1.1                          A bill for an act
  1.2             relating to state government; modifying the state 
  1.3             procurement process; authorizing rulemaking; making 
  1.4             various conforming amendments; appropriating money; 
  1.5             amending Minnesota Statutes 1996, sections 3.225, 
  1.6             subdivision 2; 3.732, subdivision 6; 3.922, 
  1.7             subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 
  1.8             11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 
  1.9             15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 
  1.10            17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, 
  1.11            subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 
  1.12            84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, 
  1.13            subdivision 3; 116.03, subdivision 2; 116J.035, 
  1.14            subdivision 1; 116J.402; 116J.58, subdivision 2; 
  1.15            116J.68, subdivision 2; 116J.966, subdivision 1; 
  1.16            124.14, subdivision 1; 126.151, subdivision 2; 
  1.17            129C.10, subdivision 7; 136A.06; 136A.16, subdivision 
  1.18            1; 136A.29, subdivision 6; 136F.23; 136F.56, 
  1.19            subdivision 5; 136F.581, subdivision 3; 136F.66; 
  1.20            136F.72, subdivision 3; 136F.96; 137.35, subdivisions 
  1.21            1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, 
  1.22            subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 
  1.23            7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 
  1.24            1; 216C.02, subdivision 1; 237.51, subdivision 5a; 
  1.25            241.0221, subdivision 6; 241.27, subdivision 2; 
  1.26            246.36; 246.57, subdivisions 1 and 6; 256B.031, 
  1.27            subdivision 1; 256B.04, subdivisions 14 and 15; 
  1.28            298.2211, subdivision 4; 349A.06, subdivision 1; 
  1.29            349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 
  1.30            354.06, subdivision 2a; 354.07, subdivision 7; 
  1.31            356A.06, subdivision 7; 446A.12, subdivision 5; 
  1.32            462A.18, subdivision 2; 471.345, subdivision 8; 
  1.33            473.142; 473.556, subdivision 14; 480.09, subdivision 
  1.34            1; and 626.90, subdivision 2; Minnesota Statutes 1997 
  1.35            Supplement, sections 3.225, subdivision 1; 16A.15, 
  1.36            subdivision 3; 16B.465, subdivision 7; 16E.07, 
  1.37            subdivision 9; 17.03, subdivision 12; 41D.03, 
  1.38            subdivision 7; 61B.21, subdivision 1; 85A.02, 
  1.39            subdivision 5b; 121.1113, subdivision 2; 136A.40; 
  1.40            138.35, subdivision 1b; 179A.03, subdivision 14; 
  1.41            216D.03, subdivision 2; 241.277, subdivision 2; 
  1.42            256B.19, subdivision 2a; 256D.03, subdivision 6; 
  1.43            353.03, subdivision 3a; 363.073, subdivision 1; and 
  1.44            626.91, subdivision 2; proposing coding for new law in 
  1.45            Minnesota Statutes, chapters 16C; and 174; repealing 
  1.46            Minnesota Statutes 1996, sections 16B.06; 16B.07; 
  2.1             16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 
  2.2             16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 
  2.3             16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 
  2.4             16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 
  2.5             16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; 
  2.6             Minnesota Statutes 1997 Supplement, sections 16B.18, 
  2.7             subdivision 3; 16B.20, subdivision 2; and 16B.482. 
  2.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.9                              ARTICLE 1 
  2.10                         PROCUREMENT REFORM
  2.11     Section 1.  Minnesota Statutes 1996, section 15.054, is 
  2.12  amended to read: 
  2.13     15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM 
  2.14  GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.] 
  2.15     No officer or employee of the state or any of its political 
  2.16  subdivisions shall sell or procure for sale or possess or 
  2.17  control for sale to any other officer or employee of the state 
  2.18  or the subdivision, as appropriate, any property or materials 
  2.19  owned by the state or subdivision except pursuant to conditions 
  2.20  provided in this section.  Property or materials owned by the 
  2.21  state or a subdivision, except real property, and not needed for 
  2.22  public purposes, may be sold to an employee of the state or the 
  2.23  subdivision after reasonable public notice at a public auction 
  2.24  or by sealed bid if the employee is the highest responsible 
  2.25  bidder and response, if the employee is not directly involved in 
  2.26  the auction or process pertaining to the administration and 
  2.27  collection of sealed bid process responses.  Requirements for 
  2.28  reasonable public notice may be prescribed by other law or 
  2.29  ordinance so long as at least one week's published or posted 
  2.30  notice is specified.  A state An employee of the state or a 
  2.31  political subdivision may purchase no more than one motor 
  2.32  vehicle from the state in any 12-month period.  A person 
  2.33  violating the provisions of this section is guilty of a 
  2.34  misdemeanor.  This section shall not apply to the sale of 
  2.35  property or materials acquired or produced by the state or 
  2.36  subdivision for sale to the general public in the ordinary 
  2.37  course of business.  Nothing in this section shall prohibit an 
  2.38  employee of the state or a political subdivision from selling or 
  2.39  possessing for sale public property if the sale or possession 
  3.1   for sale is in the ordinary course of business or normal course 
  3.2   of the employee's duties. 
  3.3      Sec. 2.  Minnesota Statutes 1996, section 16B.181, is 
  3.4   amended to read: 
  3.5      16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.] 
  3.6      Subdivision 1.  [DEFINITIONS.] As used in this section: 
  3.7      (1) "public entity" or "public entities" includes the state 
  3.8   and an agency, department, or institution of the state, any 
  3.9   governmental unit as defined in section 471.59, the state 
  3.10  legislative and judicial branches, and state colleges and 
  3.11  universities; and 
  3.12     (2) "items" includes articles, products, supplies, and 
  3.13  services. 
  3.14     Subd. 2.  [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS 
  3.15  INDUSTRIES.] (a) The commissioner of corrections, in 
  3.16  consultation with the commissioner of administration, shall 
  3.17  prepare updated lists of the items available for purchase from 
  3.18  department of corrections industries and annually forward a copy 
  3.19  of the most recent list to all public entities within the 
  3.20  state.  A public entity that is supported in whole or in part 
  3.21  with funds from the state treasury shall may purchase items 
  3.22  directly from corrections industries those items that are 
  3.23  comparable in price, quality, and delivery time to items 
  3.24  available from other vendors.  An item is comparable in price if 
  3.25  the price is no more than five percent higher than the lowest 
  3.26  bid price.  The bid solicitation process is not required for 
  3.27  these purchases. 
  3.28     (b) The commissioner of administration shall develop a 
  3.29  contract or contracts pursuant to section 16B.09, to enable 
  3.30  public entities to purchase items directly from corrections 
  3.31  industries.  The commissioner of administration, in consultation 
  3.32  with the commissioner of corrections, shall determine the fair 
  3.33  market price for listed items.  In determining fair market 
  3.34  price, the commissioner shall use competitive bidding, or shall 
  3.35  consider open bid prices in previous years for similar products 
  3.36  which meet the needs of the public entity.  The commissioner of 
  4.1   administration shall require that all requests for bids or 
  4.2   proposals, for items provided by corrections industries, be 
  4.3   forwarded to the commissioner of corrections to enable 
  4.4   corrections industries to submit bids.  The commissioner of 
  4.5   corrections shall consult with the commissioner of 
  4.6   administration prior to introducing new products to the state 
  4.7   agency market. 
  4.8      (c) No public entity may evade the intent of this section 
  4.9   by adopting slight variations in specifications, when Minnesota 
  4.10  corrections industry items meet the reasonable needs and 
  4.11  specifications of the public entity. 
  4.12     (d) As part of its ongoing audit process, the legislative 
  4.13  auditor is requested to ensure that state agencies are in 
  4.14  compliance with this section.  The commissioners of 
  4.15  administration and corrections shall develop annual performance 
  4.16  measures outlining goals to maximize inmate work program 
  4.17  participation.  The commissioners of administration and 
  4.18  corrections shall appoint cochairs for a task force whose 
  4.19  purpose is to determine additional methods to achieve the 
  4.20  performance goals for public entity purchasing.  The task force 
  4.21  shall include representatives from the Minnesota house of 
  4.22  representatives, Minnesota senate, the Minnesota state colleges 
  4.23  and universities, University of Minnesota, Minnesota League of 
  4.24  Cities, Minnesota Association of Counties, and administrators 
  4.25  with purchasing responsibilities from the Minnesota state 
  4.26  departments of corrections, public safety, finance, 
  4.27  transportation, natural resources, human services, health, and 
  4.28  economic security. 
  4.29     (e) The commissioners of administration and corrections 
  4.30  shall appoint a joint task force to explore additional methods 
  4.31  that support the philosophy of providing a substantial market 
  4.32  opportunity to correctional industries that maximizes inmate 
  4.33  work opportunities.  The task force shall develop a plan and 
  4.34  prepare a set of criteria with which to evaluate the 
  4.35  effectiveness of the recommendations and initiatives in the 
  4.36  plan.  By February 15, 1997, the task force shall report to the 
  5.1   chairs of the senate and house of representatives committees 
  5.2   having jurisdiction over criminal justice funding.  If 
  5.3   performance goals for public entity purchasing are not achieved 
  5.4   in two consecutive fiscal years, public entities shall purchase 
  5.5   items available from corrections industries.  The commissioner 
  5.6   of administration shall be responsible for notifying state 
  5.7   agencies of this requirement. 
  5.8      Sec. 3.  [16C.02] [DEFINITIONS.] 
  5.9      Subdivision 1.  [APPLICABILITY.] For purposes of this 
  5.10  chapter, the following terms have the meanings given them, 
  5.11  unless the context clearly indicates otherwise.  
  5.12     Subd. 2.  [AGENCY.] "Agency" means any state officer, 
  5.13  employee, board, commission, authority, department, entity, or 
  5.14  organization of the executive branch of state government.  
  5.15     Unless specifically provided elsewhere in this chapter, 
  5.16  agency does not include the Minnesota state colleges and 
  5.17  universities. 
  5.18     Subd. 3.  [AWARD.] "Award" means a commissioner's written 
  5.19  acceptance of a bid or proposal to provide goods, services, or 
  5.20  utilities. 
  5.21     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
  5.22  commissioner of administration.  
  5.23     Subd. 5.  [CONTRACT.] "Contract" means any written 
  5.24  instrument or electronic document containing the elements of 
  5.25  offer, acceptance, and consideration. 
  5.26     Subd. 6.  [FORMAL SOLICITATION.] "Formal solicitation" 
  5.27  means a solicitation which requires a sealed response. 
  5.28     Subd. 7.  [GOODS.] "Goods" means all types of personal 
  5.29  property including commodities, materials, supplies, and 
  5.30  equipment. 
  5.31     Subd. 8.  [INFORMAL SOLICITATION.] "Informal solicitation" 
  5.32  means a solicitation which does not require a sealed response. 
  5.33     Subd. 9.  [LEASE.] "Lease" means a contract conveying from 
  5.34  one entity to another the use of real or personal property for a 
  5.35  designated period of time in return for payment or other 
  5.36  consideration. 
  6.1      Subd. 10.  [REQUEST FOR BID OR RFB.] "Request for bid" or 
  6.2   "RFB" means a solicitation in which the terms, conditions, and 
  6.3   specifications are described and responses are not subject to 
  6.4   negotiation. 
  6.5      Subd. 11.  [REQUEST FOR PROPOSAL OR RFP.] "Request for 
  6.6   proposal" or "RFP" means a solicitation in which it is not 
  6.7   practicable or advantageous to set forth all the actual, 
  6.8   detailed requirements at the time of solicitation and responses 
  6.9   are subject to negotiation. 
  6.10     Subd. 12.  [RESIDENT VENDOR.] "Resident vendor" means a 
  6.11  person, firm, or corporation authorized to conduct business in 
  6.12  the state of Minnesota on the date a solicitation for a contract 
  6.13  is first advertised or announced.  It includes a foreign 
  6.14  corporation duly authorized to engage in business in Minnesota.  
  6.15     Subd. 13.  [RESPONSE.] "Response" means the offer received 
  6.16  from a vendor in response to a solicitation.  A response 
  6.17  includes submissions commonly referred to as "offers," "bids," 
  6.18  "quotes," or "proposals." 
  6.19     Subd. 14.  [SEALED.] "Sealed" means a method determined by 
  6.20  the commissioner to prevent the contents being revealed or known 
  6.21  before the deadline for submission of responses. 
  6.22     Subd. 15.  [SERVICE CONTRACT.] "Service contract" means a 
  6.23  contract for any nonprofessional or technical services. 
  6.24     Subd. 16.  [SERVICES.] "Services" means, unless otherwise 
  6.25  indicated, both professional or technical services and service 
  6.26  performed under a service contract. 
  6.27     Subd. 17.  [SINGLE SOURCE.] "Single source" means an 
  6.28  acquisition where, after a search, only one supplier is 
  6.29  determined to be reasonably available for the required product, 
  6.30  service, or construction item. 
  6.31     Subd. 18.  [SOLICITATION.] "Solicitation" means the process 
  6.32  used to communicate procurement requirements and to request 
  6.33  responses from interested vendors.  A solicitation may be, but 
  6.34  is not limited to, a request for bid and request for proposal. 
  6.35     Sec. 4.  [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 
  6.36  DUTIES.] 
  7.1      Subdivision 1.  [SCOPE.] The commissioner's authority in 
  7.2   this section applies to an agency and is subject to other 
  7.3   provisions of this chapter and chapter 16B.  Unless otherwise 
  7.4   provided, the provisions in this chapter and chapter 16B do not 
  7.5   apply to the Minnesota state colleges and universities. 
  7.6      Subd. 2.  [RULEMAKING AUTHORITY.] Subject to chapter 14, 
  7.7   the commissioner may adopt, amend, and repeal rules relating to 
  7.8   any purpose, responsibility, or authorization in this chapter.  
  7.9   The rules must comply with any provisions in this chapter that 
  7.10  specify or restrict the adoption of particular rules. 
  7.11     Subd. 3.  [ACQUISITION AUTHORITY.] The commissioner shall 
  7.12  acquire all goods, services, and utilities needed by agencies.  
  7.13  The commissioner shall acquire goods, services, and utilities by 
  7.14  any method the commissioner deems appropriate, unless another 
  7.15  section of law requires a particular method of acquisition be 
  7.16  utilized.  The commissioner shall make all decisions regarding 
  7.17  acquisition activities.  The determination of the acquisition 
  7.18  method and all decisions involved in the acquisition process, 
  7.19  unless otherwise provided for by law, shall be based on best 
  7.20  value which includes an evaluation of price and may include 
  7.21  other considerations including, but not limited to, 
  7.22  environmental considerations, quality, and vendor performance.  
  7.23  The duties set forth in this subdivision are subject to 
  7.24  delegation pursuant to this section. 
  7.25     Subd. 4.  [CONTRACTING AUTHORITY.] The commissioner shall 
  7.26  conduct all contracting by, for, and between agencies and 
  7.27  perform all contract management and review functions for 
  7.28  contracts, except those functions specifically delegated to be 
  7.29  performed by the contracting agency, the attorney general, or 
  7.30  otherwise provided for by law. 
  7.31     Subd. 5.  [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 
  7.32  commissioner shall, in addition to the duties set forth in 
  7.33  subdivisions 3 and 4, make all decisions regarding amendments, 
  7.34  cancellations, and appeals of all agency acquisition activities 
  7.35  unless the duties are delegated pursuant to this section. 
  7.36     Subd. 6.  [LEASE AND INSTALLMENT PURCHASES.] The 
  8.1   commissioner is authorized to enter into lease purchases or 
  8.2   installment purchases for periods not exceeding the anticipated 
  8.3   useful life of the items acquired unless otherwise prohibited by 
  8.4   law. 
  8.5      Subd. 7.  [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 
  8.6   commissioner is authorized to enter into lease, lease purchase, 
  8.7   rental, or installment agreements for the use or acquisition, 
  8.8   whichever is applicable, of real or personal property. 
  8.9      Subd. 8.  [POLICY AND PROCEDURES.] The commissioner is 
  8.10  authorized to issue policies, procedures, and standards 
  8.11  applicable to all acquisition activities by and for agencies. 
  8.12     Subd. 9.  [EMPLOYEE PURCHASING.] The commissioner is 
  8.13  authorized to enter into contracts under which a vendor agrees 
  8.14  to sell computer equipment and related products to state 
  8.15  employees, for their own use, at contract prices.  Under no 
  8.16  circumstances shall the state be liable for purchases made under 
  8.17  this subdivision.  The provisions of section 43A.38, 
  8.18  subdivisions 4 and 5, clause (a), do not apply to this 
  8.19  subdivision. 
  8.20     Subd. 10.  [COOPERATIVE PURCHASING.] The commissioner is 
  8.21  authorized to enter into a cooperative purchasing agreement for 
  8.22  the provision of goods, services, and utilities with one or more 
  8.23  other states or governmental units, as described in section 
  8.24  471.59, subdivision 1.  The commissioner is authorized to enter 
  8.25  into cooperative purchasing agreements for the purchase of 
  8.26  goods, services, and utilities with health care facilities that 
  8.27  are required to provide indigent care. 
  8.28     Subd. 11.  [SURPLUS PROPERTY.] The commissioner is 
  8.29  authorized to purchase, accept, transfer, warehouse, sell, 
  8.30  distribute, or dispose of surplus property in accordance with 
  8.31  state and federal rules and regulations.  The commissioner may 
  8.32  charge a fee to cover any expenses incurred in connection with 
  8.33  any of these acts. 
  8.34     Subd. 12.  [CENTRAL DISTRIBUTION CENTER.] The commissioner 
  8.35  is authorized to provide and manage a central distribution 
  8.36  center for federal and state surplus personal property, as 
  9.1   defined in section 16C.24, and may provide and manage a 
  9.2   warehouse facility. 
  9.3      Subd. 13.  [CENTRAL STORES.] The commissioner is authorized 
  9.4   to provide agencies with supplies and equipment and operate all 
  9.5   central stores and supply rooms serving more than one agency. 
  9.6      Subd. 14.  [PROVISION OF GOODS, SERVICES, AND 
  9.7   UTILITIES.] The commissioner has the authority to provide goods, 
  9.8   services, and utilities under this chapter to state legislative 
  9.9   and judicial branch agencies, political subdivisions, the 
  9.10  Minnesota state colleges and universities, the University of 
  9.11  Minnesota, and federal government agencies. 
  9.12     Subd. 15.  [REIMBURSEMENT FOR GOODS, SERVICES, AND 
  9.13  UTILITIES.] The commissioner is authorized to charge a fee to 
  9.14  cover costs and expenses associated with operating a revolving 
  9.15  fund or an enterprise fund to acquire goods, services, and 
  9.16  utilities.  The fees are appropriated to the commissioner to 
  9.17  administer and manage the programs and facilities covered under 
  9.18  this section. 
  9.19     Subd. 16.  [DELEGATION OF DUTIES.] The commissioner may 
  9.20  delegate duties imposed by this chapter to the head of an agency 
  9.21  and to any subordinate of the agency head.  Delegated duties 
  9.22  shall be exercised in the name of the commissioner and under the 
  9.23  commissioner's direct supervision and control.  A delegation of 
  9.24  duties may include, but is not limited to, allowing individuals 
  9.25  within agencies to acquire goods, services, and utilities within 
  9.26  dollar limitations and for designated types of acquisitions.  
  9.27  Delegation of contract management and review functions must be 
  9.28  filed with the secretary of state and may not, except with 
  9.29  respect to delegations within the department of administration, 
  9.30  exceed two years in duration.  The commissioner may withdraw any 
  9.31  delegation at the commissioner's sole discretion. 
  9.32     Sec. 5.  [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 
  9.33  INTEREST.] 
  9.34     Subdivision 1.  [DUTY.] An employee of the executive branch 
  9.35  involved directly or indirectly in the acquisition process, at 
  9.36  any level, is subject to the code of ethics in section 43A.38. 
 10.1      Subd. 2.  [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 
 10.2   The commissioner must develop policies regarding code of ethics 
 10.3   and conflict of interest designed to prevent conflicts of 
 10.4   interest for employees involved in the acquisition of goods, 
 10.5   services, and utilities.  The policies must apply to employees 
 10.6   who are directly or indirectly involved in the acquisition of 
 10.7   goods, services, and utilities, developing requests for 
 10.8   proposals, evaluating bids or proposals, awarding the contract, 
 10.9   selecting the final vendor, drafting and entering into 
 10.10  contracts, evaluating performance under these contracts, and 
 10.11  authorizing payments under the contract.  
 10.12     (b) The policies must contain a process for making 
 10.13  employees aware of policy and laws relating to conflict of 
 10.14  interest, and for training employees on how to avoid and deal 
 10.15  with potential conflicts.  
 10.16     (c) The policies must contain a process under which an 
 10.17  employee who has a conflict of interest or a potential conflict 
 10.18  of interest must disclose the matter, and a process under which 
 10.19  work on the contract may be assigned to another employee if 
 10.20  possible.  
 10.21     Sec. 6.  [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 
 10.22  REVIEW.] 
 10.23     Subdivision 1.  [AGENCY COOPERATION.] Agencies shall fully 
 10.24  cooperate with the commissioner in the management and review of 
 10.25  state contracts. 
 10.26     Subd. 2.  [CREATION AND VALIDITY OF CONTRACTS.] (a) A 
 10.27  contract is not valid and the state is not bound by it unless: 
 10.28     (1) it has first been executed by the head of the agency or 
 10.29  a delegate who is a party to the contract; 
 10.30     (2) it has been approved by the commissioner; 
 10.31     (3) it has been approved by the attorney general or a 
 10.32  delegate as to form and execution; 
 10.33     (4) the accounting system shows an obligation in an expense 
 10.34  budget or encumbrance for the amount of the contract liability; 
 10.35  and 
 10.36     (5) the combined contract and amendments shall not exceed 
 11.1   five years, unless otherwise provided for by law.  The term of 
 11.2   the original contract must not exceed two years unless the 
 11.3   commissioner determines that a longer duration is in the best 
 11.4   interest of the state. 
 11.5      (b) Grants, interagency agreements, purchase orders, and 
 11.6   annual plans need not, in the discretion of the commissioner and 
 11.7   attorney general, require the signature of the commissioner 
 11.8   and/or the attorney general. 
 11.9      (c) A fully executed copy of every contract must be kept on 
 11.10  file at the contracting agency. 
 11.11     Subd. 3.  [EXCEPTION.] The requirements of subdivision 2 do 
 11.12  not apply to contracts of the department of economic security 
 11.13  distributing state and federal funds for the purpose of 
 11.14  subcontracting the provision of program services to eligible 
 11.15  recipients.  For these contracts, the commissioner of economic 
 11.16  security is authorized to directly enter into agency contracts 
 11.17  and encumber available funds.  For contracts distributing state 
 11.18  or federal funds pursuant to the federal Economic Dislocation 
 11.19  and Worker Adjustment Assistance Act, United States Code, title 
 11.20  29, section 1651 et seq., or sections 268.9771, 268.978, 
 11.21  268.9781, and 268.9782, the commissioner of economic security is 
 11.22  authorized to directly enter into agency contracts with approval 
 11.23  of the workforce development council and encumber available 
 11.24  funds to ensure a rapid response to the needs of dislocated 
 11.25  workers.  The commissioner of economic security shall adopt 
 11.26  internal procedures to administer and monitor funds distributed 
 11.27  under these contracts.  This exception also applies to any 
 11.28  contracts entered into by the commissioner of children, 
 11.29  families, and learning that were previously entered into by the 
 11.30  commissioner of economic security. 
 11.31     Subd. 4.  [CONTRACT ADMINISTRATION.] A contracting agency 
 11.32  shall diligently administer and monitor any contract it has 
 11.33  entered into, pursuant to a delegation of duties from the 
 11.34  commissioner.  The commissioner may require an agency to report 
 11.35  to the commissioner at any time on the status of any contracts 
 11.36  to which the agency is a party. 
 12.1      Subd. 5.  [SUBJECT TO AUDIT.] A contract or any pass- 
 12.2   through disbursement of public funds to a vendor of goods or 
 12.3   services or a grantee made by or under the supervision of the 
 12.4   commissioner or any county or unit of local government must 
 12.5   include, expressed or implied, an audit clause that provides 
 12.6   that the books, records, documents, and accounting procedures 
 12.7   and practices of the vendor or other party, that are relevant to 
 12.8   the contract or transaction, are subject to examination by the 
 12.9   contracting agency and either the legislative auditor or the 
 12.10  state auditor, as appropriate, for a minimum of six years.  If 
 12.11  the contracting agency is a local unit of government, and the 
 12.12  governing body of the local unit of government requests that the 
 12.13  state auditor examine the books, records, documents, and 
 12.14  accounting procedures and practices of the vendor or other party 
 12.15  pursuant to this subdivision, the contracting agency shall be 
 12.16  liable for the cost of the examination.  If the contracting 
 12.17  agency is a local unit of government, and the grantee, vendor, 
 12.18  or other party requests that the state auditor examine all 
 12.19  books, records, documents, and accounting procedures and 
 12.20  practices related to the contract, the grantee, vendor, or other 
 12.21  party that requested the examination shall be liable for the 
 12.22  cost of the examination.  An agency contract made for purchase, 
 12.23  lease, or license of software and data from the state is not 
 12.24  required to contain this audit clause. 
 12.25     Subd. 6.  [AUTHORITY OF ATTORNEY GENERAL.] The attorney 
 12.26  general may pursue remedies available by law to avoid the 
 12.27  obligation of an agency to pay under a contract or to recover 
 12.28  payments made if services performed or goods received under the 
 12.29  contract are so unsatisfactory, incomplete, or inconsistent that 
 12.30  payment would involve unjust enrichment.  The contrary opinion 
 12.31  of the contracting agency does not affect the power of the 
 12.32  attorney general under this subdivision. 
 12.33     Subd. 7.  [CONTRACTS WITH INDIAN TRIBES AND 
 12.34  BANDS.] Notwithstanding any other law, an agency may not require 
 12.35  an Indian tribe or band to deny its sovereignty as a requirement 
 12.36  or condition of a contract with an agency. 
 13.1      Sec. 7.  [16C.07] [ACQUISITIONS.] 
 13.2      Subdivision 1.  [PUBLICATION REQUIREMENTS.] Notices of 
 13.3   solicitations for acquisitions estimated to be more than $25,000 
 13.4   must be publicized in a manner designated by the commissioner. 
 13.5      Subd. 2.  [SOLICITATION PROCESS.] (a) A formal solicitation 
 13.6   must be used to acquire all goods, services, and utilities 
 13.7   estimated at or more than $25,000 unless otherwise provided 
 13.8   for.  All formal responses must be sealed when they are received 
 13.9   and must be opened in public at the hour stated in the 
 13.10  solicitation.  Formal responses must be authenticated by the 
 13.11  responder in a manner specified by the commissioner.  
 13.12     (b) An informal solicitation may be used to acquire all 
 13.13  goods, services, and utilities that are estimated at less than 
 13.14  $25,000.  The number of vendors required to receive 
 13.15  solicitations may be determined by the commissioner.  Informal 
 13.16  responses must be authenticated by the responder in a manner 
 13.17  specified by the commissioner. 
 13.18     Subd. 3.  [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 
 13.19  name of the vendor and dollar amounts specified in a response to 
 13.20  a request for bids shall be read at the time of opening.  Only 
 13.21  the name of the responding vendors to all requests for proposals 
 13.22  shall be read at the time of opening.  All other information 
 13.23  contained in a vendor's response to a bid is classified as 
 13.24  nonpublic data, as defined in section 13.02, and remains 
 13.25  nonpublic data until completion of the selection process.  All 
 13.26  other information contained in a vendor's response to a request 
 13.27  for proposal, other than the name of the vendor, is classified 
 13.28  as nonpublic data, as defined in section 13.02, and remains 
 13.29  nonpublic data until the completion of the evaluation process.  
 13.30     (b) All responses are public information at the time of the 
 13.31  award unless otherwise provided for.  All responses and 
 13.32  documents pertaining to the final award of an acquisition must 
 13.33  be retained and made a part of a permanent file or record and 
 13.34  remain open to public inspection, after award, unless otherwise 
 13.35  provided for by law. 
 13.36     Subd. 4.  [STRATEGIC ALLIANCES.] (a) For the purposes of 
 14.1   this subdivision, a "strategic alliance" means a contract 
 14.2   between an agency and a vendor forming a relationship that 
 14.3   exists throughout the development of a multiphase project.  
 14.4   Parties to the strategic alliance may share the roles, 
 14.5   responsibilities, risks, investments, and results of the project.
 14.6      (b) A strategic alliance must be designated in advance by 
 14.7   means determined by the commissioner.  The commissioner may 
 14.8   develop or approve development of strategic alliances during the 
 14.9   course of a contractual relationship between the state and a 
 14.10  vendor that jointly develop goods and services, not otherwise 
 14.11  available, that are cost-beneficial and provide best value to 
 14.12  the state.  
 14.13     Subd. 5.  [MULTIPLE AWARDS.] The commissioner may award a 
 14.14  contract to more than one vendor if, in the opinion of the 
 14.15  commissioner, it is in the best interest of the state. 
 14.16     Subd. 6.  [STATE AS RESPONDER.] The head of an agency, in 
 14.17  consultation with the requesting agency and the commissioner, 
 14.18  may respond to a solicitation or request if the goods and 
 14.19  services meet the needs of the requesting agency and provide the 
 14.20  state with the best value.  When an agency responds to a 
 14.21  solicitation, all work product relating to the response is 
 14.22  nonpublic data as defined in section 13.02, and shall become 
 14.23  public information in accordance with subdivision 3. 
 14.24     Subd. 7.  [AWARDS.] Awards must be based on best value, 
 14.25  which includes an evaluation of price, and may include other 
 14.26  considerations including, but not limited to, environmental 
 14.27  considerations, quality, and vendor performance.  
 14.28     Subd. 8.  [OTHER STATES WITH RESIDENT 
 14.29  PREFERENCE.] Acquisition of goods and services must be awarded 
 14.30  according to the provisions of this chapter except that a 
 14.31  resident vendor shall be allowed a preference over a nonresident 
 14.32  vendor from a state that gives or requires a preference to 
 14.33  vendors from that state.  The preference shall be equal to the 
 14.34  preference given or required by the state of the nonresident 
 14.35  vendor.  
 14.36     Subd. 9.  [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 8 
 15.1   does not apply to a contract for any project in which federal 
 15.2   funds are expended. 
 15.3      Subd. 10.  [REJECTION.] At the discretion of the 
 15.4   commissioner, any or all responses may be rejected if it is 
 15.5   determined to be in the best interest of the state. 
 15.6      Sec. 8.  [16C.08] [EMPLOYEE SKILLS INVENTORY.] 
 15.7      The commissioner of employee relations shall develop a 
 15.8   directory of services that state agencies commonly provide.  
 15.9      Before an agency may seek approval of a professional or 
 15.10  technical services contract valued at a total cost in excess of 
 15.11  $25,000, it must certify to the commissioner that it has 
 15.12  publicized the contract by posting notice at appropriate 
 15.13  worksites within agencies and has made reasonable efforts to 
 15.14  determine that no state employee or agency, including an 
 15.15  employee or agency outside the contracting agency, is able and 
 15.16  available to perform the required services.  When possible, this 
 15.17  posting should be done electronically.  
 15.18     Sec. 9.  [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 
 15.19     Subdivision 1.  [DEFINITION.] For the purposes of this 
 15.20  section, "professional or technical services" means services 
 15.21  that are intellectual in character, including consultation, 
 15.22  analysis, evaluation, prediction, planning, programming, or 
 15.23  recommendation, and result in the production of a report or the 
 15.24  completion of a task.  Professional or technical contracts do 
 15.25  not include the provision of supplies or materials except by the 
 15.26  approval of the commissioner or except as incidental to the 
 15.27  provision of professional or technical services.  
 15.28     Subd. 2.  [DUTIES OF CONTRACTING AGENCY.] Before an agency 
 15.29  may seek approval of a professional or technical services 
 15.30  contract valued in excess of $5,000, it must certify to the 
 15.31  commissioner that: 
 15.32     (1) no current state employee is able and available to 
 15.33  perform the services called for by the contract; 
 15.34     (2) the normal competitive bidding mechanisms will not 
 15.35  provide for adequate performance of the services; 
 15.36     (3) the contractor has certified that the product of the 
 16.1   services will be original in character; 
 16.2      (4) reasonable efforts were made to publicize the 
 16.3   availability of the contract to the public; 
 16.4      (5) the agency has received, reviewed, and accepted a 
 16.5   detailed work plan from the contractor for performance under the 
 16.6   contract, if applicable; 
 16.7      (6) the agency has developed, and fully intends to 
 16.8   implement, a written plan providing for the assignment of 
 16.9   specific agency personnel to a monitoring and liaison function, 
 16.10  the periodic review of interim reports or other indications of 
 16.11  past performance, and the ultimate utilization of the final 
 16.12  product of the services; and 
 16.13     (7) the agency will not allow the contractor to begin work 
 16.14  before funds are fully encumbered.  
 16.15     Subd. 3.  [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 
 16.16  CONTRACTS.] Before approving a proposed contract for 
 16.17  professional or technical services, the commissioner must 
 16.18  determine, at least, that: 
 16.19     (1) all provisions of subdivision 2 and section 16C.17 have 
 16.20  been verified or complied with; 
 16.21     (2) the work to be performed under the contract is 
 16.22  necessary to the agency's achievement of its statutory 
 16.23  responsibilities and there is statutory authority to enter into 
 16.24  the contract; 
 16.25     (3) the contract will not establish an employment 
 16.26  relationship between the state or the agency and any persons 
 16.27  performing under the contract; 
 16.28     (4) the contractor and agents are not employees of the 
 16.29  state; 
 16.30     (5) no agency has previously performed or contracted for 
 16.31  the performance of tasks which would be substantially duplicated 
 16.32  under the proposed contract; 
 16.33     (6) the contracting agency has specified a satisfactory 
 16.34  method of evaluating and using the results of the work to be 
 16.35  performed; and 
 16.36     (7) the combined contract and amendments will not exceed 
 17.1   five years, unless otherwise provided for by law.  The term of 
 17.2   the original contract must not exceed two years unless the 
 17.3   commissioner determines that a longer duration is in the best 
 17.4   interest of the state. 
 17.5      Subd. 4.  [REPORTS.] (a) The commissioner shall submit to 
 17.6   the governor, the chairs of the house ways and means and senate 
 17.7   finance committees, and the legislative reference library a 
 17.8   yearly listing of all contracts for professional or technical 
 17.9   services executed.  The report must identify the contractor, 
 17.10  contract amount, duration, and services to be provided.  The 
 17.11  commissioner shall also issue yearly reports summarizing the 
 17.12  contract review activities of the department by fiscal year. 
 17.13     (b) The fiscal year report must: 
 17.14     (1) be sorted by agency and by contractor; 
 17.15     (2) show the aggregate value of contracts issued by each 
 17.16  agency and issued to each contractor; 
 17.17     (3) distinguish between contracts that are being issued for 
 17.18  the first time and contracts that are being extended; 
 17.19     (4) state the termination date of each contract; and 
 17.20     (5) identify services by commodity code, including topics 
 17.21  such as contracts for training, contracts for research and 
 17.22  opinions, and contracts for computer systems.  
 17.23     (c) Within 30 days of final completion of a contract over 
 17.24  $40,000 covered by this subdivision, the head of the agency 
 17.25  entering into the contract must submit a one-page report to the 
 17.26  commissioner who must submit a copy to the legislative reference 
 17.27  library.  The report must:  
 17.28     (1) summarize the purpose of the contract, including why it 
 17.29  was necessary to enter into a contract; 
 17.30     (2) state the amount spent on the contract; and 
 17.31     (3) explain why this amount was a cost-effective way to 
 17.32  enable the agency to provide its services or products better or 
 17.33  more efficiently.  
 17.34     Subd. 5.  [CONTRACT TERMS.] (a) A professional or technical 
 17.35  services contract must by its terms permit the commissioner to 
 17.36  unilaterally terminate the contract prior to completion, upon 
 18.1   payment of just compensation, if the commissioner determines 
 18.2   that further performance under the contract would not serve 
 18.3   agency purposes. 
 18.4      (b) The terms of a contract must provide that no more than 
 18.5   90 percent of the amount due under the contract may be paid 
 18.6   until the final product has been reviewed by the head of the 
 18.7   agency entering into the contract and the head of the agency has 
 18.8   certified that the contractor has satisfactorily fulfilled the 
 18.9   terms of the contract, unless specifically excluded in writing 
 18.10  by the commissioner.  
 18.11     Subd. 6.  [FILING COPY.] If the final product of the 
 18.12  contract is a written report, a copy must be filed with the 
 18.13  legislative reference library. 
 18.14     Subd. 7.  [EXCLUSIONS.] This section does not apply to 
 18.15  contracts with individuals or organizations for administration 
 18.16  of employee pension plans authorized under chapter 354B or 354C. 
 18.17     Sec. 10.  [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 
 18.18     Before entering into or approving a service contract, the 
 18.19  commissioner must determine, at least, that: 
 18.20     (1) no current state employee is able and available to 
 18.21  perform the services called for by the contract; 
 18.22     (2) the work to be performed under the contract is 
 18.23  necessary to the agency's achievement of its statutory 
 18.24  responsibilities and there is statutory authority to enter into 
 18.25  the contract; 
 18.26     (3) the contract will not establish an employment 
 18.27  relationship between the state or the agency and any persons 
 18.28  performing under the contract; 
 18.29     (4) the contractor and agents are not employees of the 
 18.30  state; 
 18.31     (5) the contracting agency has specified a satisfactory 
 18.32  method of evaluating and using the results of the work to be 
 18.33  performed; and 
 18.34     (6) the combined contract and amendments will not exceed 
 18.35  five years, unless otherwise provided for by law.  The term of 
 18.36  the original contract must not exceed two years, unless the 
 19.1   commissioner determines that a longer duration is in the best 
 19.2   interest of the state. 
 19.3   For purposes of clause (1), employees are available if qualified 
 19.4   and: 
 19.5      (1) are already doing the work in question; or 
 19.6      (2) are on layoff status in classes that can do the work in 
 19.7   question. 
 19.8   An employee is not available if the employee is doing other 
 19.9   work, is retired, or has decided not to do the work in question. 
 19.10     Sec. 11.  [16C.11] [EXCEPTIONS TO THE SOLICITATION 
 19.11  PROCESS.] 
 19.12     Subdivision 1.  [SINGLE SOURCE.] The solicitation process 
 19.13  described in this chapter is not required when there is clearly 
 19.14  and legitimately only a single source for the goods and services 
 19.15  and the commissioner determines that the price has been fairly 
 19.16  and reasonably established. 
 19.17     Subd. 2.  [EMERGENCY ACQUISITION.] (a) For the purpose of 
 19.18  this subdivision, "emergency" means a threat to public health, 
 19.19  welfare, or safety that threatens the functioning of government, 
 19.20  the protection of property, or the health or safety of people.  
 19.21     (b) The solicitation process described in this chapter is 
 19.22  not required in emergencies.  In emergencies, the commissioner 
 19.23  may make any purchases necessary for the repair, rehabilitation, 
 19.24  and improvement of a state-owned structure or may authorize an 
 19.25  agency to do so and may purchase, or may authorize an agency to 
 19.26  purchase, goods, services, or utility services directly for 
 19.27  immediate use. 
 19.28     Subd. 3.  [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 
 19.29  anything in this chapter to the contrary, the commissioner may, 
 19.30  instead of soliciting bids, contract for purchases with 
 19.31  suppliers who have published schedules of prices effective for 
 19.32  sales to any federal agency of the United States.  These 
 19.33  contracts may be entered into, regardless of the amount of the 
 19.34  purchase price, if the commissioner considers them advantageous 
 19.35  and if the purchase price of all the commodities purchased under 
 19.36  the contract do not exceed the price specified by the schedule. 
 20.1      Subd. 4.  [COOPERATIVE AGREEMENTS.] The solicitation 
 20.2   process described in this chapter is not required for 
 20.3   cooperative agreements.  The commissioner may enter into 
 20.4   contracts or accept prices effective for sales to any 
 20.5   governmental unit as defined in section 471.59, through a 
 20.6   cooperative agreement as defined in section 471.59. 
 20.7      Subd. 5.  [SPECIFIC PURCHASES.] The solicitation process 
 20.8   described in this chapter is not required for acquisition of the 
 20.9   following: 
 20.10     (1) merchandise for resale purchased under policies 
 20.11  determined by the commissioner; 
 20.12     (2) farm and garden products which, as determined by the 
 20.13  commissioner, may be purchased at the prevailing market price on 
 20.14  the date of sale; 
 20.15     (3) goods and services from the Minnesota correctional 
 20.16  facilities; 
 20.17     (4) goods and services from rehabilitation facilities and 
 20.18  sheltered workshops that are certified by the commissioner of 
 20.19  economic security; 
 20.20     (5) goods and services for use by a community-based 
 20.21  residential facility operated by the commissioner of human 
 20.22  services; 
 20.23     (6) goods purchased at auction or when submitting a sealed 
 20.24  bid at auction provided that before authorizing such an action, 
 20.25  the commissioner consult with the requesting agency to determine 
 20.26  a fair and reasonable value for the goods considering factors 
 20.27  including, but not limited to, costs associated with submitting 
 20.28  a bid, travel, transportation, and storage.  This fair and 
 20.29  reasonable value must represent the limit of the state's bid; 
 20.30  and 
 20.31     (7) utility services where no competition exists or where 
 20.32  rates are fixed by law or ordinance. 
 20.33     Sec. 12.  [16C.12] [COOPERATIVE PURCHASING VENTURE; 
 20.34  PURCHASING REVOLVING FUND.] 
 20.35     The commissioner may enter into joint or cooperative 
 20.36  purchasing agreements with any entity that is authorized under 
 21.1   section 471.59 to do so.  The cooperative purchasing venture 
 21.2   revolving fund is a separate account in the state treasury.  The 
 21.3   commissioner may charge a fee to cover the commissioner's 
 21.4   administrative expenses to governmental units that have joint or 
 21.5   cooperative purchasing agreements with the state under section 
 21.6   471.59.  The fees collected must be deposited in the revolving 
 21.7   fund established by this section.  Money in the fund is 
 21.8   appropriated to the commissioner to administer the programs and 
 21.9   services covered by this chapter. 
 21.10     Sec. 13.  [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 
 21.11  STATE.] 
 21.12     The commissioner shall encourage and make a reasonable 
 21.13  attempt to identify and purchase food products that are grown in 
 21.14  the state.  
 21.15     Sec. 14.  [16C.14] [CERTAIN VEHICLES.] 
 21.16     Upon the written request of the commissioner of public 
 21.17  safety, motor vehicles for use by investigative and undercover 
 21.18  agents of the department of public safety must be purchased by 
 21.19  the brand, make, and model specified by the agency. 
 21.20     Sec. 15.  [16C.15] [ENERGY EFFICIENCY INSTALLMENT 
 21.21  PURCHASES.] 
 21.22     Subdivision 1.  [CONTRACT CONDITIONS.] The commissioner may 
 21.23  contract to purchase by installment payments capital or other 
 21.24  equipment or services intended to improve the energy efficiency 
 21.25  of a state building or facility if: 
 21.26     (1) the term of the contract does not exceed ten years, 
 21.27  with not more than a ten-year payback; 
 21.28     (2) the entire cost of the contract is a percentage of the 
 21.29  resultant savings in energy costs only.  "Savings in energy cost"
 21.30  means a comparison of energy cost and energy usage under the 
 21.31  precontract conditions, including reasonable projections of 
 21.32  energy cost and usage if no change is made to the precontract 
 21.33  conditions, against energy cost and usage with the changes made 
 21.34  under the contract.  If it is impractical to directly measure 
 21.35  energy cost and/or energy usage, reasonable engineering 
 21.36  estimates may be substituted for measured results; 
 22.1      (3) the contract for purchase must be completed using a 
 22.2   solicitation; 
 22.3      (4) the commissioner has determined that the contract 
 22.4   vendor is a responsible vendor; 
 22.5      (5) the contract vendor can finance or obtain financing for 
 22.6   the performance of the contract without state assistance or 
 22.7   guarantee; and 
 22.8      (6) the state may unilaterally cancel the agreement if the 
 22.9   legislature fails to appropriate funds to continue the contract 
 22.10  or if the contractor at any time during the term of the contract 
 22.11  fails to perform its contractual obligations, including failure 
 22.12  to deliver or install equipment or materials, failure to replace 
 22.13  faulty equipment or materials in a timely fashion, and failure 
 22.14  to maintain the equipment as agreed in the contract. 
 22.15     Subd. 2.  [ENERGY APPROPRIATION.] The commissioner may 
 22.16  spend money appropriated for energy costs in payment of a 
 22.17  contract under this section.  
 22.18     Subd. 3.  [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 
 22.19  any other law to the contrary, fuel cost savings resulting from 
 22.20  energy conservation actions shall be available at the managerial 
 22.21  level at which the actions took place for expenditure for other 
 22.22  purposes within the biennium in which the actions occur or in 
 22.23  the case of a shared savings agreement for the contract period 
 22.24  of the shared savings agreement.  For purposes of this 
 22.25  subdivision "shared savings agreement" means a contract meeting 
 22.26  the terms and conditions of subdivision 1.  
 22.27     Sec. 16.  [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 
 22.28  ACTIVITY PROGRAMS.] 
 22.29     The commissioner, in consultation with the commissioner of 
 22.30  economic security, shall prepare a list containing products and 
 22.31  services of state-certified rehabilitation facilities, sheltered 
 22.32  workshops, and work activity programs for acquisition by state 
 22.33  agencies and institutions. 
 22.34     Sec. 17.  [16C.17] [DESIGNATION OF PROCUREMENTS FROM SMALL 
 22.35  BUSINESSES.] 
 22.36     Subdivision 1.  [SMALL BUSINESS PROCUREMENTS.] The 
 23.1   commissioner shall for each fiscal year ensure that small 
 23.2   businesses receive at least 25 percent of the value of 
 23.3   anticipated total state procurement of goods and services, 
 23.4   including printing and construction.  The commissioner shall 
 23.5   divide the procurements so designated into contract award units 
 23.6   of economically feasible production runs in order to facilitate 
 23.7   offers or bids from small businesses.  In making the annual 
 23.8   designation of such procurements the commissioner shall attempt 
 23.9   (1) to vary the included procurements so that a variety of goods 
 23.10  and services produced by different small businesses are obtained 
 23.11  each year, and (2) to designate small business procurements in a 
 23.12  manner that will encourage proportional distribution of such 
 23.13  awards among the geographical regions of the state.  To promote 
 23.14  the geographical distribution of awards, the commissioner may 
 23.15  designate a portion of the small business procurement for award 
 23.16  to bidders from a specified congressional district or other 
 23.17  geographical region specified by the commissioner.  The failure 
 23.18  of the commissioner to designate particular procurements shall 
 23.19  not be deemed to prohibit or discourage small businesses from 
 23.20  seeking the procurement award through the normal process.  
 23.21     Subd. 2.  [SMALL BUSINESS.] The commissioner shall adopt 
 23.22  rules defining "small business" for purposes of sections 16C.17 
 23.23  to 16C.22, 137.31, 137.35, 161.321, and 473.142.  The definition 
 23.24  must include only businesses with their principal place of 
 23.25  business in Minnesota.  The definition must establish different 
 23.26  size standards for various types of businesses.  In establishing 
 23.27  these standards, the commissioner must consider the differences 
 23.28  among industries caused by the size of the market for goods or 
 23.29  services and the relative size and market share of the 
 23.30  competitors operating in those markets.  
 23.31     Subd. 3.  [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 
 23.32  state agency shall for each fiscal year designate for awarding 
 23.33  to small businesses at least 25 percent of the value of 
 23.34  anticipated procurements of that agency for professional or 
 23.35  technical services.  The set-aside under this subdivision is in 
 23.36  addition to that provided by subdivision 1, but must otherwise 
 24.1   comply with section 16C.10. 
 24.2      Subd. 4.  [TARGETED GROUP PURCHASING.] The commissioner 
 24.3   shall establish a program for purchasing goods and services from 
 24.4   targeted group businesses, as designated in subdivision 5.  The 
 24.5   purpose of the program is to remedy the effects of past 
 24.6   discrimination against members of targeted groups.  In 
 24.7   furtherance of this purpose, the commissioner shall attempt to 
 24.8   ensure that purchases from targeted group businesses reflect a 
 24.9   fair and equitable representation of all the state's purchasing. 
 24.10     Subd. 5.  [DESIGNATION OF TARGETED GROUPS.] (a) The 
 24.11  commissioner of administration shall periodically designate 
 24.12  businesses that are majority owned and operated by women, 
 24.13  persons with a substantial physical disability, or specific 
 24.14  minorities as targeted group businesses within purchasing 
 24.15  categories as determined by the commissioner.  A group may be 
 24.16  targeted within a purchasing category if the commissioner 
 24.17  determines there is a statistical disparity between the 
 24.18  percentage of purchasing from businesses owned by group members 
 24.19  and the representation of businesses owned by group members 
 24.20  among all businesses in the state in the purchasing category.  
 24.21     (b) In addition to designations under paragraph (a), an 
 24.22  individual business may be included as a targeted group business 
 24.23  if the commissioner determines that inclusion is necessary to 
 24.24  remedy discrimination against the owner based on race, gender, 
 24.25  or disability in attempting to operate a business that would 
 24.26  provide goods or services to public agencies. 
 24.27     (c) The designations of purchasing categories and 
 24.28  businesses under paragraphs (a) and (b) are not rules for 
 24.29  purposes of chapter 14, and are not subject to rulemaking 
 24.30  procedures of that chapter. 
 24.31     Subd. 6.  [PURCHASING METHODS.] (a) The commissioner may 
 24.32  award up to a six percent preference in the amount bid for 
 24.33  specified goods or services to small targeted group businesses. 
 24.34     (b) The commissioner may designate a purchase of goods or 
 24.35  services for award only to small businesses or small targeted 
 24.36  group businesses if the commissioner determines that at least 
 25.1   three small businesses or small targeted group businesses are 
 25.2   likely to bid. 
 25.3      (c) The commissioner, as a condition of awarding a 
 25.4   construction contract or approving a contract for professional 
 25.5   or technical services, may set goals that require the prime 
 25.6   contractor to subcontract a portion of the contract to small 
 25.7   businesses or small targeted group businesses.  The commissioner 
 25.8   must establish a procedure for granting waivers from the 
 25.9   subcontracting requirement when qualified small businesses or 
 25.10  small targeted group businesses are not reasonably available.  
 25.11  The commissioner may establish financial incentives for prime 
 25.12  contractors who exceed the goals for use of small business or 
 25.13  small targeted group business subcontractors and financial 
 25.14  penalties for prime contractors who fail to meet goals under 
 25.15  this paragraph.  The subcontracting requirements of this 
 25.16  paragraph do not apply to prime contractors who are small 
 25.17  businesses or small targeted group businesses. 
 25.18     Subd. 7.  [ECONOMICALLY DISADVANTAGED AREAS.] The 
 25.19  commissioner may award up to a four percent preference in the 
 25.20  amount bid on state procurement to small businesses located in 
 25.21  an economically disadvantaged area.  A business is located in an 
 25.22  economically disadvantaged area if: 
 25.23     (1) the owner resides in or the business is located in a 
 25.24  county in which the median income for married couples is less 
 25.25  than 70 percent of the state median income for married couples; 
 25.26     (2) the owner resides in or the business is located in an 
 25.27  area designated a labor surplus area by the United States 
 25.28  Department of Labor; or 
 25.29     (3) the business is a rehabilitation facility or work 
 25.30  activity program. 
 25.31     The commissioner may designate one or more areas designated 
 25.32  as targeted neighborhoods under section 469.202 or as enterprise 
 25.33  zones under section 469.167 as economically disadvantaged areas 
 25.34  for purposes of this subdivision if the commissioner determines 
 25.35  that this designation would further the purposes of this 
 25.36  section.  If the owner of a small business resides or is 
 26.1   employed in a designated area, the small business is eligible 
 26.2   for any preference provided under this subdivision. 
 26.3      The department of revenue shall gather data necessary to 
 26.4   make the determinations required by clause (1), and shall 
 26.5   annually certify counties that qualify under clause (1).  An 
 26.6   area designated a labor surplus area retains that status for 120 
 26.7   days after certified small businesses in the area are notified 
 26.8   of the termination of the designation by the United States 
 26.9   Department of Labor. 
 26.10     Subd. 8.  [SURETY BONDS.] Surety bonds guaranteed by the 
 26.11  federal Small Business Administration and second party bonds are 
 26.12  acceptable security for a construction award under this 
 26.13  section.  "Second party bond" means a bond that designates as 
 26.14  principal, guarantor, or both, a person or persons in addition 
 26.15  to the person to whom the contract is proposed for award.  
 26.16     Subd. 9.  [DETERMINATION OF ABILITY TO PERFORM.] Before 
 26.17  making an award under the preference programs established in 
 26.18  subdivisions 4 to 7, the commissioner shall evaluate whether the 
 26.19  small business or small targeted group business scheduled to 
 26.20  receive the award is able to perform the contract.  This 
 26.21  determination shall include consideration of production and 
 26.22  financial capacity and technical competence.  
 26.23     Subd. 10.  [LIMITS.] At least 75 percent of the value of 
 26.24  the subcontracts awarded to small businesses or small targeted 
 26.25  group businesses under subdivision 6, paragraph (c), must be 
 26.26  performed by the business to which the subcontract is awarded or 
 26.27  by another small business or small targeted group business.  
 26.28     Subd. 11.  [PROCUREMENT PROCEDURES.] All laws and rules 
 26.29  pertaining to solicitations, bid evaluations, contract awards, 
 26.30  and other procurement matters apply equally to procurements 
 26.31  designated for small businesses or small targeted group 
 26.32  businesses.  In the event of conflict with other rules, section 
 26.33  16C.16 and rules adopted under it govern, if section 16C.16 
 26.34  applies.  If it does not apply, sections 16C.17 to 16C.22 and 
 26.35  rules adopted under those sections govern.  
 26.36     Subd. 12.  [APPLICABILITY.] This section does not apply to 
 27.1   construction contracts or contracts for professional or 
 27.2   technical services under section 16C.09 that are financed in 
 27.3   whole or in part with federal funds and that are subject to 
 27.4   federal disadvantaged business enterprise regulations. 
 27.5      Sec. 18.  [16C.18] [ENCOURAGEMENT OF PARTICIPATION; 
 27.6   ADVISORY COUNCIL.] 
 27.7      Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
 27.8   commissioners of administration and trade and economic 
 27.9   development shall publicize the provisions of the purchasing 
 27.10  programs in sections 16C.17 to 16C.22, attempt to locate small 
 27.11  businesses or small targeted group businesses able to perform 
 27.12  under the programs, and encourage participation through 
 27.13  education, technical assistance, mentoring, and other means.  
 27.14  When the commissioner of administration determines that a small 
 27.15  business or small targeted group business is unable to perform 
 27.16  under a program established in sections 16C.17 to 16C.22, the 
 27.17  commissioner shall inform the commissioner of trade and economic 
 27.18  development who shall assist the small business or small 
 27.19  targeted group business in attempting to remedy the causes of 
 27.20  the inability to perform the award.  In assisting the small 
 27.21  business or small targeted group business, the commissioner of 
 27.22  trade and economic development in cooperation with the 
 27.23  commissioner of administration shall use management or financial 
 27.24  assistance programs made available by or through the department 
 27.25  of trade and economic development, other state or governmental 
 27.26  agencies, or private sources.  
 27.27     Subd. 2.  [ADVISORY COUNCIL.] The small business 
 27.28  procurement advisory council consists of 13 members appointed by 
 27.29  the commissioner of administration.  A chair of the advisory 
 27.30  council shall be elected from among the members.  The 
 27.31  appointments are subject to the appointments program provided by 
 27.32  section 15.0597.  The terms, compensation, and removal of 
 27.33  members are as provided in section 15.059. 
 27.34     Subd. 3.  [DUTIES.] The small business procurement advisory 
 27.35  council shall:  
 27.36     (1) advise the commissioner of administration on matters 
 28.1   relating to the small business and small targeted group business 
 28.2   procurement program; 
 28.3      (2) review complaints or grievances from small businesses 
 28.4   and small targeted group businesses who are doing or attempting 
 28.5   to do business under the program; and 
 28.6      (3) review the reports of the commissioners of 
 28.7   administration and trade and economic development provided by 
 28.8   section 16C.19 to ensure compliance with the goals of the 
 28.9   program.  
 28.10     Sec. 19.  [16C.19] [REPORTS.] 
 28.11     Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
 28.12  commissioner shall submit an annual report pursuant to section 
 28.13  3.195 to the governor and the legislature with a copy to the 
 28.14  commissioner of trade and economic development indicating the 
 28.15  progress being made toward the objectives and goals of sections 
 28.16  16C.17 to 16C.22, 161.321, and 473.142 during the preceding 
 28.17  fiscal year. 
 28.18     Subd. 2.  [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 
 28.19  The commissioner of trade and economic development shall submit 
 28.20  an annual report to the governor and the legislature pursuant to 
 28.21  section 3.195 with a copy to the commissioner of 
 28.22  administration.  This report shall include the following 
 28.23  information:  
 28.24     (1) the efforts undertaken to publicize the provisions of 
 28.25  the small business and small targeted group business procurement 
 28.26  program during the preceding fiscal year; 
 28.27     (2) the efforts undertaken to identify small businesses and 
 28.28  small targeted group businesses and the efforts undertaken to 
 28.29  encourage participation in the targeted group purchasing 
 28.30  program; 
 28.31     (3) the efforts undertaken by the commissioner to remedy 
 28.32  the inability of small businesses and small targeted group 
 28.33  businesses to perform on potential awards; and 
 28.34     (4) the commissioner's recommendations for strengthening 
 28.35  the small business and small targeted group business procurement 
 28.36  program and delivery of services to small businesses. 
 29.1      Subd. 3.  [REPORTS FROM OTHER AGENCIES.] The commissioner 
 29.2   of transportation, and each metropolitan agency listed in 
 29.3   section 473.143, subdivision 1, shall report to the commissioner 
 29.4   of administration all information that the commissioner requests 
 29.5   to make reports required under this section.  The information 
 29.6   must be reported at the time and in the manner requested by the 
 29.7   commissioner of administration. 
 29.8      Sec. 20.  [16C.20] [ELIGIBILITY; RULES.] 
 29.9      (a) A small business wishing to participate in the programs 
 29.10  under section 16C.17, subdivisions 4 to 7, must be certified by 
 29.11  the commissioner.  The commissioner shall adopt by rule 
 29.12  standards and procedures for certifying that small businesses, 
 29.13  small targeted group businesses, and small businesses located in 
 29.14  economically disadvantaged areas are eligible to participate 
 29.15  under the requirements of sections 16C.17 to 16C.22.  The 
 29.16  commissioner shall adopt by rule standards and procedures for 
 29.17  hearing appeals and grievances and other rules necessary to 
 29.18  carry out the duties set forth in sections 16C.17 to 16C.22.  
 29.19     (b) The commissioner may make rules which exclude or limit 
 29.20  the participation of nonmanufacturing business, including 
 29.21  third-party lessors, brokers, franchises, jobbers, 
 29.22  manufacturers' representatives, and others from eligibility 
 29.23  under sections 16C.17 to 16C.22. 
 29.24     (c) The commissioner may make rules that set time limits 
 29.25  and other eligibility limits on business participation in 
 29.26  programs under sections 16C.17 to 16C.22. 
 29.27     Sec. 21.  [16C.21] [CERTIFICATION.] 
 29.28     A business that is certified by the commissioner of 
 29.29  administration as a small business, small targeted group 
 29.30  business or a small business located in an economically 
 29.31  disadvantaged area is eligible to participate under the 
 29.32  requirements of sections 137.31 and 161.321 and, if certified as 
 29.33  a small business or small targeted group business, under section 
 29.34  473.142 without further certification by the contracting agency. 
 29.35     Sec. 22.  [16C.22] [CRIMINAL PENALTY.] 
 29.36     A person who knowingly provides false information to a 
 30.1   public official or employee for the purpose of obtaining or 
 30.2   retaining certification as a small targeted group business or a 
 30.3   small business located in an economically disadvantaged area 
 30.4   under sections 16C.17 to 16C.21, 137.31, 137.35, 161.321, or 
 30.5   473.142 is guilty of a misdemeanor. 
 30.6      Sec. 23.  [16C.23] [DISTRICT HEATING.] 
 30.7      Notwithstanding any other law, general or special, the 
 30.8   commissioner is authorized to enter into or approve a written 
 30.9   agreement not to exceed 31 years with a district heating utility 
 30.10  that will specify, but not be limited to, the appropriate terms 
 30.11  and conditions for the interchange of district heating services. 
 30.12     Sec. 24.  [16C.24] [SURPLUS PROPERTY ACQUISITION, 
 30.13  DISTRIBUTION, AND DISPOSAL.] 
 30.14     Subdivision 1.  [DEFINITIONS.] "Governmental unit or 
 30.15  nonprofit organization" means a governmental unit as defined in 
 30.16  section 471.59, subdivision 1, an Indian tribal government, and 
 30.17  any nonprofit and tax-exempt medical institution, hospital, 
 30.18  clinic, health center, school, school system, college, 
 30.19  university, or other institution organized and existing for any 
 30.20  purpose authorized by federal law to accept surplus federal 
 30.21  property.  
 30.22     Subd. 2.  [SURPLUS PROPERTY.] "Surplus property" means 
 30.23  state or federal commodities, equipment, materials, supplies, 
 30.24  books, printed matter, buildings, and other personal or real 
 30.25  property that is obsolete, unused, not needed for a public 
 30.26  purpose, or ineffective for current use. 
 30.27     Subd. 3.  [AUTHORIZATION.] (a) The commissioner is the 
 30.28  state agency designated to transfer, purchase, accept, sell, or 
 30.29  dispose of surplus property for the state and for the benefit of 
 30.30  any other governmental unit or nonprofit organization for any 
 30.31  purpose authorized by state and federal law and in accordance 
 30.32  with state and federal rules and regulations.  Any governmental 
 30.33  unit or nonprofit organization may designate the commissioner to 
 30.34  purchase or accept surplus property for it upon mutually 
 30.35  agreeable terms and conditions.  The commissioner may acquire, 
 30.36  accept, warehouse, and distribute surplus property and charge a 
 31.1   fee to cover any expenses incurred in connection with any of 
 31.2   these acts.  
 31.3      (b) Federal surplus property that has been transferred to 
 31.4   the state for donation to public agencies and nonprofit 
 31.5   organizations must be transferred or sold in accordance with the 
 31.6   plan developed under paragraph (c).  Expenses incurred in 
 31.7   connection with the acquisition, warehousing, distribution, and 
 31.8   disposal of federal surplus property must be paid from the 
 31.9   surplus services revolving fund.  Proceeds of sales, minus any 
 31.10  expenses, must be deposited in the surplus services revolving 
 31.11  fund. 
 31.12     (c) The commissioner shall develop a detailed plan for 
 31.13  disposal of donated federal property in conformance with state 
 31.14  law and federal regulations.  The plan must be submitted to the 
 31.15  governor for certification and submission to the federal 
 31.16  administrator of general services. 
 31.17     (d) The commissioner, after consultation with one or more 
 31.18  nonprofit organizations with an interest in providing housing 
 31.19  for homeless veterans and their families, may acquire property 
 31.20  from the United States government that is designated by the 
 31.21  General Services Administration as surplus property.  The 
 31.22  commissioner may lease the property to a qualified nonprofit 
 31.23  organization that agrees to develop or rehabilitate the property 
 31.24  for the purpose of providing suitable housing for veterans and 
 31.25  their families.  The lease agreement with the nonprofit 
 31.26  organization may require that the property be developed for use 
 31.27  as housing for homeless and displaced veterans and their 
 31.28  families and for veterans and their families who lose their 
 31.29  housing. 
 31.30     Subd. 4.  [DEPOSIT OF RECEIPTS.] The surplus services 
 31.31  revolving fund is a separate fund in the state treasury.  All 
 31.32  money resulting from the acquisition, acceptance, warehousing, 
 31.33  distribution, and public sale of surplus property, must be 
 31.34  deposited in the fund.  Money paid into the surplus services 
 31.35  revolving fund is appropriated to the commissioner for the 
 31.36  purposes of the programs and services referred to in this 
 32.1   section.  
 32.2      Subd. 5.  [TRANSFER OR SALE.] (a) When the state or an 
 32.3   agency operating under a legislative appropriation obtains 
 32.4   surplus property from the commissioner, the commissioner of 
 32.5   finance must, at the commissioner's request, transfer the cost 
 32.6   of the surplus property, including any expenses of acquiring, 
 32.7   accepting, warehousing, and distributing the surplus property, 
 32.8   from the appropriation of the agency receiving the surplus 
 32.9   property to the surplus services revolving fund.  The 
 32.10  determination of the commissioner is final as to the cost of the 
 32.11  surplus property to the agency receiving the property. 
 32.12     (b) When any governmental unit or nonprofit organization 
 32.13  other than an agency receives surplus property from the 
 32.14  commissioner, the governmental unit or nonprofit organization 
 32.15  must reimburse the surplus services revolving fund for the cost 
 32.16  of the property, including the expenses of acquiring, accepting, 
 32.17  warehousing, and distributing it, in an amount the commissioner 
 32.18  sets.  The commissioner may, however, require the governmental 
 32.19  unit or nonprofit organization to deposit in advance in the 
 32.20  surplus services revolving fund the cost of the surplus property 
 32.21  upon mutually agreeable terms and conditions.  
 32.22     (c) The commissioner may transfer or sell state surplus 
 32.23  property to any person at public auction, at prepriced sale, or 
 32.24  by sealed bid process in accordance with applicable state laws. 
 32.25     Subd. 6.  [STATE SURPLUS PROPERTY.] The commissioner may do 
 32.26  any of the following to dispose of state surplus property:  
 32.27     (1) transfer it to or between state agencies; 
 32.28     (2) transfer it to a governmental unit or nonprofit 
 32.29  organization in Minnesota; or 
 32.30     (3) sell it and charge a fee to cover expenses incurred by 
 32.31  the commissioner in the disposal of the surplus property.  
 32.32     The proceeds of the sale less the fee are appropriated to 
 32.33  the agency for whose account the sale was made, to be used and 
 32.34  expended by that agency to purchase similar state property. 
 32.35     Subd. 7.  [GIFTS.] The commissioner is authorized to 
 32.36  solicit and accept donated money and fixed and consumable 
 33.1   property for the benefit of the state and any other governmental 
 33.2   unit or nonprofit organization for any purpose authorized by 
 33.3   state and federal law and in accordance with federal regulations 
 33.4   and rules.  The gift acceptance procedures of sections 7.09 to 
 33.5   7.12 do not apply to this subdivision. 
 33.6      Sec. 25.  [16C.25] [RULES.] 
 33.7      Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 
 33.8   under chapter 16B, govern under this chapter.  In the event 
 33.9   rules adopted under chapter 16B conflict with provisions of this 
 33.10  chapter, this chapter shall govern. 
 33.11     Sec. 26.  [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 
 33.12     Notwithstanding anything in chapter 16C to the contrary, 
 33.13  all contracts for the repair, improvement, maintenance, or 
 33.14  construction of highways or highway bridges must be advertised 
 33.15  and let as provided by law for highway construction contracts.  
 33.16     Sec. 27.  Minnesota Statutes 1997 Supplement, section 
 33.17  363.073, subdivision 1, is amended to read: 
 33.18     Subdivision 1.  [SCOPE OF APPLICATION.] No department or 
 33.19  agency of the state shall accept any bid or proposal for a 
 33.20  contract or agreement For all contracts for goods and services 
 33.21  in excess of $100,000, no department or agency of the state 
 33.22  shall accept any bid or proposal for a contract or agreement 
 33.23  from any business having more than 40 full-time employees within 
 33.24  this state on a single working day during the previous 12 
 33.25  months, unless the firm or business has an affirmative action 
 33.26  plan for the employment of minority persons, women, and 
 33.27  qualified disabled individuals, submitted to the commissioner of 
 33.28  human rights for approval.  No department or agency of the state 
 33.29  shall execute any such contract or agreement for goods or 
 33.30  services in excess of $100,000 with any business having more 
 33.31  than 40 full-time employees, either within or outside this 
 33.32  state, on a single working day during the previous 12 months, 
 33.33  unless the firm or business has an until the affirmative action 
 33.34  plan for the employment of minority persons, women, and the 
 33.35  disabled that has been approved by the commissioner of human 
 33.36  rights.  Receipt of a certificate of compliance issued by the 
 34.1   commissioner shall signify that a firm or business has an 
 34.2   affirmative action plan that has been approved by the 
 34.3   commissioner.  A certificate shall be valid for a period of two 
 34.4   years.  A municipality as defined in section 466.01, subdivision 
 34.5   1, that receives state money for any reason is encouraged to 
 34.6   prepare and implement an affirmative action plan for the 
 34.7   employment of minority persons, women, and the qualified 
 34.8   disabled and submit the plan to the commissioner of human rights.
 34.9      Sec. 28.  [REPORT.] 
 34.10     The commissioner of administration shall report to the 
 34.11  legislature on the use of measurable objectives as a means of 
 34.12  tracking progress toward the purchase of recycled content goods 
 34.13  as a part of the commissioner's next report to the legislature 
 34.14  in accordance with Minnesota Statutes, section 115A.15, 
 34.15  subdivision 5, paragraph (a). 
 34.16     Sec. 29.  [REPEALER.] 
 34.17     Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 
 34.18  16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 
 34.19  16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 
 34.20  1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 
 34.21  16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 
 34.22  16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, 
 34.23  subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 
 34.24     Sec. 30.  [EFFECTIVE DATE.] 
 34.25     This article is effective July 1, 1998. 
 34.26                             ARTICLE 2 
 34.27                       CONFORMING AMENDMENTS 
 34.28     Section 1.  Minnesota Statutes 1997 Supplement, section 
 34.29  3.225, subdivision 1, is amended to read: 
 34.30     Subdivision 1.  [APPLICATION.] This section applies to a 
 34.31  contract for professional or technical services entered into by 
 34.32  the house of representatives, the senate, the legislative 
 34.33  coordinating commission, or any group under the jurisdiction of 
 34.34  the legislative coordinating commission.  For purposes of this 
 34.35  section, "professional or technical services" has the meaning 
 34.36  defined in section 16B.17 16C.09, subdivision 1, but does not 
 35.1   include legal services for official legislative business. 
 35.2      Sec. 2.  Minnesota Statutes 1996, section 3.225, 
 35.3   subdivision 2, is amended to read: 
 35.4      Subd. 2.  [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 
 35.5   into a contract for professional or technical services, the 
 35.6   contracting entity must determine that: 
 35.7      (1) all provisions of section 16B.19 16C.17, subdivision 2 
 35.8   3, have been verified or complied with; 
 35.9      (2) the work to be performed under the contract is 
 35.10  necessary to the entity's achievement of its responsibilities; 
 35.11     (3) the contract will not establish an employment 
 35.12  relationship between the state or the entity and any persons 
 35.13  performing under the contract; 
 35.14     (4) no current legislative employees will engage in the 
 35.15  performance of the contract; 
 35.16     (5) no state agency has previously performed or contracted 
 35.17  for the performance of tasks which would be substantially 
 35.18  duplicated under the proposed contract; 
 35.19     (6) the contracting entity has specified a satisfactory 
 35.20  method of evaluating and using the results of the work to be 
 35.21  performed; and 
 35.22     (7) the combined contract and amendments will not extend 
 35.23  for more than five years. 
 35.24     Sec. 3.  Minnesota Statutes 1996, section 3.732, 
 35.25  subdivision 6, is amended to read: 
 35.26     Subd. 6.  [SETTLEMENT.] The head of each department or 
 35.27  agency, or a designee, acting on behalf of the state, may enter 
 35.28  into structured settlements, through the negotiation, creation, 
 35.29  and use of annuities or similar financial plans for claimants, 
 35.30  to resolve claims arising from the alleged negligence of the 
 35.31  state, its agencies, or employees.  Sections 16B.06, 16B.07, 
 35.32  16B.08, and 16B.09 16C.03, subdivision 4, 16C.06, and 16C.07 do 
 35.33  not apply to the state's selection of and contracts with 
 35.34  structured settlement consultants or purveyors of structured 
 35.35  settlement plans.  
 35.36     Sec. 4.  Minnesota Statutes 1996, section 3.922, 
 36.1   subdivision 5, is amended to read: 
 36.2      Subd. 5.  [OFFICERS; PERSONNEL; AUTHORITY.] The council 
 36.3   shall annually elect a chair and other officers as it may deem 
 36.4   necessary.  The chair may appoint subcommittees necessary to 
 36.5   fulfill the duties of the council.  It shall also employ and 
 36.6   prescribe the duties of employees and agents as it deems 
 36.7   necessary.  The compensation of the executive director of the 
 36.8   board is as provided by section 43A.18.  All employees are in 
 36.9   the unclassified service.  The chair is an ex officio member of 
 36.10  the state board of human rights.  Appropriations and other funds 
 36.11  of the council are subject to chapter 16B 16C.  The council may 
 36.12  contract in its own name.  Contracts must be approved by a 
 36.13  majority of the members of the council and executed by the chair 
 36.14  and the executive director.  The council may apply for, receive, 
 36.15  and spend in its own name, grants and gifts of money consistent 
 36.16  with the powers and duties specified in this section.  The 
 36.17  council shall maintain its primary office in Bemidji.  It shall 
 36.18  also maintain personnel and office space in St. Paul. 
 36.19     Sec. 5.  Minnesota Statutes 1996, section 3C.10, 
 36.20  subdivision 3, is amended to read: 
 36.21     Subd. 3.  [NEGOTIATED CONTRACTS.] The revisor's office may 
 36.22  negotiate for all or part of the editing, indexing, compiling, 
 36.23  and printing of Minnesota Statutes, supplements to Minnesota 
 36.24  Statutes, and Laws of Minnesota and contract with a law book 
 36.25  publisher for these services.  The provisions of chapter 16B 16C 
 36.26  as they relate to competitive bidding do not apply to these 
 36.27  contracts.  No contract may be made until the revisor of 
 36.28  statutes has consulted with the legislative coordinating 
 36.29  commission.  Failure or refusal of the commission to make a 
 36.30  recommendation promptly shall be deemed an affirmative 
 36.31  recommendation.  
 36.32     Sec. 6.  Minnesota Statutes 1996, section 4A.04, is amended 
 36.33  to read: 
 36.34     4A.04 [COOPERATIVE CONTRACTS.] 
 36.35     (a) The director may apply for, receive, and expend money 
 36.36  from municipal, county, regional, and other planning agencies; 
 37.1   apply for, accept, and disburse grants and other aids for 
 37.2   planning purposes from the federal government and from other 
 37.3   public or private sources; and may enter into contracts with 
 37.4   agencies of the federal government, local governmental units, 
 37.5   the University of Minnesota, and other educational institutions, 
 37.6   and private persons as necessary to perform the director's 
 37.7   duties.  Contracts made pursuant to this section are not subject 
 37.8   to the provisions of chapter 16B 16C, as they relate to 
 37.9   competitive bidding. 
 37.10     (b) The director may apply for, receive, and expend money 
 37.11  made available from federal sources or other sources for the 
 37.12  purposes of carrying out the duties and responsibilities of the 
 37.13  director relating to local and urban affairs.  
 37.14     (c) All money received by the director pursuant to this 
 37.15  section shall be deposited in the state treasury and is 
 37.16  appropriated to the director for the purposes for which the 
 37.17  money has been received.  The money shall not cancel and is 
 37.18  available until expended.  
 37.19     Sec. 7.  Minnesota Statutes 1996, section 6.551, is amended 
 37.20  to read: 
 37.21     6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 
 37.22  GOVERNMENTS.] 
 37.23     The state auditor may examine the books, records, 
 37.24  documents, and accounting procedures and practices of a 
 37.25  contractor or grantee of a local government pursuant to section 
 37.26  16B.06 16C.06, subdivision 4 5.  The examination shall be 
 37.27  limited to the books, records, documents, and accounting 
 37.28  procedures and practices that are relevant to the contract or 
 37.29  transaction with the local government. 
 37.30     Sec. 8.  Minnesota Statutes 1996, section 11A.24, 
 37.31  subdivision 4, is amended to read: 
 37.32     Subd. 4.  [OTHER OBLIGATIONS.] (a) The state board may 
 37.33  invest funds in bankers acceptances, certificates of deposit, 
 37.34  deposit notes, commercial paper, mortgage securities and asset 
 37.35  backed securities, repurchase agreements and reverse repurchase 
 37.36  agreements, guaranteed investment contracts, savings accounts, 
 38.1   and guaranty fund certificates, surplus notes, or debentures of 
 38.2   domestic mutual insurance companies if they conform to the 
 38.3   following provisions: 
 38.4      (1) bankers acceptances and deposit notes of United States 
 38.5   banks are limited to those issued by banks rated in the highest 
 38.6   four quality categories by a nationally recognized rating 
 38.7   agency; 
 38.8      (2) certificates of deposit are limited to those issued by 
 38.9   (i) United States banks and savings institutions that are rated 
 38.10  in the top four quality categories by a nationally recognized 
 38.11  rating agency or whose certificates of deposit are fully insured 
 38.12  by federal agencies; or (ii) credit unions in amounts up to the 
 38.13  limit of insurance coverage provided by the National Credit 
 38.14  Union Administration; 
 38.15     (3) commercial paper is limited to those issued by United 
 38.16  States corporations or their Canadian subsidiaries and rated in 
 38.17  the highest two quality categories by a nationally recognized 
 38.18  rating agency; 
 38.19     (4) mortgage securities shall be rated in the top four 
 38.20  quality categories by a nationally recognized rating agency; 
 38.21     (5) collateral for repurchase agreements and reverse 
 38.22  repurchase agreements is limited to letters of credit and 
 38.23  securities authorized in this section; 
 38.24     (6) guaranteed investment contracts are limited to those 
 38.25  issued by insurance companies or banks rated in the top four 
 38.26  quality categories by a nationally recognized rating agency or 
 38.27  to alternative guaranteed investment contracts where the 
 38.28  underlying assets comply with the requirements of this section; 
 38.29     (7) savings accounts are limited to those fully insured by 
 38.30  federal agencies; and 
 38.31     (8) asset backed securities shall be rated in the top four 
 38.32  quality categories by a nationally recognized rating agency. 
 38.33     (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 
 38.34  16C.06 do not apply to certificates of deposit and 
 38.35  collateralization agreements executed by the state board under 
 38.36  paragraph (a), clause (2). 
 39.1      (c) In addition to investments authorized by paragraph (a), 
 39.2   clause (4), the state board may purchase from the Minnesota 
 39.3   housing finance agency all or any part of a pool of residential 
 39.4   mortgages, not in default, that has previously been financed by 
 39.5   the issuance of bonds or notes of the agency.  The state board 
 39.6   may also enter into a commitment with the agency, at the time of 
 39.7   any issue of bonds or notes, to purchase at a specified future 
 39.8   date, not exceeding 12 years from the date of the issue, the 
 39.9   amount of mortgage loans then outstanding and not in default 
 39.10  that have been made or purchased from the proceeds of the bonds 
 39.11  or notes.  The state board may charge reasonable fees for any 
 39.12  such commitment and may agree to purchase the mortgage loans at 
 39.13  a price sufficient to produce a yield to the state board 
 39.14  comparable, in its judgment, to the yield available on similar 
 39.15  mortgage loans at the date of the bonds or notes.  The state 
 39.16  board may also enter into agreements with the agency for the 
 39.17  investment of any portion of the funds of the agency.  The 
 39.18  agreement must cover the period of the investment, withdrawal 
 39.19  privileges, and any guaranteed rate of return. 
 39.20     Sec. 9.  Minnesota Statutes 1996, section 12.221, 
 39.21  subdivision 5, is amended to read: 
 39.22     Subd. 5.  [REQUIREMENTS WAIVED.] Pursuant to any 
 39.23  federal-state agreement entered into by the state director, 
 39.24  serving as the governor's authorized representative, in the 
 39.25  acceptance of federal money made available as a result of a 
 39.26  disaster declaration, and upon the review and acceptance by the 
 39.27  attorney general's office of the language contained in the 
 39.28  subgrant agreement and any amendments to the agreement, the 
 39.29  requirements of section 16B.06 16C.06, subdivision 2, paragraph 
 39.30  (a), clause (3), must be waived. 
 39.31     Sec. 10.  Minnesota Statutes 1996, section 15.061, is 
 39.32  amended to read: 
 39.33     15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 
 39.34     In accordance with section 16B.17 sections 16C.03 and 
 39.35  16C.09, the head of a state department or agency may, with the 
 39.36  approval of the commissioner of administration, contract for 
 40.1   professional or technical services in connection with the 
 40.2   operation of the department or agency.  A contract negotiated 
 40.3   under this section is not subject to the competitive bidding 
 40.4   requirements of chapter 16B 16C. 
 40.5      Sec. 11.  Minnesota Statutes 1996, section 16A.101, is 
 40.6   amended to read: 
 40.7      16A.101 [SERVICE CONTRACTS.] 
 40.8      The state accounting system must list expenditures for 
 40.9   professional and technical service contracts, as defined in 
 40.10  section 16B.17 16C.09, subdivision 1, as a separate category.  
 40.11  No other expenditures may be included in this category. 
 40.12     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 40.13  16A.15, subdivision 3, is amended to read: 
 40.14     Subd. 3.  [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 
 40.15  not be made without prior obligation.  An obligation may not be 
 40.16  incurred against any fund, allotment, or appropriation unless 
 40.17  the commissioner has certified a sufficient unencumbered balance 
 40.18  or the accounting system shows sufficient allotment or 
 40.19  encumbrance balance in the fund, allotment, or appropriation to 
 40.20  meet it.  The commissioner shall determine when the accounting 
 40.21  system may be used to incur obligations without the 
 40.22  commissioner's certification of a sufficient unencumbered 
 40.23  balance.  An expenditure or obligation authorized or incurred in 
 40.24  violation of this chapter is invalid and ineligible for payment 
 40.25  until made valid.  A payment made in violation of this chapter 
 40.26  is illegal.  An employee authorizing or making the payment, or 
 40.27  taking part in it, and a person receiving any part of the 
 40.28  payment, are jointly and severally liable to the state for the 
 40.29  amount paid or received.  If an employee knowingly incurs an 
 40.30  obligation or authorizes or makes an expenditure in violation of 
 40.31  this chapter or takes part in the violation, the violation is 
 40.32  just cause for the employee's removal by the appointing 
 40.33  authority or by the governor if an appointing authority other 
 40.34  than the governor fails to do so.  In the latter case, the 
 40.35  governor shall give notice of the violation and an opportunity 
 40.36  to be heard on it to the employee and to the appointing 
 41.1   authority.  A claim presented against an appropriation without 
 41.2   prior allotment or encumbrance may be made valid on 
 41.3   investigation, review, and approval by the agency head in 
 41.4   accordance with the commissioner's policy, if the services, 
 41.5   materials, or supplies to be paid for were actually furnished in 
 41.6   good faith without collusion and without intent to defraud.  The 
 41.7   commissioner may then draw a warrant to pay the claim just as 
 41.8   properly allotted and encumbered claims are paid. 
 41.9      (b) The commissioner may approve payment for materials and 
 41.10  supplies in excess of the obligation amount when increases are 
 41.11  authorized by section 16B.07 16C.03, subdivision 2 3. 
 41.12     (c) To minimize potential construction delay claims, an 
 41.13  agency with a project funded by a building appropriation may 
 41.14  allow a contractor to proceed with supplemental work within the 
 41.15  limits of the appropriation before money is encumbered.  Under 
 41.16  this circumstance, the agency may requisition funds and allow 
 41.17  contractors to expeditiously proceed with a construction 
 41.18  sequence.  While the contractor is proceeding, the agency shall 
 41.19  immediately act to encumber the required funds. 
 41.20     Sec. 13.  Minnesota Statutes 1996, section 16A.85, 
 41.21  subdivision 1, is amended to read: 
 41.22     Subdivision 1.  [AUTHORIZATION.] The commissioner of 
 41.23  administration may determine, in conjunction with the 
 41.24  commissioner of finance, the personal property needs of the 
 41.25  various state departments, agencies, boards, commissions and the 
 41.26  legislature of the kinds of property identified in this 
 41.27  subdivision that may be economically funded through a master 
 41.28  lease program and request the commissioner of finance to execute 
 41.29  a master lease.  The master lease may be used only to finance 
 41.30  the following kinds of purchases: 
 41.31     (a) The master lease may be used to finance purchases by 
 41.32  the commissioner of administration with money from an internal 
 41.33  services fund. 
 41.34     (b) The master lease may be used to refinance a purchase of 
 41.35  equipment already purchased under a lease-purchase agreement. 
 41.36     (c) The master lease may be used to finance purchases of 
 42.1   large equipment with a capital value of more than $100,000 and a 
 42.2   useful life of more than ten years. 
 42.3      (d) The legislature may specifically authorize a particular 
 42.4   purchase to be financed using the master lease.  The legislature 
 42.5   anticipates that this authorization will be given only to 
 42.6   finance the purchase of major pieces of equipment with a capital 
 42.7   value of more than $10,000. 
 42.8      The commissioner of finance may authorize the sale and 
 42.9   issuance of certificates of participation relative to a master 
 42.10  lease in an amount sufficient to fund these personal property 
 42.11  needs.  The term of the certificates must be less than the 
 42.12  expected useful life of the equipment whose purchase is financed 
 42.13  by the certificates.  The commissioner of administration may use 
 42.14  the proceeds from the master lease or the sale of the 
 42.15  certificates of participation to acquire the personal property 
 42.16  through the appropriate procurement procedure in chapter 16B 16C.
 42.17  Money appropriated for the lease or acquisition of this personal 
 42.18  property is appropriated to the commissioner of finance to make 
 42.19  master lease payments. 
 42.20     Sec. 14.  Minnesota Statutes 1997 Supplement, section 
 42.21  16B.465, subdivision 7, is amended to read: 
 42.22     Subd. 7.  [EXEMPTION.] The system is exempt from the 
 42.23  five-year limitation on contracts set by section 16B.07, 
 42.24  subdivision 2 sections 16C.06, subdivision 2, paragraph (a), 
 42.25  clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 
 42.26  clause (6). 
 42.27     Sec. 15.  Minnesota Statutes 1997 Supplement, section 
 42.28  16E.07, subdivision 9, is amended to read: 
 42.29     Subd. 9.  [AGGREGATION OF SERVICE DEMAND.] The office shall 
 42.30  identify opportunities to aggregate demand for technical 
 42.31  services required by government units for online activities and 
 42.32  may contract with governmental or nongovernmental entities to 
 42.33  provide services.  These contracts are not subject to the 
 42.34  requirements of chapter chapters 16B and 16C, except 
 42.35  sections 16B.167, 16B.17, and 16B.175 16C.05, 16C.08, 16C.09, 
 42.36  and 16C.10. 
 43.1      Sec. 16.  Minnesota Statutes 1997 Supplement, section 
 43.2   17.03, subdivision 12, is amended to read: 
 43.3      Subd. 12.  [CONTRACTS; APPROPRIATION.] The commissioner may 
 43.4   accept money as part of a contract with any public or private 
 43.5   entity to provide statutorily prescribed services by the 
 43.6   department.  A contract must specify the services to be provided 
 43.7   by the department and the amount and method of reimbursement.  
 43.8   Money generated in a contractual agreement under this section 
 43.9   must be deposited in a special revenue fund and is appropriated 
 43.10  to the department for purposes of providing services specified 
 43.11  in the contracts.  Contracts under this section must be 
 43.12  processed in accordance with section 16B.06 16C.06.  The 
 43.13  commissioner must report revenues collected and expenditures 
 43.14  made under this section to the chairs of the environment and 
 43.15  natural resources finance committee in the house of 
 43.16  representatives and the environment and agriculture budget 
 43.17  division in the senate by January 15 of each odd-numbered year. 
 43.18     Sec. 17.  Minnesota Statutes 1996, section 17.1015, is 
 43.19  amended to read: 
 43.20     17.1015 [PROMOTIONAL EXPENDITURES.] 
 43.21     In order to accomplish the purposes of section 17.101, the 
 43.22  commissioner may participate jointly with private persons in 
 43.23  appropriate programs and projects and may enter into contracts 
 43.24  to carry out those programs and projects.  The contracts may not 
 43.25  include the acquisition of land or buildings and are not subject 
 43.26  to the provisions of chapter 16B 16C relating to competitive 
 43.27  bidding. 
 43.28     The commissioner may spend money appropriated for the 
 43.29  purposes of section 17.101, and expenditures made pursuant to 
 43.30  section 17.101 for food, lodging, or travel are not governed by 
 43.31  the travel rules of the commissioner of employee relations.  
 43.32     Sec. 18.  Minnesota Statutes 1996, section 41A.023, is 
 43.33  amended to read: 
 43.34     41A.023 [POWERS.] 
 43.35     In addition to other powers granted by this chapter, the 
 43.36  board may: 
 44.1      (1) sue and be sued; 
 44.2      (2) acquire, hold, lease, and transfer any interest in real 
 44.3   and personal property for its corporate purposes; 
 44.4      (3) sell at public or private sale, at the price or prices 
 44.5   determined by the board, any note, mortgage, lease, sublease, 
 44.6   lease purchase, or other instrument or obligation evidencing or 
 44.7   securing a loan made for the purpose of economic development, 
 44.8   job creation, redevelopment, or community revitalization by a 
 44.9   public agency to a business, for-profit or nonprofit 
 44.10  organization, or an individual; 
 44.11     (4) obtain insurance on its property; 
 44.12     (5) obtain municipal bond insurance, letters of credit, 
 44.13  surety obligations, or similar agreements from financial 
 44.14  institutions; 
 44.15     (6) enter into other agreements or transactions, without 
 44.16  regard to chapter 16B or 16C, that the board considers necessary 
 44.17  or appropriate to carry out the purposes of this chapter with 
 44.18  federal or state agencies, political subdivisions of the state, 
 44.19  or other persons, firms, or corporations; 
 44.20     (7) establish and collect fees without regard to chapter 14 
 44.21  and section 16A.1285; 
 44.22     (8) accept appropriations, gifts, grants, and bequests; 
 44.23     (9) use money received from any source for any legal 
 44.24  purpose or program of the board; 
 44.25     (10) participate in loans for agricultural resource 
 44.26  projects in accordance with section 41A.035; 
 44.27     (11) provide small business development loans in accordance 
 44.28  with section 41A.036; and 
 44.29     (12) guarantee or insure bonds or notes issued by the board.
 44.30     Sec. 19.  Minnesota Statutes 1997 Supplement, section 
 44.31  41D.03, subdivision 7, is amended to read: 
 44.32     Subd. 7.  [PURCHASING INSTRUCTIONAL ITEMS.] Technical 
 44.33  educational equipment may be procured for programs of the 
 44.34  Minnesota center for agriculture education by the council either 
 44.35  by brand designation or in accordance with standards and 
 44.36  specifications the council may adopt, notwithstanding chapter 
 45.1   16B 16C. 
 45.2      Sec. 20.  Minnesota Statutes 1996, section 43A.23, 
 45.3   subdivision 1, is amended to read: 
 45.4      Subdivision 1.  [GENERAL.] The commissioner is authorized 
 45.5   to request bids from carriers or to negotiate with carriers and 
 45.6   to enter into contracts with carriers which in the judgment of 
 45.7   the commissioner are best qualified to underwrite and service 
 45.8   the benefit plans.  Contracts entered into with carriers are not 
 45.9   subject to the requirements of sections 16B.19 to 16B.22 16C.17 
 45.10  to 16C.20.  The commissioner may negotiate premium rates and 
 45.11  coverage provisions with all carriers licensed under chapters 
 45.12  62A, 62C, and 62D.  The commissioner may also negotiate 
 45.13  reasonable restrictions to be applied to all carriers under 
 45.14  chapters 62A, 62C, and 62D.  Contracts to underwrite the benefit 
 45.15  plans must be bid or negotiated separately from contracts to 
 45.16  service the benefit plans, which may be awarded only on the 
 45.17  basis of competitive bids.  The commissioner shall consider the 
 45.18  cost of the plans, conversion options relating to the contracts, 
 45.19  service capabilities, character, financial position, and 
 45.20  reputation of the carriers, and any other factors which the 
 45.21  commissioner deems appropriate.  Each benefit contract must be 
 45.22  for a uniform term of at least one year, but may be made 
 45.23  automatically renewable from term to term in the absence of 
 45.24  notice of termination by either party.  The commissioner shall, 
 45.25  to the extent feasible, make hospital and medical benefits 
 45.26  available from at least one carrier licensed to do business 
 45.27  pursuant to each of chapters 62A, 62C, and 62D.  The 
 45.28  commissioner need not provide health maintenance organization 
 45.29  services to an employee who resides in an area which is not 
 45.30  served by a licensed health maintenance organization.  The 
 45.31  commissioner may refuse to allow a health maintenance 
 45.32  organization to continue as a carrier.  The commissioner may 
 45.33  elect not to offer all three types of carriers if there are no 
 45.34  bids or no acceptable bids by that type of carrier or if the 
 45.35  offering of additional carriers would result in substantial 
 45.36  additional administrative costs.  A carrier licensed under 
 46.1   chapter 62A is exempt from the tax imposed by section 60A.15 on 
 46.2   premiums paid to it by the state. 
 46.3      Sec. 21.  Minnesota Statutes 1996, section 44A.01, 
 46.4   subdivision 1, is amended to read: 
 46.5      Subdivision 1.  [ESTABLISHMENT.] The Minnesota world trade 
 46.6   center corporation is a public corporation established to 
 46.7   facilitate and support Minnesota world trade center programs and 
 46.8   services and to promote the Minnesota world trade center.  The 
 46.9   corporation is a state agency, but is not subject to chapters 
 46.10  14, 16A, 16B, 16C, 43A, and 179A.  
 46.11     Sec. 22.  Minnesota Statutes 1996, section 45.0291, is 
 46.12  amended to read: 
 46.13     45.0291 [DEPARTMENT BONDS.] 
 46.14     Bonds issued under chapters 45 to 83, 309, 332, and 
 46.15  sections 326.83 to 326.98, are not state bonds or contracts for 
 46.16  purposes of sections 8.05 and 16B.06 16C.06, subdivision 2. 
 46.17     Sec. 23.  Minnesota Statutes 1997 Supplement, section 
 46.18  61B.21, subdivision 1, is amended to read: 
 46.19     Subdivision 1.  [FUNCTIONS.] The Minnesota life and health 
 46.20  insurance guaranty association shall perform its functions under 
 46.21  the plan of operation established and approved under section 
 46.22  61B.25, and shall exercise its powers through a board of 
 46.23  directors.  The association is not a state agency for purposes 
 46.24  of chapter 16A, 16B, 16C, or 43A.  For purposes of 
 46.25  administration and assessment, the association shall establish 
 46.26  and maintain two accounts: 
 46.27     (1) the life insurance and annuity account which includes 
 46.28  the following subaccounts: 
 46.29     (i) the life insurance account; 
 46.30     (ii) the annuity account; and 
 46.31     (iii) the unallocated annuity account; and 
 46.32     (2) the health insurance account. 
 46.33     Sec. 24.  Minnesota Statutes 1996, section 84.025, 
 46.34  subdivision 7, is amended to read: 
 46.35     Subd. 7.  [CONTRACTS.] The commissioner of natural 
 46.36  resources may contract with the federal government, local 
 47.1   governmental units, the University of Minnesota, and other 
 47.2   educational institutions, and private persons as may be 
 47.3   necessary in the performance of duties.  Contracts made pursuant 
 47.4   to this section for professional services shall not be subject 
 47.5   to the provisions of chapter 16B 16C, as they relate to 
 47.6   competitive bidding. 
 47.7      Sec. 25.  Minnesota Statutes 1996, section 84.026, is 
 47.8   amended to read: 
 47.9      84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 
 47.10  SERVICES.] 
 47.11     The commissioner of natural resources is authorized to 
 47.12  enter into contractual agreements with any public or private 
 47.13  entity for the provision of statutorily prescribed natural 
 47.14  resources services by the department.  The contracts shall 
 47.15  specify the services to be provided and the amount and method of 
 47.16  reimbursement.  Funds generated in a contractual agreement made 
 47.17  pursuant to this section shall be deposited in the special 
 47.18  revenue fund and are appropriated to the department for purposes 
 47.19  of providing the services specified in the contracts.  All such 
 47.20  contractual agreements shall be processed in accordance with the 
 47.21  provisions of section 16B.06 16C.06.  The commissioner shall 
 47.22  report revenues collected and expenditures made under this 
 47.23  section to the chairs of the committees on appropriations in the 
 47.24  house and finance in the senate by January 1 of each 
 47.25  odd-numbered year. 
 47.26     Sec. 26.  Minnesota Statutes 1996, section 84.0845, is 
 47.27  amended to read: 
 47.28     84.0845 [ADVANCE OF MATCHING FUNDS.] 
 47.29     The commissioner may advance funds appropriated for fish 
 47.30  and wildlife programs to government agencies, the National Fish 
 47.31  and Wildlife Foundation, federally recognized Indian tribes and 
 47.32  bands, and private, nonprofit organizations for the purposes of 
 47.33  securing nonstate matching funds for projects involving 
 47.34  acquisition and improvement of fish and wildlife habitat and 
 47.35  related research and management.  The commissioner shall execute 
 47.36  agreements for contracts with the matching parties under section 
 48.1   16B.06 sections 16C.03, subdivision 4, and 16C.06 prior to 
 48.2   advancing any state funds.  The agreement or contract shall 
 48.3   contain provisions for return of the state's share and the 
 48.4   matching funds within a period of time specified by the 
 48.5   commissioner.  The state's funds and the nonstate matching funds 
 48.6   must be deposited in a separate account and expended solely for 
 48.7   the purposes set forth in the agreement or contract.  The 
 48.8   commissioner shall enter into agreements or contracts only with 
 48.9   the National Fish and Wildlife Foundation and federal and 
 48.10  nonprofit authorities deemed by the commissioner to be dedicated 
 48.11  to the purposes of the project. 
 48.12     Sec. 27.  Minnesota Statutes 1996, section 85A.02, 
 48.13  subdivision 3, is amended to read: 
 48.14     Subd. 3.  The board may conduct research studies and 
 48.15  programs, collect and analyze data and prepare reports, maps, 
 48.16  charts and other information relating to the zoological garden 
 48.17  or any wild or domestic animals or may contract for any of such 
 48.18  services without complying with chapter 16B 16C. 
 48.19     Sec. 28.  Minnesota Statutes 1997 Supplement, section 
 48.20  85A.02, subdivision 5b, is amended to read: 
 48.21     Subd. 5b.  [EXEMPTIONS.] The board is not subject to 
 48.22  sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 
 48.23  chapter chapters 16B and 16C, except for sections 16B.07, 
 48.24  16B.102, 16B.17, 16B.19, 16B.35, and 16B.55 16B.35, 16B.55, 
 48.25  16C.07, 16C.09, 16C.10, and 16C.17; and chapter 14, except 
 48.26  section 14.386, paragraph (a), clauses (1) and (3).  Section 
 48.27  14.386, paragraph (b), does not apply to the board's actions.  
 48.28     Sec. 29.  Minnesota Statutes 1996, section 85A.02, 
 48.29  subdivision 16, is amended to read: 
 48.30     Subd. 16.  The board may acquire by lease-purchase or 
 48.31  installment purchase contract, transportation systems, 
 48.32  facilities and equipment that it determines will substantially 
 48.33  enhance the public's opportunity to view, study or derive 
 48.34  information concerning the animals to be located in the 
 48.35  zoological garden, and will increase attendance at the garden.  
 48.36  The contracts may provide for:  (1) the payment of money over a 
 49.1   12-year period, or over a longer period not exceeding 25 years 
 49.2   if approved by the board; (2) the payment of money from any 
 49.3   funds of the board not pledged or appropriated for another 
 49.4   purpose; (3) indemnification of the lessor or seller for damage 
 49.5   to property or injury to persons due primarily to the actions of 
 49.6   the board or its employees; (4) the transfer of title to the 
 49.7   property to the board upon execution of the contract or upon 
 49.8   payment of specified amounts; (5) the reservation to the lessor 
 49.9   or seller of a security interest in the property; and (6) any 
 49.10  other terms that the board determines to be commercially 
 49.11  reasonable.  Property so acquired by the board, and its purchase 
 49.12  or use by the board, or by any nonprofit corporation having a 
 49.13  concession from the board requiring its purchase, shall not be 
 49.14  subject to taxation by the state or its political subdivisions.  
 49.15  Each contract shall be subject to the provisions of chapter 16B 
 49.16  16C, relating to competitive bidding, provided that, 
 49.17  notwithstanding subdivision 5b, the board is not required to 
 49.18  readvertise for competitive proposals for any transportation 
 49.19  system, facilities and equipment heretofore selected from 
 49.20  competitive proposals. 
 49.21     Sec. 30.  Minnesota Statutes 1996, section 85A.02, 
 49.22  subdivision 18, is amended to read: 
 49.23     Subd. 18.  [PURCHASING.] The board may contract for 
 49.24  supplies, materials, purchase or rental of equipment, and 
 49.25  utility services.  Except as provided in subdivision 5b, chapter 
 49.26  16B 16C does not apply to these contracts.  
 49.27     Sec. 31.  Minnesota Statutes 1996, section 103F.515, 
 49.28  subdivision 3, is amended to read: 
 49.29     Subd. 3.  [CONSERVATION EASEMENTS.] (a) The board may 
 49.30  acquire, or accept by gift or donation, conservation easements 
 49.31  on eligible land.  An easement may be permanent or of limited 
 49.32  duration.  An easement acquired on land for windbreak purposes, 
 49.33  under subdivision 2, may be only of permanent duration.  An 
 49.34  easement of limited duration may not be acquired if it is for a 
 49.35  period less than 20 years.  The negotiation and acquisition of 
 49.36  easements authorized by this section are exempt from the 
 50.1   contractual provisions of chapter chapters 16B and 16C.  
 50.2      (b) The board may acquire, or accept by gift or donation, 
 50.3   flowage easements when necessary for completion of wetland 
 50.4   restoration projects. 
 50.5      Sec. 32.  Minnesota Statutes 1996, section 116.03, 
 50.6   subdivision 2, is amended to read: 
 50.7      Subd. 2.  The commissioner shall organize the agency and 
 50.8   employ such assistants and other officers, employees and agents 
 50.9   as the commissioner may deem necessary to discharge the 
 50.10  functions of the commissioner's office, define the duties of 
 50.11  such officers, employees and agents, and delegate to them any of 
 50.12  the commissioner's powers, duties, and responsibilities, subject 
 50.13  to the commissioner's control and under such conditions as the 
 50.14  commissioner may prescribe.  The commissioner may also contract 
 50.15  with persons, firms, corporations, the federal government and 
 50.16  any agency or instrumentality thereof, the water research center 
 50.17  of the University of Minnesota or any other instrumentality of 
 50.18  such university, for doing any of the work of the commissioner's 
 50.19  office, and none of the provisions of chapter 16B 16C, relating 
 50.20  to bids, shall apply to such contracts.  
 50.21     Sec. 33.  Minnesota Statutes 1996, section 116J.035, 
 50.22  subdivision 1, is amended to read: 
 50.23     Subdivision 1.  [POWERS.] The commissioner may:  
 50.24     (a) apply for, receive, and expend money from municipal, 
 50.25  county, regional, and other government agencies; 
 50.26     (b) apply for, accept, and disburse grants and other aids 
 50.27  from other public or private sources; 
 50.28     (c) contract for professional services if such work or 
 50.29  services cannot be satisfactorily performed by employees of the 
 50.30  department or by any other state agency; 
 50.31     (d) enter into interstate compacts to jointly carry out 
 50.32  such research and planning with other states or the federal 
 50.33  government where appropriate; 
 50.34     (e) distribute informational material at no cost to the 
 50.35  public upon reasonable request; and 
 50.36     (f) enter into contracts necessary for the performance of 
 51.1   the commissioner's duties with federal, state, regional, 
 51.2   metropolitan, local, and other agencies or units of government; 
 51.3   educational institutions, including the University of 
 51.4   Minnesota.  Contracts made pursuant to this section shall not be 
 51.5   subject to the competitive bidding requirements of chapter 16B 
 51.6   16C.  
 51.7      The commissioner may apply for, receive, and expend money 
 51.8   made available from federal or other sources for the purpose of 
 51.9   carrying out the duties and responsibilities of the commissioner 
 51.10  pursuant to this chapter.  
 51.11     All moneys received by the commissioner pursuant to this 
 51.12  chapter shall be deposited in the state treasury and are 
 51.13  appropriated to the commissioner for the purpose for which the 
 51.14  moneys have been received.  The money shall not cancel and shall 
 51.15  be available until expended.  
 51.16     Sec. 34.  Minnesota Statutes 1996, section 116J.402, is 
 51.17  amended to read: 
 51.18     116J.402 [COOPERATIVE CONTRACTS.] 
 51.19     The commissioner of trade and economic development may 
 51.20  apply for, receive, and spend money for community development 
 51.21  from municipal, county, regional, and other planning agencies. 
 51.22  The commissioner may also apply for, accept, and disburse grants 
 51.23  and other aids for community development and related planning 
 51.24  from the federal government and other sources.  The commissioner 
 51.25  may enter into contracts with agencies of the federal 
 51.26  government, local governmental units, regional development 
 51.27  commissions, and the metropolitan council, other state agencies, 
 51.28  the University of Minnesota, and other educational institutions, 
 51.29  and private persons as necessary to perform the commissioner's 
 51.30  duties.  Contracts made according to this section, except those 
 51.31  with private persons, are not subject to the provisions of 
 51.32  chapter 16B 16C concerning competitive bidding.  
 51.33     The commissioner may apply for, receive, and spend money 
 51.34  made available from federal sources or other sources for the 
 51.35  purposes of carrying out the duties and responsibilities of the 
 51.36  commissioner.  
 52.1      Money received by the commissioner under this section must 
 52.2   be deposited in the state treasury and is appropriated to the 
 52.3   commissioner for the purposes for which the money has been 
 52.4   received.  The money does not cancel and is available until 
 52.5   spent.  
 52.6      Sec. 35.  Minnesota Statutes 1996, section 116J.58, 
 52.7   subdivision 2, is amended to read: 
 52.8      Subd. 2.  [PROMOTIONAL CONTRACTS.] In order to best carry 
 52.9   out duties and responsibilities and to serve the people of the 
 52.10  state in the promotion of tourism, trade, and economic 
 52.11  development, the commissioner may engage in programs and 
 52.12  projects jointly with a private person, firm, corporation or 
 52.13  association and may enter into contracts under terms to be 
 52.14  mutually agreed upon to carry out such programs and projects not 
 52.15  including acquisition of land or buildings.  Contracts may be 
 52.16  negotiated and are not subject to the provisions of chapter 16B 
 52.17  16C relating to competitive bidding.  
 52.18     Sec. 36.  Minnesota Statutes 1996, section 116J.68, 
 52.19  subdivision 2, is amended to read: 
 52.20     Subd. 2.  The bureau shall:  
 52.21     (a) provide information and assistance with respect to all 
 52.22  aspects of business planning and business management related to 
 52.23  the start-up, operation, or expansion of a small business in 
 52.24  Minnesota; 
 52.25     (b) refer persons interested in the start-up, operation, or 
 52.26  expansion of a small business in Minnesota to assistance 
 52.27  programs sponsored by federal agencies, state agencies, 
 52.28  educational institutions, chambers of commerce, civic 
 52.29  organizations, community development groups, private industry 
 52.30  associations, and other organizations or to the business 
 52.31  assistance referral system established by the Minnesota Project 
 52.32  Outreach Corporation; 
 52.33     (c) plan, develop, and implement a master file of 
 52.34  information on small business assistance programs of federal, 
 52.35  state, and local governments, and other public and private 
 52.36  organizations so as to provide comprehensive, timely information 
 53.1   to the bureau's clients; 
 53.2      (d) employ staff with adequate and appropriate skills and 
 53.3   education and training for the delivery of information and 
 53.4   assistance; 
 53.5      (e) seek out and utilize, to the extent practicable, 
 53.6   contributed expertise and services of federal, state, and local 
 53.7   governments, educational institutions, and other public and 
 53.8   private organizations; 
 53.9      (f) maintain a close and continued relationship with the 
 53.10  director of the procurement program within the department of 
 53.11  administration so as to facilitate the department's duties and 
 53.12  responsibilities under sections 16B.19 to 16B.22 16C.17 to 
 53.13  16C.20 relating to the small targeted group business and 
 53.14  economically disadvantaged business program of the state; 
 53.15     (g) develop an information system which will enable the 
 53.16  commissioner and other state agencies to efficiently store, 
 53.17  retrieve, analyze, and exchange data regarding small business 
 53.18  development and growth in the state.  All executive branch 
 53.19  agencies of state government and the secretary of state shall to 
 53.20  the extent practicable, assist the bureau in the development and 
 53.21  implementation of the information system; 
 53.22     (h) establish and maintain a toll free telephone number so 
 53.23  that all small business persons anywhere in the state can call 
 53.24  the bureau office for assistance.  An outreach program shall be 
 53.25  established to make the existence of the bureau well known to 
 53.26  its potential clientele throughout the state.  If the small 
 53.27  business person requires a referral to another provider the 
 53.28  bureau may use the business assistance referral system 
 53.29  established by the Minnesota Project Outreach Corporation; 
 53.30     (i) conduct research and provide data as required by the 
 53.31  state legislature; 
 53.32     (j) develop and publish material on all aspects of the 
 53.33  start-up, operation, or expansion of a small business in 
 53.34  Minnesota; 
 53.35     (k) collect and disseminate information on state 
 53.36  procurement opportunities, including information on the 
 54.1   procurement process; 
 54.2      (l) develop a public awareness program through the use of 
 54.3   newsletters, personal contacts, and electronic and print news 
 54.4   media advertising about state assistance programs for small 
 54.5   businesses, including those programs specifically for socially 
 54.6   disadvantaged small business persons; 
 54.7      (m) enter into agreements with the federal government and 
 54.8   other public and private entities to serve as the statewide 
 54.9   coordinator or host agency for the federal small business 
 54.10  development center program under United States Code, title 15, 
 54.11  section 648; and 
 54.12     (n) assist providers in the evaluation of their programs 
 54.13  and the assessment of their service area needs.  The bureau may 
 54.14  establish model evaluation techniques and performance standards 
 54.15  for providers to use. 
 54.16     Sec. 37.  Minnesota Statutes 1996, section 116J.966, 
 54.17  subdivision 1, is amended to read: 
 54.18     Subdivision 1.  [GENERALLY.] (a) The commissioner shall 
 54.19  promote, develop, and facilitate trade and foreign investment in 
 54.20  Minnesota.  In furtherance of these goals, and in addition to 
 54.21  the powers granted by section 116J.035, the commissioner may:  
 54.22     (1) locate, develop, and promote international markets for 
 54.23  Minnesota products and services; 
 54.24     (2) arrange and lead trade missions to countries with 
 54.25  promising international markets for Minnesota goods, technology, 
 54.26  services, and agricultural products; 
 54.27     (3) promote Minnesota products and services at domestic and 
 54.28  international trade shows; 
 54.29     (4) organize, promote, and present domestic and 
 54.30  international trade shows featuring Minnesota products and 
 54.31  services; 
 54.32     (5) host trade delegations and assist foreign traders in 
 54.33  contacting appropriate Minnesota businesses and investments; 
 54.34     (6) develop contacts with Minnesota businesses and gather 
 54.35  and provide information to assist them in locating and 
 54.36  communicating with international trading or joint venture 
 55.1   counterparts; 
 55.2      (7) provide information, education, and counseling services 
 55.3   to Minnesota businesses regarding the economic, commercial, 
 55.4   legal, and cultural contexts of international trade; 
 55.5      (8) provide Minnesota businesses with international trade 
 55.6   leads and information about the availability and sources of 
 55.7   services relating to international trade, such as export 
 55.8   financing, licensing, freight forwarding, international 
 55.9   advertising, translation, and custom brokering; 
 55.10     (9) locate, attract, and promote foreign direct investment 
 55.11  and business development in Minnesota to enhance employment 
 55.12  opportunities in Minnesota; 
 55.13     (10) provide foreign businesses and investors desiring to 
 55.14  locate facilities in Minnesota information regarding sources of 
 55.15  governmental, legal, real estate, financial, and business 
 55.16  services; 
 55.17     (11) enter into contracts or other agreements with private 
 55.18  persons and public entities, including agreements to establish 
 55.19  and maintain offices and other types of representation in 
 55.20  foreign countries, to carry out the purposes of promoting 
 55.21  international trade and attracting investment from foreign 
 55.22  countries to Minnesota and to carry out this section, without 
 55.23  regard to sections 16B.07 and 16B.09 section 16C.07; 
 55.24     (12) enter into administrative, programming, and service 
 55.25  partnerships with the Minnesota world trade center; and 
 55.26     (13) market trade-related materials to businesses and 
 55.27  organizations, and the proceeds of which must be placed in a 
 55.28  special revolving account and are appropriated to the 
 55.29  commissioner to prepare and distribute trade-related materials.  
 55.30     (b) The programs and activities of the commissioner of 
 55.31  trade and economic development and the Minnesota trade division 
 55.32  may not duplicate programs and activities of the commissioner of 
 55.33  agriculture or the Minnesota world trade center corporation. 
 55.34     (c) The commissioner shall notify the chairs of the senate 
 55.35  finance and house appropriations committees of each agreement 
 55.36  under this subdivision to establish and maintain an office or 
 56.1   other type of representation in a foreign country.  
 56.2      Sec. 38.  Minnesota Statutes 1997 Supplement, section 
 56.3   121.1113, subdivision 2, is amended to read: 
 56.4      Subd. 2.  [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 
 56.5   ASSISTANCE.] The department of children, families, and learning 
 56.6   shall contract for professional and technical services according 
 56.7   to competitive bidding procedures under chapter 16B 16C for 
 56.8   purposes of this section. 
 56.9      Sec. 39.  Minnesota Statutes 1996, section 124.14, 
 56.10  subdivision 1, is amended to read: 
 56.11     Subdivision 1.  The commissioner shall supervise 
 56.12  distribution of school aids and grants in accordance with law.  
 56.13  It may make rules consistent with law for the distribution to 
 56.14  enable districts to perform efficiently the services required by 
 56.15  law and further education in the state, including reasonable 
 56.16  requirements for the reports and accounts to it as will assure 
 56.17  accurate and lawful apportionment of aids.  State and federal 
 56.18  aids and discretionary or entitlement grants distributed by the 
 56.19  commissioner shall not be subject to the contract approval 
 56.20  procedures of the commissioner of administration or to chapter 
 56.21  16A or, 16B, or 16C.  The commissioner shall adopt internal 
 56.22  procedures for administration and monitoring of aids and grants. 
 56.23     Sec. 40.  Minnesota Statutes 1996, section 126.151, 
 56.24  subdivision 2, is amended to read: 
 56.25     Subd. 2.  [ACCOUNTS OF THE ORGANIZATION.] The commissioner 
 56.26  and the board of trustees of the Minnesota state colleges and 
 56.27  universities may retain dues and other money collected on behalf 
 56.28  of students participating in approved vocational student 
 56.29  organizations and may deposit the money in separate accounts.  
 56.30  The money in these accounts shall be available for expenditures 
 56.31  for state and national activities related to specific 
 56.32  organizations.  Administration of money collected under this 
 56.33  section is not subject to the provisions of chapters 15, 
 56.34  16A, and 16B, and 16C, and may be deposited outside the state 
 56.35  treasury.  Money shall be administered under the policies of the 
 56.36  applicable state board or agency relating to post-secondary and 
 57.1   secondary vocational student organizations and is subject to 
 57.2   audit by the legislative auditor.  Any unexpended money shall 
 57.3   not cancel but may be carried forward to the next fiscal year. 
 57.4      Sec. 41.  Minnesota Statutes 1996, section 129C.10, 
 57.5   subdivision 7, is amended to read: 
 57.6      Subd. 7.  [PURCHASING INSTRUCTIONAL ITEMS.] Technical 
 57.7   educational equipment may be procured for programs of the Lola 
 57.8   and Rudy Perpich Minnesota center for arts education by the 
 57.9   board either by brand designation or in accordance with 
 57.10  standards and specifications the board may adopt, 
 57.11  notwithstanding chapter chapters 16B and 16C. 
 57.12     Sec. 42.  Minnesota Statutes 1996, section 136A.06, is 
 57.13  amended to read: 
 57.14     136A.06 [FEDERAL FUNDS.] 
 57.15     The higher education services office is designated the 
 57.16  state agency to apply for, receive, accept, and disburse to both 
 57.17  public and private institutions of higher education all federal 
 57.18  funds which are allocated to the state of Minnesota to support 
 57.19  higher education programs, construction, or other activities and 
 57.20  which require administration by a state higher education agency 
 57.21  under the Higher Education Facilities Act of 1963, and any 
 57.22  amendments thereof, the Higher Education Act of 1965, and any 
 57.23  amendments thereof, and any other law which provides funds for 
 57.24  higher education and requires administration by a state higher 
 57.25  education agency as enacted or may be enacted by the Congress of 
 57.26  the United States; provided that no commitment shall be made 
 57.27  that shall bind the legislature to make appropriations beyond 
 57.28  current allocations of funds.  The office may apply for, 
 57.29  receive, accept, and disburse all administrative funds available 
 57.30  to the office for administering federal funds to support higher 
 57.31  education programs, construction, or other activities.  The 
 57.32  office also may apply for, receive, accept, and disburse any 
 57.33  research, planning, or program funds which are available for 
 57.34  purposes consistent with the provisions of this chapter.  In 
 57.35  making application for and administering federal funds the 
 57.36  office may comply with any and all requirements of federal law 
 58.1   and federal rules and regulations to enable it to receive and 
 58.2   accept such funds.  The expenditure of any such funds received 
 58.3   shall be governed by the laws of the state, except insofar as 
 58.4   federal regulations may otherwise provide.  The office may 
 58.5   contract with both public and private institutions in 
 58.6   administering federal funds, and such contracts shall not be 
 58.7   subject to the provisions of chapter 16B 16C.  All such money 
 58.8   received by the office shall be deposited in the state treasury 
 58.9   and are hereby appropriated to it annually for the purpose for 
 58.10  which such funds are received. None of such moneys shall cancel 
 58.11  but shall be available until expended. 
 58.12     Sec. 43.  Minnesota Statutes 1996, section 136A.16, 
 58.13  subdivision 1, is amended to read: 
 58.14     Subdivision 1.  Notwithstanding chapter 16B 16C, the 
 58.15  Minnesota higher education services office is designated as the 
 58.16  administrative agency for carrying out the purposes and terms of 
 58.17  sections 136A.15 to 136A.1702.  The office may establish one or 
 58.18  more loan programs. 
 58.19     Sec. 44.  Minnesota Statutes 1996, section 136A.29, 
 58.20  subdivision 6, is amended to read: 
 58.21     Subd. 6.  The authority is authorized and empowered to 
 58.22  determine the location and character of any project to be 
 58.23  financed under the provisions of sections 136A.25 to 136A.42, 
 58.24  and to construct, reconstruct, remodel, maintain, manage, 
 58.25  enlarge, alter, add to, repair, operate, lease, as lessee or 
 58.26  lessor, and regulate the same, to enter into contracts for any 
 58.27  or all of such purposes, to enter into contracts for the 
 58.28  management and operation of a project, and to designate a 
 58.29  participating institution of higher education as its agent to 
 58.30  determine the location and character of a project undertaken by 
 58.31  such participating institution of higher education under the 
 58.32  provisions of sections 136A.25 to 136A.42 and as the agent of 
 58.33  the authority, to construct, reconstruct, remodel, maintain, 
 58.34  manage, enlarge, alter, add to, repair, operate, lease, as 
 58.35  lessee or lessor, and regulate the same, and as the agent of the 
 58.36  authority, to enter into contracts for any or all of such 
 59.1   purposes, including contracts for the management and operation 
 59.2   of such project.  Contracts of the authority or of a 
 59.3   participating institution of higher education to acquire or to 
 59.4   construct, reconstruct, remodel, maintain, enlarge, alter, add 
 59.5   to, or repair projects shall not be subject to the provisions of 
 59.6   chapter 16B 16C or section 574.26, or any other public contract 
 59.7   or competitive bid law. 
 59.8      Sec. 45.  Minnesota Statutes 1997 Supplement, section 
 59.9   136A.40, is amended to read: 
 59.10     136A.40 [ADMINISTRATION.] 
 59.11     The administration of sections 136A.25 to 136A.42, shall be 
 59.12  under the authority independent of other departments and 
 59.13  agencies and notwithstanding chapter 16B 16C.  The authority 
 59.14  shall not be subject to the provisions of chapter 14, including 
 59.15  section 14.386 in connection with the adoption of any rules, 
 59.16  rents, fees or charges or with the exercise of any other powers 
 59.17  or duties.  
 59.18     Sec. 46.  Minnesota Statutes 1996, section 136F.23, is 
 59.19  amended to read: 
 59.20     136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 
 59.21     Notwithstanding chapter 16A or 16B 16C, the student 
 59.22  associations recognized by the board of trustees of the 
 59.23  Minnesota state colleges and universities may purchase goods or 
 59.24  materials through state purchasing authority for the ordinary 
 59.25  day-to-day operations of the associations.  The student 
 59.26  associations must be nonprofit 501(c)(3) organizations in order 
 59.27  to qualify for this authority.  The department of administration 
 59.28  may require that the purchase documents be approved by 
 59.29  appropriate officials in the board's central office. 
 59.30     Sec. 47.  Minnesota Statutes 1996, section 136F.56, 
 59.31  subdivision 5, is amended to read: 
 59.32     Subd. 5.  [SERVICE CONTRACTS.] The council may contract for 
 59.33  the services it needs to carry out its function.  The council 
 59.34  may also contract to provide services to other organizations. 
 59.35  The contracts are not subject to the contract approval 
 59.36  procedures of the commissioner of administration or of 
 60.1   chapter 16B 16C.  
 60.2      Sec. 48.  Minnesota Statutes 1996, section 136F.581, 
 60.3   subdivision 3, is amended to read: 
 60.4      Subd. 3.  [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 
 60.5   policies and procedures must include provisions for procurement, 
 60.6   including construction, from small targeted group businesses and 
 60.7   businesses from economically disadvantaged areas designated 
 60.8   under section 16B.19 16C.17.  The board, colleges, and 
 60.9   universities shall use the methods contained in section 471.345, 
 60.10  subdivision 8, for such purchasing, or may develop additional 
 60.11  methods in which the cost percentage preferences are consistent 
 60.12  with the provision of section 16B.19 16C.17, subdivisions 2c and 
 60.13  2d 6, paragraph (a), and 7, or consistent with the provisions of 
 60.14  the University of Minnesota's targeted group business purchasing 
 60.15  program. 
 60.16     Sec. 49.  Minnesota Statutes 1996, section 136F.66, is 
 60.17  amended to read: 
 60.18     136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 
 60.19     In awarding contracts for capital projects under section 
 60.20  136F.64, the board shall consider the documentation provided by 
 60.21  the bidders regarding their qualifications, including evidence 
 60.22  of having successfully completed similar work, or delivering 
 60.23  services or products comparable to that being requested.  The 
 60.24  board shall set procedures to administer this section, which 
 60.25  must include practices that will assist in the economic 
 60.26  development of small businesses, small targeted group 
 60.27  businesses, and businesses in economically disadvantaged areas 
 60.28  designated under section 16B.19 16C.17. 
 60.29     Sec. 50.  Minnesota Statutes 1996, section 136F.72, 
 60.30  subdivision 3, is amended to read: 
 60.31     Subd. 3.  [ADMINISTRATION.] Each college and university, 
 60.32  independent of other authority and notwithstanding chapters 
 60.33  16A and, 16B, and 16C, shall administer its activity funds.  The 
 60.34  board, independent of other authority and notwithstanding 
 60.35  chapters 16A and, 16B, and 16C, shall administer the 
 60.36  administrative fund established in the system office.  All 
 61.1   activity fund money collected shall be administered under the 
 61.2   policies of the board subject to audit of the legislative 
 61.3   auditor.  
 61.4      Sec. 51.  Minnesota Statutes 1996, section 136F.96, is 
 61.5   amended to read: 
 61.6      136F.96 [ADMINISTRATION.] 
 61.7      The administration of sections 136F.90 to 136F.98 shall be 
 61.8   under the board of trustees of the Minnesota state colleges and 
 61.9   universities independent of other authority and notwithstanding 
 61.10  chapters 16A and, 16B, and 16C. 
 61.11     Sec. 52.  Minnesota Statutes 1996, section 137.35, 
 61.12  subdivision 1, is amended to read: 
 61.13     Subdivision 1.  [PURCHASING METHODS.] (a) The regents may 
 61.14  award up to a six percent preference in the amount bid for 
 61.15  specified goods and services to small targeted group businesses 
 61.16  designated under section 16B.19 16C.17, subdivision 5. 
 61.17     (b) The regents may designate a purchase of goods or 
 61.18  services for award only to small targeted group businesses 
 61.19  designated under section 16B.19 16C.17, subdivision 5, if the 
 61.20  regents determine that at least three small targeted group 
 61.21  businesses are likely to bid. 
 61.22     (c) The regents, as a condition of awarding a construction 
 61.23  contract or approving a contract for consultant, professional, 
 61.24  or technical services, may set goals that require the prime 
 61.25  contractor to subcontract a portion of the contract to small 
 61.26  targeted group businesses.  The regents must establish a 
 61.27  procedure for granting waivers from the subcontracting 
 61.28  requirement when qualified small targeted group businesses are 
 61.29  not reasonably available.  The regents may establish financial 
 61.30  incentives for prime contractors who exceed the goals for use of 
 61.31  subcontractors and financial penalties for prime contractors who 
 61.32  fail to meet goals under this paragraph.  The subcontracting 
 61.33  requirements of this paragraph do not apply to prime contractors 
 61.34  who are small targeted group businesses.  At least 75 percent of 
 61.35  the value of the subcontracts awarded to small targeted group 
 61.36  businesses under this paragraph must be performed by the 
 62.1   business to which the subcontract is awarded or by another small 
 62.2   targeted group business. 
 62.3      (d) The regents may award up to a four percent preference 
 62.4   in the amount bid on university procurement to small businesses 
 62.5   located in an economically disadvantaged area as defined in 
 62.6   section 16B.19 16C.17, subdivision 7. 
 62.7      (e) The regents may delegate responsibility under this 
 62.8   section to university employees. 
 62.9      Sec. 53.  Minnesota Statutes 1996, section 137.35, 
 62.10  subdivision 2, is amended to read: 
 62.11     Subd. 2.  [ELIGIBILITY.] The rules adopted by the 
 62.12  commissioner of administration to define small businesses and to 
 62.13  set time and other eligibility requirements for participation in 
 62.14  programs under sections 16B.19 to 16B.22 16C.17 to 16C.20 apply 
 62.15  to this section. 
 62.16     Sec. 54.  Minnesota Statutes 1996, section 137.35, 
 62.17  subdivision 3, is amended to read: 
 62.18     Subd. 3.  [NONCOMPETITIVE BIDS.] The regents are encouraged 
 62.19  to purchase from small targeted group businesses designated 
 62.20  under section 16B.19 16C.17 when making purchases that are not 
 62.21  subject to competitive bidding procedures. 
 62.22     Sec. 55.  Minnesota Statutes 1997 Supplement, section 
 62.23  138.35, subdivision 1b, is amended to read: 
 62.24     Subd. 1b.  [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 
 62.25  state archaeologist may contract with the federal government, 
 62.26  local governmental units, other states, the university and other 
 62.27  educational institutions, and private persons or organizations 
 62.28  as necessary in the performance of the duties in sections 138.31 
 62.29  to 138.42.  Contracts made under this section for professional 
 62.30  services shall not be subject to chapter 16B 16C, as it relates 
 62.31  to competitive bidding.  The state archaeologist may recruit, 
 62.32  train, and accept, without regard to personnel laws or rules, 
 62.33  the services of individuals as volunteers for or in aid of 
 62.34  performance of the state archaeologist's duties, and may provide 
 62.35  for the incidental expenses of volunteers, such as 
 62.36  transportation, lodging, and subsistence.  The state 
 63.1   archaeologist may apply for, receive, and expend grants and 
 63.2   gifts of money consistent with the powers and duties in sections 
 63.3   138.31 to 138.42.  Any money so received is appropriated for the 
 63.4   purpose for which it was granted.  
 63.5      Sec. 56.  Minnesota Statutes 1996, section 144.0742, is 
 63.6   amended to read: 
 63.7      144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 
 63.8   SERVICES.] 
 63.9      The commissioner of health is authorized to enter into 
 63.10  contractual agreements with any public or private entity for the 
 63.11  provision of statutorily prescribed public health services by 
 63.12  the department.  The contracts shall specify the services to be 
 63.13  provided and the amount and method of reimbursement therefor.  
 63.14  Funds generated in a contractual agreement made pursuant to this 
 63.15  section are appropriated to the department for purposes of 
 63.16  providing the services specified in the contracts.  All such 
 63.17  contractual agreements shall be processed in accordance with the 
 63.18  provisions of chapter 16B 16C.  
 63.19     Sec. 57.  Minnesota Statutes 1996, section 144.95, 
 63.20  subdivision 5, is amended to read: 
 63.21     Subd. 5.  [GENERAL AUTHORITY.] (a) To carry out 
 63.22  subdivisions 1 to 4, the commissioner of health may:  
 63.23     (1) accept money, property, or services from any source; 
 63.24     (2) receive and hold lands; 
 63.25     (3) accept gifts; 
 63.26     (4) cooperate with city, state, federal, or private 
 63.27  agencies whose research on mosquito control or on other 
 63.28  environmental matters may be affected by the commissioner's 
 63.29  mosquito management and research activities; and 
 63.30     (5) enter into contracts with any public or private entity. 
 63.31     (b) The contracts must specify the duties performed, 
 63.32  services provided, and the amount and method of reimbursement 
 63.33  for them.  Money collected by the commissioner under contracts 
 63.34  made under this subdivision is appropriated to the commissioner 
 63.35  for the purposes specified in the contracts.  Contractual 
 63.36  agreements must be processed under section 16B.17 16C.09.  
 64.1      Sec. 58.  Minnesota Statutes 1996, section 161.315, 
 64.2   subdivision 4, is amended to read: 
 64.3      Subd. 4.  [EXCEPTIONS.] The commissioner may terminate a 
 64.4   debarment by order, or the commissioner or a county, town, or 
 64.5   home rule or statutory city may award a contract to a debarred 
 64.6   or suspended person when: 
 64.7      (1) that person is the sole supplier of a material or 
 64.8   service required by the commissioner or a county, town, or home 
 64.9   rule or statutory city; 
 64.10     (2) the commissioner determines that an emergency exists as 
 64.11  defined in section 161.32, subdivision 3; 
 64.12     (3) the commissioner of administration determines that an 
 64.13  emergency exists as defined in section 16B.08 16C.11, 
 64.14  subdivision 6 2; 
 64.15     (4) in the case of a contract to be awarded by a county, 
 64.16  town, or home rule or statutory city, the governing body thereof 
 64.17  determines by resolution that an emergency exists that will 
 64.18  result in a road, street, or bridge being closed to travel; or 
 64.19     (5) the contract is for purchasing materials or renting 
 64.20  equipment for routine road maintenance. 
 64.21     Sec. 59.  Minnesota Statutes 1996, section 161.321, 
 64.22  subdivision 1, is amended to read: 
 64.23     Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 64.24  the following terms have the meanings given them, except where 
 64.25  the context clearly indicates a different meaning is intended. 
 64.26     (a) "Award" means the granting of a contract in accordance 
 64.27  with all applicable laws and rules governing competitive bidding 
 64.28  except as otherwise provided in this section. 
 64.29     (b) "Contract" means an agreement entered into between a 
 64.30  business entity and the state of Minnesota for the construction 
 64.31  of transportation improvements. 
 64.32     (c) "Subcontractor" means a business entity which enters 
 64.33  into a legally binding agreement with another business entity 
 64.34  which is a party to a contract as defined in clause (b). 
 64.35     (d) "Targeted group business" means a business designated 
 64.36  under section 16B.19 16C.17, subdivision 2b 5. 
 65.1      Sec. 60.  Minnesota Statutes 1996, section 161.321, 
 65.2   subdivision 2, is amended to read: 
 65.3      Subd. 2.  [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 
 65.4   may award up to a six percent preference in the amount bid for 
 65.5   specified construction work to small targeted group businesses. 
 65.6      (b) The commissioner may designate a contract for 
 65.7   construction work for award only to small targeted group 
 65.8   businesses if the commissioner determines that at least three 
 65.9   small targeted group businesses are likely to bid. 
 65.10     (c) The commissioner, as a condition of awarding a 
 65.11  construction contract, may set goals that require the prime 
 65.12  contractor to subcontract a portion of the contract to small 
 65.13  targeted group businesses.  The commissioner must establish a 
 65.14  procedure for granting waivers from the subcontracting 
 65.15  requirement when qualified small targeted group businesses are 
 65.16  not reasonably available.  The commissioner may establish 
 65.17  financial incentives for prime contractors who exceed the goals 
 65.18  for use of subcontractors and financial penalties for prime 
 65.19  contractors who fail to meet goals under this paragraph.  The 
 65.20  subcontracting requirements of this paragraph do not apply to 
 65.21  prime contractors who are small targeted group businesses. 
 65.22     (d) The commissioner may award up to a four percent 
 65.23  preference in the amount bid on procurement to small businesses 
 65.24  located in an economically disadvantaged area as defined in 
 65.25  section 16B.19 16C.17, subdivision 7.  
 65.26     Sec. 61.  Minnesota Statutes 1996, section 161.321, 
 65.27  subdivision 5, is amended to read: 
 65.28     Subd. 5.  [RECOURSE TO OTHER BUSINESSES.] If the 
 65.29  commissioner is unable to award a contract pursuant to the 
 65.30  provisions of subdivisions 2 and 3, the award may be placed 
 65.31  pursuant to the normal solicitation and award provisions set 
 65.32  forth in this chapter and chapter 16B 16C. 
 65.33     Sec. 62.  Minnesota Statutes 1996, section 161.321, 
 65.34  subdivision 6, is amended to read: 
 65.35     Subd. 6.  [RULES.] The rules adopted by the commissioner of 
 65.36  administration to define small businesses and to set time and 
 66.1   other eligibility requirements for participation in programs 
 66.2   under sections 16B.19 to 16B.22 16C.17 to 16C.20 apply to this 
 66.3   section.  The commissioner may promulgate other rules necessary 
 66.4   to carry out this section. 
 66.5      Sec. 63.  Minnesota Statutes 1996, section 161.321, 
 66.6   subdivision 7, is amended to read: 
 66.7      Subd. 7.  [NONCOMPETITIVE BIDS.] The commissioner is 
 66.8   encouraged to purchase from small targeted group businesses 
 66.9   designated under section 16B.19 16C.17 when making purchases 
 66.10  that are not subject to competitive bidding procedures. 
 66.11     Sec. 64.  Minnesota Statutes 1996, section 161.41, 
 66.12  subdivision 2, is amended to read: 
 66.13     Subd. 2.  [DETERMINATION OF VALUE; DISPOSITION.] The 
 66.14  commissioner shall administer all aspects of the disposition of 
 66.15  property declared to be surplus under this section.  The 
 66.16  commissioner shall first determine the value of the surplus 
 66.17  property.  The commissioner may then transfer the possession of 
 66.18  the surplus property to any state agency or political 
 66.19  subdivision of this state or to the United States government 
 66.20  upon receipt of payment in an amount equal to the value of the 
 66.21  surplus property. 
 66.22     The commissioner may also sell the surplus property under 
 66.23  the competitive bidding provisions of chapter 16B 16C if no 
 66.24  state agency or political subdivision of this state offers to 
 66.25  purchase the surplus property for its determined value.  
 66.26     Sec. 65.  Minnesota Statutes 1997 Supplement, section 
 66.27  179A.03, subdivision 14, is amended to read: 
 66.28     Subd. 14.  [PUBLIC EMPLOYEE.] "Public employee" or 
 66.29  "employee" means any person appointed or employed by a public 
 66.30  employer except:  
 66.31     (a) elected public officials; 
 66.32     (b) election officers; 
 66.33     (c) commissioned or enlisted personnel of the Minnesota 
 66.34  national guard; 
 66.35     (d) emergency employees who are employed for emergency work 
 66.36  caused by natural disaster; 
 67.1      (e) part-time employees whose service does not exceed the 
 67.2   lesser of 14 hours per week or 35 percent of the normal work 
 67.3   week in the employee's appropriate unit; 
 67.4      (f) employees whose positions are basically temporary or 
 67.5   seasonal in character and:  (1) are not for more than 67 working 
 67.6   days in any calendar year; or (2) are not for more than 100 
 67.7   working days in any calendar year and the employees are under 
 67.8   the age of 22, are full-time students enrolled in a nonprofit or 
 67.9   public educational institution prior to being hired by the 
 67.10  employer, and have indicated, either in an application for 
 67.11  employment or by being enrolled at an educational institution 
 67.12  for the next academic year or term, an intention to continue as 
 67.13  students during or after their temporary employment; 
 67.14     (g) employees providing services for not more than two 
 67.15  consecutive quarters to the board of trustees of the Minnesota 
 67.16  state colleges and universities under the terms of a 
 67.17  professional or technical services contract as defined in 
 67.18  section 16B.17 16C.09, subdivision 1; 
 67.19     (h) employees of charitable hospitals as defined by section 
 67.20  179.35, subdivision 3; 
 67.21     (i) full-time undergraduate students employed by the school 
 67.22  which they attend under a work-study program or in connection 
 67.23  with the receipt of financial aid, irrespective of number of 
 67.24  hours of service per week; 
 67.25     (j) an individual who is employed for less than 300 hours 
 67.26  in a fiscal year as an instructor in an adult vocational 
 67.27  education program; 
 67.28     (k) an individual hired by a school district or the board 
 67.29  of trustees of the Minnesota state colleges and universities to 
 67.30  teach one course for up to four credits for one quarter in a 
 67.31  year.  
 67.32     The following individuals are public employees regardless 
 67.33  of the exclusions of clauses (e) and (f):  
 67.34     (1) An employee hired by a school district or the board of 
 67.35  trustees of the Minnesota state colleges and universities except 
 67.36  at the university established in section 136F.13 or for 
 68.1   community services or community education instruction offered on 
 68.2   a noncredit basis:  (i) to replace an absent teacher or faculty 
 68.3   member who is a public employee, where the replacement employee 
 68.4   is employed more than 30 working days as a replacement for that 
 68.5   teacher or faculty member; or (ii) to take a teaching position 
 68.6   created due to increased enrollment, curriculum expansion, 
 68.7   courses which are a part of the curriculum whether offered 
 68.8   annually or not, or other appropriate reasons; and 
 68.9      (2) An employee hired for a position under clause (f)(1) if 
 68.10  that same position has already been filled under clause (f)(1) 
 68.11  in the same calendar year and the cumulative number of days 
 68.12  worked in that same position by all employees exceeds 67 
 68.13  calendar days in that year.  For the purpose of this paragraph, 
 68.14  "same position" includes a substantially equivalent position if 
 68.15  it is not the same position solely due to a change in the 
 68.16  classification or title of the position. 
 68.17     Sec. 66.  Minnesota Statutes 1996, section 179A.23, is 
 68.18  amended to read: 
 68.19     179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 
 68.20  BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 
 68.21  BARGAINING UNIT.] 
 68.22     Any contract entered into after March 23, 1982, by the 
 68.23  state of Minnesota or the University of Minnesota involving 
 68.24  services, any part of which, in the absence of the contract, 
 68.25  would be performed by members of a unit provided in sections 
 68.26  179A.10 and 179A.11, shall be subject to section 16B.07 16C.07 
 68.27  and shall provide for the preferential employment by a party of 
 68.28  members of that unit whose employment with the state of 
 68.29  Minnesota or the University of Minnesota is terminated as a 
 68.30  result of that contract.  
 68.31     Contracts entered into by the state of Minnesota for the 
 68.32  purpose of providing court reporter services or transcription of 
 68.33  the record of a hearing which was recorded by means of an audio 
 68.34  magnetic recording device shall be subject to section 16B.17 
 68.35  16C.09 and the preferential employment provisions enumerated in 
 68.36  this section.  Any court reporter seeking a contract pursuant to 
 69.1   the preferential employment provisions of this section shall be 
 69.2   given preference when the services are needed only if that court 
 69.3   reporter's charges for the services requested are no greater 
 69.4   than the average of the charges made for the identical services 
 69.5   by other court reporters in the same locality who are also under 
 69.6   contract with the state for those services.  
 69.7      Sec. 67.  Minnesota Statutes 1996, section 198.35, 
 69.8   subdivision 1, is amended to read: 
 69.9      Subdivision 1.  [ESTABLISHMENT.] The board may establish a 
 69.10  veterans home in Silver Bay by renovating an existing facility 
 69.11  owned by the city of Silver Bay if the city donates the building 
 69.12  to the board at no cost.  Contracts made by the board for the 
 69.13  purposes of this subdivision are subject to chapter 16B 16C.  
 69.14  Buildings used for the veterans home must comply with 
 69.15  requirements established by federal agencies as conditions for 
 69.16  the receipt of federal funds for the nursing and boarding care 
 69.17  of veterans.  The city of Silver Bay shall secure the state 
 69.18  match requirement from sources other than the state general 
 69.19  fund.  Money from other sources must equal at least 35 percent 
 69.20  of the total cost of the renovation with the remainder of the 
 69.21  funds to be provided by the United States Veterans 
 69.22  Administration. 
 69.23     Sec. 68.  Minnesota Statutes 1996, section 216C.02, 
 69.24  subdivision 1, is amended to read: 
 69.25     Subdivision 1.  [POWERS.] (a) The commissioner may: 
 69.26     (1) apply for, receive, and spend money received from 
 69.27  federal, municipal, county, regional, and other government 
 69.28  agencies and private sources; 
 69.29     (2) apply for, accept, and disburse grants and other aids 
 69.30  from public and private sources; 
 69.31     (3) contract for professional services if work or services 
 69.32  required or authorized to be carried out by the commissioner 
 69.33  cannot be satisfactorily performed by employees of the 
 69.34  department or by another state agency; 
 69.35     (4) enter into interstate compacts to carry out research 
 69.36  and planning jointly with other states or the federal government 
 70.1   when appropriate; 
 70.2      (5) upon reasonable request, distribute informational 
 70.3   material at no cost to the public; and 
 70.4      (6) enter into contracts for the performance of the 
 70.5   commissioner's duties with federal, state, regional, 
 70.6   metropolitan, local, and other agencies or units of government 
 70.7   and educational institutions, including the University of 
 70.8   Minnesota, without regard to the competitive bidding 
 70.9   requirements of chapters 16A and 16B 16C.  
 70.10     (b) The commissioner shall collect information on 
 70.11  conservation and other energy-related programs carried on by 
 70.12  other agencies, by public utilities, by cooperative electric 
 70.13  associations, by municipal power agencies, by other fuel 
 70.14  suppliers, by political subdivisions, and by private 
 70.15  organizations.  Other agencies, cooperative electric 
 70.16  associations, municipal power agencies, and political 
 70.17  subdivisions shall cooperate with the commissioner by providing 
 70.18  information requested by the commissioner.  The commissioner may 
 70.19  by rule require the submission of information by other program 
 70.20  operators.  The commissioner shall make the information 
 70.21  available to other agencies and to the public and, as necessary, 
 70.22  shall recommend to the legislature changes in the laws governing 
 70.23  conservation and other energy-related programs to ensure that: 
 70.24     (1) expenditures on the programs are adequate to meet 
 70.25  identified needs; 
 70.26     (2) the needs of low-income energy users are being 
 70.27  adequately addressed; 
 70.28     (3) duplication of effort is avoided or eliminated; 
 70.29     (4) a program that is ineffective is improved or 
 70.30  eliminated; and 
 70.31     (5) voluntary efforts are encouraged through incentives for 
 70.32  their operators.  
 70.33     The commissioner shall appoint an advisory task force to 
 70.34  help evaluate the information collected and formulate 
 70.35  recommendations to the legislature.  The task force must include 
 70.36  low-income energy users. 
 71.1      (c) By January 15 of each year, the commissioner shall 
 71.2   report to the legislature on the projected amount of federal 
 71.3   money likely to be available to the state during the next fiscal 
 71.4   year, including grant money and money received by the state as a 
 71.5   result of litigation or settlements of alleged violations of 
 71.6   federal petroleum pricing regulations.  The report must also 
 71.7   estimate the amount of money projected as needed during the next 
 71.8   fiscal year to finance a level of conservation and other 
 71.9   energy-related programs adequate to meet projected needs, 
 71.10  particularly the needs of low-income persons and households, and 
 71.11  must recommend the amount of state appropriations needed to 
 71.12  cover the difference between the projected availability of 
 71.13  federal money and the projected needs. 
 71.14     Sec. 69.  Minnesota Statutes 1997 Supplement, section 
 71.15  216D.03, subdivision 2, is amended to read: 
 71.16     Subd. 2.  [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 
 71.17  (a) The notification center services must be provided by a 
 71.18  nonprofit corporation approved in writing by the commissioner.  
 71.19  The nonprofit corporation must be governed by a board of 
 71.20  directors of up to 20 members, one of whom is the director of 
 71.21  the office of pipeline safety.  The other board members must 
 71.22  represent and be elected by operators, excavators, and other 
 71.23  persons eligible to participate in the center.  In deciding to 
 71.24  approve a nonprofit corporation, the commissioner shall consider 
 71.25  whether it meets the requirements of this paragraph and whether 
 71.26  it demonstrates that it has the ability to contract for and 
 71.27  implement the notification center service. 
 71.28     (b) The commissioner shall adopt rules: 
 71.29     (1) establishing a notification process and competitive 
 71.30  bidding procedure for selecting a vendor to provide the 
 71.31  notification service; 
 71.32     (2) governing the operating procedures and technology 
 71.33  needed for a statewide notification center; and 
 71.34     (3) setting forth the method for assessing the cost of the 
 71.35  service among operators.  
 71.36     (c) The commissioner shall select a vendor to provide the 
 72.1   notification center service.  The commissioner may advertise for 
 72.2   bids as provided in section 16B.07 16C.07, subdivision 
 72.3   3 subdivisions 1 and 2, and base the selection of a vendor on an 
 72.4   identification of the lowest responsible bidder best value as 
 72.5   provided in section 16B.09 16C.07, subdivision 1 7.  The 
 72.6   commissioner shall select and contract with the vendor to 
 72.7   provide the notification center service, but all costs of the 
 72.8   center must be paid by the operators.  The commissioner may at 
 72.9   any time appoint a task force to advise on the renewal of the 
 72.10  contract or any other matter involving the center's operations. 
 72.11     (d) An operator may submit a bid and be selected to 
 72.12  contract to provide the notification center service under 
 72.13  paragraph (a) or (c).  The commissioner shall annually review 
 72.14  the services provided by the nonprofit corporation approved 
 72.15  under paragraph (a) or the vendor selected under paragraph (c). 
 72.16     Sec. 70.  Minnesota Statutes 1996, section 237.51, 
 72.17  subdivision 5a, is amended to read: 
 72.18     Subd. 5a.  [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 
 72.19  addition to any duties specified elsewhere in sections 237.51 to 
 72.20  237.56, the department of human services shall: 
 72.21     (1) define economic hardship, special needs, and household 
 72.22  criteria so as to determine the priority of eligible applicants 
 72.23  for initial distribution of devices and to determine 
 72.24  circumstances necessitating provision of more than one 
 72.25  communication device per household; 
 72.26     (2) establish a method to verify eligibility requirements; 
 72.27     (3) establish specifications for communication devices to 
 72.28  be purchased under section 237.53, subdivision 3; 
 72.29     (4) inform the public and specifically the community of 
 72.30  communication-impaired persons of the program; and 
 72.31     (5) notwithstanding any provision of chapter chapters 16B 
 72.32  and 16C, develop guidelines for the purchase of some 
 72.33  communication devices from local retailers and dispensers if the 
 72.34  department determines that otherwise they will be economically 
 72.35  harmed by implementation of sections 237.50 to 237.56. 
 72.36     (b) The department may establish an advisory board to 
 73.1   advise the department in carrying out the duties specified in 
 73.2   this section and to advise the department of public service in 
 73.3   carrying out its duties under section 237.54.  If so 
 73.4   established, the advisory board must include, at a minimum, the 
 73.5   following communication-impaired persons: 
 73.6      (1) at least one member who is deaf; 
 73.7      (2) at least one member who is speech impaired; 
 73.8      (3) at least one member who is mobility impaired; and 
 73.9      (4) at least one member who is hard-of-hearing. 
 73.10     The membership terms, compensation, and removal of members 
 73.11  and the filling of membership vacancies are governed by section 
 73.12  15.059.  Advisory board meetings shall be held at the discretion 
 73.13  of the commissioner. 
 73.14     Sec. 71.  Minnesota Statutes 1996, section 241.0221, 
 73.15  subdivision 6, is amended to read: 
 73.16     Subd. 6.  [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 
 73.17  To qualify for a subsidy, a county or group of counties must 
 73.18  enter into a memorandum of agreement with the commissioner 
 73.19  agreeing to comply with the minimum standards and requirements 
 73.20  established by the commissioner under subdivision 4.  The 
 73.21  memorandum of agreement is not subject to the contract approval 
 73.22  procedures of the commissioner of administration or chapter 
 73.23  chapters 16B and 16C.  The commissioner shall provide forms and 
 73.24  instructions for submission of subsidy applications.  
 73.25     The commissioner shall require a county or group of 
 73.26  counties to document in its application that it is requesting 
 73.27  subsidy funds for the least restrictive alternative appropriate 
 73.28  to the county or counties detention needs.  The commissioner 
 73.29  shall evaluate applications and grant subsidies for local 
 73.30  detention facilities and alternative detention programs 
 73.31  described in this section in a manner consistent with the 
 73.32  minimum standards and requirements established by the 
 73.33  commissioner in subdivision 4 and within the limit 
 73.34  appropriations made available by law.  
 73.35     Sec. 72.  Minnesota Statutes 1996, section 241.27, 
 73.36  subdivision 2, is amended to read: 
 74.1      Subd. 2.  [REVOLVING FUND; USE OF FUND.] There is 
 74.2   established in the department of corrections under the control 
 74.3   of the commissioner of corrections the Minnesota correctional 
 74.4   industries revolving fund to which shall be transferred the 
 74.5   revolving funds authorized in Minnesota Statutes 1978, sections 
 74.6   243.41 and 243.85, clause (f), and any other industrial 
 74.7   revolving funds heretofore established at any state correctional 
 74.8   facility under the control of the commissioner of corrections.  
 74.9   The revolving fund established shall be used for the conduct of 
 74.10  the industrial and commercial activities now or hereafter 
 74.11  established at any state correctional facility, including but 
 74.12  not limited to the purchase of equipment, raw materials, the 
 74.13  payment of salaries, wages and other expenses necessary and 
 74.14  incident thereto.  The purchase of materials and commodities for 
 74.15  resale are not subject to the competitive bidding procedures of 
 74.16  section 16B.07 16C.07, but are subject to all other provisions 
 74.17  of chapter 16B chapters 16B and 16C.  When practical, purchases 
 74.18  must be made from small targeted group businesses designated 
 74.19  under section 16B.19 16C.17.  Additionally, the expenses of 
 74.20  inmate vocational training and the inmate release fund may be 
 74.21  financed from the correctional industries revolving fund in an 
 74.22  amount to be determined by the commissioner.  The proceeds and 
 74.23  income from all industrial and commercial activities conducted 
 74.24  at state correctional facilities shall be deposited in the 
 74.25  correctional industries revolving fund subject to disbursement 
 74.26  as hereinabove provided.  The commissioner of corrections may 
 74.27  request that money in the fund be invested pursuant to section 
 74.28  11A.25; the proceeds from the investment not currently needed 
 74.29  shall be accounted for separately and credited to the fund. 
 74.30     Sec. 73.  Minnesota Statutes 1997 Supplement, section 
 74.31  241.277, subdivision 2, is amended to read: 
 74.32     Subd. 2.  [REQUEST FOR PROPOSALS.] After consulting with 
 74.33  and considering the advice of the association of Minnesota 
 74.34  counties, the commissioner may issue a request for proposals and 
 74.35  select a vendor to operate the program.  Section 16B.17 16C.09 
 74.36  does not apply to the issuance of the request for proposals. 
 75.1      Sec. 74.  Minnesota Statutes 1996, section 246.36, is 
 75.2   amended to read: 
 75.3      246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 
 75.4      For the purpose of carrying out a duty, the commissioner of 
 75.5   human services shall have authority to accept uncompensated and 
 75.6   voluntary services and to enter into contracts or agreements 
 75.7   with private or public agencies, or persons, for uncompensated 
 75.8   and voluntary services, as the commissioner may deem 
 75.9   practicable.  Uncompensated and voluntary services do not 
 75.10  include services mandated by licensure and certification 
 75.11  requirements for health care facilities.  The volunteer 
 75.12  agencies, organizations, or persons who provide services to 
 75.13  residents of state facilities operated under the authority of 
 75.14  the commissioner are not subject to the procurement requirements 
 75.15  of chapters 16A and 16B 16C.  The agencies, organizations, or 
 75.16  persons may purchase supplies, services, and equipment to be 
 75.17  used in providing services to residents of state facilities 
 75.18  through the department of administration. 
 75.19     Sec. 75.  Minnesota Statutes 1996, section 246.57, 
 75.20  subdivision 1, is amended to read: 
 75.21     Subdivision 1.  [AUTHORIZED.] The commissioner of human 
 75.22  services may authorize any state facility operated under the 
 75.23  authority of the commissioner to enter into agreement with other 
 75.24  governmental entities and both nonprofit and for-profit 
 75.25  organizations for participation in shared service agreements 
 75.26  that would be of mutual benefit to the state, other governmental 
 75.27  entities and organizations involved, and the public.  
 75.28  Notwithstanding section 16B.06 16C.06, subdivision 2, the 
 75.29  commissioner of human services may delegate the execution of 
 75.30  shared services contracts to the chief executive officers of the 
 75.31  regional centers or state operated nursing homes.  No additional 
 75.32  employees shall be added to the legislatively approved 
 75.33  complement for any regional center or state nursing home as a 
 75.34  result of entering into any shared service agreement.  However, 
 75.35  positions funded by a shared service agreement may be authorized 
 75.36  by the commissioner of finance for the duration of the shared 
 76.1   service agreement.  The charges for the services shall be on an 
 76.2   actual cost basis.  All receipts for shared services may be 
 76.3   retained by the regional treatment center or state-operated 
 76.4   nursing home that provided the services, in addition to other 
 76.5   funding the regional treatment center or state-operated nursing 
 76.6   home receives. 
 76.7      Sec. 76.  Minnesota Statutes 1996, section 246.57, 
 76.8   subdivision 6, is amended to read: 
 76.9      Subd. 6.  [DENTAL SERVICES.] The commissioner of human 
 76.10  services shall authorize any regional treatment center or 
 76.11  state-operated nursing home under the commissioner's authority 
 76.12  to provide dental services to disabled persons who are eligible 
 76.13  for medical assistance and are not residing at the regional 
 76.14  treatment center or state-operated nursing home, provided that 
 76.15  the reimbursement received for these services is sufficient to 
 76.16  cover actual costs.  To provide these services, regional 
 76.17  treatment centers and state-operated nursing homes may 
 76.18  participate under contract with health networks in their service 
 76.19  area.  Notwithstanding section 16B.06 16C.06, subdivision 2, the 
 76.20  commissioner of human services may delegate the execution of 
 76.21  these dental services contracts to the chief executive officers 
 76.22  of the regional centers or state-operated nursing homes.  All 
 76.23  receipts for these dental services shall be retained by the 
 76.24  regional treatment center or state-operated nursing home that 
 76.25  provides the services and shall be in addition to other funding 
 76.26  the regional treatment center or state-operated nursing home 
 76.27  receives. 
 76.28     Sec. 77.  Minnesota Statutes 1996, section 256B.031, 
 76.29  subdivision 1, is amended to read: 
 76.30     Subdivision 1.  [CONTRACTS.] The commissioner may contract 
 76.31  with health insurers licensed and operating under chapters 60A 
 76.32  and 62A, nonprofit health service plans licensed and operating 
 76.33  under chapter 62C, health maintenance organizations licensed and 
 76.34  operating under chapter 62D, and vendors of medical care and 
 76.35  organizations participating in prepaid programs under section 
 76.36  256D.03, subdivision 4, clause (b), to provide medical services 
 77.1   to medical assistance recipients.  Notwithstanding any other 
 77.2   law, health insurers may enter into contracts with the 
 77.3   commissioner under this section.  As a condition of the 
 77.4   contract, health insurers and health service plan corporations 
 77.5   must agree to comply with the requirements of section 62D.04, 
 77.6   subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 
 77.7   a complaint procedure that satisfies the requirements of section 
 77.8   62D.11.  Nothing in this section permits health insurers not 
 77.9   licensed as health maintenance organizations under chapter 62D 
 77.10  to offer a prepaid health plan as defined in section 256B.02, 
 77.11  subdivision 12, to persons other than those receiving medical 
 77.12  assistance or general assistance medical care under this 
 77.13  section.  Contracts between the commissioner and a prepaid 
 77.14  health plan are exempt from the set-aside and preference 
 77.15  provisions of section 16B.19 16C.17, subdivisions 5 and 6, 
 77.16  paragraph (a), and 7.  Contracts must specify the services that 
 77.17  are included in the per capita rate.  Contracts must specify 
 77.18  those services that are to be eligible for risk sharing between 
 77.19  the prepaid health plan and the state.  Contracts must also 
 77.20  state that payment must be made within 60 days after the month 
 77.21  of coverage. 
 77.22     Sec. 78.  Minnesota Statutes 1996, section 256B.04, 
 77.23  subdivision 14, is amended to read: 
 77.24     Subd. 14.  [COMPETITIVE BIDDING.] When determined to be 
 77.25  effective, economical, and feasible, the commissioner may 
 77.26  utilize volume purchase through competitive bidding and 
 77.27  negotiation under the provisions of chapter 16B 16C, to provide 
 77.28  items under the medical assistance program including but not 
 77.29  limited to the following: 
 77.30     (1) eyeglasses; 
 77.31     (2) oxygen.  The commissioner shall provide for oxygen 
 77.32  needed in an emergency situation on a short-term basis, until 
 77.33  the vendor can obtain the necessary supply from the contract 
 77.34  dealer; 
 77.35     (3) hearing aids and supplies; and 
 77.36     (4) durable medical equipment, including but not limited to:
 78.1      (a) hospital beds; 
 78.2      (b) commodes; 
 78.3      (c) glide-about chairs; 
 78.4      (d) patient lift apparatus; 
 78.5      (e) wheelchairs and accessories; 
 78.6      (f) oxygen administration equipment; 
 78.7      (g) respiratory therapy equipment; 
 78.8      (h) electronic diagnostic, therapeutic and life support 
 78.9   systems; 
 78.10     (5) special transportation services; and 
 78.11     (6) drugs. 
 78.12     Sec. 79.  Minnesota Statutes 1996, section 256B.04, 
 78.13  subdivision 15, is amended to read: 
 78.14     Subd. 15.  [UTILIZATION REVIEW.] (1) Establish on a 
 78.15  statewide basis a new program to safeguard against unnecessary 
 78.16  or inappropriate use of medical assistance services, against 
 78.17  excess payments, against unnecessary or inappropriate hospital 
 78.18  admissions or lengths of stay, and against underutilization of 
 78.19  services in prepaid health plans, long-term care facilities or 
 78.20  any health care delivery system subject to fixed rate 
 78.21  reimbursement.  In implementing the program, the state agency 
 78.22  shall utilize both prepayment and postpayment review systems to 
 78.23  determine if utilization is reasonable and necessary.  The 
 78.24  determination of whether services are reasonable and necessary 
 78.25  shall be made by the commissioner in consultation with a 
 78.26  professional services advisory group or health care consultant 
 78.27  appointed by the commissioner.  
 78.28     (2) Contracts entered into for purposes of meeting the 
 78.29  requirements of this subdivision shall not be subject to the 
 78.30  set-aside provisions of chapter 16B 16C. 
 78.31     (3) A recipient aggrieved by the commissioner's termination 
 78.32  of services or denial of future services may appeal pursuant to 
 78.33  section 256.045.  A vendor aggrieved by the commissioner's 
 78.34  determination that services provided were not reasonable or 
 78.35  necessary may appeal pursuant to the contested case procedures 
 78.36  of chapter 14.  To appeal, the vendor shall notify the 
 79.1   commissioner in writing within 30 days of receiving the 
 79.2   commissioner's notice.  The appeal request shall specify each 
 79.3   disputed item, the reason for the dispute, an estimate of the 
 79.4   dollar amount involved for each disputed item, the computation 
 79.5   that the vendor believes is correct, the authority in statute or 
 79.6   rule upon which the vendor relies for each disputed item, the 
 79.7   name and address of the person or firm with whom contacts may be 
 79.8   made regarding the appeal, and other information required by the 
 79.9   commissioner. 
 79.10     (4) The commissioner may select providers to provide case 
 79.11  management services to recipients who use health care services 
 79.12  inappropriately or to recipients who are eligible for other 
 79.13  managed care projects.  The providers shall be selected based 
 79.14  upon criteria that may include a comparison with a peer group of 
 79.15  providers related to the quality, quantity, or cost of health 
 79.16  care services delivered or a review of sanctions previously 
 79.17  imposed by health care services programs or the provider's 
 79.18  professional licensing board. 
 79.19     Sec. 80.  Minnesota Statutes 1997 Supplement, section 
 79.20  256B.19, subdivision 2a, is amended to read: 
 79.21     Subd. 2a.  [DIVISION OF COSTS.] The county shall ensure 
 79.22  that only the least costly, most appropriate transportation and 
 79.23  travel expenses are used.  The state may enter into volume 
 79.24  purchase contracts, or use a competitive bidding process, 
 79.25  whenever feasible, to minimize the costs of transportation 
 79.26  services.  If the state has entered into a volume purchase 
 79.27  contract or used the competitive bidding procedures of chapter 
 79.28  16B 16C to arrange for transportation services, the county may 
 79.29  be required to use such arrangements. 
 79.30     Sec. 81.  Minnesota Statutes 1997 Supplement, section 
 79.31  256D.03, subdivision 6, is amended to read: 
 79.32     Subd. 6.  [DIVISION OF COSTS.] The state share of county 
 79.33  agency expenditures for general assistance medical care shall be 
 79.34  100 percent.  Payments made under this subdivision shall be made 
 79.35  according to sections 256B.041, subdivision 5 and 256B.19, 
 79.36  subdivision 1.  In counties where a pilot or demonstration 
 80.1   project is operated for general assistance medical care 
 80.2   services, the state may pay 100 percent of the costs of 
 80.3   administering the pilot or demonstration project.  
 80.4      Notwithstanding any provision to the contrary, beginning 
 80.5   July 1, 1991, the state shall pay 100 percent of the costs for 
 80.6   centralized claims processing by the department of 
 80.7   administration relative to claims beginning January 1, 1991, and 
 80.8   submitted on behalf of general assistance medical care 
 80.9   recipients by vendors in the general assistance medical care 
 80.10  program. 
 80.11     Beginning July 1, 1991, the state shall reimburse counties 
 80.12  up to the limit of state appropriations for general assistance 
 80.13  medical care common carrier transportation and related travel 
 80.14  expenses provided for medical purposes after December 31, 1990.  
 80.15  For purposes of this subdivision, transportation shall have the 
 80.16  meaning given it in Code of Federal Regulations, title 42, 
 80.17  section 440.170(a), as amended through October 1, 1987, and 
 80.18  travel expenses shall have the meaning given in Code of Federal 
 80.19  Regulations, title 42, section 440.170(a)(3), as amended through 
 80.20  October 1, 1987. 
 80.21     The county shall ensure that only the least costly most 
 80.22  appropriate transportation and travel expenses are used.  The 
 80.23  state may enter into volume purchase contracts, or use a 
 80.24  competitive bidding process, whenever feasible, to minimize the 
 80.25  costs of transportation services.  If the state has entered into 
 80.26  a volume purchase contract or used the competitive bidding 
 80.27  procedures of chapter 16B 16C to arrange for transportation 
 80.28  services, the county may be required to use such arrangements to 
 80.29  be eligible for state reimbursement for general assistance 
 80.30  medical care common carrier transportation and related travel 
 80.31  expenses provided for medical purposes. 
 80.32     In counties where prepaid health plans are under contract 
 80.33  to the commissioner to provide services to general assistance 
 80.34  medical care recipients, the cost of court ordered treatment 
 80.35  that does not include diagnostic evaluation, recommendation, or 
 80.36  referral for treatment by the prepaid health plan is the 
 81.1   responsibility of the county of financial responsibility. 
 81.2      Sec. 82.  Minnesota Statutes 1996, section 298.2211, 
 81.3   subdivision 4, is amended to read: 
 81.4      Subd. 4.  [OBLIGATIONS NOT STATE DEBT.] Bonds and other 
 81.5   obligations issued by the commissioner pursuant to this section, 
 81.6   along with all related documents, are not general obligations of 
 81.7   the state of Minnesota and are not subject to section 16B.06 
 81.8   sections 16C.03, subdivision 4, and 16C.06.  The full faith and 
 81.9   credit and taxing powers of the state are not and may not be 
 81.10  pledged for the payment of these bonds or other obligations, and 
 81.11  no person has the right to compel the levy of any state tax for 
 81.12  their payment or to compel the appropriation of any moneys of 
 81.13  the state for their payment except as specifically provided 
 81.14  herein.  These bonds and obligations shall be payable solely 
 81.15  from the property and moneys derived by the commissioner 
 81.16  pursuant to the authority granted in this section that the 
 81.17  commissioner pledges to their payment.  The legislature intends 
 81.18  not to appropriate money from the general fund to pay for these 
 81.19  bonds or other obligations.  All these bonds or other 
 81.20  obligations must contain the provisions of this subdivision or 
 81.21  words to the same effect on their face.  
 81.22     Sec. 83.  Minnesota Statutes 1996, section 349A.06, 
 81.23  subdivision 1, is amended to read: 
 81.24     Subdivision 1.  [CONTRACTS.] The director shall sell 
 81.25  tickets for the lottery through lottery retailers with whom the 
 81.26  director contracts.  Contracts under this section are not 
 81.27  subject to the provisions of sections 16B.06 to 16B.102, and 
 81.28  16B.17 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 
 81.29  are valid for a period of one year.  The director may permit a 
 81.30  retailer to sell tickets at more than one business location 
 81.31  under a contract entered into under this section. 
 81.32     Sec. 84.  Minnesota Statutes 1996, section 349A.07, 
 81.33  subdivision 6, is amended to read: 
 81.34     Subd. 6.  [EXEMPTIONS.] Lottery procurement contracts 
 81.35  entered into by the director are not subject to the provisions 
 81.36  of sections 16B.06 to 16B.102 or 16B.17 section 16C.03, 16C.06, 
 82.1   16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 
 82.2   must utilize an open and competitive bid process, and as nearly 
 82.3   as practicable follow the procedures of chapter chapters 16B and 
 82.4   16C governing contracts, consistent with the provisions of this 
 82.5   section.  
 82.6      Sec. 85.  Minnesota Statutes 1996, section 352.03, 
 82.7   subdivision 6, is amended to read: 
 82.8      Subd. 6.  [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 
 82.9   management of the system is vested in the director, who is the 
 82.10  executive and administrative head of the system.  The director 
 82.11  shall be advisor to the board on matters pertaining to the 
 82.12  system and shall also act as the secretary of the board.  The 
 82.13  director shall: 
 82.14     (1) attend meetings of the board; 
 82.15     (2) prepare and recommend to the board appropriate rules to 
 82.16  carry out this chapter; 
 82.17     (3) establish and maintain an adequate system of records 
 82.18  and accounts following recognized accounting principles and 
 82.19  controls; 
 82.20     (4) designate an assistant director with the approval of 
 82.21  the board; 
 82.22     (5) appoint any employees, both permanent and temporary, 
 82.23  that are necessary to carry out the provisions of this chapter; 
 82.24     (6) organize the work of the system as the director deems 
 82.25  necessary to fulfill the functions of the system, and define the 
 82.26  duties of its employees and delegate to them any powers or 
 82.27  duties, subject to the control of the director and under 
 82.28  conditions the director may prescribe.  Appointments to exercise 
 82.29  delegated power must be by written order and shall be filed with 
 82.30  the secretary of state; 
 82.31     (7) with the advice and consent of the board, contract for 
 82.32  the services of an approved actuary, professional management 
 82.33  services, and any other consulting services as necessary and fix 
 82.34  the compensation for those services.  The contracts are not 
 82.35  subject to competitive bidding under chapter 16B 16C.  Any 
 82.36  approved actuary retained by the executive director shall 
 83.1   function as the actuarial advisor of the board and the executive 
 83.2   director, and may perform actuarial valuations and experience 
 83.3   studies to supplement those performed by the actuary retained by 
 83.4   the legislative commission on pensions and retirement.  Any 
 83.5   supplemental actuarial valuations or experience studies shall be 
 83.6   filed with the executive director of the legislative commission 
 83.7   on pensions and retirement.  Professional management services 
 83.8   may not be contracted for more often than once in six years.  
 83.9   Copies of professional management survey reports must be 
 83.10  transmitted to the secretary of the senate, the chief clerk of 
 83.11  the house of representatives, and the legislative reference 
 83.12  library as provided by section 3.195, to the executive director 
 83.13  of the commission and to the legislative auditor at the time as 
 83.14  reports are furnished to the board.  Only management firms 
 83.15  experienced in conducting management surveys of federal, state, 
 83.16  or local public retirement systems are qualified to contract 
 83.17  with the director; 
 83.18     (8) with the advice and consent of the board provide 
 83.19  in-service training for the employees of the system; 
 83.20     (9) make refunds of accumulated contributions to former 
 83.21  state employees and to the designated beneficiary, surviving 
 83.22  spouse, legal representative, or next of kin of deceased state 
 83.23  employees or deceased former state employees, as provided in 
 83.24  this chapter; 
 83.25     (10) determine the amount of the annuities and disability 
 83.26  benefits of employees covered by the system and authorize 
 83.27  payment of the annuities and benefits beginning as of the dates 
 83.28  on which the annuities and benefits begin to accrue, in 
 83.29  accordance with the provisions of this chapter; 
 83.30     (11) pay annuities, refunds, survivor benefits, salaries, 
 83.31  and necessary operating expenses of the system; 
 83.32     (12) certify funds available for investment to the state 
 83.33  board of investment; 
 83.34     (13) with the advice and approval of the board request the 
 83.35  state board of investment to sell securities when the director 
 83.36  determines that funds are needed for the system; 
 84.1      (14) prepare and submit to the board and the legislature an 
 84.2   annual financial report covering the operation of the system, as 
 84.3   required by section 356.20; 
 84.4      (15) prepare and submit biennial and annual budgets to the 
 84.5   board and with the approval of the board submit the budgets to 
 84.6   the department of finance; and 
 84.7      (16) with the approval of the board, perform other duties 
 84.8   required to administer the retirement and other provisions of 
 84.9   this chapter and to do its business. 
 84.10     Sec. 86.  Minnesota Statutes 1996, section 352.03, 
 84.11  subdivision 16, is amended to read: 
 84.12     Subd. 16.  [DATA PROCESSING SERVICES.] Notwithstanding 
 84.13  chapter 16B, or 16C or any law to the contrary, the executive 
 84.14  director of the system may use the services of the department of 
 84.15  administration, information services division, for electronic 
 84.16  data processing and related services or may contract for all or 
 84.17  a part of the services. 
 84.18     Sec. 87.  Minnesota Statutes 1997 Supplement, section 
 84.19  353.03, subdivision 3a, is amended to read: 
 84.20     Subd. 3a.  [EXECUTIVE DIRECTOR.] (a)  [APPOINTMENT.] The 
 84.21  board shall appoint, with the advice and consent of the senate, 
 84.22  an executive director on the basis of education, experience in 
 84.23  the retirement field, and leadership ability.  The executive 
 84.24  director shall have had at least five years' experience in an 
 84.25  executive level management position, which has included 
 84.26  responsibility for pensions, deferred compensation, or employee 
 84.27  benefits.  The executive director serves at the pleasure of the 
 84.28  board.  The salary of the executive director is as provided by 
 84.29  section 15A.0815. 
 84.30     (b)  [DUTIES.] The management of the association is vested 
 84.31  in the executive director who shall be the executive and 
 84.32  administrative head of the association.  The executive director 
 84.33  shall act as adviser to the board on all matters pertaining to 
 84.34  the association and shall also act as the secretary of the 
 84.35  board.  The executive director shall: 
 84.36     (1) attend all meetings of the board; 
 85.1      (2) prepare and recommend to the board appropriate rules to 
 85.2   carry out the provisions of this chapter; 
 85.3      (3) establish and maintain an adequate system of records 
 85.4   and accounts following recognized accounting principles and 
 85.5   controls; 
 85.6      (4) designate, with the approval of the board, up to two 
 85.7   persons who shall serve in the unclassified service and whose 
 85.8   salary is set in accordance with section 43A.18, subdivision 3, 
 85.9   appoint a confidential secretary in the unclassified service, 
 85.10  and appoint employees to carry out this chapter, who are subject 
 85.11  to chapters 43A and 179A in the same manner as are executive 
 85.12  branch employees; 
 85.13     (5) organize the work of the association as the director 
 85.14  deems necessary to fulfill the functions of the association, and 
 85.15  define the duties of its employees and delegate to them any 
 85.16  powers or duties, subject to the control of, and under such 
 85.17  conditions as, the executive director may prescribe; 
 85.18     (6) with the approval of the board, contract for the 
 85.19  services of an approved actuary, professional management 
 85.20  services, and any other consulting services as necessary to 
 85.21  fulfill the purposes of this chapter.  All contracts are subject 
 85.22  to chapter 16B 16C.  The commissioner of administration shall 
 85.23  not approve, and the association shall not enter into, any 
 85.24  contract to provide lobbying services or legislative advocacy of 
 85.25  any kind.  Any approved actuary retained by the executive 
 85.26  director shall function as the actuarial advisor of the board 
 85.27  and the executive director and may perform actuarial valuations 
 85.28  and experience studies to supplement those performed by the 
 85.29  actuary retained by the legislative commission on pensions and 
 85.30  retirement.  Any supplemental actuarial valuations or experience 
 85.31  studies shall be filed with the executive director of the 
 85.32  legislative commission on pensions and retirement.  Copies of 
 85.33  professional management survey reports shall be transmitted to 
 85.34  the secretary of the senate, the chief clerk of the house of 
 85.35  representatives, and the legislative reference library as 
 85.36  provided by section 3.195, to the executive director of the 
 86.1   commission and to the legislative auditor at the same time as 
 86.2   reports are furnished to the board.  Only management firms 
 86.3   experienced in conducting management surveys of federal, state, 
 86.4   or local public retirement systems shall be qualified to 
 86.5   contract with the director hereunder; 
 86.6      (7) with the approval of the board provide in-service 
 86.7   training for the employees of the association; 
 86.8      (8) make refunds of accumulated contributions to former 
 86.9   members and to the designated beneficiary, surviving spouse, 
 86.10  legal representative or next of kin of deceased members or 
 86.11  deceased former members, as provided in this chapter; 
 86.12     (9) determine the amount of the annuities and disability 
 86.13  benefits of members covered by the association and authorize 
 86.14  payment of the annuities and benefits beginning as of the dates 
 86.15  on which the annuities and benefits begin to accrue, in 
 86.16  accordance with the provisions of this chapter; 
 86.17     (10) pay annuities, refunds, survivor benefits, salaries, 
 86.18  and necessary operating expenses of the association; 
 86.19     (11) prepare and submit to the board and the legislature an 
 86.20  annual financial report covering the operation of the 
 86.21  association, as required by section 356.20; 
 86.22     (12) prepare and submit biennial and annual budgets to the 
 86.23  board for its approval and submit the approved budgets to the 
 86.24  department of finance for approval by the commissioner; 
 86.25     (13) reduce all or part of the accrued interest payable 
 86.26  under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 
 86.27  subdivision 5, upon receipt of proof by the association of an 
 86.28  unreasonable processing delay or other extenuating circumstances 
 86.29  of the employing unit.  The executive director shall prescribe 
 86.30  and submit for approval by the board the conditions under which 
 86.31  such interest may be reduced; and 
 86.32     (14) with the approval of the board, perform such other 
 86.33  duties as may be required for the administration of the 
 86.34  association and the other provisions of this chapter and for the 
 86.35  transaction of its business.  
 86.36     Sec. 88.  Minnesota Statutes 1996, section 354.06, 
 87.1   subdivision 2a, is amended to read: 
 87.2      Subd. 2a.  [DUTIES OF EXECUTIVE DIRECTOR.] The management 
 87.3   of the association is vested in the executive director who shall 
 87.4   be the executive and administrative head of the association.  
 87.5   The executive director shall act as advisor to the board on all 
 87.6   matters pertaining to the association and shall also act as the 
 87.7   secretary of the board.  The executive director shall: 
 87.8      (1) attend all meetings of the board; 
 87.9      (2) prepare and recommend to the board appropriate rules to 
 87.10  carry out the provisions of this chapter; 
 87.11     (3) establish and maintain an adequate system of records 
 87.12  and accounts following recognized accounting principles and 
 87.13  controls; 
 87.14     (4) designate an assistant executive director in the 
 87.15  unclassified service and two assistant executive directors in 
 87.16  the classified service with the approval of the board, and 
 87.17  appoint such employees, both permanent and temporary, as are 
 87.18  necessary to carry out the provisions of this chapter; 
 87.19     (5) organize the work of the association as the director 
 87.20  deems necessary to fulfill the functions of the association, and 
 87.21  define the duties of its employees and delegate to them any 
 87.22  powers or duties, subject to the director's control and under 
 87.23  such conditions as the director may prescribe; 
 87.24     (6) with the approval of the board, contract and set the 
 87.25  compensation for the services of an approved actuary, 
 87.26  professional management services, and any other consulting 
 87.27  services.  These contracts are not subject to the competitive 
 87.28  bidding procedure prescribed by chapter 16B 16C.  An approved 
 87.29  actuary retained by the executive director shall function as the 
 87.30  actuarial advisor of the board and the executive director and 
 87.31  may perform actuarial valuations and experience studies to 
 87.32  supplement those performed by the actuary retained by the 
 87.33  legislative commission on pensions and retirement.  Any 
 87.34  supplemental actuarial valuations or experience studies shall be 
 87.35  filed with the executive director of the legislative commission 
 87.36  on pensions and retirement.  Copies of professional management 
 88.1   survey reports must be transmitted to the secretary of the 
 88.2   senate, the chief clerk of the house of representatives, and the 
 88.3   legislative reference library as provided by section 3.195, to 
 88.4   the executive director of the commission and to the legislative 
 88.5   auditor at the same time as reports are furnished to the board.  
 88.6   Only management firms experienced in conducting management 
 88.7   surveys of federal, state, or local public retirement systems 
 88.8   are qualified to contract with the executive director; 
 88.9      (7) with the approval of the board, provide in-service 
 88.10  training for the employees of the association; 
 88.11     (8) make refunds of accumulated contributions to former 
 88.12  members and to the designated beneficiary, surviving spouse, 
 88.13  legal representative, or next of kin of deceased members or 
 88.14  deceased former members, under this chapter; 
 88.15     (9) determine the amount of the annuities and disability 
 88.16  benefits of members covered by the association and authorize 
 88.17  payment of the annuities and benefits beginning as of the dates 
 88.18  on which the annuities and benefits begin to accrue, under this 
 88.19  chapter; 
 88.20     (10) pay annuities, refunds, survivor benefits, salaries, 
 88.21  and necessary operating expenses of the association; 
 88.22     (11) prepare and submit to the board and the legislature an 
 88.23  annual financial report covering the operation of the 
 88.24  association, as required by section 356.20; 
 88.25     (12) certify funds available for investment to the state 
 88.26  board of investment; 
 88.27     (13) with the advice and approval of the board, request the 
 88.28  state board of investment to sell securities on determining that 
 88.29  funds are needed for the purposes of the association; 
 88.30     (14) prepare and submit biennial and annual budgets to the 
 88.31  board and with the approval of the board submit those budgets to 
 88.32  the department of finance; and 
 88.33     (15) with the approval of the board, perform such other 
 88.34  duties as may be required for the administration of the 
 88.35  association and the other provisions of this chapter and for the 
 88.36  transaction of its business.  The executive director may: 
 89.1      (i) reduce all or part of the accrued interest and fines 
 89.2   payable by an employing unit for reporting requirements under 
 89.3   section 354.52, based on an evaluation of any extenuating 
 89.4   circumstances of the employing unit; 
 89.5      (ii) assign association employees to conduct field audits 
 89.6   of an employing unit to ensure compliance with the provisions of 
 89.7   this chapter; and 
 89.8      (iii) recover overpayments, if not repaid to the 
 89.9   association, by suspending or reducing the payment of a 
 89.10  retirement annuity, refund, disability benefit, survivor 
 89.11  benefit, or optional annuity under this chapter until the 
 89.12  overpayment, plus interest, has been recovered. 
 89.13     Sec. 89.  Minnesota Statutes 1996, section 354.07, 
 89.14  subdivision 7, is amended to read: 
 89.15     Subd. 7.  Notwithstanding chapter 16B, or 16C or any law to 
 89.16  the contrary, the board may use the services of the department 
 89.17  of administration, information services division, for electronic 
 89.18  data processing and related services or may contract for all or 
 89.19  a portion of such services. 
 89.20     Sec. 90.  Minnesota Statutes 1996, section 356A.06, 
 89.21  subdivision 7, is amended to read: 
 89.22     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
 89.23  SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
 89.24  authorized by law or bylaws, a covered pension plan not 
 89.25  described by subdivision 6, paragraph (a), may invest its assets 
 89.26  only in accordance with this subdivision. 
 89.27     (b)  [SECURITIES GENERALLY.] The covered pension plan has 
 89.28  the authority to purchase, sell, lend, or exchange the 
 89.29  securities specified in paragraphs (c) to (g), including puts 
 89.30  and call options and future contracts traded on a contract 
 89.31  market regulated by a governmental agency or by a financial 
 89.32  institution regulated by a governmental agency.  These 
 89.33  securities may be owned as units in commingled trusts that own 
 89.34  the securities described in paragraphs (c) to (g).  
 89.35     (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
 89.36  invest funds in governmental bonds, notes, bills, mortgages, and 
 90.1   other evidences of indebtedness provided the issue is backed by 
 90.2   the full faith and credit of the issuer or the issue is rated 
 90.3   among the top four quality rating categories by a nationally 
 90.4   recognized rating agency.  The obligations in which funds may be 
 90.5   invested under this paragraph include guaranteed or insured 
 90.6   issues of (1) the United States, its agencies, its 
 90.7   instrumentalities, or organizations created and regulated by an 
 90.8   act of Congress; (2) Canada and its provinces, provided the 
 90.9   principal and interest is payable in United States dollars; (3) 
 90.10  the states and their municipalities, political subdivisions, 
 90.11  agencies, or instrumentalities; (4) the International Bank for 
 90.12  Reconstruction and Development, the Inter-American Development 
 90.13  Bank, the Asian Development Bank, the African Development Bank, 
 90.14  or any other United States government sponsored organization of 
 90.15  which the United States is a member, provided the principal and 
 90.16  interest is payable in United States dollars. 
 90.17     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
 90.18  invest funds in bonds, notes, debentures, transportation 
 90.19  equipment obligations, or any other longer term evidences of 
 90.20  indebtedness issued or guaranteed by a corporation organized 
 90.21  under the laws of the United States or any state thereof, or the 
 90.22  Dominion of Canada or any province thereof if they conform to 
 90.23  the following provisions: 
 90.24     (1) the principal and interest of obligations of 
 90.25  corporations incorporated or organized under the laws of the 
 90.26  Dominion of Canada or any province thereof must be payable in 
 90.27  United States dollars; and 
 90.28     (2) obligations must be rated among the top four quality 
 90.29  categories by a nationally recognized rating agency. 
 90.30     (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
 90.31  invest funds in bankers acceptances, certificates of deposit, 
 90.32  deposit notes, commercial paper, mortgage participation 
 90.33  certificates and pools, asset backed securities, repurchase 
 90.34  agreements and reverse repurchase agreements, guaranteed 
 90.35  investment contracts, savings accounts, and guaranty fund 
 90.36  certificates, surplus notes, or debentures of domestic mutual 
 91.1   insurance companies if they conform to the following provisions: 
 91.2      (i) bankers acceptances and deposit notes of United States 
 91.3   banks are limited to those issued by banks rated in the highest 
 91.4   four quality categories by a nationally recognized rating 
 91.5   agency; 
 91.6      (ii) certificates of deposit are limited to those issued by 
 91.7   (A) United States banks and savings institutions that are rated 
 91.8   in the highest four quality categories by a nationally 
 91.9   recognized rating agency or whose certificates of deposit are 
 91.10  fully insured by federal agencies; or (B) credit unions in 
 91.11  amounts up to the limit of insurance coverage provided by the 
 91.12  National Credit Union Administration; 
 91.13     (iii) commercial paper is limited to those issued by United 
 91.14  States corporations or their Canadian subsidiaries and rated in 
 91.15  the highest two quality categories by a nationally recognized 
 91.16  rating agency; 
 91.17     (iv) mortgage participation or pass through certificates 
 91.18  evidencing interests in pools of first mortgages or trust deeds 
 91.19  on improved real estate located in the United States where the 
 91.20  loan to value ratio for each loan as calculated in accordance 
 91.21  with section 61A.28, subdivision 3, does not exceed 80 percent 
 91.22  for fully amortizable residential properties and in all other 
 91.23  respects meets the requirements of section 61A.28, subdivision 
 91.24  3; 
 91.25     (v) collateral for repurchase agreements and reverse 
 91.26  repurchase agreements is limited to letters of credit and 
 91.27  securities authorized in this section; 
 91.28     (vi) guaranteed investment contracts are limited to those 
 91.29  issued by insurance companies or banks rated in the top four 
 91.30  quality categories by a nationally recognized rating agency or 
 91.31  to alternative guaranteed investment contracts where the 
 91.32  underlying assets comply with the requirements of this 
 91.33  subdivision; 
 91.34     (vii) savings accounts are limited to those fully insured 
 91.35  by federal agencies; and 
 91.36     (viii) asset backed securities must be rated in the top 
 92.1   four quality categories by a nationally recognized rating agency.
 92.2      (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 
 92.3   16C.06 do not apply to certificates of deposit and 
 92.4   collateralization agreements executed by the covered pension 
 92.5   plan under clause (1), item (ii). 
 92.6      (3) In addition to investments authorized by clause (1), 
 92.7   item (iv), the covered pension plan may purchase from the 
 92.8   Minnesota housing finance agency all or any part of a pool of 
 92.9   residential mortgages, not in default, that has previously been 
 92.10  financed by the issuance of bonds or notes of the agency.  The 
 92.11  covered pension plan may also enter into a commitment with the 
 92.12  agency, at the time of any issue of bonds or notes, to purchase 
 92.13  at a specified future date, not exceeding 12 years from the date 
 92.14  of the issue, the amount of mortgage loans then outstanding and 
 92.15  not in default that have been made or purchased from the 
 92.16  proceeds of the bonds or notes.  The covered pension plan may 
 92.17  charge reasonable fees for any such commitment and may agree to 
 92.18  purchase the mortgage loans at a price sufficient to produce a 
 92.19  yield to the covered pension plan comparable, in its judgment, 
 92.20  to the yield available on similar mortgage loans at the date of 
 92.21  the bonds or notes.  The covered pension plan may also enter 
 92.22  into agreements with the agency for the investment of any 
 92.23  portion of the funds of the agency.  The agreement must cover 
 92.24  the period of the investment, withdrawal privileges, and any 
 92.25  guaranteed rate of return. 
 92.26     (f)  [CORPORATE STOCKS.] The covered pension plan may 
 92.27  invest funds in stocks or convertible issues of any corporation 
 92.28  organized under the laws of the United States or the states 
 92.29  thereof, the Dominion of Canada or its provinces, or any 
 92.30  corporation listed on the New York Stock Exchange or the 
 92.31  American Stock Exchange, if they conform to the following 
 92.32  provisions: 
 92.33     (1) the aggregate value of corporate stock investments, as 
 92.34  adjusted for realized profits and losses, must not exceed 85 
 92.35  percent of the market or book value, whichever is less, of a 
 92.36  fund, less the aggregate value of investments according to 
 93.1   subdivision 6; 
 93.2      (2) investments must not exceed five percent of the total 
 93.3   outstanding shares of any one corporation. 
 93.4      (g)  [OTHER INVESTMENTS.] (1) In addition to the 
 93.5   investments authorized in paragraphs (b) to (f), and subject to 
 93.6   the provisions in clause (2), the covered pension plan may 
 93.7   invest funds in:  
 93.8      (i) venture capital investment businesses through 
 93.9   participation in limited partnerships and corporations; 
 93.10     (ii) real estate ownership interests or loans secured by 
 93.11  mortgages or deeds of trust through investment in limited 
 93.12  partnerships, bank sponsored collective funds, trusts, and 
 93.13  insurance company commingled accounts, including separate 
 93.14  accounts; 
 93.15     (iii) regional and mutual funds through bank sponsored 
 93.16  collective funds and open-end investment companies registered 
 93.17  under the Federal Investment Company Act of 1940; 
 93.18     (iv) resource investments through limited partnerships, 
 93.19  private placements, and corporations; and 
 93.20     (v) international securities. 
 93.21     (2) The investments authorized in clause (1) must conform 
 93.22  to the following provisions:  
 93.23     (i) the aggregate value of all investments made according 
 93.24  to clause (1) may not exceed 35 percent of the market value of 
 93.25  the fund for which the covered pension plan is investing; 
 93.26     (ii) there must be at least four unrelated owners of the 
 93.27  investment other than the state board for investments made under 
 93.28  clause (1), item (i), (ii), (iii), or (iv); 
 93.29     (iii) covered pension plan participation in an investment 
 93.30  vehicle is limited to 20 percent thereof for investments made 
 93.31  under clause (1), item (i), (ii), (iii), or (iv); and 
 93.32     (iv) covered pension plan participation in a limited 
 93.33  partnership does not include a general partnership interest or 
 93.34  other interest involving general liability.  The covered pension 
 93.35  plan may not engage in any activity as a limited partner which 
 93.36  creates general liability. 
 94.1      Sec. 91.  Minnesota Statutes 1996, section 446A.12, 
 94.2   subdivision 5, is amended to read: 
 94.3      Subd. 5.  [EXEMPTION.] The notes and bonds of the authority 
 94.4   are not subject to section 16B.06 sections 16C.03, subdivision 
 94.5   4, and 16C.06. 
 94.6      Sec. 92.  Minnesota Statutes 1996, section 462A.18, 
 94.7   subdivision 2, is amended to read: 
 94.8      Subd. 2.  [CONTRACTS AND SECURITY.] Notwithstanding the 
 94.9   provisions of this section, the agency shall have power to 
 94.10  contract with the holders of any of its notes or bonds, as to 
 94.11  the custody, collection, securing, investment, and payment of 
 94.12  any money of the agency, or any money held in trust or otherwise 
 94.13  for the payment of notes or bonds, and to carry out such 
 94.14  contract.  Money held in trust or otherwise for the payment of 
 94.15  notes or bonds or in any way to secure notes or bonds and 
 94.16  deposits of such money may be secured in the same manner as 
 94.17  money of the agency, and all banks and trust companies are 
 94.18  authorized to give such security for such deposits.  All money 
 94.19  so paid to the state treasurer as agent of the agency, from 
 94.20  whatever source, are appropriated to the agency.  The agency's 
 94.21  notes and bonds are not subject to section 16B.06 sections 
 94.22  16C.03, subdivision 4, and 16C.06.  
 94.23     Sec. 93.  Minnesota Statutes 1996, section 471.345, 
 94.24  subdivision 8, is amended to read: 
 94.25     Subd. 8.  [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 
 94.26  PERSONS.] For purposes of this subdivision, the following terms 
 94.27  shall have the meanings herein ascribed to them: 
 94.28     (a) "Small targeted group business" means businesses 
 94.29  designated under section 16B.19 16C.17.  
 94.30     (b) "Business entity" means an entity organized for profit, 
 94.31  including an individual, partnership, corporation, joint 
 94.32  venture, association, or cooperative.  
 94.33     Nothing in this section shall be construed to prohibit any 
 94.34  municipality from adopting a resolution, rule, regulation, or 
 94.35  ordinance which on an annual basis designates and sets aside for 
 94.36  awarding to small targeted group businesses a percentage of the 
 95.1   value of its anticipated total procurement of goods and 
 95.2   services, including construction, and which uses either a 
 95.3   negotiated price or bid contract procedure in the awarding of a 
 95.4   procurement contract under a set-aside program as allowed in 
 95.5   this subdivision, provided that any award based on a negotiated 
 95.6   price shall not exceed by more than five percent the 
 95.7   municipality's estimated price for the goods and services if 
 95.8   they were purchased on the open market and not under the 
 95.9   set-aside program. 
 95.10     Sec. 94.  Minnesota Statutes 1996, section 473.142, is 
 95.11  amended to read: 
 95.12     473.142 [SMALL BUSINESSES.] 
 95.13     (a) The metropolitan council and agencies specified in 
 95.14  section 473.143, subdivision 1, may award up to a six percent 
 95.15  preference in the amount bid for specified goods or services to 
 95.16  small targeted group businesses designated under section 16B.19 
 95.17  16C.17. 
 95.18     (b) The council and each agency specified in section 
 95.19  473.143, subdivision 1, may designate a purchase of goods or 
 95.20  services for award only to small targeted group businesses 
 95.21  designated under section 16B.19 16C.17 if the council or agency 
 95.22  determines that at least three small targeted group businesses 
 95.23  are likely to bid. 
 95.24     (c) The council and each agency specified in section 
 95.25  473.143, subdivision 1, as a condition of awarding a 
 95.26  construction contract or approving a contract for consultant, 
 95.27  professional, or technical services, may set goals that require 
 95.28  the prime contractor to subcontract a portion of the contract to 
 95.29  small targeted group businesses designated under section 16B.19 
 95.30  16C.17.  The council or agency must establish a procedure for 
 95.31  granting waivers from the subcontracting requirement when 
 95.32  qualified small targeted group businesses are not reasonably 
 95.33  available.  The council or agency may establish financial 
 95.34  incentives for prime contractors who exceed the goals for use of 
 95.35  subcontractors and financial penalties for prime contractors who 
 95.36  fail to meet goals under this paragraph.  The subcontracting 
 96.1   requirements of this paragraph do not apply to prime contractors 
 96.2   who are small targeted group businesses.  At least 75 percent of 
 96.3   the value of the subcontracts awarded to small targeted group 
 96.4   businesses under this paragraph must be performed by the 
 96.5   business to which the subcontract is awarded or by another small 
 96.6   targeted group business. 
 96.7      (d) The council and each agency listed in section 473.143, 
 96.8   subdivision 1, are encouraged to purchase from small targeted 
 96.9   group businesses designated under section 16B.19 16C.17 when 
 96.10  making purchases that are not subject to competitive bidding 
 96.11  procedures. 
 96.12     (e) The council and each agency may adopt rules to 
 96.13  implement this section. 
 96.14     (f) Each council or agency contract must require the prime 
 96.15  contractor to pay any subcontractor within ten days of the prime 
 96.16  contractor's receipt of payment from the council or agency for 
 96.17  undisputed services provided by the subcontractor.  The contract 
 96.18  must require the prime contractor to pay interest of 1-1/2 
 96.19  percent per month or any part of a month to the subcontractor on 
 96.20  any undisputed amount not paid on time to the subcontractor.  
 96.21  The minimum monthly interest penalty payment for an unpaid 
 96.22  balance of $100 or more is $10.  For an unpaid balance of less 
 96.23  than $100, the prime contractor shall pay the actual penalty due 
 96.24  to the subcontractor.  A subcontractor who prevails in a civil 
 96.25  action to collect interest penalties from a prime contractor 
 96.26  must be awarded its costs and disbursements, including attorney 
 96.27  fees, incurred in bringing the action. 
 96.28     (g) This section does not apply to procurement financed in 
 96.29  whole or in part with federal funds if the procurement is 
 96.30  subject to federal disadvantaged, minority, or women business 
 96.31  enterprise regulations.  The council and each agency shall 
 96.32  report to the commissioner of administration on compliance with 
 96.33  this section.  The information must be reported at the time and 
 96.34  in the manner requested by the commissioner. 
 96.35     Sec. 95.  Minnesota Statutes 1996, section 473.556, 
 96.36  subdivision 14, is amended to read: 
 97.1      Subd. 14.  [SMALL BUSINESS CONTRACTS.] In exercising its 
 97.2   powers to contract for the purchase of services, materials, 
 97.3   supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 
 97.4   10, the commission shall designate and set aside each fiscal 
 97.5   year for awarding to small businesses approximately ten percent 
 97.6   of the value of anticipated contracts and subcontracts of that 
 97.7   kind for that year, in the manner required of the commissioner 
 97.8   of administration for state procurement contracts pursuant to 
 97.9   sections 16B.19 to 16B.22 16C.17 to 16C.20.  The commission 
 97.10  shall follow the rules promulgated by the commissioner of 
 97.11  administration pursuant to section 16B.22 16C.20, and shall 
 97.12  submit reports of the kinds required of the commissioners of 
 97.13  administration and economic development by section 16B.21 16C.19.
 97.14     Sec. 96.  Minnesota Statutes 1996, section 480.09, 
 97.15  subdivision 1, is amended to read: 
 97.16     Subdivision 1.  The state library shall be maintained in 
 97.17  the capitol and shall be under the supervision of the justices 
 97.18  of the supreme court.  Notwithstanding chapter 16B 16C or any 
 97.19  other act inconsistent herewith or acts amendatory thereof or 
 97.20  supplementary thereto, they shall direct the purchases of books, 
 97.21  pamphlets, and documents therefor and the sales and exchanges 
 97.22  therefrom upon such terms and conditions as they may deem just 
 97.23  and proper.  They may authorize the transfer of books and 
 97.24  documents to the University of Minnesota or any department 
 97.25  thereof, or to any state agency.  They shall adopt rules for the 
 97.26  government of the library and the management of its affairs, and 
 97.27  prescribe penalties for the violation thereof.  
 97.28     Sec. 97.  Minnesota Statutes 1996, section 626.90, 
 97.29  subdivision 2, is amended to read: 
 97.30     Subd. 2.  [LAW ENFORCEMENT AGENCY.] (a) The band has the 
 97.31  powers of a law enforcement agency, as defined in section 
 97.32  626.84, subdivision 1, paragraph (h), if all of the requirements 
 97.33  of clauses (1) to (4) are met: 
 97.34     (1) the band agrees to be subject to liability for its 
 97.35  torts and those of its officers, employees, and agents acting 
 97.36  within the scope of their employment or duties arising out of a 
 98.1   law enforcement agency function conferred by this section, to 
 98.2   the same extent as a municipality under chapter 466, and the 
 98.3   band further agrees, notwithstanding section 16B.06 16C.06, 
 98.4   subdivision 6 7, to waive its sovereign immunity for purposes of 
 98.5   claims of this liability; 
 98.6      (2) the band files with the board of peace officer 
 98.7   standards and training a bond or certificate of insurance for 
 98.8   liability coverage for the maximum amounts set forth in section 
 98.9   466.04; 
 98.10     (3) the band files with the board of peace officer 
 98.11  standards and training a certificate of insurance for liability 
 98.12  of its law enforcement officers, employees, and agents for 
 98.13  lawsuits under the United States Constitution; and 
 98.14     (4) the band agrees to be subject to section 13.82 and any 
 98.15  other laws of the state relating to data practices of law 
 98.16  enforcement agencies. 
 98.17     (b) The band shall enter into mutual aid/cooperative 
 98.18  agreements with the Mille Lacs county sheriff under section 
 98.19  471.59 to define and regulate the provision of law enforcement 
 98.20  services under this section.  The agreements must define the 
 98.21  trust property involved in the joint powers agreement. 
 98.22     (c) The band shall have concurrent jurisdictional authority 
 98.23  under this section with the Mille Lacs county sheriff's 
 98.24  department only if the requirements of paragraph (a) are met and 
 98.25  under the following circumstances: 
 98.26     (1) over all persons in the geographical boundaries of the 
 98.27  property held by the United States in trust for the Mille Lacs 
 98.28  band or the Minnesota Chippewa tribe; 
 98.29     (2) over all Minnesota Chippewa tribal members within the 
 98.30  boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 
 98.31  Mille Lacs county, Minnesota; and 
 98.32     (3) concurrent jurisdiction over any person who commits or 
 98.33  attempts to commit a crime in the presence of an appointed band 
 98.34  peace officer within the boundaries of the Treaty of February 
 98.35  22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 
 98.36     Sec. 98.  Minnesota Statutes 1997 Supplement, section 
 99.1   626.91, subdivision 2, is amended to read: 
 99.2      Subd. 2.  [LAW ENFORCEMENT AGENCY.] (a) The community has 
 99.3   the powers of a law enforcement agency, as defined in section 
 99.4   626.84, subdivision 1, paragraph (h), if all of the requirements 
 99.5   of clauses (1) to (4) are met: 
 99.6      (1) the community agrees to be subject to liability for its 
 99.7   torts and those of its officers, employees, and agents acting 
 99.8   within the scope of their employment or duties arising out of 
 99.9   the law enforcement agency powers conferred by this section to 
 99.10  the same extent as a municipality under chapter 466, and the 
 99.11  community further agrees, notwithstanding section 16B.06 16C.06, 
 99.12  subdivision 6 7, to waive its sovereign immunity with respect to 
 99.13  claims arising from this liability; 
 99.14     (2) the community files with the board of peace officer 
 99.15  standards and training a bond or certificate of insurance for 
 99.16  liability coverage for the maximum amounts set forth in section 
 99.17  466.04; 
 99.18     (3) the community files with the board of peace officer 
 99.19  standards and training a certificate of insurance for liability 
 99.20  of its law enforcement officers, employees, and agents for 
 99.21  lawsuits under the United States Constitution; and 
 99.22     (4) the community agrees to be subject to section 13.82 and 
 99.23  any other laws of the state relating to data practices of law 
 99.24  enforcement agencies. 
 99.25     (b) The community shall enter into an agreement under 
 99.26  section 471.59 with the Redwood county sheriff to define and 
 99.27  regulate the provision of law enforcement services under this 
 99.28  section and to provide for mutual aid and cooperation.  The 
 99.29  agreement must identify and describe the trust property involved 
 99.30  in the agreement.  For purposes of entering into this agreement, 
 99.31  the community shall be considered a "governmental unit" as that 
 99.32  term is defined in section 471.59, subdivision 1. 
 99.33     Sec. 99.  [EFFECTIVE DATE.] 
 99.34     This article is effective July 1, 1998.