You asked if there would be constitutional problems with a state law that establishes a set-aside program for disabled veterans.

The Office of Legislative Research is not authorized to give legal opinions and this report should not be considered one.

CONSTITUTIONAL ANALYSIS IN EQUAL PROTECTION CASES

If challenged on constitutional grounds, a law that requires state agencies to set aside a specified percentage of all contracts they award for disabled veterans would likely be challenged, if at all, as a violation of the equal protection provision of the state or federal constitutions. These provisions generally prohibit the government from engaging in discriminatory practices. Specifically, under the U. S. Constitution, the Fourteenth Amendment's Equal Protection Clause prohibits a state from “deny[ing] to any person within its jurisdiction the equal protection of the laws. ” Under the state constitution, the Twenty First Amendment similarly provides:

Connecticut courts have generally held that the state and federal constitutional clauses have the same meaning (Franklin v. Berger, 211 Conn. 591 (1989)).

When a state law is challenged on constitutional equal protection grounds, the court must first decide what standard to apply. If a statute affects “fundamental rights” or creates a “suspect classification” it will survive a constitutional challenge only if it serves a compelling state interest and is narrowly tailored to serve that interest (Ryszkiewicz v. City of New Britain, 193 Conn. 589 (1984)). A law creates a suspect classification when it treats individuals differently on the basis of an innate group characteristic such as race, ancestry, or national origin. A right is fundamental if it is explicitly or implicitly guaranteed by the state or federal constitution (Zapata v. Burns, 207 Conn. 496 (1988)).

If a law does not affect fundamental rights or a suspect class, it need only be related to some legitimate governmental purpose to withstand an equal protection challenge. This is called the rational basis test.

We are unaware of any court holding that obtaining a state contract is a fundamental right and the proposed legislation does not appear to treat people differently based on race, religion, nationality, or any other suspect classification. Thus, it appears that a court would likely apply a rational basis standard. This is the same standard the court would apply if the state's current (1) set-aside for small businesses (CGS § 4a-60 et seq. ) or (2) state employment preference for disabled veterans (CGS §§ 5-224 and 7-415) is ever challenged. Both laws have been in effect for over 30 years and neither has been challenged on constitutional grounds.

In these equal protection cases where there is a plausible policy reason for the law; courts generally decline to judge the legislature's wisdom or logic even if the reason is not expressly articulated. As long as some conceivable rational basis exists for the statutory classification, it can withstand constitutional challenge (D. A. Pincus and Co. Inc. v. Meechan, 235 Conn. 865 (1996)). As a result, individuals challenging a statute's constitutionality on this ground have a difficult time demonstrating its invalidity.

PROPOSED SET-ASIDE LAW FOR DISABLED VETERANS

SB 1020 establishes a separate set-aside program for contractors who are disabled veterans that mirrors the existing small contractor-minority set-aside program in most ways. One major difference is that participation in the set-aside program for small contractors is limited to businesses with no more than $ 10 million in gross revenues in a single year while the program for disabled veterans would be open to qualified businesses regardless of their size.

It requires state agencies and quasi-public agencies that put to bid more than $ 10,000 of contracts in any year set aside in each fiscal year at least 3% for disabled veteran contractors on the basis of competitive bidding. As under the law for the existing small contractor-minority set-aside program, agencies may exclude contracts that cannot be set aside because of a conflict with federal law. They may also set aside an amount based on the amount of all contracts not excluded from the calculation if the method of calculation would result in more or less than a 3% set-aside.

Awarding agencies, instead of setting aside any contract, may require a contractor or other entity authorized by the agency to award contracts to set aside a portion of the contract for subcontractors eligible for set-aside contracts. But this cannot be construed to reduce the total set-aside from 3%.

The bill defines a “veteran with a disability” as any veteran (1) who has at least a 10% Veterans' Administration-rated service disability incurred or aggravated in the line of duty while serving on active duty and (2) who was discharged under other than dishonorable conditions. It defines a “disabled veteran contractor” as a contractor, subcontractor, manufacturer, or service company that has been doing business under the same ownership and management and has maintained its principal business place in Connecticut for at least one year before applying for certification. Also, at least 51% of the business must be held by a veteran or veterans with a disability exercising operational authority over its daily affairs and having the power to direct its management and policies.

The bill excludes disabled veteran contractors from the definition of small contractor and minority business, thereby precluding them from participating in the small contractor set-aside program. It also precludes them from some Title 32 programs available to small contractors and minority businesses (e. g. , Comprehensive Business Assistance Fund (CGS § 32-23x) and Business Outreach Center Challenge grants (CGS § 32-9qq)).

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