During the discussion in previous subcommittee meetings, several Delegate's brought up the concern from their constituents “how does a small business break into public procurement?” Because the current “small business definition” allows companies to have up to 250 employees and UNLIMITED revenue, it leaves no opportunity for the real small businesses to be able to participate in public procurement. That is the “elephant in the room” that needs to be addressed if the Commonwealth is serious about expanding opportunities to small women-owned, small minority-owned, business. That was the recommendation from the JLARC study and the VCU study commissioned by the DSBSD. Respectfully, Chris Stone.

The two state teaching hospitals VCUHS and UVA Health, are both statutorily exempt from the VPPA due to the General Assembly’s long-standing recognition that we must compete in a largely private marketplace with hospitals that are not subject to state procurement requirements. For many years, these exemptions have afforded us flexibility and nimbleness in our ability to purchase necessary medical supplies. HB5002 would severely impact our procurement operations by: • Restricting the speed by which necessary purchases are made, and requiring significant redesign of current purchasing and data management programs to be compliant. Especially in the current COVID-19 pandemic, our procurement channels have been extremely limited, and we have had to acquire supplies swiftly, from whatever sources might be available. • Jeopardizing our GPO contracts, which are ubiquitous in the hospital industry and allow us to realize substantial savings that ultimately benefit our patients. • Impairing our ability to drive product standardization which would have implications on best practice quality outcomes and cost savings opportunities. • Limiting our ability to procure certain physician preference items (e.g., implants, screws, etc.). Our hospitals’ purchase selections are often driven by the preference of our physicians who have been trained using specific supplies and devices. In an effort to reduce our overall cost of care, we do aggressive strategic sourcing of physician preference items. Limiting purchase options would likely have a negative impact to the quality and safety of patient care, and would impact our ability to recruit and retain top physician talent to our AMCs • Limiting our ability to meet service level needs. With a limited number of SWaM firms in the health care industry we are concerned about the ability to meet the complex needs of an academic medical center in a highly regulated industry, including the ability to scale operations. • Limiting the progress of driving down the total cost of healthcare throughout VA and across the US. Traditionally, our total cost of care is higher than community hospitals due to our teaching missions and the complexity of patients treated, so limiting our ability to leverage national GPO contracts would put us at an even greater disadvantage with value based care and advanced payment models with government and commercial payors. • Negatively impacting our patients. VCUHS and UVA Health have worked for many years to arrive at focused efforts to reduce supply acquisition costs. We have in turn passed these savings to our patients in direct and indirect ways, and we are committed to continuing that effort towards more affordable healthcare. If HB5002 is implemented, VCUHS estimates the negative fiscal impact to its operations would be approximately $37M annually. This estimate is conservative as it only includes operating costs, and not additional human resource and technology expense that would be required to comply with the administrative requirements of the legislation. It also does not capture the impact to capital expenditures. UVA Health estimates the negative fiscal impact to its operations would be approximately $33.1M, and $99.3M over the average 3-year GPO contract term. This is a conservative estimate that only includes operating and capital contract expenditures, and not additional human resources and technology expenses associated with compliance.

Just writing to let you know that Sec. Ball (Sec of C&T), Fran Bradford (Dep Sec of Ed) and Sandra Gill (DGS), would welcome a chance to be in the "room" in case there are questions. And Secretary Ball is prepared to speak on the bill if desired. - Fran

HB 5002 codifies a requirement for all state agencies and universities to mandate a set aside program for certified small, woman owned and minority owned business. A key word in the requirements set forth is "certified". The Small Business Administration reports there are over 700K small businesses in Virginia. Yet in Commonwealth, there are only 13K small, woman owned and minority owned companies certified as such. The state has seen a 40% decrease in the number of certified SWaM firms in the Commonwealth since 2017. A set aside program will not be successful unless the number of certified small, woman owned and minority owned business matches the number of available firms. The disparity study reported out percentages based on all small, woman owned and minority owned businesses available and not based on state certified businesses. It is premature to require a set aside program for such a small fraction of small businesses in the Commonwealth. The Virginia Public Procurement Act is based on the maximum extent of competition available. This bill does this opposite. I recommend not passing a mandatory set aside but instead suggest proposing legislation that would fix the small, woman owned and minority owned certification process that will encourage more of these businesses to get certified. There is absolutely no incentive for a company to go through the intrusive certification process that is in place today required to get certified and it typically takes 3-6 months to get certified. You need to ask the SWaM eligible businesses about the certification process not the agency that certifies as you hear two different accounts of the process. And as more companies are certified, the Commonwealth needs to remove the current moratorium which disallows certifying small, woman owned and minority owned businesses from thirteen other states including the three most populous states in the country being Florida, Texas, California and also includes a moratorium on certifying SWaM businesses from Washington DC. I would support any bill that allows more state purchases to be awarded to small, woman owned and minority owned businesses but not when the Commonwealth is already excluding so many companies from being certified as such. See SBA reference noted above at: https://cdn.advocacy.sba.gov/wp-content/uploads/2020/06/04144231/2020-Small-Business-Economic-Profile-VA.pdf

During the discussion this morning at the Subcommittee meeting, many of the members brought up the point “how does a small business break into public procurement?” Because the current “small business definition” allows companies to have up to 250 employees with unlimited revenue, it leaves no opportunity for the real small businesses to be able to participate in public procurement. That is the “elephant in the room” that needs to be addressed if the Commonwealth is serious about expanding opportunities to small women-owned, small minority-owned, business. That was the recommendation from the JLARC study completed in 2020.

I support the aspirational goals of HB5002, however, I respectfully ask that General Assembly consider updating the “small business definition” to more accurately reflect what a small business enterprise is in Virginia. • The current “small business” definition has not been updated since introduced in 1986. • The current “small business” definition is not “narrowly drawn” and lumps all business types into one category. • According to the current definition, any company can have “unlimited” revenue, and as long as they have less than 250 employees, they can be certified in Virginia as a “small business”. • DSBSD commissioned VCU to study the “small business definition”. Former Secretary of Commerce and Trade Maurice Jones conducted a similar study. Last year JLARC completed a study. All concluded the definition was too broad and recommended changing it. • Under the current definition for a "small business", 99% of Virginia businesses can be certified as “small businesses” and 97% of Virginia businesses can be certified as "micro" having less than 25 employees, according to JLARC. • If the GOAL is to help small businesses grow, then the Commonwealth should update the “small business” definition so it is narrowly tailored and narrowly defined. Virginia currently defines a small business as having up to 250 employees OR up to $10 million in gross receipts averaged over the three previous years. Consequently, this definition allows companies with less than 250 employees to have UNLIMITED revenue, and still be a certified small business. If Virginia wants to support small business, small women-owned and small minority-owned business, then the Commonwealth should update the small business definition as recommended by the JLARC and VCU study. One option recommended by JLARC is “The General Assembly could amend §2.2-4310 and §2.2-1604 of the Code of Virginia to change the small business definition to businesses that have no more than 250 employees AND gross receipts of no more than $10 million.” It's time that Virginia supports "legitimate" small business, and changes the definition.

We are opposed to both SB 1305 and HB 5002.

The Heavy Construction Contractors Association (HCCA) represents 170 firms in Northern Virginia made up of 39,000 employees in road building and site development whom accumulate $1.65 billon pay roll. We are following SB1305 and HB5002 and would appreciate the opportunity to discuss the bills with you prior to tomorrow’s 7AM subcommittee meeting. Oppose SB1305 • Creates unnecessary complexity in the procurement process • Seeks to remedy a wage theft issues that is not present in the transportation construction industry (see attached for empirical data to this point) Oppose HB5002 • Goal is unattainable due to lack of small businesses in the transportation construction industry o Failure to meet compliance goals would result in debarment of essential general contractors • Artificially inflate the cost of transportation infrastructure projects

Speaking against this bill. This bill would codify the micro executive order. The micro order completely removes any opportunity for me to sell to the Commonwealth buyers. At the inception of the order I lost 1M in revenue which cost our company 4 jobs and cut the salary of 2 people in half. We have revenue above the 3M threshold yet we sell a low margin commodity. Our average order size is $250, far less than the $10,000 exemption. Our head count hovers around 28 people which is just above the 25 limit. This bill places our small business in the same category as billion dollar multinational companies. We are in favor of diversity procurement but not in favor of removing a seat at the table for small business as is the unintended consequence in this circumstance. If there were amendments that considered, inventories, equipment or actual profits that would be more telling of the actual size of the business. By SBA standards my company would be considered small at anything less than $35.5M. I am not asking for a free pass. Just asking to be allowed to sell when my small business is the best decision for the buyer. We served the Commonwealth for decades competitively against the non mandatory contract in our category. When the executive order was enacted we were completely locked out. This order has also caused a rise in third party billers that remain under 3M and assist larger companies in billing only. This process creates a higher cost to the Commonwealth. I ask that stake holders, including deserving small businesses have an opportunity to make sure companies are not locked out of the process. I am a 100% woman owned small business and at this time buyers are not allowed to buy their products from my company. Melissa Ball, Ball Office Products

I would like to speak briefly in support of the Bill.

The Danville Pittsylvania County Chamber of Commerce represents more than 580 businesses with approximately 18,000 employees. We support HB5002 as it aligns with our wealth equity initiative, focused on workplace equity, as well as the objectives of the Dan River Region Entrepreneur Ecosystem, which convenes small business owners, entrepreneurs and service providers across the region.

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

Hello My name is Usma Khan. I'm the owner of a Staffing and Recruiting business. Being an owner of a Small Business, this bill will allow me to have a larger footprint in the state of Virginia to conduct business.

VSC NAACP hope this bill will pass but be strengthened in the Senate.

I’m EJ Scott, Chair of the VSC NAACP Economic Development division. I’m here to speak in favor of HB5002. Although we are disappointed that the proposed substitute decreases the set asides for Women owned business and Minority businesses, we still believe there is merit to HB5002 that will advance business and supplier diversity and equity. The VSC NAACP asks that you vote to pass it. Thank you.

These comments are in support of HB5002. JMI supports HB5002 because the bill allows for state agencies and institutions to increase the inclusion of women-owned and minority-owned businesses for various contracting opportunities.

Please accept my full support of this Bill.

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

We have used bingo for years to support the Nansemond River High School Baseball program to fund field enhancements and maintenance, fall uniforms, the purchase of training equipment, fund the varsity program’s spring break tournament fees and most importantly, providing scholarships for graduating baseball players . I support this bill in its amended form because it includes Youth sports. There remains an area of concern fir the charities I represent. It deal with the geographic restrictions on small organizations like ours. The bill in its current form would provide preferential treatment to charities located near bingo halls that have higher gross revenues. This would have a disproportionate impact on my charities impacting their mission. I would recommend strong consideration of this concern by either redrafting that wording or delaying the bill in favor of a study to understand the impact. Again, the money raised through charitable gaming is our lifeblood and provides opportunities for many kids that may not never have the chance otherwise.

Honorable Members of the General Assembly: Please be informed that the Virginia Hispanic Foundation (Foundation), the educational and non-profit subsidiary of the Hispanic Chamber of Commerce, staunchly opposes Senate Bill number 1127 as it is currently written. Virginia Hispanic Foundation has been working with Virginia Union University , under an organization known as the Virginia Hispanic African American Alliance, for over a year. This alliance was created to educate and promote in the workforce students who are considered socially and economically disadvantaged. One of the primary mechanisms we use to raise funds and support these students in their educational journey are the proceeds of charitable gaming. Charitable gaming has positively affected our student base who are disadvantaged and an important sector of our economy. The Virginia Hispanic Foundation is a 501(c)(3) non-profits as regulated by the IRS. Further because our entity is considered private we do not enjoy the benefit of receiving funds from the Virginia Lottery. As such, charitable gaming is a mechanism of at least attempting to bridge this disparity gap which has plagued our community for many generations. Because our institution and our Hispanic community have a stake in this legislation we strongly object to being excluded from participating in the drafting of this legislation. Secondly, we oppose this legislation because, while it attempts to include our community into the equation, it does so in a very limited way, by precluding charitable gaming for our institution throughout the Commonwealth of Virginia. Currently the legislation as introduced allows our institution to engage in charitable gaming within the jurisdiction and adjacent jurisdictions in which our principle office is located. This is another example of the disparity placed upon our institution. The Virginia Lottery is allowed to serve the entire Commonwealth of Virginia for its public institutions of higher learning. Yet, our institution, who have students throughout the Commonwealth of Virginia, are limited to a mere couple of counties. If the ABC/Gaming Subcommittee as well as the General Laws Committee believe that better control or reform of the charitable gaming should be implemented, then we support you wholeheartedly. However, it is not reform to deny a significant segment of our community, such as Hispanic Foundation, the opportunity to participate in the drafting of legislation that impacts socially and economically disadvantaged students who are a strong and vibrant voting segment our community. As such we strongly oppose this legislation as currently drafted.

Honorable Members of the General Assembly: Please be informed that Virginia Union University (Union) staunchly opposes Senate Bill number 1127 as it is currently written. Virginia Union University has been working with the Virginia Hispanic Foundation, under an organization known as the Virginia Hispanic African American Alliance for over a year. This alliance was created to educate and promote in the workforce students who are considered socially and economically disadvantaged. One of the primary mechanisms we use to raise funds and support these students in their educational journey are the proceeds of charitable gaming. Charitable gaming has positively affected our student base who are disadvantaged and an important sector of our economy. Virginia Union University is a 501(c)(3) non-profit as regulated by the IRS. Further because this entity is considered private, we do not enjoy the benefit of receiving funds from the Virginia Lottery. As such, charitable gaming is a mechanism of at least attempting to bridge this disparity gap which has plagued our community for many generations. Because our institution and our community has a stake in this legislation we strongly object to being excluded from participating in the drafting of this legislation. Secondly, we oppose this legislation because, while it attempts to include our community into the equation, it does so in a very limited way, by precluding charitable gaming for our institution throughout the Commonwealth of Virginia. Currently the legislation as introduced allows our institution to engage in charitable gaming within the jurisdiction and adjacent jurisdictions in which our principle office is located. This is another example of the disparity placed upon our institution. The Virginia Lottery is allowed to serve the entire Commonwealth of Virginia for its public institutions of higher learning. Yet, our institution, who has students throughout the Commonwealth of Virginia is limited to a mere couple of counties. Virginia Union University was founded in 1875 and took its present name in 1899. It has educated students from all walks of life and from the vast majority of the counties in the Commonwealth of Virginia. Union’s history in conjunction with our alliance with the Foundation demands an acknowledgement of the breath of our voter base. As such, please be placed on notice of our concern regarding this legislation. If the ABC/Gaming Subcommittee as well as the General Laws Committee believe that better control or reform of the charitable gaming should be implemented, then we support you wholeheartedly. However, it is not reform to deny a significant segment of our community, such as Union and the Foundation, the opportunity to participate in the drafting of legislation that impacts socially and economically disadvantaged students who are a strong and vibrant voting segment our community. As such we strongly oppose this legislation as currently drafted.

Bill SB1127 will kill hundreds of jobs directly in Charities all over the commonwealth, by making it impossible for charities to be able to raise any amount of funds using the charitable gaming system. Food banks will not get the resources they need, in a time when they need it most, Students will no longer be able to get scholarships, and thats just the tip of the iceberg if this thing passes. Mr Reeves, kept moving the target in his amendments, and what for may I ask ? There is no need to for this Bill, and it is purely being forced through the assembly to hurt charities for nefarious reasons in a time they need more support and help, not less. During the committee session of 1-27-2021 Mr Reeves time and again argued "facts" that had no basis in reality. He time and again misrepresented charitable gaming and the electric pull tab machines, or was completely ignorant of exactly what his bill was for and how it would work. This from a Senator is supposedly understands the system.. So what he says in committee were either bold faced obfuscation of the truth, or he is ignorant of the laws and the facts in which he is basing his Bills merits. Case in point he kept insisting the machines "paid no taxes" and "have no oversight". When the truth of the matter is the Charities get taxed based on TOTAL GROSS INCOME as a WHOLE of ALL Games. GAME MACHINES INCLUDED. Virginia Charities pay MORE Taxes per dollar than Rosies, or the Skilled Gaming machines. As for oversight. The Department of Agriculture and Consumer Services does have oversight and he is reworking the laws that oversees them. That is fundamentally part of SB1127. So that right there is pure obfuscation of the truth. He also should be fully aware that DAGCS gets quarterly and annual reports from the Charities and pays the audit fees ( additional taxes ) on the GROSS Sales not the NET. As he even mentioned in his comments that he talked to DAGCS when formulating this bill. Consider that Mr Reeves received the most donations from Queen of Virginia Skills & Entertainment LLC and POM of VA LLC ( Manufacturer of QoVA MACHINES ) of any assembly member, Senate or House, during the period of 2019 to 2020. $5,000 1/4/2019 $5,000 5/20/2019 $5,000 1/2/2020 $5,000 9/15/2020 Thats $20,000 from the maker and operators of the skilled gaming machines that are in convenience stores across the commonwealth, whose direct competition is of course, Charitable gaming. So why this bill ? Lets look at who benefits from killing all the mom and pop bingo halls, VFWs, FOPs, and all the small local charities that rely on this income ? Queen of Virginia LLC So lets not kill the one income stream many of these charities have. It would kill the charities and destroy the jobs of Virginians across the Commonwealth that are employed by these non-profits. This Bill should die here as it serves no purpose, other than to benefit Mr Reeves' patrons.

As both an environmental science student and a concerned citizen, I ask that you consider stopping or at least rewording SB1127 to exclude conservation organizations. As proposed, it would severely impact nonprofit organizations such as the Cave Conservancy of Virginia (CCV), whose efforts and donations go to far more than just supporting, researching, and protecting the fragile and unique karst systems in our state that provide sources of drinking water and are home to several unique and endangered species. The CCV also supports other worthy causes that the local communities depend on, including local schools, landowner support, and even recreation. Please, for the sake of all those who live, learn, and rely on these incredibly environmentally important areas, reconsider this bill and its wording.

I am a teacher and sponsor of the Karst Club - a club that exposes young people to the wonders beneath our feet in the caves and karst areas of our area. I am very concerned about SB1127 because of the funding loss to organizations like the Cave Conservancy of the Virginias who have supported people like me. CCV members have helped me on numerous educational trips underground with students and have provided the guidance and safety needed to open up whole worlds to my students. Please seek a way to allow conservation organizations like the CCV to continue their very good work in Virginia.

Senate Bill 1127 would eliminate the ability of nonprofit conservation groups to raise funds through charitable bingo operations, something that has been legal and well-regulated in Virginia for many years. I am on the board of one such organization, the Cave Conservancy of the Virginias, but I am writing today not on their behalf, but as private citizen and longtime Virginia caver deeply concerned about cave and karst conservation in the Commonwealth. Please consider defeating this bill, or amending it to allow conservation organizations continued access to this vital funding source (perhaps using language similar to the provisions that reference volunteer fire departments and sports organizations). Organizations like CCV have provided critical support for local karst research and conservation efforts throughout the state. In particular, CCV has awarded over $1 million in grants since 1980, and has worked closely with state agencies including the Virginia Cave Board and Department of Conservation and Recreation.

I have had the rare privilege of working with several charitable non- profit 501-C3 conservation organizations over the last 40 years. I have had first hand knowledge of all the incredible work that these organization do for our State.. It is absolutely inconceivable to me that anyone would even consider sponsoring a bill that has eliminated the ability for conservation groups to participate in charitable gaming to raise funds. The state of Virginia does not have enough funds in their current budget to even come close to filling the void that would be created by such a drastic measure.. Most of our conservation groups here in Virginia have worked closely with local and State government to help protect some of our most important resources. Virginia is one of the most diverse and beautiful places on this planet earth and it takes a lot to keep it that way. Let’s not do anything that will mess it up by passing a bill like this. I hope it was just an oversight by someone who just forgot to include conservation organizations when they wrote this bill.

As worded, Senate Bill 1127 would eliminate the ability for not-for-profit conservation organizations to raise funds through charitable gaming (Bingo). In my experience, Bingo games are already highly-regulated and tightly-run. Charitable gaming raises irreplaceable funding to support rural and low-income communities in the form of grants to restore and conserve natural resources, such as rivers, vistas, wildlife habitat, and caves, as well as public awareness, education, and engagement of our youth. Without charitable gaming, most of these grass-roots level 501(c)3 organizations will suddenly be unable to fulfill their missions. Please table or defeat this bill to ensure that conservation charities can continue to generate funds to support community-based projects that improve the natural wealth of our Commons!

SB1127 - excludes many 501(c) organizations that depend or could depend on charitable gaming as a funding means. I am specifically concern about conservation groups but on the reading one can imagine many omitted categories and then I am sure there are more. Leave the current program alone. It has been worked through for years and seems to be working well. thank you for your service, Charles Maus

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

We are opposed to both SB 1305 and HB 5002.

The Heavy Construction Contractors Association (HCCA) represents 170 firms in Northern Virginia made up of 39,000 employees in road building and site development whom accumulate $1.65 billon pay roll. We are following SB1305 and HB5002 and would appreciate the opportunity to discuss the bills with you prior to tomorrow’s 7AM subcommittee meeting. Oppose SB1305 • Creates unnecessary complexity in the procurement process • Seeks to remedy a wage theft issues that is not present in the transportation construction industry (see attached for empirical data to this point) Oppose HB5002 • Goal is unattainable due to lack of small businesses in the transportation construction industry o Failure to meet compliance goals would result in debarment of essential general contractors • Artificially inflate the cost of transportation infrastructure projects

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

Members of the Committee. I am Fred Codding of 10382 Main Street, Fairfax, Virginia 22030. I am here on behalf of the Iron Workers Employers Association as well as the organizations which are part of the Alliance for Construction Excellence (ACE). Those organizations include Chapters of the National Electrical Contractors, Mechanical Contractors, Sheetmetal Contractors, the American Subcontractors Association and the Iron Workers Employers Association. Those organizations and their members have offices and projects throughout the Commonwealth. Members of the Iron Workers Employers Association itself supply and install reinforcing steel, structural steel, window wall, curtainwall and related products on projects throughout the Commonwealth. We support Senate Bill 1305 which provides that subcontractors may not outsource more than 10% of the work subcontracted for except in specified circumstances. We request your approval of Senate Bill 1305.

On behalf of the Mid-Atlantic Pipe Trades and our member locals of the United Association of Plumbers and Steamfitters across Virginia, I ask you to support SB 1305. The blight of the construction industry and its workers are labor brokers. These sub-subcontractors are used to provide an immorally low waged workforce by cheating workers on construction projects so the subcontractor who hires them can increase their profits. These labor brokers misclassify their workers as independent contractors, paying in cash or personal check without paying workers comp or taxes, and provide no benefits, like health insurance or retirement savings, to the workers. They take advantage of typically immigrant workers, minority workers, and workers who do not understand they have rights—their actions sometimes border on labor trafficking. The result is a race to the bottom on wages, which hurts legitimate contractors and the community. This legislation will limit the number of independent contractors a subcontractor can hire on a public construction project, essentially keeping these labor brokers from operating on a public project. It leaves leeway for a subcontractor to hire a sub-subcontractor for specific specialized tasks, such as a mechanical contractor hiring someone to fabricate HVAC ductwork or install insulation. This is not about union contractors vs. non-union contractors. This is about legitimate businesses vs. illegitimate businesses, good actors vs. bad actors. This is why I ask you to support this legislation.

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

ChamberRVA supports this bill. Coordination of workforce needs and educational efforts is essential to providing the future workforce with the skills that will be needed.

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The National Women’s Law Center writes in support of SB 1384. This is an important issue for us because forced arbitration is too often used as a tool to cover up sexual harassment and violence in the workplace and prevent survivors from seeking justice and being made whole for their injury. In arbitration, survivors stories remain secret and they are often forbidden by nondisclosure clauses from sharing their experiences. The Virginia legislature has already recognized the importance of not silencing survivors by passing legislation in 2019 to prohibit employers from using NDAs in employment contracts to silence survivors of sexual assault. SB 1384 too, is an important measure to ensure survivors have a voice and can get justice. This legislation doesn’t prohibit the use of forced arbitration, but we think it takes a really important step towards ending the abusive use of forced arbitration by increasing transparency around businesses’ use of forced arbitration.

I am a law professor and commercial arbitrator who has written extensively about the Federal Arbitration Act (FAA). I have written numerous articles and two comprehensive books about the history and development of the FAA, and state and federal courts have cited my scholarship about arbitration. In appropriate circumstances, where there is meaningful consent and fair procedures, I firmly believe that arbitration can be superior to litigation, but at the same time, parties can sometimes abuse arbitration. I am submitting this comment to state my opinion that the FAA would not preempt SB1384. It is critical to note that SB1384 does not impact the analysis of whether an arbitration agreement is fully enforceable; if parties agree to arbitrate, a court will fully enforce the agreement under the FAA. FAA preemption of state law typically exists where a state law makes arbitration agreements unenforceable, or where application of a state law would undermine a fundamental attribute of arbitration. SB1384 does not dictate what the terms of an arbitration agreement must be, what an arbitration proceeding must look like, or whether an arbitration agreement is enforceable. If one closely examines the text of the FAA, there is nothing in the FAA which would conflict with SB1384. Looking solely at FAA preemption doctrine, the FAA would not preempt SB1384. Moreover, assuming there was some conflict between the FAA and SB1384 (but there is absolutely no conflict), the localities would be operating as participants in the market. As a result, the FAA would not preempt SB1384 under the market participant exception for preemption. Overall, it seems that SB1384 would increase awareness and transparency and debate regarding the use of arbitration, all of which would be valuable in mind. By increasing awareness of the use of arbitration, SB1384 can help advance party autonomy, the central value of the FAA. Thank you for your consideration. Professor Imre Stephen Szalai Judge John D. Wessel Distinguished Professor of Social Justice Loyola University New Orleans College of Law

S.B. 1384 - The Federal Arbitration Act and Preemption Submitted by: Ann C. Hodges, Professor of Law Emerita, University of Richmond and Visiting Professor of Law, University of Virginia. As a law faculty member who has taught and written about arbitration for many years and served as an advocate in arbitration prior to joining the academy, it is my opinion that SB 1384, addressing procurement by localities, would not likely be preempted by the Federal Arbitration Act. While the Supreme Court has held some state arbitration laws preempted by the FAA, S.B. 1384 differs significantly from those laws. The law does not disfavor arbitration agreements in either their enforcement or their formation as compared to other contracts, the concern recently articulated by the Supreme Court Kindred Nursing Centers v. Clark, 137 S.Ct. 1421 (2017), which concluded that the FAA preempted a Kentucky law. The FAA was enacted by Congress to make arbitration agreements enforceable on the same grounds as other contracts. 9 U.S.C. §2. In Kindred Nursing Center, the Court concluded that the FAA preempted state law requiring a power of attorney to specifically authorize the representative to agree to arbitration in order for an arbitration agreement to be valid. The Court decided that the FAA preempts state laws interfering with formation of arbitration agreements, as well as those restricting enforcement. In AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), the Court invalidated a California law that prohibited enforcement of agreements banning class actions, holding that the law interfered with the FAA’s goal of ensuring enforcement of arbitration agreements according to their terms. These two cases, among others, make clear that states cannot target arbitration with laws that obstruct the formation or enforcement of arbitration agreements. S.B. 1384 does neither. The law does not affect any locality’s ability to enter into an arbitration agreement nor does it limit any employer that desires to mandate that its employees arbitrate their legal claims against the employer. The law simply permits localities to require disclosure of pre-dispute arbitration provisions, and certain information about the use of those provisions, as part of the procurement process. This disclosure in no way impairs arbitration requirements, which remain enforceable unless they are invalidated on other grounds as provided in the FAA. The locality is free to use the information disclosed about arbitration in any way it chooses. While some localities may be reluctant to enter into contracts with businesses using mandatory arbitration for reasons articulated by critics of the practice, this legislation would also allow a locality to prefer businesses that use mandatory arbitration if the locality believes it would be beneficial to do so. In addition, localities are completely free not to ask about arbitration at all. As a result, S.B. 1384 is simply not the sort of law disfavoring arbitration that the Supreme Court has invalidated. A further reason that the law is not preempted is that localities employing the disclosure requirements would be acting as market participants rather than regulators. Accordingly the “market participant exception” to preemption would apply. As others have addressed this issue, I will only add that I agree with the analysis.

I am a senior staff attorney with Public Justice and have litigated dozens of cases involving forced arbitration provisions, many of those focusing on the issue of Federal Arbitration Act preemption. I have also spoken on the topic of whether particular proposed state legislation is preempted by the Federal Arbitration Act before the legislatures of New York, California and Maryland. Public Justice supports SB1384, which will empower localities throughout Virginia by allowing them to gather the same information about companies that use forced arbitration that is already in the public domain with respect to companies whose employment and civil rights disputes are litigated in open court. When localities enter into contracts, they should have full information about the business records of their potential contracting partners, and this legislation will provide that much-needed transparency. Because the localities will be operating as market participants, not as regulators imposing restrictions on arbitration, the bill does not raise concerns about preemption by the Federal Arbitration Act. A more extensive discussion of the market participant doctrine and how it interacts with FAA preemption can be found in our full testimony here: http://bit.ly/Gilbride_PublicJustice_SB1384

Andrea Johnson, Director of State Policy, National Women’s Law Center writing in support of SB 1384. This is an important issue for us because forced arbitration is too often used as a tool to cover up sexual harassment and violence in the workplace and to prevent survivors from seeking justice and being made whole for their injury. In arbitration, survivors stories remain secret and they are often forbidden by nondisclosure clauses from sharing their experiences. The Virginia legislature has already recognized the importance of not silencing survivors by passing legislation in 2019 to prohibit employers from using NDAs in employment contracts to silence survivors of sexual assault. This too, is an important measure to ensure survivors have a voice and get can justice. This legislation doesn’t prohibit the use of forced arbitration, but we think it takes a really important step towards ending the abusive use of forced arbitration by increasing transparency around businesses’ use of forced arbitration

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

Public Justice is a nonprofit legal advocacy organization that brings high-impact litigation to protect the Earth's sustainability and combat corporate and governmental abuses. Public Justice attorneys, including me, have litigated hundreds of cases involving forced arbitration provisions and are very familiar with this area of law. Public Justice supports SB1384, which will empower localities in Virginia by allowing them to gather the same information about companies that use forced arbitration that is already in the public domain with respect to companies whose employment and civil rights disputes are litigated in open court. When localities enter into contracts, they should have full information about the business records of their potential contracting partners, and this legislation will provide that much-needed transparency. Because participating localities will be operating as market participants, not as regulators imposing restrictions on arbitration, the bill does not raise concerns about federal preemption by the Federal Arbitration Act. A more extensive discussion of the market participant doctrine and how it interacts with FAA preemption can be found in our full testimony here: http://bit.ly/Gilbride_PublicJustice_SB1384 I urge a yes vote on SB1384. It doesn’t interfere with existing arbitration agreements or prevent new ones from being formed. It just allows localities who want to know more to ask some basic questions about how arbitration works. And if forced arbitration is as fair as its proponents claim, there shouldn’t be anything to hide.

My name is Hugh Baran, and I am a Senior Staff Attorney and Skadden Fellow at the National Employment Law Project (NELP)—a non-profit, non-partisan research and advocacy organization specializing in a range of employment policy issues. NELP submits this testimony in support of S.B. 1384, which would empower localities in Virginia to seek disclosure about bidders’ use of forced arbitration requirements. A more detailed version of NELP’s testimony supporting S.B. 1384, as previously submitted to the Virginia State Senate’s General Laws and Technology Committee, is available here: https://www.nelp.org/wp-content/uploads/NELP-Testimony-Hugh-Baran-Senate-Laws-Committee-2021.pdf Forced arbitration requirements deny workers the right to go before a judge and jury when their employer breaks the law. Making matters even worse, class/collective action waivers incorporated into these requirements prevent employees from banding together to challenge employer lawbreaking. A recent NELP report showed that in 2019, forced arbitration enabled employers to steal $12.6 billion in wages from over 6 million low-paid private-sector workers in the U.S.. Relying on the same methodology, we find that forced arbitration enabled employers to steal $296 million in wages from low-paid private-sector workers in Virginia. In addition to facilitating wage theft, forced arbitration is also used to cover up cases of sexual harassment, racial discrimination, and other employment law violations. S.B. 1384 would give localities the ability to require bidders to disclose information regarding the use of forced arbitration in employment, civil rights, and consumer disputes, for procurement solicitations or contracts. S.B. 1384 does not require any locality to seek such information, but simply enables them to do so. S.B. 1384 advances localities’ interests in the efficient procurement of needed goods and services, insofar as these disclosures will allow the locality to determine bidder responsibility. A business’s record of compliance with workplace laws is an important, and indeed appropriate, criteria for determining a bidder’s responsibility. But forced arbitration obscures evidence of noncompliance, as arbitral proceedings are generally conducted in secret and behind closed doors. With the disclosures required by S.B. 1384, the locality will have a more complete and accurate picture of the bidder’s compliance with workplace laws. This will empower the locality to make responsible contracting decisions, including by avoiding bidders who may be covering up cases of wage theft, sexual harassment, racial discrimination, and more. A more detailed version of NELP’s testimony supporting S.B. 1384, as previously submitted to the Virginia State Senate’s General Laws and Technology Committee, is available here: https://www.nelp.org/wp-content/uploads/NELP-Testimony-Hugh-Baran-Senate-Laws-Committee-2021.pdf Thank you for the opportunity to submit these written comments.

Dear Chairman Carr and Subcommittee Members, I am writing to endorse SB 1384, the Local Procurement Transparency Act. As a representative for the Impact Project, we join a group of organizations, the Virginia Fair Arbitration Coalition, that supports the bill. Our Coalition includes Virginia organizations and national organizations with Virginia members: the Virginia Poverty Law Center, the Reserve Officers Association, Virginia Employment Lawyers Association, National Women’s Law Center, Legal Aid Justice Center, National Association of Consumer Advocates, National Employment Law Project, and the Enlisted Association of the National Guard of the United States. In addition to the Coalition, the Fairfax County School Board has this policy in its legislative agenda. Recently, certain FCPS vendors began imposing forced arbitration against families as a condition to pay online for school lunches, prom tickets, yearbooks, PE lockers, and more. SB 1384 will allow participating localities to ask bidders or offerors if they use forced arbitration in employment and civil rights disputes and certain online payment systems. Forced arbitration is when companies require employees or customers to “agree” to secretive, pre-dispute arbitration as a condition of using a product or keeping a job—before a dispute arises. Companies using forced arbitration might appear to be good candidates for a contract on paper but may be rife with unknown problems—like sexual harassment, discrimination, labor abuses, and service failures—that would undermine their contract performance. As more and more companies adopt forced arbitration clauses that require disputes to be resolved by a secret tribunal, public bodies in Virginia receive less and less information about potential contractors. SB 1384 will provide transparency for making the best contracting decisions using taxpayer dollars. Not only are sexual harassment, discrimination, wage theft, and other illegal practices harmful to Virginians, but there also is a wealth of evidence that businesses that violate the law also provide substandard work—often at higher cost. According to NELP’s 2020 ground-breaking study, forced arbitration has enabled Virginia employers to steal $296 million in wages from workers in low-wage jobs. In recent years, and even in recent months, companies have recognized that forced arbitration, while legal, is not good for business. Companies such as Google, Microsoft, and Wells Fargo have dropped provisions in employment disputes. Wells Fargo stopped using forced arbitration in sexual harassment and discrimination cases. “Googlers for Ending Forced Arbitration” was formed after more than 20,000 Google employees staged a walk-out over such practices that were hiding sexual harassment. Regarding Virginia-based businesses, after studying the issue, Cong. Don Beyer in 2014 ensured that Beyer Automotive no longer used forced arbitration and he has since become a champion in banning the practice. Finally, I want to emphasize that SB 1384 is (1) optional and (2) does not ban forced arbitration. This bill provides transparency in contracting through disclosure and falls fully within the market participant exception to any federal preemption of state law by the Federal Arbitration Act. For more information, talking points and a bill summary are posted here: https://bit.ly/SB1384TalkingPoints https://bit.ly/SB1384_Summary Thank you for your consideration.

HB 5002 Small Business & Women-owned & Minority-owned Business Procurement Enhancement Programs; Why is the bill only limited to all new capital outlay construction solicitations that are issued. How many Black women own construction companies? Why is it capped at 200K. I have an independent pharmacy in Norfolk Virginia and I have been waiting for this bill to come to committee. The bill has no bite. The state wasted money doing a diversity study , only to come up with this as a resolution. I have been consistently discriminated against in the state procurement process and I do not see where this bill is going to change anything. Dr. Anna Peoples

Virginia's Technology Councils support SB1418. This initiative was included in the 2021 Policy Agenda endorsed by all of the regional technology councils including Charlottesville Business Innovation Council, Innovation Collaborative Hampton Roads, NVTC, the Roanoke-Blacksburg Technology Council, and RVATECH. Additional flexibility is needed for businesses seeking existing economic development grants and assistance, but whose capital investment is limited due to significant remote work. Allowing more flexibility in a rapidly changing office environment would increase our ability to grow businesses and create jobs in changing business models across Virginia.

Principle Advantage representing the Virginia Spirits Association submits the following comments on their behalf. Virginia Sprits Association understands that shelf space is a valued commodity in stores – especially during a time when ABC revenue is growing while other state revenue streams are on the decline. As the patron stated during the Senate Finance hearing, removing low-alcohol beverages (LABs) from the shelves of ABC stores would free up more space for the sale of spirits which are taxed at a much higher rate than LABs which are taxed at the much lower wine rate. If the intent of the SB1428 is to clear up a marketplace issue between the ABC authority and the wholesalers and retailers it regulates, then the bill MUST be amended. The current language of the bill only removes some LABs creating an inequitable carve out for others. As written, the bill removes 91% of the LABs sold in 2020 and its associated revenue to the Commonwealth and leaves behind a carve-out market for a small, select group of licensed distillers. We respectfully request that you OPPOSE SB1428 as written, and instead amend the language of the bill to remove and low alcohol beverage coolers produced by licensed distillers on lines 16-17, 112-113, and 208-209. Removing ALL LABs from ABC store shelves would establish a fair and consistent policy for all in the LAB marketplace. VSA thanks you for your consideration, and appreciates your past support of “cocktails-to-go”.