SF 4201

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/10/2026 09:15 a.m.

A bill for an act
relating to metropolitan government; modifying small business contracting
requirements and requiring report to the legislature on compliance; repealing
compliance plan requirements for certain public contracts over a threshold amount;
amending Minnesota Statutes 2025 Supplement, section 473.142; repealing
Minnesota Statutes 2024, section 473.144.

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

Section 1.

Minnesota Statutes 2025 Supplement, section 473.142, is amended to read:

473.142 SMALL BUSINESSES.

new text begin Subdivision 1. new text end

new text begin Preference awards. new text end

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

new text begin Designations. new text end

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

new text begin Subd. 3. new text end

new text begin Contract requirements. new text end

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

new text begin Subd. 4. new text end

new text begin Direct solicitation. new text end

deleted text begin (d) deleted text end The council and each agency listed in section 473.143,
subdivision 1, may award a contract for construction, goods, or services directly to new text begin small
businesses, new text end small targeted group businesses new text begin , new text end or veteran-owned small businesses designated
under section 16C.16, up to a total contract award value, including extension options, of
the amount specified in section 16C.16, subdivision 6, paragraph (b), without completing
a competitive solicitation process.

new text begin Subd. 5. new text end

new text begin Authorized rulemaking. new text end

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

new text begin Subd. 6. new text end

new text begin Prompt payment. new text end

deleted text begin (f) deleted text end 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 must
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.

new text begin Subd. 7. new text end

new text begin Applicability. new text end

deleted text begin (g) deleted text end 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 must 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.

new text begin Subd. 8. new text end

new text begin Legislative report. new text end

new text begin By February 1 of each year, the council shall submit a
report to the legislature concerning contract awards during the preceding calendar year. At
a minimum, the report must include:
new text end

new text begin (1) a summary of any programs that specifically work with small businesses and small
targeted businesses;
new text end

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

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

new text begin (ii) small businesses;
new text end

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

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

Sec. 2. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, section 473.144, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 26-06168

473.144 CERTIFICATES OF COMPLIANCE FOR CONTRACTS.

(a) For all contracts for goods and services in excess of $100,000, neither the council nor an agency listed in section 473.143, subdivision 1, shall accept any bid or proposal for a contract or agreement from any business having more than 40 full-time employees within this state on a single working day during the previous 12 months, unless the firm or business has an affirmative action plan for the employment of minority persons, women, and qualified disabled individuals submitted to the commissioner of human rights for approval. Neither the council nor an agency listed in section 473.143, subdivision 1, shall execute the contract or agreement until the affirmative action plan has been approved by the commissioner of human rights. Receipt of a certificate of compliance from the commissioner of human rights signifies that a business has an approved affirmative action plan. A certificate is valid for two years. Section 363A.36 governs revocation of certificates. The rules adopted by the commissioner of human rights under section 363A.37 apply to this section.

(b) This paragraph applies to a contract for goods or services in excess of $100,000 to be entered into between the council or an agency listed in section 473.143, subdivision 1, and a business that is not subject to paragraph (a), but that has more than 40 full-time employees on a single working day during the previous 12 months in the state where the business has its primary place of business. The council or the agency may not execute a contract or agreement with a business covered by this paragraph unless the business has a certificate of compliance issued by the commissioner under paragraph (a) or the business certifies to the contracting agency that it is in compliance with federal affirmative action requirements.