HF 4324

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/07/2024 04:39pm

A bill for an act
relating to state government; establishing Race Based Equity and Inclusivity in
Procurement and Contracting Act; proposing coding for new law in Minnesota
Statutes, chapter 16C.

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

Section 1.

new text begin [16C.061] RACE EQUITY AND INCLUSIVITY IN PROCUREMENT
AND CONTRACTING ACT.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose and finding. new text end

new text begin (a) The legislature finds that requiring racial equity
and inclusion in government procurement and contracting is necessary to address unfairness
and hardship in underrepresented communities of color that lack the capacity, access, and
wealth-building mechanisms to be successful. Having a diverse vendor base enhances
economic opportunities and increases the overall well-being of the state.
new text end

new text begin (b) The legislature declares that barriers must be removed for intentional wealth-building
to occur in underrepresented communities.
new text end

new text begin (c) The legislature declares that past racial discrimination must be given significant
consideration to make a difference in improving the social and economic conditions in
underrepresented communities of color.
new text end

new text begin (d) The legislature finds that requiring the creation of a BIPOC small business collective
will assist government agencies in creating documented pathways for each BIPOC who has
experienced racial inequity based on social and economic conditions.
new text end

new text begin Subd. 2. new text end

new text begin Minimum race-based goals in procurement and contracting. new text end

new text begin (a) For the
purposes of this section, race, minority, and BIPOC (Black, Indigenous, and People of
Color) are interchangeable and includes the underrepresented communities of Black
Americans, Indigenous/Native/Hawaiian Americans, Latin Americans, Asian Americans,
and Arab Americans.
new text end

new text begin (b) Government agencies must achieve a 25 percent compliance of contracting for goods
and services with businesses owned by individuals who are BIPOCs. Government agencies
shall strive to increase the minimum goal of 25 percent for every industry where the purchase
and contracting of services and the procurement of goods is required in order to enhance
diversity and inclusion.
new text end

new text begin Subd. 3. new text end

new text begin Agency discretion and set-aside programs. new text end

new text begin Each governmental agency shall
establish a race-based set-aside program to achieve and exceed the minimum goal for
race-based procurement and contracting. Government agencies must work with
representatives from underrepresented communities in determining specific criteria,
procedures, implementation, and management of set-aside programs.
new text end

new text begin Subd. 4. new text end

new text begin Reporting and evaluation. new text end

new text begin (a) Government agencies must provide annual
reports to the Department of Administration and the Department of Management and Budget
detailing efforts to meet the race-based procurement goals specified in this section. Specific
reports on the BIPOC vetting process, business development support provided, and the
values of contracts awarded must be disclosed by each agency. Agencies must demonstrate
beyond good faith efforts the market research conducted, effective and intentional outreach
efforts, and documentation that reflects equity in procurement and contracting across the
various industries and categories was devoid of the appearance of favored or preferred goods
and service providers. The Department of Administration shall combine these reports and
make a report to the legislative committees governing state government.
new text end

new text begin (b) The Department of Commerce, in collaboration with the United States Department
of Commerce, Minority Business Development Agency shall evaluate the effectiveness of
the requirement to promote diversity and inclusion.
new text end

new text begin Subd. 5. new text end

new text begin Compliance requirements; fund recipients; penalty. new text end

new text begin Any private company
receiving funds from a government agency in Minnesota must adhere to the race-based
procurement and contracting goals and standards in this section. Noncompliance with the
provisions in this section by a private company may result in suspension or disbarment from
government contracts as determined by the Department of Administration.
new text end

new text begin Subd. 6. new text end

new text begin Agency procurement and contracting responsibilities. new text end

new text begin Delegated procurement
and contracting individuals employed by government agencies shall manage and oversee
procurement and contracting processes to ensure compliance with the race-based procurement
goals and standards in this section.
new text end

new text begin Subd. 7. new text end

new text begin Self-certification. new text end

new text begin Business or individuals may self-certify their eligibility for
race-based procurement and contracting opportunities. Self-certification automatically
qualifies the entity for consideration under the provisions of this section. The criteria for
self-certification is a priority of the agency and the BIPOC small business collective.
new text end

new text begin Subd. 8. new text end

new text begin Exemption from surety bonds. new text end

new text begin Notwithstanding chapter 574, construction
projects above $100,000 and awarded to BIPOC-owned businesses are exempt from the
surety bond requirement. This exemption is intended to facilitate generational wealth-building
within the BIPOC community.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end