SB 656 California Senate · 2025-2026 Regular Session

Small business: small business liaison.

Summary

Existing law establishes the Office of Small Business Advocate within the Governor's Office of Business and Economic Development to advocate for causes of small businesses and to provide small businesses with the information they need to survive in the marketplace and requires the Governor to appoint a Small Business Advocate. Executive Order No. S-02-06 establishes a 25% small business participation goal for the state's procurement and contracting processes. Existing law requires a state agency that significantly regulates small business or that significantly impacts small business to designate at least one person to serve as a small business liaison. Existing law requires the small business liaison to be responsible for specified duties relating to interactions between the state agency and small businesses, including assisting the agency secretary, department director, or executive officer of the state agency in ensuring that the procurement and contracting processes of the state agency are administered in order to meet or exceed the 25% small business participation goal, and developing and sharing innovative procurement and contracting practices from the public and private sectors to increase opportunities for small businesses. This bill would require all state agencies to designate at least one person to serve as a small business liaison. The bill would also require a small business liaison to annually submit certain information to the advocate, including a list of all current contracts between the state agency and a small business, all contracts of the state agency that include a subcontract with a small business, and the total dollar amount paid to a small business under those contracts or subcontracts. The bill would require the advocate to post the information on its internet website.

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 20, 2025 Last action Feb 2, 2026

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What changed between versions

03/25/25 - Amended Senate → 04/21/25 - Amended Senate · 4 edits · Apr 21, 2025

MODERATE

The April 21 amendment to SB 656 removed the 'economic equity first' action plan requirement from Section 11148.5, which had mandated that state agencies develop specific strategies for ensuring women-owned, minority-owned, and LGBTQ-owned small businesses are effectively involved in procurement. The bill also dropped its reference to amending Section 14838 of the Government Code (public contracts) and now requires fiscal committee review. These changes narrow the bill's scope by eliminating a significant affirmative action planning obligation while retaining the core small business liaison and participation goal provisions.

Scope change

The bill's scope narrowed by removing the economic equity first action plan mandate and dropping the Section 14838 public contracts amendment. The core requirements for small business liaisons across all state agencies, the 5% disabled veteran business enterprise participation goal, and the 25% minority business enterprise participation goal remain intact.

REQUIREMENT

The 'economic equity first' action plan requirement in Section 11148.5(c)(6) was removed. This provision had required each agency's small business liaison to develop an action plan and policy providing direction, recommendations, and strategies to ensure small businesses (including women-owned, minority-owned, and LGBTQ-owned businesses) are effectively involved in and benefiting from the agency's procurement process, with a January 1, 2024 adoption deadline.

SCOPE

The bill no longer amends Section 14838 of the Government Code (relating to public contracts). This provision was dropped entirely from the April 21 version.

The bill's short title was reorganized, removing the 'Small business procurement contracts' framing and replacing it with 'business: small business liaison,' reflecting a shift in emphasis from procurement-specific provisions to the broader liaison framework.

TECHNICAL

Fiscal committee review changed from 'no' to 'yes,' meaning the bill now requires a fiscal committee appropriation review before passage.

02/20/25 - Introduced → 03/25/25 - Amended Senate · 10 edits · Mar 25, 2025

MAJOR

SB 656 was dramatically expanded from a narrow nonsubstantive amendment to one small business procurement section into a comprehensive bill covering small business liaison requirements, disabled veteran business enterprise participation goals, minority business enterprise goals, and new reporting/portal obligations. The most significant changes are: increasing the disabled veteran business enterprise participation goal from 3% to 5%, expanding the minority business enterprise goal to all state agency contracts and raising it to 25%, requiring ALL state agencies (not just those that significantly regulate small business) to designate a small business liaison, and creating new annual contract reporting requirements with public posting.

Scope change

Expanded from a single nonsubstantive amendment to Government Code Section 14838 into a multi-code bill covering small business liaison duties and reporting, disabled veteran enterprise participation goals (increased from 3% to 5%), minority business enterprise goals (expanded to all state agencies and increased to 25%), and new public web portal requirements for the Small Business Advocate.

SCOPE

The bill was expanded from amending only Section 14838 of the Government Code (nonsubstantive changes) to amending or adding sections across the Government Code, Military and Veterans Code, and Public Contract Code, covering small business liaisons, disabled veteran enterprise goals, minority business enterprise goals, and procurement reporting.

The minority business enterprise participation goal was expanded from applying only to contracts awarded by the Department of Corrections and Rehabilitation or the Youth Authority to applying to ALL contracts awarded by any state agency for construction, professional services, materials, supplies, equipment, alteration, repair, or improvement. The MBE goal was also increased to 25 percent.

ELIGIBILITY

The requirement to designate a small business liaison was expanded from only agencies that 'significantly regulate' or 'significantly impact' small business to ALL state agencies (Section 11148.5).

REQUIREMENT

New Section 11149 requires each state agency's small business liaison to annually submit to the Small Business Advocate a list of all current contracts with small businesses, all contracts including small business subcontracts, and total dollar amounts paid. The Advocate must post this information on its website.

The disabled veteran business enterprise participation goal was increased from 3 percent to 5 percent across Sections 999, 999.1, and 999.2 of the Military and Veterans Code.

The duty of the small business liaison regarding procurement was changed from ensuring processes are administered 'in order to meet or exceed the 25 percent small business participation goal' to ensuring they are 'administered properly.'

New requirement for small business liaisons to develop an 'economic equity first' action plan and policy providing direction, recommendations, and strategies to ensure small businesses (including women-owned, minority-owned, and LGBTQ-owned) are effectively involved in procurement. The plan was to be adopted by January 1, 2024.

Section 12098.4 was amended so that only agencies under the Governor's direct authority must furnish reports to the Small Business Advocate. Agencies under other elected statewide constitutional officers may provide reports to either the advocate or the Legislature, and if submitted to the Legislature they must also be posted on the agency's website.

New Section 12098.4(c) requires the Small Business Advocate to establish an internet web portal on GO-Biz including information on regulatory assistance, procurement certification and opportunities, emergency preparedness, energy programs, financial resources, technical assistance centers, and business incentives, with a searchable interactive tool for identifying available resources.

FISCAL

The fiscal committee designation was changed from 'no' to 'yes,' indicating the bill now has fiscal implications requiring committee review.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 23, 2025

Upper · Passed

May 23 hearing: Held in committee and under submission.

upper

Apr 28, 2025

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 11. Noes 0. Page 917.) (April 28). Re-referred to Com. on APPR.

upper

Apr 22, 2025

Upper · Passed

From committee: Do pass and re-refer to Com. on B. P. & E.D. (Ayes 12. Noes 0. Page 830.) (April 22). Re-referred to Com. on B. P. & E.D.

upper

Apr 21, 2025

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on G.O.

upper

Apr 2, 2025

Committee

Re-referred to Coms. on G.O. and B. P. & E.D.

upper

Mar 25, 2025

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.

upper

Mar 5, 2025

Committee

Referred to Com. on RLS.

upper

Feb 20, 2025

Introduced

Introduced. Read first time. To Com. on RLS. for assignment. To print.

upper

1 primary · 0 co-sponsors