California Hispanic Chambers Encourages Governor to Sign AB 2019

The California Hispanic Chambers of Commerce (CHCC) is encouraging Governor Newsom to sign AB 2019 (Petrie-Norris and Holden) to ensure that small business owners have an equitable chance of being considered in State contracts. California is currently home to 3.9 million small businesses, which make up 99.8% of all businesses, of which 1.6 million are minority-owned. Small businesses not only contribute significantly to the tax base of the State but also accounted for 7 million Californians or 48.8% of all employment in the State. The CHCC is a key supporter and co-sponsor of the bill.

“CHCC believes it is necessary, as a matter of policy, for the State of California to ensure that a fair share of procurement spending is directed and dedicated to small and diverse businesses,” said Julian Canete, CHCC President and CEO. “California small businesses provide an array of goods and services that would benefit the state, but they need an opportunity to compete with larger businesses that have traditionally monopolized state contracts. AB 2019 would provide that opportunity and advance the goal of equity and inclusion when it comes to state business.”

The bill also declares that the state economy is strengthened by the diversity and resiliency of its small businesses and that it is essential to ensure all small businesses are able to fully participate in the domestic and global markets, including businesses owned by women and other specified groups.

AB 2019 creates accountability and establishes steps to increase participation by businesses owned by disadvantaged individuals by officially establishing in statute a 25% procurement goal along with an accountability mechanism. Additionally, it will create further plans, transparency, and pertinent data to encourage participation in the state process. Setting this goal in procurement will be a giant step in acknowledging the importance of small businesses in California. The bill establishes economic equity in State contracting by doing three primary things:

1. Codifying the goal of 25% of State procurement to be directed toward small businesses.
2. Fast-tracking of small business certification for “Disadvantaged Business Enterprises” (DBEs).
3. Establishing accountability within the Administration and throughout the state bureaucracy, to enforce the intent of meeting that goal, while directing all State agencies to develop and enact an education and outreach plan, which will inform their communication strategy to minority and hard-to-reach businesses.

The bill would also require each state agency’s small business liaison to develop an “economic equity first” action plan and policy for the agency to provide direction, recommendations, and strategies as to how to ensure that small businesses are effectively involved and benefiting from the agency’s procurement process. AB 2019 also requires an action plan and policy is adopted by January 1, 2024. The action plan will include general outreach to all small businesses, education and outreach, and stakeholder engagement with representative business organizations and business enterprises owned by women, minorities, and members of the LGBT community.

Finally, AB 2019 will require an annual report from state agencies to include details regarding the agency’s activities to support procurement participation by small businesses, micro-businesses, disabled veteran business enterprises, and businesses owned by women, minorities, and members of the LGBT community that also qualify as a small business, micro business, or disabled veteran business enterprise, as well as compliance and implementation of specified action plans and policies by a state agency; liaisons and advocated. The bill would also require each state agency to provide information regarding its activities upon request to the Office of the Small Business Advocate in the Governor’s Office of Business and Economic Development.