SF 2038

Introduction - 94th Legislature (2025 - 2026)

Posted on 11/05/2025 01:59 p.m.

A bill for an act
relating to Metropolitan Council; expanding application of small business programs;
authorizing direct negotiation of certain contracts; amending Minnesota Statutes
2024, sections 473.129, by adding a subdivision; 473.142; 473.1425.

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

Section 1.

Minnesota Statutes 2024, section 473.129, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Direct negotiation. new text end

new text begin Notwithstanding section 471.345, if the estimated total
contractual obligation of the council for a directly negotiated contract or contracts for
construction work or maintenance work on any single project does not exceed the amount
in section 161.32, subdivision 2, the council may enter into a contract by direct negotiation
by obtaining two or more quotations for the work without advertising for bids or otherwise
complying with the requirements of competitive bidding.
new text end

Sec. 2.

Minnesota Statutes 2024, section 473.142, is amended to read:

473.142 SMALL BUSINESSES.

(a) The Metropolitan Council and agencies specified in section 473.143, subdivision 1,
may award deleted text begin up to deleted text end a deleted text begin six percent deleted text end preference deleted text begin in the amount bid deleted text end new text begin up to the percentage under
section 16C.16, subdivision 6, paragraph (a), new text end for specified goods or services to small targeted
group businesses and veteran-owned small businesses designated under section 16C.16. new text begin
The council and each agency specified in section 473.143, subdivision 1, may award a
preference up to the percentage under section 161.321, subdivision 2, paragraph (a), in the
amount bid for specified construction work to small targeted group businesses and
veteran-owned small businesses designated under section 16C.16.
new text end

(b) The council and each agency specified in section 473.143, subdivision 1, may
designate a deleted text begin purchase of deleted text end new text begin contract for construction, new text end goods new text begin , new text end or services for award only to small
targeted group businesses designated under section 16C.16 if the council or agency
determines that at least three small targeted group businesses are likely to deleted text begin bid deleted text end new text begin respond to a
solicitation new text end . The council and each agency specified in section 473.143, subdivision 1, may
designate a deleted text begin purchase of deleted text end new text begin contract for construction, new text end goods new text begin , new text end or services for award only to
veteran-owned small businesses designated under section 16C.16 if the council or agency
determines that at least three veteran-owned small businesses are likely to deleted text begin bid deleted text end new text begin respond to a
solicitation new text end .

(c) The council and each agency specified in section 473.143, subdivision 1, as a condition
of awarding deleted text begin a construction contract deleted text end or approving a contract deleted text begin for consultant, professional, or
technical services deleted text end , may set goals that require the prime contractor to subcontract a portion
of the contract to small targeted group businesses and veteran-owned small businesses
designated under section 16C.16. The council or agency must establish a procedure for
granting waivers from the subcontracting requirement when qualified small targeted group
businesses and veteran-owned small businesses are not reasonably available. The council
or agency may establish financial incentives for prime contractors who exceed the goals
for use of subcontractors and financial penalties for prime contractors who fail to meet goals
under this paragraph. The subcontracting requirements of this paragraph do not apply to
prime contractors who are small targeted group businesses and veteran-owned small
businesses. At least 75 percent of the value of the subcontracts awarded to small targeted
group businesses under this paragraph must be performed by the business to which the
subcontract is awarded or by another small targeted group business. At least 75 percent of
the value of the subcontracts awarded to veteran-owned small businesses under this paragraph
must be performed by the business to which the subcontract is awarded or another
veteran-owned small business.

(d) The council and each agency listed in section 473.143, subdivision 1, deleted text begin are encouraged
to purchase from deleted text end new text begin may award a contract for construction, goods, or services directly to new text end small
targeted group businesses deleted text begin and deleted text end new text begin or new text end veteran-owned small businesses designated under section
16C.16 deleted text begin when making purchases that are not subject to competitive bidding procedures deleted text end new text begin , up
to a total contract award value, including extension options, of the amount specified in
section 16C.16, subdivision 6, paragraph (b), without going through a competitive solicitation
process new text end .

(e) The council and each agency may adopt rules to implement this section.

(f) Each council or agency contract must require the prime contractor to pay any
subcontractor within ten days of the prime contractor's receipt of payment from the council
or agency for undisputed services provided by the subcontractor. The contract must require
the prime contractor to pay interest of 1-1/2 percent per month or any part of a month to
the subcontractor on any undisputed amount not paid on time to the subcontractor. The
minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10.
For an unpaid balance of less than $100, the prime contractor shall pay the actual penalty
due to the subcontractor. A subcontractor who prevails in a civil action to collect interest
penalties from a prime contractor must be awarded its costs and disbursements, including
attorney fees, incurred in bringing the action.

(g) This section does not apply to procurement financed in whole or in part with federal
funds if the procurement is subject to federal disadvantaged, minority, or women business
enterprise regulations. The council and each agency shall report to the commissioner of
administration on compliance with this section. The information must be reported at the
time and in the manner requested by the commissioner.

Sec. 3.

Minnesota Statutes 2024, section 473.1425, is amended to read:

473.1425 WORKING CAPITAL FUND.

The Metropolitan Council or a metropolitan agency defined in section 473.121,
subdivision 5a, to the extent allowed by other law or contract, may grant available money
that has been appropriated for socially or economically disadvantaged business programs
to a guaranty fund administered by a nonprofit organization that makes or guarantees working
capital loans to businesses owned and operated by new text begin a new text end socially deleted text begin or deleted text end new text begin and new text end economically
disadvantaged deleted text begin persons deleted text end new text begin individual new text end as defined in Code of Federal Regulations, title 49, section
deleted text begin 23.5 deleted text end new text begin 26.5 new text end . The purpose of loans made or guaranteed by the organization must be to provide
short-term working capital to enable eligible businesses to deleted text begin be awarded deleted text end new text begin participate in new text end contracts
for goods and services or for construction related services from government agencies.

Sec. 4. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin This act is effective the day following final enactment and applies in the counties of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
new text end