Friday, November 19, 2004

Facts about the Quotas Mandated by the House Committee Substitute to
SB 2010, the Economic Development Bond Bill

- In previous bond bills, including the authorization for the Nissan project, the language did not say that funds "shall" be set aside, as it does in the Committee Substitute. The Nissan Memorandum of Understanding, state purchasing laws, and all MDA programs state that funds "may" be set aside. The unusual use of the word "shall" makes this language mandatory.

- Some have argued that the beginning of the section which states this is the "intent of the Legislature" removes the mandatory nature of this language. Using this rationale, the State of Mississippi's anti-discrimination law is optional since that statute reads that "it is the intent of the Legislature" that people should not be discriminated against.

- Those who seek to minimize the impact of the language point to the 1987 Highway program language as precedent. While the language is the same, the impact is not. Federal law prohibits set-asides such as these for federal procurement, and federal law supersedes state law. Since the Mississippi Department of Transportation engages almost entirely in federal procurement, the Highway Act set-aside is in name only and not practically in use.

- Moreover, federal courts have ruled that the establishment of an arbitrary percentage of set-asides is unconstitutional. The State of Mississippi should not enact a law which is knowingly unconstitutional. This would lead to potential exposure to court costs and confusion among contractors and state agencies.

- Racial quotas are not only wrong, but they are not fiscally prudent. Quotas artificially increase costs to the State of Mississippi by eliminating competition.

- There are better ways to foster minority contractors' participation in state-funded projects. The Barbour Administration is merging the Mississippi Contract Procurement Center (MCPC) into MDA's Minority and Small Business Development Division. This will increase the capacity and preparedness of minority contractors as they seek government contracts, without the establishment of quotas.

The language of the House Committee Substitute:

SECTION 119. It is the intent of the Legislature that from funds authorized and made available under Senate Bill No. 2010, 2004 Third Extraordinary Session, except as otherwise provided in Section 2 thereof, not less than ten percent (10%) SHALL be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals. The term "socially and economically disadvantaged individuals" shall have the meaning ascribed to such term under Section 8(d) of the Small Business Act (15 USCS, Section 637(d)) and relevant subcontracting regulations promulgated pursuant thereto; except that women shall be presumed to be socially and economically disadvantaged individuals for the purposes of this section.

As defined by the federal code referenced in this section, "socially and economically disadvantaged individuals" includes "Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities."


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