GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	2 

HOUSE BILL 476
Committee Substitute Favorable 6/29/89

Short Title:  Minority/Small Business Contracts.	(Public)
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Sponsors:
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Referred to:
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March 7, 1989

A BILL TO BE ENTITLED
AN ACT TO FURTHER THE DEVELOPMENT OF SMALL, MINORITY, FEMALE, AND HANDICAPPED-OWNED BUSINESSES BY CREATING THE DISADVANTAGED BUSINESS DEVELOPMENT COUNCIL AND THE DISADVANTAGED BUSINESS DEVELOPMENT OFFICE, AND BY ESTABLISHING GOALS FOR STATE CONTRACTS.
The General Assembly of North Carolina enacts:
Section 1.  Article 9 of Chapter 143B is amended by adding a Part to read:
“Part 29.
"Minority, Small, Female, and Handicapped-Owned
Business Development Act.
"§ 143B-426.45.  Policy; purpose.
(a)	The State of North Carolina declares that it is the public policy of the State to promote and encourage the economic development of small, minority, female, and handicapped-owned businesses and to promote their participation in the State's procurement programs as both prime contractors and subcontractors.
(b)	The purposes of this Part are:
(1)	To increase the State's knowledge of small, minority, female, and handicapped-owned businesses and to become familiar with their products and services.
(2)	To assist by providing information from both public and private sectors concerning capital and credit opportunities for small, minority, female, and handicapped-owned businesses.
(3)	To provide documentation of the number of small, minority, female, and handicapped-owned businesses that are available to undertake procurement, construction, real property, and State-funded highway construction contracts and to report levels of participation in these contracts by these groups.
(4)	To serve the public interest in the efficient performance of its public contracts by making information regarding small, minority, female, and handicapped-owned businesses readily available.
(5)	To encourage small, minority, female, and handicapped-owned businesses businesses to participate in State contracts by establishing goals for these businesses regarding State procurement, construction, real property, and State-funded highway construction contracts.
"§ 143B-426.46.  Definitions.
As used in this Part, unless the context requires otherwise:
(1)	‘Certification' means a determination made by the Director of the Disadvantaged Business Development Office in the Division of Purchase and Contract of the Department of Administration that a business entity is a small, minority, female, or handicapped-owned  business.
(2)	‘Construction contract' means all construction contracts governed by Article 8 of Chapter 143 of the General Statutes and Title I of the North Carolina Administrative Code.
(3)	‘Control' means the exclusive or ultimate and sole control of the business, including capital investment and all other financial matters, property, acquisitions, contract negotiations, legal matters, officer-director-employee selection and comprehensive hiring, operating responsibilities, cost-control matters, income and dividend matters, financial transactions and rights of other shareholders or joint partners.  Control shall be real, substantial, and continuing, not pro forma.  Control shall include the power to direct or cause the direction of the management and policies of the business and to make the day-to-day as well as major decisions in matters of policy, management, and operations.  Control does not mean simple majority or absentee ownership.
	(4)	‘Female' shall mean a person who is a citizen or lawful permanent resident of the United States and who is of the female gender.
(5)	‘Female-owned business' means a business concern:
a.	In which at least fifty-one percent (51%) is owned by one or more females, or, in the case of a corporation, in which at least fifty-one percent (51%) of the stock is owned by one or more females; and
b.	Of which the management and daily business operations are controlled by one or more of the females who own it.
(6)	‘Goal' means a voluntary percentage or quantitative objective.
(7)	‘Handicapped-owned business' means a business concern:
a.	In which at least fifty-one percent (51%) is owned by one or more handicapped persons, or in the case of a corporation, in which at least fifty-one percent (51%) of the stock is owned by one or more handicapped persons; and
b.	Of which the management and daily business operations are controlled by one or more of the handicapped persons who own it.
(8)	‘Handicapped person' means a person who is a handicapped person under the provisions of Chapter 168A of the General Statutes.
(9)	‘Minority person' means a person who is a citizen or lawful permanent resident of the United States and who is:
a.	Black, that is, a person having origins in any of the black racial groups in Africa;
b.	Hispanic, that is, a person of Spanish or Portugese culture with origins in Mexico, South or Central America, or the Caribbean Islands, regardless of race;
c.	Asian American, that is, a person having origins in any of the original peoples of the Far East, Southeast Asia and Asia, the Indian  subcontinent, or the Pacific Islands; or
d.	American Indian or Alaskan Native, that is, a person having origins in any of the original peoples of North America.
(10)	‘Minority-owned business' means a business concern:
a.	In which at least fifty-one percent (51%) is owned by one or more minority persons, or in the case of a corporation, in which at least fifty-one percent (51%) of the stock is owned by one or more minority persons; and
b.	Of which the management and daily business operations are controlled by one or more of the minority individuals who own it.
(11)	‘Procurement contract' means all procurement contracts governed by Article 3 of Chapter 143 of the General Statutes and Title I of the North Carolina Administrative Code.
(12)	‘Real property contracts' means the personal service contracts used in surveying and appraisals conducted by the Office of State Property.
(13)	‘Small business' means a business concern:
a.	In which gross annual sales total less than five million dollars ($5,000,000); and
b.	Which employs less than 75 full-time employees.
(14)	‘State agencies' means all departments, officers, boards, commissions, institutions and bodies politic and corporate of the State.
(15)	‘State contracts' means all State contracts, funded exclusively with State funds which are not subject to federal reimbursement, whether competitively bid or negotiated, including procurement contracts, real property contracts, construction contracts, and State-funded highway construction contracts.
(16)	‘State-funded highway construction contracts' means any highway construction contracts funded entirely with State monies.
"§ 143B-426.47.  Disadvantaged Business Development Council; membership.
(a)	To help implement and monitor the progress toward the goals of this Part, the Minority and Small Business Development Council of the Department of Administration is created.
The Council shall be comprised of 13 members.  The members shall include:  the Governor's Director of Minority Affairs, or his designee; the Director of the Small Business Development Division, Department of Commerce, or his designee; the Director of the Governor's Advocacy Council for Persons with Disabilities, or his designee; the Director of Indian Affairs of the Department of Administration, or his designee; the Director of the Council on the Status of Women, Department of Administration, or his designee; the Secretary of Administration, or his designee; the President of the North Carolina Association of Minority Business, or his designee; three members appointed by the General Assembly upon the recommendation of the Speaker of the House, in accordance with G.S. 120-121, one of whom shall:
(1)	Be a member of a minority as defined in G.S. 143B-426.46;
(2)	Have a demonstrated interest in and knowledge of the problems confronting minorities who seek to be in business; and
(3)	Have a demonstrated interest in minorities seeking to establish businesses,
and one of whom shall:
(1)	Be a female as defined in G.S. 143B-426.46;
(2)	Have a demonstrated interest in and knowledge of the problems confronting females who seek to be in business; and
(3)	Have a demonstrated interest in females seeking to establish businesses,
and one of whom shall:
(1)	Be a handicapped person as defined in G.S. 143B-426.26 or a person with a demonstrated interest in and knowledge of the problems confronting the disabled who seek to be in business; and
(2)	Have a demonstrated interest in disabled persons seeking to establish businesses,
and three members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, in accordance with G.S. 120-121, who satisfy the same criteria as the Speaker's three appointments.
(b)	Members serving by virtue of their office shall serve so long as they hold that office, except that the members appointed by the General Assembly shall serve two-year terms and shall be eligible for reappointment.  Vacancies in positions appointed by the General Assembly shall be filled in accordance with G.S. 120-122.
(c)	The Council shall appoint one member to serve as chairman and one member to serve as vice-chairman at the pleasure of the Council.
(d)	Members of the Council shall serve without compensation, but shall be reimbursed for any expenses pursuant to the provisions of G.S. 138-5 or G.S. 138-6.
"§ 143-426.48.  Powers and duties of the Council.
The Disadvantaged Business Development Council shall:
(1)	Develop a single certification process for businesses seeking assistance pursuant to this Part.
(2)	Recommend methods for identifying new minority, female, small, and handicapped-owned businesses for inclusion in the North Carolina Special Interest Directory.
(3)	Recommend alternatives to the bonding requirements governing procurement, construction, and real property contracts.
(4)	Submit annual reports to the Governor and the General Assembly on the status of the program implemented pursuant to this Part.
(5)	Conduct on a biennial basis a review of the established goals for the purpose of recommending to the Governor and the General Assembly increasing the goals, if deemed appropriate.
"§ 143B-426.49. Disadvantaged Business Development Office; creation.
	The Disadvantaged Business Development Office shall be located in the Division of Purchase and Contract in the Department of Administration.
"§ 143B-426.50.  Powers and duties of the Disadvantaged Business Development Office.  
	The Disadvantaged Business Development Office shall:
(1)	Implement the certification procedure to assure businesses seeking assistance under this Part are small, minority, female, or handicapped-owned businesses.
(2)	Maintain a list of all certified minority, small, female, and handicapped-owned businesses to provide to all State agencies.
(3)	Review rules and regulations for the implementation of the provisions of this Part.
(4)	Review compliance plans submitted by each agency pursuant to this Part.
(5)	Serve as a central clearinghouse for information on State contracts, including the maintenance of a list of all pending State contracts upon which minority, small, female, and handicapped-owned businesses may bid.
(6)	Serve as a coordinator for the State's minority, small, female, and disabled business goals programs and as an information and referral center for all State minority, small, female, and handicapped-owned business initiatives.
(7)	Make findings, recommendations, and proposals to the Governor and the General Assembly as are necessary and appropriate to implement the provisions of this Part.
"§ 143B-426.51.  Adoption of rules.
The Department of Administration shall submit for review by the Administrative Rules Review Commission any rules deemed appropriate for adoption pursuant to this Part.
"§ 143B-426-52.  Goals.
It is a goal to award not less than twenty-five percent (25%) of the total dollar amount of State contracts to minority, female, small, and handicapped-owned business, provided, however:
(1)	At least ten percent (10%) of the total dollar amount of State contracts shall be targeted for minority-owned businesses;
(2)	At least ten percent (10%) of the total dollar amount of procurement contracts shall be targeted for female-owned businesses; and
(3)	At least two percent (2%) of the total dollar amount of all State construction contracts and real property contracts shall be targeted for female-owned businesses.
(b)	The percentage of the total dollar amount of State contracts is calculated for one fiscal year and is calculated by examining independently each type of contract for each agency which enters into contracts pursuant to Article 3 and Article 8 of Chapter 143 of the General Statutes and Article 2 of Chapter 136 of the General Statutes.
"§ 143B-426.53.  Annual compliance plans.
(a)	Each State agency shall file with the Disadvantaged Business Development Office an annual compliance plan which outlines the agency's minority, small, female, and handicapped-owned business contracting goals for the fiscal year, the manner in which the agency intends to reach these goals, and a timetable for reaching these goals.  The Disadvantaged Business Development Office shall review and approve the plan of each agency or reject any plan that does not comply with the provisions of this Part or any rules adopted pursuant to this Part.
(b)	The compliance plan shall include a policy statement signed by the agency head, expressing a commitment to use minority, small, female, and handicapped-owned businesses in all aspects of contracting to the maximum extent feasible.
"§ 143B-426.54.  False information supplied by business.
(a)	When a State agency determines that a business has knowingly supplied false information in order to be classified as a minority, small, female, or handicapped-owned business, the State agency shall contact the Director of the Disadvantaged Business Development Office to determine, after consultation with legal counsel, the appropriate action to be taken.
(b)	Prior to any final determination under subsection (a) of this section, the business charged with supplying false information may commence an action under Chapter 150B of the General Statutes.
(c)	Any person who, with intent to defraud another, represents himself as a minority, small, female, or handicapped-owned business for the purpose of obtaining money, goods, property, services, choses in action, or any item of value from a person within this State is guilty of a Class J felony."
Sec. 2.  G.S. 120-123 is amended by adding a new subdivision to read:
"(56)	The Disadvantaged Business Development Council, as established by Part 29 of Article 9 of Chapter 143B of the General Statutes.”
Sec. 3.  There is appropriated from the General Fund to the Department of Administration the sum of $100,000 for fiscal year 1989-90 and $100,000 for fiscal year 1990-91 for the creation of the Disadvantaged Business Development Office and for the implementation of the provisions of this act.
Sec. 4.  Section 3 of this act shall become effective July 1, 1989.  Sections 1 and 2 of this act shall become effective January 1, 1990.