1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to state agencies; modifying procurement 1.3 procedures; amending Minnesota Statutes 1996, sections 1.4 3.225, subdivision 2; 3.732, subdivision 6; 3.922, 1.5 subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 1.6 11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 1.7 15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 1.8 17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, 1.9 subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 1.10 84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, 1.11 subdivision 3; 116.03, subdivision 2; 116J.035, 1.12 subdivision 1; 116J.402; 116J.58, subdivision 2; 1.13 116J.68, subdivision 2; 116J.966, subdivision 1; 1.14 124.14, subdivision 1; 126.151, subdivision 2; 1.15 129C.10, subdivision 7; 136A.06; 136A.16, subdivision 1.16 1; 136A.29, subdivision 6; 136F.23; 136F.56, 1.17 subdivision 5; 136F.581, subdivision 3; 136F.66; 1.18 136F.72, subdivision 3; 136F.96; 137.35, subdivisions 1.19 1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, 1.20 subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 1.21 7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 1.22 1; 216C.02, subdivision 1; 237.51, subdivision 5a; 1.23 241.0221, subdivision 6; 241.27, subdivision 2; 1.24 246.36; 246.57, subdivisions 1 and 6; 256B.031, 1.25 subdivision 1; 256B.04, subdivisions 14 and 15; 1.26 298.2211, subdivision 4; 349A.06, subdivision 1; 1.27 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 1.28 354.06, subdivision 2a; 354.07, subdivision 7; 1.29 356A.06, subdivision 7; 446A.12, subdivision 5; 1.30 462A.18, subdivision 2; 471.345, subdivision 8; 1.31 473.142; 473.556, subdivision 14; 480.09, subdivision 1.32 1; and 626.90, subdivision 2; Minnesota Statutes 1997 1.33 Supplement, sections 3.225, subdivision 1; 16A.15, 1.34 subdivision 3; 16B.465, subdivision 7; 16E.07, 1.35 subdivision 9; 17.03, subdivision 12; 41D.03, 1.36 subdivision 7; 61B.21, subdivision 1; 85A.02, 1.37 subdivision 5b; 121.1113, subdivision 2; 136A.40; 1.38 138.35, subdivision 1b; 179A.03, subdivision 14; 1.39 216D.03, subdivision 2; 241.277, subdivision 2; 1.40 256B.19, subdivision 2a; 256D.03, subdivision 6; 1.41 353.03, subdivision 3a; 363.073, subdivision 1; and 1.42 626.91, subdivision 2; proposing coding for new law in 1.43 Minnesota Statutes, chapters 16C; and 174; repealing 1.44 Minnesota Statutes 1996, sections 16B.06; 16B.07; 1.45 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 1.46 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 2.1 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 2.2 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 2.3 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; 2.4 Minnesota Statutes 1997 Supplement, sections 16B.18, 2.5 subdivision 3; 16B.20, subdivision 2; and 16B.482. 2.6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.7 ARTICLE 1 2.8 PROCUREMENT REFORM 2.9 Section 1. Minnesota Statutes 1996, section 15.054, is 2.10 amended to read: 2.11 15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM 2.12 GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.] 2.13 No officer or employee of the state or any of its political 2.14 subdivisions shall sell or procure for sale or possess or 2.15 control for sale to any other officer or employee of the state 2.16 or
thesubdivision, as appropriate, any property or materials 2.17 owned by the state or subdivision except pursuant to conditions 2.18 provided in this section. Property or materials owned by the 2.19 state or a subdivision, except real property, and not needed for 2.20 public purposes, may be sold to an employee of the state or the2.21 subdivision after reasonable public notice at a public auction 2.22 or by sealed bid if the employee is the highest responsible2.23 bidder andresponse, if the employee is not directly involved in 2.24 the auction or process pertaining to the administration and 2.25 collection of sealed bid processresponses. Requirements for 2.26 reasonable public notice may be prescribed by other law or 2.27 ordinance so long as at least one week's published or posted2.28 notice is specified. A stateAn employee of the state or a 2.29 political subdivision may purchase no more than one motor 2.30 vehicle from the state in any 12-month period. A person 2.31 violating the provisions of this section is guilty of a 2.32 misdemeanor. This section shall not apply to the sale of 2.33 property or materials acquired or produced by the state or 2.34 subdivision for sale to the general public in the ordinary 2.35 course of business. Nothing in this section shall prohibit an 2.36 employee of the state or a political subdivision from selling or 2.37 possessing for sale public property if the sale or possession 2.38 for sale is in the ordinary course of business or normal course 3.1 of the employee's duties. 3.2 Sec. 2. Minnesota Statutes 1996, section 16B.181, is 3.3 amended to read: 3.4 16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.] 3.5 Subdivision 1. [DEFINITIONS.] As used in this section: 3.6 (1) "public entity" or "public entities" includes the state 3.7 and an agency, department, or institution of the state, any 3.8 governmental unit as defined in section 471.59, the state 3.9 legislative and judicial branches, and state colleges and 3.10 universities; and 3.11 (2) "items" includes articles, products, supplies, and 3.12 services. 3.13 Subd. 2. [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS 3.14 INDUSTRIES.] (a) The commissioner of corrections, in 3.15 consultation with the commissioner of administration, shall 3.16 prepare updated lists of the items available for purchase from 3.17 department of corrections industries and annually forward a copy 3.18 of the most recent list to all public entities within the 3.19 state. A public entity that is supported in whole or in part 3.20 with funds from the state treasury shallmay purchase items 3.21 directly from corrections industries those items that are3.22 comparable in price, quality, and delivery time to items3.23 available from other vendors. An item is comparable in price if3.24 the price is no more than five percent higher than the lowest3.25 bid price. The bid solicitation process is not required for 3.26 these purchases. 3.27 (b) The commissioner of administration shall develop a 3.28 contract pursuant to section 16B.09,or contracts to enable 3.29 public entities to purchase items directly from corrections 3.30 industries. The commissioner of administration, in consultation 3.31 with the commissioner of corrections, shall determine the fair 3.32 market price for listed items. In determining fair market3.33 price, the commissioner shall use competitive bidding, or shall3.34 consider open bid prices in previous years for similar products3.35 which meet the needs of the public entity.The commissioner of 3.36 administration shall require that all requests for bids or 4.1 proposals, for items provided by corrections industries, be 4.2 forwarded to the commissioner of corrections to enable 4.3 corrections industries to submit bids. The commissioner of 4.4 corrections shall consult with the commissioner of 4.5 administration prior to introducing new products to the state 4.6 agency market. 4.7 (c) No public entity may evade the intent of this section 4.8 by adopting slight variations in specifications, when Minnesota 4.9 corrections industry items meet the reasonable needs and 4.10 specifications of the public entity. 4.11 (d) As part of its ongoing audit process, the legislative4.12 auditor is requested to ensure that state agencies are in4.13 compliance with this section.The commissioners of 4.14 administration and corrections shall develop annual performance 4.15 measures outlining goals to maximize inmate work program 4.16 participation. The commissioners of administration and 4.17 corrections shall appoint cochairs for a task force whose 4.18 purpose is to determine additional methods to achieve the 4.19 performance goals for public entity purchasing. The task force 4.20 shall include representatives from the Minnesota house of 4.21 representatives, Minnesota senate, the Minnesota state colleges 4.22 and universities, University of Minnesota, Minnesota League of 4.23 Cities, Minnesota Association of Counties, and administrators 4.24 with purchasing responsibilities from the Minnesota state 4.25 departments of corrections, public safety, finance, 4.26 transportation, natural resources, human services, health, and 4.27 economic security. 4.28 (e) The commissioners of administration and corrections4.29 shall appoint a joint task force to explore additional methods4.30 that support the philosophy of providing a substantial market4.31 opportunity to correctional industries that maximizes inmate4.32 work opportunities. The task force shall develop a plan and4.33 prepare a set of criteria with which to evaluate the4.34 effectiveness of the recommendations and initiatives in the4.35 plan. By February 15, 1997, the task force shall report to the4.36 chairs of the senate and house of representatives committees5.1 having jurisdiction over criminal justice funding.If 5.2 performance goals for public entity purchasing are not achieved 5.3 in two consecutive fiscal years, public entities shall purchase 5.4 items available from corrections industries. The commissioner 5.5 of administration shall be responsible for notifying public 5.6 entities of this requirement. 5.7 Sec. 3. [16C.02] [DEFINITIONS.] 5.8 Subdivision 1. [APPLICABILITY.] For purposes of this 5.9 chapter, the following terms have the meanings given them, 5.10 unless the context clearly indicates otherwise. 5.11 Subd. 2. [AGENCY.] "Agency" means any state officer, 5.12 employee, board, commission, authority, department, entity, or 5.13 organization of the executive branch of state government. 5.14 Unless specifically provided elsewhere in this chapter, 5.15 agency does not include the Minnesota state colleges and 5.16 universities. 5.17 Subd. 3. [AWARD.] "Award" means a commissioner's written 5.18 acceptance of a bid or proposal to provide goods, services, or 5.19 utilities. 5.20 Subd. 4. [BEST VALUE.] "Best value" describes a result 5.21 intended in the acquisition of all goods and services. Price 5.22 must be one of the evaluation criteria when acquiring goods and 5.23 services. Other evaluation criteria may include, but are not 5.24 limited to, environmental considerations, quality, and vendor 5.25 performance. 5.26 Subd. 5. [COMMISSIONER.] "Commissioner" means the 5.27 commissioner of administration. 5.28 Subd. 6. [CONTRACT.] "Contract" means any written 5.29 instrument or electronic document containing the elements of 5.30 offer, acceptance, and consideration to which an agency is a 5.31 party. 5.32 Subd. 7. [FORMAL SOLICITATION.] "Formal solicitation" 5.33 means a solicitation which requires a sealed response. 5.34 Subd. 8. [GOODS.] "Goods" means all types of personal 5.35 property including commodities, materials, supplies, and 5.36 equipment. 6.1 Subd. 9. [INFORMAL SOLICITATION.] "Informal solicitation" 6.2 means a solicitation which does not require a sealed response. 6.3 Subd. 10. [LEASE.] "Lease" means a contract conveying from 6.4 one entity to another the use of real or personal property for a 6.5 designated period of time in return for payment or other 6.6 consideration. 6.7 Subd. 11. [REQUEST FOR BID OR RFB.] "Request for bid" or 6.8 "RFB" means a solicitation in which the terms, conditions, and 6.9 specifications are described and responses are not subject to 6.10 negotiation. 6.11 Subd. 12. [REQUEST FOR PROPOSAL OR RFP.] "Request for 6.12 proposal" or "RFP" means a solicitation in which it is not 6.13 advantageous to set forth all the actual, detailed requirements 6.14 at the time of solicitation and responses are subject to 6.15 negotiation. 6.16 Subd. 13. [RESIDENT VENDOR.] "Resident vendor" means a 6.17 person, firm, or corporation authorized to conduct business in 6.18 the state of Minnesota on the date a solicitation for a contract 6.19 is first advertised or announced. It includes a foreign 6.20 corporation duly authorized to engage in business in Minnesota. 6.21 Subd. 14. [RESPONSE.] "Response" means the offer received 6.22 from a vendor in response to a solicitation. A response 6.23 includes submissions commonly referred to as "offers," "bids," 6.24 "quotes," or "proposals." 6.25 Subd. 15. [SEALED.] "Sealed" means a method determined by 6.26 the commissioner to prevent the contents being revealed or known 6.27 before the deadline for submission of responses. 6.28 Subd. 16. [SERVICE CONTRACT.] "Service contract" means a 6.29 contract for any nonprofessional or technical services. 6.30 Subd. 17. [SERVICES.] "Services" means, unless otherwise 6.31 indicated, both professional or technical services and service 6.32 performed under a service contract. 6.33 Subd. 18. [SINGLE SOURCE.] "Single source" means an 6.34 acquisition where, after a search, only one supplier is 6.35 determined to be reasonably available for the required product, 6.36 service, or construction item. 7.1 Subd. 19. [SOLICITATION.] "Solicitation" means the process 7.2 used to communicate procurement requirements and to request 7.3 responses from interested vendors. A solicitation may be, but 7.4 is not limited to, a request for bid and request for proposal. 7.5 Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 7.6 DUTIES.] 7.7 Subdivision 1. [SCOPE.] The commissioner's authority in 7.8 this section applies to an agency and is subject to other 7.9 provisions of this chapter and chapter 16B. Unless otherwise 7.10 provided, the provisions in this chapter and chapter 16B do not 7.11 apply to the Minnesota state colleges and universities. 7.12 Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, 7.13 the commissioner may adopt rules, consistent with this chapter 7.14 and chapter 16B, relating to the following topics: 7.15 (1) solicitations and responses to solicitations, bid 7.16 security, vendor errors, opening of responses, award of 7.17 contracts, tied bids, and award protest process; 7.18 (2) contract performance and failure to perform; 7.19 (3) authority to debar or suspend vendors, and 7.20 reinstatement of vendors; 7.21 (4) contract cancellation; and 7.22 (5) procurement from rehabilitation facilities. 7.23 Subd. 3. [ACQUISITION AUTHORITY.] The commissioner shall 7.24 acquire all goods, services, and utilities needed by agencies. 7.25 The commissioner shall acquire goods, services, and utilities by 7.26 any method the commissioner deems appropriate, unless another 7.27 section of law requires a particular method of acquisition be 7.28 utilized. The commissioner shall make all decisions regarding 7.29 acquisition activities. The determination of the acquisition 7.30 method and all decisions involved in the acquisition process, 7.31 unless otherwise provided for by law, shall be based on best 7.32 value which includes an evaluation of price and may include 7.33 other considerations including, but not limited to, 7.34 environmental considerations, quality, and vendor performance. 7.35 A best value determination must be based on the evaluation 7.36 criteria detailed in the solicitation document. Unless it is 8.1 determined by the commissioner that an alternative solicitation 8.2 method should be used to determine best value, a request for bid 8.3 must be used to solicit formal responses for all building and 8.4 construction contracts. Any or all responses may be rejected. 8.5 When using the request for bid process, the bid must be awarded 8.6 to the lowest responsive and responsible bidder, taking into 8.7 consideration conformity with the specifications, terms of 8.8 delivery, the purpose for which the contract or purchase is 8.9 intended, the status and capability of the vendor, and other 8.10 considerations imposed in the request for bids. The 8.11 commissioner may decide which is the lowest responsible bidder 8.12 for all purchases and may use the principles of life-cycle 8.13 costing, where appropriate, in determining the lowest overall 8.14 bid. The duties set forth in this subdivision are subject to 8.15 delegation pursuant to this section. 8.16 Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall 8.17 conduct all contracting by, for, and between agencies and 8.18 perform all contract management and review functions for 8.19 contracts, except those functions specifically delegated to be 8.20 performed by the contracting agency, the attorney general, or 8.21 otherwise provided for by law. 8.22 Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 8.23 commissioner shall, in addition to the duties set forth in 8.24 subdivisions 3 and 4, make all decisions regarding amendments, 8.25 cancellations, and appeals of all agency acquisition activities 8.26 unless the duties are delegated pursuant to this section. 8.27 Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The 8.28 commissioner is authorized to enter into lease purchases or 8.29 installment purchases for periods not exceeding the anticipated 8.30 useful life of the items acquired unless otherwise prohibited by 8.31 law. 8.32 Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 8.33 commissioner is authorized to enter into lease, lease purchase, 8.34 rental, or installment agreements for the use or acquisition, 8.35 whichever is applicable, of real or personal property. 8.36 Subd. 8. [POLICY AND PROCEDURES.] The commissioner is 9.1 authorized to issue policies, procedures, and standards 9.2 applicable to all acquisition activities by and for agencies. 9.3 Subd. 9. [EMPLOYEE PURCHASING.] The commissioner is 9.4 authorized to enter into contracts under which a vendor agrees 9.5 to sell computer equipment and related products to state 9.6 employees, for their own use, at contract prices. Under no 9.7 circumstances shall the state be liable for purchases made under 9.8 this subdivision. The provisions of section 43A.38, 9.9 subdivisions 4 and 5, clause (a), do not apply to this 9.10 subdivision. 9.11 Subd. 10. [COOPERATIVE PURCHASING.] The commissioner is 9.12 authorized to enter into a cooperative purchasing agreement for 9.13 the provision of goods, services, and utilities with one or more 9.14 other states or governmental units, as described in section 9.15 471.59, subdivision 1. The commissioner is authorized to enter 9.16 into cooperative purchasing agreements for the purchase of 9.17 goods, services, and utilities with health care facilities that 9.18 are required to provide indigent care. 9.19 Subd. 11. [SURPLUS PROPERTY.] The commissioner is 9.20 authorized to purchase, accept, transfer, warehouse, sell, 9.21 distribute, or dispose of surplus property in accordance with 9.22 state and federal rules and regulations. The commissioner may 9.23 charge a fee to cover any expenses incurred in connection with 9.24 any of these acts. 9.25 Subd. 12. [CENTRAL DISTRIBUTION CENTER.] The commissioner 9.26 is authorized to provide and manage a central distribution 9.27 center for federal and state surplus personal property, as 9.28 defined in section 16C.25, and may provide and manage a 9.29 warehouse facility. 9.30 Subd. 13. [CENTRAL STORES.] The commissioner is authorized 9.31 to provide agencies with supplies and equipment and operate all 9.32 central stores and supply rooms serving more than one agency. 9.33 Subd. 14. [PROVISION OF GOODS, SERVICES, AND 9.34 UTILITIES.] The commissioner has the authority to provide goods, 9.35 services, and utilities under this chapter to state legislative 9.36 and judicial branch agencies, political subdivisions, the 10.1 Minnesota state colleges and universities, the University of 10.2 Minnesota, and federal government agencies. 10.3 Subd. 15. [REIMBURSEMENT FOR GOODS, SERVICES, AND 10.4 UTILITIES.] The commissioner is authorized to charge a fee to 10.5 cover costs and expenses associated with operating a revolving 10.6 fund or an enterprise fund to acquire goods, services, and 10.7 utilities. The fees are appropriated to the commissioner to 10.8 administer and manage the programs and facilities covered under 10.9 this section. 10.10 Subd. 16. [DELEGATION OF DUTIES.] The commissioner may 10.11 delegate duties imposed by this chapter to the head of an agency 10.12 and to any subordinate of the agency head. Delegated duties 10.13 shall be exercised in the name of the commissioner and under the 10.14 commissioner's direct supervision and control. A delegation of 10.15 duties may include, but is not limited to, allowing individuals 10.16 within agencies to acquire goods, services, and utilities within 10.17 dollar limitations and for designated types of acquisitions. 10.18 Delegation of contract management and review functions must be 10.19 filed with the secretary of state and may not, except with 10.20 respect to delegations within the department of administration, 10.21 exceed two years in duration. The commissioner may withdraw any 10.22 delegation at the commissioner's sole discretion. 10.23 Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 10.24 INTEREST.] 10.25 Subdivision 1. [DUTY.] An employee of the executive branch 10.26 involved directly or indirectly in the acquisition process, at 10.27 any level, is subject to the code of ethics in section 43A.38. 10.28 Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 10.29 The commissioner must develop policies regarding code of ethics 10.30 and conflict of interest designed to prevent conflicts of 10.31 interest for employees involved in the acquisition of goods, 10.32 services, and utilities. The policies must apply to employees 10.33 who are directly or indirectly involved in the acquisition of 10.34 goods, services, and utilities, developing requests for 10.35 proposals, evaluating bids or proposals, awarding the contract, 10.36 selecting the final vendor, drafting and entering into 11.1 contracts, evaluating performance under these contracts, and 11.2 authorizing payments under the contract. 11.3 (b) The policies must contain a process for making 11.4 employees aware of policy and laws relating to conflict of 11.5 interest, and for training employees on how to avoid and deal 11.6 with potential conflicts. 11.7 (c) The policies must contain a process under which an 11.8 employee who has a conflict of interest or a potential conflict 11.9 of interest must disclose the matter, and a process under which 11.10 work on the contract may be assigned to another employee if 11.11 possible. 11.12 Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 11.13 REVIEW.] 11.14 Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully 11.15 cooperate with the commissioner in the management and review of 11.16 state contracts. 11.17 Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A 11.18 contract is not valid and the state is not bound by it unless: 11.19 (1) it has first been executed by the head of the agency or 11.20 a delegate who is a party to the contract; 11.21 (2) it has been approved by the commissioner; 11.22 (3) it has been approved by the attorney general or a 11.23 delegate as to form and execution; 11.24 (4) the accounting system shows an obligation in an expense 11.25 budget or encumbrance for the amount of the contract liability; 11.26 and 11.27 (5) the combined contract and amendments shall not exceed 11.28 five years, unless otherwise provided for by law. The term of 11.29 the original contract must not exceed two years unless the 11.30 commissioner determines that a longer duration is in the best 11.31 interest of the state. 11.32 (b) Grants, interagency agreements, purchase orders, and 11.33 annual plans need not, in the discretion of the commissioner and 11.34 attorney general, require the signature of the commissioner 11.35 and/or the attorney general. 11.36 (c) A fully executed copy of every contract must be kept on 12.1 file at the contracting agency. 12.2 Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do 12.3 not apply to contracts of the department of economic security 12.4 distributing state and federal funds for the purpose of 12.5 subcontracting the provision of program services to eligible 12.6 recipients. For these contracts, the commissioner of economic 12.7 security is authorized to directly enter into agency contracts 12.8 and encumber available funds. For contracts distributing state 12.9 or federal funds pursuant to the federal Economic Dislocation 12.10 and Worker Adjustment Assistance Act, United States Code, title 12.11 29, section 1651 et seq., or sections 268.9771, 268.978, 12.12 268.9781, and 268.9782, the commissioner of economic security is 12.13 authorized to directly enter into agency contracts with approval 12.14 of the workforce development council and encumber available 12.15 funds to ensure a rapid response to the needs of dislocated 12.16 workers. The commissioner of economic security shall adopt 12.17 internal procedures to administer and monitor funds distributed 12.18 under these contracts. This exception also applies to any 12.19 contracts entered into by the commissioner of children, 12.20 families, and learning that were previously entered into by the 12.21 commissioner of economic security. 12.22 Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency 12.23 shall diligently administer and monitor any contract it has 12.24 entered into, pursuant to a delegation of duties from the 12.25 commissioner. The commissioner may require an agency to report 12.26 to the commissioner at any time on the status of any contracts 12.27 to which the agency is a party. 12.28 Subd. 5. [SUBJECT TO AUDIT.] A contract or any pass- 12.29 through disbursement of public funds to a vendor of goods or 12.30 services or a grantee made by or under the supervision of the 12.31 commissioner or any county or unit of local government must 12.32 include, expressed or implied, an audit clause that provides 12.33 that the books, records, documents, and accounting procedures 12.34 and practices of the vendor or other party, that are relevant to 12.35 the contract or transaction, are subject to examination by the 12.36 contracting agency and either the legislative auditor or the 13.1 state auditor, as appropriate, for a minimum of six years. If 13.2 the contracting agency is a local unit of government, and the 13.3 governing body of the local unit of government requests that the 13.4 state auditor examine the books, records, documents, and 13.5 accounting procedures and practices of the vendor or other party 13.6 pursuant to this subdivision, the contracting agency shall be 13.7 liable for the cost of the examination. If the contracting 13.8 agency is a local unit of government, and the grantee, vendor, 13.9 or other party requests that the state auditor examine all 13.10 books, records, documents, and accounting procedures and 13.11 practices related to the contract, the grantee, vendor, or other 13.12 party that requested the examination shall be liable for the 13.13 cost of the examination. An agency contract made for purchase, 13.14 lease, or license of software and data from the state is not 13.15 required to contain this audit clause. 13.16 Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney 13.17 general may pursue remedies available by law to avoid the 13.18 obligation of an agency to pay under a contract or to recover 13.19 payments made if services performed or goods received under the 13.20 contract are so unsatisfactory, incomplete, or inconsistent that 13.21 payment would involve unjust enrichment. The contrary opinion 13.22 of the contracting agency does not affect the power of the 13.23 attorney general under this subdivision. 13.24 Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND 13.25 BANDS.] Notwithstanding any other law, an agency may not require 13.26 an Indian tribe or band to deny its sovereignty as a requirement 13.27 or condition of a contract with an agency. 13.28 Sec. 7. [16C.07] [ACQUISITIONS.] 13.29 Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of 13.30 solicitations for acquisitions estimated to be more than $25,000 13.31 must be publicized in a manner designated by the commissioner. 13.32 Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation 13.33 must be used to acquire all goods, service contracts, and 13.34 utilities estimated at or more than $25,000 unless otherwise 13.35 provided for. All formal responses must be sealed when they are 13.36 received and must be opened in public at the hour stated in the 14.1 solicitation. Formal responses must be authenticated by the 14.2 responder in a manner specified by the commissioner. 14.3 (b) An informal solicitation may be used to acquire all 14.4 goods, service contracts, and utilities that are estimated at 14.5 less than $25,000. The number of vendors required to receive 14.6 solicitations may be determined by the commissioner. Informal 14.7 responses must be authenticated by the responder in a manner 14.8 specified by the commissioner. 14.9 Subd. 3. [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 14.10 name of the vendor and dollar amounts specified in a response to 14.11 a request for bids shall be read at the time of opening. Only 14.12 the name of the responding vendors to all requests for proposals 14.13 shall be read at the time of opening. All other information 14.14 contained in a vendor's response to a bid is classified as 14.15 nonpublic data, as defined in section 13.02, and remains 14.16 nonpublic data until completion of the selection process. All 14.17 other information contained in a vendor's response to a request 14.18 for proposal, other than the name of the vendor, is classified 14.19 as nonpublic data, as defined in section 13.02, and remains 14.20 nonpublic data until the completion of the evaluation process. 14.21 (b) All responses are public information at the time of the 14.22 award unless otherwise provided for. All responses and 14.23 documents pertaining to the final award of an acquisition must 14.24 be retained and made a part of a permanent file or record and 14.25 remain open to public inspection, after award, unless otherwise 14.26 provided for by law. 14.27 Subd. 4. [MULTIPLE AWARDS.] The commissioner may award a 14.28 contract to more than one vendor if, in the opinion of the 14.29 commissioner, it is in the best interest of the state. 14.30 Subd. 5. [STATE AS RESPONDER.] The head of an agency, in 14.31 consultation with the requesting agency and the commissioner, 14.32 may respond to a solicitation or request if the goods and 14.33 services meet the needs of the requesting agency and provide the 14.34 state with the best value. When an agency responds to a 14.35 solicitation, all work product relating to the response is 14.36 nonpublic data as defined in section 13.02, and shall become 15.1 public information in accordance with subdivision 3. 15.2 Subd. 6. [AWARDS.] Awards must be based on best value, 15.3 which includes an evaluation of price, and may include other 15.4 considerations including, but not limited to, environmental 15.5 considerations, quality, and vendor performance. 15.6 Subd. 7. [OTHER STATES WITH RESIDENT 15.7 PREFERENCE.] Acquisition of goods and services must be awarded 15.8 according to the provisions of this chapter except that a 15.9 resident vendor shall be allowed a preference over a nonresident 15.10 vendor from a state that gives or requires a preference to 15.11 vendors from that state. The preference shall be equal to the 15.12 preference given or required by the state of the nonresident 15.13 vendor. 15.14 Subd. 8. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 15.15 does not apply to a contract for any project in which federal 15.16 funds are expended. 15.17 Subd. 9. [REJECTION.] At the discretion of the 15.18 commissioner, any or all responses may be rejected if it is 15.19 determined to be in the best interest of the state. 15.20 Subd. 10. [PREFERENCES NOT CUMULATIVE.] The preferences 15.21 provided for under subdivision 7 and sections 16B.121 and 16C.18 15.22 are not cumulative. The total percentage of preference granted 15.23 on a contract may not exceed the highest percentage of 15.24 preference allowed for that contract under any one of these 15.25 statutory sections. 15.26 Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.] 15.27 The commissioner of employee relations shall develop a 15.28 directory of services that state agencies commonly provide that 15.29 are professional or technical in nature. 15.30 Before an agency may seek approval of a professional or 15.31 technical services contract valued at a total cost in excess of 15.32 $25,000, it must certify to the commissioner that it has 15.33 publicized the contract by posting notice at appropriate 15.34 worksites within agencies and has made reasonable efforts to 15.35 determine that no state employee or agency, including an 15.36 employee or agency outside the contracting agency, is able and 16.1 available to perform the required services. When possible, this 16.2 posting should be done electronically. 16.3 Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 16.4 Subdivision 1. [DEFINITION.] For the purposes of this 16.5 section, "professional or technical services" means services 16.6 that are intellectual in character, including consultation, 16.7 analysis, evaluation, prediction, planning, programming, or 16.8 recommendation, and result in the production of a report or the 16.9 completion of a task. Professional or technical contracts do 16.10 not include the provision of supplies or materials except by the 16.11 approval of the commissioner or except as incidental to the 16.12 provision of professional or technical services. 16.13 Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency 16.14 may seek approval of a professional or technical services 16.15 contract valued in excess of $5,000, it must certify to the 16.16 commissioner that: 16.17 (1) no current state employee is able and available to 16.18 perform the services called for by the contract; 16.19 (2) the normal competitive bidding mechanisms will not 16.20 provide for adequate performance of the services; 16.21 (3) the contractor has certified that the product of the 16.22 services will be original in character; 16.23 (4) reasonable efforts were made to publicize the 16.24 availability of the contract to the public; 16.25 (5) the agency has received, reviewed, and accepted a 16.26 detailed work plan from the contractor for performance under the 16.27 contract, if applicable; 16.28 (6) the agency has developed, and fully intends to 16.29 implement, a written plan providing for the assignment of 16.30 specific agency personnel to a monitoring and liaison function, 16.31 the periodic review of interim reports or other indications of 16.32 past performance, and the ultimate utilization of the final 16.33 product of the services; and 16.34 (7) the agency will not allow the contractor to begin work 16.35 before funds are fully encumbered. 16.36 Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 17.1 CONTRACTS.] Before approving a proposed contract for 17.2 professional or technical services, the commissioner must 17.3 determine, at least, that: 17.4 (1) all provisions of subdivision 2 and section 16C.18 have 17.5 been verified or complied with; 17.6 (2) the work to be performed under the contract is 17.7 necessary to the agency's achievement of its statutory 17.8 responsibilities and there is statutory authority to enter into 17.9 the contract; 17.10 (3) the contract will not establish an employment 17.11 relationship between the state or the agency and any persons 17.12 performing under the contract; 17.13 (4) the contractor and agents are not employees of the 17.14 state; 17.15 (5) no agency has previously performed or contracted for 17.16 the performance of tasks which would be substantially duplicated 17.17 under the proposed contract; 17.18 (6) the contracting agency has specified a satisfactory 17.19 method of evaluating and using the results of the work to be 17.20 performed; and 17.21 (7) the combined contract and amendments will not exceed 17.22 five years, unless otherwise provided for by law. The term of 17.23 the original contract must not exceed two years unless the 17.24 commissioner determines that a longer duration is in the best 17.25 interest of the state. 17.26 Subd. 4. [REPORTS.] (a) The commissioner shall submit to 17.27 the governor, the chairs of the house ways and means and senate 17.28 finance committees, and the legislative reference library a 17.29 yearly listing of all contracts for professional or technical 17.30 services executed. The report must identify the contractor, 17.31 contract amount, duration, and services to be provided. The 17.32 commissioner shall also issue yearly reports summarizing the 17.33 contract review activities of the department by fiscal year. 17.34 (b) The fiscal year report must be submitted by September 1 17.35 of each year and must: 17.36 (1) be sorted by agency and by contractor; 18.1 (2) show the aggregate value of contracts issued by each 18.2 agency and issued to each contractor; 18.3 (3) distinguish between contracts that are being issued for 18.4 the first time and contracts that are being extended; 18.5 (4) state the termination date of each contract; 18.6 (5) identify services by commodity code, including topics 18.7 such as contracts for training, contracts for research and 18.8 opinions, and contracts for computer systems; 18.9 (6) show the number of sole source/single source and 18.10 overload contracts for each agency as a percent of the total 18.11 number of contracts for each agency; and 18.12 (7) show the number of contracts publicly advertised as a 18.13 percent of the total number of contracts for each agency. 18.14 (c) Within 30 days of final completion of a contract over 18.15 $40,000 covered by this subdivision, the head of the agency 18.16 entering into the contract must submit a one-page report to the 18.17 commissioner who must submit a copy to the legislative reference 18.18 library. The report must: 18.19 (1) summarize the purpose of the contract, including why it 18.20 was necessary to enter into a contract; 18.21 (2) state the amount spent on the contract; and 18.22 (3) explain why this amount was a cost-effective way to 18.23 enable the agency to provide its services or products better or 18.24 more efficiently. 18.25 Subd. 5. [CONTRACT TERMS.] (a) A professional or technical 18.26 services contract must by its terms permit the commissioner to 18.27 unilaterally terminate the contract prior to completion, upon 18.28 payment of just compensation, if the commissioner determines 18.29 that further performance under the contract would not serve 18.30 agency purposes. 18.31 (b) The terms of a contract must provide that no more than 18.32 90 percent of the amount due under the contract may be paid 18.33 until the final product has been reviewed by the head of the 18.34 agency entering into the contract and the head of the agency has 18.35 certified that the contractor has satisfactorily fulfilled the 18.36 terms of the contract, unless specifically excluded in writing 19.1 by the commissioner. 19.2 Subd. 6. [FILING COPY.] If the final product of the 19.3 contract is a written report, a copy must be filed with the 19.4 legislative reference library. 19.5 Subd. 7. [EXCLUSIONS.] This section does not apply to 19.6 contracts with individuals or organizations for administration 19.7 of employee pension plans authorized under chapter 354B or 354C. 19.8 Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 19.9 Before entering into or approving a service contract, the 19.10 commissioner must determine, at least, that: 19.11 (1) no current state employee is able and available to 19.12 perform the services called for by the contract; 19.13 (2) the work to be performed under the contract is 19.14 necessary to the agency's achievement of its statutory 19.15 responsibilities and there is statutory authority to enter into 19.16 the contract; 19.17 (3) the contract will not establish an employment 19.18 relationship between the state or the agency and any persons 19.19 performing under the contract; 19.20 (4) the contractor and agents are not employees of the 19.21 state; 19.22 (5) the contracting agency has specified a satisfactory 19.23 method of evaluating and using the results of the work to be 19.24 performed; and 19.25 (6) the combined contract and amendments will not exceed 19.26 five years, unless otherwise provided for by law. The term of 19.27 the original contract must not exceed two years, unless the 19.28 commissioner determines that a longer duration is in the best 19.29 interest of the state. 19.30 For purposes of clause (1), employees are available if qualified 19.31 and: 19.32 (i) are already doing the work in question; or 19.33 (ii) are on layoff status in classes that can do the work 19.34 in question. 19.35 An employee is not available if the employee is doing other 19.36 work, is retired, or has decided not to do the work in question. 20.1 Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION 20.2 PROCESS.] 20.3 Subdivision 1. [SINGLE SOURCE.] The solicitation process 20.4 described in this chapter is not required when there is clearly 20.5 and legitimately only a single source for the goods and services 20.6 and the commissioner determines that the price has been fairly 20.7 and reasonably established. 20.8 Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of 20.9 this subdivision, "emergency" means a threat to public health, 20.10 welfare, or safety that threatens the functioning of government, 20.11 the protection of property, or the health or safety of people. 20.12 (b) The solicitation process described in this chapter is 20.13 not required in emergencies. In emergencies, the commissioner 20.14 may make any purchases necessary for the repair, rehabilitation, 20.15 and improvement of a state-owned structure or may authorize an 20.16 agency to do so and may purchase, or may authorize an agency to 20.17 purchase, goods, services, or utility services directly for 20.18 immediate use. 20.19 Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 20.20 anything in this chapter to the contrary, the commissioner may, 20.21 instead of soliciting bids, contract for purchases with 20.22 suppliers who have published schedules of prices effective for 20.23 sales to any federal agency of the United States. These 20.24 contracts may be entered into, regardless of the amount of the 20.25 purchase price, if the commissioner considers them advantageous 20.26 and if the purchase price of all the commodities purchased under 20.27 the contract do not exceed the price specified by the schedule. 20.28 Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation 20.29 process described in this chapter is not required for 20.30 cooperative agreements. The commissioner may enter into 20.31 contracts or accept prices effective for sales to any 20.32 governmental unit as defined in section 471.59, through a 20.33 cooperative agreement as defined in section 471.59. 20.34 Subd. 5. [SPECIFIC PURCHASES.] The solicitation process 20.35 described in this chapter is not required for acquisition of the 20.36 following: 21.1 (1) merchandise for resale purchased under policies 21.2 determined by the commissioner; 21.3 (2) farm and garden products which, as determined by the 21.4 commissioner, may be purchased at the prevailing market price on 21.5 the date of sale; 21.6 (3) goods and services from the Minnesota correctional 21.7 facilities; 21.8 (4) goods and services from rehabilitation facilities and 21.9 sheltered workshops that are certified by the commissioner of 21.10 economic security; 21.11 (5) goods and services for use by a community-based 21.12 residential facility operated by the commissioner of human 21.13 services; 21.14 (6) goods purchased at auction or when submitting a sealed 21.15 bid at auction provided that before authorizing such an action, 21.16 the commissioner consult with the requesting agency to determine 21.17 a fair and reasonable value for the goods considering factors 21.18 including, but not limited to, costs associated with submitting 21.19 a bid, travel, transportation, and storage. This fair and 21.20 reasonable value must represent the limit of the state's bid; 21.21 and 21.22 (7) utility services where no competition exists or where 21.23 rates are fixed by law or ordinance. 21.24 Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; 21.25 PURCHASING REVOLVING FUND.] 21.26 The commissioner may enter into joint or cooperative 21.27 purchasing agreements with any entity that is authorized under 21.28 section 471.59 to do so. The cooperative purchasing venture 21.29 revolving fund is a separate account in the state treasury. The 21.30 commissioner may charge a fee to cover the commissioner's 21.31 administrative expenses to governmental units that have joint or 21.32 cooperative purchasing agreements with the state under section 21.33 471.59. The fees collected must be deposited in the revolving 21.34 fund established by this section. Money in the fund is 21.35 appropriated to the commissioner to administer the programs and 21.36 services covered by this chapter. 22.1 Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 22.2 STATE.] 22.3 The commissioner shall encourage and make a reasonable 22.4 attempt to identify and purchase food products that are grown in 22.5 the state. 22.6 Sec. 14. [16C.14] [CERTAIN VEHICLES.] 22.7 Upon the written request of the commissioner of public 22.8 safety, motor vehicles for use by investigative and undercover 22.9 agents of the department of public safety may be purchased by 22.10 the brand, make, and model specified by the agency. 22.11 Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT 22.12 PURCHASES.] 22.13 Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may 22.14 contract to purchase by installment payments capital or other 22.15 equipment or services intended to improve the energy efficiency 22.16 of a state building or facility if: 22.17 (1) the term of the contract does not exceed ten years, 22.18 with not more than a ten-year payback; 22.19 (2) the entire cost of the contract is a percentage of the 22.20 resultant savings in energy costs only. "Savings in energy cost" 22.21 means a comparison of energy cost and energy usage under the 22.22 precontract conditions, including reasonable projections of 22.23 energy cost and usage if no change is made to the precontract 22.24 conditions, against energy cost and usage with the changes made 22.25 under the contract. If it is impractical to directly measure 22.26 energy cost and/or energy usage, reasonable engineering 22.27 estimates may be substituted for measured results; 22.28 (3) the contract for purchase must be completed using a 22.29 solicitation; 22.30 (4) the commissioner has determined that the contract 22.31 vendor is a responsible vendor; 22.32 (5) the contract vendor can finance or obtain financing for 22.33 the performance of the contract without state assistance or 22.34 guarantee; and 22.35 (6) the state may unilaterally cancel the agreement if the 22.36 legislature fails to appropriate funds to continue the contract 23.1 or if the contractor at any time during the term of the contract 23.2 fails to perform its contractual obligations, including failure 23.3 to deliver or install equipment or materials, failure to replace 23.4 faulty equipment or materials in a timely fashion, and failure 23.5 to maintain the equipment as agreed in the contract. 23.6 Subd. 2. [ENERGY APPROPRIATION.] The commissioner may 23.7 spend money appropriated for energy costs in payment of a 23.8 contract under this section. 23.9 Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 23.10 any other law to the contrary, fuel cost savings resulting from 23.11 energy conservation actions shall be available at the managerial 23.12 level at which the actions took place for expenditure for other 23.13 purposes within the biennium in which the actions occur or in 23.14 the case of a shared savings agreement for the contract period 23.15 of the shared savings agreement. For purposes of this 23.16 subdivision "shared savings agreement" means a contract meeting 23.17 the terms and conditions of subdivision 1. 23.18 Subd. 4. [LEGISLATIVE INTENT.] The purpose of the energy 23.19 efficiency installment purchase contracts authorized by this 23.20 section is to save money on energy costs. The entire cost of 23.21 the contract must be a percentage of the resultant savings in 23.22 energy costs. Neither the state nor any agency is liable to 23.23 make payments on the contract except to the extent that there 23.24 are savings in energy costs that must be shared with other 23.25 parties to the contract. The legislature intends not to 23.26 appropriate any more money to pay for energy costs as a result 23.27 of these contracts than would be payable without them. 23.28 Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 23.29 ACTIVITY PROGRAMS.] 23.30 The commissioner, in consultation with the commissioner of 23.31 economic security, shall prepare a list containing products and 23.32 services of state-certified rehabilitation facilities, sheltered 23.33 workshops, and work activity programs for acquisition by state 23.34 agencies and institutions. 23.35 Sec. 17. [16C.18] [DESIGNATION OF PROCUREMENTS FROM SMALL 23.36 BUSINESSES.] 24.1 Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The 24.2 commissioner shall for each fiscal year ensure that small 24.3 businesses receive at least 25 percent of the value of 24.4 anticipated total state procurement of goods and services, 24.5 including printing and construction. The commissioner shall 24.6 divide the procurements so designated into contract award units 24.7 of economically feasible production runs in order to facilitate 24.8 offers or bids from small businesses. In making the annual 24.9 designation of such procurements the commissioner shall attempt 24.10 (1) to vary the included procurements so that a variety of goods 24.11 and services produced by different small businesses are obtained 24.12 each year, and (2) to designate small business procurements in a 24.13 manner that will encourage proportional distribution of such 24.14 awards among the geographical regions of the state. To promote 24.15 the geographical distribution of awards, the commissioner may 24.16 designate a portion of the small business procurement for award 24.17 to bidders from a specified congressional district or other 24.18 geographical region specified by the commissioner. The failure 24.19 of the commissioner to designate particular procurements shall 24.20 not be deemed to prohibit or discourage small businesses from 24.21 seeking the procurement award through the normal process. 24.22 Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt 24.23 rules defining "small business" for purposes of sections 16C.18 24.24 to 16C.23, 137.31, 137.35, 161.321, and 473.142. The definition 24.25 must include only businesses with their principal place of 24.26 business in Minnesota. The definition must establish different 24.27 size standards for various types of businesses. In establishing 24.28 these standards, the commissioner must consider the differences 24.29 among industries caused by the size of the market for goods or 24.30 services and the relative size and market share of the 24.31 competitors operating in those markets. 24.32 Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 24.33 state agency shall for each fiscal year designate for awarding 24.34 to small businesses at least 25 percent of the value of 24.35 anticipated procurements of that agency for professional or 24.36 technical services. The set-aside under this subdivision is in 25.1 addition to that provided by subdivision 1, but must otherwise 25.2 comply with section 16C.10. 25.3 Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner 25.4 shall establish a program for purchasing goods and services from 25.5 targeted group businesses, as designated in subdivision 5. The 25.6 purpose of the program is to remedy the effects of past 25.7 discrimination against members of targeted groups. In 25.8 furtherance of this purpose, the commissioner shall attempt to 25.9 ensure that purchases from targeted group businesses reflect a 25.10 fair and equitable representation of all the state's purchasing. 25.11 Subd. 5. [DESIGNATION OF TARGETED GROUPS.] (a) The 25.12 commissioner of administration shall periodically designate 25.13 businesses that are majority owned and operated by women, 25.14 persons with a substantial physical disability, or specific 25.15 minorities as targeted group businesses within purchasing 25.16 categories as determined by the commissioner. A group may be 25.17 targeted within a purchasing category if the commissioner 25.18 determines there is a statistical disparity between the 25.19 percentage of purchasing from businesses owned by group members 25.20 and the representation of businesses owned by group members 25.21 among all businesses in the state in the purchasing category. 25.22 (b) In addition to designations under paragraph (a), an 25.23 individual business may be included as a targeted group business 25.24 if the commissioner determines that inclusion is necessary to 25.25 remedy discrimination against the owner based on race, gender, 25.26 or disability in attempting to operate a business that would 25.27 provide goods or services to public agencies. 25.28 (c) The designations of purchasing categories and 25.29 businesses under paragraphs (a) and (b) are not rules for 25.30 purposes of chapter 14, and are not subject to rulemaking 25.31 procedures of that chapter. 25.32 Subd. 6. [PURCHASING METHODS.] (a) The commissioner may 25.33 award up to a six percent preference in the amount bid for 25.34 specified goods or services to small targeted group businesses. 25.35 (b) The commissioner may designate a purchase of goods or 25.36 services for award only to small businesses or small targeted 26.1 group businesses if the commissioner determines that at least 26.2 three small businesses or small targeted group businesses are 26.3 likely to bid. 26.4 (c) The commissioner, as a condition of awarding a 26.5 construction contract or approving a contract for professional 26.6 or technical services, may set goals that require the prime 26.7 contractor to subcontract a portion of the contract to small 26.8 businesses or small targeted group businesses. The commissioner 26.9 must establish a procedure for granting waivers from the 26.10 subcontracting requirement when qualified small businesses or 26.11 small targeted group businesses are not reasonably available. 26.12 The commissioner may establish financial incentives for prime 26.13 contractors who exceed the goals for use of small business or 26.14 small targeted group business subcontractors and financial 26.15 penalties for prime contractors who fail to meet goals under 26.16 this paragraph. The subcontracting requirements of this 26.17 paragraph do not apply to prime contractors who are small 26.18 businesses or small targeted group businesses. 26.19 Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The 26.20 commissioner may award up to a four percent preference in the 26.21 amount bid on state procurement to small businesses located in 26.22 an economically disadvantaged area. A business is located in an 26.23 economically disadvantaged area if: 26.24 (1) the owner resides in or the business is located in a 26.25 county in which the median income for married couples is less 26.26 than 70 percent of the state median income for married couples; 26.27 (2) the owner resides in or the business is located in an 26.28 area designated a labor surplus area by the United States 26.29 Department of Labor; or 26.30 (3) the business is a rehabilitation facility or work 26.31 activity program. 26.32 The commissioner may designate one or more areas designated 26.33 as targeted neighborhoods under section 469.202 or as enterprise 26.34 zones under section 469.167 as economically disadvantaged areas 26.35 for purposes of this subdivision if the commissioner determines 26.36 that this designation would further the purposes of this 27.1 section. If the owner of a small business resides or is 27.2 employed in a designated area, the small business is eligible 27.3 for any preference provided under this subdivision. 27.4 The department of revenue shall gather data necessary to 27.5 make the determinations required by clause (1), and shall 27.6 annually certify counties that qualify under clause (1). An 27.7 area designated a labor surplus area retains that status for 120 27.8 days after certified small businesses in the area are notified 27.9 of the termination of the designation by the United States 27.10 Department of Labor. 27.11 Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the 27.12 federal Small Business Administration and second party bonds are 27.13 acceptable security for a construction award under this 27.14 section. "Second party bond" means a bond that designates as 27.15 principal, guarantor, or both, a person or persons in addition 27.16 to the person to whom the contract is proposed for award. 27.17 Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before 27.18 making an award under the preference programs established in 27.19 subdivisions 4 to 7, the commissioner shall evaluate whether the 27.20 small business or small targeted group business scheduled to 27.21 receive the award is able to perform the contract. This 27.22 determination shall include consideration of production and 27.23 financial capacity and technical competence. 27.24 Subd. 10. [LIMITS.] At least 75 percent of the value of 27.25 the subcontracts awarded to small businesses or small targeted 27.26 group businesses under subdivision 6, paragraph (c), must be 27.27 performed by the business to which the subcontract is awarded or 27.28 by another small business or small targeted group business. 27.29 Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules 27.30 pertaining to solicitations, bid evaluations, contract awards, 27.31 and other procurement matters apply equally to procurements 27.32 designated for small businesses or small targeted group 27.33 businesses. In the event of conflict with other rules, section 27.34 16C.16 and rules adopted under it govern, if section 16C.16 27.35 applies. If it does not apply, sections 16C.18 to 16C.23 and 27.36 rules adopted under those sections govern. 28.1 Subd. 12. [APPLICABILITY.] This section does not apply to 28.2 construction contracts or contracts for professional or 28.3 technical services under section 16C.09 that are financed in 28.4 whole or in part with federal funds and that are subject to 28.5 federal disadvantaged business enterprise regulations. 28.6 Sec. 18. [16C.19] [ENCOURAGEMENT OF PARTICIPATION; 28.7 ADVISORY COUNCIL.] 28.8 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 28.9 commissioners of administration and trade and economic 28.10 development shall publicize the provisions of the purchasing 28.11 programs in sections 16C.18 to 16C.23, attempt to locate small 28.12 businesses or small targeted group businesses able to perform 28.13 under the programs, and encourage participation through 28.14 education, technical assistance, mentoring, and other means. 28.15 When the commissioner of administration determines that a small 28.16 business or small targeted group business is unable to perform 28.17 under a program established in sections 16C.18 to 16C.23, the 28.18 commissioner shall inform the commissioner of trade and economic 28.19 development who shall assist the small business or small 28.20 targeted group business in attempting to remedy the causes of 28.21 the inability to perform the award. In assisting the small 28.22 business or small targeted group business, the commissioner of 28.23 trade and economic development in cooperation with the 28.24 commissioner of administration shall use management or financial 28.25 assistance programs made available by or through the department 28.26 of trade and economic development, other state or governmental 28.27 agencies, or private sources. 28.28 Subd. 2. [ADVISORY COUNCIL.] The small business 28.29 procurement advisory council consists of 13 members appointed by 28.30 the commissioner of administration. A chair of the advisory 28.31 council shall be elected from among the members. The 28.32 appointments are subject to the appointments program provided by 28.33 section 15.0597. The terms, compensation, and removal of 28.34 members are as provided in section 15.059. 28.35 Subd. 3. [DUTIES.] The small business procurement advisory 28.36 council shall: 29.1 (1) advise the commissioner of administration on matters 29.2 relating to the small business and small targeted group business 29.3 procurement program; 29.4 (2) review complaints or grievances from small businesses 29.5 and small targeted group businesses who are doing or attempting 29.6 to do business under the program; and 29.7 (3) review the reports of the commissioners of 29.8 administration and trade and economic development provided by 29.9 section 16C.20 to ensure compliance with the goals of the 29.10 program. 29.11 Sec. 19. [16C.20] [REPORTS.] 29.12 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 29.13 commissioner shall submit an annual report pursuant to section 29.14 3.195 to the governor and the legislature with a copy to the 29.15 commissioner of trade and economic development indicating the 29.16 progress being made toward the objectives and goals of sections 29.17 16C.18 to 16C.23, 161.321, and 473.142 during the preceding 29.18 fiscal year. 29.19 Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 29.20 The commissioner of trade and economic development shall submit 29.21 an annual report to the governor and the legislature pursuant to 29.22 section 3.195 with a copy to the commissioner of 29.23 administration. This report shall include the following 29.24 information: 29.25 (1) the efforts undertaken to publicize the provisions of 29.26 the small business and small targeted group business procurement 29.27 program during the preceding fiscal year; 29.28 (2) the efforts undertaken to identify small businesses and 29.29 small targeted group businesses and the efforts undertaken to 29.30 encourage participation in the targeted group purchasing 29.31 program; 29.32 (3) the efforts undertaken by the commissioner to remedy 29.33 the inability of small businesses and small targeted group 29.34 businesses to perform on potential awards; and 29.35 (4) the commissioner's recommendations for strengthening 29.36 the small business and small targeted group business procurement 30.1 program and delivery of services to small businesses. 30.2 Subd. 3. [REPORTS FROM OTHER AGENCIES.] The commissioner 30.3 of transportation, and each metropolitan agency listed in 30.4 section 473.143, subdivision 1, shall report to the commissioner 30.5 of administration all information that the commissioner requests 30.6 to make reports required under this section. The information 30.7 must be reported at the time and in the manner requested by the 30.8 commissioner of administration. 30.9 Sec. 20. [16C.21] [ELIGIBILITY; RULES.] 30.10 (a) A small business wishing to participate in the programs 30.11 under section 16C.18, subdivisions 4 to 7, must be certified by 30.12 the commissioner. The commissioner shall adopt by rule 30.13 standards and procedures for certifying that small businesses, 30.14 small targeted group businesses, and small businesses located in 30.15 economically disadvantaged areas are eligible to participate 30.16 under the requirements of sections 16C.18 to 16C.23. The 30.17 commissioner shall adopt by rule standards and procedures for 30.18 hearing appeals and grievances and other rules necessary to 30.19 carry out the duties set forth in sections 16C.18 to 16C.23. 30.20 (b) The commissioner may make rules which exclude or limit 30.21 the participation of nonmanufacturing business, including 30.22 third-party lessors, brokers, franchises, jobbers, 30.23 manufacturers' representatives, and others from eligibility 30.24 under sections 16C.18 to 16C.23. 30.25 (c) The commissioner may make rules that set time limits 30.26 and other eligibility limits on business participation in 30.27 programs under sections 16C.18 to 16C.23. 30.28 Sec. 21. [16C.22] [CERTIFICATION.] 30.29 A business that is certified by the commissioner of 30.30 administration as a small business, small targeted group 30.31 business or a small business located in an economically 30.32 disadvantaged area is eligible to participate under the 30.33 requirements of sections 137.31 and 161.321 and, if certified as 30.34 a small business or small targeted group business, under section 30.35 473.142 without further certification by the contracting agency. 30.36 Sec. 22. [16C.23] [CRIMINAL PENALTY.] 31.1 A person who knowingly provides false information to a 31.2 public official or employee for the purpose of obtaining or 31.3 retaining certification as a small targeted group business or a 31.4 small business located in an economically disadvantaged area 31.5 under sections 16C.18 to 16C.22, 137.31, 137.35, 161.321, or 31.6 473.142 is guilty of a misdemeanor. 31.7 Sec. 23. [16C.24] [DISTRICT HEATING.] 31.8 Notwithstanding any other law, general or special, the 31.9 commissioner is authorized to enter into or approve a written 31.10 agreement not to exceed 31 years with a district heating utility 31.11 that will specify, but not be limited to, the appropriate terms 31.12 and conditions for the interchange of district heating services. 31.13 Sec. 24. [16C.25] [SURPLUS PROPERTY ACQUISITION, 31.14 DISTRIBUTION, AND DISPOSAL.] 31.15 Subdivision 1. [DEFINITIONS.] "Governmental unit or 31.16 nonprofit organization" means a governmental unit as defined in 31.17 section 471.59, subdivision 1, an Indian tribal government, and 31.18 any nonprofit and tax-exempt medical institution, hospital, 31.19 clinic, health center, school, school system, college, 31.20 university, or other institution organized and existing for any 31.21 purpose authorized by federal law to accept surplus federal 31.22 property. 31.23 Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means 31.24 state or federal commodities, equipment, materials, supplies, 31.25 books, printed matter, buildings, and other personal or real 31.26 property that is obsolete, unused, not needed for a public 31.27 purpose, or ineffective for current use. 31.28 Subd. 3. [AUTHORIZATION.] (a) The commissioner is the 31.29 state agency designated to transfer, purchase, accept, sell, or 31.30 dispose of surplus property for the state and for the benefit of 31.31 any other governmental unit or nonprofit organization for any 31.32 purpose authorized by state and federal law and in accordance 31.33 with state and federal rules and regulations. Any governmental 31.34 unit or nonprofit organization may designate the commissioner to 31.35 purchase or accept surplus property for it upon mutually 31.36 agreeable terms and conditions. The commissioner may acquire, 32.1 accept, warehouse, and distribute surplus property and charge a 32.2 fee to cover any expenses incurred in connection with any of 32.3 these acts. 32.4 (b) Federal surplus property that has been transferred to 32.5 the state for donation to public agencies and nonprofit 32.6 organizations must be transferred or sold in accordance with the 32.7 plan developed under paragraph (c). Expenses incurred in 32.8 connection with the acquisition, warehousing, distribution, and 32.9 disposal of federal surplus property must be paid from the 32.10 surplus services revolving fund. Proceeds of sales, minus any 32.11 expenses, must be deposited in the surplus services revolving 32.12 fund. 32.13 (c) The commissioner shall develop a detailed plan for 32.14 disposal of donated federal property in conformance with state 32.15 law and federal regulations. The plan must be submitted to the 32.16 governor for certification and submission to the federal 32.17 administrator of general services. 32.18 (d) The commissioner, after consultation with one or more 32.19 nonprofit organizations with an interest in providing housing 32.20 for homeless veterans and their families, may acquire property 32.21 from the United States government that is designated by the 32.22 General Services Administration as surplus property. The 32.23 commissioner may lease the property to a qualified nonprofit 32.24 organization that agrees to develop or rehabilitate the property 32.25 for the purpose of providing suitable housing for veterans and 32.26 their families. The lease agreement with the nonprofit 32.27 organization may require that the property be developed for use 32.28 as housing for homeless and displaced veterans and their 32.29 families and for veterans and their families who lose their 32.30 housing. 32.31 Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services 32.32 revolving fund is a separate fund in the state treasury. All 32.33 money resulting from the acquisition, acceptance, warehousing, 32.34 distribution, and public sale of surplus property, must be 32.35 deposited in the fund. Money paid into the surplus services 32.36 revolving fund is appropriated to the commissioner for the 33.1 purposes of the programs and services referred to in this 33.2 section. 33.3 Subd. 5. [TRANSFER OR SALE.] (a) When the state or an 33.4 agency operating under a legislative appropriation obtains 33.5 surplus property from the commissioner, the commissioner of 33.6 finance must, at the commissioner's request, transfer the cost 33.7 of the surplus property, including any expenses of acquiring, 33.8 accepting, warehousing, and distributing the surplus property, 33.9 from the appropriation of the agency receiving the surplus 33.10 property to the surplus services revolving fund. The 33.11 determination of the commissioner is final as to the cost of the 33.12 surplus property to the agency receiving the property. 33.13 (b) When any governmental unit or nonprofit organization 33.14 other than an agency receives surplus property from the 33.15 commissioner, the governmental unit or nonprofit organization 33.16 must reimburse the surplus services revolving fund for the cost 33.17 of the property, including the expenses of acquiring, accepting, 33.18 warehousing, and distributing it, in an amount the commissioner 33.19 sets. The commissioner may, however, require the governmental 33.20 unit or nonprofit organization to deposit in advance in the 33.21 surplus services revolving fund the cost of the surplus property 33.22 upon mutually agreeable terms and conditions. 33.23 (c) The commissioner may transfer or sell state surplus 33.24 property to any person at public auction, at prepriced sale, or 33.25 by sealed bid process in accordance with applicable state laws. 33.26 Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do 33.27 any of the following to dispose of state surplus property: 33.28 (1) transfer it to or between state agencies; 33.29 (2) transfer it to a governmental unit or nonprofit 33.30 organization in Minnesota; or 33.31 (3) sell it and charge a fee to cover expenses incurred by 33.32 the commissioner in the disposal of the surplus property. 33.33 The proceeds of the sale less the fee are appropriated to 33.34 the agency for whose account the sale was made, to be used and 33.35 expended by that agency to purchase similar state property. 33.36 Subd. 7. [GIFTS.] The commissioner is authorized to 34.1 solicit and accept donated money and fixed and consumable 34.2 property for the benefit of the state and any other governmental 34.3 unit or nonprofit organization for any purpose authorized by 34.4 state and federal law and in accordance with federal regulations 34.5 and rules. The gift acceptance procedures of sections 7.09 to 34.6 7.12 do not apply to this subdivision. 34.7 Sec. 25. [16C.26] [RULES.] 34.8 Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 34.9 under chapter 16B, govern under this chapter. In the event 34.10 rules adopted under chapter 16B conflict with provisions of this 34.11 chapter, this chapter shall govern. 34.12 Sec. 26. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 34.13 Notwithstanding anything in chapter 16C to the contrary, 34.14 all contracts for the repair, improvement, maintenance, or 34.15 construction of highways or highway bridges must be advertised 34.16 and let as provided by law for highway construction contracts. 34.17 Sec. 27. Minnesota Statutes 1997 Supplement, section 34.18 363.073, subdivision 1, is amended to read: 34.19 Subdivision 1. [SCOPE OF APPLICATION.] No department or34.20 agency of the state shall accept any bid or proposal for a34.21 contract or agreement(a) For all contracts for goods and 34.22 services in excess of $100,000, no department or agency of the 34.23 state shall accept any bid or proposal for a contract or 34.24 agreement from any business having more than 40 full-time 34.25 employees within this state on a single working day during the 34.26 previous 12 months, unless the firm or business has an 34.27 affirmative action plan for the employment of minority persons, 34.28 women, and qualified disabled individuals, submitted to the 34.29 commissioner of human rights for approval. No department or 34.30 agency of the state shall execute any such contract or agreement 34.31 for goods or services in excess of $100,000 with any business34.32 having more than 40 full-time employees, either within or34.33 outside this state, on a single working day during the previous34.34 12 months, unless the firm or business has anuntil the 34.35 affirmative action plan for the employment of minority persons,34.36 women, and the disabled thathas been approved by the 35.1 commissioner of human rights. Receipt of a certificate of 35.2 compliance issued by the commissioner shall signify that a firm 35.3 or business has an affirmative action plan that has been 35.4 approved by the commissioner. A certificate shall be valid for 35.5 a period of two years. A municipality as defined in section 35.6 466.01, subdivision 1, that receives state money for any reason 35.7 is encouraged to prepare and implement an affirmative action 35.8 plan for the employment of minority persons, women, and 35.9 the qualified disabled and submit the plan to the commissioner 35.10 of human rights. 35.11 (b) This paragraph applies to a contract for goods or 35.12 services in excess of $100,000 to be entered into between a 35.13 department or agency of the state, and a business that is not 35.14 subject to paragraph (a), but that has more than 40 full-time 35.15 employees on a single working day during the previous 12 months 35.16 in the state where the business has its primary place of 35.17 business. A department or agency of the state may not execute a 35.18 contract or agreement with such a business unless the business 35.19 has a certificate of compliance issued by the commissioner under 35.20 paragraph (a) or the business certifies to the contracting 35.21 agency: (1) that it is in compliance with any affirmative 35.22 action plan requirements in the jurisdiction of its primary 35.23 place of business; or (2) that the jurisdiction of its primary 35.24 place of business does not have an affirmative action plan 35.25 requirement. 35.26 Sec. 28. [REPORT.] 35.27 The commissioner of administration shall report to the 35.28 legislature by January 1, 1999, in the biennial report required 35.29 under Minnesota Statutes, section 115A.15, subdivision 5, on the 35.30 potential use of measurable objectives as a means of tracking 35.31 progress toward the purchase of recycled content goods. 35.32 Sec. 29. [REPEALER.] 35.33 Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 35.34 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 35.35 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 35.36 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 36.1 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 36.2 16B.89; and Minnesota Statutes 1997 Supplement, sections 16B.18, 36.3 subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 36.4 Sec. 30. [EFFECTIVE DATE.] 36.5 This article is effective July 1, 1998. 36.6 ARTICLE 2 36.7 CONFORMING AMENDMENTS 36.8 Section 1. Minnesota Statutes 1997 Supplement, section 36.9 3.225, subdivision 1, is amended to read: 36.10 Subdivision 1. [APPLICATION.] This section applies to a 36.11 contract for professional or technical services entered into by 36.12 the house of representatives, the senate, the legislative 36.13 coordinating commission, or any group under the jurisdiction of 36.14 the legislative coordinating commission. For purposes of this 36.15 section, "professional or technical services" has the meaning 36.16 defined in section 16B.1716C.09, subdivision 1, but does not 36.17 include legal services for official legislative business. 36.18 Sec. 2. Minnesota Statutes 1996, section 3.225, 36.19 subdivision 2, is amended to read: 36.20 Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 36.21 into a contract for professional or technical services, the 36.22 contracting entity must determine that: 36.23 (1) all provisions of section 16B.1916C.18, subdivision 236.24 3, have been verified or complied with; 36.25 (2) the work to be performed under the contract is 36.26 necessary to the entity's achievement of its responsibilities; 36.27 (3) the contract will not establish an employment 36.28 relationship between the state or the entity and any persons 36.29 performing under the contract; 36.30 (4) no current legislative employees will engage in the 36.31 performance of the contract; 36.32 (5) no state agency has previously performed or contracted 36.33 for the performance of tasks which would be substantially 36.34 duplicated under the proposed contract; 36.35 (6) the contracting entity has specified a satisfactory 36.36 method of evaluating and using the results of the work to be 37.1 performed; and 37.2 (7) the combined contract and amendments will not extend 37.3 for more than five years. 37.4 Sec. 3. Minnesota Statutes 1996, section 3.732, 37.5 subdivision 6, is amended to read: 37.6 Subd. 6. [SETTLEMENT.] The head of each department or 37.7 agency, or a designee, acting on behalf of the state, may enter 37.8 into structured settlements, through the negotiation, creation, 37.9 and use of annuities or similar financial plans for claimants, 37.10 to resolve claims arising from the alleged negligence of the 37.11 state, its agencies, or employees. Sections 16B.06, 16B.07,37.12 16B.08, and 16B.0916C.03, subdivision 4, 16C.06, and 16C.07 do 37.13 not apply to the state's selection of and contracts with 37.14 structured settlement consultants or purveyors of structured 37.15 settlement plans. 37.16 Sec. 4. Minnesota Statutes 1996, section 3.922, 37.17 subdivision 5, is amended to read: 37.18 Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council 37.19 shall annually elect a chair and other officers as it may deem 37.20 necessary. The chair may appoint subcommittees necessary to 37.21 fulfill the duties of the council. It shall also employ and 37.22 prescribe the duties of employees and agents as it deems 37.23 necessary. The compensation of the executive director of the 37.24 board is as provided by section 43A.18. All employees are in 37.25 the unclassified service. The chair is an ex officio member of 37.26 the state board of human rights. Appropriations and other funds 37.27 of the council are subject to chapter 16B16C. The council may 37.28 contract in its own name. Contracts must be approved by a 37.29 majority of the members of the council and executed by the chair 37.30 and the executive director. The council may apply for, receive, 37.31 and spend in its own name, grants and gifts of money consistent 37.32 with the powers and duties specified in this section. The 37.33 council shall maintain its primary office in Bemidji. It shall 37.34 also maintain personnel and office space in St. Paul. 37.35 Sec. 5. Minnesota Statutes 1996, section 3C.10, 37.36 subdivision 3, is amended to read: 38.1 Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may 38.2 negotiate for all or part of the editing, indexing, compiling, 38.3 and printing of Minnesota Statutes, supplements to Minnesota 38.4 Statutes, and Laws of Minnesota and contract with a law book 38.5 publisher for these services. The provisions of chapter 16B16C 38.6 as they relate to competitive bidding do not apply to these 38.7 contracts. No contract may be made until the revisor of 38.8 statutes has consulted with the legislative coordinating 38.9 commission. Failure or refusal of the commission to make a 38.10 recommendation promptly shall be deemed an affirmative 38.11 recommendation. 38.12 Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended 38.13 to read: 38.14 4A.04 [COOPERATIVE CONTRACTS.] 38.15 (a) The director may apply for, receive, and expend money 38.16 from municipal, county, regional, and other planning agencies; 38.17 apply for, accept, and disburse grants and other aids for 38.18 planning purposes from the federal government and from other 38.19 public or private sources; and may enter into contracts with 38.20 agencies of the federal government, local governmental units, 38.21 the University of Minnesota, and other educational institutions, 38.22 and private persons as necessary to perform the director's 38.23 duties. Contracts made pursuant to this section are not subject 38.24 to the provisions of chapter 16B16C, as they relate to 38.25 competitive bidding. 38.26 (b) The director may apply for, receive, and expend money 38.27 made available from federal sources or other sources for the 38.28 purposes of carrying out the duties and responsibilities of the 38.29 director relating to local and urban affairs. 38.30 (c) All money received by the director pursuant to this 38.31 section shall be deposited in the state treasury and is 38.32 appropriated to the director for the purposes for which the 38.33 money has been received. The money shall not cancel and is 38.34 available until expended. 38.35 Sec. 7. Minnesota Statutes 1996, section 6.551, is amended 38.36 to read: 39.1 6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 39.2 GOVERNMENTS.] 39.3 The state auditor may examine the books, records, 39.4 documents, and accounting procedures and practices of a 39.5 contractor or grantee of a local government pursuant to section 39.6 16B.0616C.06, subdivision 45. The examination shall be 39.7 limited to the books, records, documents, and accounting 39.8 procedures and practices that are relevant to the contract or 39.9 transaction with the local government. 39.10 Sec. 8. Minnesota Statutes 1996, section 11A.24, 39.11 subdivision 4, is amended to read: 39.12 Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may 39.13 invest funds in bankers acceptances, certificates of deposit, 39.14 deposit notes, commercial paper, mortgage securities and asset 39.15 backed securities, repurchase agreements and reverse repurchase 39.16 agreements, guaranteed investment contracts, savings accounts, 39.17 and guaranty fund certificates, surplus notes, or debentures of 39.18 domestic mutual insurance companies if they conform to the 39.19 following provisions: 39.20 (1) bankers acceptances and deposit notes of United States 39.21 banks are limited to those issued by banks rated in the highest 39.22 four quality categories by a nationally recognized rating 39.23 agency; 39.24 (2) certificates of deposit are limited to those issued by 39.25 (i) United States banks and savings institutions that are rated 39.26 in the top four quality categories by a nationally recognized 39.27 rating agency or whose certificates of deposit are fully insured 39.28 by federal agencies; or (ii) credit unions in amounts up to the 39.29 limit of insurance coverage provided by the National Credit 39.30 Union Administration; 39.31 (3) commercial paper is limited to those issued by United 39.32 States corporations or their Canadian subsidiaries and rated in 39.33 the highest two quality categories by a nationally recognized 39.34 rating agency; 39.35 (4) mortgage securities shall be rated in the top four 39.36 quality categories by a nationally recognized rating agency; 40.1 (5) collateral for repurchase agreements and reverse 40.2 repurchase agreements is limited to letters of credit and 40.3 securities authorized in this section; 40.4 (6) guaranteed investment contracts are limited to those 40.5 issued by insurance companies or banks rated in the top four 40.6 quality categories by a nationally recognized rating agency or 40.7 to alternative guaranteed investment contracts where the 40.8 underlying assets comply with the requirements of this section; 40.9 (7) savings accounts are limited to those fully insured by 40.10 federal agencies; and 40.11 (8) asset backed securities shall be rated in the top four 40.12 quality categories by a nationally recognized rating agency. 40.13 (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 40.14 16C.06 do not apply to certificates of deposit and 40.15 collateralization agreements executed by the state board under 40.16 paragraph (a), clause (2). 40.17 (c) In addition to investments authorized by paragraph (a), 40.18 clause (4), the state board may purchase from the Minnesota 40.19 housing finance agency all or any part of a pool of residential 40.20 mortgages, not in default, that has previously been financed by 40.21 the issuance of bonds or notes of the agency. The state board 40.22 may also enter into a commitment with the agency, at the time of 40.23 any issue of bonds or notes, to purchase at a specified future 40.24 date, not exceeding 12 years from the date of the issue, the 40.25 amount of mortgage loans then outstanding and not in default 40.26 that have been made or purchased from the proceeds of the bonds 40.27 or notes. The state board may charge reasonable fees for any 40.28 such commitment and may agree to purchase the mortgage loans at 40.29 a price sufficient to produce a yield to the state board 40.30 comparable, in its judgment, to the yield available on similar 40.31 mortgage loans at the date of the bonds or notes. The state 40.32 board may also enter into agreements with the agency for the 40.33 investment of any portion of the funds of the agency. The 40.34 agreement must cover the period of the investment, withdrawal 40.35 privileges, and any guaranteed rate of return. 40.36 Sec. 9. Minnesota Statutes 1996, section 12.221, 41.1 subdivision 5, is amended to read: 41.2 Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any 41.3 federal-state agreement entered into by the state director, 41.4 serving as the governor's authorized representative, in the 41.5 acceptance of federal money made available as a result of a 41.6 disaster declaration, and upon the review and acceptance by the 41.7 attorney general's office of the language contained in the 41.8 subgrant agreement and any amendments to the agreement, the 41.9 requirements of section 16B.0616C.06, subdivision 2, paragraph 41.10 (a), clause (3), must be waived. 41.11 Sec. 10. Minnesota Statutes 1996, section 15.061, is 41.12 amended to read: 41.13 15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 41.14 In accordance with section 16B.17sections 16C.03 and 41.15 16C.09, the head of a state department or agency may, with the 41.16 approval of the commissioner of administration, contract for 41.17 professional or technical services in connection with the 41.18 operation of the department or agency. A contract negotiated 41.19 under this section is not subject to the competitive bidding 41.20 requirements of chapter 16B16C. 41.21 Sec. 11. Minnesota Statutes 1996, section 16A.101, is 41.22 amended to read: 41.23 16A.101 [SERVICE CONTRACTS.] 41.24 The state accounting system must list expenditures for 41.25 professional and technical service contracts, as defined in 41.26 section 16B.1716C.09, subdivision 1, as a separate category. 41.27 No other expenditures may be included in this category. 41.28 Sec. 12. Minnesota Statutes 1997 Supplement, section 41.29 16A.15, subdivision 3, is amended to read: 41.30 Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 41.31 not be made without prior obligation. An obligation may not be 41.32 incurred against any fund, allotment, or appropriation unless 41.33 the commissioner has certified a sufficient unencumbered balance 41.34 or the accounting system shows sufficient allotment or 41.35 encumbrance balance in the fund, allotment, or appropriation to 41.36 meet it. The commissioner shall determine when the accounting 42.1 system may be used to incur obligations without the 42.2 commissioner's certification of a sufficient unencumbered 42.3 balance. An expenditure or obligation authorized or incurred in 42.4 violation of this chapter is invalid and ineligible for payment 42.5 until made valid. A payment made in violation of this chapter 42.6 is illegal. An employee authorizing or making the payment, or 42.7 taking part in it, and a person receiving any part of the 42.8 payment, are jointly and severally liable to the state for the 42.9 amount paid or received. If an employee knowingly incurs an 42.10 obligation or authorizes or makes an expenditure in violation of 42.11 this chapter or takes part in the violation, the violation is 42.12 just cause for the employee's removal by the appointing 42.13 authority or by the governor if an appointing authority other 42.14 than the governor fails to do so. In the latter case, the 42.15 governor shall give notice of the violation and an opportunity 42.16 to be heard on it to the employee and to the appointing 42.17 authority. A claim presented against an appropriation without 42.18 prior allotment or encumbrance may be made valid on 42.19 investigation, review, and approval by the agency head in 42.20 accordance with the commissioner's policy, if the services, 42.21 materials, or supplies to be paid for were actually furnished in 42.22 good faith without collusion and without intent to defraud. The 42.23 commissioner may then draw a warrant to pay the claim just as 42.24 properly allotted and encumbered claims are paid. 42.25 (b) The commissioner may approve payment for materials and 42.26 supplies in excess of the obligation amount when increases are 42.27 authorized by section 16B.0716C.03, subdivision 23. 42.28 (c) To minimize potential construction delay claims, an 42.29 agency with a project funded by a building appropriation may 42.30 allow a contractor to proceed with supplemental work within the 42.31 limits of the appropriation before money is encumbered. Under 42.32 this circumstance, the agency may requisition funds and allow 42.33 contractors to expeditiously proceed with a construction 42.34 sequence. While the contractor is proceeding, the agency shall 42.35 immediately act to encumber the required funds. 42.36 Sec. 13. Minnesota Statutes 1996, section 16A.85, 43.1 subdivision 1, is amended to read: 43.2 Subdivision 1. [AUTHORIZATION.] The commissioner of 43.3 administration may determine, in conjunction with the 43.4 commissioner of finance, the personal property needs of the 43.5 various state departments, agencies, boards, commissions and the 43.6 legislature of the kinds of property identified in this 43.7 subdivision that may be economically funded through a master 43.8 lease program and request the commissioner of finance to execute 43.9 a master lease. The master lease may be used only to finance 43.10 the following kinds of purchases: 43.11 (a) The master lease may be used to finance purchases by 43.12 the commissioner of administration with money from an internal 43.13 services fund. 43.14 (b) The master lease may be used to refinance a purchase of 43.15 equipment already purchased under a lease-purchase agreement. 43.16 (c) The master lease may be used to finance purchases of 43.17 large equipment with a capital value of more than $100,000 and a 43.18 useful life of more than ten years. 43.19 (d) The legislature may specifically authorize a particular 43.20 purchase to be financed using the master lease. The legislature 43.21 anticipates that this authorization will be given only to 43.22 finance the purchase of major pieces of equipment with a capital 43.23 value of more than $10,000. 43.24 The commissioner of finance may authorize the sale and 43.25 issuance of certificates of participation relative to a master 43.26 lease in an amount sufficient to fund these personal property 43.27 needs. The term of the certificates must be less than the 43.28 expected useful life of the equipment whose purchase is financed 43.29 by the certificates. The commissioner of administration may use 43.30 the proceeds from the master lease or the sale of the 43.31 certificates of participation to acquire the personal property 43.32 through the appropriate procurement procedure in chapter 16B16C. 43.33 Money appropriated for the lease or acquisition of this personal 43.34 property is appropriated to the commissioner of finance to make 43.35 master lease payments. 43.36 Sec. 14. Minnesota Statutes 1997 Supplement, section 44.1 16B.465, subdivision 7, is amended to read: 44.2 Subd. 7. [EXEMPTION.] The system is exempt from the 44.3 five-year limitation on contracts set by section 16B.07,44.4 subdivision 2sections 16C.06, subdivision 2, paragraph (a), 44.5 clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 44.6 clause (6). 44.7 Sec. 15. Minnesota Statutes 1997 Supplement, section 44.8 16E.07, subdivision 9, is amended to read: 44.9 Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall 44.10 identify opportunities to aggregate demand for technical 44.11 services required by government units for online activities and 44.12 may contract with governmental or nongovernmental entities to 44.13 provide services. These contracts are not subject to the 44.14 requirements of chapterchapters 16B and 16C, except 44.15 sections 16B.167, 16B.17, and 16B.17516C.05, 16C.08, 16C.09, 44.16 and 16C.10. 44.17 Sec. 16. Minnesota Statutes 1997 Supplement, section 44.18 17.03, subdivision 12, is amended to read: 44.19 Subd. 12. [CONTRACTS; APPROPRIATION.] The commissioner may 44.20 accept money as part of a contract with any public or private 44.21 entity to provide statutorily prescribed services by the 44.22 department. A contract must specify the services to be provided 44.23 by the department and the amount and method of reimbursement. 44.24 Money generated in a contractual agreement under this section 44.25 must be deposited in a special revenue fund and is appropriated 44.26 to the department for purposes of providing services specified 44.27 in the contracts. Contracts under this section must be 44.28 processed in accordance with section 16B.0616C.06. The 44.29 commissioner must report revenues collected and expenditures 44.30 made under this section to the chairs of the environment and 44.31 natural resources finance committee in the house of 44.32 representatives and the environment and agriculture budget 44.33 division in the senate by January 15 of each odd-numbered year. 44.34 Sec. 17. Minnesota Statutes 1996, section 17.1015, is 44.35 amended to read: 44.36 17.1015 [PROMOTIONAL EXPENDITURES.] 45.1 In order to accomplish the purposes of section 17.101, the 45.2 commissioner may participate jointly with private persons in 45.3 appropriate programs and projects and may enter into contracts 45.4 to carry out those programs and projects. The contracts may not 45.5 include the acquisition of land or buildings and are not subject 45.6 to the provisions of chapter 16B16C relating to competitive 45.7 bidding. 45.8 The commissioner may spend money appropriated for the 45.9 purposes of section 17.101, and expenditures made pursuant to 45.10 section 17.101 for food, lodging, or travel are not governed by 45.11 the travel rules of the commissioner of employee relations. 45.12 Sec. 18. Minnesota Statutes 1996, section 41A.023, is 45.13 amended to read: 45.14 41A.023 [POWERS.] 45.15 In addition to other powers granted by this chapter, the 45.16 board may: 45.17 (1) sue and be sued; 45.18 (2) acquire, hold, lease, and transfer any interest in real 45.19 and personal property for its corporate purposes; 45.20 (3) sell at public or private sale, at the price or prices 45.21 determined by the board, any note, mortgage, lease, sublease, 45.22 lease purchase, or other instrument or obligation evidencing or 45.23 securing a loan made for the purpose of economic development, 45.24 job creation, redevelopment, or community revitalization by a 45.25 public agency to a business, for-profit or nonprofit 45.26 organization, or an individual; 45.27 (4) obtain insurance on its property; 45.28 (5) obtain municipal bond insurance, letters of credit, 45.29 surety obligations, or similar agreements from financial 45.30 institutions; 45.31 (6) enter into other agreements or transactions, without 45.32 regard to chapter 16B or 16C, that the board considers necessary 45.33 or appropriate to carry out the purposes of this chapter with 45.34 federal or state agencies, political subdivisions of the state, 45.35 or other persons, firms, or corporations; 45.36 (7) establish and collect fees without regard to chapter 14 46.1 and section 16A.1285; 46.2 (8) accept appropriations, gifts, grants, and bequests; 46.3 (9) use money received from any source for any legal 46.4 purpose or program of the board; 46.5 (10) participate in loans for agricultural resource 46.6 projects in accordance with section 41A.035; 46.7 (11) provide small business development loans in accordance 46.8 with section 41A.036; and 46.9 (12) guarantee or insure bonds or notes issued by the board. 46.10 Sec. 19. Minnesota Statutes 1997 Supplement, section 46.11 41D.03, subdivision 7, is amended to read: 46.12 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 46.13 educational equipment may be procured for programs of the 46.14 Minnesota center for agriculture education by the council either 46.15 by brand designation or in accordance with standards and 46.16 specifications the council may adopt, notwithstanding chapter 46.17 16B16C. 46.18 Sec. 20. Minnesota Statutes 1996, section 43A.23, 46.19 subdivision 1, is amended to read: 46.20 Subdivision 1. [GENERAL.] The commissioner is authorized 46.21 to request bids from carriers or to negotiate with carriers and 46.22 to enter into contracts with carriers which in the judgment of 46.23 the commissioner are best qualified to underwrite and service 46.24 the benefit plans. Contracts entered into with carriers are not 46.25 subject to the requirements of sections 16B.19 to 16B.2216C.18 46.26 to 16C.21. The commissioner may negotiate premium rates and 46.27 coverage provisions with all carriers licensed under chapters 46.28 62A, 62C, and 62D. The commissioner may also negotiate 46.29 reasonable restrictions to be applied to all carriers under 46.30 chapters 62A, 62C, and 62D. Contracts to underwrite the benefit 46.31 plans must be bid or negotiated separately from contracts to 46.32 service the benefit plans, which may be awarded only on the 46.33 basis of competitive bids. The commissioner shall consider the 46.34 cost of the plans, conversion options relating to the contracts, 46.35 service capabilities, character, financial position, and 46.36 reputation of the carriers, and any other factors which the 47.1 commissioner deems appropriate. Each benefit contract must be 47.2 for a uniform term of at least one year, but may be made 47.3 automatically renewable from term to term in the absence of 47.4 notice of termination by either party. The commissioner shall, 47.5 to the extent feasible, make hospital and medical benefits 47.6 available from at least one carrier licensed to do business 47.7 pursuant to each of chapters 62A, 62C, and 62D. The 47.8 commissioner need not provide health maintenance organization 47.9 services to an employee who resides in an area which is not 47.10 served by a licensed health maintenance organization. The 47.11 commissioner may refuse to allow a health maintenance 47.12 organization to continue as a carrier. The commissioner may 47.13 elect not to offer all three types of carriers if there are no 47.14 bids or no acceptable bids by that type of carrier or if the 47.15 offering of additional carriers would result in substantial 47.16 additional administrative costs. A carrier licensed under 47.17 chapter 62A is exempt from the tax imposed by section 60A.15 on 47.18 premiums paid to it by the state. 47.19 Sec. 21. Minnesota Statutes 1996, section 44A.01, 47.20 subdivision 1, is amended to read: 47.21 Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade 47.22 center corporation is a public corporation established to 47.23 facilitate and support Minnesota world trade center programs and 47.24 services and to promote the Minnesota world trade center. The 47.25 corporation is a state agency, but is not subject to chapters 47.26 14, 16A, 16B, 16C, 43A, and 179A. 47.27 Sec. 22. Minnesota Statutes 1996, section 45.0291, is 47.28 amended to read: 47.29 45.0291 [DEPARTMENT BONDS.] 47.30 Bonds issued under chapters 45 to 83, 309, 332, and 47.31 sections 326.83 to 326.98, are not state bonds or contracts for 47.32 purposes of sections 8.05 and 16B.0616C.06, subdivision 2. 47.33 Sec. 23. Minnesota Statutes 1997 Supplement, section 47.34 61B.21, subdivision 1, is amended to read: 47.35 Subdivision 1. [FUNCTIONS.] The Minnesota life and health 47.36 insurance guaranty association shall perform its functions under 48.1 the plan of operation established and approved under section 48.2 61B.25, and shall exercise its powers through a board of 48.3 directors. The association is not a state agency for purposes 48.4 of chapter 16A, 16B, 16C, or 43A. For purposes of 48.5 administration and assessment, the association shall establish 48.6 and maintain two accounts: 48.7 (1) the life insurance and annuity account which includes 48.8 the following subaccounts: 48.9 (i) the life insurance account; 48.10 (ii) the annuity account; and 48.11 (iii) the unallocated annuity account; and 48.12 (2) the health insurance account. 48.13 Sec. 24. Minnesota Statutes 1996, section 84.025, 48.14 subdivision 7, is amended to read: 48.15 Subd. 7. [CONTRACTS.] The commissioner of natural 48.16 resources may contract with the federal government, local 48.17 governmental units, the University of Minnesota, and other 48.18 educational institutions, and private persons as may be 48.19 necessary in the performance of duties. Contracts made pursuant 48.20 to this section for professional services shall not be subject 48.21 to the provisions of chapter 16B16C, as they relate to 48.22 competitive bidding. 48.23 Sec. 25. Minnesota Statutes 1996, section 84.026, is 48.24 amended to read: 48.25 84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 48.26 SERVICES.] 48.27 The commissioner of natural resources is authorized to 48.28 enter into contractual agreements with any public or private 48.29 entity for the provision of statutorily prescribed natural 48.30 resources services by the department. The contracts shall 48.31 specify the services to be provided and the amount and method of 48.32 reimbursement. Funds generated in a contractual agreement made 48.33 pursuant to this section shall be deposited in the special 48.34 revenue fund and are appropriated to the department for purposes 48.35 of providing the services specified in the contracts. All such 48.36 contractual agreements shall be processed in accordance with the 49.1 provisions of section 16B.0616C.06. The commissioner shall 49.2 report revenues collected and expenditures made under this 49.3 section to the chairs of the committees on appropriations in the 49.4 house and finance in the senate by January 1 of each 49.5 odd-numbered year. 49.6 Sec. 26. Minnesota Statutes 1996, section 84.0845, is 49.7 amended to read: 49.8 84.0845 [ADVANCE OF MATCHING FUNDS.] 49.9 The commissioner may advance funds appropriated for fish 49.10 and wildlife programs to government agencies, the National Fish 49.11 and Wildlife Foundation, federally recognized Indian tribes and 49.12 bands, and private, nonprofit organizations for the purposes of 49.13 securing nonstate matching funds for projects involving 49.14 acquisition and improvement of fish and wildlife habitat and 49.15 related research and management. The commissioner shall execute 49.16 agreements for contracts with the matching parties under section49.17 16B.06sections 16C.03, subdivision 4, and 16C.06 prior to 49.18 advancing any state funds. The agreement or contract shall 49.19 contain provisions for return of the state's share and the 49.20 matching funds within a period of time specified by the 49.21 commissioner. The state's funds and the nonstate matching funds 49.22 must be deposited in a separate account and expended solely for 49.23 the purposes set forth in the agreement or contract. The 49.24 commissioner shall enter into agreements or contracts only with 49.25 the National Fish and Wildlife Foundation and federal and 49.26 nonprofit authorities deemed by the commissioner to be dedicated 49.27 to the purposes of the project. 49.28 Sec. 27. Minnesota Statutes 1996, section 85A.02, 49.29 subdivision 3, is amended to read: 49.30 Subd. 3. The board may conduct research studies and 49.31 programs, collect and analyze data and prepare reports, maps, 49.32 charts and other information relating to the zoological garden 49.33 or any wild or domestic animals or may contract for any of such 49.34 services without complying with chapter 16B16C. 49.35 Sec. 28. Minnesota Statutes 1997 Supplement, section 49.36 85A.02, subdivision 5b, is amended to read: 50.1 Subd. 5b. [EXEMPTIONS.] The board is not subject to 50.2 sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 50.3 chapterchapters 16B and 16C, except for sections 16B.07,50.4 16B.102, 16B.17, 16B.19, 16B.35, and 16B.5516B.35, 16B.55, 50.5 16C.07, 16C.09, 16C.10, and 16C.18; and chapter 14, except 50.6 section 14.386, paragraph (a), clauses (1) and (3). Section 50.7 14.386, paragraph (b), does not apply to the board's actions. 50.8 Sec. 29. Minnesota Statutes 1996, section 85A.02, 50.9 subdivision 16, is amended to read: 50.10 Subd. 16. The board may acquire by lease-purchase or 50.11 installment purchase contract, transportation systems, 50.12 facilities and equipment that it determines will substantially 50.13 enhance the public's opportunity to view, study or derive 50.14 information concerning the animals to be located in the 50.15 zoological garden, and will increase attendance at the garden. 50.16 The contracts may provide for: (1) the payment of money over a 50.17 12-year period, or over a longer period not exceeding 25 years 50.18 if approved by the board; (2) the payment of money from any 50.19 funds of the board not pledged or appropriated for another 50.20 purpose; (3) indemnification of the lessor or seller for damage 50.21 to property or injury to persons due primarily to the actions of 50.22 the board or its employees; (4) the transfer of title to the 50.23 property to the board upon execution of the contract or upon 50.24 payment of specified amounts; (5) the reservation to the lessor 50.25 or seller of a security interest in the property; and (6) any 50.26 other terms that the board determines to be commercially 50.27 reasonable. Property so acquired by the board, and its purchase 50.28 or use by the board, or by any nonprofit corporation having a 50.29 concession from the board requiring its purchase, shall not be 50.30 subject to taxation by the state or its political subdivisions. 50.31 Each contract shall be subject to the provisions of chapter 16B50.32 16C, relating to competitive bidding, provided that, 50.33 notwithstanding subdivision 5b, the board is not required to 50.34 readvertise for competitive proposals for any transportation 50.35 system, facilities and equipment heretofore selected from 50.36 competitive proposals. 51.1 Sec. 30. Minnesota Statutes 1996, section 85A.02, 51.2 subdivision 18, is amended to read: 51.3 Subd. 18. [PURCHASING.] The board may contract for 51.4 supplies, materials, purchase or rental of equipment, and 51.5 utility services. Except as provided in subdivision 5b, chapter 51.6 16B16C does not apply to these contracts. 51.7 Sec. 31. Minnesota Statutes 1996, section 103F.515, 51.8 subdivision 3, is amended to read: 51.9 Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may 51.10 acquire, or accept by gift or donation, conservation easements 51.11 on eligible land. An easement may be permanent or of limited 51.12 duration. An easement acquired on land for windbreak purposes, 51.13 under subdivision 2, may be only of permanent duration. An 51.14 easement of limited duration may not be acquired if it is for a 51.15 period less than 20 years. The negotiation and acquisition of 51.16 easements authorized by this section are exempt from the 51.17 contractual provisions of chapterchapters 16B and 16C. 51.18 (b) The board may acquire, or accept by gift or donation, 51.19 flowage easements when necessary for completion of wetland 51.20 restoration projects. 51.21 Sec. 32. Minnesota Statutes 1996, section 116.03, 51.22 subdivision 2, is amended to read: 51.23 Subd. 2. The commissioner shall organize the agency and 51.24 employ such assistants and other officers, employees and agents 51.25 as the commissioner may deem necessary to discharge the 51.26 functions of the commissioner's office, define the duties of 51.27 such officers, employees and agents, and delegate to them any of 51.28 the commissioner's powers, duties, and responsibilities, subject 51.29 to the commissioner's control and under such conditions as the 51.30 commissioner may prescribe. The commissioner may also contract 51.31 with persons, firms, corporations, the federal government and 51.32 any agency or instrumentality thereof, the water research center 51.33 of the University of Minnesota or any other instrumentality of 51.34 such university, for doing any of the work of the commissioner's 51.35 office, and none of the provisions of chapter 16B16C, relating 51.36 to bids, shall apply to such contracts. 52.1 Sec. 33. Minnesota Statutes 1996, section 116J.035, 52.2 subdivision 1, is amended to read: 52.3 Subdivision 1. [POWERS.] The commissioner may: 52.4 (a) apply for, receive, and expend money from municipal, 52.5 county, regional, and other government agencies; 52.6 (b) apply for, accept, and disburse grants and other aids 52.7 from other public or private sources; 52.8 (c) contract for professional services if such work or 52.9 services cannot be satisfactorily performed by employees of the 52.10 department or by any other state agency; 52.11 (d) enter into interstate compacts to jointly carry out 52.12 such research and planning with other states or the federal 52.13 government where appropriate; 52.14 (e) distribute informational material at no cost to the 52.15 public upon reasonable request; and 52.16 (f) enter into contracts necessary for the performance of 52.17 the commissioner's duties with federal, state, regional, 52.18 metropolitan, local, and other agencies or units of government; 52.19 educational institutions, including the University of 52.20 Minnesota. Contracts made pursuant to this section shall not be 52.21 subject to the competitive bidding requirements of chapter 16B52.22 16C. 52.23 The commissioner may apply for, receive, and expend money 52.24 made available from federal or other sources for the purpose of 52.25 carrying out the duties and responsibilities of the commissioner 52.26 pursuant to this chapter. 52.27 All moneys received by the commissioner pursuant to this 52.28 chapter shall be deposited in the state treasury and are 52.29 appropriated to the commissioner for the purpose for which the 52.30 moneys have been received. The money shall not cancel and shall 52.31 be available until expended. 52.32 Sec. 34. Minnesota Statutes 1996, section 116J.402, is 52.33 amended to read: 52.34 116J.402 [COOPERATIVE CONTRACTS.] 52.35 The commissioner of trade and economic development may 52.36 apply for, receive, and spend money for community development 53.1 from municipal, county, regional, and other planning agencies. 53.2 The commissioner may also apply for, accept, and disburse grants 53.3 and other aids for community development and related planning 53.4 from the federal government and other sources. The commissioner 53.5 may enter into contracts with agencies of the federal 53.6 government, local governmental units, regional development 53.7 commissions, and the metropolitan council, other state agencies, 53.8 the University of Minnesota, and other educational institutions, 53.9 and private persons as necessary to perform the commissioner's 53.10 duties. Contracts made according to this section, except those 53.11 with private persons, are not subject to the provisions of 53.12 chapter 16B16C concerning competitive bidding. 53.13 The commissioner may apply for, receive, and spend money 53.14 made available from federal sources or other sources for the 53.15 purposes of carrying out the duties and responsibilities of the 53.16 commissioner. 53.17 Money received by the commissioner under this section must 53.18 be deposited in the state treasury and is appropriated to the 53.19 commissioner for the purposes for which the money has been 53.20 received. The money does not cancel and is available until 53.21 spent. 53.22 Sec. 35. Minnesota Statutes 1996, section 116J.58, 53.23 subdivision 2, is amended to read: 53.24 Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry 53.25 out duties and responsibilities and to serve the people of the 53.26 state in the promotion of tourism, trade, and economic 53.27 development, the commissioner may engage in programs and 53.28 projects jointly with a private person, firm, corporation or 53.29 association and may enter into contracts under terms to be 53.30 mutually agreed upon to carry out such programs and projects not 53.31 including acquisition of land or buildings. Contracts may be 53.32 negotiated and are not subject to the provisions of chapter 16B53.33 16C relating to competitive bidding. 53.34 Sec. 36. Minnesota Statutes 1996, section 116J.68, 53.35 subdivision 2, is amended to read: 53.36 Subd. 2. The bureau shall: 54.1 (a) provide information and assistance with respect to all 54.2 aspects of business planning and business management related to 54.3 the start-up, operation, or expansion of a small business in 54.4 Minnesota; 54.5 (b) refer persons interested in the start-up, operation, or 54.6 expansion of a small business in Minnesota to assistance 54.7 programs sponsored by federal agencies, state agencies, 54.8 educational institutions, chambers of commerce, civic 54.9 organizations, community development groups, private industry 54.10 associations, and other organizations or to the business 54.11 assistance referral system established by the Minnesota Project 54.12 Outreach Corporation; 54.13 (c) plan, develop, and implement a master file of 54.14 information on small business assistance programs of federal, 54.15 state, and local governments, and other public and private 54.16 organizations so as to provide comprehensive, timely information 54.17 to the bureau's clients; 54.18 (d) employ staff with adequate and appropriate skills and 54.19 education and training for the delivery of information and 54.20 assistance; 54.21 (e) seek out and utilize, to the extent practicable, 54.22 contributed expertise and services of federal, state, and local 54.23 governments, educational institutions, and other public and 54.24 private organizations; 54.25 (f) maintain a close and continued relationship with the 54.26 director of the procurement program within the department of 54.27 administration so as to facilitate the department's duties and 54.28 responsibilities under sections 16B.19 to 16B.2216C.18 to 54.29 16C.21 relating to the small targeted group business and 54.30 economically disadvantaged business program of the state; 54.31 (g) develop an information system which will enable the 54.32 commissioner and other state agencies to efficiently store, 54.33 retrieve, analyze, and exchange data regarding small business 54.34 development and growth in the state. All executive branch 54.35 agencies of state government and the secretary of state shall to 54.36 the extent practicable, assist the bureau in the development and 55.1 implementation of the information system; 55.2 (h) establish and maintain a toll free telephone number so 55.3 that all small business persons anywhere in the state can call 55.4 the bureau office for assistance. An outreach program shall be 55.5 established to make the existence of the bureau well known to 55.6 its potential clientele throughout the state. If the small 55.7 business person requires a referral to another provider the 55.8 bureau may use the business assistance referral system 55.9 established by the Minnesota Project Outreach Corporation; 55.10 (i) conduct research and provide data as required by the 55.11 state legislature; 55.12 (j) develop and publish material on all aspects of the 55.13 start-up, operation, or expansion of a small business in 55.14 Minnesota; 55.15 (k) collect and disseminate information on state 55.16 procurement opportunities, including information on the 55.17 procurement process; 55.18 (l) develop a public awareness program through the use of 55.19 newsletters, personal contacts, and electronic and print news 55.20 media advertising about state assistance programs for small 55.21 businesses, including those programs specifically for socially 55.22 disadvantaged small business persons; 55.23 (m) enter into agreements with the federal government and 55.24 other public and private entities to serve as the statewide 55.25 coordinator or host agency for the federal small business 55.26 development center program under United States Code, title 15, 55.27 section 648; and 55.28 (n) assist providers in the evaluation of their programs 55.29 and the assessment of their service area needs. The bureau may 55.30 establish model evaluation techniques and performance standards 55.31 for providers to use. 55.32 Sec. 37. Minnesota Statutes 1996, section 116J.966, 55.33 subdivision 1, is amended to read: 55.34 Subdivision 1. [GENERALLY.] (a) The commissioner shall 55.35 promote, develop, and facilitate trade and foreign investment in 55.36 Minnesota. In furtherance of these goals, and in addition to 56.1 the powers granted by section 116J.035, the commissioner may: 56.2 (1) locate, develop, and promote international markets for 56.3 Minnesota products and services; 56.4 (2) arrange and lead trade missions to countries with 56.5 promising international markets for Minnesota goods, technology, 56.6 services, and agricultural products; 56.7 (3) promote Minnesota products and services at domestic and 56.8 international trade shows; 56.9 (4) organize, promote, and present domestic and 56.10 international trade shows featuring Minnesota products and 56.11 services; 56.12 (5) host trade delegations and assist foreign traders in 56.13 contacting appropriate Minnesota businesses and investments; 56.14 (6) develop contacts with Minnesota businesses and gather 56.15 and provide information to assist them in locating and 56.16 communicating with international trading or joint venture 56.17 counterparts; 56.18 (7) provide information, education, and counseling services 56.19 to Minnesota businesses regarding the economic, commercial, 56.20 legal, and cultural contexts of international trade; 56.21 (8) provide Minnesota businesses with international trade 56.22 leads and information about the availability and sources of 56.23 services relating to international trade, such as export 56.24 financing, licensing, freight forwarding, international 56.25 advertising, translation, and custom brokering; 56.26 (9) locate, attract, and promote foreign direct investment 56.27 and business development in Minnesota to enhance employment 56.28 opportunities in Minnesota; 56.29 (10) provide foreign businesses and investors desiring to 56.30 locate facilities in Minnesota information regarding sources of 56.31 governmental, legal, real estate, financial, and business 56.32 services; 56.33 (11) enter into contracts or other agreements with private 56.34 persons and public entities, including agreements to establish 56.35 and maintain offices and other types of representation in 56.36 foreign countries, to carry out the purposes of promoting 57.1 international trade and attracting investment from foreign 57.2 countries to Minnesota and to carry out this section, without 57.3 regard to sections 16B.07 and 16B.09section 16C.07; 57.4 (12) enter into administrative, programming, and service 57.5 partnerships with the Minnesota world trade center; and 57.6 (13) market trade-related materials to businesses and 57.7 organizations, and the proceeds of which must be placed in a 57.8 special revolving account and are appropriated to the 57.9 commissioner to prepare and distribute trade-related materials. 57.10 (b) The programs and activities of the commissioner of 57.11 trade and economic development and the Minnesota trade division 57.12 may not duplicate programs and activities of the commissioner of 57.13 agriculture or the Minnesota world trade center corporation. 57.14 (c) The commissioner shall notify the chairs of the senate 57.15 finance and house appropriations committees of each agreement 57.16 under this subdivision to establish and maintain an office or 57.17 other type of representation in a foreign country. 57.18 Sec. 38. Minnesota Statutes 1997 Supplement, section 57.19 121.1113, subdivision 2, is amended to read: 57.20 Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 57.21 ASSISTANCE.] The department of children, families, and learning 57.22 shall contract for professional and technical services according 57.23 to competitive bidding procedures under chapter 16B16C for 57.24 purposes of this section. 57.25 Sec. 39. Minnesota Statutes 1996, section 124.14, 57.26 subdivision 1, is amended to read: 57.27 Subdivision 1. The commissioner shall supervise 57.28 distribution of school aids and grants in accordance with law. 57.29 It may make rules consistent with law for the distribution to 57.30 enable districts to perform efficiently the services required by 57.31 law and further education in the state, including reasonable 57.32 requirements for the reports and accounts to it as will assure 57.33 accurate and lawful apportionment of aids. State and federal 57.34 aids and discretionary or entitlement grants distributed by the 57.35 commissioner shall not be subject to the contract approval 57.36 procedures of the commissioner of administration or to chapter 58.1 16A or, 16B, or 16C. The commissioner shall adopt internal 58.2 procedures for administration and monitoring of aids and grants. 58.3 Sec. 40. Minnesota Statutes 1996, section 126.151, 58.4 subdivision 2, is amended to read: 58.5 Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner 58.6 and the board of trustees of the Minnesota state colleges and 58.7 universities may retain dues and other money collected on behalf 58.8 of students participating in approved vocational student 58.9 organizations and may deposit the money in separate accounts. 58.10 The money in these accounts shall be available for expenditures 58.11 for state and national activities related to specific 58.12 organizations. Administration of money collected under this 58.13 section is not subject to the provisions of chapters 15, 58.14 16A, and16B, and 16C, and may be deposited outside the state 58.15 treasury. Money shall be administered under the policies of the 58.16 applicable state board or agency relating to post-secondary and 58.17 secondary vocational student organizations and is subject to 58.18 audit by the legislative auditor. Any unexpended money shall 58.19 not cancel but may be carried forward to the next fiscal year. 58.20 Sec. 41. Minnesota Statutes 1996, section 129C.10, 58.21 subdivision 7, is amended to read: 58.22 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 58.23 educational equipment may be procured for programs of the Lola 58.24 and Rudy Perpich Minnesota center for arts education by the 58.25 board either by brand designation or in accordance with 58.26 standards and specifications the board may adopt, 58.27 notwithstanding chapterchapters 16B and 16C. 58.28 Sec. 42. Minnesota Statutes 1996, section 136A.06, is 58.29 amended to read: 58.30 136A.06 [FEDERAL FUNDS.] 58.31 The higher education services office is designated the 58.32 state agency to apply for, receive, accept, and disburse to both 58.33 public and private institutions of higher education all federal 58.34 funds which are allocated to the state of Minnesota to support 58.35 higher education programs, construction, or other activities and 58.36 which require administration by a state higher education agency 59.1 under the Higher Education Facilities Act of 1963, and any 59.2 amendments thereof, the Higher Education Act of 1965, and any 59.3 amendments thereof, and any other law which provides funds for 59.4 higher education and requires administration by a state higher 59.5 education agency as enacted or may be enacted by the Congress of 59.6 the United States; provided that no commitment shall be made 59.7 that shall bind the legislature to make appropriations beyond 59.8 current allocations of funds. The office may apply for, 59.9 receive, accept, and disburse all administrative funds available 59.10 to the office for administering federal funds to support higher 59.11 education programs, construction, or other activities. The 59.12 office also may apply for, receive, accept, and disburse any 59.13 research, planning, or program funds which are available for 59.14 purposes consistent with the provisions of this chapter. In 59.15 making application for and administering federal funds the 59.16 office may comply with any and all requirements of federal law 59.17 and federal rules and regulations to enable it to receive and 59.18 accept such funds. The expenditure of any such funds received 59.19 shall be governed by the laws of the state, except insofar as 59.20 federal regulations may otherwise provide. The office may 59.21 contract with both public and private institutions in 59.22 administering federal funds, and such contracts shall not be 59.23 subject to the provisions of chapter 16B16C. All such money 59.24 received by the office shall be deposited in the state treasury 59.25 and are hereby appropriated to it annually for the purpose for 59.26 which such funds are received. None of such moneys shall cancel 59.27 but shall be available until expended. 59.28 Sec. 43. Minnesota Statutes 1996, section 136A.16, 59.29 subdivision 1, is amended to read: 59.30 Subdivision 1. Notwithstanding chapter 16B16C, the 59.31 Minnesota higher education services office is designated as the 59.32 administrative agency for carrying out the purposes and terms of 59.33 sections 136A.15 to 136A.1702. The office may establish one or 59.34 more loan programs. 59.35 Sec. 44. Minnesota Statutes 1996, section 136A.29, 59.36 subdivision 6, is amended to read: 60.1 Subd. 6. The authority is authorized and empowered to 60.2 determine the location and character of any project to be 60.3 financed under the provisions of sections 136A.25 to 136A.42, 60.4 and to construct, reconstruct, remodel, maintain, manage, 60.5 enlarge, alter, add to, repair, operate, lease, as lessee or 60.6 lessor, and regulate the same, to enter into contracts for any 60.7 or all of such purposes, to enter into contracts for the 60.8 management and operation of a project, and to designate a 60.9 participating institution of higher education as its agent to 60.10 determine the location and character of a project undertaken by 60.11 such participating institution of higher education under the 60.12 provisions of sections 136A.25 to 136A.42 and as the agent of 60.13 the authority, to construct, reconstruct, remodel, maintain, 60.14 manage, enlarge, alter, add to, repair, operate, lease, as 60.15 lessee or lessor, and regulate the same, and as the agent of the 60.16 authority, to enter into contracts for any or all of such 60.17 purposes, including contracts for the management and operation 60.18 of such project. Contracts of the authority or of a 60.19 participating institution of higher education to acquire or to 60.20 construct, reconstruct, remodel, maintain, enlarge, alter, add 60.21 to, or repair projects shall not be subject to the provisions of 60.22 chapter 16B16C or section 574.26, or any other public contract 60.23 or competitive bid law. 60.24 Sec. 45. Minnesota Statutes 1997 Supplement, section 60.25 136A.40, is amended to read: 60.26 136A.40 [ADMINISTRATION.] 60.27 The administration of sections 136A.25 to 136A.42, shall be 60.28 under the authority independent of other departments and 60.29 agencies and notwithstanding chapter 16B16C. The authority 60.30 shall not be subject to the provisions of chapter 14, including 60.31 section 14.386 in connection with the adoption of any rules, 60.32 rents, fees or charges or with the exercise of any other powers 60.33 or duties. 60.34 Sec. 46. Minnesota Statutes 1996, section 136F.23, is 60.35 amended to read: 60.36 136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 61.1 Notwithstanding chapter 16A or 16B16C, the student 61.2 associations recognized by the board of trustees of the 61.3 Minnesota state colleges and universities may purchase goods or 61.4 materials through state purchasing authority for the ordinary 61.5 day-to-day operations of the associations. The student 61.6 associations must be nonprofit 501(c)(3) organizations in order 61.7 to qualify for this authority. The department of administration 61.8 may require that the purchase documents be approved by 61.9 appropriate officials in the board's central office. 61.10 Sec. 47. Minnesota Statutes 1996, section 136F.56, 61.11 subdivision 5, is amended to read: 61.12 Subd. 5. [SERVICE CONTRACTS.] The council may contract for 61.13 the services it needs to carry out its function. The council 61.14 may also contract to provide services to other organizations. 61.15 The contracts are not subject to the contract approval 61.16 procedures of the commissioner of administration or of 61.17 chapter 16B16C. 61.18 Sec. 48. Minnesota Statutes 1996, section 136F.581, 61.19 subdivision 3, is amended to read: 61.20 Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 61.21 policies and procedures must include provisions for procurement, 61.22 including construction, from small targeted group businesses and 61.23 businesses from economically disadvantaged areas designated 61.24 under section 16B.1916C.18. The board, colleges, and 61.25 universities shall use the methods contained in section 471.345, 61.26 subdivision 8, for such purchasing, or may develop additional 61.27 methods in which the cost percentage preferences are consistent 61.28 with the provision of section 16B.1916C.18, subdivisions 2c and61.29 2d6, paragraph (a), and 7, or consistent with the provisions of 61.30 the University of Minnesota's targeted group business purchasing 61.31 program. 61.32 Sec. 49. Minnesota Statutes 1996, section 136F.66, is 61.33 amended to read: 61.34 136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 61.35 In awarding contracts for capital projects under section 61.36 136F.64, the board shall consider the documentation provided by 62.1 the bidders regarding their qualifications, including evidence 62.2 of having successfully completed similar work, or delivering 62.3 services or products comparable to that being requested. The 62.4 board shall set procedures to administer this section, which 62.5 must include practices that will assist in the economic 62.6 development of small businesses, small targeted group 62.7 businesses, and businesses in economically disadvantaged areas 62.8 designated under section 16B.1916C.18. 62.9 Sec. 50. Minnesota Statutes 1996, section 136F.72, 62.10 subdivision 3, is amended to read: 62.11 Subd. 3. [ADMINISTRATION.] Each college and university, 62.12 independent of other authority and notwithstanding chapters 62.13 16A and, 16B, and 16C, shall administer its activity funds. The 62.14 board, independent of other authority and notwithstanding 62.15 chapters 16A and, 16B, and 16C, shall administer the 62.16 administrative fund established in the system office. All 62.17 activity fund money collected shall be administered under the 62.18 policies of the board subject to audit of the legislative 62.19 auditor. 62.20 Sec. 51. Minnesota Statutes 1996, section 136F.96, is 62.21 amended to read: 62.22 136F.96 [ADMINISTRATION.] 62.23 The administration of sections 136F.90 to 136F.98 shall be 62.24 under the board of trustees of the Minnesota state colleges and 62.25 universities independent of other authority and notwithstanding 62.26 chapters 16A and, 16B, and 16C. 62.27 Sec. 52. Minnesota Statutes 1996, section 137.35, 62.28 subdivision 1, is amended to read: 62.29 Subdivision 1. [PURCHASING METHODS.] (a) The regents may 62.30 award up to a six percent preference in the amount bid for 62.31 specified goods and services to small targeted group businesses 62.32 designated under section 16B.1916C.18, subdivision 5. 62.33 (b) The regents may designate a purchase of goods or 62.34 services for award only to small targeted group businesses 62.35 designated under section 16B.1916C.18, subdivision 5, if the 62.36 regents determine that at least three small targeted group 63.1 businesses are likely to bid. 63.2 (c) The regents, as a condition of awarding a construction 63.3 contract or approving a contract for consultant, professional, 63.4 or technical services, may set goals that require the prime 63.5 contractor to subcontract a portion of the contract to small 63.6 targeted group businesses. The regents must establish a 63.7 procedure for granting waivers from the subcontracting 63.8 requirement when qualified small targeted group businesses are 63.9 not reasonably available. The regents may establish financial 63.10 incentives for prime contractors who exceed the goals for use of 63.11 subcontractors and financial penalties for prime contractors who 63.12 fail to meet goals under this paragraph. The subcontracting 63.13 requirements of this paragraph do not apply to prime contractors 63.14 who are small targeted group businesses. At least 75 percent of 63.15 the value of the subcontracts awarded to small targeted group 63.16 businesses under this paragraph must be performed by the 63.17 business to which the subcontract is awarded or by another small 63.18 targeted group business. 63.19 (d) The regents may award up to a four percent preference 63.20 in the amount bid on university procurement to small businesses 63.21 located in an economically disadvantaged area as defined in 63.22 section 16B.1916C.18, subdivision 7. 63.23 (e) The regents may delegate responsibility under this 63.24 section to university employees. 63.25 Sec. 53. Minnesota Statutes 1996, section 137.35, 63.26 subdivision 2, is amended to read: 63.27 Subd. 2. [ELIGIBILITY.] The rules adopted by the 63.28 commissioner of administration to define small businesses and to 63.29 set time and other eligibility requirements for participation in 63.30 programs under sections 16B.19 to 16B.2216C.18 to 16C.21 apply 63.31 to this section. 63.32 Sec. 54. Minnesota Statutes 1996, section 137.35, 63.33 subdivision 3, is amended to read: 63.34 Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged 63.35 to purchase from small targeted group businesses designated 63.36 under section 16B.1916C.18 when making purchases that are not 64.1 subject to competitive bidding procedures. 64.2 Sec. 55. Minnesota Statutes 1997 Supplement, section 64.3 138.35, subdivision 1b, is amended to read: 64.4 Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 64.5 state archaeologist may contract with the federal government, 64.6 local governmental units, other states, the university and other 64.7 educational institutions, and private persons or organizations 64.8 as necessary in the performance of the duties in sections 138.31 64.9 to 138.42. Contracts made under this section for professional 64.10 services shall not be subject to chapter 16B16C, as it relates 64.11 to competitive bidding. The state archaeologist may recruit, 64.12 train, and accept, without regard to personnel laws or rules, 64.13 the services of individuals as volunteers for or in aid of 64.14 performance of the state archaeologist's duties, and may provide 64.15 for the incidental expenses of volunteers, such as 64.16 transportation, lodging, and subsistence. The state 64.17 archaeologist may apply for, receive, and expend grants and 64.18 gifts of money consistent with the powers and duties in sections 64.19 138.31 to 138.42. Any money so received is appropriated for the 64.20 purpose for which it was granted. 64.21 Sec. 56. Minnesota Statutes 1996, section 144.0742, is 64.22 amended to read: 64.23 144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 64.24 SERVICES.] 64.25 The commissioner of health is authorized to enter into 64.26 contractual agreements with any public or private entity for the 64.27 provision of statutorily prescribed public health services by 64.28 the department. The contracts shall specify the services to be 64.29 provided and the amount and method of reimbursement therefor. 64.30 Funds generated in a contractual agreement made pursuant to this 64.31 section are appropriated to the department for purposes of 64.32 providing the services specified in the contracts. All such 64.33 contractual agreements shall be processed in accordance with the 64.34 provisions of chapter 16B16C. 64.35 Sec. 57. Minnesota Statutes 1996, section 144.95, 64.36 subdivision 5, is amended to read: 65.1 Subd. 5. [GENERAL AUTHORITY.] (a) To carry out 65.2 subdivisions 1 to 4, the commissioner of health may: 65.3 (1) accept money, property, or services from any source; 65.4 (2) receive and hold lands; 65.5 (3) accept gifts; 65.6 (4) cooperate with city, state, federal, or private 65.7 agencies whose research on mosquito control or on other 65.8 environmental matters may be affected by the commissioner's 65.9 mosquito management and research activities; and 65.10 (5) enter into contracts with any public or private entity. 65.11 (b) The contracts must specify the duties performed, 65.12 services provided, and the amount and method of reimbursement 65.13 for them. Money collected by the commissioner under contracts 65.14 made under this subdivision is appropriated to the commissioner 65.15 for the purposes specified in the contracts. Contractual 65.16 agreements must be processed under section 16B.1716C.09. 65.17 Sec. 58. Minnesota Statutes 1996, section 161.315, 65.18 subdivision 4, is amended to read: 65.19 Subd. 4. [EXCEPTIONS.] The commissioner may terminate a 65.20 debarment by order, or the commissioner or a county, town, or 65.21 home rule or statutory city may award a contract to a debarred 65.22 or suspended person when: 65.23 (1) that person is the sole supplier of a material or 65.24 service required by the commissioner or a county, town, or home 65.25 rule or statutory city; 65.26 (2) the commissioner determines that an emergency exists as 65.27 defined in section 161.32, subdivision 3; 65.28 (3) the commissioner of administration determines that an 65.29 emergency exists as defined in section 16B.0816C.11, 65.30 subdivision 62; 65.31 (4) in the case of a contract to be awarded by a county, 65.32 town, or home rule or statutory city, the governing body thereof 65.33 determines by resolution that an emergency exists that will 65.34 result in a road, street, or bridge being closed to travel; or 65.35 (5) the contract is for purchasing materials or renting 65.36 equipment for routine road maintenance. 66.1 Sec. 59. Minnesota Statutes 1996, section 161.321, 66.2 subdivision 1, is amended to read: 66.3 Subdivision 1. [DEFINITIONS.] For purposes of this section 66.4 the following terms have the meanings given them, except where 66.5 the context clearly indicates a different meaning is intended. 66.6 (a) "Award" means the granting of a contract in accordance 66.7 with all applicable laws and rules governing competitive bidding 66.8 except as otherwise provided in this section. 66.9 (b) "Contract" means an agreement entered into between a 66.10 business entity and the state of Minnesota for the construction 66.11 of transportation improvements. 66.12 (c) "Subcontractor" means a business entity which enters 66.13 into a legally binding agreement with another business entity 66.14 which is a party to a contract as defined in clause (b). 66.15 (d) "Targeted group business" means a business designated 66.16 under section 16B.1916C.18, subdivision 2b5. 66.17 Sec. 60. Minnesota Statutes 1996, section 161.321, 66.18 subdivision 2, is amended to read: 66.19 Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 66.20 may award up to a six percent preference in the amount bid for 66.21 specified construction work to small targeted group businesses. 66.22 (b) The commissioner may designate a contract for 66.23 construction work for award only to small targeted group 66.24 businesses if the commissioner determines that at least three 66.25 small targeted group businesses are likely to bid. 66.26 (c) The commissioner, as a condition of awarding a 66.27 construction contract, may set goals that require the prime 66.28 contractor to subcontract a portion of the contract to small 66.29 targeted group businesses. The commissioner must establish a 66.30 procedure for granting waivers from the subcontracting 66.31 requirement when qualified small targeted group businesses are 66.32 not reasonably available. The commissioner may establish 66.33 financial incentives for prime contractors who exceed the goals 66.34 for use of subcontractors and financial penalties for prime 66.35 contractors who fail to meet goals under this paragraph. The 66.36 subcontracting requirements of this paragraph do not apply to 67.1 prime contractors who are small targeted group businesses. 67.2 (d) The commissioner may award up to a four percent 67.3 preference in the amount bid on procurement to small businesses 67.4 located in an economically disadvantaged area as defined in 67.5 section 16B.1916C.18, subdivision 7. 67.6 Sec. 61. Minnesota Statutes 1996, section 161.321, 67.7 subdivision 5, is amended to read: 67.8 Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the 67.9 commissioner is unable to award a contract pursuant to the 67.10 provisions of subdivisions 2 and 3, the award may be placed 67.11 pursuant to the normal solicitation and award provisions set 67.12 forth in this chapter and chapter 16B16C. 67.13 Sec. 62. Minnesota Statutes 1996, section 161.321, 67.14 subdivision 6, is amended to read: 67.15 Subd. 6. [RULES.] The rules adopted by the commissioner of 67.16 administration to define small businesses and to set time and 67.17 other eligibility requirements for participation in programs 67.18 under sections 16B.19 to 16B.2216C.18 to 16C.21 apply to this 67.19 section. The commissioner may promulgate other rules necessary 67.20 to carry out this section. 67.21 Sec. 63. Minnesota Statutes 1996, section 161.321, 67.22 subdivision 7, is amended to read: 67.23 Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is 67.24 encouraged to purchase from small targeted group businesses 67.25 designated under section 16B.1916C.18 when making purchases 67.26 that are not subject to competitive bidding procedures. 67.27 Sec. 64. Minnesota Statutes 1996, section 161.41, 67.28 subdivision 2, is amended to read: 67.29 Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The 67.30 commissioner shall administer all aspects of the disposition of 67.31 property declared to be surplus under this section. The 67.32 commissioner shall first determine the value of the surplus 67.33 property. The commissioner may then transfer the possession of 67.34 the surplus property to any state agency or political 67.35 subdivision of this state or to the United States government 67.36 upon receipt of payment in an amount equal to the value of the 68.1 surplus property. 68.2 The commissioner may also sell the surplus property under 68.3 the competitive bidding provisions of chapter 16B16C if no 68.4 state agency or political subdivision of this state offers to 68.5 purchase the surplus property for its determined value. 68.6 Sec. 65. Minnesota Statutes 1997 Supplement, section 68.7 179A.03, subdivision 14, is amended to read: 68.8 Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or 68.9 "employee" means any person appointed or employed by a public 68.10 employer except: 68.11 (a) elected public officials; 68.12 (b) election officers; 68.13 (c) commissioned or enlisted personnel of the Minnesota 68.14 national guard; 68.15 (d) emergency employees who are employed for emergency work 68.16 caused by natural disaster; 68.17 (e) part-time employees whose service does not exceed the 68.18 lesser of 14 hours per week or 35 percent of the normal work 68.19 week in the employee's appropriate unit; 68.20 (f) employees whose positions are basically temporary or 68.21 seasonal in character and: (1) are not for more than 67 working 68.22 days in any calendar year; or (2) are not for more than 100 68.23 working days in any calendar year and the employees are under 68.24 the age of 22, are full-time students enrolled in a nonprofit or 68.25 public educational institution prior to being hired by the 68.26 employer, and have indicated, either in an application for 68.27 employment or by being enrolled at an educational institution 68.28 for the next academic year or term, an intention to continue as 68.29 students during or after their temporary employment; 68.30 (g) employees providing services for not more than two 68.31 consecutive quarters to the board of trustees of the Minnesota 68.32 state colleges and universities under the terms of a 68.33 professional or technical services contract as defined in 68.34 section 16B.1716C.09, subdivision 1; 68.35 (h) employees of charitable hospitals as defined by section 68.36 179.35, subdivision 3; 69.1 (i) full-time undergraduate students employed by the school 69.2 which they attend under a work-study program or in connection 69.3 with the receipt of financial aid, irrespective of number of 69.4 hours of service per week; 69.5 (j) an individual who is employed for less than 300 hours 69.6 in a fiscal year as an instructor in an adult vocational 69.7 education program; 69.8 (k) an individual hired by a school district or the board 69.9 of trustees of the Minnesota state colleges and universities to 69.10 teach one course for up to four credits for one quarter in a 69.11 year. 69.12 The following individuals are public employees regardless 69.13 of the exclusions of clauses (e) and (f): 69.14 (1) An employee hired by a school district or the board of 69.15 trustees of the Minnesota state colleges and universities except 69.16 at the university established in section 136F.13 or for 69.17 community services or community education instruction offered on 69.18 a noncredit basis: (i) to replace an absent teacher or faculty 69.19 member who is a public employee, where the replacement employee 69.20 is employed more than 30 working days as a replacement for that 69.21 teacher or faculty member; or (ii) to take a teaching position 69.22 created due to increased enrollment, curriculum expansion, 69.23 courses which are a part of the curriculum whether offered 69.24 annually or not, or other appropriate reasons; and 69.25 (2) An employee hired for a position under clause (f)(1) if 69.26 that same position has already been filled under clause (f)(1) 69.27 in the same calendar year and the cumulative number of days 69.28 worked in that same position by all employees exceeds 67 69.29 calendar days in that year. For the purpose of this paragraph, 69.30 "same position" includes a substantially equivalent position if 69.31 it is not the same position solely due to a change in the 69.32 classification or title of the position. 69.33 Sec. 66. Minnesota Statutes 1996, section 179A.23, is 69.34 amended to read: 69.35 179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 69.36 BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 70.1 BARGAINING UNIT.] 70.2 Any contract entered into after March 23, 1982, by the 70.3 state of Minnesota or the University of Minnesota involving 70.4 services, any part of which, in the absence of the contract, 70.5 would be performed by members of a unit provided in sections 70.6 179A.10 and 179A.11, shall be subject to section 16B.0716C.07 70.7 and shall provide for the preferential employment by a party of 70.8 members of that unit whose employment with the state of 70.9 Minnesota or the University of Minnesota is terminated as a 70.10 result of that contract. 70.11 Contracts entered into by the state of Minnesota for the 70.12 purpose of providing court reporter services or transcription of 70.13 the record of a hearing which was recorded by means of an audio 70.14 magnetic recording device shall be subject to section 16B.1770.15 16C.09 and the preferential employment provisions enumerated in 70.16 this section. Any court reporter seeking a contract pursuant to 70.17 the preferential employment provisions of this section shall be 70.18 given preference when the services are needed only if that court 70.19 reporter's charges for the services requested are no greater 70.20 than the average of the charges made for the identical services 70.21 by other court reporters in the same locality who are also under 70.22 contract with the state for those services. 70.23 Sec. 67. Minnesota Statutes 1996, section 198.35, 70.24 subdivision 1, is amended to read: 70.25 Subdivision 1. [ESTABLISHMENT.] The board may establish a 70.26 veterans home in Silver Bay by renovating an existing facility 70.27 owned by the city of Silver Bay if the city donates the building 70.28 to the board at no cost. Contracts made by the board for the 70.29 purposes of this subdivision are subject to chapter 16B16C. 70.30 Buildings used for the veterans home must comply with 70.31 requirements established by federal agencies as conditions for 70.32 the receipt of federal funds for the nursing and boarding care 70.33 of veterans. The city of Silver Bay shall secure the state 70.34 match requirement from sources other than the state general 70.35 fund. Money from other sources must equal at least 35 percent 70.36 of the total cost of the renovation with the remainder of the 71.1 funds to be provided by the United States Veterans 71.2 Administration. 71.3 Sec. 68. Minnesota Statutes 1996, section 216C.02, 71.4 subdivision 1, is amended to read: 71.5 Subdivision 1. [POWERS.] (a) The commissioner may: 71.6 (1) apply for, receive, and spend money received from 71.7 federal, municipal, county, regional, and other government 71.8 agencies and private sources; 71.9 (2) apply for, accept, and disburse grants and other aids 71.10 from public and private sources; 71.11 (3) contract for professional services if work or services 71.12 required or authorized to be carried out by the commissioner 71.13 cannot be satisfactorily performed by employees of the 71.14 department or by another state agency; 71.15 (4) enter into interstate compacts to carry out research 71.16 and planning jointly with other states or the federal government 71.17 when appropriate; 71.18 (5) upon reasonable request, distribute informational 71.19 material at no cost to the public; and 71.20 (6) enter into contracts for the performance of the 71.21 commissioner's duties with federal, state, regional, 71.22 metropolitan, local, and other agencies or units of government 71.23 and educational institutions, including the University of 71.24 Minnesota, without regard to the competitive bidding 71.25 requirements of chapters 16A and 16B16C. 71.26 (b) The commissioner shall collect information on 71.27 conservation and other energy-related programs carried on by 71.28 other agencies, by public utilities, by cooperative electric 71.29 associations, by municipal power agencies, by other fuel 71.30 suppliers, by political subdivisions, and by private 71.31 organizations. Other agencies, cooperative electric 71.32 associations, municipal power agencies, and political 71.33 subdivisions shall cooperate with the commissioner by providing 71.34 information requested by the commissioner. The commissioner may 71.35 by rule require the submission of information by other program 71.36 operators. The commissioner shall make the information 72.1 available to other agencies and to the public and, as necessary, 72.2 shall recommend to the legislature changes in the laws governing 72.3 conservation and other energy-related programs to ensure that: 72.4 (1) expenditures on the programs are adequate to meet 72.5 identified needs; 72.6 (2) the needs of low-income energy users are being 72.7 adequately addressed; 72.8 (3) duplication of effort is avoided or eliminated; 72.9 (4) a program that is ineffective is improved or 72.10 eliminated; and 72.11 (5) voluntary efforts are encouraged through incentives for 72.12 their operators. 72.13 The commissioner shall appoint an advisory task force to 72.14 help evaluate the information collected and formulate 72.15 recommendations to the legislature. The task force must include 72.16 low-income energy users. 72.17 (c) By January 15 of each year, the commissioner shall 72.18 report to the legislature on the projected amount of federal 72.19 money likely to be available to the state during the next fiscal 72.20 year, including grant money and money received by the state as a 72.21 result of litigation or settlements of alleged violations of 72.22 federal petroleum pricing regulations. The report must also 72.23 estimate the amount of money projected as needed during the next 72.24 fiscal year to finance a level of conservation and other 72.25 energy-related programs adequate to meet projected needs, 72.26 particularly the needs of low-income persons and households, and 72.27 must recommend the amount of state appropriations needed to 72.28 cover the difference between the projected availability of 72.29 federal money and the projected needs. 72.30 Sec. 69. Minnesota Statutes 1997 Supplement, section 72.31 216D.03, subdivision 2, is amended to read: 72.32 Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 72.33 (a) The notification center services must be provided by a 72.34 nonprofit corporation approved in writing by the commissioner. 72.35 The nonprofit corporation must be governed by a board of 72.36 directors of up to 20 members, one of whom is the director of 73.1 the office of pipeline safety. The other board members must 73.2 represent and be elected by operators, excavators, and other 73.3 persons eligible to participate in the center. In deciding to 73.4 approve a nonprofit corporation, the commissioner shall consider 73.5 whether it meets the requirements of this paragraph and whether 73.6 it demonstrates that it has the ability to contract for and 73.7 implement the notification center service. 73.8 (b) The commissioner shall adopt rules: 73.9 (1) establishing a notification process and competitive 73.10 bidding procedure for selecting a vendor to provide the 73.11 notification service; 73.12 (2) governing the operating procedures and technology 73.13 needed for a statewide notification center; and 73.14 (3) setting forth the method for assessing the cost of the 73.15 service among operators. 73.16 (c) The commissioner shall select a vendor to provide the 73.17 notification center service. The commissioner may advertise for 73.18 bids as provided in section 16B.0716C.07, subdivision73.19 3subdivisions 1 and 2, and base the selection of a vendor on an73.20 identification of the lowest responsible bidderbest value as 73.21 provided in section 16B.0916C.07, subdivision 16. The 73.22 commissioner shall select and contract with the vendor to 73.23 provide the notification center service, but all costs of the 73.24 center must be paid by the operators. The commissioner may at 73.25 any time appoint a task force to advise on the renewal of the 73.26 contract or any other matter involving the center's operations. 73.27 (d) An operator may submit a bid and be selected to 73.28 contract to provide the notification center service under 73.29 paragraph (a) or (c). The commissioner shall annually review 73.30 the services provided by the nonprofit corporation approved 73.31 under paragraph (a) or the vendor selected under paragraph (c). 73.32 Sec. 70. Minnesota Statutes 1996, section 237.51, 73.33 subdivision 5a, is amended to read: 73.34 Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 73.35 addition to any duties specified elsewhere in sections 237.51 to 73.36 237.56, the department of human services shall: 74.1 (1) define economic hardship, special needs, and household 74.2 criteria so as to determine the priority of eligible applicants 74.3 for initial distribution of devices and to determine 74.4 circumstances necessitating provision of more than one 74.5 communication device per household; 74.6 (2) establish a method to verify eligibility requirements; 74.7 (3) establish specifications for communication devices to 74.8 be purchased under section 237.53, subdivision 3; 74.9 (4) inform the public and specifically the community of 74.10 communication-impaired persons of the program; and 74.11 (5) notwithstanding any provision of chapterchapters 16B 74.12 and 16C, develop guidelines for the purchase of some 74.13 communication devices from local retailers and dispensers if the 74.14 department determines that otherwise they will be economically 74.15 harmed by implementation of sections 237.50 to 237.56. 74.16 (b) The department may establish an advisory board to 74.17 advise the department in carrying out the duties specified in 74.18 this section and to advise the department of public service in 74.19 carrying out its duties under section 237.54. If so 74.20 established, the advisory board must include, at a minimum, the 74.21 following communication-impaired persons: 74.22 (1) at least one member who is deaf; 74.23 (2) at least one member who is speech impaired; 74.24 (3) at least one member who is mobility impaired; and 74.25 (4) at least one member who is hard-of-hearing. 74.26 The membership terms, compensation, and removal of members 74.27 and the filling of membership vacancies are governed by section 74.28 15.059. Advisory board meetings shall be held at the discretion 74.29 of the commissioner. 74.30 Sec. 71. Minnesota Statutes 1996, section 241.0221, 74.31 subdivision 6, is amended to read: 74.32 Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 74.33 To qualify for a subsidy, a county or group of counties must 74.34 enter into a memorandum of agreement with the commissioner 74.35 agreeing to comply with the minimum standards and requirements 74.36 established by the commissioner under subdivision 4. The 75.1 memorandum of agreement is not subject to the contract approval 75.2 procedures of the commissioner of administration or chapter75.3 chapters 16B and 16C. The commissioner shall provide forms and 75.4 instructions for submission of subsidy applications. 75.5 The commissioner shall require a county or group of 75.6 counties to document in its application that it is requesting 75.7 subsidy funds for the least restrictive alternative appropriate 75.8 to the county or counties detention needs. The commissioner 75.9 shall evaluate applications and grant subsidies for local 75.10 detention facilities and alternative detention programs 75.11 described in this section in a manner consistent with the 75.12 minimum standards and requirements established by the 75.13 commissioner in subdivision 4 and within the limit 75.14 appropriations made available by law. 75.15 Sec. 72. Minnesota Statutes 1996, section 241.27, 75.16 subdivision 2, is amended to read: 75.17 Subd. 2. [REVOLVING FUND; USE OF FUND.] There is 75.18 established in the department of corrections under the control 75.19 of the commissioner of corrections the Minnesota correctional 75.20 industries revolving fund to which shall be transferred the 75.21 revolving funds authorized in Minnesota Statutes 1978, sections 75.22 243.41 and 243.85, clause (f), and any other industrial 75.23 revolving funds heretofore established at any state correctional 75.24 facility under the control of the commissioner of corrections. 75.25 The revolving fund established shall be used for the conduct of 75.26 the industrial and commercial activities now or hereafter 75.27 established at any state correctional facility, including but 75.28 not limited to the purchase of equipment, raw materials, the 75.29 payment of salaries, wages and other expenses necessary and 75.30 incident thereto. The purchase of materials and commodities for 75.31 resale are not subject to the competitive bidding procedures of 75.32 section 16B.0716C.07, but are subject to all other provisions 75.33 of chapter 16Bchapters 16B and 16C. When practical, purchases 75.34 must be made from small targeted group businesses designated 75.35 under section 16B.1916C.18. Additionally, the expenses of 75.36 inmate vocational training and the inmate release fund may be 76.1 financed from the correctional industries revolving fund in an 76.2 amount to be determined by the commissioner. The proceeds and 76.3 income from all industrial and commercial activities conducted 76.4 at state correctional facilities shall be deposited in the 76.5 correctional industries revolving fund subject to disbursement 76.6 as hereinabove provided. The commissioner of corrections may 76.7 request that money in the fund be invested pursuant to section 76.8 11A.25; the proceeds from the investment not currently needed 76.9 shall be accounted for separately and credited to the fund. 76.10 Sec. 73. Minnesota Statutes 1997 Supplement, section 76.11 241.277, subdivision 2, is amended to read: 76.12 Subd. 2. [REQUEST FOR PROPOSALS.] After consulting with 76.13 and considering the advice of the association of Minnesota 76.14 counties, the commissioner may issue a request for proposals and 76.15 select a vendor to operate the program. Section 16B.1716C.09 76.16 does not apply to the issuance of the request for proposals. 76.17 Sec. 74. Minnesota Statutes 1996, section 246.36, is 76.18 amended to read: 76.19 246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 76.20 For the purpose of carrying out a duty, the commissioner of 76.21 human services shall have authority to accept uncompensated and 76.22 voluntary services and to enter into contracts or agreements 76.23 with private or public agencies, or persons, for uncompensated 76.24 and voluntary services, as the commissioner may deem 76.25 practicable. Uncompensated and voluntary services do not 76.26 include services mandated by licensure and certification 76.27 requirements for health care facilities. The volunteer 76.28 agencies, organizations, or persons who provide services to 76.29 residents of state facilities operated under the authority of 76.30 the commissioner are not subject to the procurement requirements 76.31 of chapters 16A and 16B16C. The agencies, organizations, or 76.32 persons may purchase supplies, services, and equipment to be 76.33 used in providing services to residents of state facilities 76.34 through the department of administration. 76.35 Sec. 75. Minnesota Statutes 1996, section 246.57, 76.36 subdivision 1, is amended to read: 77.1 Subdivision 1. [AUTHORIZED.] The commissioner of human 77.2 services may authorize any state facility operated under the 77.3 authority of the commissioner to enter into agreement with other 77.4 governmental entities and both nonprofit and for-profit 77.5 organizations for participation in shared service agreements 77.6 that would be of mutual benefit to the state, other governmental 77.7 entities and organizations involved, and the public. 77.8 Notwithstanding section 16B.0616C.06, subdivision 2, the 77.9 commissioner of human services may delegate the execution of 77.10 shared services contracts to the chief executive officers of the 77.11 regional centers or state operated nursing homes. No additional 77.12 employees shall be added to the legislatively approved 77.13 complement for any regional center or state nursing home as a 77.14 result of entering into any shared service agreement. However, 77.15 positions funded by a shared service agreement may be authorized 77.16 by the commissioner of finance for the duration of the shared 77.17 service agreement. The charges for the services shall be on an 77.18 actual cost basis. All receipts for shared services may be 77.19 retained by the regional treatment center or state-operated 77.20 nursing home that provided the services, in addition to other 77.21 funding the regional treatment center or state-operated nursing 77.22 home receives. 77.23 Sec. 76. Minnesota Statutes 1996, section 246.57, 77.24 subdivision 6, is amended to read: 77.25 Subd. 6. [DENTAL SERVICES.] The commissioner of human 77.26 services shall authorize any regional treatment center or 77.27 state-operated nursing home under the commissioner's authority 77.28 to provide dental services to disabled persons who are eligible 77.29 for medical assistance and are not residing at the regional 77.30 treatment center or state-operated nursing home, provided that 77.31 the reimbursement received for these services is sufficient to 77.32 cover actual costs. To provide these services, regional 77.33 treatment centers and state-operated nursing homes may 77.34 participate under contract with health networks in their service 77.35 area. Notwithstanding section 16B.0616C.06, subdivision 2, the 77.36 commissioner of human services may delegate the execution of 78.1 these dental services contracts to the chief executive officers 78.2 of the regional centers or state-operated nursing homes. All 78.3 receipts for these dental services shall be retained by the 78.4 regional treatment center or state-operated nursing home that 78.5 provides the services and shall be in addition to other funding 78.6 the regional treatment center or state-operated nursing home 78.7 receives. 78.8 Sec. 77. Minnesota Statutes 1996, section 256B.031, 78.9 subdivision 1, is amended to read: 78.10 Subdivision 1. [CONTRACTS.] The commissioner may contract 78.11 with health insurers licensed and operating under chapters 60A 78.12 and 62A, nonprofit health service plans licensed and operating 78.13 under chapter 62C, health maintenance organizations licensed and 78.14 operating under chapter 62D, and vendors of medical care and 78.15 organizations participating in prepaid programs under section 78.16 256D.03, subdivision 4, clause (b), to provide medical services 78.17 to medical assistance recipients. Notwithstanding any other 78.18 law, health insurers may enter into contracts with the 78.19 commissioner under this section. As a condition of the 78.20 contract, health insurers and health service plan corporations 78.21 must agree to comply with the requirements of section 62D.04, 78.22 subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 78.23 a complaint procedure that satisfies the requirements of section 78.24 62D.11. Nothing in this section permits health insurers not 78.25 licensed as health maintenance organizations under chapter 62D 78.26 to offer a prepaid health plan as defined in section 256B.02, 78.27 subdivision 12, to persons other than those receiving medical 78.28 assistance or general assistance medical care under this 78.29 section. Contracts between the commissioner and a prepaid 78.30 health plan are exempt from the set-aside and preference 78.31 provisions of section 16B.1916C.18, subdivisions 5 and6, 78.32 paragraph (a), and 7. Contracts must specify the services that 78.33 are included in the per capita rate. Contracts must specify 78.34 those services that are to be eligible for risk sharing between 78.35 the prepaid health plan and the state. Contracts must also 78.36 state that payment must be made within 60 days after the month 79.1 of coverage. 79.2 Sec. 78. Minnesota Statutes 1996, section 256B.04, 79.3 subdivision 14, is amended to read: 79.4 Subd. 14. [COMPETITIVE BIDDING.] When determined to be 79.5 effective, economical, and feasible, the commissioner may 79.6 utilize volume purchase through competitive bidding and 79.7 negotiation under the provisions of chapter 16B16C, to provide 79.8 items under the medical assistance program including but not 79.9 limited to the following: 79.10 (1) eyeglasses; 79.11 (2) oxygen. The commissioner shall provide for oxygen 79.12 needed in an emergency situation on a short-term basis, until 79.13 the vendor can obtain the necessary supply from the contract 79.14 dealer; 79.15 (3) hearing aids and supplies; and 79.16 (4) durable medical equipment, including but not limited to: 79.17 (a) hospital beds; 79.18 (b) commodes; 79.19 (c) glide-about chairs; 79.20 (d) patient lift apparatus; 79.21 (e) wheelchairs and accessories; 79.22 (f) oxygen administration equipment; 79.23 (g) respiratory therapy equipment; 79.24 (h) electronic diagnostic, therapeutic and life support 79.25 systems; 79.26 (5) special transportation services; and 79.27 (6) drugs. 79.28 Sec. 79. Minnesota Statutes 1996, section 256B.04, 79.29 subdivision 15, is amended to read: 79.30 Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a 79.31 statewide basis a new program to safeguard against unnecessary 79.32 or inappropriate use of medical assistance services, against 79.33 excess payments, against unnecessary or inappropriate hospital 79.34 admissions or lengths of stay, and against underutilization of 79.35 services in prepaid health plans, long-term care facilities or 79.36 any health care delivery system subject to fixed rate 80.1 reimbursement. In implementing the program, the state agency 80.2 shall utilize both prepayment and postpayment review systems to 80.3 determine if utilization is reasonable and necessary. The 80.4 determination of whether services are reasonable and necessary 80.5 shall be made by the commissioner in consultation with a 80.6 professional services advisory group or health care consultant 80.7 appointed by the commissioner. 80.8 (2) Contracts entered into for purposes of meeting the 80.9 requirements of this subdivision shall not be subject to the 80.10 set-aside provisions of chapter 16B16C. 80.11 (3) A recipient aggrieved by the commissioner's termination 80.12 of services or denial of future services may appeal pursuant to 80.13 section 256.045. A vendor aggrieved by the commissioner's 80.14 determination that services provided were not reasonable or 80.15 necessary may appeal pursuant to the contested case procedures 80.16 of chapter 14. To appeal, the vendor shall notify the 80.17 commissioner in writing within 30 days of receiving the 80.18 commissioner's notice. The appeal request shall specify each 80.19 disputed item, the reason for the dispute, an estimate of the 80.20 dollar amount involved for each disputed item, the computation 80.21 that the vendor believes is correct, the authority in statute or 80.22 rule upon which the vendor relies for each disputed item, the 80.23 name and address of the person or firm with whom contacts may be 80.24 made regarding the appeal, and other information required by the 80.25 commissioner. 80.26 (4) The commissioner may select providers to provide case 80.27 management services to recipients who use health care services 80.28 inappropriately or to recipients who are eligible for other 80.29 managed care projects. The providers shall be selected based 80.30 upon criteria that may include a comparison with a peer group of 80.31 providers related to the quality, quantity, or cost of health 80.32 care services delivered or a review of sanctions previously 80.33 imposed by health care services programs or the provider's 80.34 professional licensing board. 80.35 Sec. 80. Minnesota Statutes 1997 Supplement, section 80.36 256B.19, subdivision 2a, is amended to read: 81.1 Subd. 2a. [DIVISION OF COSTS.] The county shall ensure 81.2 that only the least costly, most appropriate transportation and 81.3 travel expenses are used. The state may enter into volume 81.4 purchase contracts, or use a competitive bidding process, 81.5 whenever feasible, to minimize the costs of transportation 81.6 services. If the state has entered into a volume purchase 81.7 contract or used the competitive bidding procedures of chapter 81.8 16B16C to arrange for transportation services, the county may 81.9 be required to use such arrangements. 81.10 Sec. 81. Minnesota Statutes 1997 Supplement, section 81.11 256D.03, subdivision 6, is amended to read: 81.12 Subd. 6. [DIVISION OF COSTS.] The state share of county 81.13 agency expenditures for general assistance medical care shall be 81.14 100 percent. Payments made under this subdivision shall be made 81.15 according to sections 256B.041, subdivision 5 and 256B.19, 81.16 subdivision 1. In counties where a pilot or demonstration 81.17 project is operated for general assistance medical care 81.18 services, the state may pay 100 percent of the costs of 81.19 administering the pilot or demonstration project. 81.20 Notwithstanding any provision to the contrary, beginning 81.21 July 1, 1991, the state shall pay 100 percent of the costs for 81.22 centralized claims processing by the department of 81.23 administration relative to claims beginning January 1, 1991, and 81.24 submitted on behalf of general assistance medical care 81.25 recipients by vendors in the general assistance medical care 81.26 program. 81.27 Beginning July 1, 1991, the state shall reimburse counties 81.28 up to the limit of state appropriations for general assistance 81.29 medical care common carrier transportation and related travel 81.30 expenses provided for medical purposes after December 31, 1990. 81.31 For purposes of this subdivision, transportation shall have the 81.32 meaning given it in Code of Federal Regulations, title 42, 81.33 section 440.170(a), as amended through October 1, 1987, and 81.34 travel expenses shall have the meaning given in Code of Federal 81.35 Regulations, title 42, section 440.170(a)(3), as amended through 81.36 October 1, 1987. 82.1 The county shall ensure that only the least costly most 82.2 appropriate transportation and travel expenses are used. The 82.3 state may enter into volume purchase contracts, or use a 82.4 competitive bidding process, whenever feasible, to minimize the 82.5 costs of transportation services. If the state has entered into 82.6 a volume purchase contract or used the competitive bidding 82.7 procedures of chapter 16B16C to arrange for transportation 82.8 services, the county may be required to use such arrangements to 82.9 be eligible for state reimbursement for general assistance 82.10 medical care common carrier transportation and related travel 82.11 expenses provided for medical purposes. 82.12 In counties where prepaid health plans are under contract 82.13 to the commissioner to provide services to general assistance 82.14 medical care recipients, the cost of court ordered treatment 82.15 that does not include diagnostic evaluation, recommendation, or 82.16 referral for treatment by the prepaid health plan is the 82.17 responsibility of the county of financial responsibility. 82.18 Sec. 82. Minnesota Statutes 1996, section 298.2211, 82.19 subdivision 4, is amended to read: 82.20 Subd. 4. [OBLIGATIONS NOT STATE DEBT.] Bonds and other 82.21 obligations issued by the commissioner pursuant to this section, 82.22 along with all related documents, are not general obligations of 82.23 the state of Minnesota and are not subject to section 16B.0682.24 sections 16C.03, subdivision 4, and 16C.06. The full faith and 82.25 credit and taxing powers of the state are not and may not be 82.26 pledged for the payment of these bonds or other obligations, and 82.27 no person has the right to compel the levy of any state tax for 82.28 their payment or to compel the appropriation of any moneys of 82.29 the state for their payment except as specifically provided 82.30 herein. These bonds and obligations shall be payable solely 82.31 from the property and moneys derived by the commissioner 82.32 pursuant to the authority granted in this section that the 82.33 commissioner pledges to their payment. The legislature intends 82.34 not to appropriate money from the general fund to pay for these 82.35 bonds or other obligations. All these bonds or other 82.36 obligations must contain the provisions of this subdivision or 83.1 words to the same effect on their face. 83.2 Sec. 83. Minnesota Statutes 1996, section 349A.06, 83.3 subdivision 1, is amended to read: 83.4 Subdivision 1. [CONTRACTS.] The director shall sell 83.5 tickets for the lottery through lottery retailers with whom the 83.6 director contracts. Contracts under this section are not 83.7 subject to the provisions of sections 16B.06 to 16B.102, and83.8 16B.1716C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 83.9 are valid for a period of one year. The director may permit a 83.10 retailer to sell tickets at more than one business location 83.11 under a contract entered into under this section. 83.12 Sec. 84. Minnesota Statutes 1996, section 349A.07, 83.13 subdivision 6, is amended to read: 83.14 Subd. 6. [EXEMPTIONS.] Lottery procurement contracts 83.15 entered into by the director are not subject to the provisions 83.16 of sections 16B.06 to 16B.102 or 16B.17section 16C.03, 16C.06, 83.17 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 83.18 must utilize an open and competitive bid process, and as nearly 83.19 as practicable follow the procedures of chapterchapters 16B and 83.20 16C governing contracts, consistent with the provisions of this 83.21 section. 83.22 Sec. 85. Minnesota Statutes 1996, section 352.03, 83.23 subdivision 6, is amended to read: 83.24 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 83.25 management of the system is vested in the director, who is the 83.26 executive and administrative head of the system. The director 83.27 shall be advisor to the board on matters pertaining to the 83.28 system and shall also act as the secretary of the board. The 83.29 director shall: 83.30 (1) attend meetings of the board; 83.31 (2) prepare and recommend to the board appropriate rules to 83.32 carry out this chapter; 83.33 (3) establish and maintain an adequate system of records 83.34 and accounts following recognized accounting principles and 83.35 controls; 83.36 (4) designate an assistant director with the approval of 84.1 the board; 84.2 (5) appoint any employees, both permanent and temporary, 84.3 that are necessary to carry out the provisions of this chapter; 84.4 (6) organize the work of the system as the director deems 84.5 necessary to fulfill the functions of the system, and define the 84.6 duties of its employees and delegate to them any powers or 84.7 duties, subject to the control of the director and under 84.8 conditions the director may prescribe. Appointments to exercise 84.9 delegated power must be by written order and shall be filed with 84.10 the secretary of state; 84.11 (7) with the advice and consent of the board, contract for 84.12 the services of an approved actuary, professional management 84.13 services, and any other consulting services as necessary and fix 84.14 the compensation for those services. The contracts are not 84.15 subject to competitive bidding under chapter 16B16C. Any 84.16 approved actuary retained by the executive director shall 84.17 function as the actuarial advisor of the board and the executive 84.18 director, and may perform actuarial valuations and experience 84.19 studies to supplement those performed by the actuary retained by 84.20 the legislative commission on pensions and retirement. Any 84.21 supplemental actuarial valuations or experience studies shall be 84.22 filed with the executive director of the legislative commission 84.23 on pensions and retirement. Professional management services 84.24 may not be contracted for more often than once in six years. 84.25 Copies of professional management survey reports must be 84.26 transmitted to the secretary of the senate, the chief clerk of 84.27 the house of representatives, and the legislative reference 84.28 library as provided by section 3.195, to the executive director 84.29 of the commission and to the legislative auditor at the time as 84.30 reports are furnished to the board. Only management firms 84.31 experienced in conducting management surveys of federal, state, 84.32 or local public retirement systems are qualified to contract 84.33 with the director; 84.34 (8) with the advice and consent of the board provide 84.35 in-service training for the employees of the system; 84.36 (9) make refunds of accumulated contributions to former 85.1 state employees and to the designated beneficiary, surviving 85.2 spouse, legal representative, or next of kin of deceased state 85.3 employees or deceased former state employees, as provided in 85.4 this chapter; 85.5 (10) determine the amount of the annuities and disability 85.6 benefits of employees covered by the system and authorize 85.7 payment of the annuities and benefits beginning as of the dates 85.8 on which the annuities and benefits begin to accrue, in 85.9 accordance with the provisions of this chapter; 85.10 (11) pay annuities, refunds, survivor benefits, salaries, 85.11 and necessary operating expenses of the system; 85.12 (12) certify funds available for investment to the state 85.13 board of investment; 85.14 (13) with the advice and approval of the board request the 85.15 state board of investment to sell securities when the director 85.16 determines that funds are needed for the system; 85.17 (14) prepare and submit to the board and the legislature an 85.18 annual financial report covering the operation of the system, as 85.19 required by section 356.20; 85.20 (15) prepare and submit biennial and annual budgets to the 85.21 board and with the approval of the board submit the budgets to 85.22 the department of finance; and 85.23 (16) with the approval of the board, perform other duties 85.24 required to administer the retirement and other provisions of 85.25 this chapter and to do its business. 85.26 Sec. 86. Minnesota Statutes 1996, section 352.03, 85.27 subdivision 16, is amended to read: 85.28 Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding 85.29 chapter 16B ,or 16C or any law to the contrary, the executive 85.30 director of the system may use the services of the department of 85.31 administration, information services division, for electronic 85.32 data processing and related services or may contract for all or 85.33 a part of the services. 85.34 Sec. 87. Minnesota Statutes 1997 Supplement, section 85.35 353.03, subdivision 3a, is amended to read: 85.36 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 86.1 board shall appoint, with the advice and consent of the senate, 86.2 an executive director on the basis of education, experience in 86.3 the retirement field, and leadership ability. The executive 86.4 director shall have had at least five years' experience in an 86.5 executive level management position, which has included 86.6 responsibility for pensions, deferred compensation, or employee 86.7 benefits. The executive director serves at the pleasure of the 86.8 board. The salary of the executive director is as provided by 86.9 section 15A.0815. 86.10 (b) [DUTIES.] The management of the association is vested 86.11 in the executive director who shall be the executive and 86.12 administrative head of the association. The executive director 86.13 shall act as adviser to the board on all matters pertaining to 86.14 the association and shall also act as the secretary of the 86.15 board. The executive director shall: 86.16 (1) attend all meetings of the board; 86.17 (2) prepare and recommend to the board appropriate rules to 86.18 carry out the provisions of this chapter; 86.19 (3) establish and maintain an adequate system of records 86.20 and accounts following recognized accounting principles and 86.21 controls; 86.22 (4) designate, with the approval of the board, up to two 86.23 persons who shall serve in the unclassified service and whose 86.24 salary is set in accordance with section 43A.18, subdivision 3, 86.25 appoint a confidential secretary in the unclassified service, 86.26 and appoint employees to carry out this chapter, who are subject 86.27 to chapters 43A and 179A in the same manner as are executive 86.28 branch employees; 86.29 (5) organize the work of the association as the director 86.30 deems necessary to fulfill the functions of the association, and 86.31 define the duties of its employees and delegate to them any 86.32 powers or duties, subject to the control of, and under such 86.33 conditions as, the executive director may prescribe; 86.34 (6) with the approval of the board, contract for the 86.35 services of an approved actuary, professional management 86.36 services, and any other consulting services as necessary to 87.1 fulfill the purposes of this chapter. All contracts are subject 87.2 to chapter 16B16C. The commissioner of administration shall 87.3 not approve, and the association shall not enter into, any 87.4 contract to provide lobbying services or legislative advocacy of 87.5 any kind. Any approved actuary retained by the executive 87.6 director shall function as the actuarial advisor of the board 87.7 and the executive director and may perform actuarial valuations 87.8 and experience studies to supplement those performed by the 87.9 actuary retained by the legislative commission on pensions and 87.10 retirement. Any supplemental actuarial valuations or experience 87.11 studies shall be filed with the executive director of the 87.12 legislative commission on pensions and retirement. Copies of 87.13 professional management survey reports shall be transmitted to 87.14 the secretary of the senate, the chief clerk of the house of 87.15 representatives, and the legislative reference library as 87.16 provided by section 3.195, to the executive director of the 87.17 commission and to the legislative auditor at the same time as 87.18 reports are furnished to the board. Only management firms 87.19 experienced in conducting management surveys of federal, state, 87.20 or local public retirement systems shall be qualified to 87.21 contract with the director hereunder; 87.22 (7) with the approval of the board provide in-service 87.23 training for the employees of the association; 87.24 (8) make refunds of accumulated contributions to former 87.25 members and to the designated beneficiary, surviving spouse, 87.26 legal representative or next of kin of deceased members or 87.27 deceased former members, as provided in this chapter; 87.28 (9) determine the amount of the annuities and disability 87.29 benefits of members covered by the association and authorize 87.30 payment of the annuities and benefits beginning as of the dates 87.31 on which the annuities and benefits begin to accrue, in 87.32 accordance with the provisions of this chapter; 87.33 (10) pay annuities, refunds, survivor benefits, salaries, 87.34 and necessary operating expenses of the association; 87.35 (11) prepare and submit to the board and the legislature an 87.36 annual financial report covering the operation of the 88.1 association, as required by section 356.20; 88.2 (12) prepare and submit biennial and annual budgets to the 88.3 board for its approval and submit the approved budgets to the 88.4 department of finance for approval by the commissioner; 88.5 (13) reduce all or part of the accrued interest payable 88.6 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 88.7 subdivision 5, upon receipt of proof by the association of an 88.8 unreasonable processing delay or other extenuating circumstances 88.9 of the employing unit. The executive director shall prescribe 88.10 and submit for approval by the board the conditions under which 88.11 such interest may be reduced; and 88.12 (14) with the approval of the board, perform such other 88.13 duties as may be required for the administration of the 88.14 association and the other provisions of this chapter and for the 88.15 transaction of its business. 88.16 Sec. 88. Minnesota Statutes 1996, section 354.06, 88.17 subdivision 2a, is amended to read: 88.18 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 88.19 of the association is vested in the executive director who shall 88.20 be the executive and administrative head of the association. 88.21 The executive director shall act as advisor to the board on all 88.22 matters pertaining to the association and shall also act as the 88.23 secretary of the board. The executive director shall: 88.24 (1) attend all meetings of the board; 88.25 (2) prepare and recommend to the board appropriate rules to 88.26 carry out the provisions of this chapter; 88.27 (3) establish and maintain an adequate system of records 88.28 and accounts following recognized accounting principles and 88.29 controls; 88.30 (4) designate an assistant executive director in the 88.31 unclassified service and two assistant executive directors in 88.32 the classified service with the approval of the board, and 88.33 appoint such employees, both permanent and temporary, as are 88.34 necessary to carry out the provisions of this chapter; 88.35 (5) organize the work of the association as the director 88.36 deems necessary to fulfill the functions of the association, and 89.1 define the duties of its employees and delegate to them any 89.2 powers or duties, subject to the director's control and under 89.3 such conditions as the director may prescribe; 89.4 (6) with the approval of the board, contract and set the 89.5 compensation for the services of an approved actuary, 89.6 professional management services, and any other consulting 89.7 services. These contracts are not subject to the competitive 89.8 bidding procedure prescribed by chapter 16B16C. An approved 89.9 actuary retained by the executive director shall function as the 89.10 actuarial advisor of the board and the executive director and 89.11 may perform actuarial valuations and experience studies to 89.12 supplement those performed by the actuary retained by the 89.13 legislative commission on pensions and retirement. Any 89.14 supplemental actuarial valuations or experience studies shall be 89.15 filed with the executive director of the legislative commission 89.16 on pensions and retirement. Copies of professional management 89.17 survey reports must be transmitted to the secretary of the 89.18 senate, the chief clerk of the house of representatives, and the 89.19 legislative reference library as provided by section 3.195, to 89.20 the executive director of the commission and to the legislative 89.21 auditor at the same time as reports are furnished to the board. 89.22 Only management firms experienced in conducting management 89.23 surveys of federal, state, or local public retirement systems 89.24 are qualified to contract with the executive director; 89.25 (7) with the approval of the board, provide in-service 89.26 training for the employees of the association; 89.27 (8) make refunds of accumulated contributions to former 89.28 members and to the designated beneficiary, surviving spouse, 89.29 legal representative, or next of kin of deceased members or 89.30 deceased former members, under this chapter; 89.31 (9) determine the amount of the annuities and disability 89.32 benefits of members covered by the association and authorize 89.33 payment of the annuities and benefits beginning as of the dates 89.34 on which the annuities and benefits begin to accrue, under this 89.35 chapter; 89.36 (10) pay annuities, refunds, survivor benefits, salaries, 90.1 and necessary operating expenses of the association; 90.2 (11) prepare and submit to the board and the legislature an 90.3 annual financial report covering the operation of the 90.4 association, as required by section 356.20; 90.5 (12) certify funds available for investment to the state 90.6 board of investment; 90.7 (13) with the advice and approval of the board, request the 90.8 state board of investment to sell securities on determining that 90.9 funds are needed for the purposes of the association; 90.10 (14) prepare and submit biennial and annual budgets to the 90.11 board and with the approval of the board submit those budgets to 90.12 the department of finance; and 90.13 (15) with the approval of the board, perform such other 90.14 duties as may be required for the administration of the 90.15 association and the other provisions of this chapter and for the 90.16 transaction of its business. The executive director may: 90.17 (i) reduce all or part of the accrued interest and fines 90.18 payable by an employing unit for reporting requirements under 90.19 section 354.52, based on an evaluation of any extenuating 90.20 circumstances of the employing unit; 90.21 (ii) assign association employees to conduct field audits 90.22 of an employing unit to ensure compliance with the provisions of 90.23 this chapter; and 90.24 (iii) recover overpayments, if not repaid to the 90.25 association, by suspending or reducing the payment of a 90.26 retirement annuity, refund, disability benefit, survivor 90.27 benefit, or optional annuity under this chapter until the 90.28 overpayment, plus interest, has been recovered. 90.29 Sec. 89. Minnesota Statutes 1996, section 354.07, 90.30 subdivision 7, is amended to read: 90.31 Subd. 7. Notwithstanding chapter 16B ,or 16C or any law to 90.32 the contrary, the board may use the services of the department 90.33 of administration, information services division, for electronic 90.34 data processing and related services or may contract for all or 90.35 a portion of such services. 90.36 Sec. 90. Minnesota Statutes 1996, section 356A.06, 91.1 subdivision 7, is amended to read: 91.2 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 91.3 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 91.4 authorized by law or bylaws, a covered pension plan not 91.5 described by subdivision 6, paragraph (a), may invest its assets 91.6 only in accordance with this subdivision. 91.7 (b) [SECURITIES GENERALLY.] The covered pension plan has 91.8 the authority to purchase, sell, lend, or exchange the 91.9 securities specified in paragraphs (c) to (g), including puts 91.10 and call options and future contracts traded on a contract 91.11 market regulated by a governmental agency or by a financial 91.12 institution regulated by a governmental agency. These 91.13 securities may be owned as units in commingled trusts that own 91.14 the securities described in paragraphs (c) to (g). 91.15 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 91.16 invest funds in governmental bonds, notes, bills, mortgages, and 91.17 other evidences of indebtedness provided the issue is backed by 91.18 the full faith and credit of the issuer or the issue is rated 91.19 among the top four quality rating categories by a nationally 91.20 recognized rating agency. The obligations in which funds may be 91.21 invested under this paragraph include guaranteed or insured 91.22 issues of (1) the United States, its agencies, its 91.23 instrumentalities, or organizations created and regulated by an 91.24 act of Congress; (2) Canada and its provinces, provided the 91.25 principal and interest is payable in United States dollars; (3) 91.26 the states and their municipalities, political subdivisions, 91.27 agencies, or instrumentalities; (4) the International Bank for 91.28 Reconstruction and Development, the Inter-American Development 91.29 Bank, the Asian Development Bank, the African Development Bank, 91.30 or any other United States government sponsored organization of 91.31 which the United States is a member, provided the principal and 91.32 interest is payable in United States dollars. 91.33 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 91.34 invest funds in bonds, notes, debentures, transportation 91.35 equipment obligations, or any other longer term evidences of 91.36 indebtedness issued or guaranteed by a corporation organized 92.1 under the laws of the United States or any state thereof, or the 92.2 Dominion of Canada or any province thereof if they conform to 92.3 the following provisions: 92.4 (1) the principal and interest of obligations of 92.5 corporations incorporated or organized under the laws of the 92.6 Dominion of Canada or any province thereof must be payable in 92.7 United States dollars; and 92.8 (2) obligations must be rated among the top four quality 92.9 categories by a nationally recognized rating agency. 92.10 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 92.11 invest funds in bankers acceptances, certificates of deposit, 92.12 deposit notes, commercial paper, mortgage participation 92.13 certificates and pools, asset backed securities, repurchase 92.14 agreements and reverse repurchase agreements, guaranteed 92.15 investment contracts, savings accounts, and guaranty fund 92.16 certificates, surplus notes, or debentures of domestic mutual 92.17 insurance companies if they conform to the following provisions: 92.18 (i) bankers acceptances and deposit notes of United States 92.19 banks are limited to those issued by banks rated in the highest 92.20 four quality categories by a nationally recognized rating 92.21 agency; 92.22 (ii) certificates of deposit are limited to those issued by 92.23 (A) United States banks and savings institutions that are rated 92.24 in the highest four quality categories by a nationally 92.25 recognized rating agency or whose certificates of deposit are 92.26 fully insured by federal agencies; or (B) credit unions in 92.27 amounts up to the limit of insurance coverage provided by the 92.28 National Credit Union Administration; 92.29 (iii) commercial paper is limited to those issued by United 92.30 States corporations or their Canadian subsidiaries and rated in 92.31 the highest two quality categories by a nationally recognized 92.32 rating agency; 92.33 (iv) mortgage participation or pass through certificates 92.34 evidencing interests in pools of first mortgages or trust deeds 92.35 on improved real estate located in the United States where the 92.36 loan to value ratio for each loan as calculated in accordance 93.1 with section 61A.28, subdivision 3, does not exceed 80 percent 93.2 for fully amortizable residential properties and in all other 93.3 respects meets the requirements of section 61A.28, subdivision 93.4 3; 93.5 (v) collateral for repurchase agreements and reverse 93.6 repurchase agreements is limited to letters of credit and 93.7 securities authorized in this section; 93.8 (vi) guaranteed investment contracts are limited to those 93.9 issued by insurance companies or banks rated in the top four 93.10 quality categories by a nationally recognized rating agency or 93.11 to alternative guaranteed investment contracts where the 93.12 underlying assets comply with the requirements of this 93.13 subdivision; 93.14 (vii) savings accounts are limited to those fully insured 93.15 by federal agencies; and 93.16 (viii) asset backed securities must be rated in the top 93.17 four quality categories by a nationally recognized rating agency. 93.18 (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 93.19 16C.06 do not apply to certificates of deposit and 93.20 collateralization agreements executed by the covered pension 93.21 plan under clause (1), item (ii). 93.22 (3) In addition to investments authorized by clause (1), 93.23 item (iv), the covered pension plan may purchase from the 93.24 Minnesota housing finance agency all or any part of a pool of 93.25 residential mortgages, not in default, that has previously been 93.26 financed by the issuance of bonds or notes of the agency. The 93.27 covered pension plan may also enter into a commitment with the 93.28 agency, at the time of any issue of bonds or notes, to purchase 93.29 at a specified future date, not exceeding 12 years from the date 93.30 of the issue, the amount of mortgage loans then outstanding and 93.31 not in default that have been made or purchased from the 93.32 proceeds of the bonds or notes. The covered pension plan may 93.33 charge reasonable fees for any such commitment and may agree to 93.34 purchase the mortgage loans at a price sufficient to produce a 93.35 yield to the covered pension plan comparable, in its judgment, 93.36 to the yield available on similar mortgage loans at the date of 94.1 the bonds or notes. The covered pension plan may also enter 94.2 into agreements with the agency for the investment of any 94.3 portion of the funds of the agency. The agreement must cover 94.4 the period of the investment, withdrawal privileges, and any 94.5 guaranteed rate of return. 94.6 (f) [CORPORATE STOCKS.] The covered pension plan may 94.7 invest funds in stocks or convertible issues of any corporation 94.8 organized under the laws of the United States or the states 94.9 thereof, the Dominion of Canada or its provinces, or any 94.10 corporation listed on the New York Stock Exchange or the 94.11 American Stock Exchange, if they conform to the following 94.12 provisions: 94.13 (1) the aggregate value of corporate stock investments, as 94.14 adjusted for realized profits and losses, must not exceed 85 94.15 percent of the market or book value, whichever is less, of a 94.16 fund, less the aggregate value of investments according to 94.17 subdivision 6; 94.18 (2) investments must not exceed five percent of the total 94.19 outstanding shares of any one corporation. 94.20 (g) [OTHER INVESTMENTS.] (1) In addition to the 94.21 investments authorized in paragraphs (b) to (f), and subject to 94.22 the provisions in clause (2), the covered pension plan may 94.23 invest funds in: 94.24 (i) venture capital investment businesses through 94.25 participation in limited partnerships and corporations; 94.26 (ii) real estate ownership interests or loans secured by 94.27 mortgages or deeds of trust through investment in limited 94.28 partnerships, bank sponsored collective funds, trusts, and 94.29 insurance company commingled accounts, including separate 94.30 accounts; 94.31 (iii) regional and mutual funds through bank sponsored 94.32 collective funds and open-end investment companies registered 94.33 under the Federal Investment Company Act of 1940; 94.34 (iv) resource investments through limited partnerships, 94.35 private placements, and corporations; and 94.36 (v) international securities. 95.1 (2) The investments authorized in clause (1) must conform 95.2 to the following provisions: 95.3 (i) the aggregate value of all investments made according 95.4 to clause (1) may not exceed 35 percent of the market value of 95.5 the fund for which the covered pension plan is investing; 95.6 (ii) there must be at least four unrelated owners of the 95.7 investment other than the state board for investments made under 95.8 clause (1), item (i), (ii), (iii), or (iv); 95.9 (iii) covered pension plan participation in an investment 95.10 vehicle is limited to 20 percent thereof for investments made 95.11 under clause (1), item (i), (ii), (iii), or (iv); and 95.12 (iv) covered pension plan participation in a limited 95.13 partnership does not include a general partnership interest or 95.14 other interest involving general liability. The covered pension 95.15 plan may not engage in any activity as a limited partner which 95.16 creates general liability. 95.17 Sec. 91. Minnesota Statutes 1996, section 446A.12, 95.18 subdivision 5, is amended to read: 95.19 Subd. 5. [EXEMPTION.] The notes and bonds of the authority 95.20 are not subject to section 16B.06sections 16C.03, subdivision 95.21 4, and 16C.06. 95.22 Sec. 92. Minnesota Statutes 1996, section 462A.18, 95.23 subdivision 2, is amended to read: 95.24 Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the 95.25 provisions of this section, the agency shall have power to 95.26 contract with the holders of any of its notes or bonds, as to 95.27 the custody, collection, securing, investment, and payment of 95.28 any money of the agency, or any money held in trust or otherwise 95.29 for the payment of notes or bonds, and to carry out such 95.30 contract. Money held in trust or otherwise for the payment of 95.31 notes or bonds or in any way to secure notes or bonds and 95.32 deposits of such money may be secured in the same manner as 95.33 money of the agency, and all banks and trust companies are 95.34 authorized to give such security for such deposits. All money 95.35 so paid to the state treasurer as agent of the agency, from 95.36 whatever source, are appropriated to the agency. The agency's 96.1 notes and bonds are not subject to section 16B.06sections 96.2 16C.03, subdivision 4, and 16C.06. 96.3 Sec. 93. Minnesota Statutes 1996, section 471.345, 96.4 subdivision 8, is amended to read: 96.5 Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 96.6 PERSONS.] For purposes of this subdivision, the following terms 96.7 shall have the meanings herein ascribed to them: 96.8 (a) "Small targeted group business" means businesses 96.9 designated under section 16B.1916C.18. 96.10 (b) "Business entity" means an entity organized for profit, 96.11 including an individual, partnership, corporation, joint 96.12 venture, association, or cooperative. 96.13 Nothing in this section shall be construed to prohibit any 96.14 municipality from adopting a resolution, rule, regulation, or 96.15 ordinance which on an annual basis designates and sets aside for 96.16 awarding to small targeted group businesses a percentage of the 96.17 value of its anticipated total procurement of goods and 96.18 services, including construction, and which uses either a 96.19 negotiated price or bid contract procedure in the awarding of a 96.20 procurement contract under a set-aside program as allowed in 96.21 this subdivision, provided that any award based on a negotiated 96.22 price shall not exceed by more than five percent the 96.23 municipality's estimated price for the goods and services if 96.24 they were purchased on the open market and not under the 96.25 set-aside program. 96.26 Sec. 94. Minnesota Statutes 1996, section 473.142, is 96.27 amended to read: 96.28 473.142 [SMALL BUSINESSES.] 96.29 (a) The metropolitan council and agencies specified in 96.30 section 473.143, subdivision 1, may award up to a six percent 96.31 preference in the amount bid for specified goods or services to 96.32 small targeted group businesses designated under section 16B.1996.33 16C.18. 96.34 (b) The council and each agency specified in section 96.35 473.143, subdivision 1, may designate a purchase of goods or 96.36 services for award only to small targeted group businesses 97.1 designated under section 16B.1916C.18 if the council or agency 97.2 determines that at least three small targeted group businesses 97.3 are likely to bid. 97.4 (c) The council and each agency specified in section 97.5 473.143, subdivision 1, as a condition of awarding a 97.6 construction contract or approving a contract for consultant, 97.7 professional, or technical services, may set goals that require 97.8 the prime contractor to subcontract a portion of the contract to 97.9 small targeted group businesses designated under section 16B.1997.10 16C.18. The council or agency must establish a procedure for 97.11 granting waivers from the subcontracting requirement when 97.12 qualified small targeted group businesses are not reasonably 97.13 available. The council or agency may establish financial 97.14 incentives for prime contractors who exceed the goals for use of 97.15 subcontractors and financial penalties for prime contractors who 97.16 fail to meet goals under this paragraph. The subcontracting 97.17 requirements of this paragraph do not apply to prime contractors 97.18 who are small targeted group businesses. At least 75 percent of 97.19 the value of the subcontracts awarded to small targeted group 97.20 businesses under this paragraph must be performed by the 97.21 business to which the subcontract is awarded or by another small 97.22 targeted group business. 97.23 (d) The council and each agency listed in section 473.143, 97.24 subdivision 1, are encouraged to purchase from small targeted 97.25 group businesses designated under section 16B.1916C.18 when 97.26 making purchases that are not subject to competitive bidding 97.27 procedures. 97.28 (e) The council and each agency may adopt rules to 97.29 implement this section. 97.30 (f) Each council or agency contract must require the prime 97.31 contractor to pay any subcontractor within ten days of the prime 97.32 contractor's receipt of payment from the council or agency for 97.33 undisputed services provided by the subcontractor. The contract 97.34 must require the prime contractor to pay interest of 1-1/2 97.35 percent per month or any part of a month to the subcontractor on 97.36 any undisputed amount not paid on time to the subcontractor. 98.1 The minimum monthly interest penalty payment for an unpaid 98.2 balance of $100 or more is $10. For an unpaid balance of less 98.3 than $100, the prime contractor shall pay the actual penalty due 98.4 to the subcontractor. A subcontractor who prevails in a civil 98.5 action to collect interest penalties from a prime contractor 98.6 must be awarded its costs and disbursements, including attorney 98.7 fees, incurred in bringing the action. 98.8 (g) This section does not apply to procurement financed in 98.9 whole or in part with federal funds if the procurement is 98.10 subject to federal disadvantaged, minority, or women business 98.11 enterprise regulations. The council and each agency shall 98.12 report to the commissioner of administration on compliance with 98.13 this section. The information must be reported at the time and 98.14 in the manner requested by the commissioner. 98.15 Sec. 95. Minnesota Statutes 1996, section 473.556, 98.16 subdivision 14, is amended to read: 98.17 Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its 98.18 powers to contract for the purchase of services, materials, 98.19 supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 98.20 10, the commission shall designate and set aside each fiscal 98.21 year for awarding to small businesses approximately ten percent 98.22 of the value of anticipated contracts and subcontracts of that 98.23 kind for that year, in the manner required of the commissioner 98.24 of administration for state procurement contracts pursuant to 98.25 sections 16B.19 to 16B.2216C.18 to 16C.21. The commission 98.26 shall follow the rules promulgated by the commissioner of 98.27 administration pursuant to section 16B.2216C.21, and shall 98.28 submit reports of the kinds required of the commissioners of 98.29 administration and economic development by section 16B.2116C.20. 98.30 Sec. 96. Minnesota Statutes 1996, section 480.09, 98.31 subdivision 1, is amended to read: 98.32 Subdivision 1. The state library shall be maintained in 98.33 the capitol and shall be under the supervision of the justices 98.34 of the supreme court. Notwithstanding chapter 16B16C or any 98.35 other act inconsistent herewith or acts amendatory thereof or 98.36 supplementary thereto, they shall direct the purchases of books, 99.1 pamphlets, and documents therefor and the sales and exchanges 99.2 therefrom upon such terms and conditions as they may deem just 99.3 and proper. They may authorize the transfer of books and 99.4 documents to the University of Minnesota or any department 99.5 thereof, or to any state agency. They shall adopt rules for the 99.6 government of the library and the management of its affairs, and 99.7 prescribe penalties for the violation thereof. 99.8 Sec. 97. Minnesota Statutes 1996, section 626.90, 99.9 subdivision 2, is amended to read: 99.10 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the 99.11 powers of a law enforcement agency, as defined in section 99.12 626.84, subdivision 1, paragraph (h), if all of the requirements 99.13 of clauses (1) to (4) are met: 99.14 (1) the band agrees to be subject to liability for its 99.15 torts and those of its officers, employees, and agents acting 99.16 within the scope of their employment or duties arising out of a 99.17 law enforcement agency function conferred by this section, to 99.18 the same extent as a municipality under chapter 466, and the 99.19 band further agrees, notwithstanding section 16B.0616C.06, 99.20 subdivision 67, to waive its sovereign immunity for purposes of 99.21 claims of this liability; 99.22 (2) the band files with the board of peace officer 99.23 standards and training a bond or certificate of insurance for 99.24 liability coverage for the maximum amounts set forth in section 99.25 466.04; 99.26 (3) the band files with the board of peace officer 99.27 standards and training a certificate of insurance for liability 99.28 of its law enforcement officers, employees, and agents for 99.29 lawsuits under the United States Constitution; and 99.30 (4) the band agrees to be subject to section 13.82 and any 99.31 other laws of the state relating to data practices of law 99.32 enforcement agencies. 99.33 (b) The band shall enter into mutual aid/cooperative 99.34 agreements with the Mille Lacs county sheriff under section 99.35 471.59 to define and regulate the provision of law enforcement 99.36 services under this section. The agreements must define the 100.1 trust property involved in the joint powers agreement. 100.2 (c) The band shall have concurrent jurisdictional authority 100.3 under this section with the Mille Lacs county sheriff's 100.4 department only if the requirements of paragraph (a) are met and 100.5 under the following circumstances: 100.6 (1) over all persons in the geographical boundaries of the 100.7 property held by the United States in trust for the Mille Lacs 100.8 band or the Minnesota Chippewa tribe; 100.9 (2) over all Minnesota Chippewa tribal members within the 100.10 boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 100.11 Mille Lacs county, Minnesota; and 100.12 (3) concurrent jurisdiction over any person who commits or 100.13 attempts to commit a crime in the presence of an appointed band 100.14 peace officer within the boundaries of the Treaty of February 100.15 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 100.16 Sec. 98. Minnesota Statutes 1997 Supplement, section 100.17 626.91, subdivision 2, is amended to read: 100.18 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has 100.19 the powers of a law enforcement agency, as defined in section 100.20 626.84, subdivision 1, paragraph (h), if all of the requirements 100.21 of clauses (1) to (4) are met: 100.22 (1) the community agrees to be subject to liability for its 100.23 torts and those of its officers, employees, and agents acting 100.24 within the scope of their employment or duties arising out of 100.25 the law enforcement agency powers conferred by this section to 100.26 the same extent as a municipality under chapter 466, and the 100.27 community further agrees, notwithstanding section 16B.0616C.06, 100.28 subdivision 67, to waive its sovereign immunity with respect to 100.29 claims arising from this liability; 100.30 (2) the community files with the board of peace officer 100.31 standards and training a bond or certificate of insurance for 100.32 liability coverage for the maximum amounts set forth in section 100.33 466.04; 100.34 (3) the community files with the board of peace officer 100.35 standards and training a certificate of insurance for liability 100.36 of its law enforcement officers, employees, and agents for 101.1 lawsuits under the United States Constitution; and 101.2 (4) the community agrees to be subject to section 13.82 and 101.3 any other laws of the state relating to data practices of law 101.4 enforcement agencies. 101.5 (b) The community shall enter into an agreement under 101.6 section 471.59 with the Redwood county sheriff to define and 101.7 regulate the provision of law enforcement services under this 101.8 section and to provide for mutual aid and cooperation. The 101.9 agreement must identify and describe the trust property involved 101.10 in the agreement. For purposes of entering into this agreement, 101.11 the community shall be considered a "governmental unit" as that 101.12 term is defined in section 471.59, subdivision 1. 101.13 Sec. 99. [EFFECTIVE DATE.] 101.14 This article is effective July 1, 1998.