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             16B.04, subdivisions 1 and 2; 16B.19, subdivisions 1a, 
  1.5             2a, 2b, and 2c; 16B.20, subdivision 1; 16B.226; 
  1.6             16B.28; 16B.29; 16B.482; and 16B.89; proposing coding 
  1.7             for new law in Minnesota Statutes, chapters 16B; and 
  1.8             16C; repealing Minnesota Statutes 1996, sections 
  1.9             16B.01, subdivisions 4 and 5; 16B.06; 16B.07; 16B.08; 
  1.10            16B.09; 16B.101; 16B.102; 16B.103; 16B.121; 16B.123; 
  1.11            16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 
  1.12            16B.175; 16B.18; 16B.181; and 16B.185. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1996, section 16B.04, 
  1.15  subdivision 1, is amended to read: 
  1.16     Subdivision 1.  [RULEMAKING AUTHORITY.] Subject to chapter 
  1.17  14, the commissioner may adopt, amend, and rescind repeal rules 
  1.18  relating to any purpose, responsibility, or authorization in 
  1.19  this chapter.  Rules adopted must comply with any provisions in 
  1.20  this chapter which specify or restrict the adoption of 
  1.21  particular rules.  
  1.22     Sec. 2.  Minnesota Statutes 1996, section 16B.04, 
  1.23  subdivision 2, is amended to read: 
  1.24     Subd. 2.  [POWERS AND DUTIES, GENERAL.] Subject to other 
  1.25  provisions of this chapter, the commissioner is authorized to:  
  1.26     (1) supervise, control, review, and approve all state 
  1.27  contracts and purchasing provide and manage a central 
  1.28  distribution center for surplus property as defined in section 
  1.29  16B.28 and form handling and for use as a warehouse facility; 
  2.1      (2) provide agencies with supplies and equipment and 
  2.2   operate all central store or supply rooms serving more than one 
  2.3   agency provide and manage a central distribution office supply 
  2.4   center; 
  2.5      (3) approve all computer plans and contracts, and oversee 
  2.6   the state's data processing system; 
  2.7      (4) investigate and study the management and organization 
  2.8   of agencies, and reorganize them when necessary to ensure their 
  2.9   effective and efficient operation; 
  2.10     (5) manage and control state property, real and personal; 
  2.11     (6) maintain and operate all state buildings including the 
  2.12  state capitol building and grounds; 
  2.13     (7) supervise, control, review, and approve all capital 
  2.14  improvements to state buildings and the capitol building and 
  2.15  grounds; 
  2.16     (8) provide central duplicating, printing, and mail 
  2.17  facilities; 
  2.18     (9) oversee publication of official documents and provide 
  2.19  for their sale; 
  2.20     (10) manage and operate parking facilities for state 
  2.21  employees and a central motor pool for travel on state business; 
  2.22     (11) establish and administer a state building code; and 
  2.23     (12) provide rental space within the capitol complex for a 
  2.24  private day care center for children of state employees.  The 
  2.25  commissioner shall contract for services as provided in this 
  2.26  chapter.  The commissioner shall report back to the legislature 
  2.27  by October 1, 1984, with the recommendation to implement the 
  2.28  private day care operation.  
  2.29     Sec. 3.  Minnesota Statutes 1996, section 16B.19, 
  2.30  subdivision 1a, is amended to read: 
  2.31     Subd. 1a.  [SMALL BUSINESS.] The commissioner shall adopt 
  2.32  rules defining "small business" for purposes of sections 16B.19 
  2.33  to 16B.22, 137.31, 137.35, 161.321, and 473.142.  The definition 
  2.34  must include only businesses with their principal place of 
  2.35  business in Minnesota.  The definition must establish different 
  2.36  size standards for various types of businesses.  In establishing 
  3.1   these standards, the commissioner must consider the differences 
  3.2   among industries caused by the size of the market for goods or 
  3.3   services and the relative size and market share of the 
  3.4   competitors operating in those markets.  
  3.5      The definition of "small business" in section 645.445 
  3.6   applies to sections 16B.19 to 16B.22, 137.31, 137.35, 161.321, 
  3.7   and 473.142, until the commissioner adopts rules with a new 
  3.8   definition.  However, only small businesses with a principal 
  3.9   place of business in Minnesota are included for purposes of 
  3.10  these sections. 
  3.11     Sec. 4.  Minnesota Statutes 1996, section 16B.19, 
  3.12  subdivision 2a, is amended to read: 
  3.13     Subd. 2a.  [TARGETED GROUP PURCHASING.] The commissioner 
  3.14  shall establish a program for purchasing goods and services from 
  3.15  targeted group businesses, as designated in subdivision 2b.  The 
  3.16  purpose of the program is to remedy the effects of past 
  3.17  discrimination against members of targeted groups.  In 
  3.18  furtherance of this purpose, the commissioner shall attempt to 
  3.19  assure that for each category of goods or services purchased by 
  3.20  the state, the percentage of purchasing from each type of 
  3.21  targeted group business is proportional to the representation of 
  3.22  that targeted group business among all businesses in the state 
  3.23  in the purchasing category purchases from targeted group 
  3.24  businesses reflect a fair and equitable representation of all 
  3.25  the state's purchasing. 
  3.26     Sec. 5.  Minnesota Statutes 1996, section 16B.19, 
  3.27  subdivision 2b, is amended to read: 
  3.28     Subd. 2b.  [DESIGNATION OF TARGETED GROUPS.] (a) The 
  3.29  commissioner of administration shall periodically designate 
  3.30  businesses that are majority owned and operated by women, 
  3.31  persons with a substantial physical disability, or specific 
  3.32  minorities as targeted group businesses within purchasing 
  3.33  categories the commissioner determines.  A group must be 
  3.34  targeted within a purchasing category if the commissioner 
  3.35  determines there is a statistical disparity between the 
  3.36  percentage of purchasing from businesses owned by group members 
  4.1   and the representation of businesses owned by group members 
  4.2   among all businesses in the state in the purchasing category.  
  4.3   The commissioner must review public agencies' purchasing from 
  4.4   businesses owned by women, persons with a substantial physical 
  4.5   disability, and minorities at least once every two years.  The 
  4.6   commissioner must review the representation of businesses owned 
  4.7   by these groups among all businesses in the state at least once 
  4.8   every five years. 
  4.9      (b) In addition to designations under paragraph (a), an 
  4.10  individual business may be included as a targeted group business 
  4.11  If the commissioner determines that inclusion of an individual 
  4.12  business is necessary to remedy discrimination against the owner 
  4.13  based on race, gender, or disability in attempting to operate a 
  4.14  business that would provide goods or service to public agencies. 
  4.15     (c) The designations of purchasing categories and 
  4.16  businesses under paragraphs (a) and (b) are not rules for 
  4.17  purposes of chapter 14, and are not subject to rulemaking 
  4.18  procedures of that chapter. 
  4.19     Sec. 6.  Minnesota Statutes 1996, section 16B.19, 
  4.20  subdivision 2c, is amended to read: 
  4.21     Subd. 2c.  [PURCHASING METHODS.] (a) The commissioner may 
  4.22  award up to a six percent preference in the amount bid for 
  4.23  specified goods or services to small targeted group 
  4.24  businesses if the commissioner determines there is a statistical 
  4.25  disparity between the percentage of purchasing from businesses 
  4.26  owned by group members and the representation of businesses 
  4.27  owned by group members among all businesses in the state in the 
  4.28  purchasing category. 
  4.29     (b) The commissioner may designate a purchase of goods or 
  4.30  services for award only to small targeted group businesses, if 
  4.31  the commission commissioner determines that at least three small 
  4.32  targeted group businesses are likely to bid. 
  4.33     (c) The commissioner, as a condition of awarding a 
  4.34  construction contract or approving a contract for consultant, 
  4.35  professional, or technical services, may set goals that require 
  4.36  the prime contractor to subcontract a portion of the contract to 
  5.1   small targeted group businesses.  The commissioner must 
  5.2   establish a procedure for granting waivers from the 
  5.3   subcontracting requirement when qualified small targeted group 
  5.4   businesses are not reasonably available.  The commissioner may 
  5.5   establish financial incentives for prime contractors who exceed 
  5.6   the goals for use of subcontractors and financial penalties for 
  5.7   prime contractors who fail to meet goals under this paragraph.  
  5.8   The subcontracting requirements of this paragraph do not apply 
  5.9   to prime contractors who are small targeted group businesses. 
  5.10     Sec. 7.  Minnesota Statutes 1996, section 16B.20, 
  5.11  subdivision 1, is amended to read: 
  5.12     Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
  5.13  commissioners of administration and trade and economic 
  5.14  development shall publicize the provisions of the purchasing 
  5.15  programs in sections 16B.19 to 16B.22, attempt to locate small 
  5.16  businesses able to perform under the programs, and encourage 
  5.17  participation through education, technical assistance, advocacy, 
  5.18  mentoring, and other means.  When the commissioner of 
  5.19  administration determines that a small business is unable to 
  5.20  perform under a program established in sections 16B.19 to 
  5.21  16B.22, the commissioner shall inform the commissioner of trade 
  5.22  and economic development who shall assist the small business in 
  5.23  attempting to remedy the causes of the inability to perform a 
  5.24  set-aside award.  In assisting the small business, the 
  5.25  commissioner of trade and economic development in cooperation 
  5.26  with the commissioner of administration shall use management or 
  5.27  financial assistance programs made available by or through the 
  5.28  department of trade and economic development, other state or 
  5.29  governmental agencies, or private sources.  
  5.30     Sec. 8.  Minnesota Statutes 1996, section 16B.226, is 
  5.31  amended to read: 
  5.32     16B.226 [CERTIFICATION.] 
  5.33     A business that is certified by the commissioner of 
  5.34  administration as a small business, small targeted group 
  5.35  business or a business located in an economically disadvantaged 
  5.36  area is eligible to participate under the requirements of 
  6.1   sections 137.31, 161.321, and, if certified as a small targeted 
  6.2   group business, under section 473.142 without further 
  6.3   certification by the contracting agency.  Personnel in state 
  6.4   agencies currently involved in certifying small businesses shall 
  6.5   be reduced accordingly. 
  6.6      Sec. 9.  Minnesota Statutes 1996, section 16B.28, is 
  6.7   amended to read: 
  6.8      16B.28 [MATERIALS DISTRIBUTION.] 
  6.9      Subdivision 1.  [DEFINITIONS.] For purposes of this section 
  6.10  the following terms have the meanings given them:  
  6.11     (a) "Surplus property" means obsolete or unused state or 
  6.12  federal commodities, equipment, materials, supplies, books, 
  6.13  printed matter, and other property made available by a 
  6.14  governmental unit or nonprofit organization to another 
  6.15  governmental unit or nonprofit organization.  
  6.16     (b) "Governmental unit or nonprofit organization" means a 
  6.17  governmental unit as defined in section 471.59, subdivision 1, 
  6.18  an Indian tribal government, and any nonprofit and tax-exempt 
  6.19  medical institution, hospital, clinic, health center, school, 
  6.20  school system, college, university, or other institution 
  6.21  organized and existing for any purpose authorized by federal law 
  6.22  to accept surplus federal property.  
  6.23     Subd. 2.  [AUTHORIZATION.] (a) The commissioner is the 
  6.24  state agency designated to transfer, purchase, accept, sell, or 
  6.25  dispose of federal surplus property for the state and for the 
  6.26  benefit of any other governmental unit or nonprofit organization 
  6.27  for any purpose authorized by state and federal law and in 
  6.28  accordance with state and federal rules and regulations.  Any 
  6.29  governmental unit or nonprofit organization may designate the 
  6.30  commissioner to purchase or accept surplus property for it upon 
  6.31  mutually agreeable terms and conditions.  The commissioner may 
  6.32  acquire, accept, warehouse, and distribute surplus 
  6.33  property until it is needed and any expenses incurred in 
  6.34  connection with any of these acts shall be paid from the 
  6.35  materials distribution revolving fund and charge a fee to cover 
  6.36  any expenses incurred in connection with any of these acts.  
  7.1      (b) To dispose of surplus property or other property that 
  7.2   is obsolete or unused that belongs to the state or any other 
  7.3   governmental unit or nonprofit organization, the commissioner 
  7.4   may transfer or sell it to a governmental unit or nonprofit 
  7.5   organization or sell it to any other person.  Federal surplus 
  7.6   property that has been transferred to the state for donation to 
  7.7   public agencies and nonprofit organizations must be transferred 
  7.8   or sold in accordance with the plan developed under paragraph 
  7.9   (d) (c).  Expenses incurred in connection with the acquisition, 
  7.10  warehousing, distribution, and disposal of federal surplus 
  7.11  property or other property that is obsolete or unused must be 
  7.12  paid from the materials distribution surplus services revolving 
  7.13  fund.  If the commissioner sells the property, the proceeds of 
  7.14  the sale, minus any expenses of providing the service set by the 
  7.15  commissioner, are appropriated to the governmental unit or 
  7.16  nonprofit organization for whose account the sale was made, to 
  7.17  be used and expended by the organization for the purposes it 
  7.18  determines. 
  7.19     (c) The commissioner shall develop a detailed plan for 
  7.20  disposal of donated federal property in conformance with state 
  7.21  law and federal regulations.  The plan must be submitted to the 
  7.22  governor for certification and submission to the federal 
  7.23  administrator of general services. 
  7.24     (d) The commissioner may centrally acquire, warehouse, and 
  7.25  distribute supplies, materials, and equipment for governmental 
  7.26  units or nonprofit organizations.  Expenses incurred in 
  7.27  connection with acquiring, warehousing, and distributing must be 
  7.28  paid from the materials distribution surplus services revolving 
  7.29  fund.  
  7.30     (d) The commissioner shall develop a detailed plan for 
  7.31  disposal of donated federal property in conformance with state 
  7.32  law and federal regulations.  The plan must be submitted to the 
  7.33  governor for certification and submission to the federal 
  7.34  administrator of general services. 
  7.35     Subd. 3.  [DEPOSIT OF RECEIPTS.] (a)  [CREATION.] 
  7.36  The materials distribution surplus services revolving fund is a 
  8.1   separate fund in the state treasury.  All money resulting from 
  8.2   the acquisition, acceptance, warehousing, distribution, and 
  8.3   public sale of surplus property, must be deposited in the fund.  
  8.4   All money resulting from the sale of centrally acquired, 
  8.5   warehoused, and distributed supplies, materials, and equipment 
  8.6   must be deposited in the fund.  Money paid into the materials 
  8.7   distribution surplus services revolving fund is appropriated to 
  8.8   the commissioner for the purposes of the programs and services 
  8.9   referred to in this section.  
  8.10     (b)  [TRANSFER OR SALE TO STATE AGENCY.] When the state or 
  8.11  an agency operating under a legislative appropriation obtains 
  8.12  surplus property from the commissioner, the commissioner of 
  8.13  finance must, at the commissioner's request, transfer the cost 
  8.14  of the surplus property, including any expenses of acquiring, 
  8.15  accepting, warehousing, and distributing the surplus property, 
  8.16  from the appropriation of the state agency receiving the surplus 
  8.17  property to the materials distribution surplus services 
  8.18  revolving fund.  The determination of the commissioner is final 
  8.19  as to the cost of the surplus property to the state agency 
  8.20  receiving the property.  
  8.21     (c)  [TRANSFER OR SALE TO OTHER GOVERNMENTAL UNITS OR 
  8.22  NONPROFIT ORGANIZATIONS.] When any governmental unit or 
  8.23  nonprofit organization other than a state agency receives 
  8.24  surplus property, supplies, materials, or equipment from the 
  8.25  commissioner, the governmental unit or nonprofit organization 
  8.26  must reimburse the materials distribution surplus services 
  8.27  revolving fund for the cost of the property, including the 
  8.28  expenses of acquiring, accepting, warehousing, and distributing 
  8.29  it, in an amount the commissioner sets.  The commissioner may, 
  8.30  however, require the governmental unit or nonprofit organization 
  8.31  to deposit in advance in the materials distribution surplus 
  8.32  services revolving fund the cost of the surplus property, 
  8.33  supplies, materials, and equipment upon mutually agreeable terms 
  8.34  and conditions.  
  8.35     (d)  [TRANSFER OR SALE TO ANY PERSON.] The commissioner may 
  8.36  charge a fee to political subdivisions and nonprofit 
  9.1   organizations to establish their eligibility for receiving the 
  9.2   property and to pay for costs of storage and 
  9.3   distribution transfer or sell state surplus property to any 
  9.4   person at public auction at prepriced or by sealed bid process 
  9.5   in accordance with applicable state law.  
  9.6      Sec. 10.  Minnesota Statutes 1996, section 16B.29, is 
  9.7   amended to read: 
  9.8      16B.29 [STATE SURPLUS PROPERTY; DISPOSAL.] 
  9.9      The commissioner may do any of the following to dispose of 
  9.10  supplies, materials, and equipment which are surplus, obsolete, 
  9.11  or unused state surplus property:  (1) transfer it to or between 
  9.12  state agencies; (2) transfer it to local government units in 
  9.13  Minnesota and other institutions and organizations a 
  9.14  governmental unit or nonprofit organization in Minnesota 
  9.15  authorized by federal law to accept surplus property and charge 
  9.16  a fee to cover expenses incurred by the commissioner in making 
  9.17  the property available to these units; or (3) sell it and charge 
  9.18  a fee to cover expenses incurred by the commissioner in the 
  9.19  disposal of the surplus property.  The commissioner must make 
  9.20  proper adjustments in the accounts and appropriations of the 
  9.21  agencies concerned.  When the commissioner sells the supplies, 
  9.22  materials and equipment, The proceeds of the sale less the fee 
  9.23  are appropriated to the agency for whose account the sale was 
  9.24  made, to be used and expended by the that agency to purchase 
  9.25  similar needed supplies, materials, and equipment state property.
  9.26     Sec. 11.  Minnesota Statutes 1996, section 16B.482, is 
  9.27  amended to read: 
  9.28     16B.482 [REIMBURSEMENT FOR MATERIALS AND SERVICES.] 
  9.29     The commissioner of administration may provide 
  9.30  materials goods and services under this chapter to state 
  9.31  legislative and judicial branch agencies, political 
  9.32  subdivisions, the Minnesota state colleges and universities, the 
  9.33  University of Minnesota, and federal government 
  9.34  agencies.  Executive, legislative, and judicial branch agencies, 
  9.35  political subdivisions, the Minnesota state colleges and 
  9.36  universities, the University of Minnesota, and federal 
 10.1   government agencies purchasing materials goods and services from 
 10.2   the commissioner of administration shall reimburse the surplus 
 10.3   services, central stores, general services, intertechnologies, 
 10.4   and cooperative purchasing revolving funds for cost. 
 10.5      Sec. 12.  Minnesota Statutes 1996, section 16B.89, is 
 10.6   amended to read: 
 10.7      16B.89 [ACQUISITION OF SURPLUS FEDERAL PROPERTY HOMELESS 
 10.8   VETERANS HOUSING.] 
 10.9      The commissioner of administration, after consultation with 
 10.10  one or more nonprofit organizations with an interest in 
 10.11  providing housing for homeless veterans and their families, may 
 10.12  acquire property from the United States government that is 
 10.13  designated by the General Services Administration as surplus 
 10.14  property.  The commissioner of administration may lease the 
 10.15  property to a qualified nonprofit organization qualified by the 
 10.16  General Services Administration that agrees to develop or 
 10.17  rehabilitate the property for the purpose of providing suitable 
 10.18  housing for veterans and their families.  The lease agreement 
 10.19  with the nonprofit organization may require that the property be 
 10.20  developed for use as housing for homeless and displaced veterans 
 10.21  and their families and for veterans and their families who lose 
 10.22  their housing.  
 10.23     Sec. 13.  [16B.90] [GIFTS.] 
 10.24     The commissioner is authorized to solicit and accept 
 10.25  donated money and fixed and consumable property for the benefit 
 10.26  of the state and any other governmental unit or nonprofit 
 10.27  organization for any purpose authorized by state and federal law 
 10.28  and in accordance with federal regulations and rules.  The gift 
 10.29  acceptance procedures of sections 7.09 to 7.12 do not apply to 
 10.30  this section. 
 10.31     Sec. 14.  [16C.05] [COMMISSIONER'S AUTHORITY FOR STATE 
 10.32  CONTRACTS.] 
 10.33     (a) The commissioner of administration shall provide for 
 10.34  the purchase of, contracting for, and providing of supplies, 
 10.35  materials, services, utilities, equipment, printing, and all 
 10.36  other items needed by state agencies which have not otherwise 
 11.1   been expressly provided for by law.  The commissioner may use 
 11.2   competitive bids, request for proposals, negotiation, or any 
 11.3   other method of procurement that the commissioner deems 
 11.4   appropriate. 
 11.5      (b) The commissioner shall make all decisions concerning 
 11.6   the solicitation, award, amendment, cancellation, and appeal of 
 11.7   all state purchasing activities, which have not otherwise been 
 11.8   expressly provided for by law. 
 11.9      (c) The commissioner may delegate purchasing authority to 
 11.10  other state agencies within dollar limitations and for 
 11.11  designated types of purchases.  The commissioner may withdraw 
 11.12  delegated authority upon a finding that a state agency did not 
 11.13  comply with the commissioner's purchasing directives. 
 11.14     (d) The commissioner may enter into lease purchases or 
 11.15  installment purchases for periods not exceeding the anticipated 
 11.16  useful life of the items purchased unless otherwise prohibited 
 11.17  by law. 
 11.18     (e) The commissioner shall issue rules, policies, 
 11.19  procedures, and standards of performance applicable to all 
 11.20  purchasing activities. 
 11.21     (f) The commissioner may enter into a cooperative 
 11.22  purchasing agreement with one or more other states or 
 11.23  governmental units, as defined in section 471.59, subdivision 1, 
 11.24  for the provision of all items authorized pursuant to paragraph 
 11.25  (a). 
 11.26     (g) The commissioner may charge a fee to cover costs of 
 11.27  acquiring all items authorized pursuant to paragraph (a).  The 
 11.28  fees collected are appropriated to the commissioner to 
 11.29  administer the programs covered under this section. 
 11.30     Sec. 15.  [REPEALER.] 
 11.31     Minnesota Statutes 1996, sections 16B.01, subdivisions 4 
 11.32  and 5; 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 
 11.33  16B.103; 16B.121; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 
 11.34  16B.167; 16B.17; 16B.175; 16B.18; 16B.181; and 16B.185, are 
 11.35  repealed.