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HF 1821

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/21/2012 05:21pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - 1st Engrossment

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A bill for an act
relating to veterans; changing the small business set-aside program for
veteran-owned small businesses; authorizing county set-aside programs for
veteran-owned small businesses; changing reporting requirements; amending
Minnesota Statutes 2010, section 161.321, subdivisions 2, 5, 8, by adding
subdivisions; proposing coding for new law in Minnesota Statutes, chapter 375.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

CONSTRUCTION CONTRACTING FOR VETERAN-OWNED
SMALL BUSINESSES

Section 1.

Minnesota Statutes 2010, section 161.321, subdivision 2, is amended to read:


Subd. 2.

Small new text begin targeted group new text end business set-asides.

(a) The commissioner may
award up to a six percent preference in the amount bid for specified construction work to
small targeted group businesses deleted text begin and veteran-owned small businessesdeleted text end .

(b) The commissioner may designate a contract for construction work for award only
to small targeted group businesses if the commissioner determines that at least three small
targeted group businesses are likely to bid. deleted text begin The commissioner may designate a contract for
construction work for award only to veteran-owned small businesses if the commissioner
determines that at least three veteran-owned small businesses are likely to bid.
deleted text end

(c) The commissioner, as a condition of awarding a construction contract, may
set goals that require the prime contractor to subcontract a portion of the contract to
small targeted group businesses deleted text begin and veteran-owned small businessesdeleted text end . The commissioner
must establish a procedure for granting waivers from the subcontracting requirement
when qualified small targeted group businesses deleted text begin and veteran-owned small businessesdeleted text end
are not reasonably available. The commissioner may establish financial incentives for
prime contractors who exceed the goals for use of subcontractors and financial penalties
for prime contractors who fail to meet goals under this paragraph. The subcontracting
requirements of this paragraph do not apply to prime contractors who are small targeted
group businesses deleted text begin or veteran-owned small businessesdeleted text end .

(d) The commissioner may award up to a four percent preference in the amount bid
on procurement to small businesses located in an economically disadvantaged area as
defined in section 16C.16, subdivision 7.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contracts let on or after July
1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2010, section 161.321, is amended by adding a subdivision
to read:


new text begin Subd. 2a. new text end

new text begin Veteran-owned small business set-asides. new text end

new text begin (a) The commissioner must
award up to a six percent preference in the amount bid for specified construction work to
veteran-owned small businesses, except when prohibited by the federal government as a
condition of receiving federal funds. The percentage of preference in bid amount provided
under this subdivision may not be less than the percentage of bid preference provided to
any small targeted group business under subdivision 2.
new text end

new text begin (b) The commissioner must be as inclusive as possible in specifying contracts for
construction work, as well as for construction-related professional and technical services,
available under this bid preference program for veteran-owned small businesses. The
term "construction" must be given broad meaning for purposes of specifying and letting
contracts for veteran-owned small businesses and must include, but is not limited to,
preplanning, planning, and all other construction-related professional and technical
services.
new text end

new text begin (c) The commissioner must strive to ensure that contracts under this subdivision will
be awarded on a proportional basis with contracts awarded under subdivision 2.
new text end

new text begin (d) The commissioner, as a condition of awarding a construction contract, must
set goals that require the prime contractor to subcontract a portion of the contract to
veteran-owned small businesses, except when prohibited by federal law or rule as a
condition of receiving federal funds. The commissioner must establish a procedure for
granting waivers from the subcontracting requirement when qualified veteran-owned
small businesses are not reasonably available. The commissioner may establish financial
incentives for prime contractors who exceed the goals for use of veteran-owned small
business subcontractors, as well as financial penalties for prime contractors who have not
been granted a waiver and fail to meet goals under this paragraph. The subcontracting
requirements of this paragraph do not apply to prime contractors who are veteran-owned
small businesses.
new text end

new text begin (e) The commissioner may designate a contract for construction work for award only
to veteran-owned small businesses, if the commissioner determines that at least three
veteran-owned small businesses are likely to bid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contracts let on or after July
1, 2012.
new text end

Sec. 3.

Minnesota Statutes 2010, section 161.321, subdivision 5, is amended to read:


Subd. 5.

Recourse to other businesses.

If the commissioner is unable to award
a contract pursuant to the provisions of subdivisions 2new text begin , 2a,new text end and 3, the award may be
placed pursuant to the normal solicitation and award provisions set forth in this chapter
and chapter 16C.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contracts let on or after July
1, 2012.
new text end

Sec. 4.

Minnesota Statutes 2010, section 161.321, subdivision 8, is amended to read:


Subd. 8.

deleted text begin Report by commissionerdeleted text end new text begin Reportingnew text end .

new text begin (a) new text end The commissioner deleted text begin of
transportation
deleted text end shall report to the commissioner of administration on compliance with this
section. The information must be reported at the time and in the manner requested by the
commissionernew text begin of administrationnew text end .

new text begin (b) By February 1 of each even-numbered year, the commissioner of transportation
shall submit a report to the chairs and ranking minority members of the legislative
committees with jurisdiction over transportation policy and finance and veterans policy
and finance concerning contract awards during the preceding biennium under this section.
At a minimum, the report must include:
new text end

new text begin (1) a summary of the program;
new text end

new text begin (2) a review of the use of preferences for contracting during the preceding biennium,
including frequency of establishment of a preference and frequency and amount of
contract awards to:
new text end

new text begin (i) small targeted group businesses; and
new text end

new text begin (ii) veteran-owned small businesses;
new text end

new text begin (3) a review of goals and good faith efforts to use small targeted group businesses
and veteran-owned small businesses in subcontracts, including analysis of methods used
for, and effectiveness of, good faith efforts;
new text end

new text begin (4) a summary of any financial incentives used or sanctions imposed;
new text end

new text begin (5) agency commentary on any perceived impediments, whether statutory,
administrative, or otherwise, that may be limiting the participation of small targeted
group businesses and veteran-owned small businesses in the agency's contract preference
program; and
new text end

new text begin (6) any recommendations for legislative or programmatic changes.
new text end

Sec. 5.

Minnesota Statutes 2010, section 161.321, is amended by adding a subdivision
to read:


new text begin Subd. 9. new text end

new text begin Purpose. new text end

new text begin The purpose of the state contracting bid preference program for
veteran-owned small businesses is to facilitate the healthy transition of veterans from
military to civilian life, and to help compensate veterans for their sacrifices including, but
not limited to, their sacrifice of health and time to the state and nation during their military
service, as well as to enhance economic development within Minnesota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for contracts let on or after July
1, 2012.
new text end

ARTICLE 2

AUTHORIZING COUNTIES FOR BID PREFERENCE FOR
VETERAN-OWNED SMALL BUSINESSES

Section 1.

new text begin [375.771] VETERAN-OWNED SMALL BUSINESS CONTRACTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this
section.
new text end

new text begin (b) "Award" means the granting of a contract in accordance with all applicable laws
and rules governing competitive bidding, except as otherwise provided in this section.
new text end

new text begin (c) "Contract" means an agreement entered into between a business entity and the
county for procurement of goods and services including both technical and nontechnical
goods and services, printing, and construction.
new text end

new text begin (d) "County board" or "board" has the meaning given in section 375.01.
new text end

new text begin (e) "County purchasing department" has the meaning given in section 375.72.
new text end

new text begin (f) "Director of purchasing" has the meaning given in section 375.74.
new text end

new text begin (g) "Subcontractor" means a business entity that enters into a legally binding
agreement with another business entity that is a party to a contract as defined in paragraph
(c).
new text end

new text begin (h) "Veteran" has the meaning given in section 197.447.
new text end

new text begin (i) "Veteran-owned small business" means a business designated under section
16C.16, subdivision 6a.
new text end

new text begin Subd. 2. new text end

new text begin Policy; purpose; director. new text end

new text begin (a) A county board may establish a program
within the county in accordance with this section to provide a bid preference for
awarding contracts to designated veteran-owned small businesses for the procurement of
technical and nontechnical goods and services including, but not limited to, printing and
construction, broadly defined to include all phases of the construction process.
new text end

new text begin (b) The purpose of this program is to facilitate the transition of veterans from
military to civilian life, and to help compensate veterans for their sacrifices including, but
not limited to, their sacrifice of health and time to the community, state, and nation during
their military service, as well as to enhance economic development throughout Minnesota.
new text end

new text begin (c) The county board may direct the county director of purchasing, or other
designated official within the county purchasing department, to administer this program in
accordance with county policy established by the board.
new text end

new text begin Subd. 3. new text end

new text begin Small business set-asides. new text end

new text begin (a) The county director of purchasing may
award up to a six percent preference in the amount bid for procurement of goods and
services including, but not limited to, technical and nontechnical goods and services,
printing, and construction to veteran-owned small businesses having their principal place
of business in Minnesota.
new text end

new text begin (b) The board, as a condition of awarding a construction contract, may set goals that
require the prime contractor to subcontract a portion of the contract to veteran-owned
small businesses. The board must establish a procedure for granting waivers from the
subcontracting requirement when qualified veteran-owned small businesses are not
reasonably available. The board may establish financial incentives for prime contractors
who exceed the goals for use of veteran-owned small business subcontractors and
financial penalties for prime contractors who fail to meet goals under this paragraph. The
subcontracting requirements of this paragraph do not apply to prime contractors who are
veteran-owned small businesses.
new text end

new text begin Subd. 4. new text end

new text begin Awards to small businesses. new text end

new text begin At least 75 percent of subcontracts awarded
to veteran-owned small businesses must be performed by the business to which the
subcontract is awarded or another veteran-owned small business.
new text end

new text begin Subd. 5. new text end

new text begin Awards, limitations. new text end

new text begin Contracts awarded under this section are subject to
all limitations adopted by the board.
new text end

new text begin Subd. 6. new text end

new text begin Recourse to other businesses. new text end

new text begin If the director is unable to award a contract
under subdivisions 3 and 4, the award may be placed under normal solicitation and award
statutes and rules.
new text end

new text begin Subd. 7. new text end

new text begin Noncompetitive bids. new text end

new text begin The board is encouraged to purchase from
veteran-owned small businesses designated under section 16C.16, subdivision 6a, when
making purchases that are not subject to competitive bidding procedures.
new text end

new text begin Subd. 8. new text end

new text begin Report to board. new text end

new text begin At the request of the county board, the county treasurer
shall report to the board on compliance with this section. The information must be
reported at the time and in the manner requested by the board.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2012, for contracts awarded
by counties on or after that date.
new text end