Supporting Local Business Enterprises Emergency Amendment Act of 2026

MURIELBOWSERMAYOR
February26,2026
‘TheHonorablePhilMendelson
Chairman
CounciloftheDistrictofColumbia
JohnA.WilsonBuilding
1350PennsylvaniaAvenue,NW, Suite504
Washington,DC 20004

DearChairmanMendelson:
EnclosedforconsiderationandadoptionbytheCounciloftheDistrictofColumbiaisthe“SupportingLocalBusinessEnterprisesEmergencyDeclarationResolutionof2026,”the “SupportingLocalBusinessEnterprisesEmergencyAmendmentActof2026,”the“SupportingLocalBusinessEnterprisesTemporaryAmendmentActof2026,”andthe“SupportingLocalBusinessEnterprisesAmendmentActof2026.”

Theresolutionandaccompanyingemergency,temporaryandpermanentbillsamendtheSmallandCertifiedBusinessEnterpriseDevelopmentandAssistanceActof2005(“CBEAct”),byclarifyingthequalificationsforcertaincertifiedbusinessenterprise(“CBE”)categories,enhancingexistingpenalties,clarifyingrelevantcontractingandsubcontractingrequirements,andestablishinginvoicingandpaymentrequirements.

Morespecifically,theseamendments:(1)proposeanewpenaltystructurethatwouldrequireabeneficiarytopaythedifferencebetweenthedollaramountitwasrequiredtosubcontracttoCBEsandtheactualdollaramountsubcontractedtoCBEs;(2)prohibitbeneficiariesfromsubcontractinganyoftheir35%spendinggoaltoanenterpriseinwhichthebeneficiaryhasanownershipinterest;(3)waivedeveloper,acquisition,andgeneralcontractorfeesthat,whentotaled,areunreasonablydisproportionatetothepercentageofitsequityinvestmentintheproject;(4)establishuniformhearingproceduresforenforcementactionsundertheCBEAct;(5)expandthedefinitionofbeneficiarytoincludenon-profitentities;(6)requirebeneficiariestoinvoicetheDistrictforundisputedworkperformedonagovernmentassistedprojectevery30days,andfollowingreceiptofpaymentbytheDistrict,topaysubcontractorsforworkproperlyinvoicedandsatisfactorilyperformed;(7)requireapplicantsforcertificationasalocalbusinessenterprisetobeindependentlyownedandoperated:(8)requireeachCBEholdinganinterestinacertifiedjointventurethatisselectedasabeneficiarytoperformapercentageoftheworkthatisequaltoorgreaterthanitspercentageinterestinthejointventure.

ThesechangeswillstrengthentheDistriet’sCBElawsandhelpstrengthenthelocalbusinesscommunity.
urgetheCounciltotakepromptandfavorableactionontheenclosedlegislation.
Sincerely, 5
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A BILL
Chainnan Phil Mendelson
at the request of the Mayor
10 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
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13 To amend, on an emergency basis, the Small and Certified Business Enterprise Development and
14 Assistance Act of 2005 to require a business applying for certification as a local business
15 enterprise to be independently owned and operated, to establish uniform hearing
16 procedures for enforcement actions, to expand the scope of the Department of Small and
17 Local Business Development's complaint hotline, to add penalties for any business
18 enterprise that violates the act, to include non-profit entities as beneficiaries subject to
19 certified business enterprise subcontracting and reporting requirements, to establish
20 minimum and maximum periods of revocations for violations under the act, to increase
21 the penalty for beneficiaries who fail to show commercially reasonable best efforts to
22 meet subcontracting requirements, to prevent a beneficiary from fulfilling subcontracting
23 requirements by hiring a certified business enterprise in which it has an ownership
24 interest, to limit eligibility requirements for equity sponsors to prevent conflicts of
25 interest, to protect equity sponsors from bearing disproportionate project costs on projects
26 and protect equity sponsor voting rights, to clarify contracting and subcontracting
27 requirements for certified business enterprise beneficiaries, to eliminate moot Department
28 reporting requirements, to establish certification procedures during a public health
29 emergency, and to repeal the Living Wage Certification Program , Triennial Review of
30 Program and Subchapter, and Volunteer Corp of Executives and Entrepreneurs
31 provisions of the Act; and to amend the Quick Payment Act to impose invoice
32 submission timing requirements on beneficiaries and to authorize fines and other
33 penalties for failure to comply with the invoicing requirements.
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35 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
36 act may be cited as the "Supporting Local Business Enterprises Emergency Amendment Act of
37 2026".

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Sec. 2. The Small and Certified Business Enterprise Development and Assistance Act of 38
2005, effective October 20, 2005 (D.C. Law 16-33; D.C. Official Code § 2-218.01 et seq.), is 39
amended as follows: 40
(a) The table of contents is amended as follows: 41
(1) The section designation for section 2315 is amended to read as follows: 42
“Sec. 2315. Living Wage Certification Program. [Repealed]”. 43
(2) The section designation for section 2337 is amended to read as follows: 44
“Sec. 2337. Local business enterprise with its principal office located in an enterprise 45
zone.”. 46
(3) The section designation for section 2346 is amended to read as follows: 47
“Sec. 2346. Performance and subcontracting requirements for government-assisted 48
projects; subcontracting plans.”. 49
(4) A new section designation is added to read as follows: 50
“Sec. 2361a. Certificate of registration during a public health emergency.”. 51
(5) The section designation for section 2367 is amended to read as follows: 52
“Sec. 2367. Establishment of the Volunteer Corp of Executives and Entrepreneurs. 53
[Repealed]”. 54
(6) The section designation for section 2371 is amended to read as follows: 55
“Sec. 2371. Triennial review of program and subchapter. [Repealed]”. 56
(b) Section 2302 (D.C. Official Code § 2-218.02) is amended as follows: 57
(1) Paragraph (1B) is amended to read as follows: 58
“(1B) “Beneficiary” means a business enterprise, not-for-profit business, or other 59
person that is the prime contractor or developer on a government-assisted project.”. 60

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(2) Paragraph (7) is amended to read as follows: 61
“(7) “Economically disadvantaged individual” means an individual who owns at 62
least a 51% interest in a business enterprise and whose personal net worth does not exceed the 63
limit set forth in 49 CFR § 26.68.”. 64
(3) Paragraph (8) is amended to read as follows: 65
“(8) “Enterprise zone” means a census tract(s) within the District of Columbia 66
that has a poverty rate of 10 percent or more as provided by the U.S. Census Bureau.”. 67
(4) Paragraph (8A) is amended to read as follows: 68
“(8A) “Equity impact enterprise” means a business enterprise that is a resident- 69
owned business, small business enterprise, and disadvantaged business enterprise.”. 70
(5) A new paragraph (8B) is added to read as follows: 71
“(8B) “Equity sponsor” means a small investor, a disadvantaged investor, or a 72
certified equity participant.”. 73
(6) A new paragraph (9-1) is added to read as follows: 74
“(9-1) “Formal complaint” means a complaint that is submitted to the 75
Department in writing, sworn to by the complainant, and notarized.”. 76
(7) A new paragraph (10A) is added to read as follows: 77
“(10A) “Informal complaint” means any complaint other than a formal complaint, 78
and includes complaints submitted in person, by email, by telephone, or through the 79
Department’s complaint hotline.”. 80
(8) A new paragraph (10B) is added to read as follows: 81
“(10B) “Independently owned and operated” means, with respect to a business, 82
that the ownership interests, management, and operation of the business are not subject to 83

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control, restriction, modification, or limitation by a person with no official role in the business. 84
There is a rebuttable presumption that a business is not independently owned and operated if: 85
“(A) A person with no official role in the business owns or controls 50% 86
or more of the voting stock; or 87
“(B) One or more owners, general partners, directors, officers, or members 88
of another business controls or has the power to control or has the ability to control, veto, 89
approve, deny, amend or change the course of the day-to-day operations of the business, the 90
business’s board of directors, or owner of the business.”. 91
(9) Paragraph (11) is amended to read as follows: 92
“(11) “Joint venture” means 2 or more persons that combine their property, 93
capital, efforts, skills, or knowledge to carry out a single project.”. 94
(10) Paragraph (13A) is amended to read as follows: 95
“(13A) “Material change” means a change in: 96
“(A) A business’s ownership; 97
“(B) The address of a business’s principal office; 98
“(C) A business’s size, if the business is certified as a small business 99
enterprise; and 100
“(D) Any other characteristic of the business that affects whether the 101
business continues to qualify for certification under a CBE category under which the business 102
enterprise is certified.”. 103
(11) Paragraph (13B) is redesignated as paragraph (13D). 104
(12) New paragraphs (13B) and (13C) are added to read as follows: 105

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“(13B) “Person” means any individual, firm, partnership, general partner of a 106
partnership, limited liability company, registered limited liability partnership, foreign limited 107
liability partnership, association, corporation, unincorporated business, company, syndicate, 108
estate, trust, business trust, trustee, trustee in bankruptcy, receiver, executor, administrator, 109
assignee, fiduciary, or entity of any kind. 110
“(13C) “Principal office” means the location where the primary operational, 111
financial, and recordkeeping functions of the business occur.”. 112
(13) Paragraph (15) is amended to read as follows: 113
“(15) "Resident-owned business" means a local business enterprise in which more 114
than 50% of the ownership interest is owned by an individual who is, or individuals who are: 115
“(A) Domiciled in the District of Columbia; and 116
“(B) Subject to personal income tax under District law as a full-year 117
resident, or as full-year residents, of the District of Columbia.”. 118
(c) Section 2315 (D.C. Official Code § 2-218.15) is repealed. 119
(d) Section 2331 (D.C. Official Code § 2-218.31) is amended by adding a new paragraph 120
(1A) to read as follows: 121
“(1A)(A) Is: 122
“(i) Independently owned and operated; 123
“(ii) More than 50% owned, operated, and controlled by a District-124
based enterprise or not-for-profit business; or 125
“(iii) Owned by a non-District-based business enterprise that is 126
more than 50% owned by District residents;”. 127
(e) Section 2332 (D.C. Official Code § 2-218.32) is amended as follows: 128

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(1) Subsection (a) is amended as follows: 129
(A) Paragraph (1)(A) is amended by striking the semicolon and inserting 130
the phrase “; and” in its place. 131
(B) Paragraph (2) is repealed. 132
(2) Subsections (b) and (c) are repealed. 133
(f) Section 2333 (D.C. Official Code § 2-218.33) is amended as follows: 134
(1) Subsection (a)(2)(A) is amended by striking the phrase “; or” and inserting a 135
period in its place. 136
(2) Subsection (b) is repealed. 137
(g) Section 2337 (D.C. Official Code § 2–218.37) is amended to read as follows: 138
“Sec. 2337. Local business enterprise with its principal office located in an enterprise 139
zone. 140
“A local business enterprise shall be eligible for certification as a local business 141
enterprise with its principal office located in an enterprise zone if its principal office is located in 142
an enterprise zone as defined by section 2302(8).”. 143
(h) Section 2338 (D.C. Official Code § 2-218.38) is amended as follows: 144
(1) Paragraph (2) is amended by striking the semicolon and inserting the phrase “; 145
and” in its place. 146
(2) Paragraph (3) is amended by striking the phrase “; and” and inserting a period 147
in its place. 148
(3) Paragraph (4) is repealed. 149
(i) Section 2346 (D.C. Official Code § 2-218.46) is amended as follows: 150

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(1) The section heading is amended by striking the phrase “construction and non-151
construction contracts” and inserting the phrase “government-assisted projects” in its place. 152
(2) Subsection (a)(3) is amended to read as follows: 153
“(3) A local business enterprise shall not be subject to the requirements in 154
paragraph (1) or (2) of this subsection.”. 155
(3) Subsection (b) is amended as follows: 156
(A) Paragraph (1)(A) is amended to read as follows: 157
“(A)(i) This paragraph applies to each contract for a government-assisted 158
project for which a certified business enterprise was selected as a beneficiary and was: 159
“(I) Granted points or a price reduction pursuant to section 160
2343; or 161
“(II) Selected through a set-aside program under this 162
subpart. 163
“(ii) If the contract for the government-assisted project is valued at 164
or over $1 million: 165
“(I) The certified business enterprise shall perform at least 166
35% of the work on the contract with its own organization and resources; and 167
“(II) If the certified business enterprise subcontracts, at 168
least 35% of the dollar volume of the overall subcontract shall be subcontracted with certified 169
business enterprises. 170
“(iii) If the project is valued at less than $1 million: 171
“(I) The certified business enterprise shall perform at least 172
50% of the work on the contract with its own organization and resources; and 173

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“(II) If the certified business enterprise subcontracts, at 174
least 35% of the dollar volume of the overall subcontracting amount shall be subcontracted with 175
certified business enterprises.”. 176
(B) Paragraph (2)(A) is amended to read as follows: 177
“(A) For each government-assisted project for which a certified joint 178
venture is selected as a beneficiary and is granted points or a price reduction pursuant to section 179
2343, selected through a set-aside program under this part, or conferred a procurement 180
preference for being a certified business enterprise: 181
“(i) Each certified business enterprise holding a majority or 182
minority interest in the certified joint venture shall, with its own organization and resources, 183
perform a percentage of the work equal to or greater than its percentage interest in the joint 184
venture. 185
“(ii) If the certified joint venture subcontracts, at least 35% of the 186
dollar volume of the subcontract shall be subcontracted with qualified certified business 187
enterprises.”. 188
(4) Subsection (b-1) is amended by striking the phrase “subsections (a) and (b) of 189
this subsection” and inserting the phrase “subsections (a) and (b) of this section” in its place. 190
(5) Subsection (c) is repealed. 191
(6) A new subsection (c-1) is added to read as follows: 192
“(c-1) Any dollar volume of a contract for a government-assisted project that is 193
subcontracted to a certified business enterprise in which a beneficiary of that contract has an 194
ownership or financial interest shall not count toward the fulfillment of the 35% dollar volume 195
subcontracting requirement set forth in this section.”. 196

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(7) Subsection (d)(3) is amended by striking the word “District” and inserting the 197
phrase “procurement authority” in its place. 198
(8) Subsection (h) is repealed. 199
(9) Subsection (i) is amended as follows: 200
(A) Paragraph (1) is amended by striking the phrase “A beneficiary” and 201
inserting the phrase “A beneficiary on a government-assisted project subject to subcontracting 202
requirements under subsections (a), (b), or (b-1) of this section” in its place. 203
(B) A new paragraph (1A) is added to read as follows: 204
“(1A) The initial quarterly report filed by the beneficiary shall include a copy of 205
the subcontracting plan.” 206
(C) New paragraphs (3) and (4) are added to read as follows: 207
“(3) A subcontractor identified on a beneficiary’s subcontracting plan shall not 208
commence performance on the subcontract until the subcontract has been executed. The 209
beneficiary shall not receive credit for monies paid to a certified business enterprise 210
subcontractor for work performed on the government-assisted project before the subcontract 211
agreement was executed. 212
“(4) If a beneficiary fails to submit copies of the executed subcontracts within 30 213
calendar days of execution to the Department, the beneficiary’s failure shall render voidable by 214
the District any underlying contract with the beneficiary for that project.”. 215
(j) Section 2349a(a) (D.C. Official Code § 2-218.49a(a)) is amended as follows: 216
(1) A new paragraph (1A) is added to read as follows: 217
“(1A) An investment of a small investor, disadvantaged investor, or certified 218
equity participant shall not count toward the 20% equity requirement set forth in paragraph (1) of 219

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this subsection if the beneficiary for the project and either the small investor, disadvantaged 220
investor, or certified equity participant stand in any of the following relationships with one 221
another: 222
“(A) One stands in an employee-employer relationship to the other; 223
“(B) One has an ownership or financial interest in the other; or 224
“(C) One has a fiduciary duty to the other.”. 225
(2) New paragraphs (4), (5), and (6) are added to read as follows: 226
“(4) An equity sponsor for a government-assisted project shall not be required to 227
pay developer fees, acquisition fees, or general contractor fees that, when totaled, are 228
unreasonably disproportionate to the percentage of its equity investment in the project. 229
“(5) An equity sponsor for a government-assisted project shall have voting rights 230
pertaining to personnel and managerial decisions on a covered project that are commensurate 231
with its percentage of equity investment. 232
“(6) The Mayor shall issue rules, pursuant to section 2372, specifying: 233
“(A) The maximum ratio between the percentage of total fees an equity 234
sponsor is required to pay and the percentage of its equity investment, before those fees become 235
unreasonably disproportionate for purposes of paragraph (4) of this subsection; and 236
“(B) The minimum ratio, between an equity sponsor’s percentage of total 237
voting rights and the percentage of its equity investment in the project, that makes the sponsor’s 238
voting rights commensurate with its percentage of equity investment for purposes of paragraph 239
(5) of this subsection.”. 240
(k) Section 2354(a), (b), and (c)(2) (D.C. Official Code § 2-218.54(a), (b), and (c)(2)) are 241
repealed. 242

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(l) Section 2361 (D.C. Official Code § 2-218.61) is amended as follows: 243
(1) A new subsection (c-1) is added to read as follows: 244
“(c-1) If the Department denies an application for certification, the Department shall not 245
accept, review, or evaluate any of the following for a period of 6 months from the date the 246
applicant receives notice of the decision to deny the application: 247
“(1) Amendments to the denied application; or 248
“(2) A new certification application from the applicant, its agent(s), 249
representative(s), or other members of the public on the applicant's behalf.”. 250
(2) A new subsection (f) is added to read as follows: 251
“(f)(1) Within 90 days after the effective date of the 2024 Act, a business enterprise 252
certified by the Department as of the day before the 2024 Act’s effective date shall notify the 253
Department in writing if it determines that it no longer qualifies for certification under any of the 254
designations under sections 2331 through 2339a of the Act. 255
“(2) An application required by this subsection shall contain the information 256
required by subsection (b) of this section; provided, that the Department may by rule clarify the 257
documents or information required to be submitted with the application. 258
“(3) The Department shall deny the application of a certified business enterprise 259
filed pursuant to paragraph (1) of this subsection if: 260
“(A) The business enterprise timely filed the application and the 261
Department determines that the business no longer meets the requirements for certification under 262
this act; or 263
“(B) The business enterprise did not timely file the application. 264

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“(4) A business enterprise whose application is denied under paragraph (3) of this 265
subsection shall nonetheless be treated as a certified business enterprise for the purpose of the 266
following contracts, including with respect to the contracting, subcontracting, and procurement 267
requirements of this act, as well as any applicable subcontractor credit described in this act, so 268
long as the business enterprise remains in compliance with the other provisions of this act: 269
“(A) Any contract between the business enterprise and the District that 270
fwas executed before the effective date of 2024Act; and 271
“(B) Any contract executed before the effective date of the 2024 Act on 272
which the business enterprise was included as a subcontractor on a subcontracting plan.” 273
“(5) For the purpose of this section, the phrase “2024 Act” refers to the 274
Supporting Local Business Enterprises Amendment Act of 2024, introduced on ____ (Bill 25-275
__).”. 276
(m) A new section 2361a is added to read as follows: 277
“Sec. 2361a. Certificate of registration during a public health emergency. 278
“(a) During a public health emergency declared by the Mayor pursuant to section 5a of 279
the District of Columbia Public Emergency Act of 1980, effective October 17, 2002 (D.C. Law 280
14-194; D.C. Official Code § 7-2304.01): 281
“(1) A business enterprise that satisfies all elements of section 2331 other than 282
section 2331(2) shall still be eligible for certification or subsequent certification as provided in 283
section 2361 if: 284
“(A) The business enterprise demonstrates that its chief executive officer 285
and highest-level managerial employees are restricted, by statute, regulation, Mayor’s Order, or 286

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decision of the business, from working in the business enterprise’s principal office due to the 287
declared public health emergency; and 288
“(B) The principal office maintained by the business enterprise in the 289
District is either: 290
“(i) A brick-and-mortar dedicated office space leased or owned by 291
the business enterprise; or 292
“(ii) A leased or owned dwelling in which the majority owner of 293
the business enterprise resides. 294
“(2) A business enterprise certified pursuant to paragraph (1) of this subsection 295
shall be eligible for subsequent certification pursuant to section 2361(c-1) during the public 296
health emergency if it either: 297
“(A) Files a no-change affidavit, pursuant to section 2361(c-1), attesting 298
that there has been no material change in the business enterprise’s business status and that the 299
business enterprise continues to satisfy the requirements of paragraph (1) of this subsection; or 300
“(B) Demonstrates that the business enterprise satisfies section 2331. 301
“(b) A business enterprise certified pursuant to paragraph (a)(1) of this section shall be 302
eligible for subsequent certification after the public health emergency has ended so long as the 303
business enterprise demonstrates that it satisfies section 2331. 304
“(c) Notwithstanding section 2361(d), a certificate of registration issued during a public 305
health emergency to a business enterprise shall expire 1 year after the date of approval of the 306
application if the business enterprise did not demonstrate its compliance with section 2331(2).”. 307
(n) Section 2363 (D.C. Official Code § 2-218.63) is amended as follows: 308
(1) Subsection (a) is amended as follows: 309

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(A) Paragraph (3) is amended as follows: 310
(i) Subparagraph (B) is amended by striking the word “city” and 311
inserting the phrase “District government” in its place. 312
(ii) Subparagraph (C) is amended as follows: 313
(I) Sub-subparagraph (iii) is amended by striking the word 314
“Made” and inserting the phrase “Willfully made” in its place. 315
(II) Sub-subparagraph (iv) is amended to read as follows: 316
“(iv) Used a document that the person knows to contain a false 317
statement or entry; or”. 318
(III) A new sub-subparagraph (v) is added to read as 319
follows: 320
“(v) Willfully omitted a material fact in a submission to the 321
Department.”. 322
(iii) Subparagraph (H) is amended to read as follows: 323
“(H) Failed to operate and manage a certified joint venture in 324
accordance with section 2339; provided, that, if the joint venture demonstrates that the failure to 325
operate and manage the joint venture in accordance with the joint venture application was 326
necessary due to unforeseen business or operational issues, the failure shall not be a violation of 327
this act.”. 328
(ii) Subparagraph (I) is amended as follows: 329
(I) Strike the word “submits” and insert the word 330
“submitted” in its place. 331

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(II) Strike the word “violates” and insert the word 332
“violated” in its place. 333
(iii) Subparagraph (J) is amended by striking the period at the end 334
and inserting the phrase “; or” in its place. 335
(B) A new paragraph (4) is added to read as follows: 336
“(4) A business enterprise: 337
“(A) Willfully obstructed or impeded, or attempted to obstruct or impede, 338
a District government official or employee investigating the qualifications of a business 339
enterprise that has requested certification; or 340
“(B) In any certified business enterprise matter administered under this 341
act: 342
“(i) Fraudulently obtained, attempted to obtain, or aided another 343
person in fraudulently obtaining or attempting to obtain, public moneys to which the person is 344
not entitled; 345
“(ii) Willfully falsified, concealed, or covered up a material fact by 346
any scheme or device; 347
“(iii) Willfully made a materially false statement or representation; 348
“(iv) Knowingly used a document that contains a false statement or 349
entry; or 350
“(v) Willfully omitted a material fact in a submission to the 351
Department.”. 352
(2) Subsection (b) is amended by striking the phrase “an individual or business” 353
and inserting the phrase “a person” in its place. 354

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(3) Subsection (c) is amended as follows: 355
(A) The lead-in language is amended to read as follows: 356
“(c) If the Department determines, in accordance with procedures set forth in subsection 357
(g) of this section, that a person:”. 358
(B) Paragraph (1) is amended as follows: 359
(i) Strike the phrase “Department shall:” and insert the phrase 360
“Department shall, to the extent consistent with applicable law:” in its place. 361
(ii) Subparagraph (C) is amended as follows: 362
(I) Sub-subparagraph (i) is amended to read as follows: 363
“(i) Assess a civil penalty of not more than $25,000 for the third 364
and any subsequent offense.”. 365
(II) Sub-subparagraph (ii) is repealed. 366
(iii) Subparagraph (C-1) is amended by striking the phrase 367
“Department shall assess” and insert the phrase “Department shall, to the extent consistent with 368
applicable law, assess” in its place. 369
(C) Paragraph (2) is amended to read as follows: 370
“(2) Has committed a violation of subsection (a)(2) or (a)(3) of this section and is 371
a certified business enterprise or certified joint venture, the Department shall suspend or revoke 372
its certification;”. 373
(D) Paragraph (3) is repealed. 374
(E) Paragraph (4) is amended as follows: 375
(i) Strike the word “reasonably” and insert the word “reasonable” 376
in its place. 377

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(ii) Strike the phrase “10% of the dollar volume of the contract that 378
the beneficiary or certified joint venture was required but failed to subcontract.” and insert the 379
phrase “the difference between the dollar volume the beneficiary or certified joint venture was 380
required to subcontract to certified business enterprises under section 2346 and the actual dollar 381
volume subcontracted to certified business enterprises.” in its place. 382
(iii) Strike the phrase “; and” and insert a semicolon in its place. 383
(F) Paragraph (5) is amended as follows: 384
(i) Strike the phrase “Department shall assess” and insert the 385
phrase “Department shall, to the extent consistent with applicable law, assess” 386
(i) Strike the period at the end and insert the phrase “; and” in its 387
place. 388
(G) A new paragraph (6) is added to read as follows: 389
“(6) Ceases to meet the requirements of a particular category of certification and 390
is a certified business enterprise, the Department may change the business enterprise’s certificate 391
of registration by removing the category of certification for which the business enterprise no 392
longer meets the requirements of certification; provided, that this paragraph shall not apply if a 393
certified business enterprise ceases to qualify as a local business enterprise.”. 394
(4) New subsections (d-1) and (d-2) are added to read as follows: 395
“(d-1) The Department may refer matters to the Office of Contracting and Procurement, 396
including matters involving agencies not subject to the Office of Contracting and Procurement’s 397
authority pursuant to section 201(b) of the Procurement Practices Reform Act of 2010, effective 398
April 8, 2011 (D.C. Law 18-371; D.C. Official Code § 2-352.01(b)), for investigation. If the 399
Office of Contracting and Procurement through its hearing procedures determines that a 400

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beneficiary, business enterprise, or certified joint venture has committed more than 2 violations 401
of subsection (a)(1) of this section, or any violations of subsections (a)(3) or (a)(4) of this 402
section, the beneficiary, business enterprise, or certified joint venture shall be: 403
“(1) Debarred from consideration of award of contracts or subcontracts with the 404
District government for a period of no more than 5 years; and 405
“(2) Deemed ineligible from consideration for government-assisted projects with 406
the District government for a period of no more than 5 years. 407
“(d-2) The Department may refer any suspected violation of this section to the Attorney 408
General for the District of Columbia, who may bring a civil action in the Superior Court of the 409
District of Columbia against any person, including the directors or officers of a business 410
enterprise, alleged to have committed the violation. A person alleged to have violated subsection 411
(a)(3) or (a)(4) of this section shall be subject to civil penalties of $100,000, or triple the profit 412
earned by the person on all contracts awarded, whichever is greater.”. 413
(5) Subsection (e) is amended as follows: 414
(A) Paragraphs (1) through (3) are amended to read as follows: 415
“(1) Any person may file with the Department a formal or informal complaint 416
alleging a violation of this act. The Department shall maintain a hotline for the filing of informal 417
complaints. 418
“(2) The Department shall investigate each formal or informal complaint filed 419
with it, except as provided in paragraph (3) of this subsection. 420
“(3) The Department may dismiss a complaint without conducting an 421

19

investigation if the Department determines that the complaint is frivolous or otherwise without 422
merit. If the Department dismisses a formal complaint as frivolous or otherwise without merit, 423
the Department shall prepare a report documenting the following: 424
“(A) A statement detailing the formal complaint, including the name, 425
address, and telephone number of the person filing the complaint; 426
“(B) The name of the person or certified joint venture alleged to be in 427
violation of this act; 428
“(C) The facts and law considered in rendering the determination; and 429
“(D) Any other information considered in rendering the determination.”. 430
(B) Paragraph (4) is repealed. 431
(C) New paragraphs (5) and (6) are added to read as follows: 432
“(5) After the completion of an investigation conducted pursuant to this 433
subsection, the Department shall, as it deems appropriate, take any enforcement action available 434
under this act.. 435
“(6) The Department shall maintain a record listing all formal complaints, which 436
shall contain the following information: 437
“(A) The name of the person alleged to be in violation of this act; 438
“(B) The date the formal complaint was made to the Department; and 439
“(C) A description of the formal complaint.”. 440
(6) Subsection (f) is repealed. 441
(7) Subsection (g) is amended to read as follows: 442
“(g)(1) Except as provided in paragraph (8) of this subsection, before issuing a civil 443
penalty to, or denying, suspending, changing, or revoking a certification of a business enterprise 444

20

or a certified joint venture, the Department shall issue a notice of determination to the person or 445
certified joint venture. The notice of determination shall describe the basis for the Department’s 446
determination; the proposed penalty, if any; and the process and timeline by which the person or 447
certified joint venture may request a hearing. 448
“(2) The person, or the certified representative if the notice of determination is 449
issued to a joint venture, may request a hearing before the Office of Administrative Hearings, 450
pursuant to paragraph (3) of this subsection, within 10 calendar days after receiving the notice. If 451
the person or certified joint venture does not request a hearing within that time, the civil penalty, 452
denial, suspension, change, or revocation shall become final. 453
“(3) If a hearing is requested, the Office of Administrative Hearings shall consider 454
the matter pursuant to section 19 of the Office of Administrative Hearings Establishment Act 455
of 2001, effective March 6, 2002 (D.C. Law 14-76; D.C. Official Code § 2-1831.16), and the 456
rules promulgated thereunder. The Department shall bear the burden of establishing the reason 457
for the civil penalty, change, denial, suspension, or revocation by a preponderance of the 458
evidence. 459
“(4) The decision of the Office of Administrative Hearings shall be the final 460
administrative decision for purpose of judicial review. 461
“(5) Notice of a final suspension or revocation of a certification shall be published 462
on the Department’s website. 463
“(6) A business enterprise or joint venture whose certification has been revoked 464
shall not be eligible to apply for a new certification from the Department until 36 months after 465
the date that the revocation became final. 466
“(7)(A) The Department may at any time, upon motion by a business enterprise or 467

21

joint venture whose certification has been suspended or revoked, remove the suspension or 468
reissue a certification, if the Department determines that it is in the District government's interest 469
to remove the suspension or reissue the certification before the end of the 36-month period and 470
such removal or reissuance does not endanger the health, safety, or welfare of the general public. 471
“(B) In determining whether to remove a suspension or reissuance a 472
certification, the Department shall consider in part whether the business enterprise or joint 473
venture submitted satisfactory proof that conditions within, or actions by, the business enterprise 474
or joint venture that led to the suspension or revocation have been corrected. 475
“(C) A business enterprise or joint venture whose certification is reissued 476
shall cease to be subject to the 36-month waiting period established in paragraph (6) of this 477
subsection. 478
“(8)(A) If, after an investigation, the Department determines that a business 479
enterprise or joint venture certified under this act has violated any provision of this act in such a 480
manner as to present an imminent danger to the health, safety, or welfare of any person or the 481
general public, and that a summary suspension is necessary and appropriate to respond to that 482
imminent danger, the Department may summarily suspend the certification of the business 483
enterprise or joint venture upon issuing the notice of determination described in paragraph (1) of 484
this subsection. 485
“(B) The notice of determination shall inform the business enterprise or 486
joint venture of the reason for the summary suspension and the right to request a hearing before 487
the Office of Administrative Hearings pursuant to paragraph (1) of this subsection. 488
“(C) If a business enterprise or joint venture timely requests a hearing on a 489
summary suspension, the Office of Administrative Hearings shall conduct the hearing within 14 490

22

days after receiving the request, unless the Office of Administrative Hearings and the business 491
enterprise or joint venture agree to a longer period of time, and shall issue a decision within 14 492
days after the record for the hearing closes.”. 493
(o) Section 2367 (D.C. Official Code § 2-218.67) is repealed. 494
(p) Section 2371 (D.C. Official Code § 2-218.71) is repealed. 495
(q) Section 2375(c)(2) (D.C. Official Code § 2-218.75(c)(2)) is amended by striking the 496
phrase “pursuant to section 2363(c)” and inserting the phrase “pursuant to section 2363(d-2)” in 497
its place. 498
Sec. 3. Section 3 of the District of Columbia Government Quick Payment Act of 1984, 499
effective March 15, 1985 (D.C. Law 5-164; D.C. Official Code 2-221.02), is amended as 500
follows: 501
(a) Subsection (d) is amended by adding a new paragraph (1A) to read as follows: 502
“(1A) A clause requiring a beneficiary performing work on a government-assisted 503
project for which a certified business enterprise (“CBE”) is utilized to meet the subcontracting 504
requirements pursuant to section 2346 of the Small and Certified Business Enterprise 505
Development and Assistance Act of 2005, effective October 20, 2005 (D.C. Law 16-33; D.C. 506
Official Code § 2-218.46), to submit an invoice to the District agency every 30 calendar days for 507
work by the CBE subcontractor that, in the beneficiary’s judgment, the subcontractor has 508
satisfactorily performed and properly invoiced, with the first invoice due to the District no later 509
than 35 calendar days after the certified business enterprise submits its initial invoice to the 510
beneficiary, unless the beneficiary’s contract with the District requires a different payment 511
timeline or deliverable;”. 512
(b) A new subsection (g) is added to read as follows: 513

23

“(g) The Mayor may impose a fine, or another penalty authorized by this act, on a 514
contractor, including a beneficiary, for failure to comply with a provision of this section or a 515
contract clause required by this section. The processes for determining the amount of the fine 516
and imposing the fine shall be established by the Mayor by rule issued pursuant to Title I of the 517
District of Columbia Administrative Procedure Act, approved October 21, 1968 (82 Stat. 1204; 518
D.C. Official Code § 2-501 et seq.).”. 519
Sec. 4. The Certified Business Enterprise Program Compliance and Enforcement Support 520
Temporary Amendment Act of 2025, effective August 16, 2025 (D.C. Law 26-25; 72 DCR 521
7536), is repealed. 522
Sec. 5. Fiscal impact statement. 523
The Council adopts the fiscal impact statement in the committee report as the fiscal 524
impact statement required by section 4a of the General Legislative Procedures Act of 1975, 525
approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 526
Sec. 6. Effective date. 527
The act shall take effect following approval by the Mayor (or in the event of veto by the 528
Mayor, action by the Council to override the veto), and shall remain in effect for no longer than 529
90 days, as provided for emergency acts of the Council of the District of Columbia in section 530
412(a) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 788; 531
D.C. Official Code § 1-204.12(a)). 532
Government of the District of Columbia
Office of the Chief Financial Officer

Glen Lee
Chief Financial Officer

1350 Pennsylvania Avenue, NW, Suite 203, Washington, DC 20004 (202)727 -2476
www.cfo.dc.gov
MEMORANDUM

TO: The Honorable Phil Mendelson
Chairman, Council of the District of Columbia

FROM: Glen Lee
Chief Financial Officer

DATE: February 17, 2026

SUBJECT: Fiscal Impact Statement – Supporting Local Business Enterprises
Emergency Amendment Act of 2026

REFERENCE: Draft Bill as provided to the Office of Revenue Analysis on February 12,
2026

Conclusion

Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to
implement the bill.

Background

The Department of Small and Local Business Development (DSLBD) supports the growth and
development of the District’s small businesses through education, grants, certification programs, and
enforcement of contracting laws related to small business participa tion. DSLBD also runs the
Certified Business Enterprise (CBE) program. District -based businesses that meet specified criteria
regarding ownership, size, and physical location can qualify as CBEs. Organizations certified as CBEs
receive preference in District contracting or procurement actions.

The bill makes several changes to DSLBD’s business enterprise certification programs and CBE
program and would permanently modify the process to appeal a CBE determination or file a
complaint. These changes are currently in effect on a temporary basis. 1 The bill repeals the existing

1 These provisions are in effect on a temporary basis until March 29, 2026, via the Certified Business
Enterprise Program Compliance and Enforcement Support Temporary Amendment Act of 2025, effective
August 16, 2025 (D.C. Law 26-25; 72 DCR 7536).
The Honorable Phil Mendelson
FIS: “Supporting Local Business Enterprises Emergency Amendment Act of 2026,” Draft Bill as provided to
the Office of Revenue Analysis on February 12, 2026
Page 2 of 3

temporary legislation in favor of this emergency bill and its accompanying temporary and permanent
versions.

Within the CBE category, DSLBD also certifies businesses in several categories that qualify the
business for additional priority in contracting actions (via point scoring or percentage reduction in
price)2, including Small Business Enterprises, Local Business Enterprises, Disadvantaged Business
Enterprises, and Equity Impact Enterprises. The bill changes the definition for many of these
additional subcategories and outlines how existing CBEs will be treated if they no longer meet the
criteria for CBEs set out in the bill.

The bill expands the CBE designation (that applies to prime contractors or developers on
government-assisted contracts) to include not-for-profit entities. Under current law, only for -profit
entities qualify as CBEs. The bill also establishes the process f or waiving certain CBE criteria during
a public health emergency if its high-level employees (that would otherwise be required to be in their
offices in the District) are restricted from working in the office.

In disposing of excess real property owned by the District, the Mayor may require that the developer
contract with certified local business for equity investment in the project (an “equity sponsor”). The
bill further defines equity sponsor for these purposes to include a small investor, disadvantaged
investor, or certified equity participant. The bill prohibits the developer from charging fees to the
equity sponsor that are unreasonab ly large relative to the equity investment, and it requires the
Mayor to issue rules implementing this section.

Disadvantaged Business Enterprises must be local business enterprises that are more than 50
percent owned, operated, and controlled by socially and economically disadvantaged individuals.
The bill redefines Disadvantaged Business Enterprises to be those he ld by individuals whose
personal net worth is at or below the level qualifying for the federal Disadvantaged Business
Enterprise program.

The bill revises the definition of Small Business Enterprises to match the federal definition of “small
business concern” or have gross receipts below a certain level.

The bill revises the certification for Local Business Enterprises. Local Business Enterprises are those
that are independently owned and operated and either 1) more than 50 percent owned and
controlled by a District -based enterprise or not -for-profit business, or 2) owned by a non -district
business enterprise that itself is more than 50 percent owned by District residents.

The bill eliminates the Living Wage Certification Program (the “Program”) that was established to
certify businesses that pay their employees a living wage 3. These businesses could then advertise
their designation as a living wage employer under the Program. The Program was never established
or funded. The bill also repeals a reporting requirement.

The bill changes the hearing procedures for persons wishing to protest a DSLBD determination or
penalty, removing a requirement that DSLBD hold an internal hearing before the applicant or entity
can appeal to the Office of Administrative Hearings , and increases the civil penalty amounts for

2 Slide 1 (dc.gov)
3 Living Wage Certification Grant Program Amendment Act of 2018, effective October 30, 2018 (D.C. Law 22 -
168; D.C. Official Code § 2-218.15).
The Honorable Phil Mendelson
FIS: “Supporting Local Business Enterprises Emergency Amendment Act of 2026,” Draft Bill as provided to
the Office of Revenue Analysis on February 12, 2026
Page 3 of 3
entities that are found to have violated certain of the contracting and subcontracting requirements
set out in the law. The bill also permits both formal and informal complaints and more explicitly lays
out DSLBD’s process after conducting an investigation of a formal complaint, including timeframes.
Finally, the bill eliminates the Volunteer Corps of Executives and Entrepreneurs, which was designed
to provide mentoring and network opportunities to Certified Business Enterprises. The Volunteer
Corps was never established.
Financial Plan Impact
Funds are sufficient in the fiscal year 2026 through fiscal year 2029 budget and financial plan to
implement the bill. Costs related to changing these definitions were absorbed during the
implementation of previous emergency and temporary legislation.4 Therefore, there is no additional
cost associated with this emergency bill or its accompanying temporary and permanent versions. As
the Living Wage Certification Program and the Volunteer Corps were never operational, their repeal
has no impact on the budget and financial plan.
4 The Local Business Enterprise Clarification Emergency Amendment Act of 2022, effective April 25, 2022
through July 24, 2022 (D.C. Act 24-382; 69 DCR 4037), the Local Business Enterprise Clarification Emergency
Amendment Act of 2023, effective February 27, 2023 through May 28, 2023 (D.C. Act 25-37; 70 DCR 2984)
and the Local Business Enterprise Clarification Temporary Amendment Act of 2023, effective May 25, 2023
through Jan 5, 2024 (D.C. Act A25-55; 70 DCR 8446).
2
GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE ATTORNEY GENERAL
BRIAN L. SCHWALB
ATTORNEY GENERAL
LEGAL COUNSEL DIVISION
M
EMORANDUM
T
O: Tomás Talamante
Director
Office of Policy and Legislative Affairs
FROM: Adele El-Khouri
Deputy Attorney General
Legal Counsel Division
DATE: February 11, 2026
SUBJECT: Legal Sufficiency Review of Draft “Supporting Local Business Enterprises
Emergency Amendment Act of 2026,” “Supporting Local Business Enterprises
Temporary Amendment Act of 2026,” and Accompanying Emergency Declaration
Resolution
(AE-25-302 C)
_____________________________________________________________________________________
This is to Certify that this Office has reviewed the above-referenced draft
legislation and found it to be legally sufficient. If you have any questions in this regard, please do
not hesitate to call me at (202) 262-6402.
_________________________________

Adele El-Khouri