HF 715

2nd Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:28 p.m.

1.1A bill for an act 1.2relating to state government; authorizing preferences in state procurement and 1.3awarding of contracts for service-disabled veteran-owned small businesses; 1.4amending Minnesota Statutes 2008, sections 16C.16, by adding a subdivision; 1.516C.19; 16C.20; 161.321; 473.142. 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7    Section 1. Minnesota Statutes 2008, section 16C.16, is amended by adding a 1.8subdivision to read: 1.9     new text begin Subd. 6a. new text end new text begin Service-disabled veteran-owned small businesses. new text end new text begin (a) The new text end 1.10 new text begin commissioner shall award up to a six percent preference in the amount bid on state new text end 1.11 new text begin procurement to certified small businesses that are majority-owned and operated by new text end 1.12 new text begin veterans having service-connected disabilities, as determined by the United States new text end 1.13 new text begin Department of Veterans Affairs. new text end 1.14 new text begin (b) The purpose of this designation is to facilitate the transition of service-disabled new text end 1.15 new text begin veterans from military to civilian life, and to help compensate them for their sacrifices, new text end 1.16 new text begin including but not limited to their sacrifice of health and time, for the state and nation during new text end 1.17 new text begin their military service, as well as to enhance economic development within Minnesota. new text end 1.18 new text begin (c) For purposes of this section and section 16C.19, the following terms have the new text end 1.19 new text begin meanings given them: new text end 1.20 new text begin (1) "veteran" has the meaning given in section 197.447; and new text end 1.21 new text begin (2) "service-connected disability" has the meaning given in United States Code, title new text end 1.22 new text begin 38, section 101(16), as determined by the United States Department of Veterans Affairs. new text end 1.23 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2009, and applies to new text end 1.24 new text begin procurement contract bid solicitations issued on and after that date. new text end 2.1    Sec. 2. Minnesota Statutes 2008, section 16C.19, is amended to read: 2.216C.19 ELIGIBILITY; RULES. 2.3(a) A small business wishing to participate in the programs under section 16C.16, 2.4subdivisions 4 to 7 , must be certified by the commissioner. The commissioner shall adopt 2.5by rule standards and procedures for certifying that small businesses, small targeted group 2.6businesses, and small businesses located in economically disadvantaged areas are eligible 2.7to participate under the requirements of sections 16C.16 to 16C.21. The commissioner 2.8shall adopt by rule standards and procedures for hearing appeals and grievances and other 2.9rules necessary to carry out the duties set forth in sections 16C.16 to 16C.21. 2.10(b) The commissioner may make rules which exclude or limit the participation of 2.11nonmanufacturing business, including third-party lessors, brokers, franchises, jobbers, 2.12manufacturers' representatives, and others from eligibility under sections 16C.16 to 2.1316C.21 . 2.14(c) The commissioner may make rules that set time limits and other eligibility limits 2.15on business participation in programs under sections 16C.16 to 16C.21. 2.16 new text begin (d) Notwithstanding paragraph (c), for purposes of sections 16C.16 to 16C.21, a new text end 2.17 new text begin service-disabled veteran-owned small business, the principal place of business of which new text end 2.18 new text begin is in Minnesota, is certified if it has been verified by the United States Department of new text end 2.19 new text begin Veterans Affairs as being a service-disabled veteran-owned small business in accordance new text end 2.20 new text begin with Public Law 109-461 and Code of Federal Regulations, title 38, part 74. new text end 2.21 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2009, and applies to new text end 2.22 new text begin procurement contract bid solicitations issued on and after that date. new text end 2.23    Sec. 3. Minnesota Statutes 2008, section 16C.20, is amended to read: 2.2416C.20 CERTIFICATION. 2.25A business that is certified by the commissioner of administration as a small 2.26business, small targeted group business or new text begin , new text end a small business located in an economically 2.27disadvantaged area new text begin , or a service-disabled veteran-owned small business new text end is eligible to 2.28participate under the requirements of sections 137.31 and 161.321 and, if certified as a 2.29small business or new text begin , new text end small targeted group business, new text begin or service-disabled veteran-owned small new text end 2.30 new text begin business, new text end under section 473.142 without further certification by the contracting agency. 2.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2009, and applies to new text end 2.32 new text begin procurement contract bid solicitations issued on and after that date. new text end 3.1    Sec. 4. Minnesota Statutes 2008, section 161.321, is amended to read: 3.2161.321 SMALL BUSINESS CONTRACTS. 3.3    Subdivision 1. Definitions. For purposes of this section the following terms have 3.4the meanings given them, except where the context clearly indicates a different meaning is 3.5intended. 3.6(a) "Award" means the granting of a contract in accordance with all applicable laws 3.7and rules governing competitive bidding except as otherwise provided in this section. 3.8(b) "Contract" means an agreement entered into between a business entity and the 3.9state of Minnesota for the construction of transportation improvements. 3.10(c) "Subcontractor" means a business entity which enters into a legally binding 3.11agreement with another business entity which is a party to a contract as defined in 3.12paragraph (b). 3.13(d) "Targeted group business" means a business designated under section 16C.16, 3.14subdivision 5 . 3.15 new text begin (e) "Service-disabled veteran-owned small business" means a business designated new text end 3.16 new text begin under section 16C.16, subdivision 6a. new text end 3.17    Subd. 2. Small business set-asides. (a) The commissioner may award up to a six 3.18percent preference in the amount bid for specified construction work to small targeted 3.19group businesses new text begin and service-disabled veteran-owned small businesses new text end . 3.20(b) The commissioner may designate a contract for construction work for award only 3.21to small targeted group businesses if the commissioner determines that at least three small 3.22targeted group businesses are likely to bid. new text begin The commissioner may designate a contract new text end 3.23 new text begin for construction work for award only to service-disabled veteran-owned small businesses new text end 3.24 new text begin if the commissioner determines that at least three service-disabled veteran-owned small new text end 3.25 new text begin businesses are likely to bid. new text end 3.26(c) The commissioner, as a condition of awarding a construction contract, may set 3.27goals that require the prime contractor to subcontract a portion of the contract to small 3.28targeted group businesses new text begin and service-disabled veteran-owned small businesses new text end . The 3.29commissioner must establish a procedure for granting waivers from the subcontracting 3.30requirement when qualified small targeted group businesses new text begin and service-disabled new text end 3.31 new text begin veteran-owned small businesses new text end are not reasonably available. The commissioner may 3.32establish financial incentives for prime contractors who exceed the goals for use of 3.33subcontractors and financial penalties for prime contractors who fail to meet goals under 3.34this paragraph. The subcontracting requirements of this paragraph do not apply to prime 3.35contractors who are small targeted group businesses new text begin or service-disabled veteran-owned new text end 3.36 new text begin small businesses new text end . 4.1(d) The commissioner may award up to a four percent preference in the amount bid 4.2on procurement to small businesses located in an economically disadvantaged area as 4.3defined in section 16C.16, subdivision 7. 4.4    Subd. 3. Awards to small businesses. At least 75 percent of subcontracts awarded 4.5to small targeted group businesses must be performed by the business to which the 4.6subcontract is awarded or another small targeted group business. new text begin At least 75 percent new text end 4.7 new text begin of subcontracts awarded to service-disabled veteran-owned small businesses must be new text end 4.8 new text begin performed by the business to which the subcontract is awarded or another service-disabled new text end 4.9 new text begin veteran-owned small business. new text end 4.10    Subd. 4. Awards, limitations. Contracts awarded pursuant to this section are 4.11subject to all limitations contained in rules adopted by the commissioner of administration. 4.12    Subd. 5. Recourse to other businesses. If the commissioner is unable to award 4.13a contract pursuant to the provisions of subdivisions 2 and 3, the award may be placed 4.14pursuant to the normal solicitation and award provisions set forth in this chapter and 4.15chapter 16C. 4.16    Subd. 6. Rules. The rules adopted by the commissioner of administration to define 4.17small businesses and to set time and other eligibility requirements for participation in 4.18programs under sections 16C.16 to 16C.19 apply to this section. The commissioner may 4.19promulgate other rules necessary to carry out this section. 4.20    Subd. 7. Noncompetitive bids. The commissioner is encouraged to purchase from 4.21small targeted group businesses new text begin and service-disabled veteran-owned small businesses new text end 4.22designated under section 16C.16 when making purchases that are not subject to 4.23competitive bidding procedures. 4.24    Subd. 8. Report by commissioner. The commissioner of transportation shall report 4.25to the commissioner of administration on compliance with this section. The information 4.26must be reported at the time and in the manner requested by the commissioner. 4.27 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2009, and applies to new text end 4.28 new text begin procurement contract bid solicitations issued on and after that date. new text end 4.29    Sec. 5. Minnesota Statutes 2008, section 473.142, is amended to read: 4.30473.142 SMALL BUSINESSES. 4.31(a) The Metropolitan Council and agencies specified in section 473.143, subdivision 4.321 , may award up to a six percent preference in the amount bid for specified goods or 4.33services to small targeted group businesses new text begin and service-disabled veteran-owned small new text end 4.34 new text begin businesses new text end designated under section 16C.16. 5.1(b) The council and each agency specified in section 473.143, subdivision 1, 5.2may designate a purchase of goods or services for award only to small targeted group 5.3businesses designated under section 16C.16 if the council or agency determines that at 5.4least three small targeted group businesses are likely to bid. new text begin The council and each agency new text end 5.5 new text begin specified in section 473.143, subdivision 1, may designate a purchase of goods or services new text end 5.6 new text begin for award only to service-disabled veteran-owned small businesses designated under new text end 5.7 new text begin section 16C.16 if the council or agency determines that at least three service-disabled new text end 5.8 new text begin veteran-owned small businesses are likely to bid. new text end 5.9(c) The council and each agency specified in section 473.143, subdivision 1, as a 5.10condition of awarding a construction contract or approving a contract for consultant, 5.11professional, or technical services, may set goals that require the prime contractor 5.12to subcontract a portion of the contract to small targeted group businesses new text begin and new text end 5.13 new text begin service-disabled veteran-owned small businesses new text end designated under section 16C.16. The 5.14council or agency must establish a procedure for granting waivers from the subcontracting 5.15requirement when qualified small targeted group businesses new text begin and service-disabled new text end 5.16 new text begin veteran-owned small businesses new text end are not reasonably available. The council or agency 5.17may establish financial incentives for prime contractors who exceed the goals for use of 5.18subcontractors and financial penalties for prime contractors who fail to meet goals under 5.19this paragraph. The subcontracting requirements of this paragraph do not apply to prime 5.20contractors who are small targeted group businesses new text begin and service-disabled veteran-owned new text end 5.21 new text begin small businesses new text end . At least 75 percent of the value of the subcontracts awarded to small 5.22targeted group businesses under this paragraph must be performed by the business to 5.23which the subcontract is awarded or by another small targeted group business. new text begin At least new text end 5.24 new text begin 75 percent of the value of the subcontracts awarded to service-disabled veteran-owned new text end 5.25 new text begin small businesses under this paragraph must be performed by the business to which the new text end 5.26 new text begin subcontract is awarded or another service-disabled veteran-owned small business. new text end 5.27(d) The council and each agency listed in section 473.143, subdivision 1, are 5.28encouraged to purchase from small targeted group businesses new text begin and service-disabled new text end 5.29 new text begin veteran-owned small businesses new text end designated under section 16C.16 when making purchases 5.30that are not subject to competitive bidding procedures. 5.31(e) The council and each agency may adopt rules to implement this section. 5.32(f) Each council or agency contract must require the prime contractor to pay any 5.33subcontractor within ten days of the prime contractor's receipt of payment from the 5.34council or agency for undisputed services provided by the subcontractor. The contract 5.35must require the prime contractor to pay interest of 1-1/2 percent per month or any 5.36part of a month to the subcontractor on any undisputed amount not paid on time to the 6.1subcontractor. The minimum monthly interest penalty payment for an unpaid balance of 6.2$100 or more is $10. For an unpaid balance of less than $100, the prime contractor shall 6.3pay the actual penalty due to the subcontractor. A subcontractor who prevails in a civil 6.4action to collect interest penalties from a prime contractor must be awarded its costs and 6.5disbursements, including attorney fees, incurred in bringing the action. 6.6(g) This section does not apply to procurement financed in whole or in part 6.7with federal funds if the procurement is subject to federal disadvantaged, minority, or 6.8women business enterprise regulations. The council and each agency shall report to the 6.9commissioner of administration on compliance with this section. The information must be 6.10reported at the time and in the manner requested by the commissioner. 6.11 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2009, and applies to new text end 6.12 new text begin procurement contract bid solicitations issued on and after that date. new text end