SB 1219 Summary

• Establishes employment social enterprises (ESEs) as a new category eligible for state contracting preferences alongside small businesses and microbusinesses, effective October 1, 2018.

• Defines ESEs as California-based social purpose corporations, benefit corporations, or nonprofits that earn at least 51% of revenue from producing goods or services and employ a direct labor force that is at least 80% individuals facing multiple barriers to employment (homeless, out-of-school youth, or with employment barriers).

• Grants ESEs a 5% bid preference in state contracts for goods, services, information technology, and construction, with requirements that at least 70% of labor hours be performed by enterprise participants facing barriers to employment (50% for businesses with 25 or fewer employees in manufacturing).

• Requires the Department of General Services to maintain a bidders list of certified ESEs and include ESE participation statistics in annual contracting activity reports.

• Mandates that information submitted for ESE certification be provided under penalty of perjury and establishes penalties including civil fines, contract suspension, and certification revocation for fraudulent certification or misrepresentation.