A bill to end affirmative action in education hiring and outlaw state goals for steering procurement contracts to minority- and women-owned businesses in Arkansas ignited fierce legislative debate and considerable worry for entrepreneurs before stalling last week in the House.
Senate Bill 71 could have disrupted an entire division of the Arkansas Economic Development Commission, changing the mission of its Minority & Women-Owned Business Enterprise unit.
The bill, by Jonesboro Republican Dan Sullivan, put a big target on minority procurement goals, critics said.
The legislation narrowly prevailed in an 18-12 Senate vote March 9. But it was tabled Wednesday by the House Committee on State Agencies & Governmental Affairs as the legislative session hurtled toward adjournment.
A bill tabled in committee faces significant obstacles because removing it from the table requires a majority of the quorum of the committee. The action also signals that legislation is in trouble, or at least facing questions from members.
SB71 would have made it illegal for the state to continue programs promoting minority hiring by public schools and universities and outlawed AEDC goals for varying percentages of state procurement contracts to go to minority-owned businesses, women-owned businesses and businesses owned by disabled veterans.
Those goals never had the force of law but were serious expectations. State agencies are required to keep track of procurement percentages and report them to the AEDC division.
SB71 would have presumably outlawed a state list of minority and women-owned businesses, replacing it with a registry of businesses deserving consideration “based on merit or needs,” according to Sullivan.
Anna Beth Gorman, CEO of the nonprofit Women’s Foundation of Arkansas, said even though the bill lost momentum, it or something similar could rise again.
“We have to remain vigilant in protecting women and minority business interests in the state,” she said. “This bill was bad for business, and it got too far along in the process. I’m hoping we do not see another attempt like it this session.”
Gorman said misconceptions exist on exactly what the Minority & Women-Owned Business Enterprise Division does. “It’s a navigator that exists for women and minority business owners to reach out, and for folks that work there to help them navigate opportunities that exist for everybody.” It isn’t a case of minority businesses “cutting in front of everyone else,” she said.
All five women in the Arkansas Senate voted against the bill, including three Republicans. One of those no votes came from Sen. Missy Irvin, R-Mountain View. A conservative, she was instrumental in adding women to the minority business efforts of the AEDC in 2017.
“I voted against the bill due to my concern over the AEDC’s Minority and Women-Owned Business Enterprise Division being negatively impacted or eliminated,” Irvin said in an email. “I would prefer a robust, proactive AEDC that is focused on helping all citizens, and not just large businesses.”
Esperanza Massana, the MWOBE Division director, said that she couldn’t take a position on legislation or speculate on its potential effects. But the division’s work goes on; a “matchmaking event” is scheduled May 18 to let minority businesses mingle and seek to do business with state, federal and municipal procurement officials, as well as private enterprises.
Sullivan said SB71 could have changed the division’s mission, but that it offered a two-year window for rulemaking toward giving state aid to businesses that demonstrate a need, rather than minority ownership. “We’re having all kinds of problems right now even defining what a minority is, or what a gender is,” he said in a telephone interview.
Loretta Lever, president of Choice Promotions, a Little Rock promotional products distributor, said she lobbied against the bill after getting a call from a major company expressing concern about it.
“I started reaching out to legislators to find a way to defeat it,” said Lever, whose business distributes promotional products. “I wanted to kill it in committee.”
Spirit of ’76
The sponsor said that if a woman or minority business owner could demonstrate a need, under the bill she would qualify for state help. “We’ll have two years to work this out. We have time to process and identify who does and doesn’t qualify,” Sullivan said. “If you can show this need, you could still qualify with state procurement, loans and grants. I suspect a very good example would be a first-time business owner. As a first-time business owner you might have some degree of seniority over people already operating other successful businesses, regardless of what your race or gender is.”
But Gorman said uncertainties about the bill’s repercussions were a red flag.
“I don’t think there’s anything practical about this bill,” the Women’s Foundation chief said. “It’s clear the sponsor has not done homework to understand what agencies, programs or issues would be impacted by this bill. And there are individuals within the state agencies that have been extremely nervous about this bill.”
Sullivan hopes to move the state closer to the tenets of the Declaration of Independence, that “all men are created equal,” he said. He quoted the African American author, economist and newspaper columnist Thomas Sowell: “When people get used to preferential treatment, equal treatment seems like discrimination.”
When questioned, he said that in some cases white men now face discrimination in Arkansas.
The legislation’s goal, he said, is for the best applicant to win, regardless of race or gender. The bill would strike the words “diversity,” “equity” and “civil rights” from state laws and would repeal state schoolteacher and administrator recruitment and retention plans as well as its higher education minority retention programs.
Sullivan said opponents lied about the bill, citing an assertion by Sen. Clarke Tucker, D-Little Rock, that it could have shuttered the Arkansas Department of Heritage’s Mosaic Templars Cultural Center in Little Rock.
Sullivan cited Attorney General Tim Griffin’s opinion that such a prediction was ridiculous. Tucker did not respond to several messages seeking comment
Sen. Linda Chesterfield, D-Little Rock, feared SB71 would disrupt the state’s Minority Health Commission in its work to cut the state’s high maternal death rate in Black childbirth. Sullivan said he favors continued efforts to improve Black health outcomes “because clearly there’s a need there.” Chesterfield hopes to retain the state registry of minority and women-owned businesses.
“In the state of Arkansas, minority is defined as an ethnic minority, a woman and a disabled veteran,” she said. “What Senator Sullivan’s bill does is remove the few programs that are designed to enhance the ability of those underserved groups to develop the skill sets that will allow them to increase the economy of this state and this nation.”
She said that unlike some states, Arkansas has never employed quotas for hiring or procurement. “All Arkansas has said is our goal is to make our state’s landscape look as much like the population of this state whenever possible. In most instances the state has fallen woefully short because hiring is still predicated largely on who you know, not what you know.”
The bill would make it unlawful to “discriminate against, or grant preferential treatment to, an individual or group on the basis of race, sex, color, ethnicity, or nation origin in matters of state employment, public education, or state procurement.” Those negligently violating that part of the bill would be committing a Class A misdemeanor.
“I understand that this is very contentious legislation, and I understand that people are very concerned,” Sullivan said. But he said other states had enacted similar bills and the sky hasn’t fallen. He also said opponents of SB71 “are just trying to scare people."
Pushing Back: Two Little Rock Businesswomen Who Battled the Bill
Loretta Lever, a Black businesswoman who teamed with Rodney Slater and an Arkansas governor named Bill Clinton to pioneer the state’s first efforts to promote minority-owned businesses, got busy when she heard about Senate Bill 71.
She is president of Choice Promotions, a Little Rock promotional products distributor. “I started reaching out to legislators, because I understood the importance of it, and the devastation that it was likely to cause,” said Lever, who is involved in several other successful businesses. “And not only did I reach out to lawmakers, but also to the governor as well.”
Gov. Sarah Huckabee Sanders said through a press representative that she was waiting to see a final version of the bill emerge from the House before taking any position. The bill was tabled Wednesday in committee.
“I had read in the paper that she was closely following Senate Bill 71,” Lever said. “That made me feel that she had some concerns. Then I would like to think she had concerns as a woman as well.”
Choice Promotions has a Disadvantaged Business Enterprise certification. “We work with the state, with the federal government, with corporations and universities,” Lever said. “Those certifications are very, very important, because they give credibility to your company.”
Her advocacy for minority and women-owned businesses dates back to the Clinton administration at the state Capitol. “That was when Rodney Slater [later U.S. secretary of transportation] and I worked together to write the first goals for the state of Arkansas.”
She said she wasn’t surprised by SB71, which labeled state goals to increase minority business participation as a form of discrimination. “Look at the mood of the country,” she said. “We’re going to have to keep trying to create economic development for everyone, because it’s important to create jobs and to keep that money in the state. Small businesses create the most jobs.”
Mary M. Parham, president of J Kelly Referrals, a Certified Minority Business Enterprise that operates a call center and has done work for the Arkansas Lottery Commission, said the bill would destroy opportunities for minority businesses and set the state back 100 years.
Parham, the Little Rock Regional Chamber’s 2021 Minority Legacy Business honoree, also took aim at the bill’s sponsor, Sen. Dan Sullivan, R-Jonesboro. “How ludicrous that he initiated this bill trying to remove minority businesses from the equation. There’s nothing right about that at all. I don’t know how he sleeps at night.”