LB652 LB652
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LEGISLATURE OF NEBRASKA
ONE HUNDRED SEVENTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 652
Introduced by Wayne, 13.
Read first time January 20, 2021
Committee: Government, Military and Veterans Affairs
1 A BILL FOR AN ACT relating to economic development; to adopt the Nebraska
2 Historically Underutilized Business Program Act; and to provide an
3 operative date.
4 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 11 of this act shall be known and may be
2 cited as the Nebraska Historically Underutilized Business Program Act.
3 Sec. 2. (1) The Legislature finds:
4 (a) That the promotion of HUBs is a matter of state concern,
5 particularly in communities which contain a large number of HUBs;
6 (b) That it is necessary and expedient to require the inclusion of
7 certain provisions in contracts with constitutional offices and state
8 agencies to promote and encourage the creation of business opportunities
9 for HUBs of this state, and businesses in economic redevelopment areas,
10 to promote equality of access to public contracts;
11 (c) That it is in the best interest of the people of Nebraska to
12 promote the interests of HUBs because it is vital that all Nebraskans
13 have an opportunity to contribute economically by participating in
14 business opportunities existing in government;
15 (d) That a coordinated effort is necessary to eliminate any barriers
16 impeding equal opportunity for HUBs doing business with a constitutional
17 office or state agency;
18 (e) That the utilization of HUBs is critical to creating a vibrant,
19 sustainable, and diverse business community in Nebraska; and
20 (f) That it is the policy of this state to encourage the use of HUBs
21 by constitutional offices and state agencies and to assist such offices
22 and agencies in the implementation of this policy through means that are
23 neutral as to race, ethnicity, and gender.
24 (2) The purpose of the Nebraska Historically Underutilized Business
25 Program Act is to promote full and equal business opportunities for all
26 businesses in an effort to remedy disparities in state and local
27 procurement and contracting.
28 (3) The Nebraska Historically Underutilized Business Program Act
29 describes the minimum steps and requirements to be undertaken by a
30 government entity to fulfill the state's HUB policy and attain
31 aspirational goals.
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1 Sec. 3. For purposes of the Nebraska Historically Underutilized
2 Business Program Act:
3 (1) Applicant means a person or business that applies to the
4 Commissioner of Labor for certification as a HUB;
5 (2) Application means the Department of Labor's form for applicants
6 to request certification as a HUB;
7 (3) Bidder means any person or business seeking to be awarded a
8 government entity contract;
9 (4) Commodities means any tangible good provided by a contractor to
10 the state;
11 (5) Contract means any contract awarded by a government entity
12 whereby the government entity is committed to expend or does expend
13 public funds, including, but not limited to, any public funds received
14 from other government entities, tax incentive programs, or tax-increment
15 financing expenditures, including public funds used for construction,
16 work, labor services, financial services, technical services,
17 professional services, supplies, equipment, materials, or any combination
18 of the foregoing;
19 (6) Contractor means a person or business that contracts with a
20 government entity to provide commodities or services, including
21 professional services;
22 (7) Economic redevelopment area means an area in the State of
23 Nebraska in which: (a) The average rate of unemployment in the area
24 during the period covered by the most recent federal decennial census or
25 American Community Survey 5-Year Estimate by the United States Bureau of
26 the Census is at least one hundred fifty percent of the average rate of
27 unemployment in the state during the same period; and (b) the average
28 poverty rate in the area is twenty percent or more for the total federal
29 census tract or tracts or federal census block group or block groups in
30 the area;
31 (8) Government entity means any of the following:
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1 (a) Constitutional office; or
2 (b) State agency;
3 (9)(a) Historically underutilized business or HUB means:
4 (i) A participant in the United States Department of
5 Transportation's disadvantaged business enterprise program and that
6 adheres to the requirements and guidance contained in 49 C.F.R. part 26,
7 Participation By Disadvantaged Business Enterprises In Department of
8 Transportation Financial Assistance Programs, as such part existed on
9 January 1, 2021; or
10 (ii) Any person or business with its principal place of business
11 located within an economic redevelopment area and is:
12 (A) A contractor, including a building constructor or heavy and
13 civil engineering constructor as described in subsectors 236 and 237,
14 respectively, of the NAICS whose average annual gross receipts from the
15 past three years do not exceed the size standard of XX million dollars or
16 the size standard in number of employees, twenty-five percent of the
17 NAICS for those subsectors of the NAICS as published in the current
18 United States Small Business Administration Table of Small Business Size
19 Standards matched to the North American Industry Classification System
20 subsectors;
21 (B) A specialty trade contractor as described in subsector 238 of
22 the NAICS whose average annual gross receipts from the past three years
23 do not exceed the size standard of XX million dollars or the size
24 standard in number of employees, twenty-five percent of the NAICS for
25 those subsectors of the NAICS as published in the current United States
26 Small Business Administration Table of Small Business Size Standards
27 matched to the North American Industry Classification System subsectors;
28 or
29 (C) An entity whose average annual gross receipts from the past
30 three years do not exceed the size standard of XX million dollars or the
31 size standard in number of employees, twenty-five percent of the NAICS as
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1 published in the current United States Small Business Administration
2 Table of Small Business Standards matched to the North American Industry
3 Classification System subsectors; and that is not an affiliate or
4 subsidiary of a business in its field of operation; and
5 (b) HUB cannot be:
6 (i) A manufacturer's representative; a franchise, unless operating
7 as an independent entrepreneur utilizing a franchise name only; a
8 business for which the owner is an owner or part owner of another similar
9 business; or a non-stocking retailer or wholesaler; or
10 (ii) An entity whose owners:
11 (A) Have a net worth more than the sum of one million five hundred
12 thousand dollars after excluding the equity of the individual or
13 individuals in the business seeking certification and such individual's
14 equity in their primary residences; or
15 (B) Hold more than ten percent ownership in any other single
16 business, unless the other business is certified as a HUB;
17 (10) HUB subcontracting plan means a written document that outlines
18 the use of subcontractors, which is required to be submitted with a
19 response to a government entity solicitation for which subcontracting
20 opportunities have been determined by the government entity to be
21 probable. The HUB subcontracting plan subsequently becomes a provision of
22 the awarded contract and shall be monitored for compliance by the
23 government entity during the term of the contract;
24 (11) North American Industry Classification System or NAICS means
25 the standard established by the United States Office of Management and
26 Budget and used by federal statistical agencies in classifying business
27 establishments for the purpose of collecting, analyzing, and publishing
28 statistical data related to the United States business economy;
29 (12) Owner means any person or business holding any percentage
30 ownership in a business;
31 (13) Prime contractor is a person or business that is awarded a
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1 government entity contract;
2 (14) Principal place of business means the location where the owner
3 or owners of the business direct, control, and coordinate the business's
4 daily operations and activities;
5 (15) Professional services means services of licensed or registered
6 professions;
7 (16) Reside, when used in reference to a requirement that a person
8 reside within this state, means that a person:
9 (a) Physically resides in this state for a period of not less than
10 twelve consecutive months prior to submitting an application for HUB
11 certification and lists Nebraska as such person's residency in such
12 person's most recent federal tax return; or
13 (b) Has established, to the satisfaction of the Department of
14 Revenue, a Nebraska domicile for a period of time sufficient to
15 demonstrate an intention to permanently reside in this state consistently
16 over a substantial period of time;
17 (17) Respondent means a person or business that submits a response;
18 (18) Response means a submission made in answer to an invitation for
19 bids, requests for proposals, or other purchase solicitation documents,
20 which may take the form of a bid, proposal, offer, or other applicable
21 expression of interest;
22 (19) Subcontractor means a person or business who contracts with a
23 prime contractor to work or contribute toward completing work for a
24 government entity;
25 (20) Tier I HUB means any HUB that:
26 (a) Has its principal place of business located within an economic
27 redevelopment area; and
28 (b) Has twenty percent or more of its employees residing within an
29 economic redevelopment area;
30 (21) Tier II HUB means any HUB that:
31 (a) Has its principal place of business located within an economic
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1 redevelopment area; or
2 (b) Has twenty percent or more of its employees residing within an
3 economic redevelopment area; and
4 (22) Tier III HUB means any HUB that is not a Tier I HUB or Tier II
5 HUB.
6 Sec. 4. (1) A business desiring to be certified as a HUB must
7 complete a form prescribed by the Department of Labor or participate in
8 the Department of Transportation's Nebraska Unified Certification
9 Program.
10 (2) The Department of Labor may request any additional information
11 determined necessary to evaluate a business's qualifications for
12 certification prior to a decision to certify an applicant as a HUB.
13 (3) Once a business has been certified as a HUB, the certification
14 shall remain in place for five years, as long as the certification status
15 of the business does not change. The business must complete an annual
16 affidavit of certification that states its current certification status,
17 regardless of whether variables have changed. A business may apply to be
18 recertified as a HUB if the business maintains its qualifications for
19 certification, subject to the limits set forth in this section. A HUB
20 shall only be permitted to recertify four times for a maximum of twenty
21 years. No business that was initially certified as a HUB shall
22 participate in the HUB program for a period greater than twenty-five
23 years.
24 (4) When a business no longer meets the criteria of the HUB program,
25 the business shall be decertified and shall no longer participate in the
26 program. However, if a business is certified to participate in the
27 program at the time it enters into any contract, the business shall
28 remain certified for that contract only until the expiration of the
29 contract. Nothing in this subsection shall prohibit the Department of
30 Labor or the Department of Transportation from decertifying any business
31 that violates any rule, policy, or procedure of the HUB program.
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1 Sec. 5. (1) Each government entity shall make a good faith effort
2 to utilize HUBs in contracts for construction, services, including
3 professional and consulting services, and commodities purchases. Each
4 government entity may achieve the statewide or office, agency, or
5 political subdivision-specific annual HUB goals specified in the
6 constitutional office's or state agency's appropriations request or the
7 political subdivision's budget by contracting directly with HUBs or
8 indirectly through subcontracting opportunities.
9 (2) The statewide HUB reporting categories are:
10 (a) Heavy construction other than building contracts;
11 (b) All building construction, including general contractors and
12 operative builders contracts;
13 (c) All special trade construction contracts;
14 (d) Professional services contracts;
15 (e) All other services contracts; and
16 (f) Commodities contracts.
17 (3) Priorities shall be set forth as follows: If there is an
18 adequate number of qualified and certified HUB bidders or applicants,
19 first priority shall be given to Tier I HUBs; if not, then the next
20 priority will be given to Tier II HUBs; and then Tier III HUBs.
21 (4) Government entities must establish their own specific HUB goals
22 for each procurement category outlined in subsections (2) and (3) of this
23 section. Such goals should be based on:
24 (a) A government entity's fiscal year expenditures and total
25 contract expenditures;
26 (b) The availability to a government entity of HUBs in each
27 procurement category;
28 (c) The government entity's historic utilization of HUBs;
29 (d) The government entity's identification of potential
30 subcontracting opportunities in all contracts and the requirement of a
31 HUB subcontracting plan for contracts of two hundred thousand dollars or
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1 more over the life of the contract, including any renewals, where such
2 opportunities exist;
3 (e) The identification of HUB subcontracting or HUB prime
4 contracting in contracts that are less than two hundred thousand dollars,
5 whenever possible; and
6 (f) Other relevant factors.
7 (5)