Seal of the Governor
For Immediate Release: April 30, 2019
Contacts: Office of the Governor: Alena Yarmosky, Alena.Yarmosky@governor.virginia.gov

Governor Northam Vetoes Legislation Undermining “Micro Business” Classification

RICHMOND—Governor Ralph Northam today vetoed Senate Bill 1592, which would change the certification process for a subcategory of small businesses known as “micro businesses” and undermine the intent of the classification. The Governor’s full veto statement is below.

April 30, 2019

Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto Senate Bill 1592, which changes the certification process for a subcategory of small businesses known as “micro businesses.” The legislation requires the Director of the Department of Small Business and Supplier Diversity (DSBSD) to amend its certification regulations to provide that a micro business may be certified using full-time equivalents.

The legislation is problematic because the exclusion of less-than-full time employees in the certification process could allow larger businesses to qualify as micro businesses. This would undermine the intent of the micro business designation, which is aimed at small businesses that have no more than twenty-five (25) employees and no more than $3 million in average annual revenue over the three-year period prior to their certification. Under the legislation, a business with many more employees could qualify as a micro business as long as twenty-five or fewer are deemed full-time.

Moreover, DSBSD has worked to streamline the certification process, and this legislation could result in the reversal of that progress. Under the legislation, DSBSD would have to review twelve months of payroll and wage data to determine the number of full-time equivalents the business employs when evaluating a new micro business certification. This would place an additional burden both on the agency and on the business that would now need to submit payroll and wage report information to the agency.

The micro business program has provided an opportunity for a number of the Commonwealth’s smallest businesses to grow and thrive. This legislation makes changes to the program that could undermine that goal.

Accordingly, I veto this bill.

Sincerely,

 

Ralph S. Northam

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