Fiscal Note - HB 1259, Women & minority contracting (Office of Minority and Women's Business Enterprises)
Summary
Multiple Agency Fiscal Note Summary for HB 1259, titled Women & minority contracting, with a published date of Preliminary 1/26/2021 and prepared by Ramona Nabors, OFM. It is followed by the individual fiscal note of the Office of Minority and Women's Business Enterprises (OMWBE), which lists estimated operating expenditures of 1,525,858 for 2021-23 with 4.0 FTE staff years and estimated cash receipts of 210,000. The narrative says the bill would require OMWBE to identify state agencies and educational institutions with low levels of participation by minority- and women-owned businesses and to report annually. It assumes two additional staff for investigations and fines of not more than $7,000 each.
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“Fiscal Note - HB 1259, Women & minority contracting (Office of Minority and Women's Business Enterprises).”
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Multiple Agency Fiscal Note Summary
Bill Number: 1259 HB Title: Women & minority contracting
Estimated Cash Receipts
Agency Name 2021-23 2023-25 2025-27
GF-State NGF-Outlook Total GF-State NGF-Outlook Total GF-State NGF-Outlook Total
Office of Minority and 0 0 210,000 0 0 168,000 0 0 168,000
Women's Business
Enterprises
Total $ 0 0 210,000 0 0 168,000 0 0 168,000
Agency Name 2021-23 2023-25 2025-27
GF- State Total GF- State Total GF- State Total
Local Gov. Courts Fiscal note not available
Loc School dist-SPI
Local Gov. Other
Local Gov. Total
Estimated Operating Expenditures
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Administrative Fiscal note not available
Office of the Courts
Office of Attorney Fiscal note not available
General
Office of Minority 4.0 1,525,858 1,525,858 1,525,858 4.0 1,349,710 1,349,710 1,349,710 .0 1,349,710 1,349,710 1,349,710
and Women's
Business Enterprises
Department of Fiscal note not available
Enterprise Services
Total $ 4.0 1,525,858 1,525,858 1,525,858 4.0 1,349,710 1,349,710 1,349,710 0.0 1,349,710 1,349,710 1,349,710
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts Fiscal note not available
Loc School dist-SPI
Local Gov. Other
Local Gov. Total
Estimated Capital Budget Expenditures
FNPID: 61331
FNS029 Multi Agency rollup
Agency Name 2021-23 2023-25 2025-27
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Administrative Office of Fiscal note not available
the Courts
Office of Attorney Fiscal note not available
General
Office of Minority and .0 0 0 .0 0 0 .0 0 0
Women's Business
Enterprises
Department of Enterprise Fiscal note not available
Services
Total $ 0.0 0 0 0.0 0 0 0.0 0 0
Agency Name 2021-23 2023-25 2025-27
FTEs GF-State Total FTEs GF-State Total FTEs GF-State Total
Local Gov. Courts Fiscal note not available
Loc School dist-SPI
Local Gov. Other
Local Gov. Total
Estimated Capital Budget Breakout
NONE
Prepared by: Ramona Nabors, OFM Phone: Date Published:
(360) 902-0547 Preliminary 1/26/2021
FNPID: 61331
FNS029 Multi Agency rollup
Individual State Agency Fiscal Note
Bill Number: 1259 HB Title: Women & minority contracting Agency: 147-Office of Minority
and Women's Business
Enterprises
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
ACCOUNT FY 2022 FY 2023 2021-23 2023-25 2025-27
OMWBE Enterprises Account-State 105,000 105,000 210,000 168,000 168,000
453-1
Total $ 105,000 105,000 210,000 168,000 168,000
Estimated Operating Expenditures from:
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 4.0 4.0 4.0 4.0 0.0
Account
General Fund-State 001-1 851,003 674,855 1,525,858 1,349,710 1,349,710
Total $ 851,003 674,855 1,525,858 1,349,710 1,349,710
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
X Requires new rule making, complete Part V.
Legislative Contact: Kyle Raymond Phone: 360-786-7190 Date: 01/19/2021
Agency Preparation: Paul Bitar Phone: 360-407-8129 Date: 01/25/2021
Agency Approval: Paul Bitar Phone: 360-407-8129 Date: 01/25/2021
OFM Review: Ramona Nabors Phone: (360) 902-0547 Date: 01/25/2021
Form FN (Rev 1/00) 163,437.00 Request # 147-1259HB-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1259 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Briefly describe by section number, the significant provisions of the bill, and any related workload or policy assumptions, that have revenue or
expenditure impact on the responding agency.
This bill will increase the regulatory oversight and accountability by the Office of Minority and Women’s
Business Enterprises (OMWBE).
Section 2 (3) would require OMWBE to identify state agencies and educational institutions with low levels of
participation by minority- and women-owned businesses in their public contracts, and to report on this annually.
OMWBE is in the process of implementing new software, the Business Diversity Management System, that will
track and identify spending in public contracting statewide that will also help to meet the direction in Section
2(3) of the bill. Initial funding to begin this project was provided by the Legislature in the 2020 session, and the
Governor’s proposed budget for the 21-23 biennium includes the remaining funding needed to fully implement
the project. We are assuming that funding will be included in the final budget as adopted by the Legislature so we
are not including any cost impacts for this bill for that system, though it will be necessary to carry out the work
as fully intended by the bill.
Section 4 (1) (a) states that if a person, firm, corporation, or business does not comply with a contract
requirement the state may impose one or more penalties.
Section 4 (1) (b) states if a person firm, corporation, or business commits any of the prohibited activities in RCW
39.19.080, the state must impose one of the above mentioned sanctions. The fiscal note assumption is that two
additional staff will be needed to satisfy these investigations and subsequent requirements.
Section 4 (1) (c) requires that if a penalty is imposed and then an entity willfully repeats violations, exceeding a
single violation, OMWBE must disqualify the contractor from further participation in state contracts for a period
of three years. The monitoring and enforcing of these violation and sanctions will require the above mentioned
additional staff.
Section 4 (3) requires OMWBE to adopt, by rule, criteria for the imposition of penalties. This section allows the
rule to incorporate the debarment process authorized for the Department of Enterprise Services in RCW
39.26.200. However, debarment activities would not be housed within OMWBE because there are existing
processes in place outside of OMWBE more appropriate for this work.
Section 4 (4)(a) allows OMWBE to establish an audit and review unit for the purposes of detecting and
investigating fraud and violations of certification requirements. Per this section, the office must employ qualified
personnel for the unit and must audit or visit at least 3% of businesses under this chapter per year. OMWBE has
determined that the new staff should consist of two experienced investigators to conduct audits/investigations of
certified firms who receive public contracts. OMWBE assumes each investigator would conduct 3-4
audits/investigations per year and that the agency would receive between 6-7 per year based on historical data.
The number of investigations would likely increase over time as the number of certifications increase, consistent
with the trends that OMWBE is seeing.
Section 6 clarifies that the OMWBE account (managed by the State Treasurer) will receive the civil penalties
imposed under RCW 39.19.090 and will deposit receipts to this account. This account is for expenditures for
defraying all or part of the costs of the office in administering this chapter (bill).
Women & minority contracting 147-Office of Minority and Women's Business Enterpris
Form FN (Rev 1/00) 163,437.00 Request # 147-1259HB-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1259 HB
II. B - Cash receipts Impact
Briefly describe and quantify the cash receipts impact of the legislation on the responding agency, identifying the cash receipts provisions by section
number and when appropriate the detail of the revenue sources. Briefly describe the factual basis of the assumptions and the method by which the
cash receipts impact is derived. Explain how workload assumptions translate into estimates. Distinguish between one time and ongoing functions.
The fiscal note assumption is that a portion of the costs incurred by OMWBE will be reimbursed by the
collection of fines from entities in violation. OMWBE assumes fines will first be assessed in FY 22. During FY
22 and FY 23, OMWBE estimates approximately 15 violations per year and subsequent imposed fines of not
more than $7,000 each for a total of $105,000 for each of the first two fiscal years. For FY 24 onward the
expectation is 12 violations per year for a total of $84,000 per year. The slight reduction is anticipated from
removing violating entities from contractual participation.
II. C - Expenditures
Briefly describe the agency expenditures necessary to implement this legislation (or savings resulting from this legislation), identifying by section
number the provisions of the legislation that result in the expenditures (or savings). Briefly describe the factual basis of the assumptions and the
method by which the expenditure impact is derived. Explain how workload assumptions translate into cost estimates. Distinguish between one time
and ongoing functions.
OBJECT A & B
In reviewing HB 1259, the Office of Minority and Women’s Business Enterprises (OMWBE) estimates it will
need 4.0 additional staff to satisfy HB 1259's purpose of increasing the regulatory oversight and accountability of
OMWBE. Hiring for these 4.0 positions would begin July 1, 2021, with the recruitment 90 days prior. The total
costs for staff (Objects A and B) in FY 22 are estimated at $426,488, and $426,488 for the following fiscal years.
OBJECT C
HB 1259 would require OMWBE to incur IT costs to update its server security to ensure it meets the
requirements to hold sensitive information such as discoverable items and subpoenas. OMWBE estimates a
one-time implementation cost of $150,000 in FY 22.
OBJECT E
In FY22, OMWBE estimates that it will incur an additional $18,567 in Goods and Service costs (Object E)
related to the four new FTEs, and $16,647 each year thereafter.
Additional costs include $20,000 per year in Office of Administrative Hearings (OAH), $148,000 in Attorney
General (ATG) costs in FY 2022, and $146,000 in ATG costs each year thereafter. The anticipation is 6-7
hearings per year - the cost estimate is based on 6-7 hearings estimated at about $3,000 per hearing. Due to the
creation of the audit and review unit, the number of hearings may increase in later fiscal years, but the potential
increase in volume is unknown.
Ongoing maintenance costs related to OMWBE's updated server security are estimated at $50,000 per year,
starting in FY 22. This would be needed to ensure that the agency meets security requirements associated with
holding discoverable items and subpoenas.
OBJECT G
Travel costs estimated at $15,720 per year, starting in FY 22.
OBJECT J
The addition of four new FTEs will necessitate the purchase of new computer equipment and furniture. This is
estimated to be a one-time cost of $22,228 in FY22.
Women & minority contracting 147-Office of Minority and Women's Business Enterpris
Form FN (Rev 1/00) 163,437.00 Request # 147-1259HB-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1259 HB
*See attached document titled "Cost Estimate Detail 1259 HB" for additional information on costs described
above.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2022 FY 2023 2021-23 2023-25 2025-27
001-1 General Fund State 851,003 674,855 1,525,858 1,349,710 1,349,710
Total $ 851,003 674,855 1,525,858 1,349,710 1,349,710
III. B - Expenditures by Object Or Purpose
FY 2022 FY 2023 2021-23 2023-25 2025-27
FTE Staff Years 4.0 4.0 4.0 4.0
A-Salaries and Wages 312,768 312,768 625,536 625,536 625,536
B-Employee Benefits 113,720 113,720 227,440 227,440 227,440
C-Professional Service Contracts 150,000 150,000
E-Goods and Other Services 236,567 232,647 469,214 465,294 465,294
G-Travel 15,720 15,720 31,440 31,440 31,440
J-Capital Outlays 22,228 22,228
M-Inter Agency/Fund Transfers
N-Grants, Benefits & Client Services
P-Debt Service
S-Interagency Reimbursements
T-Intra-Agency Reimbursements
9-
Total $ 851,003 674,855 1,525,858 1,349,710 1,349,710
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
Job Classification Salary FY 2022 FY 2023 2021-23 2023-25 2025-27
Attorney 96,000 1.0 1.0 1.0 1.0
Contract Specialist 2 67,560 1.0 1.0 1.0 1.0
Investigator 3 74,604 2.0 2.0 2.0 2.0
Total FTEs 4.0 4.0 4.0 4.0 0.0
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Identify acquisition and construction costs not reflected elsewhere on the fiscal note and describe potential financing methods
NONE
Women & minority contracting 147-Office of Minority and Women's Business Enterpris
Form FN (Rev 1/00) 163,437.00 Request # 147-1259HB-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 1259 HB
IV. D - Capital FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part IVB
NONE
Part V: New Rule Making Required
Identify provisions of the measure that require the agency to adopt new administrative rules or repeal/revise existing rules.
Per HB 1259, OMWBE would be required to amend WAC 326-08 to include debarment as a reason for the procedures.
There would also need to be a fines/sanction schedule, and rules governing the investigation unit outlined in Section 4 of the
bill.
Women & minority contracting 147-Office of Minority and Women's Business Enterpris
Form FN (Rev 1/00) 163,437.00 Request # 147-1259HB-1
FNS063 Individual State Agency Fiscal Note 5 Bill # 1259 HB
Cost Estimate Detail 1259 HB
Range/ Salary Number Number
Salaries: (A) Step Per Month Needed FY 2022 Needed FY 2023
Investigator 3 L $6,217.00 2 $149,208 2 $149,208
Contract Specialist 2 L $5,630.00 1 67,560 1 67,560
Attorney N/A $8,000.00 1 96,000 1 96,000
Total Salary 4 $312,768 4 $312,768
Percentage Number Number
Benefits: (B) of salary/rate Needed FY 2022 Needed FY 2023
OASI 0.062 19,392 19,392
Retirement (PERS employer rate) 0.1297 40,566 40,566
Medicare 0.0145 4,535 4,535
Health Insurance ($916/mo) 976 4 46,848 4 46,848
Industrial Insurance
Class 4902 - Office Workers 480 4 1,920 4 1,920
Paid Family Leave Insurance (Gross x .4% x .3667) 0.0015 4 459 4 459
Total Benefits $113,720 $113,720
Amount per Number Number
Goods & Services: Employee Needed FY 2022 Needed FY 2023
Supplies (EA) $600 4 $2,400 4 $2,400
Communications (EB)
Phone Line (Olympia area) 540 4 2,160 4 2,160
Switched Long Distance Service 125 4 500 4 500
Centurylink Voice Mail 42 4 168 4 168
Internet - VPN - One time set up fee 180 4 720 0 0
Internet - VPN Soft/Cert 108 4 432 4 432
Email,Vault license & Filtering 59 4 235 4 235
Vault Storage - 2GB per person 30 4 122 4 122
Other (cell phone, pager, etc.) 1,080 4 4,320 4 4,320
Printing (Business Cards) (EF) 25 4 100 4 100
Training (EG) 1,000 4 4,000 4 4,000
Software Licenses (EY) 500 4 2,000 4 2,000
Parking (EK) (Avg. Campus rate) 52.50 4 210 4 210
One-time Costs:
Phone Line/Data Cable Installation 300 4 1,200 0 0
Total Goods & Services $18,567 $16,647
Amount per Number Number
Travel: (G) Employee Needed FY 2022 Needed FY 2023
15 days per year, $151 per day (low cost area rate) 2,265 4 9,060 4 9,060
Private Car Mileage
1500 miles @ $.56 per mile 840 4 3,360 4 3,360
Misc travel (parking) 375 4 1,500 4 1,500
Airfare (1 flight per year to Spokane) 250 4 1,000 4 1,000
Other Estimated Misc Costs 200 4 800 4 800
Total Travel $15,720 $15,720
Amount per Number Number
Equipment: (J) Item Needed FY 2022 Needed FY 2023
Desk System 1,887 4 7,548 0 0
Desk Chair 500 4 2,000 0 0
Side Chair 235 4 940 0 0
File Cabinet 360 4 1,440 0 0
Bookcase 300 4 1,200 0 0
Laptop w/ LCD, Dock, Cable, Mouse, Keyboard 2,000 4 8,000 0 0
Ergonomic Keyboard 50 4 200 0 0
Security Lock 30 4 120 0 0
Phone 195 4 780 0 0
Total Equipment $22,228 $0
Amount per Number Number
Other costs: Item Needed FY 2022 Needed FY 2023
Professional Service Contracts: (C)
IT Updated Server Security Implementation 150,000 one-time cost 150,000 0
Goods and Services: (E)
Hearings - Office of Administrative Hearings $3,000 per hearing 6-7 hearings 20,000 6-7 hearings 20,000
Attorney General Expenses ATG estimate 148,000 ATG estimate 146,000
IT Updated Server Security Maintenance 50,000 annual cost 50,000 annual cost 50,000
Total Other Costs $368,000 $216,000
Total Request $ 851,003 $ 674,855
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