<a id="pl.1.3"></a><var>1.3</var>awarding of contracts for service-disabled veteran-owned small businesses;<br/>
<a id="pl.1.4"></a><var>1.4</var>amending Minnesota Statutes 2008, sections 16C.16, by adding a subdivision; <br/>
<a id="pl.1.5"></a><var>1.5</var>16C.19; 16C.20; 161.321; 473.142.<br/>
<a id="pl.1.6"></a><var>1.6</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.7"></a><var>1.7</var>    Section 1. Minnesota Statutes 2008, section 16C.16, is amended by adding a <br/>
<a id="pl.1.8"></a><var>1.8</var>subdivision to read:<br/>
<a id="pl.1.9"></a><var>1.9</var>    Subd. 6a. <b>Service-disabled veteran-owned small businesses.</b> (a) The <br/>
<a id="pl.1.10"></a><var>1.10</var>commissioner shall award up to a six percent preference in the amount bid on state <br/>
<a id="pl.1.11"></a><var>1.11</var>procurement to certified small businesses that are majority-owned and operated by <br/>
<a id="pl.1.12"></a><var>1.12</var>veterans having service-connected disabilities, as determined by the United States <br/>
<a id="pl.1.13"></a><var>1.13</var>Department of Veterans Affairs.<br/>
<a id="pl.1.14"></a><var>1.14</var>(b) The purpose of this designation is to facilitate the transition of service-disabled <br/>
<a id="pl.1.15"></a><var>1.15</var>veterans from military to civilian life, and to help compensate them for their sacrifices, <br/>
<a id="pl.1.16"></a><var>1.16</var>including but not limited to their sacrifice of health and time, for the state and nation during <br/>
<a id="pl.1.17"></a><var>1.17</var>their military service, as well as to enhance economic development within Minnesota.<br/>
<a id="pl.1.18"></a><var>1.18</var>(c) For purposes of this section and section 16C.19, the following terms have the <br/>
<a id="pl.1.19"></a><var>1.19</var>meanings given them:<br/>
<a id="pl.1.20"></a><var>1.20</var>(1) "veteran" has the meaning given in section 197.447; and<br/>
<a id="pl.1.21"></a><var>1.21</var>(2) "service-connected disability" has the meaning given in United States Code, title <br/>
<a id="pl.1.22"></a><var>1.22</var>38, section 101(16), as determined by the United States Department of Veterans Affairs.<br/>
<a id="pl.1.23"></a><var>1.23</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2009, and applies to <br/>
<a id="pl.1.24"></a><var>1.24</var>procurement contract bid solicitations issued on and after that date.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.1"></a><var>2.1</var>    Sec. 2. Minnesota Statutes 2008, section 16C.19, is amended to read:<br/>
<a id="pl.2.2"></a><var>2.2</var><b>16C.19 ELIGIBILITY; RULES.</b><br/>
<a id="pl.2.3"></a><var>2.3</var>(a) A small business wishing to participate in the programs under section 
         <statute_ref>16C.16, <br/>
<a id="pl.2.4"></a><var>2.4</var>subdivisions 4 to 7
         </statute_ref>, must be certified by the commissioner. The commissioner shall adopt <br/>
<a id="pl.2.5"></a><var>2.5</var>by rule standards and procedures for certifying that small businesses, small targeted group <br/>
<a id="pl.2.6"></a><var>2.6</var>businesses, and small businesses located in economically disadvantaged areas are eligible <br/>
<a id="pl.2.7"></a><var>2.7</var>to participate under the requirements of sections 
         <statute_ref>16C.16</statute_ref> to 
         <statute_ref>16C.21</statute_ref>. The commissioner <br/>
<a id="pl.2.8"></a><var>2.8</var>shall adopt by rule standards and procedures for hearing appeals and grievances and other <br/>
<a id="pl.2.9"></a><var>2.9</var>rules necessary to carry out the duties set forth in sections 
         <statute_ref>16C.16</statute_ref> to 
         <statute_ref>16C.21</statute_ref>.  <br/>
<a id="pl.2.10"></a><var>2.10</var>(b) The commissioner may make rules which exclude or limit the participation of <br/>
<a id="pl.2.11"></a><var>2.11</var>nonmanufacturing business, including third-party lessors, brokers, franchises, jobbers, <br/>
<a id="pl.2.12"></a><var>2.12</var>manufacturers' representatives, and others from eligibility under sections 
         <statute_ref>16C.16</statute_ref> to <br/>
<statute_ref><a id="pl.2.13"></a><var>2.13</var>16C.21
         </statute_ref>.  <br/>
<a id="pl.2.14"></a><var>2.14</var>(c) The commissioner may make rules that set time limits and other eligibility limits <br/>
<a id="pl.2.15"></a><var>2.15</var>on business participation in programs under sections 
         <statute_ref>16C.16</statute_ref> to 
         <statute_ref>16C.21</statute_ref>.  <br/>
<a id="pl.2.16"></a><var>2.16</var>(d) Notwithstanding paragraph (c), for purposes of sections 16C.16 to 16C.21, a <br/>
<a id="pl.2.17"></a><var>2.17</var>service-disabled veteran-owned small business, the principal place of business of which <br/>
<a id="pl.2.18"></a><var>2.18</var>is in Minnesota, is certified if it has been verified by the United States Department of <br/>
<a id="pl.2.19"></a><var>2.19</var>Veterans Affairs as being a service-disabled veteran-owned small business in accordance <br/>
<a id="pl.2.20"></a><var>2.20</var>with Public Law 109-461 and Code of Federal Regulations, title 38, part 74.<br/>
<a id="pl.2.21"></a><var>2.21</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2009, and applies to <br/>
<a id="pl.2.22"></a><var>2.22</var>procurement contract bid solicitations issued on and after that date.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.2.23"></a><var>2.23</var>    Sec. 3. Minnesota Statutes 2008, section 16C.20, is amended to read:<br/>
<a id="pl.2.24"></a><var>2.24</var><b>16C.20 CERTIFICATION.</b><br/>
<a id="pl.2.25"></a><var>2.25</var>A business that is certified by the commissioner of administration as a small <br/>
<a id="pl.2.26"></a><var>2.26</var>business, small targeted group business or, a small business located in an economically <br/>
<a id="pl.2.27"></a><var>2.27</var>disadvantaged area, or a service-disabled veteran-owned small business is eligible to <br/>
<a id="pl.2.28"></a><var>2.28</var>participate under the requirements of sections 
         <statute_ref>137.31</statute_ref> and 
         <statute_ref>161.321</statute_ref> and, if certified as a <br/>
<a id="pl.2.29"></a><var>2.29</var>small business or, small targeted group business, or service-disabled veteran-owned small <br/>
<a id="pl.2.30"></a><var>2.30</var>business, under section 
         <statute_ref>473.142</statute_ref> without further certification by the contracting agency.  <br/>
<a id="pl.2.31"></a><var>2.31</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2009, and applies to <br/>
<a id="pl.2.32"></a><var>2.32</var>procurement contract bid solicitations issued on and after that date.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.3.1"></a><var>3.1</var>    Sec. 4. Minnesota Statutes 2008, section 161.321, is amended to read:<br/>
<a id="pl.3.2"></a><var>3.2</var><b>161.321 SMALL BUSINESS CONTRACTS.</b><br/>
<a id="pl.3.3"></a><var>3.3</var>    Subdivision 1. <b>Definitions.</b> For purposes of this section the following terms have <br/>
<a id="pl.3.4"></a><var>3.4</var>the meanings given them, except where the context clearly indicates a different meaning is <br/>
<a id="pl.3.5"></a><var>3.5</var>intended.<br/>
<a id="pl.3.6"></a><var>3.6</var>(a) "Award" means the granting of a contract in accordance with all applicable laws <br/>
<a id="pl.3.7"></a><var>3.7</var>and rules governing competitive bidding except as otherwise provided in this section.<br/>
<a id="pl.3.8"></a><var>3.8</var>(b) "Contract" means an agreement entered into between a business entity and the <br/>
<a id="pl.3.9"></a><var>3.9</var>state of Minnesota for the construction of transportation improvements.<br/>
<a id="pl.3.10"></a><var>3.10</var>(c) "Subcontractor" means a business entity which enters into a legally binding <br/>
<a id="pl.3.11"></a><var>3.11</var>agreement with another business entity which is a party to a contract as defined in <br/>
<a id="pl.3.12"></a><var>3.12</var>paragraph (b).<br/>
<a id="pl.3.13"></a><var>3.13</var>(d) "Targeted group business" means a business designated under section 
         <statute_ref>16C.16, <br/>
<a id="pl.3.14"></a><var>3.14</var>subdivision 5
         </statute_ref>.  <br/>
<a id="pl.3.15"></a><var>3.15</var>(e) "Service-disabled veteran-owned small business" means a business designated <br/>
<a id="pl.3.16"></a><var>3.16</var>under section 16C.16, subdivision 6a.<br/>
<a id="pl.3.17"></a><var>3.17</var>    Subd. 2. <b>Small business set-asides.</b> (a) The commissioner may award up to a six <br/>
<a id="pl.3.18"></a><var>3.18</var>percent preference in the amount bid for specified construction work to small targeted <br/>
<a id="pl.3.19"></a><var>3.19</var>group businesses and service-disabled veteran-owned small businesses.<br/>
<a id="pl.3.20"></a><var>3.20</var>(b) The commissioner may designate a contract for construction work for award only <br/>
<a id="pl.3.21"></a><var>3.21</var>to small targeted group businesses if the commissioner determines that at least three small <br/>
<a id="pl.3.22"></a><var>3.22</var>targeted group businesses are likely to bid. The commissioner may designate a contract <br/>
<a id="pl.3.23"></a><var>3.23</var>for construction work for award only to service-disabled veteran-owned small businesses <br/>
<a id="pl.3.24"></a><var>3.24</var>if the commissioner determines that at least three service-disabled veteran-owned small <br/>
<a id="pl.3.25"></a><var>3.25</var>businesses are likely to bid.<br/>
<a id="pl.3.26"></a><var>3.26</var>(c) The commissioner, as a condition of awarding a construction contract, may set <br/>
<a id="pl.3.27"></a><var>3.27</var>goals that require the prime contractor to subcontract a portion of the contract to small <br/>
<a id="pl.3.28"></a><var>3.28</var>targeted group businesses and service-disabled veteran-owned small businesses. The <br/>
<a id="pl.3.29"></a><var>3.29</var>commissioner must establish a procedure for granting waivers from the subcontracting <br/>
<a id="pl.3.30"></a><var>3.30</var>requirement when qualified small targeted group businesses and  service-disabled <br/>
<a id="pl.3.31"></a><var>3.31</var>veteran-owned small businesses are not reasonably available. The commissioner may <br/>
<a id="pl.3.32"></a><var>3.32</var>establish financial incentives for prime contractors who exceed the goals for use of <br/>
<a id="pl.3.33"></a><var>3.33</var>subcontractors and financial penalties for prime contractors who fail to meet goals under <br/>
<a id="pl.3.34"></a><var>3.34</var>this paragraph. The subcontracting requirements of this paragraph do not apply to prime <br/>
<a id="pl.3.35"></a><var>3.35</var>contractors who are small targeted group businesses or service-disabled veteran-owned <br/>
<a id="pl.3.36"></a><var>3.36</var>small businesses.<br/>
<a id="pl.4.1"></a><var>4.1</var>(d) The commissioner may award up to a four percent preference in the amount bid <br/>
<a id="pl.4.2"></a><var>4.2</var>on procurement to small businesses located in an economically disadvantaged area as <br/>
<a id="pl.4.3"></a><var>4.3</var>defined in section 
         <statute_ref>16C.16, subdivision 7</statute_ref>.  <br/>
<a id="pl.4.4"></a><var>4.4</var>    Subd. 3. <b>Awards to small businesses.</b> At least 75 percent of subcontracts awarded <br/>
<a id="pl.4.5"></a><var>4.5</var>to small targeted group businesses must be performed by the business to which the <br/>
<a id="pl.4.6"></a><var>4.6</var>subcontract is awarded or another small targeted group business. At least 75 percent <br/>
<a id="pl.4.7"></a><var>4.7</var>of subcontracts awarded to service-disabled veteran-owned small businesses must be <br/>
<a id="pl.4.8"></a><var>4.8</var>performed by the business to which the subcontract is awarded or another service-disabled <br/>
<a id="pl.4.9"></a><var>4.9</var>veteran-owned small business.<br/>
<a id="pl.4.10"></a><var>4.10</var>    Subd. 4. <b>Awards, limitations.</b> Contracts awarded pursuant to this section are <br/>
<a id="pl.4.11"></a><var>4.11</var>subject to all limitations contained in rules adopted by the commissioner of administration.<br/>
<a id="pl.4.12"></a><var>4.12</var>    Subd. 5. <b>Recourse to other businesses.</b> If the commissioner is unable to award <br/>
<a id="pl.4.13"></a><var>4.13</var>a contract pursuant to the provisions of subdivisions 2 and 3, the award may be placed <br/>
<a id="pl.4.14"></a><var>4.14</var>pursuant to the normal solicitation and award provisions set forth in this chapter and <br/>
<a id="pl.4.15"></a><var>4.15</var>chapter 16C.<br/>
<a id="pl.4.16"></a><var>4.16</var>    Subd. 6. <b>Rules.</b> The rules adopted by the commissioner of administration to define <br/>
<a id="pl.4.17"></a><var>4.17</var>small businesses and to set time and other eligibility requirements for participation in <br/>
<a id="pl.4.18"></a><var>4.18</var>programs under sections 
         <statute_ref>16C.16</statute_ref> to 
         <statute_ref>16C.19</statute_ref> apply to this section. The commissioner may <br/>
<a id="pl.4.19"></a><var>4.19</var>promulgate other rules necessary to carry out this section.  <br/>
<a id="pl.4.20"></a><var>4.20</var>    Subd. 7. <b>Noncompetitive bids.</b> The commissioner is encouraged to purchase from <br/>
<a id="pl.4.21"></a><var>4.21</var>small targeted group businesses and service-disabled veteran-owned small businesses <br/>
<a id="pl.4.22"></a><var>4.22</var>designated under section 
         <statute_ref>16C.16</statute_ref> when making purchases that are not subject to <br/>
<a id="pl.4.23"></a><var>4.23</var>competitive bidding procedures.  <br/>
<a id="pl.4.24"></a><var>4.24</var>    Subd. 8. <b>Report by commissioner.</b> The commissioner of transportation shall report <br/>
<a id="pl.4.25"></a><var>4.25</var>to the commissioner of administration on compliance with this section. The information <br/>
<a id="pl.4.26"></a><var>4.26</var>must be reported at the time and in the manner requested by the commissioner.<br/>
<a id="pl.4.27"></a><var>4.27</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2009, and applies to <br/>
<a id="pl.4.28"></a><var>4.28</var>procurement contract bid solicitations issued on and after that date.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.4.29"></a><var>4.29</var>    Sec. 5. Minnesota Statutes 2008, section 473.142, is amended to read:<br/>
<a id="pl.4.30"></a><var>4.30</var><b>473.142 SMALL BUSINESSES.</b><br/>
<a id="pl.4.31"></a><var>4.31</var>(a) The Metropolitan Council and agencies specified in section 
         <statute_ref>473.143, subdivision <br/>
<a id="pl.4.32"></a><var>4.32</var>1
         </statute_ref>, may award up to a six percent preference in the amount bid for specified goods or <br/>
<a id="pl.4.33"></a><var>4.33</var>services to small targeted group businesses and service-disabled veteran-owned small <br/>
<a id="pl.4.34"></a><var>4.34</var>businesses designated under section 
         <statute_ref>16C.16</statute_ref>.  <br/>
<a id="pl.5.1"></a><var>5.1</var>(b) The council and each agency specified in section 
         <statute_ref>473.143, subdivision 1</statute_ref>, <br/>
<a id="pl.5.2"></a><var>5.2</var>may designate a purchase of goods or services for award only to small targeted group <br/>
<a id="pl.5.3"></a><var>5.3</var>businesses designated under section 
         <statute_ref>16C.16</statute_ref> if the council or agency determines that at <br/>
<a id="pl.5.4"></a><var>5.4</var>least three small targeted group businesses are likely to bid. The council and each agency <br/>
<a id="pl.5.5"></a><var>5.5</var>specified in section 473.143, subdivision 1, may designate a purchase of goods or services <br/>
<a id="pl.5.6"></a><var>5.6</var>for award only to service-disabled veteran-owned small businesses designated under <br/>
<a id="pl.5.7"></a><var>5.7</var>section 16C.16 if the council or agency determines that at least three service-disabled <br/>
<a id="pl.5.8"></a><var>5.8</var>veteran-owned small businesses are likely to bid. <br/>
<a id="pl.5.9"></a><var>5.9</var>(c) The council and each agency specified in section 
         <statute_ref>473.143, subdivision 1</statute_ref>, as a <br/>
<a id="pl.5.10"></a><var>5.10</var>condition of awarding a construction contract or approving a contract for consultant, <br/>
<a id="pl.5.11"></a><var>5.11</var>professional, or technical services, may set goals that require the prime contractor <br/>
<a id="pl.5.12"></a><var>5.12</var>to subcontract a portion of the contract to small targeted group businesses and <br/>
<a id="pl.5.13"></a><var>5.13</var>service-disabled veteran-owned small businesses designated under section 
         <statute_ref>16C.16</statute_ref>. The <br/>
<a id="pl.5.14"></a><var>5.14</var>council or agency must establish a procedure for granting waivers from the subcontracting <br/>
<a id="pl.5.15"></a><var>5.15</var>requirement when qualified small targeted group businesses and service-disabled <br/>
<a id="pl.5.16"></a><var>5.16</var>veteran-owned small businesses are not reasonably available. The council or agency <br/>
<a id="pl.5.17"></a><var>5.17</var>may establish financial incentives for prime contractors who exceed the goals for use of <br/>
<a id="pl.5.18"></a><var>5.18</var>subcontractors and financial penalties for prime contractors who fail to meet goals under <br/>
<a id="pl.5.19"></a><var>5.19</var>this paragraph. The subcontracting requirements of this paragraph do not apply to prime <br/>
<a id="pl.5.20"></a><var>5.20</var>contractors who are small targeted group businesses and service-disabled veteran-owned <br/>
<a id="pl.5.21"></a><var>5.21</var>small businesses. At least 75 percent of the value of the subcontracts awarded to small <br/>
<a id="pl.5.22"></a><var>5.22</var>targeted group businesses under this paragraph must be performed by the business to <br/>
<a id="pl.5.23"></a><var>5.23</var>which the subcontract is awarded or by another small targeted group business. At least <br/>
<a id="pl.5.24"></a><var>5.24</var>75 percent of the value of the subcontracts awarded to service-disabled veteran-owned <br/>
<a id="pl.5.25"></a><var>5.25</var>small businesses under this paragraph must be performed by the business to which the <br/>
<a id="pl.5.26"></a><var>5.26</var>subcontract is awarded or another service-disabled veteran-owned small business. <br/>
<a id="pl.5.27"></a><var>5.27</var>(d) The council and each agency listed in section 
         <statute_ref>473.143, subdivision 1</statute_ref>, are <br/>
<a id="pl.5.28"></a><var>5.28</var>encouraged to purchase from small targeted group businesses and service-disabled <br/>
<a id="pl.5.29"></a><var>5.29</var>veteran-owned small businesses designated under section 
         <statute_ref>16C.16</statute_ref> when making purchases <br/>
<a id="pl.5.30"></a><var>5.30</var>that are not subject to competitive bidding procedures.  <br/>
<a id="pl.5.31"></a><var>5.31</var>(e) The council and each agency may adopt rules to implement this section.<br/>
<a id="pl.5.32"></a><var>5.32</var>(f) Each council or agency contract must require the prime contractor to pay any <br/>
<a id="pl.5.33"></a><var>5.33</var>subcontractor within ten days of the prime contractor's receipt of payment from the <br/>
<a id="pl.5.34"></a><var>5.34</var>council or agency for undisputed services provided by the subcontractor. The contract <br/>
<a id="pl.5.35"></a><var>5.35</var>must require the prime contractor to pay interest of 1-1/2 percent per month or any <br/>
<a id="pl.5.36"></a><var>5.36</var>part of a month to the subcontractor on any undisputed amount not paid on time to the <br/>
<a id="pl.6.1"></a><var>6.1</var>subcontractor. The minimum monthly interest penalty payment for an unpaid balance of <br/>
<a id="pl.6.2"></a><var>6.2</var>$100 or more is $10. For an unpaid balance of less than $100, the prime contractor shall <br/>
<a id="pl.6.3"></a><var>6.3</var>pay the actual penalty due to the subcontractor. A subcontractor who prevails in a civil <br/>
<a id="pl.6.4"></a><var>6.4</var>action to collect interest penalties from a prime contractor must be awarded its costs and <br/>
<a id="pl.6.5"></a><var>6.5</var>disbursements, including attorney fees, incurred in bringing the action.<br/>
<a id="pl.6.6"></a><var>6.6</var>(g) This section does not apply to procurement financed in whole or in part <br/>
<a id="pl.6.7"></a><var>6.7</var>with federal funds if the procurement is subject to federal disadvantaged, minority, or <br/>
<a id="pl.6.8"></a><var>6.8</var>women business enterprise regulations. The council and each agency shall report to the <br/>
<a id="pl.6.9"></a><var>6.9</var>commissioner of administration on compliance with this section. The information must be <br/>
<a id="pl.6.10"></a><var>6.10</var>reported at the time and in the manner requested by the commissioner.<br/>
<a id="pl.6.11"></a><var>6.11</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2009, and applies to <br/>
<a id="pl.6.12"></a><var>6.12</var>procurement contract bid solicitations issued on and after that date.<br/>