Committee backs bill to streamline state certification for minority-, women- and veteran-owned businesses

Representative Hong presented House Bill 128 (LC 365387-E-C) on behalf of the governor, saying the bill transfers responsibility for state certification of small-business contractors out of the Department of Transportation to the Department of Administrative Services (DOAS), simplifies the process for firms seeking state certification and adds women-owned and veteran-owned businesses to the state certification categories. The bill also extends an existing tax deduction available to prime contractors who subcontract with certified firms.

Hong described the current process as burdensome because many would-be state-certified firms must first obtain federal DBE certification through the Department of Transportation; HB128 would allow businesses to apply directly to DOAS and would permit DOAS to accept certifications from vetted third-party organizations (for example, SBA programs, Women’s Business Enterprise National Council, the VA verification service and National Minority Supplier Development Council). Autumn Cole, general counsel at DOAS, told the committee the department plans to streamline the process by accepting certifications from respected national certifiers so small businesses need not complete duplicate vetting.

The bill would expand an existing tax provision so that when a prime contractor subcontracts to a certified minority-, women- or veteran-owned firm, the prime may reduce taxable gross income by 10% of qualifying payments (up to a $100,000 cap) as described in the bill. Committee members pressed for clarity on classification thresholds (51% ownership to qualify) and how state certifications would interact with local purchasing rules. Cole and Representative Hong said DOAS will set policy-level guidelines for which third-party certifiers it will accept and intends not to add new layers of paperwork.

Representative Reese moved that the committee recommend HB128 do pass; the motion was seconded and approved by voice vote. The committee reported the recommendation in the transcript and then adjourned.

The transcript records committee discussion of implementation details (which certifying organizations would be accepted and how the tax-deduction calculation is applied) and several members expressed support for the bill as a step to reduce red tape for small businesses. The committee’s voice-vote recommendation will be forwarded to the next legislative step per normal process.