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California Bill Would Require State to Contract More With Black-Owned Businesses

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Antonio Ray Harvey | California Black Media

Last week, Assemblymember David Chiu (D-San Francisco) introduced the Economic Equity First Act of 2021, also known as Assembly Bill 915. The legislation is proposing measures to ensure fair opportunities for minority-owned small businesses in state contracting and procurement.

Under AB 915, all state agencies, departments, boards, and commissions would be mandated to achieve a minimum goal of 25% participation for minority businesses, which include Black-owned, women-owned and disabled veteran-owned firms in state procurement and contracts.

“Our small businesses, particularly minority-owned small businesses, have been hit especially hard by the pandemic,” said Assemblymember David Chiu (D-San Francisco). “This bill uses the state’s enormous purchasing power to help uplift our small businesses when they need it most.”

The legislation is based on the recognition that small businesses makeup 99.8% of all California private sector companies, and they make a significant contribution to the economy, accounting for 7 million employees across the State. Black businesses in California hire nearly 82,000 employees.

The California Asian Pacific Chamber of Commerce (CalAsian Chamber) worked closely with the Assemblymember’s office to develop this legislation, which increases access to procurement opportunities for small, minority, women-owned and disabled veteran-owned businesses.

The CalAsian Chamber is joined by the California Hispanic Chambers of Commerce and the California African American Chamber of Commerce (CAACC) in co-sponsoring and supporting this landmark legislation.

Of California’s 4.1 million small businesses, 1.2 million (29%) are minority owned. The CalAsian Chamber alone represents the voice of over 600,000 Asian and Asian Pacific Islander (AAPI)-owned businesses that generate more than $181 billion in annual revenue.

The Asian entities also employ over 910,135 Californians with an annual payroll of over $26 billion. AB 915, if it becomes law, could enhance African American businesses’ status in the state, supporters say.

According to a June 2020 report by ZIPPIA, titled the “Most Supportive States for Black Businesses,” California ranked No. 4.

ZIPPIA, an online career support company, reported that there are 10, 287 Black-owned businesses operating in the state. They employ 81, 530 employees. ZIPPIA also examined the number of Black-owned businesses per capita, using data from the United States Census’ Annual Business Survey.

The top three states in the country that support Black-owned businesses are Maryland, Georgia, and New York.

“It’s shocking that only 7% of the country’s businesses are Black-owned. Recent events have led to a nationwide push to support black-owned businesses. So, we wanted to find out what states support a thriving environment for Black-owned businesses,” ZIPPIA stated in the 2020 report.

AB 915 updates and seeks to enact Gov. Arnold Schwarzenegger’s 2006 executive order (EO S-02-06), which required the same minimum goal of 25% minority participation in government contracting.

It also expands on AB 657, passed in 2017, which initiated steps to establish a “small business liaison-advocate” for each agency that regularly interacts with small businesses. This office would primarily be responsible for meeting the 25% goal.

“I am proud of this piece of legislation which will not only raise the priority of all small businesses seeking contracts with the State but elevate the importance of minority-owned businesses in the State’s procurement process,” Pat Fong Kushida, President and Chief Executive Officer of the CalAsian Chamber. “It is my hope that this bill will be the first of many which proactively offer real-life solutions for the millions of business owners across California.”

Also, more help is on the way for businesses suffering the most significant economic hardship from the COVID-19 recession.
Gov. Gavin Newsom, Senate President pro Tempore Toni G. Atkins. (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) announced that they have reached an agreement on a package of immediate actions that will ramp up relief to individuals, families and businesses.

The compromise builds on the initiatives in the governor’s state budget proposal to provide cash relief to lower-income Californians, increase aid to small businesses, and provide license renewal fee waivers to businesses impacted by the pandemic.

In addition to these measures, the agreement provides tax relief for businesses, commits additional resources for critical childcare services, and funds emergency financial aid for community college students.

“As we continue to fight the pandemic and recover, I’m grateful for the Legislature’s partnership to provide urgent relief and support for California families and small businesses where it’s needed most,” Newsom said. “From child care, relief for small business owners, direct cash support to individuals, financial aid for community college students, and more, these actions are critical for millions of Californians who embody the resilience of the California spirit.”


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