3rd 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; 161.32, by adding subdivisions; 1.21 161.321, subdivisions 1, 2, 5, 6, and 7; 161.41, 1.22 subdivision 2; 179A.23; 198.35, subdivision 1; 1.23 216C.02, subdivision 1; 237.51, subdivision 5a; 1.24 241.0221, subdivision 6; 241.27, subdivision 2; 1.25 246.36; 246.57, subdivisions 1 and 6; 256B.031, 1.26 subdivision 1; 256B.04, subdivisions 14 and 15; 1.27 298.2211, subdivision 4; 349A.06, subdivision 1; 1.28 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 1.29 354.06, subdivision 2a; 354.07, subdivision 7; 1.30 356A.06, subdivision 7; 446A.12, subdivision 5; 1.31 462A.18, subdivision 2; 471.345, subdivision 8; 1.32 473.142; 473.556, subdivision 14; 480.09, subdivision 1.33 1; and 626.90, subdivision 2; Minnesota Statutes 1997 1.34 Supplement, sections 3.225, subdivision 1; 16A.15, 1.35 subdivision 3; 16B.465, subdivision 7; 16E.07, 1.36 subdivision 9; 17.03, subdivision 12; 41D.03, 1.37 subdivision 7; 61B.21, subdivision 1; 85A.02, 1.38 subdivision 5b; 121.1113, subdivision 2; 136A.40; 1.39 138.35, subdivision 1b; 179A.03, subdivision 14; 1.40 216D.03, subdivision 2; 241.277, subdivision 2; 1.41 256B.19, subdivision 2a; 256D.03, subdivision 6; 1.42 353.03, subdivision 3a; 363.073, subdivision 1; and 1.43 626.91, subdivision 2; proposing coding for new law in 1.44 Minnesota Statutes, chapters 16C; and 174; repealing 1.45 Minnesota Statutes 1996, sections 16B.06; 16B.07; 1.46 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 2.1 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 2.2 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 2.3 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 2.4 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; 2.5 Minnesota Statutes 1997 Supplement, sections 16B.18, 2.6 subdivision 3; 16B.20, subdivision 2; and 16B.482. 2.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.8 ARTICLE 1 2.9 PROCUREMENT REFORM 2.10 Section 1. Minnesota Statutes 1996, section 15.054, is 2.11 amended to read: 2.12 15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM 2.13 GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.] 2.14 No officer or employee of the state or any of its political 2.15 subdivisions shall sell or procure for sale or possess or 2.16 control for sale to any other officer or employee of the state 2.17 or
thesubdivision, as appropriate, any property or materials 2.18 owned by the state or subdivision except pursuant to conditions 2.19 provided in this section. Property or materials owned by the 2.20 state or a subdivision, except real property, and not needed for 2.21 public purposes, may be sold to an employee of the state or the2.22 subdivision after reasonable public notice at a public auction 2.23 or by sealed bid if the employee is the highest responsible2.24 bidder andresponse, if the employee is not directly involved in 2.25 the auction or process pertaining to the administration and 2.26 collection of sealed bid processresponses. Requirements for 2.27 reasonable public notice may be prescribed by other law or 2.28 ordinance so long as at least one week's published or posted2.29 notice is specified. A stateAn employee of the state or a 2.30 political subdivision may purchase no more than one motor 2.31 vehicle from the state in any 12-month period. A person 2.32 violating the provisions of this section is guilty of a 2.33 misdemeanor. This section shall not apply to the sale of 2.34 property or materials acquired or produced by the state or 2.35 subdivision for sale to the general public in the ordinary 2.36 course of business. Nothing in this section shall prohibit an 2.37 employee of the state or a political subdivision from selling or 2.38 possessing for sale public property if the sale or possession 3.1 for sale is in the ordinary course of business or normal course 3.2 of the employee's duties. 3.3 Sec. 2. Minnesota Statutes 1996, section 16B.181, is 3.4 amended to read: 3.5 16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.] 3.6 Subdivision 1. [DEFINITIONS.] As used in this section: 3.7 (1) "public entity" or "public entities" includes the state 3.8 and an agency, department, or institution of the state, any 3.9 governmental unit as defined in section 471.59, the state 3.10 legislative and judicial branches, and state colleges and 3.11 universities; and 3.12 (2) "items" includes articles, products, supplies, and 3.13 services. 3.14 Subd. 2. [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS 3.15 INDUSTRIES.] (a) The commissioner of corrections, in 3.16 consultation with the commissioner of administration, shall 3.17 prepare updated lists of the items available for purchase from 3.18 department of corrections industries and annually forward a copy 3.19 of the most recent list to all public entities within the 3.20 state. A public entity that is supported in whole or in part 3.21 with funds from the state treasury shallmay purchase items 3.22 directly from corrections industries those items that are3.23 comparable in price, quality, and delivery time to items3.24 available from other vendors. An item is comparable in price if3.25 the price is no more than five percent higher than the lowest3.26 bid price. The bid solicitation process is not required for 3.27 these purchases. 3.28 (b) The commissioner of administration shall develop a 3.29 contract pursuant to section 16B.09,or contracts to enable 3.30 public entities to purchase items directly from corrections 3.31 industries. The commissioner of administration, in consultation 3.32 with the commissioner of corrections, shall determine the fair 3.33 market price for listed items. In determining fair market3.34 price, the commissioner shall use competitive bidding, or shall3.35 consider open bid prices in previous years for similar products3.36 which meet the needs of the public entity.The commissioner of 4.1 administration shall require that all requests for bids or 4.2 proposals, for items provided by corrections industries, be 4.3 forwarded to the commissioner of corrections to enable 4.4 corrections industries to submit bids. The commissioner of 4.5 corrections shall consult with the commissioner of 4.6 administration prior to introducing new products to the state 4.7 agency market. 4.8 (c) No public entity may evade the intent of this section 4.9 by adopting slight variations in specifications, when Minnesota 4.10 corrections industry items meet the reasonable needs and 4.11 specifications of the public entity. 4.12 (d) As part of its ongoing audit process, the legislative4.13 auditor is requested to ensure that state agencies are in4.14 compliance with this section.The commissioners of 4.15 administration and corrections shall develop annual performance 4.16 measures outlining goals to maximize inmate work program 4.17 participation. The commissioners of administration and 4.18 corrections shall appoint cochairs for a task force whose 4.19 purpose is to determine additional methods to achieve the 4.20 performance goals for public entity purchasing. The task force 4.21 shall include representatives from the Minnesota house of 4.22 representatives, Minnesota senate, the Minnesota state colleges 4.23 and universities, University of Minnesota, Minnesota League of 4.24 Cities, Minnesota Association of Counties, and administrators 4.25 with purchasing responsibilities from the Minnesota state 4.26 departments of corrections, public safety, finance, 4.27 transportation, natural resources, human services, health, and 4.28 economic security. 4.29 (e) The commissioners of administration and corrections4.30 shall appoint a joint task force to explore additional methods4.31 that support the philosophy of providing a substantial market4.32 opportunity to correctional industries that maximizes inmate4.33 work opportunities. The task force shall develop a plan and4.34 prepare a set of criteria with which to evaluate the4.35 effectiveness of the recommendations and initiatives in the4.36 plan. By February 15, 1997, the task force shall report to the5.1 chairs of the senate and house of representatives committees5.2 having jurisdiction over criminal justice funding.If 5.3 performance goals for public entity purchasing are not achieved 5.4 in two consecutive fiscal years, public entities shall purchase 5.5 items available from corrections industries. The commissioner 5.6 of administration shall be responsible for notifying public 5.7 entities of this requirement. 5.8 Sec. 3. [16C.02] [DEFINITIONS.] 5.9 Subdivision 1. [APPLICABILITY.] For purposes of this 5.10 chapter, the following terms have the meanings given them, 5.11 unless the context clearly indicates otherwise. 5.12 Subd. 2. [AGENCY.] "Agency" means any state officer, 5.13 employee, board, commission, authority, department, entity, or 5.14 organization of the executive branch of state government. 5.15 Unless specifically provided elsewhere in this chapter, 5.16 agency does not include the Minnesota state colleges and 5.17 universities. 5.18 Subd. 3. [AWARD.] "Award" means a commissioner's written 5.19 acceptance of a bid or proposal to provide goods, services, or 5.20 utilities. 5.21 Subd. 4. [BEST VALUE.] "Best value" describes a result 5.22 intended in the acquisition of all goods and services. Price 5.23 must be one of the evaluation criteria when acquiring goods and 5.24 services. Other evaluation criteria may include, but are not 5.25 limited to, environmental considerations, quality, and vendor 5.26 performance. 5.27 Subd. 5. [COMMISSIONER.] "Commissioner" means the 5.28 commissioner of administration. 5.29 Subd. 6. [CONTRACT.] "Contract" means any written 5.30 instrument or electronic document containing the elements of 5.31 offer, acceptance, and consideration to which an agency is a 5.32 party. 5.33 Subd. 7. [FORMAL SOLICITATION.] "Formal solicitation" 5.34 means a solicitation which requires a sealed response. 5.35 Subd. 8. [GOODS.] "Goods" means all types of personal 5.36 property including commodities, materials, supplies, and 6.1 equipment. 6.2 Subd. 9. [INFORMAL SOLICITATION.] "Informal solicitation" 6.3 means a solicitation which does not require a sealed response. 6.4 Subd. 10. [LEASE.] "Lease" means a contract conveying from 6.5 one entity to another the use of real or personal property for a 6.6 designated period of time in return for payment or other 6.7 consideration. 6.8 Subd. 11. [REQUEST FOR BID OR RFB.] "Request for bid" or 6.9 "RFB" means a solicitation in which the terms, conditions, and 6.10 specifications are described and responses are not subject to 6.11 negotiation. 6.12 Subd. 12. [REQUEST FOR PROPOSAL OR RFP.] "Request for 6.13 proposal" or "RFP" means a solicitation in which it is not 6.14 advantageous to set forth all the actual, detailed requirements 6.15 at the time of solicitation and responses are subject to 6.16 negotiation. 6.17 Subd. 13. [RESIDENT VENDOR.] "Resident vendor" means a 6.18 person, firm, or corporation authorized to conduct business in 6.19 the state of Minnesota on the date a solicitation for a contract 6.20 is first advertised or announced. It includes a foreign 6.21 corporation duly authorized to engage in business in Minnesota. 6.22 Subd. 14. [RESPONSE.] "Response" means the offer received 6.23 from a vendor in response to a solicitation. A response 6.24 includes submissions commonly referred to as "offers," "bids," 6.25 "quotes," or "proposals." 6.26 Subd. 15. [SEALED.] "Sealed" means a method determined by 6.27 the commissioner to prevent the contents being revealed or known 6.28 before the deadline for submission of responses. 6.29 Subd. 16. [SERVICE CONTRACT.] "Service contract" means a 6.30 contract for any nonprofessional or technical services. 6.31 Subd. 17. [SERVICES.] "Services" means, unless otherwise 6.32 indicated, both professional or technical services and service 6.33 performed under a service contract. 6.34 Subd. 18. [SINGLE SOURCE.] "Single source" means an 6.35 acquisition where, after a search, only one supplier is 6.36 determined to be reasonably available for the required product, 7.1 service, or construction item. 7.2 Subd. 19. [SOLICITATION.] "Solicitation" means the process 7.3 used to communicate procurement requirements and to request 7.4 responses from interested vendors. A solicitation may be, but 7.5 is not limited to, a request for bid and request for proposal. 7.6 Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 7.7 DUTIES.] 7.8 Subdivision 1. [SCOPE.] The commissioner's authority in 7.9 this section applies to an agency and is subject to other 7.10 provisions of this chapter and chapter 16B. Unless otherwise 7.11 provided, the provisions in this chapter and chapter 16B do not 7.12 apply to the Minnesota state colleges and universities. 7.13 Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, 7.14 the commissioner may adopt rules, consistent with this chapter 7.15 and chapter 16B, relating to the following topics: 7.16 (1) solicitations and responses to solicitations, bid 7.17 security, vendor errors, opening of responses, award of 7.18 contracts, tied bids, and award protest process; 7.19 (2) contract performance and failure to perform; 7.20 (3) authority to debar or suspend vendors, and 7.21 reinstatement of vendors; 7.22 (4) contract cancellation; and 7.23 (5) procurement from rehabilitation facilities. 7.24 Subd. 3. [ACQUISITION AUTHORITY.] The commissioner shall 7.25 acquire all goods, services, and utilities needed by agencies. 7.26 The commissioner shall acquire goods, services, and utilities by 7.27 requests for bids, requests for proposals, or other methods 7.28 provided by law, unless a section of law requires a particular 7.29 method of acquisition to be used. The commissioner shall make 7.30 all decisions regarding acquisition activities. The 7.31 determination of the acquisition method and all decisions 7.32 involved in the acquisition process, unless otherwise provided 7.33 for by law, shall be based on best value which includes an 7.34 evaluation of price and may include other considerations 7.35 including, but not limited to, environmental considerations, 7.36 quality, and vendor performance. A best value determination 8.1 must be based on the evaluation criteria detailed in the 8.2 solicitation document. If criteria other than price are used, 8.3 the solicitation document must state the relative importance of 8.4 price and other factors. Unless it is determined by the 8.5 commissioner that an alternative solicitation method provided by 8.6 law should be used to determine best value, a request for bid 8.7 must be used to solicit formal responses for all building and 8.8 construction contracts. Any or all responses may be rejected. 8.9 When using the request for bid process, the bid must be awarded 8.10 to the lowest responsive and responsible bidder, taking into 8.11 consideration conformity with the specifications, terms of 8.12 delivery, the purpose for which the contract or purchase is 8.13 intended, the status and capability of the vendor, and other 8.14 considerations imposed in the request for bids. The 8.15 commissioner may decide which is the lowest responsible bidder 8.16 for all purchases and may use the principles of life-cycle 8.17 costing, where appropriate, in determining the lowest overall 8.18 bid. The duties set forth in this subdivision are subject to 8.19 delegation pursuant to this section. 8.20 Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall 8.21 conduct all contracting by, for, and between agencies and 8.22 perform all contract management and review functions for 8.23 contracts, except those functions specifically delegated to be 8.24 performed by the contracting agency, the attorney general, or 8.25 otherwise provided for by law. 8.26 Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 8.27 commissioner shall, in addition to the duties set forth in 8.28 subdivisions 3 and 4, make all decisions regarding amendments, 8.29 cancellations, and appeals of all agency acquisition activities 8.30 unless the duties are delegated pursuant to this section. 8.31 Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The 8.32 commissioner is authorized to enter into lease purchases or 8.33 installment purchases for periods not exceeding the anticipated 8.34 useful life of the items acquired unless otherwise prohibited by 8.35 law. 8.36 Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 9.1 commissioner is authorized to enter into lease, lease purchase, 9.2 rental, or installment agreements for the use or acquisition, 9.3 whichever is applicable, of real or personal property. 9.4 Subd. 8. [POLICY AND PROCEDURES.] The commissioner is 9.5 authorized to issue policies, procedures, and standards 9.6 applicable to all acquisition activities by and for agencies. 9.7 Subd. 9. [EMPLOYEE PURCHASING.] The commissioner is 9.8 authorized to enter into contracts under which a vendor agrees 9.9 to sell computer equipment and related products to state 9.10 employees, for their own use related to work, at contract prices. 9.11 Employees may make only one purchase under this subdivision. 9.12 Under no circumstances shall the state be liable for purchases 9.13 made under this subdivision. The provisions of section 43A.38, 9.14 subdivisions 4 and 5, clause (a), do not apply to this 9.15 subdivision. 9.16 Subd. 10. [COOPERATIVE PURCHASING.] The commissioner is 9.17 authorized to enter into a cooperative purchasing agreement for 9.18 the provision of goods, services, and utilities with one or more 9.19 other states or governmental units, as described in section 9.20 471.59, subdivision 1. The commissioner is authorized to enter 9.21 into cooperative purchasing agreements for the purchase of 9.22 goods, services, and utilities with health care facilities that 9.23 are required to provide indigent care. 9.24 Subd. 11. [SURPLUS PROPERTY.] The commissioner is 9.25 authorized to purchase, accept, transfer, warehouse, sell, 9.26 distribute, or dispose of surplus property in accordance with 9.27 state and federal rules and regulations. The commissioner may 9.28 charge a fee to cover any expenses incurred in connection with 9.29 any of these acts. 9.30 Subd. 12. [CENTRAL DISTRIBUTION CENTER.] The commissioner 9.31 is authorized to provide and manage a central distribution 9.32 center for federal and state surplus personal property, as 9.33 defined in section 16C.25, and may provide and manage a 9.34 warehouse facility. 9.35 Subd. 13. [CENTRAL STORES.] The commissioner is authorized 9.36 to provide agencies with supplies and equipment and operate all 10.1 central stores and supply rooms serving more than one agency. 10.2 Subd. 14. [PROVISION OF GOODS, SERVICES, AND 10.3 UTILITIES.] The commissioner has the authority to provide goods, 10.4 services, and utilities under this chapter to state legislative 10.5 and judicial branch agencies, political subdivisions, the 10.6 Minnesota state colleges and universities, the University of 10.7 Minnesota, and federal government agencies. 10.8 Subd. 15. [REIMBURSEMENT FOR GOODS, SERVICES, AND 10.9 UTILITIES.] The commissioner is authorized to charge a fee to 10.10 cover costs and expenses associated with operating a revolving 10.11 fund or an enterprise fund to acquire goods, services, and 10.12 utilities. The fees are appropriated to the commissioner to 10.13 administer and manage the programs and facilities covered under 10.14 this section. 10.15 Subd. 16. [DELEGATION OF DUTIES.] The commissioner may 10.16 delegate duties imposed by this chapter to the head of an agency 10.17 and to any subordinate of the agency head. Delegated duties 10.18 shall be exercised in the name of the commissioner and under the 10.19 commissioner's direct supervision and control. A delegation of 10.20 duties may include, but is not limited to, allowing individuals 10.21 within agencies to acquire goods, services, and utilities within 10.22 dollar limitations and for designated types of acquisitions. 10.23 Delegation of contract management and review functions must be 10.24 filed with the secretary of state and may not, except with 10.25 respect to delegations within the department of administration, 10.26 exceed two years in duration. The commissioner may withdraw any 10.27 delegation at the commissioner's sole discretion. 10.28 Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 10.29 INTEREST.] 10.30 Subdivision 1. [DUTY.] An employee of the executive branch 10.31 involved directly or indirectly in the acquisition process, at 10.32 any level, is subject to the code of ethics in section 43A.38. 10.33 Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 10.34 The commissioner must develop policies regarding code of ethics 10.35 and conflict of interest designed to prevent conflicts of 10.36 interest for employees involved in the acquisition of goods, 11.1 services, and utilities. The policies must apply to employees 11.2 who are directly or indirectly involved in the acquisition of 11.3 goods, services, and utilities, developing requests for 11.4 proposals, evaluating bids or proposals, awarding the contract, 11.5 selecting the final vendor, drafting and entering into 11.6 contracts, evaluating performance under these contracts, and 11.7 authorizing payments under the contract. 11.8 (b) The policies must contain a process for making 11.9 employees aware of policy and laws relating to conflict of 11.10 interest, and for training employees on how to avoid and deal 11.11 with potential conflicts. 11.12 (c) The policies must contain a process under which an 11.13 employee who has a conflict of interest or a potential conflict 11.14 of interest must disclose the matter, and a process under which 11.15 work on the contract may be assigned to another employee if 11.16 possible. 11.17 Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 11.18 REVIEW.] 11.19 Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully 11.20 cooperate with the commissioner in the management and review of 11.21 state contracts. 11.22 Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A 11.23 contract is not valid and the state is not bound by it unless: 11.24 (1) it has first been executed by the head of the agency or 11.25 a delegate who is a party to the contract; 11.26 (2) it has been approved by the commissioner; 11.27 (3) it has been approved by the attorney general or a 11.28 delegate as to form and execution; 11.29 (4) the accounting system shows an obligation in an expense 11.30 budget or encumbrance for the amount of the contract liability; 11.31 and 11.32 (5) the combined contract and amendments shall not exceed 11.33 five years, unless otherwise provided for by law. The term of 11.34 the original contract must not exceed two years unless the 11.35 commissioner determines that a longer duration is in the best 11.36 interest of the state. 12.1 (b) Grants, interagency agreements, purchase orders, and 12.2 annual plans need not, in the discretion of the commissioner and 12.3 attorney general, require the signature of the commissioner 12.4 and/or the attorney general. 12.5 (c) A fully executed copy of every contract must be kept on 12.6 file at the contracting agency. 12.7 Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do 12.8 not apply to contracts of the department of economic security 12.9 distributing state and federal funds for the purpose of 12.10 subcontracting the provision of program services to eligible 12.11 recipients. For these contracts, the commissioner of economic 12.12 security is authorized to directly enter into agency contracts 12.13 and encumber available funds. For contracts distributing state 12.14 or federal funds pursuant to the federal Economic Dislocation 12.15 and Worker Adjustment Assistance Act, United States Code, title 12.16 29, section 1651 et seq., or sections 268.9771, 268.978, 12.17 268.9781, and 268.9782, the commissioner of economic security is 12.18 authorized to directly enter into agency contracts with approval 12.19 of the workforce development council and encumber available 12.20 funds to ensure a rapid response to the needs of dislocated 12.21 workers. The commissioner of economic security shall adopt 12.22 internal procedures to administer and monitor funds distributed 12.23 under these contracts. This exception also applies to any 12.24 contracts entered into by the commissioner of children, 12.25 families, and learning that were previously entered into by the 12.26 commissioner of economic security. 12.27 Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency 12.28 shall diligently administer and monitor any contract it has 12.29 entered into, pursuant to a delegation of duties from the 12.30 commissioner. The commissioner may require an agency to report 12.31 to the commissioner at any time on the status of any contracts 12.32 to which the agency is a party. 12.33 Subd. 5. [SUBJECT TO AUDIT.] A contract or any 12.34 pass-through disbursement of public funds to a vendor of goods 12.35 or services or a grantee made by or under the supervision of the 12.36 commissioner or any county or unit of local government must 13.1 include, expressed or implied, an audit clause that provides 13.2 that the books, records, documents, and accounting procedures 13.3 and practices of the vendor or other party, that are relevant to 13.4 the contract or transaction, are subject to examination by the 13.5 contracting agency and either the legislative auditor or the 13.6 state auditor, as appropriate, for a minimum of six years. If 13.7 the contracting agency is a local unit of government, and the 13.8 governing body of the local unit of government requests that the 13.9 state auditor examine the books, records, documents, and 13.10 accounting procedures and practices of the vendor or other party 13.11 pursuant to this subdivision, the contracting agency shall be 13.12 liable for the cost of the examination. If the contracting 13.13 agency is a local unit of government, and the grantee, vendor, 13.14 or other party requests that the state auditor examine all 13.15 books, records, documents, and accounting procedures and 13.16 practices related to the contract, the grantee, vendor, or other 13.17 party that requested the examination shall be liable for the 13.18 cost of the examination. An agency contract made for purchase, 13.19 lease, or license of software and data from the state is not 13.20 required to contain this audit clause. 13.21 Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney 13.22 general may pursue remedies available by law to avoid the 13.23 obligation of an agency to pay under a contract or to recover 13.24 payments made if services performed or goods received under the 13.25 contract are so unsatisfactory, incomplete, or inconsistent that 13.26 payment would involve unjust enrichment. The contrary opinion 13.27 of the contracting agency does not affect the power of the 13.28 attorney general under this subdivision. 13.29 Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND 13.30 BANDS.] Notwithstanding any other law, an agency may not require 13.31 an Indian tribe or band to deny its sovereignty as a requirement 13.32 or condition of a contract with an agency. 13.33 Sec. 7. [16C.07] [ACQUISITIONS.] 13.34 Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of 13.35 solicitations for acquisitions estimated to be more than $25,000 13.36 must be publicized in a manner designated by the commissioner. 14.1 Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation 14.2 must be used to acquire all goods, service contracts, and 14.3 utilities estimated at or more than $25,000 unless otherwise 14.4 provided for. All formal responses must be sealed when they are 14.5 received and must be opened in public at the hour stated in the 14.6 solicitation. Formal responses must be authenticated by the 14.7 responder in a manner specified by the commissioner. 14.8 (b) An informal solicitation may be used to acquire all 14.9 goods, service contracts, and utilities that are estimated at 14.10 less than $25,000. The number of vendors required to receive 14.11 solicitations may be determined by the commissioner. Informal 14.12 responses must be authenticated by the responder in a manner 14.13 specified by the commissioner. 14.14 Subd. 3. [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 14.15 name of the vendor and dollar amounts specified in a response to 14.16 a request for bids shall be read at the time of opening. Only 14.17 the name of the responding vendors to all requests for proposals 14.18 shall be read at the time of opening. All other information 14.19 contained in a vendor's response to a bid is classified as 14.20 nonpublic data, as defined in section 13.02, and remains 14.21 nonpublic data until completion of the selection process. All 14.22 other information contained in a vendor's response to a request 14.23 for proposal, other than the name of the vendor, is classified 14.24 as nonpublic data, as defined in section 13.02, and remains 14.25 nonpublic data until the completion of the evaluation process. 14.26 (b) All responses are public information at the time of the 14.27 award unless otherwise provided for. All responses and 14.28 documents pertaining to the final award of an acquisition must 14.29 be retained and made a part of a permanent file or record and 14.30 remain open to public inspection, after award, unless otherwise 14.31 provided for by law. 14.32 Subd. 4. [MULTIPLE AWARDS.] The commissioner may award a 14.33 contract to more than one vendor if, in the opinion of the 14.34 commissioner, it is in the best interest of the state. 14.35 Subd. 5. [STATE AS RESPONDER.] The head of an agency, in 14.36 consultation with the requesting agency and the commissioner, 15.1 may respond to a solicitation or request if the goods and 15.2 services meet the needs of the requesting agency and provide the 15.3 state with the best value. When an agency responds to a 15.4 solicitation, all work product relating to the response is 15.5 nonpublic data as defined in section 13.02, and shall become 15.6 public information in accordance with subdivision 3. 15.7 Subd. 6. [AWARDS.] Awards must be based on best value, 15.8 which includes an evaluation of price, and may include other 15.9 considerations including, but not limited to, environmental 15.10 considerations, quality, and vendor performance. If criteria 15.11 other than price are used, the solicitation document must state 15.12 the relative importance of price and other factors. 15.13 Subd. 7. [OTHER STATES WITH RESIDENT 15.14 PREFERENCE.] Acquisition of goods and services must be awarded 15.15 according to the provisions of this chapter except that a 15.16 resident vendor shall be allowed a preference over a nonresident 15.17 vendor from a state that gives or requires a preference to 15.18 vendors from that state. The preference shall be equal to the 15.19 preference given or required by the state of the nonresident 15.20 vendor. 15.21 Subd. 8. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 15.22 does not apply to a contract for any project in which federal 15.23 funds are expended. 15.24 Subd. 9. [REJECTION.] At the discretion of the 15.25 commissioner, any or all responses may be rejected if it is 15.26 determined to be in the best interest of the state. 15.27 Subd. 10. [PREFERENCES NOT CUMULATIVE.] The preferences 15.28 provided for under subdivision 7 and sections 16B.121 and 16C.18 15.29 are not cumulative. The total percentage of preference granted 15.30 on a contract may not exceed the highest percentage of 15.31 preference allowed for that contract under any one of these 15.32 statutory sections. 15.33 Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.] 15.34 The commissioner of employee relations shall develop a 15.35 directory of services that state agencies commonly provide that 15.36 are professional or technical in nature. 16.1 Before an agency may seek approval of a professional or 16.2 technical services contract valued at a total cost in excess of 16.3 $25,000, it must certify to the commissioner that it has 16.4 publicized the contract by posting notice at appropriate 16.5 worksites within agencies and has made reasonable efforts to 16.6 determine that no state employee or agency, including an 16.7 employee or agency outside the contracting agency, is able and 16.8 available to perform the required services. When possible, this 16.9 posting should be done electronically. 16.10 Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 16.11 Subdivision 1. [DEFINITION.] For the purposes of this 16.12 section, "professional or technical services" means services 16.13 that are intellectual in character, including consultation, 16.14 analysis, evaluation, prediction, planning, programming, or 16.15 recommendation, and result in the production of a report or the 16.16 completion of a task. Professional or technical contracts do 16.17 not include the provision of supplies or materials except by the 16.18 approval of the commissioner or except as incidental to the 16.19 provision of professional or technical services. 16.20 Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency 16.21 may seek approval of a professional or technical services 16.22 contract valued in excess of $5,000, it must certify to the 16.23 commissioner that: 16.24 (1) no current state employee is able and available to 16.25 perform the services called for by the contract; 16.26 (2) the normal competitive bidding mechanisms will not 16.27 provide for adequate performance of the services; 16.28 (3) the contractor has certified that the product of the 16.29 services will be original in character; 16.30 (4) reasonable efforts were made to publicize the 16.31 availability of the contract to the public; 16.32 (5) the agency has received, reviewed, and accepted a 16.33 detailed work plan from the contractor for performance under the 16.34 contract, if applicable; 16.35 (6) the agency has developed, and fully intends to 16.36 implement, a written plan providing for the assignment of 17.1 specific agency personnel to a monitoring and liaison function, 17.2 the periodic review of interim reports or other indications of 17.3 past performance, and the ultimate utilization of the final 17.4 product of the services; and 17.5 (7) the agency will not allow the contractor to begin work 17.6 before funds are fully encumbered. 17.7 Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 17.8 CONTRACTS.] Before approving a proposed contract for 17.9 professional or technical services, the commissioner must 17.10 determine, at least, that: 17.11 (1) all provisions of subdivision 2 and section 16C.18 have 17.12 been verified or complied with; 17.13 (2) the work to be performed under the contract is 17.14 necessary to the agency's achievement of its statutory 17.15 responsibilities and there is statutory authority to enter into 17.16 the contract; 17.17 (3) the contract will not establish an employment 17.18 relationship between the state or the agency and any persons 17.19 performing under the contract; 17.20 (4) the contractor and agents are not employees of the 17.21 state; 17.22 (5) no agency has previously performed or contracted for 17.23 the performance of tasks which would be substantially duplicated 17.24 under the proposed contract; 17.25 (6) the contracting agency has specified a satisfactory 17.26 method of evaluating and using the results of the work to be 17.27 performed; and 17.28 (7) the combined contract and amendments will not exceed 17.29 five years, unless otherwise provided for by law. The term of 17.30 the original contract must not exceed two years unless the 17.31 commissioner determines that a longer duration is in the best 17.32 interest of the state. 17.33 Subd. 4. [REPORTS.] (a) The commissioner shall submit to 17.34 the governor, the chairs of the house ways and means and senate 17.35 finance committees, and the legislative reference library a 17.36 yearly listing of all contracts for professional or technical 18.1 services executed. The report must identify the contractor, 18.2 contract amount, duration, and services to be provided. The 18.3 commissioner shall also issue yearly reports summarizing the 18.4 contract review activities of the department by fiscal year. 18.5 (b) The fiscal year report must be submitted by September 1 18.6 of each year and must: 18.7 (1) be sorted by agency and by contractor; 18.8 (2) show the aggregate value of contracts issued by each 18.9 agency and issued to each contractor; 18.10 (3) distinguish between contracts that are being issued for 18.11 the first time and contracts that are being extended; 18.12 (4) state the termination date of each contract; and 18.13 (5) identify services by commodity code, including topics 18.14 such as contracts for training, contracts for research and 18.15 opinions, and contracts for computer systems. 18.16 (c) Within 30 days of final completion of a contract over 18.17 $40,000 covered by this subdivision, the head of the agency 18.18 entering into the contract must submit a one-page report to the 18.19 commissioner who must submit a copy to the legislative reference 18.20 library. The report must: 18.21 (1) summarize the purpose of the contract, including why it 18.22 was necessary to enter into a contract; 18.23 (2) state the amount spent on the contract; and 18.24 (3) explain why this amount was a cost-effective way to 18.25 enable the agency to provide its services or products better or 18.26 more efficiently. 18.27 Subd. 5. [CONTRACT TERMS.] (a) A professional or technical 18.28 services contract must by its terms permit the commissioner to 18.29 unilaterally terminate the contract prior to completion, upon 18.30 payment of just compensation, if the commissioner determines 18.31 that further performance under the contract would not serve 18.32 agency purposes. 18.33 (b) The terms of a contract must provide that no more than 18.34 90 percent of the amount due under the contract may be paid 18.35 until the final product has been reviewed by the head of the 18.36 agency entering into the contract and the head of the agency has 19.1 certified that the contractor has satisfactorily fulfilled the 19.2 terms of the contract, unless specifically excluded in writing 19.3 by the commissioner. 19.4 Subd. 6. [FILING COPY.] If the final product of the 19.5 contract is a written report, a copy must be filed with the 19.6 legislative reference library. 19.7 Subd. 7. [EXCLUSIONS.] This section does not apply to 19.8 contracts with individuals or organizations for administration 19.9 of employee pension plans authorized under chapter 354B or 354C. 19.10 Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 19.11 Before entering into or approving a service contract, the 19.12 commissioner must determine, at least, that: 19.13 (1) no current state employee is able and available to 19.14 perform the services called for by the contract; 19.15 (2) the work to be performed under the contract is 19.16 necessary to the agency's achievement of its statutory 19.17 responsibilities and there is statutory authority to enter into 19.18 the contract; 19.19 (3) the contract will not establish an employment 19.20 relationship between the state or the agency and any persons 19.21 performing under the contract; 19.22 (4) the contractor and agents are not employees of the 19.23 state; 19.24 (5) the contracting agency has specified a satisfactory 19.25 method of evaluating and using the results of the work to be 19.26 performed; and 19.27 (6) the combined contract and amendments will not exceed 19.28 five years, unless otherwise provided for by law. The term of 19.29 the original contract must not exceed two years, unless the 19.30 commissioner determines that a longer duration is in the best 19.31 interest of the state. 19.32 For purposes of clause (1), employees are available if qualified 19.33 and: 19.34 (i) are already doing the work in question; or 19.35 (ii) are on layoff status in classes that can do the work 19.36 in question. 20.1 An employee is not available if the employee is doing other 20.2 work, is retired, or has decided not to do the work in question. 20.3 Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION 20.4 PROCESS.] 20.5 Subdivision 1. [SINGLE SOURCE.] The solicitation process 20.6 described in this chapter is not required when there is clearly 20.7 and legitimately only a single source for the goods and services 20.8 and the commissioner determines that the price has been fairly 20.9 and reasonably established. 20.10 Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of 20.11 this subdivision, "emergency" means a threat to public health, 20.12 welfare, or safety that threatens the functioning of government, 20.13 the protection of property, or the health or safety of people. 20.14 (b) The solicitation process described in this chapter is 20.15 not required in emergencies. In emergencies, the commissioner 20.16 may make any purchases necessary for the repair, rehabilitation, 20.17 and improvement of a state-owned structure or may authorize an 20.18 agency to do so and may purchase, or may authorize an agency to 20.19 purchase, goods, services, or utility services directly for 20.20 immediate use. 20.21 Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 20.22 anything in this chapter to the contrary, the commissioner may, 20.23 instead of soliciting bids, contract for purchases with 20.24 suppliers who have published schedules of prices effective for 20.25 sales to any federal agency of the United States. These 20.26 contracts may be entered into, regardless of the amount of the 20.27 purchase price, if the commissioner considers them advantageous 20.28 and if the purchase price of all the commodities purchased under 20.29 the contract do not exceed the price specified by the schedule. 20.30 Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation 20.31 process described in this chapter is not required for 20.32 cooperative agreements. The commissioner may enter into 20.33 contracts or accept prices effective for sales to any 20.34 governmental unit as defined in section 471.59, through a 20.35 cooperative agreement as defined in section 471.59. 20.36 Subd. 5. [SPECIFIC PURCHASES.] The solicitation process 21.1 described in this chapter is not required for acquisition of the 21.2 following: 21.3 (1) merchandise for resale purchased under policies 21.4 determined by the commissioner; 21.5 (2) farm and garden products which, as determined by the 21.6 commissioner, may be purchased at the prevailing market price on 21.7 the date of sale; 21.8 (3) goods and services from the Minnesota correctional 21.9 facilities; 21.10 (4) goods and services from rehabilitation facilities and 21.11 sheltered workshops that are certified by the commissioner of 21.12 economic security; 21.13 (5) goods and services for use by a community-based 21.14 residential facility operated by the commissioner of human 21.15 services; 21.16 (6) goods purchased at auction or when submitting a sealed 21.17 bid at auction provided that before authorizing such an action, 21.18 the commissioner consult with the requesting agency to determine 21.19 a fair and reasonable value for the goods considering factors 21.20 including, but not limited to, costs associated with submitting 21.21 a bid, travel, transportation, and storage. This fair and 21.22 reasonable value must represent the limit of the state's bid; 21.23 and 21.24 (7) utility services where no competition exists or where 21.25 rates are fixed by law or ordinance. 21.26 Subd. 6. [EXPENDITURES UNDER SPECIFIED AMOUNTS.] The 21.27 solicitation process described in this chapter is not required 21.28 for: 21.29 (1) acquisition of goods or services, other than 21.30 professional or technical services, in an amount of $2,500 or 21.31 less; or 21.32 (2) acquisition of professional or technical services in an 21.33 amount of $5,000 or less, provided the requirements of section 21.34 16C.09, subdivisions 3 to 6, are met. 21.35 Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; 21.36 PURCHASING REVOLVING FUND.] 22.1 The commissioner may enter into joint or cooperative 22.2 purchasing agreements with any entity that is authorized under 22.3 section 471.59 to do so. The cooperative purchasing venture 22.4 revolving fund is a separate account in the state treasury. The 22.5 commissioner may charge a fee to cover the commissioner's 22.6 administrative expenses to governmental units that have joint or 22.7 cooperative purchasing agreements with the state under section 22.8 471.59. The fees collected must be deposited in the revolving 22.9 fund established by this section. Money in the fund is 22.10 appropriated to the commissioner to administer the programs and 22.11 services covered by this chapter. 22.12 Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 22.13 STATE.] 22.14 The commissioner shall encourage and make a reasonable 22.15 attempt to identify and purchase food products that are grown in 22.16 the state. 22.17 Sec. 14. [16C.14] [CERTAIN VEHICLES.] 22.18 Upon the written request of the commissioner of public 22.19 safety, motor vehicles for use by investigative and undercover 22.20 agents of the department of public safety must be purchased by 22.21 the brand, make, and model specified by the agency. 22.22 Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT 22.23 PURCHASES.] 22.24 Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may 22.25 contract to purchase by installment payments capital or other 22.26 equipment or services intended to improve the energy efficiency 22.27 of a state building or facility if: 22.28 (1) the term of the contract does not exceed ten years, 22.29 with not more than a ten-year payback; 22.30 (2) the entire cost of the contract is a percentage of the 22.31 resultant savings in energy costs only. "Savings in energy cost" 22.32 means a comparison of energy cost and energy usage under the 22.33 precontract conditions, including reasonable projections of 22.34 energy cost and usage if no change is made to the precontract 22.35 conditions, against energy cost and usage with the changes made 22.36 under the contract. If it is impractical to directly measure 23.1 energy cost and/or energy usage, reasonable engineering 23.2 estimates may be substituted for measured results; 23.3 (3) the contract for purchase must be completed using a 23.4 solicitation; 23.5 (4) the commissioner has determined that the contract 23.6 vendor is a responsible vendor; 23.7 (5) the contract vendor can finance or obtain financing for 23.8 the performance of the contract without state assistance or 23.9 guarantee; and 23.10 (6) the state may unilaterally cancel the agreement if the 23.11 legislature fails to appropriate funds to continue the contract 23.12 or if the contractor at any time during the term of the contract 23.13 fails to perform its contractual obligations, including failure 23.14 to deliver or install equipment or materials, failure to replace 23.15 faulty equipment or materials in a timely fashion, and failure 23.16 to maintain the equipment as agreed in the contract. 23.17 Subd. 2. [ENERGY APPROPRIATION.] The commissioner may 23.18 spend money appropriated for energy costs in payment of a 23.19 contract under this section. 23.20 Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 23.21 any other law to the contrary, fuel cost savings resulting from 23.22 energy conservation actions shall be available at the managerial 23.23 level at which the actions took place for expenditure for other 23.24 purposes within the biennium in which the actions occur or in 23.25 the case of a shared savings agreement for the contract period 23.26 of the shared savings agreement. For purposes of this 23.27 subdivision "shared savings agreement" means a contract meeting 23.28 the terms and conditions of subdivision 1. 23.29 Subd. 4. [ENERGY COSTS.] The entire cost of an energy 23.30 efficiency installment purchase contract must be a percentage of 23.31 the resultant savings in energy costs. Neither the state nor 23.32 any agency is liable to make payments on the contract except to 23.33 the extent that there are savings in energy costs that must be 23.34 shared with other parties to the contract. 23.35 Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 23.36 ACTIVITY PROGRAMS.] 24.1 The commissioner, in consultation with the commissioner of 24.2 economic security, shall prepare a list containing products and 24.3 services of state-certified rehabilitation facilities, sheltered 24.4 workshops, and work activity programs for acquisition by state 24.5 agencies and institutions. 24.6 Sec. 17. [16C.18] [DESIGNATION OF PROCUREMENTS FROM SMALL 24.7 BUSINESSES.] 24.8 Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The 24.9 commissioner shall for each fiscal year ensure that small 24.10 businesses receive at least 25 percent of the value of 24.11 anticipated total state procurement of goods and services, 24.12 including printing and construction. The commissioner shall 24.13 divide the procurements so designated into contract award units 24.14 of economically feasible production runs in order to facilitate 24.15 offers or bids from small businesses. In making the annual 24.16 designation of such procurements the commissioner shall attempt 24.17 (1) to vary the included procurements so that a variety of goods 24.18 and services produced by different small businesses are obtained 24.19 each year, and (2) to designate small business procurements in a 24.20 manner that will encourage proportional distribution of such 24.21 awards among the geographical regions of the state. To promote 24.22 the geographical distribution of awards, the commissioner may 24.23 designate a portion of the small business procurement for award 24.24 to bidders from a specified congressional district or other 24.25 geographical region specified by the commissioner. The failure 24.26 of the commissioner to designate particular procurements shall 24.27 not be deemed to prohibit or discourage small businesses from 24.28 seeking the procurement award through the normal process. 24.29 Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt 24.30 rules defining "small business" for purposes of sections 16C.18 24.31 to 16C.23, 137.31, 137.35, 161.321, and 473.142. The definition 24.32 must include only businesses with their principal place of 24.33 business in Minnesota. The definition must establish different 24.34 size standards for various types of businesses. In establishing 24.35 these standards, the commissioner must consider the differences 24.36 among industries caused by the size of the market for goods or 25.1 services and the relative size and market share of the 25.2 competitors operating in those markets. 25.3 Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 25.4 state agency must for each fiscal year designate for awarding to 25.5 small businesses at least 25 percent of the value of anticipated 25.6 procurements of that agency for professional or technical 25.7 services. The set-aside under this subdivision is in addition 25.8 to that provided by subdivision 1, but must otherwise comply 25.9 with section 16C.09. 25.10 Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner 25.11 shall establish a program for purchasing goods and services from 25.12 targeted group businesses, as designated in subdivision 5. The 25.13 purpose of the program is to remedy the effects of past 25.14 discrimination against members of targeted groups. In 25.15 furtherance of this purpose, the commissioner shall attempt to 25.16 ensure that purchases from targeted group businesses reflect a 25.17 fair and equitable representation of all the state's purchasing. 25.18 Subd. 5. [DESIGNATION OF TARGETED GROUPS.] (a) The 25.19 commissioner of administration shall periodically designate 25.20 businesses that are majority owned and operated by women, 25.21 persons with a substantial physical disability, or specific 25.22 minorities as targeted group businesses within purchasing 25.23 categories as determined by the commissioner. A group may be 25.24 targeted within a purchasing category if the commissioner 25.25 determines there is a statistical disparity between the 25.26 percentage of purchasing from businesses owned by group members 25.27 and the representation of businesses owned by group members 25.28 among all businesses in the state in the purchasing category. 25.29 (b) In addition to designations under paragraph (a), an 25.30 individual business may be included as a targeted group business 25.31 if the commissioner determines that inclusion is necessary to 25.32 remedy discrimination against the owner based on race, gender, 25.33 or disability in attempting to operate a business that would 25.34 provide goods or services to public agencies. 25.35 (c) The designations of purchasing categories and 25.36 businesses under paragraphs (a) and (b) are not rules for 26.1 purposes of chapter 14, and are not subject to rulemaking 26.2 procedures of that chapter. 26.3 Subd. 6. [PURCHASING METHODS.] (a) The commissioner may 26.4 award up to a six percent preference in the amount bid for 26.5 specified goods or services to small targeted group businesses. 26.6 (b) The commissioner may designate a purchase of goods or 26.7 services for award only to small businesses or small targeted 26.8 group businesses if the commissioner determines that at least 26.9 three small businesses or small targeted group businesses are 26.10 likely to bid. 26.11 (c) The commissioner, as a condition of awarding a 26.12 construction contract or approving a contract for professional 26.13 or technical services, may set goals that require the prime 26.14 contractor to subcontract a portion of the contract to small 26.15 businesses or small targeted group businesses. The commissioner 26.16 must establish a procedure for granting waivers from the 26.17 subcontracting requirement when qualified small businesses or 26.18 small targeted group businesses are not reasonably available. 26.19 The commissioner may establish financial incentives for prime 26.20 contractors who exceed the goals for use of small business or 26.21 small targeted group business subcontractors and financial 26.22 penalties for prime contractors who fail to meet goals under 26.23 this paragraph. The subcontracting requirements of this 26.24 paragraph do not apply to prime contractors who are small 26.25 businesses or small targeted group businesses. 26.26 Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The 26.27 commissioner may award up to a four percent preference in the 26.28 amount bid on state procurement to small businesses located in 26.29 an economically disadvantaged area. A business is located in an 26.30 economically disadvantaged area if: 26.31 (1) the owner resides in or the business is located in a 26.32 county in which the median income for married couples is less 26.33 than 70 percent of the state median income for married couples; 26.34 (2) the owner resides in or the business is located in an 26.35 area designated a labor surplus area by the United States 26.36 Department of Labor; or 27.1 (3) the business is a rehabilitation facility or work 27.2 activity program. 27.3 The commissioner may designate one or more areas designated 27.4 as targeted neighborhoods under section 469.202 or as enterprise 27.5 zones under section 469.167 as economically disadvantaged areas 27.6 for purposes of this subdivision if the commissioner determines 27.7 that this designation would further the purposes of this 27.8 section. If the owner of a small business resides or is 27.9 employed in a designated area, the small business is eligible 27.10 for any preference provided under this subdivision. 27.11 The department of revenue shall gather data necessary to 27.12 make the determinations required by clause (1), and shall 27.13 annually certify counties that qualify under clause (1). An 27.14 area designated a labor surplus area retains that status for 120 27.15 days after certified small businesses in the area are notified 27.16 of the termination of the designation by the United States 27.17 Department of Labor. 27.18 Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the 27.19 federal Small Business Administration and second party bonds are 27.20 acceptable security for a construction award under this 27.21 section. "Second party bond" means a bond that designates as 27.22 principal, guarantor, or both, a person or persons in addition 27.23 to the person to whom the contract is proposed for award. 27.24 Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before 27.25 making an award under the preference programs established in 27.26 subdivisions 4 to 7, the commissioner shall evaluate whether the 27.27 small business or small targeted group business scheduled to 27.28 receive the award is able to perform the contract. This 27.29 determination shall include consideration of production and 27.30 financial capacity and technical competence. 27.31 Subd. 10. [LIMITS.] At least 75 percent of the value of 27.32 the subcontracts awarded to small businesses or small targeted 27.33 group businesses under subdivision 6, paragraph (c), must be 27.34 performed by the business to which the subcontract is awarded or 27.35 by another small business or small targeted group business. 27.36 Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules 28.1 pertaining to solicitations, bid evaluations, contract awards, 28.2 and other procurement matters apply equally to procurements 28.3 designated for small businesses or small targeted group 28.4 businesses. In the event of conflict with other rules, section 28.5 16C.16 and rules adopted under it govern, if section 16C.16 28.6 applies. If it does not apply, sections 16C.18 to 16C.23 and 28.7 rules adopted under those sections govern. 28.8 Subd. 12. [APPLICABILITY.] This section does not apply to 28.9 construction contracts or contracts for professional or 28.10 technical services under section 16C.09 that are financed in 28.11 whole or in part with federal funds and that are subject to 28.12 federal disadvantaged business enterprise regulations. 28.13 Sec. 18. [16C.19] [ENCOURAGEMENT OF PARTICIPATION; 28.14 ADVISORY COUNCIL.] 28.15 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 28.16 commissioners of administration and trade and economic 28.17 development shall publicize the provisions of the purchasing 28.18 programs in sections 16C.18 to 16C.23, attempt to locate small 28.19 businesses or small targeted group businesses able to perform 28.20 under the programs, and encourage participation through 28.21 education, technical assistance, mentoring, and other means. 28.22 When the commissioner of administration determines that a small 28.23 business or small targeted group business is unable to perform 28.24 under a program established in sections 16C.18 to 16C.23, the 28.25 commissioner shall inform the commissioner of trade and economic 28.26 development who shall assist the small business or small 28.27 targeted group business in attempting to remedy the causes of 28.28 the inability to perform the award. In assisting the small 28.29 business or small targeted group business, the commissioner of 28.30 trade and economic development in cooperation with the 28.31 commissioner of administration shall use management or financial 28.32 assistance programs made available by or through the department 28.33 of trade and economic development, other state or governmental 28.34 agencies, or private sources. 28.35 Subd. 2. [ADVISORY COUNCIL.] The small business 28.36 procurement advisory council consists of 13 members appointed by 29.1 the commissioner of administration. A chair of the advisory 29.2 council shall be elected from among the members. The 29.3 appointments are subject to the appointments program provided by 29.4 section 15.0597. The terms, compensation, and removal of 29.5 members are as provided in section 15.059. 29.6 Subd. 3. [DUTIES.] The small business procurement advisory 29.7 council shall: 29.8 (1) advise the commissioner of administration on matters 29.9 relating to the small business and small targeted group business 29.10 procurement program; 29.11 (2) review complaints or grievances from small businesses 29.12 and small targeted group businesses who are doing or attempting 29.13 to do business under the program; and 29.14 (3) review the reports of the commissioners of 29.15 administration and trade and economic development provided by 29.16 section 16C.20 to ensure compliance with the goals of the 29.17 program. 29.18 Sec. 19. [16C.20] [REPORTS.] 29.19 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 29.20 commissioner shall submit an annual report pursuant to section 29.21 3.195 to the governor and the legislature with a copy to the 29.22 commissioner of trade and economic development indicating the 29.23 progress being made toward the objectives and goals of sections 29.24 16C.18 to 16C.23, 161.321, and 473.142 during the preceding 29.25 fiscal year. 29.26 Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 29.27 The commissioner of trade and economic development shall submit 29.28 an annual report to the governor and the legislature pursuant to 29.29 section 3.195 with a copy to the commissioner of 29.30 administration. This report shall include the following 29.31 information: 29.32 (1) the efforts undertaken to publicize the provisions of 29.33 the small business and small targeted group business procurement 29.34 program during the preceding fiscal year; 29.35 (2) the efforts undertaken to identify small businesses and 29.36 small targeted group businesses and the efforts undertaken to 30.1 encourage participation in the targeted group purchasing 30.2 program; 30.3 (3) the efforts undertaken by the commissioner to remedy 30.4 the inability of small businesses and small targeted group 30.5 businesses to perform on potential awards; and 30.6 (4) the commissioner's recommendations for strengthening 30.7 the small business and small targeted group business procurement 30.8 program and delivery of services to small businesses. 30.9 Subd. 3. [REPORTS FROM OTHER AGENCIES.] The commissioner 30.10 of transportation, and each metropolitan agency listed in 30.11 section 473.143, subdivision 1, shall report to the commissioner 30.12 of administration all information that the commissioner requests 30.13 to make reports required under this section. The information 30.14 must be reported at the time and in the manner requested by the 30.15 commissioner of administration. 30.16 Sec. 20. [16C.21] [ELIGIBILITY; RULES.] 30.17 (a) A small business wishing to participate in the programs 30.18 under section 16C.18, subdivisions 4 to 7, must be certified by 30.19 the commissioner. The commissioner shall adopt by rule 30.20 standards and procedures for certifying that small businesses, 30.21 small targeted group businesses, and small businesses located in 30.22 economically disadvantaged areas are eligible to participate 30.23 under the requirements of sections 16C.18 to 16C.23. The 30.24 commissioner shall adopt by rule standards and procedures for 30.25 hearing appeals and grievances and other rules necessary to 30.26 carry out the duties set forth in sections 16C.18 to 16C.23. 30.27 (b) The commissioner may make rules which exclude or limit 30.28 the participation of nonmanufacturing business, including 30.29 third-party lessors, brokers, franchises, jobbers, 30.30 manufacturers' representatives, and others from eligibility 30.31 under sections 16C.18 to 16C.23. 30.32 (c) The commissioner may make rules that set time limits 30.33 and other eligibility limits on business participation in 30.34 programs under sections 16C.18 to 16C.23. 30.35 Sec. 21. [16C.22] [CERTIFICATION.] 30.36 A business that is certified by the commissioner of 31.1 administration as a small business, small targeted group 31.2 business or a small business located in an economically 31.3 disadvantaged area is eligible to participate under the 31.4 requirements of sections 137.31 and 161.321 and, if certified as 31.5 a small business or small targeted group business, under section 31.6 473.142 without further certification by the contracting agency. 31.7 Sec. 22. [16C.23] [CRIMINAL PENALTY.] 31.8 A person who knowingly provides false information to a 31.9 public official or employee for the purpose of obtaining or 31.10 retaining certification as a small targeted group business or a 31.11 small business located in an economically disadvantaged area 31.12 under sections 16C.18 to 16C.22, 137.31, 137.35, 161.321, or 31.13 473.142 is guilty of a misdemeanor. 31.14 Sec. 23. [16C.24] [DISTRICT HEATING.] 31.15 Notwithstanding any other law, general or special, the 31.16 commissioner is authorized to enter into or approve a written 31.17 agreement not to exceed 31 years with a district heating utility 31.18 that will specify, but not be limited to, the appropriate terms 31.19 and conditions for the interchange of district heating services. 31.20 Sec. 24. [16C.25] [SURPLUS PROPERTY ACQUISITION, 31.21 DISTRIBUTION, AND DISPOSAL.] 31.22 Subdivision 1. [DEFINITIONS.] "Governmental unit or 31.23 nonprofit organization" means a governmental unit as defined in 31.24 section 471.59, subdivision 1, an Indian tribal government, and 31.25 any nonprofit and tax-exempt medical institution, hospital, 31.26 clinic, health center, school, school system, college, 31.27 university, or other institution organized and existing for any 31.28 purpose authorized by federal law to accept surplus federal 31.29 property. 31.30 Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means 31.31 state or federal commodities, equipment, materials, supplies, 31.32 books, printed matter, buildings, and other personal or real 31.33 property that is obsolete, unused, not needed for a public 31.34 purpose, or ineffective for current use. 31.35 Subd. 3. [AUTHORIZATION.] (a) The commissioner is the 31.36 state agency designated to transfer, purchase, accept, sell, or 32.1 dispose of surplus property for the state and for the benefit of 32.2 any other governmental unit or nonprofit organization for any 32.3 purpose authorized by state and federal law and in accordance 32.4 with state and federal rules and regulations. Any governmental 32.5 unit or nonprofit organization may designate the commissioner to 32.6 purchase or accept surplus property for it upon mutually 32.7 agreeable terms and conditions. The commissioner may acquire, 32.8 accept, warehouse, and distribute surplus property and charge a 32.9 fee to cover any expenses incurred in connection with any of 32.10 these acts. 32.11 (b) Federal surplus property that has been transferred to 32.12 the state for donation to public agencies and nonprofit 32.13 organizations must be transferred or sold in accordance with the 32.14 plan developed under paragraph (c). Expenses incurred in 32.15 connection with the acquisition, warehousing, distribution, and 32.16 disposal of federal surplus property must be paid from the 32.17 surplus services revolving fund. Proceeds of sales, minus any 32.18 expenses, must be deposited in the surplus services revolving 32.19 fund. 32.20 (c) The commissioner shall develop a detailed plan for 32.21 disposal of donated federal property in conformance with state 32.22 law and federal regulations. The plan must be submitted to the 32.23 governor for certification and submission to the federal 32.24 administrator of general services. 32.25 (d) The commissioner, after consultation with one or more 32.26 nonprofit organizations with an interest in providing housing 32.27 for homeless veterans and their families, may acquire property 32.28 from the United States government that is designated by the 32.29 General Services Administration as surplus property. The 32.30 commissioner may lease the property to a qualified nonprofit 32.31 organization that agrees to develop or rehabilitate the property 32.32 for the purpose of providing suitable housing for veterans and 32.33 their families. The lease agreement with the nonprofit 32.34 organization may require that the property be developed for use 32.35 as housing for homeless and displaced veterans and their 32.36 families and for veterans and their families who lose their 33.1 housing. 33.2 Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services 33.3 revolving fund is a separate fund in the state treasury. All 33.4 money resulting from the acquisition, acceptance, warehousing, 33.5 distribution, and public sale of surplus property, must be 33.6 deposited in the fund. Money paid into the surplus services 33.7 revolving fund is appropriated to the commissioner for the 33.8 purposes of the programs and services referred to in this 33.9 section. 33.10 Subd. 5. [TRANSFER OR SALE.] (a) When the state or an 33.11 agency operating under a legislative appropriation obtains 33.12 surplus property from the commissioner, the commissioner of 33.13 finance must, at the commissioner's request, transfer the cost 33.14 of the surplus property, including any expenses of acquiring, 33.15 accepting, warehousing, and distributing the surplus property, 33.16 from the appropriation of the agency receiving the surplus 33.17 property to the surplus services revolving fund. The 33.18 determination of the commissioner is final as to the cost of the 33.19 surplus property to the agency receiving the property. 33.20 (b) When any governmental unit or nonprofit organization 33.21 other than an agency receives surplus property from the 33.22 commissioner, the governmental unit or nonprofit organization 33.23 must reimburse the surplus services revolving fund for the cost 33.24 of the property, including the expenses of acquiring, accepting, 33.25 warehousing, and distributing it, in an amount the commissioner 33.26 sets. The commissioner may, however, require the governmental 33.27 unit or nonprofit organization to deposit in advance in the 33.28 surplus services revolving fund the cost of the surplus property 33.29 upon mutually agreeable terms and conditions. 33.30 (c) The commissioner may transfer or sell state surplus 33.31 property to any person at public auction, at prepriced sale, or 33.32 by sealed bid process in accordance with applicable state laws. 33.33 Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do 33.34 any of the following to dispose of state surplus property: 33.35 (1) transfer it to or between state agencies; 33.36 (2) transfer it to a governmental unit or nonprofit 34.1 organization in Minnesota; or 34.2 (3) sell it and charge a fee to cover expenses incurred by 34.3 the commissioner in the disposal of the surplus property. 34.4 The proceeds of the sale less the fee are appropriated to 34.5 the agency for whose account the sale was made, to be used and 34.6 expended by that agency to purchase similar state property. 34.7 Subd. 7. [GIFTS.] The commissioner is authorized to 34.8 solicit and accept donated money and fixed and consumable 34.9 property for the benefit of the state and any other governmental 34.10 unit or nonprofit organization for any purpose authorized by 34.11 state and federal law and in accordance with federal regulations 34.12 and rules. The gift acceptance procedures of sections 7.09 to 34.13 7.12 do not apply to this subdivision. 34.14 Sec. 25. [16C.26] [RULES.] 34.15 Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 34.16 under chapter 16B, govern under this chapter until amended, 34.17 repealed, or superseded by rules adopted under chapter 16B or 34.18 this chapter. In the event rules adopted under chapter 16B 34.19 conflict with provisions of this chapter, this chapter governs. 34.20 Sec. 26. [16C.27] [BUILDING AND CONSTRUCTION CONTRACTS.] 34.21 Notwithstanding any contrary law, the provisions of 34.22 Minnesota Statutes 1996, section 16B.07, 16B.08, 16B.09, and all 34.23 other laws applicable to competitive bidding for building and 34.24 construction contracts on the day before the effective date of 34.25 this section apply to building and construction contracts 34.26 entered into on or after the effective date of this section. 34.27 Sec. 27. Minnesota Statutes 1996, section 161.32, is 34.28 amended by adding a subdivision to read: 34.29 Subd. 1a. [STANDARD SPECIFICATIONS, SECURITY.] Contracts 34.30 under this section must be based on specifications prescribed by 34.31 the commissioner. Each bidder for a contract must furnish 34.32 security approved by the commissioner to ensure completion of 34.33 the contract. 34.34 Sec. 28. Minnesota Statutes 1996, section 161.32, is 34.35 amended by adding a subdivision to read: 34.36 Subd. 1b. [LOWEST RESPONSIBLE BIDDER.] Trunk highway 35.1 construction contracts, including design-build contracts, must 35.2 be awarded to the lowest responsible bidder, taking into 35.3 consideration conformity with the specifications, the purpose 35.4 for which the contract or purchase is intended, the status and 35.5 capability of the vendor, and other considerations imposed in 35.6 the call for bids. The commissioner may decide which is the 35.7 lowest responsible bidder for all contracts and may use the 35.8 principles of life cycle costing, where appropriate, in 35.9 determining the lowest overall bid. Any or all bids may be 35.10 rejected. In a case where competitive bids are required and 35.11 where all bids are rejected, new bids, if solicited, must be 35.12 called for as in the first instance, unless otherwise provided 35.13 by law. 35.14 Sec. 29. Minnesota Statutes 1996, section 161.32, is 35.15 amended by adding a subdivision to read: 35.16 Subd. 1c. [ALTERATIONS AND ERASURES.] A bid containing an 35.17 alteration or erasure of any price contained in the bid which is 35.18 used in determining the lowest responsible bid must be rejected 35.19 unless the alteration or erasure is corrected pursuant to this 35.20 subdivision. An alteration or erasure may be crossed out and 35.21 the correction printed in ink or typewritten adjacent to it and 35.22 initialed in ink by the person signing the bid. 35.23 Sec. 30. Minnesota Statutes 1996, section 161.32, is 35.24 amended by adding a subdivision to read: 35.25 Subd. 1d. [SPECIAL CIRCUMSTANCES.] The commissioner may 35.26 reject the bid of any bidder who has failed to perform a 35.27 previous contract with the state. In the case of identical low 35.28 bids from two or more bidders, the commissioner may use 35.29 negotiated procurement methods with the tied low bidders for 35.30 that particular transaction, so long as the price paid does not 35.31 exceed the low tied bid price. The commissioner may award 35.32 contracts to more than one bidder in accordance with subdivision 35.33 1b, if doing so does not decrease the service level or diminish 35.34 the effect of competition. 35.35 Sec. 31. Minnesota Statutes 1996, section 161.32, is 35.36 amended by adding a subdivision to read: 36.1 Subd. 1e. [RECORD.] A record must be kept of all bids, 36.2 including names of bidders, amounts of bids, and each successful 36.3 bid. This record is open to public inspection. 36.4 Sec. 32. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 36.5 Notwithstanding anything in chapter 16C to the contrary, 36.6 all contracts for the repair, improvement, maintenance, or 36.7 construction of highways or highway bridges must be advertised 36.8 and let as provided by law for highway construction contracts. 36.9 Sec. 33. Minnesota Statutes 1997 Supplement, section 36.10 363.073, subdivision 1, is amended to read: 36.11 Subdivision 1. [SCOPE OF APPLICATION.] No department or36.12 agency of the state shall accept any bid or proposal for a36.13 contract or agreement(a) For all contracts for goods and 36.14 services in excess of $100,000, no department or agency of the 36.15 state shall accept any bid or proposal for a contract or 36.16 agreement from any business having more than 40 full-time 36.17 employees within this state on a single working day during the 36.18 previous 12 months, unless the firm or business has an 36.19 affirmative action plan for the employment of minority persons, 36.20 women, and qualified disabled individuals, submitted to the 36.21 commissioner of human rights for approval. No department or 36.22 agency of the state shall execute any such contract or agreement 36.23 for goods or services in excess of $100,000 with any business36.24 having more than 40 full-time employees, either within or36.25 outside this state, on a single working day during the previous36.26 12 months, unless the firm or business has anuntil the 36.27 affirmative action plan for the employment of minority persons,36.28 women, and the disabled thathas been approved by the 36.29 commissioner of human rights. Receipt of a certificate of 36.30 compliance issued by the commissioner shall signify that a firm 36.31 or business has an affirmative action plan that has been 36.32 approved by the commissioner. A certificate shall be valid for 36.33 a period of two years. A municipality as defined in section 36.34 466.01, subdivision 1, that receives state money for any reason 36.35 is encouraged to prepare and implement an affirmative action 36.36 plan for the employment of minority persons, women, and 37.1 the qualified disabled and submit the plan to the commissioner 37.2 of human rights. 37.3 (b) This paragraph applies to a contract for goods or 37.4 services in excess of $100,000 to be entered into between a 37.5 department or agency of the state and a business that is not 37.6 subject to paragraph (a), but that has more than 40 full-time 37.7 employees on a single working day during the previous 12 months 37.8 in the state where the business has its primary place of 37.9 business. A department or agency of the state may not execute a 37.10 contract or agreement with a business covered by this paragraph 37.11 unless the business has a certificate of compliance issued by 37.12 the commissioner under paragraph (a) or the business certifies 37.13 that it is in compliance with federal affirmative action 37.14 requirements. 37.15 (c) This section does not apply to contracts entered into 37.16 by the state board of investment for investment options under 37.17 section 352.96. 37.18 Sec. 34. [REPORT.] 37.19 The commissioner of administration shall report to the 37.20 legislature by January 15, 1999, in the biennial report required 37.21 under Minnesota Statutes, section 115A.15, subdivision 5, on the 37.22 potential use of measurable objectives as a means of tracking 37.23 progress toward the purchase of recycled content goods. 37.24 Sec. 35. [REPEALER.] 37.25 Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 37.26 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 37.27 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 37.28 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 37.29 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 37.30 16B.89; and Minnesota Statutes 1997 Supplement, sections 16B.18, 37.31 subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 37.32 Sec. 36. [EFFECTIVE DATE.] 37.33 Section 33 is effective May 1, 1998, except that it does 37.34 not apply to any part of the procurement process that results 37.35 from a solicitation dated before May 1, 1998. The remainder of 37.36 this article is effective July 1, 1998, except that it does not 38.1 apply to any part of the procurement process that results from a 38.2 solicitation dated before July 1, 1998. 38.3 ARTICLE 2 38.4 CONFORMING AMENDMENTS 38.5 Section 1. Minnesota Statutes 1997 Supplement, section 38.6 3.225, subdivision 1, is amended to read: 38.7 Subdivision 1. [APPLICATION.] This section applies to a 38.8 contract for professional or technical services entered into by 38.9 the house of representatives, the senate, the legislative 38.10 coordinating commission, or any group under the jurisdiction of 38.11 the legislative coordinating commission. For purposes of this 38.12 section, "professional or technical services" has the meaning 38.13 defined in section 16B.1716C.09, subdivision 1, but does not 38.14 include legal services for official legislative business. 38.15 Sec. 2. Minnesota Statutes 1996, section 3.225, 38.16 subdivision 2, is amended to read: 38.17 Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 38.18 into a contract for professional or technical services, the 38.19 contracting entity must determine that: 38.20 (1) all provisions of section 16B.1916C.18, subdivision 238.21 3, relating to purchases from small businesses, have been 38.22 verified or complied with; 38.23 (2) the work to be performed under the contract is 38.24 necessary to the entity's achievement of its responsibilities; 38.25 (3) the contract will not establish an employment 38.26 relationship between the state or the entity and any persons 38.27 performing under the contract; 38.28 (4) no current legislative employees will engage in the 38.29 performance of the contract; 38.30 (5) no state agency has previously performed or contracted 38.31 for the performance of tasks which would be substantially 38.32 duplicated under the proposed contract; 38.33 (6) the contracting entity has specified a satisfactory 38.34 method of evaluating and using the results of the work to be 38.35 performed; and 38.36 (7) the combined contract and amendments will not extend 39.1 for more than five years. 39.2 Sec. 3. Minnesota Statutes 1996, section 3.732, 39.3 subdivision 6, is amended to read: 39.4 Subd. 6. [SETTLEMENT.] The head of each department or 39.5 agency, or a designee, acting on behalf of the state, may enter 39.6 into structured settlements, through the negotiation, creation, 39.7 and use of annuities or similar financial plans for claimants, 39.8 to resolve claims arising from the alleged negligence of the 39.9 state, its agencies, or employees. Sections 16B.06, 16B.07,39.10 16B.08, and 16B.0916C.03, subdivision 4, 16C.06, and 16C.07 do 39.11 not apply to the state's selection of and contracts with 39.12 structured settlement consultants or purveyors of structured 39.13 settlement plans. 39.14 Sec. 4. Minnesota Statutes 1996, section 3.922, 39.15 subdivision 5, is amended to read: 39.16 Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council 39.17 shall annually elect a chair and other officers as it may deem 39.18 necessary. The chair may appoint subcommittees necessary to 39.19 fulfill the duties of the council. It shall also employ and 39.20 prescribe the duties of employees and agents as it deems 39.21 necessary. The compensation of the executive director of the 39.22 board is as provided by section 43A.18. All employees are in 39.23 the unclassified service. The chair is an ex officio member of 39.24 the state board of human rights. Appropriations and other funds 39.25 of the council are subject to chapter 16B16C. The council may 39.26 contract in its own name. Contracts must be approved by a 39.27 majority of the members of the council and executed by the chair 39.28 and the executive director. The council may apply for, receive, 39.29 and spend in its own name, grants and gifts of money consistent 39.30 with the powers and duties specified in this section. The 39.31 council shall maintain its primary office in Bemidji. It shall 39.32 also maintain personnel and office space in St. Paul. 39.33 Sec. 5. Minnesota Statutes 1996, section 3C.10, 39.34 subdivision 3, is amended to read: 39.35 Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may 39.36 negotiate for all or part of the editing, indexing, compiling, 40.1 and printing of Minnesota Statutes, supplements to Minnesota 40.2 Statutes, and Laws of Minnesota and contract with a law book 40.3 publisher for these services. The provisions of chapter 16B16C 40.4 as they relate to competitive bidding do not apply to these 40.5 contracts. No contract may be made until the revisor of 40.6 statutes has consulted with the legislative coordinating 40.7 commission. Failure or refusal of the commission to make a 40.8 recommendation promptly shall be deemed an affirmative 40.9 recommendation. 40.10 Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended 40.11 to read: 40.12 4A.04 [COOPERATIVE CONTRACTS.] 40.13 (a) The director may apply for, receive, and expend money 40.14 from municipal, county, regional, and other planning agencies; 40.15 apply for, accept, and disburse grants and other aids for 40.16 planning purposes from the federal government and from other 40.17 public or private sources; and may enter into contracts with 40.18 agencies of the federal government, local governmental units, 40.19 the University of Minnesota, and other educational institutions, 40.20 and private persons as necessary to perform the director's 40.21 duties. Contracts made pursuant to this section are not subject 40.22 to the provisions of chapter 16B16C, as they relate to 40.23 competitive bidding. 40.24 (b) The director may apply for, receive, and expend money 40.25 made available from federal sources or other sources for the 40.26 purposes of carrying out the duties and responsibilities of the 40.27 director relating to local and urban affairs. 40.28 (c) All money received by the director pursuant to this 40.29 section shall be deposited in the state treasury and is 40.30 appropriated to the director for the purposes for which the 40.31 money has been received. The money shall not cancel and is 40.32 available until expended. 40.33 Sec. 7. Minnesota Statutes 1996, section 6.551, is amended 40.34 to read: 40.35 6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 40.36 GOVERNMENTS.] 41.1 The state auditor may examine the books, records, 41.2 documents, and accounting procedures and practices of a 41.3 contractor or grantee of a local government pursuant to section 41.4 16B.0616C.06, subdivision 45. The examination shall be 41.5 limited to the books, records, documents, and accounting 41.6 procedures and practices that are relevant to the contract or 41.7 transaction with the local government. 41.8 Sec. 8. Minnesota Statutes 1996, section 11A.24, 41.9 subdivision 4, is amended to read: 41.10 Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may 41.11 invest funds in bankers acceptances, certificates of deposit, 41.12 deposit notes, commercial paper, mortgage securities and asset 41.13 backed securities, repurchase agreements and reverse repurchase 41.14 agreements, guaranteed investment contracts, savings accounts, 41.15 and guaranty fund certificates, surplus notes, or debentures of 41.16 domestic mutual insurance companies if they conform to the 41.17 following provisions: 41.18 (1) bankers acceptances and deposit notes of United States 41.19 banks are limited to those issued by banks rated in the highest 41.20 four quality categories by a nationally recognized rating 41.21 agency; 41.22 (2) certificates of deposit are limited to those issued by 41.23 (i) United States banks and savings institutions that are rated 41.24 in the top four quality categories by a nationally recognized 41.25 rating agency or whose certificates of deposit are fully insured 41.26 by federal agencies; or (ii) credit unions in amounts up to the 41.27 limit of insurance coverage provided by the National Credit 41.28 Union Administration; 41.29 (3) commercial paper is limited to those issued by United 41.30 States corporations or their Canadian subsidiaries and rated in 41.31 the highest two quality categories by a nationally recognized 41.32 rating agency; 41.33 (4) mortgage securities shall be rated in the top four 41.34 quality categories by a nationally recognized rating agency; 41.35 (5) collateral for repurchase agreements and reverse 41.36 repurchase agreements is limited to letters of credit and 42.1 securities authorized in this section; 42.2 (6) guaranteed investment contracts are limited to those 42.3 issued by insurance companies or banks rated in the top four 42.4 quality categories by a nationally recognized rating agency or 42.5 to alternative guaranteed investment contracts where the 42.6 underlying assets comply with the requirements of this section; 42.7 (7) savings accounts are limited to those fully insured by 42.8 federal agencies; and 42.9 (8) asset backed securities shall be rated in the top four 42.10 quality categories by a nationally recognized rating agency. 42.11 (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 42.12 16C.06 do not apply to certificates of deposit and 42.13 collateralization agreements executed by the state board under 42.14 paragraph (a), clause (2). 42.15 (c) In addition to investments authorized by paragraph (a), 42.16 clause (4), the state board may purchase from the Minnesota 42.17 housing finance agency all or any part of a pool of residential 42.18 mortgages, not in default, that has previously been financed by 42.19 the issuance of bonds or notes of the agency. The state board 42.20 may also enter into a commitment with the agency, at the time of 42.21 any issue of bonds or notes, to purchase at a specified future 42.22 date, not exceeding 12 years from the date of the issue, the 42.23 amount of mortgage loans then outstanding and not in default 42.24 that have been made or purchased from the proceeds of the bonds 42.25 or notes. The state board may charge reasonable fees for any 42.26 such commitment and may agree to purchase the mortgage loans at 42.27 a price sufficient to produce a yield to the state board 42.28 comparable, in its judgment, to the yield available on similar 42.29 mortgage loans at the date of the bonds or notes. The state 42.30 board may also enter into agreements with the agency for the 42.31 investment of any portion of the funds of the agency. The 42.32 agreement must cover the period of the investment, withdrawal 42.33 privileges, and any guaranteed rate of return. 42.34 Sec. 9. Minnesota Statutes 1996, section 12.221, 42.35 subdivision 5, is amended to read: 42.36 Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any 43.1 federal-state agreement entered into by the state director, 43.2 serving as the governor's authorized representative, in the 43.3 acceptance of federal money made available as a result of a 43.4 disaster declaration, and upon the review and acceptance by the 43.5 attorney general's office of the language contained in the 43.6 subgrant agreement and any amendments to the agreement, the 43.7 requirements of section 16B.0616C.06, subdivision 2, paragraph 43.8 (a), clause (3), must be waived. 43.9 Sec. 10. Minnesota Statutes 1996, section 15.061, is 43.10 amended to read: 43.11 15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 43.12 In accordance with section 16B.17sections 16C.03 and 43.13 16C.09, the head of a state department or agency may, with the 43.14 approval of the commissioner of administration, contract for 43.15 professional or technical services in connection with the 43.16 operation of the department or agency. A contract negotiated 43.17 under this section is not subject to the competitive bidding 43.18 requirements of chapter 16B16C. 43.19 Sec. 11. Minnesota Statutes 1996, section 16A.101, is 43.20 amended to read: 43.21 16A.101 [SERVICE CONTRACTS.] 43.22 The state accounting system must list expenditures for 43.23 professional and technical service contracts, as defined in 43.24 section 16B.1716C.09, subdivision 1, as a separate category. 43.25 No other expenditures may be included in this category. 43.26 Sec. 12. Minnesota Statutes 1997 Supplement, section 43.27 16A.15, subdivision 3, is amended to read: 43.28 Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 43.29 not be made without prior obligation. An obligation may not be 43.30 incurred against any fund, allotment, or appropriation unless 43.31 the commissioner has certified a sufficient unencumbered balance 43.32 or the accounting system shows sufficient allotment or 43.33 encumbrance balance in the fund, allotment, or appropriation to 43.34 meet it. The commissioner shall determine when the accounting 43.35 system may be used to incur obligations without the 43.36 commissioner's certification of a sufficient unencumbered 44.1 balance. An expenditure or obligation authorized or incurred in 44.2 violation of this chapter is invalid and ineligible for payment 44.3 until made valid. A payment made in violation of this chapter 44.4 is illegal. An employee authorizing or making the payment, or 44.5 taking part in it, and a person receiving any part of the 44.6 payment, are jointly and severally liable to the state for the 44.7 amount paid or received. If an employee knowingly incurs an 44.8 obligation or authorizes or makes an expenditure in violation of 44.9 this chapter or takes part in the violation, the violation is 44.10 just cause for the employee's removal by the appointing 44.11 authority or by the governor if an appointing authority other 44.12 than the governor fails to do so. In the latter case, the 44.13 governor shall give notice of the violation and an opportunity 44.14 to be heard on it to the employee and to the appointing 44.15 authority. A claim presented against an appropriation without 44.16 prior allotment or encumbrance may be made valid on 44.17 investigation, review, and approval by the agency head in 44.18 accordance with the commissioner's policy, if the services, 44.19 materials, or supplies to be paid for were actually furnished in 44.20 good faith without collusion and without intent to defraud. The 44.21 commissioner may then draw a warrant to pay the claim just as 44.22 properly allotted and encumbered claims are paid. 44.23 (b) The commissioner may approve payment for materials and 44.24 supplies in excess of the obligation amount when increases are 44.25 authorized by section 16B.0716C.03, subdivision 23. 44.26 (c) To minimize potential construction delay claims, an 44.27 agency with a project funded by a building appropriation may 44.28 allow a contractor to proceed with supplemental work within the 44.29 limits of the appropriation before money is encumbered. Under 44.30 this circumstance, the agency may requisition funds and allow 44.31 contractors to expeditiously proceed with a construction 44.32 sequence. While the contractor is proceeding, the agency shall 44.33 immediately act to encumber the required funds. 44.34 Sec. 13. Minnesota Statutes 1996, section 16A.85, 44.35 subdivision 1, is amended to read: 44.36 Subdivision 1. [AUTHORIZATION.] The commissioner of 45.1 administration may determine, in conjunction with the 45.2 commissioner of finance, the personal property needs of the 45.3 various state departments, agencies, boards, commissions and the 45.4 legislature of the kinds of property identified in this 45.5 subdivision that may be economically funded through a master 45.6 lease program and request the commissioner of finance to execute 45.7 a master lease. The master lease may be used only to finance 45.8 the following kinds of purchases: 45.9 (a) The master lease may be used to finance purchases by 45.10 the commissioner of administration with money from an internal 45.11 services fund. 45.12 (b) The master lease may be used to refinance a purchase of 45.13 equipment already purchased under a lease-purchase agreement. 45.14 (c) The master lease may be used to finance purchases of 45.15 large equipment with a capital value of more than $100,000 and a 45.16 useful life of more than ten years. 45.17 (d) The legislature may specifically authorize a particular 45.18 purchase to be financed using the master lease. The legislature 45.19 anticipates that this authorization will be given only to 45.20 finance the purchase of major pieces of equipment with a capital 45.21 value of more than $10,000. 45.22 The commissioner of finance may authorize the sale and 45.23 issuance of certificates of participation relative to a master 45.24 lease in an amount sufficient to fund these personal property 45.25 needs. The term of the certificates must be less than the 45.26 expected useful life of the equipment whose purchase is financed 45.27 by the certificates. The commissioner of administration may use 45.28 the proceeds from the master lease or the sale of the 45.29 certificates of participation to acquire the personal property 45.30 through the appropriate procurement procedure in chapter 16B16C. 45.31 Money appropriated for the lease or acquisition of this personal 45.32 property is appropriated to the commissioner of finance to make 45.33 master lease payments. 45.34 Sec. 14. Minnesota Statutes 1997 Supplement, section 45.35 16B.465, subdivision 7, is amended to read: 45.36 Subd. 7. [EXEMPTION.] The system is exempt from the 46.1 five-year limitation on contracts set by section 16B.07,46.2 subdivision 2sections 16C.06, subdivision 2, paragraph (a), 46.3 clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 46.4 clause (6). 46.5 Sec. 15. Minnesota Statutes 1997 Supplement, section 46.6 16E.07, subdivision 9, is amended to read: 46.7 Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall 46.8 identify opportunities to aggregate demand for technical 46.9 services required by government units for online activities and 46.10 may contract with governmental or nongovernmental entities to 46.11 provide services. These contracts are not subject to the 46.12 requirements of chapterchapters 16B and 16C, except 46.13 sections 16B.167, 16B.17, and 16B.17516C.05, 16C.08, 16C.09, 46.14 and 16C.10. 46.15 Sec. 16. Minnesota Statutes 1997 Supplement, section 46.16 17.03, subdivision 12, is amended to read: 46.17 Subd. 12. [CONTRACTS; APPROPRIATION.] The commissioner may 46.18 accept money as part of a contract with any public or private 46.19 entity to provide statutorily prescribed services by the 46.20 department. A contract must specify the services to be provided 46.21 by the department and the amount and method of reimbursement. 46.22 Money generated in a contractual agreement under this section 46.23 must be deposited in a special revenue fund and is appropriated 46.24 to the department for purposes of providing services specified 46.25 in the contracts. Contracts under this section must be 46.26 processed in accordance with section 16B.0616C.06. The 46.27 commissioner must report revenues collected and expenditures 46.28 made under this section to the chairs of the environment and 46.29 natural resources finance committee in the house of 46.30 representatives and the environment and agriculture budget 46.31 division in the senate by January 15 of each odd-numbered year. 46.32 Sec. 17. Minnesota Statutes 1996, section 17.1015, is 46.33 amended to read: 46.34 17.1015 [PROMOTIONAL EXPENDITURES.] 46.35 In order to accomplish the purposes of section 17.101, the 46.36 commissioner may participate jointly with private persons in 47.1 appropriate programs and projects and may enter into contracts 47.2 to carry out those programs and projects. The contracts may not 47.3 include the acquisition of land or buildings and are not subject 47.4 to the provisions of chapter 16B16C relating to competitive 47.5 bidding. 47.6 The commissioner may spend money appropriated for the 47.7 purposes of section 17.101, and expenditures made pursuant to 47.8 section 17.101 for food, lodging, or travel are not governed by 47.9 the travel rules of the commissioner of employee relations. 47.10 Sec. 18. Minnesota Statutes 1996, section 41A.023, is 47.11 amended to read: 47.12 41A.023 [POWERS.] 47.13 In addition to other powers granted by this chapter, the 47.14 board may: 47.15 (1) sue and be sued; 47.16 (2) acquire, hold, lease, and transfer any interest in real 47.17 and personal property for its corporate purposes; 47.18 (3) sell at public or private sale, at the price or prices 47.19 determined by the board, any note, mortgage, lease, sublease, 47.20 lease purchase, or other instrument or obligation evidencing or 47.21 securing a loan made for the purpose of economic development, 47.22 job creation, redevelopment, or community revitalization by a 47.23 public agency to a business, for-profit or nonprofit 47.24 organization, or an individual; 47.25 (4) obtain insurance on its property; 47.26 (5) obtain municipal bond insurance, letters of credit, 47.27 surety obligations, or similar agreements from financial 47.28 institutions; 47.29 (6) enter into other agreements or transactions, without 47.30 regard to chapter 16B or 16C, that the board considers necessary 47.31 or appropriate to carry out the purposes of this chapter with 47.32 federal or state agencies, political subdivisions of the state, 47.33 or other persons, firms, or corporations; 47.34 (7) establish and collect fees without regard to chapter 14 47.35 and section 16A.1285; 47.36 (8) accept appropriations, gifts, grants, and bequests; 48.1 (9) use money received from any source for any legal 48.2 purpose or program of the board; 48.3 (10) participate in loans for agricultural resource 48.4 projects in accordance with section 41A.035; 48.5 (11) provide small business development loans in accordance 48.6 with section 41A.036; and 48.7 (12) guarantee or insure bonds or notes issued by the board. 48.8 Sec. 19. Minnesota Statutes 1997 Supplement, section 48.9 41D.03, subdivision 7, is amended to read: 48.10 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 48.11 educational equipment may be procured for programs of the 48.12 Minnesota center for agriculture education by the council either 48.13 by brand designation or in accordance with standards and 48.14 specifications the council may adopt, notwithstanding chapter 48.15 16B16C. 48.16 Sec. 20. Minnesota Statutes 1996, section 43A.23, 48.17 subdivision 1, is amended to read: 48.18 Subdivision 1. [GENERAL.] The commissioner is authorized 48.19 to request bids from carriers or to negotiate with carriers and 48.20 to enter into contracts with carriers which in the judgment of 48.21 the commissioner are best qualified to underwrite and service 48.22 the benefit plans. Contracts entered into with carriers are not 48.23 subject to the requirements of sections 16B.19 to 16B.2216C.18 48.24 to 16C.21. The commissioner may negotiate premium rates and 48.25 coverage provisions with all carriers licensed under chapters 48.26 62A, 62C, and 62D. The commissioner may also negotiate 48.27 reasonable restrictions to be applied to all carriers under 48.28 chapters 62A, 62C, and 62D. Contracts to underwrite the benefit 48.29 plans must be bid or negotiated separately from contracts to 48.30 service the benefit plans, which may be awarded only on the 48.31 basis of competitive bids. The commissioner shall consider the 48.32 cost of the plans, conversion options relating to the contracts, 48.33 service capabilities, character, financial position, and 48.34 reputation of the carriers, and any other factors which the 48.35 commissioner deems appropriate. Each benefit contract must be 48.36 for a uniform term of at least one year, but may be made 49.1 automatically renewable from term to term in the absence of 49.2 notice of termination by either party. The commissioner shall, 49.3 to the extent feasible, make hospital and medical benefits 49.4 available from at least one carrier licensed to do business 49.5 pursuant to each of chapters 62A, 62C, and 62D. The 49.6 commissioner need not provide health maintenance organization 49.7 services to an employee who resides in an area which is not 49.8 served by a licensed health maintenance organization. The 49.9 commissioner may refuse to allow a health maintenance 49.10 organization to continue as a carrier. The commissioner may 49.11 elect not to offer all three types of carriers if there are no 49.12 bids or no acceptable bids by that type of carrier or if the 49.13 offering of additional carriers would result in substantial 49.14 additional administrative costs. A carrier licensed under 49.15 chapter 62A is exempt from the tax imposed by section 60A.15 on 49.16 premiums paid to it by the state. 49.17 Sec. 21. Minnesota Statutes 1996, section 44A.01, 49.18 subdivision 1, is amended to read: 49.19 Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade 49.20 center corporation is a public corporation established to 49.21 facilitate and support Minnesota world trade center programs and 49.22 services and to promote the Minnesota world trade center. The 49.23 corporation is a state agency, but is not subject to chapters 49.24 14, 16A, 16B, 16C, 43A, and 179A. 49.25 Sec. 22. Minnesota Statutes 1996, section 45.0291, is 49.26 amended to read: 49.27 45.0291 [DEPARTMENT BONDS.] 49.28 Bonds issued under chapters 45 to 83, 309, 332, and 49.29 sections 326.83 to 326.98, are not state bonds or contracts for 49.30 purposes of sections 8.05 and 16B.0616C.06, subdivision 2. 49.31 Sec. 23. Minnesota Statutes 1997 Supplement, section 49.32 61B.21, subdivision 1, is amended to read: 49.33 Subdivision 1. [FUNCTIONS.] The Minnesota life and health 49.34 insurance guaranty association shall perform its functions under 49.35 the plan of operation established and approved under section 49.36 61B.25, and shall exercise its powers through a board of 50.1 directors. The association is not a state agency for purposes 50.2 of chapter 16A, 16B, 16C, or 43A. For purposes of 50.3 administration and assessment, the association shall establish 50.4 and maintain two accounts: 50.5 (1) the life insurance and annuity account which includes 50.6 the following subaccounts: 50.7 (i) the life insurance account; 50.8 (ii) the annuity account; and 50.9 (iii) the unallocated annuity account; and 50.10 (2) the health insurance account. 50.11 Sec. 24. Minnesota Statutes 1996, section 84.025, 50.12 subdivision 7, is amended to read: 50.13 Subd. 7. [CONTRACTS.] The commissioner of natural 50.14 resources may contract with the federal government, local 50.15 governmental units, the University of Minnesota, and other 50.16 educational institutions, and private persons as may be 50.17 necessary in the performance of duties. Contracts made pursuant 50.18 to this section for professional services shall not be subject 50.19 to the provisions of chapter 16B16C, as they relate to 50.20 competitive bidding. 50.21 Sec. 25. Minnesota Statutes 1996, section 84.026, is 50.22 amended to read: 50.23 84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 50.24 SERVICES.] 50.25 The commissioner of natural resources is authorized to 50.26 enter into contractual agreements with any public or private 50.27 entity for the provision of statutorily prescribed natural 50.28 resources services by the department. The contracts shall 50.29 specify the services to be provided and the amount and method of 50.30 reimbursement. Funds generated in a contractual agreement made 50.31 pursuant to this section shall be deposited in the special 50.32 revenue fund and are appropriated to the department for purposes 50.33 of providing the services specified in the contracts. All such 50.34 contractual agreements shall be processed in accordance with the 50.35 provisions of section 16B.0616C.06. The commissioner shall 50.36 report revenues collected and expenditures made under this 51.1 section to the chairs of the committees on appropriations in the 51.2 house and finance in the senate by January 1 of each 51.3 odd-numbered year. 51.4 Sec. 26. Minnesota Statutes 1996, section 84.0845, is 51.5 amended to read: 51.6 84.0845 [ADVANCE OF MATCHING FUNDS.] 51.7 The commissioner may advance funds appropriated for fish 51.8 and wildlife programs to government agencies, the National Fish 51.9 and Wildlife Foundation, federally recognized Indian tribes and 51.10 bands, and private, nonprofit organizations for the purposes of 51.11 securing nonstate matching funds for projects involving 51.12 acquisition and improvement of fish and wildlife habitat and 51.13 related research and management. The commissioner shall execute 51.14 agreements for contracts with the matching parties under section51.15 16B.06sections 16C.03, subdivision 4, and 16C.06 prior to 51.16 advancing any state funds. The agreement or contract shall 51.17 contain provisions for return of the state's share and the 51.18 matching funds within a period of time specified by the 51.19 commissioner. The state's funds and the nonstate matching funds 51.20 must be deposited in a separate account and expended solely for 51.21 the purposes set forth in the agreement or contract. The 51.22 commissioner shall enter into agreements or contracts only with 51.23 the National Fish and Wildlife Foundation and federal and 51.24 nonprofit authorities deemed by the commissioner to be dedicated 51.25 to the purposes of the project. 51.26 Sec. 27. Minnesota Statutes 1996, section 85A.02, 51.27 subdivision 3, is amended to read: 51.28 Subd. 3. The board may conduct research studies and 51.29 programs, collect and analyze data and prepare reports, maps, 51.30 charts and other information relating to the zoological garden 51.31 or any wild or domestic animals or may contract for any of such 51.32 services without complying with chapter 16B16C. 51.33 Sec. 28. Minnesota Statutes 1997 Supplement, section 51.34 85A.02, subdivision 5b, is amended to read: 51.35 Subd. 5b. [EXEMPTIONS.] The board is not subject to 51.36 sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 52.1 chapterchapters 16B and 16C, except for sections 16B.07,52.2 16B.102, 16B.17, 16B.19, 16B.35, and 16B.5516B.35, 16B.55, 52.3 16C.07, 16C.09, 16C.10, and 16C.18; and chapter 14, except 52.4 section 14.386, paragraph (a), clauses (1) and (3). Section 52.5 14.386, paragraph (b), does not apply to the board's actions. 52.6 Sec. 29. Minnesota Statutes 1996, section 85A.02, 52.7 subdivision 16, is amended to read: 52.8 Subd. 16. The board may acquire by lease-purchase or 52.9 installment purchase contract, transportation systems, 52.10 facilities and equipment that it determines will substantially 52.11 enhance the public's opportunity to view, study or derive 52.12 information concerning the animals to be located in the 52.13 zoological garden, and will increase attendance at the garden. 52.14 The contracts may provide for: (1) the payment of money over a 52.15 12-year period, or over a longer period not exceeding 25 years 52.16 if approved by the board; (2) the payment of money from any 52.17 funds of the board not pledged or appropriated for another 52.18 purpose; (3) indemnification of the lessor or seller for damage 52.19 to property or injury to persons due primarily to the actions of 52.20 the board or its employees; (4) the transfer of title to the 52.21 property to the board upon execution of the contract or upon 52.22 payment of specified amounts; (5) the reservation to the lessor 52.23 or seller of a security interest in the property; and (6) any 52.24 other terms that the board determines to be commercially 52.25 reasonable. Property so acquired by the board, and its purchase 52.26 or use by the board, or by any nonprofit corporation having a 52.27 concession from the board requiring its purchase, shall not be 52.28 subject to taxation by the state or its political subdivisions. 52.29 Each contract shall be subject to the provisions of chapter 16B52.30 16C, relating to competitive bidding, provided that, 52.31 notwithstanding subdivision 5b, the board is not required to 52.32 readvertise for competitive proposals for any transportation 52.33 system, facilities and equipment heretofore selected from 52.34 competitive proposals. 52.35 Sec. 30. Minnesota Statutes 1996, section 85A.02, 52.36 subdivision 18, is amended to read: 53.1 Subd. 18. [PURCHASING.] The board may contract for 53.2 supplies, materials, purchase or rental of equipment, and 53.3 utility services. Except as provided in subdivision 5b, chapter 53.4 16B16C does not apply to these contracts. 53.5 Sec. 31. Minnesota Statutes 1996, section 103F.515, 53.6 subdivision 3, is amended to read: 53.7 Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may 53.8 acquire, or accept by gift or donation, conservation easements 53.9 on eligible land. An easement may be permanent or of limited 53.10 duration. An easement acquired on land for windbreak purposes, 53.11 under subdivision 2, may be only of permanent duration. An 53.12 easement of limited duration may not be acquired if it is for a 53.13 period less than 20 years. The negotiation and acquisition of 53.14 easements authorized by this section are exempt from the 53.15 contractual provisions of chapterchapters 16B and 16C. 53.16 (b) The board may acquire, or accept by gift or donation, 53.17 flowage easements when necessary for completion of wetland 53.18 restoration projects. 53.19 Sec. 32. Minnesota Statutes 1996, section 116.03, 53.20 subdivision 2, is amended to read: 53.21 Subd. 2. The commissioner shall organize the agency and 53.22 employ such assistants and other officers, employees and agents 53.23 as the commissioner may deem necessary to discharge the 53.24 functions of the commissioner's office, define the duties of 53.25 such officers, employees and agents, and delegate to them any of 53.26 the commissioner's powers, duties, and responsibilities, subject 53.27 to the commissioner's control and under such conditions as the 53.28 commissioner may prescribe. The commissioner may also contract 53.29 with persons, firms, corporations, the federal government and 53.30 any agency or instrumentality thereof, the water research center 53.31 of the University of Minnesota or any other instrumentality of 53.32 such university, for doing any of the work of the commissioner's 53.33 office, and none of the provisions of chapter 16B16C, relating 53.34 to bids, shall apply to such contracts. 53.35 Sec. 33. Minnesota Statutes 1996, section 116J.035, 53.36 subdivision 1, is amended to read: 54.1 Subdivision 1. [POWERS.] The commissioner may: 54.2 (a) apply for, receive, and expend money from municipal, 54.3 county, regional, and other government agencies; 54.4 (b) apply for, accept, and disburse grants and other aids 54.5 from other public or private sources; 54.6 (c) contract for professional services if such work or 54.7 services cannot be satisfactorily performed by employees of the 54.8 department or by any other state agency; 54.9 (d) enter into interstate compacts to jointly carry out 54.10 such research and planning with other states or the federal 54.11 government where appropriate; 54.12 (e) distribute informational material at no cost to the 54.13 public upon reasonable request; and 54.14 (f) enter into contracts necessary for the performance of 54.15 the commissioner's duties with federal, state, regional, 54.16 metropolitan, local, and other agencies or units of government; 54.17 educational institutions, including the University of 54.18 Minnesota. Contracts made pursuant to this section shall not be 54.19 subject to the competitive bidding requirements of chapter 16B54.20 16C. 54.21 The commissioner may apply for, receive, and expend money 54.22 made available from federal or other sources for the purpose of 54.23 carrying out the duties and responsibilities of the commissioner 54.24 pursuant to this chapter. 54.25 All moneys received by the commissioner pursuant to this 54.26 chapter shall be deposited in the state treasury and are 54.27 appropriated to the commissioner for the purpose for which the 54.28 moneys have been received. The money shall not cancel and shall 54.29 be available until expended. 54.30 Sec. 34. Minnesota Statutes 1996, section 116J.402, is 54.31 amended to read: 54.32 116J.402 [COOPERATIVE CONTRACTS.] 54.33 The commissioner of trade and economic development may 54.34 apply for, receive, and spend money for community development 54.35 from municipal, county, regional, and other planning agencies. 54.36 The commissioner may also apply for, accept, and disburse grants 55.1 and other aids for community development and related planning 55.2 from the federal government and other sources. The commissioner 55.3 may enter into contracts with agencies of the federal 55.4 government, local governmental units, regional development 55.5 commissions, and the metropolitan council, other state agencies, 55.6 the University of Minnesota, and other educational institutions, 55.7 and private persons as necessary to perform the commissioner's 55.8 duties. Contracts made according to this section, except those 55.9 with private persons, are not subject to the provisions of 55.10 chapter 16B16C concerning competitive bidding. 55.11 The commissioner may apply for, receive, and spend money 55.12 made available from federal sources or other sources for the 55.13 purposes of carrying out the duties and responsibilities of the 55.14 commissioner. 55.15 Money received by the commissioner under this section must 55.16 be deposited in the state treasury and is appropriated to the 55.17 commissioner for the purposes for which the money has been 55.18 received. The money does not cancel and is available until 55.19 spent. 55.20 Sec. 35. Minnesota Statutes 1996, section 116J.58, 55.21 subdivision 2, is amended to read: 55.22 Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry 55.23 out duties and responsibilities and to serve the people of the 55.24 state in the promotion of tourism, trade, and economic 55.25 development, the commissioner may engage in programs and 55.26 projects jointly with a private person, firm, corporation or 55.27 association and may enter into contracts under terms to be 55.28 mutually agreed upon to carry out such programs and projects not 55.29 including acquisition of land or buildings. Contracts may be 55.30 negotiated and are not subject to the provisions of chapter 16B55.31 16C relating to competitive bidding. 55.32 Sec. 36. Minnesota Statutes 1996, section 116J.68, 55.33 subdivision 2, is amended to read: 55.34 Subd. 2. The bureau shall: 55.35 (a) provide information and assistance with respect to all 55.36 aspects of business planning and business management related to 56.1 the start-up, operation, or expansion of a small business in 56.2 Minnesota; 56.3 (b) refer persons interested in the start-up, operation, or 56.4 expansion of a small business in Minnesota to assistance 56.5 programs sponsored by federal agencies, state agencies, 56.6 educational institutions, chambers of commerce, civic 56.7 organizations, community development groups, private industry 56.8 associations, and other organizations or to the business 56.9 assistance referral system established by the Minnesota Project 56.10 Outreach Corporation; 56.11 (c) plan, develop, and implement a master file of 56.12 information on small business assistance programs of federal, 56.13 state, and local governments, and other public and private 56.14 organizations so as to provide comprehensive, timely information 56.15 to the bureau's clients; 56.16 (d) employ staff with adequate and appropriate skills and 56.17 education and training for the delivery of information and 56.18 assistance; 56.19 (e) seek out and utilize, to the extent practicable, 56.20 contributed expertise and services of federal, state, and local 56.21 governments, educational institutions, and other public and 56.22 private organizations; 56.23 (f) maintain a close and continued relationship with the 56.24 director of the procurement program within the department of 56.25 administration so as to facilitate the department's duties and 56.26 responsibilities under sections 16B.19 to 16B.2216C.18 to 56.27 16C.21 relating to the small targeted group business and 56.28 economically disadvantaged business program of the state; 56.29 (g) develop an information system which will enable the 56.30 commissioner and other state agencies to efficiently store, 56.31 retrieve, analyze, and exchange data regarding small business 56.32 development and growth in the state. All executive branch 56.33 agencies of state government and the secretary of state shall to 56.34 the extent practicable, assist the bureau in the development and 56.35 implementation of the information system; 56.36 (h) establish and maintain a toll free telephone number so 57.1 that all small business persons anywhere in the state can call 57.2 the bureau office for assistance. An outreach program shall be 57.3 established to make the existence of the bureau well known to 57.4 its potential clientele throughout the state. If the small 57.5 business person requires a referral to another provider the 57.6 bureau may use the business assistance referral system 57.7 established by the Minnesota Project Outreach Corporation; 57.8 (i) conduct research and provide data as required by the 57.9 state legislature; 57.10 (j) develop and publish material on all aspects of the 57.11 start-up, operation, or expansion of a small business in 57.12 Minnesota; 57.13 (k) collect and disseminate information on state 57.14 procurement opportunities, including information on the 57.15 procurement process; 57.16 (l) develop a public awareness program through the use of 57.17 newsletters, personal contacts, and electronic and print news 57.18 media advertising about state assistance programs for small 57.19 businesses, including those programs specifically for socially 57.20 disadvantaged small business persons; 57.21 (m) enter into agreements with the federal government and 57.22 other public and private entities to serve as the statewide 57.23 coordinator or host agency for the federal small business 57.24 development center program under United States Code, title 15, 57.25 section 648; and 57.26 (n) assist providers in the evaluation of their programs 57.27 and the assessment of their service area needs. The bureau may 57.28 establish model evaluation techniques and performance standards 57.29 for providers to use. 57.30 Sec. 37. Minnesota Statutes 1996, section 116J.966, 57.31 subdivision 1, is amended to read: 57.32 Subdivision 1. [GENERALLY.] (a) The commissioner shall 57.33 promote, develop, and facilitate trade and foreign investment in 57.34 Minnesota. In furtherance of these goals, and in addition to 57.35 the powers granted by section 116J.035, the commissioner may: 57.36 (1) locate, develop, and promote international markets for 58.1 Minnesota products and services; 58.2 (2) arrange and lead trade missions to countries with 58.3 promising international markets for Minnesota goods, technology, 58.4 services, and agricultural products; 58.5 (3) promote Minnesota products and services at domestic and 58.6 international trade shows; 58.7 (4) organize, promote, and present domestic and 58.8 international trade shows featuring Minnesota products and 58.9 services; 58.10 (5) host trade delegations and assist foreign traders in 58.11 contacting appropriate Minnesota businesses and investments; 58.12 (6) develop contacts with Minnesota businesses and gather 58.13 and provide information to assist them in locating and 58.14 communicating with international trading or joint venture 58.15 counterparts; 58.16 (7) provide information, education, and counseling services 58.17 to Minnesota businesses regarding the economic, commercial, 58.18 legal, and cultural contexts of international trade; 58.19 (8) provide Minnesota businesses with international trade 58.20 leads and information about the availability and sources of 58.21 services relating to international trade, such as export 58.22 financing, licensing, freight forwarding, international 58.23 advertising, translation, and custom brokering; 58.24 (9) locate, attract, and promote foreign direct investment 58.25 and business development in Minnesota to enhance employment 58.26 opportunities in Minnesota; 58.27 (10) provide foreign businesses and investors desiring to 58.28 locate facilities in Minnesota information regarding sources of 58.29 governmental, legal, real estate, financial, and business 58.30 services; 58.31 (11) enter into contracts or other agreements with private 58.32 persons and public entities, including agreements to establish 58.33 and maintain offices and other types of representation in 58.34 foreign countries, to carry out the purposes of promoting 58.35 international trade and attracting investment from foreign 58.36 countries to Minnesota and to carry out this section, without 59.1 regard to sections 16B.07 and 16B.09section 16C.07; 59.2 (12) enter into administrative, programming, and service 59.3 partnerships with the Minnesota world trade center; and 59.4 (13) market trade-related materials to businesses and 59.5 organizations, and the proceeds of which must be placed in a 59.6 special revolving account and are appropriated to the 59.7 commissioner to prepare and distribute trade-related materials. 59.8 (b) The programs and activities of the commissioner of 59.9 trade and economic development and the Minnesota trade division 59.10 may not duplicate programs and activities of the commissioner of 59.11 agriculture or the Minnesota world trade center corporation. 59.12 (c) The commissioner shall notify the chairs of the senate 59.13 finance and house appropriations committees of each agreement 59.14 under this subdivision to establish and maintain an office or 59.15 other type of representation in a foreign country. 59.16 Sec. 38. Minnesota Statutes 1997 Supplement, section 59.17 121.1113, subdivision 2, is amended to read: 59.18 Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 59.19 ASSISTANCE.] The department of children, families, and learning 59.20 shall contract for professional and technical services according 59.21 to competitive bidding procedures under chapter 16B16C for 59.22 purposes of this section. 59.23 Sec. 39. Minnesota Statutes 1996, section 124.14, 59.24 subdivision 1, is amended to read: 59.25 Subdivision 1. The commissioner shall supervise 59.26 distribution of school aids and grants in accordance with law. 59.27 It may make rules consistent with law for the distribution to 59.28 enable districts to perform efficiently the services required by 59.29 law and further education in the state, including reasonable 59.30 requirements for the reports and accounts to it as will assure 59.31 accurate and lawful apportionment of aids. State and federal 59.32 aids and discretionary or entitlement grants distributed by the 59.33 commissioner shall not be subject to the contract approval 59.34 procedures of the commissioner of administration or to chapter 59.35 16A or, 16B, or 16C. The commissioner shall adopt internal 59.36 procedures for administration and monitoring of aids and grants. 60.1 Sec. 40. Minnesota Statutes 1996, section 126.151, 60.2 subdivision 2, is amended to read: 60.3 Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner 60.4 and the board of trustees of the Minnesota state colleges and 60.5 universities may retain dues and other money collected on behalf 60.6 of students participating in approved vocational student 60.7 organizations and may deposit the money in separate accounts. 60.8 The money in these accounts shall be available for expenditures 60.9 for state and national activities related to specific 60.10 organizations. Administration of money collected under this 60.11 section is not subject to the provisions of chapters 15, 60.12 16A, and16B, and 16C, and may be deposited outside the state 60.13 treasury. Money shall be administered under the policies of the 60.14 applicable state board or agency relating to post-secondary and 60.15 secondary vocational student organizations and is subject to 60.16 audit by the legislative auditor. Any unexpended money shall 60.17 not cancel but may be carried forward to the next fiscal year. 60.18 Sec. 41. Minnesota Statutes 1996, section 129C.10, 60.19 subdivision 7, is amended to read: 60.20 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 60.21 educational equipment may be procured for programs of the Lola 60.22 and Rudy Perpich Minnesota center for arts education by the 60.23 board either by brand designation or in accordance with 60.24 standards and specifications the board may adopt, 60.25 notwithstanding chapterchapters 16B and 16C. 60.26 Sec. 42. Minnesota Statutes 1996, section 136A.06, is 60.27 amended to read: 60.28 136A.06 [FEDERAL FUNDS.] 60.29 The higher education services office is designated the 60.30 state agency to apply for, receive, accept, and disburse to both 60.31 public and private institutions of higher education all federal 60.32 funds which are allocated to the state of Minnesota to support 60.33 higher education programs, construction, or other activities and 60.34 which require administration by a state higher education agency 60.35 under the Higher Education Facilities Act of 1963, and any 60.36 amendments thereof, the Higher Education Act of 1965, and any 61.1 amendments thereof, and any other law which provides funds for 61.2 higher education and requires administration by a state higher 61.3 education agency as enacted or may be enacted by the Congress of 61.4 the United States; provided that no commitment shall be made 61.5 that shall bind the legislature to make appropriations beyond 61.6 current allocations of funds. The office may apply for, 61.7 receive, accept, and disburse all administrative funds available 61.8 to the office for administering federal funds to support higher 61.9 education programs, construction, or other activities. The 61.10 office also may apply for, receive, accept, and disburse any 61.11 research, planning, or program funds which are available for 61.12 purposes consistent with the provisions of this chapter. In 61.13 making application for and administering federal funds the 61.14 office may comply with any and all requirements of federal law 61.15 and federal rules and regulations to enable it to receive and 61.16 accept such funds. The expenditure of any such funds received 61.17 shall be governed by the laws of the state, except insofar as 61.18 federal regulations may otherwise provide. The office may 61.19 contract with both public and private institutions in 61.20 administering federal funds, and such contracts shall not be 61.21 subject to the provisions of chapter 16B16C. All such money 61.22 received by the office shall be deposited in the state treasury 61.23 and are hereby appropriated to it annually for the purpose for 61.24 which such funds are received. None of such moneys shall cancel 61.25 but shall be available until expended. 61.26 Sec. 43. Minnesota Statutes 1996, section 136A.16, 61.27 subdivision 1, is amended to read: 61.28 Subdivision 1. Notwithstanding chapter 16B16C, the 61.29 Minnesota higher education services office is designated as the 61.30 administrative agency for carrying out the purposes and terms of 61.31 sections 136A.15 to 136A.1702. The office may establish one or 61.32 more loan programs. 61.33 Sec. 44. Minnesota Statutes 1996, section 136A.29, 61.34 subdivision 6, is amended to read: 61.35 Subd. 6. The authority is authorized and empowered to 61.36 determine the location and character of any project to be 62.1 financed under the provisions of sections 136A.25 to 136A.42, 62.2 and to construct, reconstruct, remodel, maintain, manage, 62.3 enlarge, alter, add to, repair, operate, lease, as lessee or 62.4 lessor, and regulate the same, to enter into contracts for any 62.5 or all of such purposes, to enter into contracts for the 62.6 management and operation of a project, and to designate a 62.7 participating institution of higher education as its agent to 62.8 determine the location and character of a project undertaken by 62.9 such participating institution of higher education under the 62.10 provisions of sections 136A.25 to 136A.42 and as the agent of 62.11 the authority, to construct, reconstruct, remodel, maintain, 62.12 manage, enlarge, alter, add to, repair, operate, lease, as 62.13 lessee or lessor, and regulate the same, and as the agent of the 62.14 authority, to enter into contracts for any or all of such 62.15 purposes, including contracts for the management and operation 62.16 of such project. Contracts of the authority or of a 62.17 participating institution of higher education to acquire or to 62.18 construct, reconstruct, remodel, maintain, enlarge, alter, add 62.19 to, or repair projects shall not be subject to the provisions of 62.20 chapter 16B16C or section 574.26, or any other public contract 62.21 or competitive bid law. 62.22 Sec. 45. Minnesota Statutes 1997 Supplement, section 62.23 136A.40, is amended to read: 62.24 136A.40 [ADMINISTRATION.] 62.25 The administration of sections 136A.25 to 136A.42, shall be 62.26 under the authority independent of other departments and 62.27 agencies and notwithstanding chapter 16B16C. The authority 62.28 shall not be subject to the provisions of chapter 14, including 62.29 section 14.386 in connection with the adoption of any rules, 62.30 rents, fees or charges or with the exercise of any other powers 62.31 or duties. 62.32 Sec. 46. Minnesota Statutes 1996, section 136F.23, is 62.33 amended to read: 62.34 136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 62.35 Notwithstanding chapter 16A or 16B16C, the student 62.36 associations recognized by the board of trustees of the 63.1 Minnesota state colleges and universities may purchase goods or 63.2 materials through state purchasing authority for the ordinary 63.3 day-to-day operations of the associations. The student 63.4 associations must be nonprofit 501(c)(3) organizations in order 63.5 to qualify for this authority. The department of administration 63.6 may require that the purchase documents be approved by 63.7 appropriate officials in the board's central office. 63.8 Sec. 47. Minnesota Statutes 1996, section 136F.56, 63.9 subdivision 5, is amended to read: 63.10 Subd. 5. [SERVICE CONTRACTS.] The council may contract for 63.11 the services it needs to carry out its function. The council 63.12 may also contract to provide services to other organizations. 63.13 The contracts are not subject to the contract approval 63.14 procedures of the commissioner of administration or of 63.15 chapter 16B16C. 63.16 Sec. 48. Minnesota Statutes 1996, section 136F.581, 63.17 subdivision 3, is amended to read: 63.18 Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 63.19 policies and procedures must include provisions for procurement, 63.20 including construction, from small targeted group businesses and 63.21 businesses from economically disadvantaged areas designated 63.22 under section 16B.1916C.18. The board, colleges, and 63.23 universities shall use the methods contained in section 471.345, 63.24 subdivision 8, for such purchasing, or may develop additional 63.25 methods in which the cost percentage preferences are consistent 63.26 with the provision of section 16B.1916C.18, subdivisions 2c and63.27 2d6, paragraph (a), and 7, or consistent with the provisions of 63.28 the University of Minnesota's targeted group business purchasing 63.29 program. 63.30 Sec. 49. Minnesota Statutes 1996, section 136F.66, is 63.31 amended to read: 63.32 136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 63.33 In awarding contracts for capital projects under section 63.34 136F.64, the board shall consider the documentation provided by 63.35 the bidders regarding their qualifications, including evidence 63.36 of having successfully completed similar work, or delivering 64.1 services or products comparable to that being requested. The 64.2 board shall set procedures to administer this section, which 64.3 must include practices that will assist in the economic 64.4 development of small businesses, small targeted group 64.5 businesses, and businesses in economically disadvantaged areas 64.6 designated under section 16B.1916C.18. 64.7 Sec. 50. Minnesota Statutes 1996, section 136F.72, 64.8 subdivision 3, is amended to read: 64.9 Subd. 3. [ADMINISTRATION.] Each college and university, 64.10 independent of other authority and notwithstanding chapters 64.11 16A and, 16B, and 16C, shall administer its activity funds. The 64.12 board, independent of other authority and notwithstanding 64.13 chapters 16A and, 16B, and 16C, shall administer the 64.14 administrative fund established in the system office. All 64.15 activity fund money collected shall be administered under the 64.16 policies of the board subject to audit of the legislative 64.17 auditor. 64.18 Sec. 51. Minnesota Statutes 1996, section 136F.96, is 64.19 amended to read: 64.20 136F.96 [ADMINISTRATION.] 64.21 The administration of sections 136F.90 to 136F.98 shall be 64.22 under the board of trustees of the Minnesota state colleges and 64.23 universities independent of other authority and notwithstanding 64.24 chapters 16A and, 16B, and 16C. 64.25 Sec. 52. Minnesota Statutes 1996, section 137.35, 64.26 subdivision 1, is amended to read: 64.27 Subdivision 1. [PURCHASING METHODS.] (a) The regents may 64.28 award up to a six percent preference in the amount bid for 64.29 specified goods and services to small targeted group businesses 64.30 designated under section 16B.1916C.18, subdivision 5. 64.31 (b) The regents may designate a purchase of goods or 64.32 services for award only to small targeted group businesses 64.33 designated under section 16B.1916C.18, subdivision 5, if the 64.34 regents determine that at least three small targeted group 64.35 businesses are likely to bid. 64.36 (c) The regents, as a condition of awarding a construction 65.1 contract or approving a contract for consultant, professional, 65.2 or technical services, may set goals that require the prime 65.3 contractor to subcontract a portion of the contract to small 65.4 targeted group businesses. The regents must establish a 65.5 procedure for granting waivers from the subcontracting 65.6 requirement when qualified small targeted group businesses are 65.7 not reasonably available. The regents may establish financial 65.8 incentives for prime contractors who exceed the goals for use of 65.9 subcontractors and financial penalties for prime contractors who 65.10 fail to meet goals under this paragraph. The subcontracting 65.11 requirements of this paragraph do not apply to prime contractors 65.12 who are small targeted group businesses. At least 75 percent of 65.13 the value of the subcontracts awarded to small targeted group 65.14 businesses under this paragraph must be performed by the 65.15 business to which the subcontract is awarded or by another small 65.16 targeted group business. 65.17 (d) The regents may award up to a four percent preference 65.18 in the amount bid on university procurement to small businesses 65.19 located in an economically disadvantaged area as defined in 65.20 section 16B.1916C.18, subdivision 7. 65.21 (e) The regents may delegate responsibility under this 65.22 section to university employees. 65.23 Sec. 53. Minnesota Statutes 1996, section 137.35, 65.24 subdivision 2, is amended to read: 65.25 Subd. 2. [ELIGIBILITY.] The rules adopted by the 65.26 commissioner of administration to define small businesses and to 65.27 set time and other eligibility requirements for participation in 65.28 programs under sections 16B.19 to 16B.2216C.18 to 16C.21 apply 65.29 to this section. 65.30 Sec. 54. Minnesota Statutes 1996, section 137.35, 65.31 subdivision 3, is amended to read: 65.32 Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged 65.33 to purchase from small targeted group businesses designated 65.34 under section 16B.1916C.18 when making purchases that are not 65.35 subject to competitive bidding procedures. 65.36 Sec. 55. Minnesota Statutes 1997 Supplement, section 66.1 138.35, subdivision 1b, is amended to read: 66.2 Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 66.3 state archaeologist may contract with the federal government, 66.4 local governmental units, other states, the university and other 66.5 educational institutions, and private persons or organizations 66.6 as necessary in the performance of the duties in sections 138.31 66.7 to 138.42. Contracts made under this section for professional 66.8 services shall not be subject to chapter 16B16C, as it relates 66.9 to competitive bidding. The state archaeologist may recruit, 66.10 train, and accept, without regard to personnel laws or rules, 66.11 the services of individuals as volunteers for or in aid of 66.12 performance of the state archaeologist's duties, and may provide 66.13 for the incidental expenses of volunteers, such as 66.14 transportation, lodging, and subsistence. The state 66.15 archaeologist may apply for, receive, and expend grants and 66.16 gifts of money consistent with the powers and duties in sections 66.17 138.31 to 138.42. Any money so received is appropriated for the 66.18 purpose for which it was granted. 66.19 Sec. 56. Minnesota Statutes 1996, section 144.0742, is 66.20 amended to read: 66.21 144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 66.22 SERVICES.] 66.23 The commissioner of health is authorized to enter into 66.24 contractual agreements with any public or private entity for the 66.25 provision of statutorily prescribed public health services by 66.26 the department. The contracts shall specify the services to be 66.27 provided and the amount and method of reimbursement therefor. 66.28 Funds generated in a contractual agreement made pursuant to this 66.29 section are appropriated to the department for purposes of 66.30 providing the services specified in the contracts. All such 66.31 contractual agreements shall be processed in accordance with the 66.32 provisions of chapter 16B16C. 66.33 Sec. 57. Minnesota Statutes 1996, section 144.95, 66.34 subdivision 5, is amended to read: 66.35 Subd. 5. [GENERAL AUTHORITY.] (a) To carry out 66.36 subdivisions 1 to 4, the commissioner of health may: 67.1 (1) accept money, property, or services from any source; 67.2 (2) receive and hold lands; 67.3 (3) accept gifts; 67.4 (4) cooperate with city, state, federal, or private 67.5 agencies whose research on mosquito control or on other 67.6 environmental matters may be affected by the commissioner's 67.7 mosquito management and research activities; and 67.8 (5) enter into contracts with any public or private entity. 67.9 (b) The contracts must specify the duties performed, 67.10 services provided, and the amount and method of reimbursement 67.11 for them. Money collected by the commissioner under contracts 67.12 made under this subdivision is appropriated to the commissioner 67.13 for the purposes specified in the contracts. Contractual 67.14 agreements must be processed under section 16B.1716C.09. 67.15 Sec. 58. Minnesota Statutes 1996, section 161.315, 67.16 subdivision 4, is amended to read: 67.17 Subd. 4. [EXCEPTIONS.] The commissioner may terminate a 67.18 debarment by order, or the commissioner or a county, town, or 67.19 home rule or statutory city may award a contract to a debarred 67.20 or suspended person when: 67.21 (1) that person is the sole supplier of a material or 67.22 service required by the commissioner or a county, town, or home 67.23 rule or statutory city; 67.24 (2) the commissioner determines that an emergency exists as 67.25 defined in section 161.32, subdivision 3; 67.26 (3) the commissioner of administration determines that an 67.27 emergency exists as defined in section 16B.0816C.11, 67.28 subdivision 62; 67.29 (4) in the case of a contract to be awarded by a county, 67.30 town, or home rule or statutory city, the governing body thereof 67.31 determines by resolution that an emergency exists that will 67.32 result in a road, street, or bridge being closed to travel; or 67.33 (5) the contract is for purchasing materials or renting 67.34 equipment for routine road maintenance. 67.35 Sec. 59. Minnesota Statutes 1996, section 161.321, 67.36 subdivision 1, is amended to read: 68.1 Subdivision 1. [DEFINITIONS.] For purposes of this section 68.2 the following terms have the meanings given them, except where 68.3 the context clearly indicates a different meaning is intended. 68.4 (a) "Award" means the granting of a contract in accordance 68.5 with all applicable laws and rules governing competitive bidding 68.6 except as otherwise provided in this section. 68.7 (b) "Contract" means an agreement entered into between a 68.8 business entity and the state of Minnesota for the construction 68.9 of transportation improvements. 68.10 (c) "Subcontractor" means a business entity which enters 68.11 into a legally binding agreement with another business entity 68.12 which is a party to a contract as defined in clause (b). 68.13 (d) "Targeted group business" means a business designated 68.14 under section 16B.1916C.18, subdivision 2b5. 68.15 Sec. 60. Minnesota Statutes 1996, section 161.321, 68.16 subdivision 2, is amended to read: 68.17 Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 68.18 may award up to a six percent preference in the amount bid for 68.19 specified construction work to small targeted group businesses. 68.20 (b) The commissioner may designate a contract for 68.21 construction work for award only to small targeted group 68.22 businesses if the commissioner determines that at least three 68.23 small targeted group businesses are likely to bid. 68.24 (c) The commissioner, as a condition of awarding a 68.25 construction contract, may set goals that require the prime 68.26 contractor to subcontract a portion of the contract to small 68.27 targeted group businesses. The commissioner must establish a 68.28 procedure for granting waivers from the subcontracting 68.29 requirement when qualified small targeted group businesses are 68.30 not reasonably available. The commissioner may establish 68.31 financial incentives for prime contractors who exceed the goals 68.32 for use of subcontractors and financial penalties for prime 68.33 contractors who fail to meet goals under this paragraph. The 68.34 subcontracting requirements of this paragraph do not apply to 68.35 prime contractors who are small targeted group businesses. 68.36 (d) The commissioner may award up to a four percent 69.1 preference in the amount bid on procurement to small businesses 69.2 located in an economically disadvantaged area as defined in 69.3 section 16B.1916C.18, subdivision 7. 69.4 Sec. 61. Minnesota Statutes 1996, section 161.321, 69.5 subdivision 5, is amended to read: 69.6 Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the 69.7 commissioner is unable to award a contract pursuant to the 69.8 provisions of subdivisions 2 and 3, the award may be placed 69.9 pursuant to the normal solicitation and award provisions set 69.10 forth in this chapter and chapter 16B16C. 69.11 Sec. 62. Minnesota Statutes 1996, section 161.321, 69.12 subdivision 6, is amended to read: 69.13 Subd. 6. [RULES.] The rules adopted by the commissioner of 69.14 administration to define small businesses and to set time and 69.15 other eligibility requirements for participation in programs 69.16 under sections 16B.19 to 16B.2216C.18 to 16C.21 apply to this 69.17 section. The commissioner may promulgate other rules necessary 69.18 to carry out this section. 69.19 Sec. 63. Minnesota Statutes 1996, section 161.321, 69.20 subdivision 7, is amended to read: 69.21 Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is 69.22 encouraged to purchase from small targeted group businesses 69.23 designated under section 16B.1916C.18 when making purchases 69.24 that are not subject to competitive bidding procedures. 69.25 Sec. 64. Minnesota Statutes 1996, section 161.41, 69.26 subdivision 2, is amended to read: 69.27 Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The 69.28 commissioner shall administer all aspects of the disposition of 69.29 property declared to be surplus under this section. The 69.30 commissioner shall first determine the value of the surplus 69.31 property. The commissioner may then transfer the possession of 69.32 the surplus property to any state agency or political 69.33 subdivision of this state or to the United States government 69.34 upon receipt of payment in an amount equal to the value of the 69.35 surplus property. 69.36 The commissioner may also sell the surplus property under 70.1 the competitive bidding provisions of chapter 16B16C if no 70.2 state agency or political subdivision of this state offers to 70.3 purchase the surplus property for its determined value. 70.4 Sec. 65. Minnesota Statutes 1997 Supplement, section 70.5 179A.03, subdivision 14, is amended to read: 70.6 Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or 70.7 "employee" means any person appointed or employed by a public 70.8 employer except: 70.9 (a) elected public officials; 70.10 (b) election officers; 70.11 (c) commissioned or enlisted personnel of the Minnesota 70.12 national guard; 70.13 (d) emergency employees who are employed for emergency work 70.14 caused by natural disaster; 70.15 (e) part-time employees whose service does not exceed the 70.16 lesser of 14 hours per week or 35 percent of the normal work 70.17 week in the employee's appropriate unit; 70.18 (f) employees whose positions are basically temporary or 70.19 seasonal in character and: (1) are not for more than 67 working 70.20 days in any calendar year; or (2) are not for more than 100 70.21 working days in any calendar year and the employees are under 70.22 the age of 22, are full-time students enrolled in a nonprofit or 70.23 public educational institution prior to being hired by the 70.24 employer, and have indicated, either in an application for 70.25 employment or by being enrolled at an educational institution 70.26 for the next academic year or term, an intention to continue as 70.27 students during or after their temporary employment; 70.28 (g) employees providing services for not more than two 70.29 consecutive quarters to the board of trustees of the Minnesota 70.30 state colleges and universities under the terms of a 70.31 professional or technical services contract as defined in 70.32 section 16B.1716C.09, subdivision 1; 70.33 (h) employees of charitable hospitals as defined by section 70.34 179.35, subdivision 3; 70.35 (i) full-time undergraduate students employed by the school 70.36 which they attend under a work-study program or in connection 71.1 with the receipt of financial aid, irrespective of number of 71.2 hours of service per week; 71.3 (j) an individual who is employed for less than 300 hours 71.4 in a fiscal year as an instructor in an adult vocational 71.5 education program; 71.6 (k) an individual hired by a school district or the board 71.7 of trustees of the Minnesota state colleges and universities to 71.8 teach one course for up to four credits for one quarter in a 71.9 year. 71.10 The following individuals are public employees regardless 71.11 of the exclusions of clauses (e) and (f): 71.12 (1) An employee hired by a school district or the board of 71.13 trustees of the Minnesota state colleges and universities except 71.14 at the university established in section 136F.13 or for 71.15 community services or community education instruction offered on 71.16 a noncredit basis: (i) to replace an absent teacher or faculty 71.17 member who is a public employee, where the replacement employee 71.18 is employed more than 30 working days as a replacement for that 71.19 teacher or faculty member; or (ii) to take a teaching position 71.20 created due to increased enrollment, curriculum expansion, 71.21 courses which are a part of the curriculum whether offered 71.22 annually or not, or other appropriate reasons; and 71.23 (2) An employee hired for a position under clause (f)(1) if 71.24 that same position has already been filled under clause (f)(1) 71.25 in the same calendar year and the cumulative number of days 71.26 worked in that same position by all employees exceeds 67 71.27 calendar days in that year. For the purpose of this paragraph, 71.28 "same position" includes a substantially equivalent position if 71.29 it is not the same position solely due to a change in the 71.30 classification or title of the position. 71.31 Sec. 66. Minnesota Statutes 1996, section 179A.23, is 71.32 amended to read: 71.33 179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 71.34 BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 71.35 BARGAINING UNIT.] 71.36 Any contract entered into after March 23, 1982, by the 72.1 state of Minnesota or the University of Minnesota involving 72.2 services, any part of which, in the absence of the contract, 72.3 would be performed by members of a unit provided in sections 72.4 179A.10 and 179A.11, shall be subject to section 16B.0716C.07 72.5 and shall provide for the preferential employment by a party of 72.6 members of that unit whose employment with the state of 72.7 Minnesota or the University of Minnesota is terminated as a 72.8 result of that contract. 72.9 Contracts entered into by the state of Minnesota for the 72.10 purpose of providing court reporter services or transcription of 72.11 the record of a hearing which was recorded by means of an audio 72.12 magnetic recording device shall be subject to section 16B.1772.13 16C.09 and the preferential employment provisions enumerated in 72.14 this section. Any court reporter seeking a contract pursuant to 72.15 the preferential employment provisions of this section shall be 72.16 given preference when the services are needed only if that court 72.17 reporter's charges for the services requested are no greater 72.18 than the average of the charges made for the identical services 72.19 by other court reporters in the same locality who are also under 72.20 contract with the state for those services. 72.21 Sec. 67. Minnesota Statutes 1996, section 198.35, 72.22 subdivision 1, is amended to read: 72.23 Subdivision 1. [ESTABLISHMENT.] The board may establish a 72.24 veterans home in Silver Bay by renovating an existing facility 72.25 owned by the city of Silver Bay if the city donates the building 72.26 to the board at no cost. Contracts made by the board for the 72.27 purposes of this subdivision are subject to chapter 16B16C. 72.28 Buildings used for the veterans home must comply with 72.29 requirements established by federal agencies as conditions for 72.30 the receipt of federal funds for the nursing and boarding care 72.31 of veterans. The city of Silver Bay shall secure the state 72.32 match requirement from sources other than the state general 72.33 fund. Money from other sources must equal at least 35 percent 72.34 of the total cost of the renovation with the remainder of the 72.35 funds to be provided by the United States Veterans 72.36 Administration. 73.1 Sec. 68. Minnesota Statutes 1996, section 216C.02, 73.2 subdivision 1, is amended to read: 73.3 Subdivision 1. [POWERS.] (a) The commissioner may: 73.4 (1) apply for, receive, and spend money received from 73.5 federal, municipal, county, regional, and other government 73.6 agencies and private sources; 73.7 (2) apply for, accept, and disburse grants and other aids 73.8 from public and private sources; 73.9 (3) contract for professional services if work or services 73.10 required or authorized to be carried out by the commissioner 73.11 cannot be satisfactorily performed by employees of the 73.12 department or by another state agency; 73.13 (4) enter into interstate compacts to carry out research 73.14 and planning jointly with other states or the federal government 73.15 when appropriate; 73.16 (5) upon reasonable request, distribute informational 73.17 material at no cost to the public; and 73.18 (6) enter into contracts for the performance of the 73.19 commissioner's duties with federal, state, regional, 73.20 metropolitan, local, and other agencies or units of government 73.21 and educational institutions, including the University of 73.22 Minnesota, without regard to the competitive bidding 73.23 requirements of chapters 16A and 16B16C. 73.24 (b) The commissioner shall collect information on 73.25 conservation and other energy-related programs carried on by 73.26 other agencies, by public utilities, by cooperative electric 73.27 associations, by municipal power agencies, by other fuel 73.28 suppliers, by political subdivisions, and by private 73.29 organizations. Other agencies, cooperative electric 73.30 associations, municipal power agencies, and political 73.31 subdivisions shall cooperate with the commissioner by providing 73.32 information requested by the commissioner. The commissioner may 73.33 by rule require the submission of information by other program 73.34 operators. The commissioner shall make the information 73.35 available to other agencies and to the public and, as necessary, 73.36 shall recommend to the legislature changes in the laws governing 74.1 conservation and other energy-related programs to ensure that: 74.2 (1) expenditures on the programs are adequate to meet 74.3 identified needs; 74.4 (2) the needs of low-income energy users are being 74.5 adequately addressed; 74.6 (3) duplication of effort is avoided or eliminated; 74.7 (4) a program that is ineffective is improved or 74.8 eliminated; and 74.9 (5) voluntary efforts are encouraged through incentives for 74.10 their operators. 74.11 The commissioner shall appoint an advisory task force to 74.12 help evaluate the information collected and formulate 74.13 recommendations to the legislature. The task force must include 74.14 low-income energy users. 74.15 (c) By January 15 of each year, the commissioner shall 74.16 report to the legislature on the projected amount of federal 74.17 money likely to be available to the state during the next fiscal 74.18 year, including grant money and money received by the state as a 74.19 result of litigation or settlements of alleged violations of 74.20 federal petroleum pricing regulations. The report must also 74.21 estimate the amount of money projected as needed during the next 74.22 fiscal year to finance a level of conservation and other 74.23 energy-related programs adequate to meet projected needs, 74.24 particularly the needs of low-income persons and households, and 74.25 must recommend the amount of state appropriations needed to 74.26 cover the difference between the projected availability of 74.27 federal money and the projected needs. 74.28 Sec. 69. Minnesota Statutes 1997 Supplement, section 74.29 216D.03, subdivision 2, is amended to read: 74.30 Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 74.31 (a) The notification center services must be provided by a 74.32 nonprofit corporation approved in writing by the commissioner. 74.33 The nonprofit corporation must be governed by a board of 74.34 directors of up to 20 members, one of whom is the director of 74.35 the office of pipeline safety. The other board members must 74.36 represent and be elected by operators, excavators, and other 75.1 persons eligible to participate in the center. In deciding to 75.2 approve a nonprofit corporation, the commissioner shall consider 75.3 whether it meets the requirements of this paragraph and whether 75.4 it demonstrates that it has the ability to contract for and 75.5 implement the notification center service. 75.6 (b) The commissioner shall adopt rules: 75.7 (1) establishing a notification process and competitive 75.8 bidding procedure for selecting a vendor to provide the 75.9 notification service; 75.10 (2) governing the operating procedures and technology 75.11 needed for a statewide notification center; and 75.12 (3) setting forth the method for assessing the cost of the 75.13 service among operators. 75.14 (c) The commissioner shall select a vendor to provide the 75.15 notification center service. The commissioner may advertise for 75.16 bids as provided in section 16B.0716C.07, subdivision75.17 3subdivisions 1 and 2, and base the selection of a vendor on an75.18 identification of the lowest responsible bidderbest value as 75.19 provided in section 16B.0916C.07, subdivision 16. The 75.20 commissioner shall select and contract with the vendor to 75.21 provide the notification center service, but all costs of the 75.22 center must be paid by the operators. The commissioner may at 75.23 any time appoint a task force to advise on the renewal of the 75.24 contract or any other matter involving the center's operations. 75.25 (d) An operator may submit a bid and be selected to 75.26 contract to provide the notification center service under 75.27 paragraph (a) or (c). The commissioner shall annually review 75.28 the services provided by the nonprofit corporation approved 75.29 under paragraph (a) or the vendor selected under paragraph (c). 75.30 Sec. 70. Minnesota Statutes 1996, section 237.51, 75.31 subdivision 5a, is amended to read: 75.32 Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 75.33 addition to any duties specified elsewhere in sections 237.51 to 75.34 237.56, the department of human services shall: 75.35 (1) define economic hardship, special needs, and household 75.36 criteria so as to determine the priority of eligible applicants 76.1 for initial distribution of devices and to determine 76.2 circumstances necessitating provision of more than one 76.3 communication device per household; 76.4 (2) establish a method to verify eligibility requirements; 76.5 (3) establish specifications for communication devices to 76.6 be purchased under section 237.53, subdivision 3; 76.7 (4) inform the public and specifically the community of 76.8 communication-impaired persons of the program; and 76.9 (5) notwithstanding any provision of chapterchapters 16B 76.10 and 16C, develop guidelines for the purchase of some 76.11 communication devices from local retailers and dispensers if the 76.12 department determines that otherwise they will be economically 76.13 harmed by implementation of sections 237.50 to 237.56. 76.14 (b) The department may establish an advisory board to 76.15 advise the department in carrying out the duties specified in 76.16 this section and to advise the department of public service in 76.17 carrying out its duties under section 237.54. If so 76.18 established, the advisory board must include, at a minimum, the 76.19 following communication-impaired persons: 76.20 (1) at least one member who is deaf; 76.21 (2) at least one member who is speech impaired; 76.22 (3) at least one member who is mobility impaired; and 76.23 (4) at least one member who is hard-of-hearing. 76.24 The membership terms, compensation, and removal of members 76.25 and the filling of membership vacancies are governed by section 76.26 15.059. Advisory board meetings shall be held at the discretion 76.27 of the commissioner. 76.28 Sec. 71. Minnesota Statutes 1996, section 241.0221, 76.29 subdivision 6, is amended to read: 76.30 Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 76.31 To qualify for a subsidy, a county or group of counties must 76.32 enter into a memorandum of agreement with the commissioner 76.33 agreeing to comply with the minimum standards and requirements 76.34 established by the commissioner under subdivision 4. The 76.35 memorandum of agreement is not subject to the contract approval 76.36 procedures of the commissioner of administration or chapter77.1 chapters 16B and 16C. The commissioner shall provide forms and 77.2 instructions for submission of subsidy applications. 77.3 The commissioner shall require a county or group of 77.4 counties to document in its application that it is requesting 77.5 subsidy funds for the least restrictive alternative appropriate 77.6 to the county or counties detention needs. The commissioner 77.7 shall evaluate applications and grant subsidies for local 77.8 detention facilities and alternative detention programs 77.9 described in this section in a manner consistent with the 77.10 minimum standards and requirements established by the 77.11 commissioner in subdivision 4 and within the limit 77.12 appropriations made available by law. 77.13 Sec. 72. Minnesota Statutes 1996, section 241.27, 77.14 subdivision 2, is amended to read: 77.15 Subd. 2. [REVOLVING FUND; USE OF FUND.] There is 77.16 established in the department of corrections under the control 77.17 of the commissioner of corrections the Minnesota correctional 77.18 industries revolving fund to which shall be transferred the 77.19 revolving funds authorized in Minnesota Statutes 1978, sections 77.20 243.41 and 243.85, clause (f), and any other industrial 77.21 revolving funds heretofore established at any state correctional 77.22 facility under the control of the commissioner of corrections. 77.23 The revolving fund established shall be used for the conduct of 77.24 the industrial and commercial activities now or hereafter 77.25 established at any state correctional facility, including but 77.26 not limited to the purchase of equipment, raw materials, the 77.27 payment of salaries, wages and other expenses necessary and 77.28 incident thereto. The purchase of materials and commodities for 77.29 resale are not subject to the competitive bidding procedures of 77.30 section 16B.0716C.07, but are subject to all other provisions 77.31 of chapter 16Bchapters 16B and 16C. When practical, purchases 77.32 must be made from small targeted group businesses designated 77.33 under section 16B.1916C.18. Additionally, the expenses of 77.34 inmate vocational training and the inmate release fund may be 77.35 financed from the correctional industries revolving fund in an 77.36 amount to be determined by the commissioner. The proceeds and 78.1 income from all industrial and commercial activities conducted 78.2 at state correctional facilities shall be deposited in the 78.3 correctional industries revolving fund subject to disbursement 78.4 as hereinabove provided. The commissioner of corrections may 78.5 request that money in the fund be invested pursuant to section 78.6 11A.25; the proceeds from the investment not currently needed 78.7 shall be accounted for separately and credited to the fund. 78.8 Sec. 73. Minnesota Statutes 1997 Supplement, section 78.9 241.277, subdivision 2, is amended to read: 78.10 Subd. 2. [REQUEST FOR PROPOSALS.] After consulting with 78.11 and considering the advice of the association of Minnesota 78.12 counties, the commissioner may issue a request for proposals and 78.13 select a vendor to operate the program. Section 16B.1716C.09 78.14 does not apply to the issuance of the request for proposals. 78.15 Sec. 74. Minnesota Statutes 1996, section 246.36, is 78.16 amended to read: 78.17 246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 78.18 For the purpose of carrying out a duty, the commissioner of 78.19 human services shall have authority to accept uncompensated and 78.20 voluntary services and to enter into contracts or agreements 78.21 with private or public agencies, or persons, for uncompensated 78.22 and voluntary services, as the commissioner may deem 78.23 practicable. Uncompensated and voluntary services do not 78.24 include services mandated by licensure and certification 78.25 requirements for health care facilities. The volunteer 78.26 agencies, organizations, or persons who provide services to 78.27 residents of state facilities operated under the authority of 78.28 the commissioner are not subject to the procurement requirements 78.29 of chapters 16A and 16B16C. The agencies, organizations, or 78.30 persons may purchase supplies, services, and equipment to be 78.31 used in providing services to residents of state facilities 78.32 through the department of administration. 78.33 Sec. 75. Minnesota Statutes 1996, section 246.57, 78.34 subdivision 1, is amended to read: 78.35 Subdivision 1. [AUTHORIZED.] The commissioner of human 78.36 services may authorize any state facility operated under the 79.1 authority of the commissioner to enter into agreement with other 79.2 governmental entities and both nonprofit and for-profit 79.3 organizations for participation in shared service agreements 79.4 that would be of mutual benefit to the state, other governmental 79.5 entities and organizations involved, and the public. 79.6 Notwithstanding section 16B.0616C.06, subdivision 2, the 79.7 commissioner of human services may delegate the execution of 79.8 shared services contracts to the chief executive officers of the 79.9 regional centers or state operated nursing homes. No additional 79.10 employees shall be added to the legislatively approved 79.11 complement for any regional center or state nursing home as a 79.12 result of entering into any shared service agreement. However, 79.13 positions funded by a shared service agreement may be authorized 79.14 by the commissioner of finance for the duration of the shared 79.15 service agreement. The charges for the services shall be on an 79.16 actual cost basis. All receipts for shared services may be 79.17 retained by the regional treatment center or state-operated 79.18 nursing home that provided the services, in addition to other 79.19 funding the regional treatment center or state-operated nursing 79.20 home receives. 79.21 Sec. 76. Minnesota Statutes 1996, section 246.57, 79.22 subdivision 6, is amended to read: 79.23 Subd. 6. [DENTAL SERVICES.] The commissioner of human 79.24 services shall authorize any regional treatment center or 79.25 state-operated nursing home under the commissioner's authority 79.26 to provide dental services to disabled persons who are eligible 79.27 for medical assistance and are not residing at the regional 79.28 treatment center or state-operated nursing home, provided that 79.29 the reimbursement received for these services is sufficient to 79.30 cover actual costs. To provide these services, regional 79.31 treatment centers and state-operated nursing homes may 79.32 participate under contract with health networks in their service 79.33 area. Notwithstanding section 16B.0616C.06, subdivision 2, the 79.34 commissioner of human services may delegate the execution of 79.35 these dental services contracts to the chief executive officers 79.36 of the regional centers or state-operated nursing homes. All 80.1 receipts for these dental services shall be retained by the 80.2 regional treatment center or state-operated nursing home that 80.3 provides the services and shall be in addition to other funding 80.4 the regional treatment center or state-operated nursing home 80.5 receives. 80.6 Sec. 77. Minnesota Statutes 1996, section 256B.031, 80.7 subdivision 1, is amended to read: 80.8 Subdivision 1. [CONTRACTS.] The commissioner may contract 80.9 with health insurers licensed and operating under chapters 60A 80.10 and 62A, nonprofit health service plans licensed and operating 80.11 under chapter 62C, health maintenance organizations licensed and 80.12 operating under chapter 62D, and vendors of medical care and 80.13 organizations participating in prepaid programs under section 80.14 256D.03, subdivision 4, clause (b), to provide medical services 80.15 to medical assistance recipients. Notwithstanding any other 80.16 law, health insurers may enter into contracts with the 80.17 commissioner under this section. As a condition of the 80.18 contract, health insurers and health service plan corporations 80.19 must agree to comply with the requirements of section 62D.04, 80.20 subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 80.21 a complaint procedure that satisfies the requirements of section 80.22 62D.11. Nothing in this section permits health insurers not 80.23 licensed as health maintenance organizations under chapter 62D 80.24 to offer a prepaid health plan as defined in section 256B.02, 80.25 subdivision 12, to persons other than those receiving medical 80.26 assistance or general assistance medical care under this 80.27 section. Contracts between the commissioner and a prepaid 80.28 health plan are exempt from the set-aside and preference 80.29 provisions of section 16B.1916C.18, subdivisions 5 and6, 80.30 paragraph (a), and 7. Contracts must specify the services that 80.31 are included in the per capita rate. Contracts must specify 80.32 those services that are to be eligible for risk sharing between 80.33 the prepaid health plan and the state. Contracts must also 80.34 state that payment must be made within 60 days after the month 80.35 of coverage. 80.36 Sec. 78. Minnesota Statutes 1996, section 256B.04, 81.1 subdivision 14, is amended to read: 81.2 Subd. 14. [COMPETITIVE BIDDING.] When determined to be 81.3 effective, economical, and feasible, the commissioner may 81.4 utilize volume purchase through competitive bidding and 81.5 negotiation under the provisions of chapter 16B16C, to provide 81.6 items under the medical assistance program including but not 81.7 limited to the following: 81.8 (1) eyeglasses; 81.9 (2) oxygen. The commissioner shall provide for oxygen 81.10 needed in an emergency situation on a short-term basis, until 81.11 the vendor can obtain the necessary supply from the contract 81.12 dealer; 81.13 (3) hearing aids and supplies; and 81.14 (4) durable medical equipment, including but not limited to: 81.15 (a) hospital beds; 81.16 (b) commodes; 81.17 (c) glide-about chairs; 81.18 (d) patient lift apparatus; 81.19 (e) wheelchairs and accessories; 81.20 (f) oxygen administration equipment; 81.21 (g) respiratory therapy equipment; 81.22 (h) electronic diagnostic, therapeutic and life support 81.23 systems; 81.24 (5) special transportation services; and 81.25 (6) drugs. 81.26 Sec. 79. Minnesota Statutes 1996, section 256B.04, 81.27 subdivision 15, is amended to read: 81.28 Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a 81.29 statewide basis a new program to safeguard against unnecessary 81.30 or inappropriate use of medical assistance services, against 81.31 excess payments, against unnecessary or inappropriate hospital 81.32 admissions or lengths of stay, and against underutilization of 81.33 services in prepaid health plans, long-term care facilities or 81.34 any health care delivery system subject to fixed rate 81.35 reimbursement. In implementing the program, the state agency 81.36 shall utilize both prepayment and postpayment review systems to 82.1 determine if utilization is reasonable and necessary. The 82.2 determination of whether services are reasonable and necessary 82.3 shall be made by the commissioner in consultation with a 82.4 professional services advisory group or health care consultant 82.5 appointed by the commissioner. 82.6 (2) Contracts entered into for purposes of meeting the 82.7 requirements of this subdivision shall not be subject to the 82.8 set-aside provisions of chapter 16B16C. 82.9 (3) A recipient aggrieved by the commissioner's termination 82.10 of services or denial of future services may appeal pursuant to 82.11 section 256.045. A vendor aggrieved by the commissioner's 82.12 determination that services provided were not reasonable or 82.13 necessary may appeal pursuant to the contested case procedures 82.14 of chapter 14. To appeal, the vendor shall notify the 82.15 commissioner in writing within 30 days of receiving the 82.16 commissioner's notice. The appeal request shall specify each 82.17 disputed item, the reason for the dispute, an estimate of the 82.18 dollar amount involved for each disputed item, the computation 82.19 that the vendor believes is correct, the authority in statute or 82.20 rule upon which the vendor relies for each disputed item, the 82.21 name and address of the person or firm with whom contacts may be 82.22 made regarding the appeal, and other information required by the 82.23 commissioner. 82.24 (4) The commissioner may select providers to provide case 82.25 management services to recipients who use health care services 82.26 inappropriately or to recipients who are eligible for other 82.27 managed care projects. The providers shall be selected based 82.28 upon criteria that may include a comparison with a peer group of 82.29 providers related to the quality, quantity, or cost of health 82.30 care services delivered or a review of sanctions previously 82.31 imposed by health care services programs or the provider's 82.32 professional licensing board. 82.33 Sec. 80. Minnesota Statutes 1997 Supplement, section 82.34 256B.19, subdivision 2a, is amended to read: 82.35 Subd. 2a. [DIVISION OF COSTS.] The county shall ensure 82.36 that only the least costly, most appropriate transportation and 83.1 travel expenses are used. The state may enter into volume 83.2 purchase contracts, or use a competitive bidding process, 83.3 whenever feasible, to minimize the costs of transportation 83.4 services. If the state has entered into a volume purchase 83.5 contract or used the competitive bidding procedures of chapter 83.6 16B16C to arrange for transportation services, the county may 83.7 be required to use such arrangements. 83.8 Sec. 81. Minnesota Statutes 1997 Supplement, section 83.9 256D.03, subdivision 6, is amended to read: 83.10 Subd. 6. [DIVISION OF COSTS.] The state share of county 83.11 agency expenditures for general assistance medical care shall be 83.12 100 percent. Payments made under this subdivision shall be made 83.13 according to sections 256B.041, subdivision 5 and 256B.19, 83.14 subdivision 1. In counties where a pilot or demonstration 83.15 project is operated for general assistance medical care 83.16 services, the state may pay 100 percent of the costs of 83.17 administering the pilot or demonstration project. 83.18 Notwithstanding any provision to the contrary, beginning 83.19 July 1, 1991, the state shall pay 100 percent of the costs for 83.20 centralized claims processing by the department of 83.21 administration relative to claims beginning January 1, 1991, and 83.22 submitted on behalf of general assistance medical care 83.23 recipients by vendors in the general assistance medical care 83.24 program. 83.25 Beginning July 1, 1991, the state shall reimburse counties 83.26 up to the limit of state appropriations for general assistance 83.27 medical care common carrier transportation and related travel 83.28 expenses provided for medical purposes after December 31, 1990. 83.29 For purposes of this subdivision, transportation shall have the 83.30 meaning given it in Code of Federal Regulations, title 42, 83.31 section 440.170(a), as amended through October 1, 1987, and 83.32 travel expenses shall have the meaning given in Code of Federal 83.33 Regulations, title 42, section 440.170(a)(3), as amended through 83.34 October 1, 1987. 83.35 The county shall ensure that only the least costly most 83.36 appropriate transportation and travel expenses are used. The 84.1 state may enter into volume purchase contracts, or use a 84.2 competitive bidding process, whenever feasible, to minimize the 84.3 costs of transportation services. If the state has entered into 84.4 a volume purchase contract or used the competitive bidding 84.5 procedures of chapter 16B16C to arrange for transportation 84.6 services, the county may be required to use such arrangements to 84.7 be eligible for state reimbursement for general assistance 84.8 medical care common carrier transportation and related travel 84.9 expenses provided for medical purposes. 84.10 In counties where prepaid health plans are under contract 84.11 to the commissioner to provide services to general assistance 84.12 medical care recipients, the cost of court ordered treatment 84.13 that does not include diagnostic evaluation, recommendation, or 84.14 referral for treatment by the prepaid health plan is the 84.15 responsibility of the county of financial responsibility. 84.16 Sec. 82. Minnesota Statutes 1996, section 298.2211, 84.17 subdivision 4, is amended to read: 84.18 Subd. 4. [OBLIGATIONS NOT STATE DEBT.] Bonds and other 84.19 obligations issued by the commissioner pursuant to this section, 84.20 along with all related documents, are not general obligations of 84.21 the state of Minnesota and are not subject to section 16B.0684.22 sections 16C.03, subdivision 4, and 16C.06. The full faith and 84.23 credit and taxing powers of the state are not and may not be 84.24 pledged for the payment of these bonds or other obligations, and 84.25 no person has the right to compel the levy of any state tax for 84.26 their payment or to compel the appropriation of any moneys of 84.27 the state for their payment except as specifically provided 84.28 herein. These bonds and obligations shall be payable solely 84.29 from the property and moneys derived by the commissioner 84.30 pursuant to the authority granted in this section that the 84.31 commissioner pledges to their payment. The legislature intends 84.32 not to appropriate money from the general fund to pay for these 84.33 bonds or other obligations. All these bonds or other 84.34 obligations must contain the provisions of this subdivision or 84.35 words to the same effect on their face. 84.36 Sec. 83. Minnesota Statutes 1996, section 349A.06, 85.1 subdivision 1, is amended to read: 85.2 Subdivision 1. [CONTRACTS.] The director shall sell 85.3 tickets for the lottery through lottery retailers with whom the 85.4 director contracts. Contracts under this section are not 85.5 subject to the provisions of sections 16B.06 to 16B.102, and85.6 16B.1716C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 85.7 are valid for a period of one year. The director may permit a 85.8 retailer to sell tickets at more than one business location 85.9 under a contract entered into under this section. 85.10 Sec. 84. Minnesota Statutes 1996, section 349A.07, 85.11 subdivision 6, is amended to read: 85.12 Subd. 6. [EXEMPTIONS.] Lottery procurement contracts 85.13 entered into by the director are not subject to the provisions 85.14 of sections 16B.06 to 16B.102 or 16B.17section 16C.03, 16C.06, 85.15 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 85.16 must utilize an open and competitive bid process, and as nearly 85.17 as practicable follow the procedures of chapterchapters 16B and 85.18 16C governing contracts, consistent with the provisions of this 85.19 section. 85.20 Sec. 85. Minnesota Statutes 1996, section 352.03, 85.21 subdivision 6, is amended to read: 85.22 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 85.23 management of the system is vested in the director, who is the 85.24 executive and administrative head of the system. The director 85.25 shall be advisor to the board on matters pertaining to the 85.26 system and shall also act as the secretary of the board. The 85.27 director shall: 85.28 (1) attend meetings of the board; 85.29 (2) prepare and recommend to the board appropriate rules to 85.30 carry out this chapter; 85.31 (3) establish and maintain an adequate system of records 85.32 and accounts following recognized accounting principles and 85.33 controls; 85.34 (4) designate an assistant director with the approval of 85.35 the board; 85.36 (5) appoint any employees, both permanent and temporary, 86.1 that are necessary to carry out the provisions of this chapter; 86.2 (6) organize the work of the system as the director deems 86.3 necessary to fulfill the functions of the system, and define the 86.4 duties of its employees and delegate to them any powers or 86.5 duties, subject to the control of the director and under 86.6 conditions the director may prescribe. Appointments to exercise 86.7 delegated power must be by written order and shall be filed with 86.8 the secretary of state; 86.9 (7) with the advice and consent of the board, contract for 86.10 the services of an approved actuary, professional management 86.11 services, and any other consulting services as necessary and fix 86.12 the compensation for those services. The contracts are not 86.13 subject to competitive bidding under chapter 16B16C. Any 86.14 approved actuary retained by the executive director shall 86.15 function as the actuarial advisor of the board and the executive 86.16 director, and may perform actuarial valuations and experience 86.17 studies to supplement those performed by the actuary retained by 86.18 the legislative commission on pensions and retirement. Any 86.19 supplemental actuarial valuations or experience studies shall be 86.20 filed with the executive director of the legislative commission 86.21 on pensions and retirement. Professional management services 86.22 may not be contracted for more often than once in six years. 86.23 Copies of professional management survey reports must be 86.24 transmitted to the secretary of the senate, the chief clerk of 86.25 the house of representatives, and the legislative reference 86.26 library as provided by section 3.195, to the executive director 86.27 of the commission and to the legislative auditor at the time as 86.28 reports are furnished to the board. Only management firms 86.29 experienced in conducting management surveys of federal, state, 86.30 or local public retirement systems are qualified to contract 86.31 with the director; 86.32 (8) with the advice and consent of the board provide 86.33 in-service training for the employees of the system; 86.34 (9) make refunds of accumulated contributions to former 86.35 state employees and to the designated beneficiary, surviving 86.36 spouse, legal representative, or next of kin of deceased state 87.1 employees or deceased former state employees, as provided in 87.2 this chapter; 87.3 (10) determine the amount of the annuities and disability 87.4 benefits of employees covered by the system and authorize 87.5 payment of the annuities and benefits beginning as of the dates 87.6 on which the annuities and benefits begin to accrue, in 87.7 accordance with the provisions of this chapter; 87.8 (11) pay annuities, refunds, survivor benefits, salaries, 87.9 and necessary operating expenses of the system; 87.10 (12) certify funds available for investment to the state 87.11 board of investment; 87.12 (13) with the advice and approval of the board request the 87.13 state board of investment to sell securities when the director 87.14 determines that funds are needed for the system; 87.15 (14) prepare and submit to the board and the legislature an 87.16 annual financial report covering the operation of the system, as 87.17 required by section 356.20; 87.18 (15) prepare and submit biennial and annual budgets to the 87.19 board and with the approval of the board submit the budgets to 87.20 the department of finance; and 87.21 (16) with the approval of the board, perform other duties 87.22 required to administer the retirement and other provisions of 87.23 this chapter and to do its business. 87.24 Sec. 86. Minnesota Statutes 1996, section 352.03, 87.25 subdivision 16, is amended to read: 87.26 Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding 87.27 chapter 16B ,or 16C or any law to the contrary, the executive 87.28 director of the system may use the services of the department of 87.29 administration, information services division, for electronic 87.30 data processing and related services or may contract for all or 87.31 a part of the services. 87.32 Sec. 87. Minnesota Statutes 1997 Supplement, section 87.33 353.03, subdivision 3a, is amended to read: 87.34 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 87.35 board shall appoint, with the advice and consent of the senate, 87.36 an executive director on the basis of education, experience in 88.1 the retirement field, and leadership ability. The executive 88.2 director shall have had at least five years' experience in an 88.3 executive level management position, which has included 88.4 responsibility for pensions, deferred compensation, or employee 88.5 benefits. The executive director serves at the pleasure of the 88.6 board. The salary of the executive director is as provided by 88.7 section 15A.0815. 88.8 (b) [DUTIES.] The management of the association is vested 88.9 in the executive director who shall be the executive and 88.10 administrative head of the association. The executive director 88.11 shall act as adviser to the board on all matters pertaining to 88.12 the association and shall also act as the secretary of the 88.13 board. The executive director shall: 88.14 (1) attend all meetings of the board; 88.15 (2) prepare and recommend to the board appropriate rules to 88.16 carry out the provisions of this chapter; 88.17 (3) establish and maintain an adequate system of records 88.18 and accounts following recognized accounting principles and 88.19 controls; 88.20 (4) designate, with the approval of the board, up to two 88.21 persons who shall serve in the unclassified service and whose 88.22 salary is set in accordance with section 43A.18, subdivision 3, 88.23 appoint a confidential secretary in the unclassified service, 88.24 and appoint employees to carry out this chapter, who are subject 88.25 to chapters 43A and 179A in the same manner as are executive 88.26 branch employees; 88.27 (5) organize the work of the association as the director 88.28 deems necessary to fulfill the functions of the association, and 88.29 define the duties of its employees and delegate to them any 88.30 powers or duties, subject to the control of, and under such 88.31 conditions as, the executive director may prescribe; 88.32 (6) with the approval of the board, contract for the 88.33 services of an approved actuary, professional management 88.34 services, and any other consulting services as necessary to 88.35 fulfill the purposes of this chapter. All contracts are subject 88.36 to chapter 16B16C. The commissioner of administration shall 89.1 not approve, and the association shall not enter into, any 89.2 contract to provide lobbying services or legislative advocacy of 89.3 any kind. Any approved actuary retained by the executive 89.4 director shall function as the actuarial advisor of the board 89.5 and the executive director and may perform actuarial valuations 89.6 and experience studies to supplement those performed by the 89.7 actuary retained by the legislative commission on pensions and 89.8 retirement. Any supplemental actuarial valuations or experience 89.9 studies shall be filed with the executive director of the 89.10 legislative commission on pensions and retirement. Copies of 89.11 professional management survey reports shall be transmitted to 89.12 the secretary of the senate, the chief clerk of the house of 89.13 representatives, and the legislative reference library as 89.14 provided by section 3.195, to the executive director of the 89.15 commission and to the legislative auditor at the same time as 89.16 reports are furnished to the board. Only management firms 89.17 experienced in conducting management surveys of federal, state, 89.18 or local public retirement systems shall be qualified to 89.19 contract with the director hereunder; 89.20 (7) with the approval of the board provide in-service 89.21 training for the employees of the association; 89.22 (8) make refunds of accumulated contributions to former 89.23 members and to the designated beneficiary, surviving spouse, 89.24 legal representative or next of kin of deceased members or 89.25 deceased former members, as provided in this chapter; 89.26 (9) determine the amount of the annuities and disability 89.27 benefits of members covered by the association and authorize 89.28 payment of the annuities and benefits beginning as of the dates 89.29 on which the annuities and benefits begin to accrue, in 89.30 accordance with the provisions of this chapter; 89.31 (10) pay annuities, refunds, survivor benefits, salaries, 89.32 and necessary operating expenses of the association; 89.33 (11) prepare and submit to the board and the legislature an 89.34 annual financial report covering the operation of the 89.35 association, as required by section 356.20; 89.36 (12) prepare and submit biennial and annual budgets to the 90.1 board for its approval and submit the approved budgets to the 90.2 department of finance for approval by the commissioner; 90.3 (13) reduce all or part of the accrued interest payable 90.4 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 90.5 subdivision 5, upon receipt of proof by the association of an 90.6 unreasonable processing delay or other extenuating circumstances 90.7 of the employing unit. The executive director shall prescribe 90.8 and submit for approval by the board the conditions under which 90.9 such interest may be reduced; and 90.10 (14) with the approval of the board, perform such other 90.11 duties as may be required for the administration of the 90.12 association and the other provisions of this chapter and for the 90.13 transaction of its business. 90.14 Sec. 88. Minnesota Statutes 1996, section 354.06, 90.15 subdivision 2a, is amended to read: 90.16 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 90.17 of the association is vested in the executive director who shall 90.18 be the executive and administrative head of the association. 90.19 The executive director shall act as advisor to the board on all 90.20 matters pertaining to the association and shall also act as the 90.21 secretary of the board. The executive director shall: 90.22 (1) attend all meetings of the board; 90.23 (2) prepare and recommend to the board appropriate rules to 90.24 carry out the provisions of this chapter; 90.25 (3) establish and maintain an adequate system of records 90.26 and accounts following recognized accounting principles and 90.27 controls; 90.28 (4) designate an assistant executive director in the 90.29 unclassified service and two assistant executive directors in 90.30 the classified service with the approval of the board, and 90.31 appoint such employees, both permanent and temporary, as are 90.32 necessary to carry out the provisions of this chapter; 90.33 (5) organize the work of the association as the director 90.34 deems necessary to fulfill the functions of the association, and 90.35 define the duties of its employees and delegate to them any 90.36 powers or duties, subject to the director's control and under 91.1 such conditions as the director may prescribe; 91.2 (6) with the approval of the board, contract and set the 91.3 compensation for the services of an approved actuary, 91.4 professional management services, and any other consulting 91.5 services. These contracts are not subject to the competitive 91.6 bidding procedure prescribed by chapter 16B16C. An approved 91.7 actuary retained by the executive director shall function as the 91.8 actuarial advisor of the board and the executive director and 91.9 may perform actuarial valuations and experience studies to 91.10 supplement those performed by the actuary retained by the 91.11 legislative commission on pensions and retirement. Any 91.12 supplemental actuarial valuations or experience studies shall be 91.13 filed with the executive director of the legislative commission 91.14 on pensions and retirement. Copies of professional management 91.15 survey reports must be transmitted to the secretary of the 91.16 senate, the chief clerk of the house of representatives, and the 91.17 legislative reference library as provided by section 3.195, to 91.18 the executive director of the commission and to the legislative 91.19 auditor at the same time as reports are furnished to the board. 91.20 Only management firms experienced in conducting management 91.21 surveys of federal, state, or local public retirement systems 91.22 are qualified to contract with the executive director; 91.23 (7) with the approval of the board, provide in-service 91.24 training for the employees of the association; 91.25 (8) make refunds of accumulated contributions to former 91.26 members and to the designated beneficiary, surviving spouse, 91.27 legal representative, or next of kin of deceased members or 91.28 deceased former members, under this chapter; 91.29 (9) determine the amount of the annuities and disability 91.30 benefits of members covered by the association and authorize 91.31 payment of the annuities and benefits beginning as of the dates 91.32 on which the annuities and benefits begin to accrue, under this 91.33 chapter; 91.34 (10) pay annuities, refunds, survivor benefits, salaries, 91.35 and necessary operating expenses of the association; 91.36 (11) prepare and submit to the board and the legislature an 92.1 annual financial report covering the operation of the 92.2 association, as required by section 356.20; 92.3 (12) certify funds available for investment to the state 92.4 board of investment; 92.5 (13) with the advice and approval of the board, request the 92.6 state board of investment to sell securities on determining that 92.7 funds are needed for the purposes of the association; 92.8 (14) prepare and submit biennial and annual budgets to the 92.9 board and with the approval of the board submit those budgets to 92.10 the department of finance; and 92.11 (15) with the approval of the board, perform such other 92.12 duties as may be required for the administration of the 92.13 association and the other provisions of this chapter and for the 92.14 transaction of its business. The executive director may: 92.15 (i) reduce all or part of the accrued interest and fines 92.16 payable by an employing unit for reporting requirements under 92.17 section 354.52, based on an evaluation of any extenuating 92.18 circumstances of the employing unit; 92.19 (ii) assign association employees to conduct field audits 92.20 of an employing unit to ensure compliance with the provisions of 92.21 this chapter; and 92.22 (iii) recover overpayments, if not repaid to the 92.23 association, by suspending or reducing the payment of a 92.24 retirement annuity, refund, disability benefit, survivor 92.25 benefit, or optional annuity under this chapter until the 92.26 overpayment, plus interest, has been recovered. 92.27 Sec. 89. Minnesota Statutes 1996, section 354.07, 92.28 subdivision 7, is amended to read: 92.29 Subd. 7. Notwithstanding chapter 16B ,or 16C or any law to 92.30 the contrary, the board may use the services of the department 92.31 of administration, information services division, for electronic 92.32 data processing and related services or may contract for all or 92.33 a portion of such services. 92.34 Sec. 90. Minnesota Statutes 1996, section 356A.06, 92.35 subdivision 7, is amended to read: 92.36 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 93.1 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 93.2 authorized by law or bylaws, a covered pension plan not 93.3 described by subdivision 6, paragraph (a), may invest its assets 93.4 only in accordance with this subdivision. 93.5 (b) [SECURITIES GENERALLY.] The covered pension plan has 93.6 the authority to purchase, sell, lend, or exchange the 93.7 securities specified in paragraphs (c) to (g), including puts 93.8 and call options and future contracts traded on a contract 93.9 market regulated by a governmental agency or by a financial 93.10 institution regulated by a governmental agency. These 93.11 securities may be owned as units in commingled trusts that own 93.12 the securities described in paragraphs (c) to (g). 93.13 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 93.14 invest funds in governmental bonds, notes, bills, mortgages, and 93.15 other evidences of indebtedness provided the issue is backed by 93.16 the full faith and credit of the issuer or the issue is rated 93.17 among the top four quality rating categories by a nationally 93.18 recognized rating agency. The obligations in which funds may be 93.19 invested under this paragraph include guaranteed or insured 93.20 issues of (1) the United States, its agencies, its 93.21 instrumentalities, or organizations created and regulated by an 93.22 act of Congress; (2) Canada and its provinces, provided the 93.23 principal and interest is payable in United States dollars; (3) 93.24 the states and their municipalities, political subdivisions, 93.25 agencies, or instrumentalities; (4) the International Bank for 93.26 Reconstruction and Development, the Inter-American Development 93.27 Bank, the Asian Development Bank, the African Development Bank, 93.28 or any other United States government sponsored organization of 93.29 which the United States is a member, provided the principal and 93.30 interest is payable in United States dollars. 93.31 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 93.32 invest funds in bonds, notes, debentures, transportation 93.33 equipment obligations, or any other longer term evidences of 93.34 indebtedness issued or guaranteed by a corporation organized 93.35 under the laws of the United States or any state thereof, or the 93.36 Dominion of Canada or any province thereof if they conform to 94.1 the following provisions: 94.2 (1) the principal and interest of obligations of 94.3 corporations incorporated or organized under the laws of the 94.4 Dominion of Canada or any province thereof must be payable in 94.5 United States dollars; and 94.6 (2) obligations must be rated among the top four quality 94.7 categories by a nationally recognized rating agency. 94.8 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 94.9 invest funds in bankers acceptances, certificates of deposit, 94.10 deposit notes, commercial paper, mortgage participation 94.11 certificates and pools, asset backed securities, repurchase 94.12 agreements and reverse repurchase agreements, guaranteed 94.13 investment contracts, savings accounts, and guaranty fund 94.14 certificates, surplus notes, or debentures of domestic mutual 94.15 insurance companies if they conform to the following provisions: 94.16 (i) bankers acceptances and deposit notes of United States 94.17 banks are limited to those issued by banks rated in the highest 94.18 four quality categories by a nationally recognized rating 94.19 agency; 94.20 (ii) certificates of deposit are limited to those issued by 94.21 (A) United States banks and savings institutions that are rated 94.22 in the highest four quality categories by a nationally 94.23 recognized rating agency or whose certificates of deposit are 94.24 fully insured by federal agencies; or (B) credit unions in 94.25 amounts up to the limit of insurance coverage provided by the 94.26 National Credit Union Administration; 94.27 (iii) commercial paper is limited to those issued by United 94.28 States corporations or their Canadian subsidiaries and rated in 94.29 the highest two quality categories by a nationally recognized 94.30 rating agency; 94.31 (iv) mortgage participation or pass through certificates 94.32 evidencing interests in pools of first mortgages or trust deeds 94.33 on improved real estate located in the United States where the 94.34 loan to value ratio for each loan as calculated in accordance 94.35 with section 61A.28, subdivision 3, does not exceed 80 percent 94.36 for fully amortizable residential properties and in all other 95.1 respects meets the requirements of section 61A.28, subdivision 95.2 3; 95.3 (v) collateral for repurchase agreements and reverse 95.4 repurchase agreements is limited to letters of credit and 95.5 securities authorized in this section; 95.6 (vi) guaranteed investment contracts are limited to those 95.7 issued by insurance companies or banks rated in the top four 95.8 quality categories by a nationally recognized rating agency or 95.9 to alternative guaranteed investment contracts where the 95.10 underlying assets comply with the requirements of this 95.11 subdivision; 95.12 (vii) savings accounts are limited to those fully insured 95.13 by federal agencies; and 95.14 (viii) asset backed securities must be rated in the top 95.15 four quality categories by a nationally recognized rating agency. 95.16 (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 95.17 16C.06 do not apply to certificates of deposit and 95.18 collateralization agreements executed by the covered pension 95.19 plan under clause (1), item (ii). 95.20 (3) In addition to investments authorized by clause (1), 95.21 item (iv), the covered pension plan may purchase from the 95.22 Minnesota housing finance agency all or any part of a pool of 95.23 residential mortgages, not in default, that has previously been 95.24 financed by the issuance of bonds or notes of the agency. The 95.25 covered pension plan may also enter into a commitment with the 95.26 agency, at the time of any issue of bonds or notes, to purchase 95.27 at a specified future date, not exceeding 12 years from the date 95.28 of the issue, the amount of mortgage loans then outstanding and 95.29 not in default that have been made or purchased from the 95.30 proceeds of the bonds or notes. The covered pension plan may 95.31 charge reasonable fees for any such commitment and may agree to 95.32 purchase the mortgage loans at a price sufficient to produce a 95.33 yield to the covered pension plan comparable, in its judgment, 95.34 to the yield available on similar mortgage loans at the date of 95.35 the bonds or notes. The covered pension plan may also enter 95.36 into agreements with the agency for the investment of any 96.1 portion of the funds of the agency. The agreement must cover 96.2 the period of the investment, withdrawal privileges, and any 96.3 guaranteed rate of return. 96.4 (f) [CORPORATE STOCKS.] The covered pension plan may 96.5 invest funds in stocks or convertible issues of any corporation 96.6 organized under the laws of the United States or the states 96.7 thereof, the Dominion of Canada or its provinces, or any 96.8 corporation listed on the New York Stock Exchange or the 96.9 American Stock Exchange, if they conform to the following 96.10 provisions: 96.11 (1) the aggregate value of corporate stock investments, as 96.12 adjusted for realized profits and losses, must not exceed 85 96.13 percent of the market or book value, whichever is less, of a 96.14 fund, less the aggregate value of investments according to 96.15 subdivision 6; 96.16 (2) investments must not exceed five percent of the total 96.17 outstanding shares of any one corporation. 96.18 (g) [OTHER INVESTMENTS.] (1) In addition to the 96.19 investments authorized in paragraphs (b) to (f), and subject to 96.20 the provisions in clause (2), the covered pension plan may 96.21 invest funds in: 96.22 (i) venture capital investment businesses through 96.23 participation in limited partnerships and corporations; 96.24 (ii) real estate ownership interests or loans secured by 96.25 mortgages or deeds of trust through investment in limited 96.26 partnerships, bank sponsored collective funds, trusts, and 96.27 insurance company commingled accounts, including separate 96.28 accounts; 96.29 (iii) regional and mutual funds through bank sponsored 96.30 collective funds and open-end investment companies registered 96.31 under the Federal Investment Company Act of 1940; 96.32 (iv) resource investments through limited partnerships, 96.33 private placements, and corporations; and 96.34 (v) international securities. 96.35 (2) The investments authorized in clause (1) must conform 96.36 to the following provisions: 97.1 (i) the aggregate value of all investments made according 97.2 to clause (1) may not exceed 35 percent of the market value of 97.3 the fund for which the covered pension plan is investing; 97.4 (ii) there must be at least four unrelated owners of the 97.5 investment other than the state board for investments made under 97.6 clause (1), item (i), (ii), (iii), or (iv); 97.7 (iii) covered pension plan participation in an investment 97.8 vehicle is limited to 20 percent thereof for investments made 97.9 under clause (1), item (i), (ii), (iii), or (iv); and 97.10 (iv) covered pension plan participation in a limited 97.11 partnership does not include a general partnership interest or 97.12 other interest involving general liability. The covered pension 97.13 plan may not engage in any activity as a limited partner which 97.14 creates general liability. 97.15 Sec. 91. Minnesota Statutes 1996, section 446A.12, 97.16 subdivision 5, is amended to read: 97.17 Subd. 5. [EXEMPTION.] The notes and bonds of the authority 97.18 are not subject to section 16B.06sections 16C.03, subdivision 97.19 4, and 16C.06. 97.20 Sec. 92. Minnesota Statutes 1996, section 462A.18, 97.21 subdivision 2, is amended to read: 97.22 Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the 97.23 provisions of this section, the agency shall have power to 97.24 contract with the holders of any of its notes or bonds, as to 97.25 the custody, collection, securing, investment, and payment of 97.26 any money of the agency, or any money held in trust or otherwise 97.27 for the payment of notes or bonds, and to carry out such 97.28 contract. Money held in trust or otherwise for the payment of 97.29 notes or bonds or in any way to secure notes or bonds and 97.30 deposits of such money may be secured in the same manner as 97.31 money of the agency, and all banks and trust companies are 97.32 authorized to give such security for such deposits. All money 97.33 so paid to the state treasurer as agent of the agency, from 97.34 whatever source, are appropriated to the agency. The agency's 97.35 notes and bonds are not subject to section 16B.06sections 97.36 16C.03, subdivision 4, and 16C.06. 98.1 Sec. 93. Minnesota Statutes 1996, section 471.345, 98.2 subdivision 8, is amended to read: 98.3 Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 98.4 PERSONS.] For purposes of this subdivision, the following terms 98.5 shall have the meanings herein ascribed to them: 98.6 (a) "Small targeted group business" means businesses 98.7 designated under section 16B.1916C.18. 98.8 (b) "Business entity" means an entity organized for profit, 98.9 including an individual, partnership, corporation, joint 98.10 venture, association, or cooperative. 98.11 Nothing in this section shall be construed to prohibit any 98.12 municipality from adopting a resolution, rule, regulation, or 98.13 ordinance which on an annual basis designates and sets aside for 98.14 awarding to small targeted group businesses a percentage of the 98.15 value of its anticipated total procurement of goods and 98.16 services, including construction, and which uses either a 98.17 negotiated price or bid contract procedure in the awarding of a 98.18 procurement contract under a set-aside program as allowed in 98.19 this subdivision, provided that any award based on a negotiated 98.20 price shall not exceed by more than five percent the 98.21 municipality's estimated price for the goods and services if 98.22 they were purchased on the open market and not under the 98.23 set-aside program. 98.24 Sec. 94. Minnesota Statutes 1996, section 473.142, is 98.25 amended to read: 98.26 473.142 [SMALL BUSINESSES.] 98.27 (a) The metropolitan council and agencies specified in 98.28 section 473.143, subdivision 1, may award up to a six percent 98.29 preference in the amount bid for specified goods or services to 98.30 small targeted group businesses designated under section 16B.1998.31 16C.18. 98.32 (b) The council and each agency specified in section 98.33 473.143, subdivision 1, may designate a purchase of goods or 98.34 services for award only to small targeted group businesses 98.35 designated under section 16B.1916C.18 if the council or agency 98.36 determines that at least three small targeted group businesses 99.1 are likely to bid. 99.2 (c) The council and each agency specified in section 99.3 473.143, subdivision 1, as a condition of awarding a 99.4 construction contract or approving a contract for consultant, 99.5 professional, or technical services, may set goals that require 99.6 the prime contractor to subcontract a portion of the contract to 99.7 small targeted group businesses designated under section 16B.1999.8 16C.18. The council or agency must establish a procedure for 99.9 granting waivers from the subcontracting requirement when 99.10 qualified small targeted group businesses are not reasonably 99.11 available. The council or agency may establish financial 99.12 incentives for prime contractors who exceed the goals for use of 99.13 subcontractors and financial penalties for prime contractors who 99.14 fail to meet goals under this paragraph. The subcontracting 99.15 requirements of this paragraph do not apply to prime contractors 99.16 who are small targeted group businesses. At least 75 percent of 99.17 the value of the subcontracts awarded to small targeted group 99.18 businesses under this paragraph must be performed by the 99.19 business to which the subcontract is awarded or by another small 99.20 targeted group business. 99.21 (d) The council and each agency listed in section 473.143, 99.22 subdivision 1, are encouraged to purchase from small targeted 99.23 group businesses designated under section 16B.1916C.18 when 99.24 making purchases that are not subject to competitive bidding 99.25 procedures. 99.26 (e) The council and each agency may adopt rules to 99.27 implement this section. 99.28 (f) Each council or agency contract must require the prime 99.29 contractor to pay any subcontractor within ten days of the prime 99.30 contractor's receipt of payment from the council or agency for 99.31 undisputed services provided by the subcontractor. The contract 99.32 must require the prime contractor to pay interest of 1-1/2 99.33 percent per month or any part of a month to the subcontractor on 99.34 any undisputed amount not paid on time to the subcontractor. 99.35 The minimum monthly interest penalty payment for an unpaid 99.36 balance of $100 or more is $10. For an unpaid balance of less 100.1 than $100, the prime contractor shall pay the actual penalty due 100.2 to the subcontractor. A subcontractor who prevails in a civil 100.3 action to collect interest penalties from a prime contractor 100.4 must be awarded its costs and disbursements, including attorney 100.5 fees, incurred in bringing the action. 100.6 (g) This section does not apply to procurement financed in 100.7 whole or in part with federal funds if the procurement is 100.8 subject to federal disadvantaged, minority, or women business 100.9 enterprise regulations. The council and each agency shall 100.10 report to the commissioner of administration on compliance with 100.11 this section. The information must be reported at the time and 100.12 in the manner requested by the commissioner. 100.13 Sec. 95. Minnesota Statutes 1996, section 473.556, 100.14 subdivision 14, is amended to read: 100.15 Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its 100.16 powers to contract for the purchase of services, materials, 100.17 supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 100.18 10, the commission shall designate and set aside each fiscal 100.19 year for awarding to small businesses approximately ten percent 100.20 of the value of anticipated contracts and subcontracts of that 100.21 kind for that year, in the manner required of the commissioner 100.22 of administration for state procurement contracts pursuant to 100.23 sections 16B.19 to 16B.2216C.18 to 16C.21. The commission 100.24 shall follow the rules promulgated by the commissioner of 100.25 administration pursuant to section 16B.2216C.21, and shall 100.26 submit reports of the kinds required of the commissioners of 100.27 administration and economic development by section 16B.2116C.20. 100.28 Sec. 96. Minnesota Statutes 1996, section 480.09, 100.29 subdivision 1, is amended to read: 100.30 Subdivision 1. The state library shall be maintained in 100.31 the capitol and shall be under the supervision of the justices 100.32 of the supreme court. Notwithstanding chapter 16B16C or any 100.33 other act inconsistent herewith or acts amendatory thereof or 100.34 supplementary thereto, they shall direct the purchases of books, 100.35 pamphlets, and documents therefor and the sales and exchanges 100.36 therefrom upon such terms and conditions as they may deem just 101.1 and proper. They may authorize the transfer of books and 101.2 documents to the University of Minnesota or any department 101.3 thereof, or to any state agency. They shall adopt rules for the 101.4 government of the library and the management of its affairs, and 101.5 prescribe penalties for the violation thereof. 101.6 Sec. 97. Minnesota Statutes 1996, section 626.90, 101.7 subdivision 2, is amended to read: 101.8 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the 101.9 powers of a law enforcement agency, as defined in section 101.10 626.84, subdivision 1, paragraph (h), if all of the requirements 101.11 of clauses (1) to (4) are met: 101.12 (1) the band agrees to be subject to liability for its 101.13 torts and those of its officers, employees, and agents acting 101.14 within the scope of their employment or duties arising out of a 101.15 law enforcement agency function conferred by this section, to 101.16 the same extent as a municipality under chapter 466, and the 101.17 band further agrees, notwithstanding section 16B.0616C.06, 101.18 subdivision 67, to waive its sovereign immunity for purposes of 101.19 claims of this liability; 101.20 (2) the band files with the board of peace officer 101.21 standards and training a bond or certificate of insurance for 101.22 liability coverage for the maximum amounts set forth in section 101.23 466.04; 101.24 (3) the band files with the board of peace officer 101.25 standards and training a certificate of insurance for liability 101.26 of its law enforcement officers, employees, and agents for 101.27 lawsuits under the United States Constitution; and 101.28 (4) the band agrees to be subject to section 13.82 and any 101.29 other laws of the state relating to data practices of law 101.30 enforcement agencies. 101.31 (b) The band shall enter into mutual aid/cooperative 101.32 agreements with the Mille Lacs county sheriff under section 101.33 471.59 to define and regulate the provision of law enforcement 101.34 services under this section. The agreements must define the 101.35 trust property involved in the joint powers agreement. 101.36 (c) The band shall have concurrent jurisdictional authority 102.1 under this section with the Mille Lacs county sheriff's 102.2 department only if the requirements of paragraph (a) are met and 102.3 under the following circumstances: 102.4 (1) over all persons in the geographical boundaries of the 102.5 property held by the United States in trust for the Mille Lacs 102.6 band or the Minnesota Chippewa tribe; 102.7 (2) over all Minnesota Chippewa tribal members within the 102.8 boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 102.9 Mille Lacs county, Minnesota; and 102.10 (3) concurrent jurisdiction over any person who commits or 102.11 attempts to commit a crime in the presence of an appointed band 102.12 peace officer within the boundaries of the Treaty of February 102.13 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 102.14 Sec. 98. Minnesota Statutes 1997 Supplement, section 102.15 626.91, subdivision 2, is amended to read: 102.16 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has 102.17 the powers of a law enforcement agency, as defined in section 102.18 626.84, subdivision 1, paragraph (h), if all of the requirements 102.19 of clauses (1) to (4) are met: 102.20 (1) the community agrees to be subject to liability for its 102.21 torts and those of its officers, employees, and agents acting 102.22 within the scope of their employment or duties arising out of 102.23 the law enforcement agency powers conferred by this section to 102.24 the same extent as a municipality under chapter 466, and the 102.25 community further agrees, notwithstanding section 16B.0616C.06, 102.26 subdivision 67, to waive its sovereign immunity with respect to 102.27 claims arising from this liability; 102.28 (2) the community files with the board of peace officer 102.29 standards and training a bond or certificate of insurance for 102.30 liability coverage for the maximum amounts set forth in section 102.31 466.04; 102.32 (3) the community files with the board of peace officer 102.33 standards and training a certificate of insurance for liability 102.34 of its law enforcement officers, employees, and agents for 102.35 lawsuits under the United States Constitution; and 102.36 (4) the community agrees to be subject to section 13.82 and 103.1 any other laws of the state relating to data practices of law 103.2 enforcement agencies. 103.3 (b) The community shall enter into an agreement under 103.4 section 471.59 with the Redwood county sheriff to define and 103.5 regulate the provision of law enforcement services under this 103.6 section and to provide for mutual aid and cooperation. The 103.7 agreement must identify and describe the trust property involved 103.8 in the agreement. For purposes of entering into this agreement, 103.9 the community shall be considered a "governmental unit" as that 103.10 term is defined in section 471.59, subdivision 1. 103.11 Sec. 99. [EFFECTIVE DATE.] 103.12 This article is effective July 1, 1998, except that it does 103.13 not apply to any part of the procurement process that results 103.14 from a solicitation dated before July 1, 1998.