986).

e. "Minority" means a person who is:

(1) Black, which is a person having origins in any of the black racial groups in Africa; or

(2) Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean Islands, regardless of race; or

(3) Asian-American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, Indian subcontinent, Hawaii, or the Pacific Islands; or

(4) American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America.

f. "Minority business" means a business which is:

(1) A sole proprietorship owned and controlled by a minority;

(3) A corporation or other entity whose management and daily business operations are controlled by one or more minorities who own it, and which is at least 51% owned by one or more minorities, or, if stock is issued, at least 51% of the stock is owned by one or more minorities.

g. "Public agency" means the State or any department, division, agency, authority, board, commission or committee thereof.

h. "Woman" or "women" means a female or females, regardless of race.

i. "Women's business" means a business which is:

(1) A sole proprietorship owned and controlled by a woman; or

(3) A corporation or other entity whose management and daily business operations are controlled by one or more women who own it, and which is at least 51% owned by women, or, if stock is issued, at least 51% of the stock is owned by one or more women.

(cf: P.L.1986, c.195, s.2)

11. Section 2 of P.L.1987, c.56 (C.52:27H-21.26) is amended to read as follows:

2. As used in this act:

a. "Commissioner" means the Commissioner of the Department of Commerce and Economic Development or his designated representative, which may be the New Jersey Economic Development Authority.

b. "Minority" means a person who is:

(1) Black, which is a person having origins in any of the black racial groups in Africa; or

(2) Hispanic, which is a person of Spanish or Portuguese culture, with origins in Mexico, South or Central America, or the Caribbean Islands regardless of race; or

(3) Asian American, which is a person having origins in any of the original peoples of the Far East, Southeast Asia, Indian Subcontinent, Hawaii, or the Pacific Islands; or

(4) American Indian or Alaskan native, which is a person having origins in any of the original peoples of North America.

c. "Minority business" means a business which is:

(1) A sole proprietorship, owned and controlled by a minority;

(3) A corporation or other entity whose management and daily business operations are controlled by one or more minorities who own it, and which is at least 51% owned by one or more minorities, or, if stock is issued, at least 51% of the stock is owned by one or more minorities.

d. "Small business" means a business which is of a size and type defined by the commissioner.

e. "Women's business" means a business which is:

(1) A sole proprietorship owned and controlled by a woman;

f. "Grantee" means a county or municipality who has received a grant under this act.

g. "Technical assistance" means aiding the establishment, development and promotion of small, minority and women's businesses operating within the grantee's jurisdiction by means that will be defined by the commissioner under the provisions of the act.

h. "Certification assistance" means aiding minority and women's businesses within the grantee's jurisdiction in becoming certified, under State regulations, to be eligible to bid on public contracts or otherwise represent themselves as a "minority business" or "women's business" under any program conducted by public agencies for which such certification is so required. Certification assistance also covers the cost to the grantee of integrating and standardizing existing local government certification procedures with State certification standards and procedures.

(cf: P.L.1987, c.56, s.2)

12. Section 3 of P.L.1983, c.482 (C.52:32-19) is amended to read as follows:

3. As used in this act:

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

b. "Chief" means the Chief of the Office of Small Business Assistance when used in conjunction with the small business and female business set-aside programs, or the Chief of the Office of Minority Business Enterprise when used in conjunction with the minority business set-aside program.

c. "Department" means the Department of Commerce and Economic Development.

d. "Office" means the Office of Small Business Assistance in the Department of Commerce and Economic Development when used in conjunction with the small business and female business set-aside programs, or the Office of Minority Business Enterprise when used in conjunction with the minority business set-aside program.

e. "Small business" means a business which has its principal place of business in the State, is independently owned and operated and meets all other qualifications as may be established in accordance with P.L.1981, c.283 (C.52:27H-21.1 et seq.).

f. "Small business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from small businesses, or (2) a portion of a contract when that portion has been so designated.

g. "Minority business" means a business which has its principal place of business in the State, is independently owned and operated and at least 51% of which is owned and controlled by persons who are black, Hispanic, including Portuguese, or Asian-American, American Indian or Alaskan natives.

h. "Minority business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from minority businesses; or (2) a portion of a contract when that portion is so designated.

i. "Female business" means a business which has its principal place of business in the State, is independently owned and operated and at least 51% of which is owned and controlled by women.

j. "Female business set-aside contract" means (1) a contract for goods, equipment, construction or services which is designated as a contract with respect to which bids are invited and accepted only from female businesses; or (2) a portion of a contract when that portion is so designated.

(cf: P.L.1985, c.384, s.4)

13. (New section) The Public Contract Oversight Office shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate such rules and regulations as may be necessary to effectuate the purposes of this act.

14. This act shall take effect immediately.

STATEMENT

In 1989, the United States Supreme Court decided City of Richmond v. Croson, 109 S.Ct. 706 (1989) in which it held that minority business public contract set-aside programs were unconstitutional unless narrowly tailored to address documented discrimination against specific racial groups in a particular industry or a public entity's own spending practices had aggravated a pattern of discrimination. Following this decision, the State suspended its minority and women business set-aside programs. Executive Order No. 213, issued by Governor Kean on August 14, 1989, created the Governor's Study Commission on Discrimination in Public Works Procurement and Construction Contracts to investigate the nature and scope of discriminatory practices in public contracting in New Jersey. The commission documented discrimination against African-Americans, Hispanics, Asian-Americans and women and recommended that the set-aside programs be reimplemented for these groups. On March 5, 1993, the State's set-aside programs were reestablished by Executive Order No. 84, issued by Governor Florio, for the groups against which discrimination had been documented.

This bill would implement several of the recommendations contained in the final report of the commission issued on February 22, 1993. The bill conforms the statutory definition of "minority" to the findings of the commission. It creates an independent Public Contract Oversight Office in the Department of Commerce and Economic Development. It would be the mission of the office to implement measures intended to eliminate discrimination against minorities and women in the awarding of public contracts and to include minority businesses and women's businesses in the economic life of the State. This bill also establishes a Public Contract Oversight Advisory Committee in the Department of Commerce and Economic Development to assist the office. The office would be responsible for collecting data, establishing set-aside goals and monitoring compliance. The bill imposes certain record-keeping responsibilities on contracting agencies and requires them to take affirmative actions to meet set-aside goals.

Creates Public Contract Oversight Office; implements procedures concerning set-aside contracts in order to remedy certain discriminatory practices.