S 1405 Session 110 (1993-1994)
S 1405 General Bill, By Jackson
A Bill 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 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 m
05/09/94 Senate Introduced and read first time SJ-3
05/09/94 Senate Referred to Committee on Judiciary SJ-3
A BILL
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:
"Article 21
Assistance to Minority and Female
Businesses
Subarticle 1
Definitions
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.
Subarticle 3
Assistance to Minority and Female
Businesses
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.
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