1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to state government; modifying the state 1.3 procurement process; authorizing rulemaking; making 1.4 various conforming amendments; appropriating money; 1.5 amending Minnesota Statutes 1996, sections 3.225, 1.6 subdivision 2; 3.732, subdivision 6; 3.922, 1.7 subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 1.8 11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 1.9 15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 1.10 17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, 1.11 subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 1.12 84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, 1.13 subdivision 3; 116.03, subdivision 2; 116J.035, 1.14 subdivision 1; 116J.402; 116J.58, subdivision 2; 1.15 116J.68, subdivision 2; 116J.966, subdivision 1; 1.16 124.14, subdivision 1; 126.151, subdivision 2; 1.17 129C.10, subdivision 7; 136A.06; 136A.16, subdivision 1.18 1; 136A.29, subdivision 6; 136F.23; 136F.56, 1.19 subdivision 5; 136F.581, subdivision 3; 136F.66; 1.20 136F.72, subdivision 3; 136F.96; 137.35, subdivisions 1.21 1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, 1.22 subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 1.23 7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 1.24 1; 216C.02, subdivision 1; 237.51, subdivision 5a; 1.25 241.0221, subdivision 6; 241.27, subdivision 2; 1.26 246.36; 246.57, subdivisions 1 and 6; 256B.031, 1.27 subdivision 1; 256B.04, subdivisions 14 and 15; 1.28 298.2211, subdivision 4; 349A.06, subdivision 1; 1.29 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 1.30 354.06, subdivision 2a; 354.07, subdivision 7; 1.31 356A.06, subdivision 7; 446A.12, subdivision 5; 1.32 462A.18, subdivision 2; 471.345, subdivision 8; 1.33 473.142; 473.556, subdivision 14; 480.09, subdivision 1.34 1; and 626.90, subdivision 2; Minnesota Statutes 1997 1.35 Supplement, sections 3.225, subdivision 1; 16A.15, 1.36 subdivision 3; 16B.465, subdivision 7; 16E.07, 1.37 subdivision 9; 17.03, subdivision 12; 41D.03, 1.38 subdivision 7; 61B.21, subdivision 1; 85A.02, 1.39 subdivision 5b; 121.1113, subdivision 2; 136A.40; 1.40 138.35, subdivision 1b; 179A.03, subdivision 14; 1.41 216D.03, subdivision 2; 241.277, subdivision 2; 1.42 256B.19, subdivision 2a; 256D.03, subdivision 6; 1.43 353.03, subdivision 3a; 363.073, subdivision 1; and 1.44 626.91, subdivision 2; proposing coding for new law in 1.45 Minnesota Statutes, chapters 16C; and 174; repealing 1.46 Minnesota Statutes 1996, sections 16B.06; 16B.07; 2.1 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 2.2 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 2.3 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 2.4 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 2.5 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; 2.6 Minnesota Statutes 1997 Supplement, sections 16B.18, 2.7 subdivision 3; 16B.20, subdivision 2; and 16B.482. 2.8 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.9 ARTICLE 1 2.10 PROCUREMENT REFORM 2.11 Section 1. Minnesota Statutes 1996, section 15.054, is 2.12 amended to read: 2.13 15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM 2.14 GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.] 2.15 No officer or employee of the state or any of its political 2.16 subdivisions shall sell or procure for sale or possess or 2.17 control for sale to any other officer or employee of the state 2.18 or
thesubdivision, as appropriate, any property or materials 2.19 owned by the state or subdivision except pursuant to conditions 2.20 provided in this section. Property or materials owned by the 2.21 state or a subdivision, except real property, and not needed for 2.22 public purposes, may be sold to an employee of the state or the2.23 subdivision after reasonable public notice at a public auction 2.24 or by sealed bid if the employee is the highest responsible2.25 bidder andresponse, if the employee is not directly involved in 2.26 the auction or process pertaining to the administration and 2.27 collection of sealed bid processresponses. Requirements for 2.28 reasonable public notice may be prescribed by other law or 2.29 ordinance so long as at least one week's published or posted2.30 notice is specified. A stateAn employee of the state or a 2.31 political subdivision may purchase no more than one motor 2.32 vehicle from the state in any 12-month period. A person 2.33 violating the provisions of this section is guilty of a 2.34 misdemeanor. This section shall not apply to the sale of 2.35 property or materials acquired or produced by the state or 2.36 subdivision for sale to the general public in the ordinary 2.37 course of business. Nothing in this section shall prohibit an 2.38 employee of the state or a political subdivision from selling or 2.39 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 or contracts pursuant to section 16B.09, 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 state 5.7 agencies 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. [COMMISSIONER.] "Commissioner" means the 5.22 commissioner of administration. 5.23 Subd. 5. [CONTRACT.] "Contract" means any written 5.24 instrument or electronic document containing the elements of 5.25 offer, acceptance, and consideration. 5.26 Subd. 6. [FORMAL SOLICITATION.] "Formal solicitation" 5.27 means a solicitation which requires a sealed response. 5.28 Subd. 7. [GOODS.] "Goods" means all types of personal 5.29 property including commodities, materials, supplies, and 5.30 equipment. 5.31 Subd. 8. [INFORMAL SOLICITATION.] "Informal solicitation" 5.32 means a solicitation which does not require a sealed response. 5.33 Subd. 9. [LEASE.] "Lease" means a contract conveying from 5.34 one entity to another the use of real or personal property for a 5.35 designated period of time in return for payment or other 5.36 consideration. 6.1 Subd. 10. [REQUEST FOR BID OR RFB.] "Request for bid" or 6.2 "RFB" means a solicitation in which the terms, conditions, and 6.3 specifications are described and responses are not subject to 6.4 negotiation. 6.5 Subd. 11. [REQUEST FOR PROPOSAL OR RFP.] "Request for 6.6 proposal" or "RFP" means a solicitation in which it is not 6.7 practicable or advantageous to set forth all the actual, 6.8 detailed requirements at the time of solicitation and responses 6.9 are subject to negotiation. 6.10 Subd. 12. [RESIDENT VENDOR.] "Resident vendor" means a 6.11 person, firm, or corporation authorized to conduct business in 6.12 the state of Minnesota on the date a solicitation for a contract 6.13 is first advertised or announced. It includes a foreign 6.14 corporation duly authorized to engage in business in Minnesota. 6.15 Subd. 13. [RESPONSE.] "Response" means the offer received 6.16 from a vendor in response to a solicitation. A response 6.17 includes submissions commonly referred to as "offers," "bids," 6.18 "quotes," or "proposals." 6.19 Subd. 14. [SEALED.] "Sealed" means a method determined by 6.20 the commissioner to prevent the contents being revealed or known 6.21 before the deadline for submission of responses. 6.22 Subd. 15. [SERVICE CONTRACT.] "Service contract" means a 6.23 contract for any nonprofessional or technical services. 6.24 Subd. 16. [SERVICES.] "Services" means, unless otherwise 6.25 indicated, both professional or technical services and service 6.26 performed under a service contract. 6.27 Subd. 17. [SINGLE SOURCE.] "Single source" means an 6.28 acquisition where, after a search, only one supplier is 6.29 determined to be reasonably available for the required product, 6.30 service, or construction item. 6.31 Subd. 18. [SOLICITATION.] "Solicitation" means the process 6.32 used to communicate procurement requirements and to request 6.33 responses from interested vendors. A solicitation may be, but 6.34 is not limited to, a request for bid and request for proposal. 6.35 Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 6.36 DUTIES.] 7.1 Subdivision 1. [SCOPE.] The commissioner's authority in 7.2 this section applies to an agency and is subject to other 7.3 provisions of this chapter and chapter 16B. Unless otherwise 7.4 provided, the provisions in this chapter and chapter 16B do not 7.5 apply to the Minnesota state colleges and universities. 7.6 Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, 7.7 the commissioner may adopt, amend, and repeal rules relating to 7.8 any purpose, responsibility, or authorization in this chapter. 7.9 The rules must comply with any provisions in this chapter that 7.10 specify or restrict the adoption of particular rules. 7.11 Subd. 3. [ACQUISITION AUTHORITY.] The commissioner shall 7.12 acquire all goods, services, and utilities needed by agencies. 7.13 The commissioner shall acquire goods, services, and utilities by 7.14 any method the commissioner deems appropriate, unless another 7.15 section of law requires a particular method of acquisition be 7.16 utilized. The commissioner shall make all decisions regarding 7.17 acquisition activities. The determination of the acquisition 7.18 method and all decisions involved in the acquisition process, 7.19 unless otherwise provided for by law, shall be based on best 7.20 value which includes an evaluation of price and may include 7.21 other considerations including, but not limited to, 7.22 environmental considerations, quality, and vendor performance. 7.23 The duties set forth in this subdivision are subject to 7.24 delegation pursuant to this section. 7.25 Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall 7.26 conduct all contracting by, for, and between agencies and 7.27 perform all contract management and review functions for 7.28 contracts, except those functions specifically delegated to be 7.29 performed by the contracting agency, the attorney general, or 7.30 otherwise provided for by law. 7.31 Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 7.32 commissioner shall, in addition to the duties set forth in 7.33 subdivisions 3 and 4, make all decisions regarding amendments, 7.34 cancellations, and appeals of all agency acquisition activities 7.35 unless the duties are delegated pursuant to this section. 7.36 Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The 8.1 commissioner is authorized to enter into lease purchases or 8.2 installment purchases for periods not exceeding the anticipated 8.3 useful life of the items acquired unless otherwise prohibited by 8.4 law. 8.5 Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 8.6 commissioner is authorized to enter into lease, lease purchase, 8.7 rental, or installment agreements for the use or acquisition, 8.8 whichever is applicable, of real or personal property. 8.9 Subd. 8. [POLICY AND PROCEDURES.] The commissioner is 8.10 authorized to issue policies, procedures, and standards 8.11 applicable to all acquisition activities by and for agencies. 8.12 Subd. 9. [EMPLOYEE PURCHASING.] The commissioner is 8.13 authorized to enter into contracts under which a vendor agrees 8.14 to sell computer equipment and related products to state 8.15 employees, for their own use, at contract prices. Under no 8.16 circumstances shall the state be liable for purchases made under 8.17 this subdivision. The provisions of section 43A.38, 8.18 subdivisions 4 and 5, clause (a), do not apply to this 8.19 subdivision. 8.20 Subd. 10. [COOPERATIVE PURCHASING.] The commissioner is 8.21 authorized to enter into a cooperative purchasing agreement for 8.22 the provision of goods, services, and utilities with one or more 8.23 other states or governmental units, as described in section 8.24 471.59, subdivision 1. The commissioner is authorized to enter 8.25 into cooperative purchasing agreements for the purchase of 8.26 goods, services, and utilities with health care facilities that 8.27 are required to provide indigent care. 8.28 Subd. 11. [SURPLUS PROPERTY.] The commissioner is 8.29 authorized to purchase, accept, transfer, warehouse, sell, 8.30 distribute, or dispose of surplus property in accordance with 8.31 state and federal rules and regulations. The commissioner may 8.32 charge a fee to cover any expenses incurred in connection with 8.33 any of these acts. 8.34 Subd. 12. [CENTRAL DISTRIBUTION CENTER.] The commissioner 8.35 is authorized to provide and manage a central distribution 8.36 center for federal and state surplus personal property, as 9.1 defined in section 16C.24, and may provide and manage a 9.2 warehouse facility. 9.3 Subd. 13. [CENTRAL STORES.] The commissioner is authorized 9.4 to provide agencies with supplies and equipment and operate all 9.5 central stores and supply rooms serving more than one agency. 9.6 Subd. 14. [PROVISION OF GOODS, SERVICES, AND 9.7 UTILITIES.] The commissioner has the authority to provide goods, 9.8 services, and utilities under this chapter to state legislative 9.9 and judicial branch agencies, political subdivisions, the 9.10 Minnesota state colleges and universities, the University of 9.11 Minnesota, and federal government agencies. 9.12 Subd. 15. [REIMBURSEMENT FOR GOODS, SERVICES, AND 9.13 UTILITIES.] The commissioner is authorized to charge a fee to 9.14 cover costs and expenses associated with operating a revolving 9.15 fund or an enterprise fund to acquire goods, services, and 9.16 utilities. The fees are appropriated to the commissioner to 9.17 administer and manage the programs and facilities covered under 9.18 this section. 9.19 Subd. 16. [DELEGATION OF DUTIES.] The commissioner may 9.20 delegate duties imposed by this chapter to the head of an agency 9.21 and to any subordinate of the agency head. Delegated duties 9.22 shall be exercised in the name of the commissioner and under the 9.23 commissioner's direct supervision and control. A delegation of 9.24 duties may include, but is not limited to, allowing individuals 9.25 within agencies to acquire goods, services, and utilities within 9.26 dollar limitations and for designated types of acquisitions. 9.27 Delegation of contract management and review functions must be 9.28 filed with the secretary of state and may not, except with 9.29 respect to delegations within the department of administration, 9.30 exceed two years in duration. The commissioner may withdraw any 9.31 delegation at the commissioner's sole discretion. 9.32 Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 9.33 INTEREST.] 9.34 Subdivision 1. [DUTY.] An employee of the executive branch 9.35 involved directly or indirectly in the acquisition process, at 9.36 any level, is subject to the code of ethics in section 43A.38. 10.1 Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 10.2 The commissioner must develop policies regarding code of ethics 10.3 and conflict of interest designed to prevent conflicts of 10.4 interest for employees involved in the acquisition of goods, 10.5 services, and utilities. The policies must apply to employees 10.6 who are directly or indirectly involved in the acquisition of 10.7 goods, services, and utilities, developing requests for 10.8 proposals, evaluating bids or proposals, awarding the contract, 10.9 selecting the final vendor, drafting and entering into 10.10 contracts, evaluating performance under these contracts, and 10.11 authorizing payments under the contract. 10.12 (b) The policies must contain a process for making 10.13 employees aware of policy and laws relating to conflict of 10.14 interest, and for training employees on how to avoid and deal 10.15 with potential conflicts. 10.16 (c) The policies must contain a process under which an 10.17 employee who has a conflict of interest or a potential conflict 10.18 of interest must disclose the matter, and a process under which 10.19 work on the contract may be assigned to another employee if 10.20 possible. 10.21 Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 10.22 REVIEW.] 10.23 Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully 10.24 cooperate with the commissioner in the management and review of 10.25 state contracts. 10.26 Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A 10.27 contract is not valid and the state is not bound by it unless: 10.28 (1) it has first been executed by the head of the agency or 10.29 a delegate who is a party to the contract; 10.30 (2) it has been approved by the commissioner; 10.31 (3) it has been approved by the attorney general or a 10.32 delegate as to form and execution; 10.33 (4) the accounting system shows an obligation in an expense 10.34 budget or encumbrance for the amount of the contract liability; 10.35 and 10.36 (5) the combined contract and amendments shall not exceed 11.1 five years, unless otherwise provided for by law. The term of 11.2 the original contract must not exceed two years unless the 11.3 commissioner determines that a longer duration is in the best 11.4 interest of the state. 11.5 (b) Grants, interagency agreements, purchase orders, and 11.6 annual plans need not, in the discretion of the commissioner and 11.7 attorney general, require the signature of the commissioner 11.8 and/or the attorney general. 11.9 (c) A fully executed copy of every contract must be kept on 11.10 file at the contracting agency. 11.11 Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do 11.12 not apply to contracts of the department of economic security 11.13 distributing state and federal funds for the purpose of 11.14 subcontracting the provision of program services to eligible 11.15 recipients. For these contracts, the commissioner of economic 11.16 security is authorized to directly enter into agency contracts 11.17 and encumber available funds. For contracts distributing state 11.18 or federal funds pursuant to the federal Economic Dislocation 11.19 and Worker Adjustment Assistance Act, United States Code, title 11.20 29, section 1651 et seq., or sections 268.9771, 268.978, 11.21 268.9781, and 268.9782, the commissioner of economic security is 11.22 authorized to directly enter into agency contracts with approval 11.23 of the workforce development council and encumber available 11.24 funds to ensure a rapid response to the needs of dislocated 11.25 workers. The commissioner of economic security shall adopt 11.26 internal procedures to administer and monitor funds distributed 11.27 under these contracts. This exception also applies to any 11.28 contracts entered into by the commissioner of children, 11.29 families, and learning that were previously entered into by the 11.30 commissioner of economic security. 11.31 Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency 11.32 shall diligently administer and monitor any contract it has 11.33 entered into, pursuant to a delegation of duties from the 11.34 commissioner. The commissioner may require an agency to report 11.35 to the commissioner at any time on the status of any contracts 11.36 to which the agency is a party. 12.1 Subd. 5. [SUBJECT TO AUDIT.] A contract or any pass- 12.2 through disbursement of public funds to a vendor of goods or 12.3 services or a grantee made by or under the supervision of the 12.4 commissioner or any county or unit of local government must 12.5 include, expressed or implied, an audit clause that provides 12.6 that the books, records, documents, and accounting procedures 12.7 and practices of the vendor or other party, that are relevant to 12.8 the contract or transaction, are subject to examination by the 12.9 contracting agency and either the legislative auditor or the 12.10 state auditor, as appropriate, for a minimum of six years. If 12.11 the contracting agency is a local unit of government, and the 12.12 governing body of the local unit of government requests that the 12.13 state auditor examine the books, records, documents, and 12.14 accounting procedures and practices of the vendor or other party 12.15 pursuant to this subdivision, the contracting agency shall be 12.16 liable for the cost of the examination. If the contracting 12.17 agency is a local unit of government, and the grantee, vendor, 12.18 or other party requests that the state auditor examine all 12.19 books, records, documents, and accounting procedures and 12.20 practices related to the contract, the grantee, vendor, or other 12.21 party that requested the examination shall be liable for the 12.22 cost of the examination. An agency contract made for purchase, 12.23 lease, or license of software and data from the state is not 12.24 required to contain this audit clause. 12.25 Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney 12.26 general may pursue remedies available by law to avoid the 12.27 obligation of an agency to pay under a contract or to recover 12.28 payments made if services performed or goods received under the 12.29 contract are so unsatisfactory, incomplete, or inconsistent that 12.30 payment would involve unjust enrichment. The contrary opinion 12.31 of the contracting agency does not affect the power of the 12.32 attorney general under this subdivision. 12.33 Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND 12.34 BANDS.] Notwithstanding any other law, an agency may not require 12.35 an Indian tribe or band to deny its sovereignty as a requirement 12.36 or condition of a contract with an agency. 13.1 Sec. 7. [16C.07] [ACQUISITIONS.] 13.2 Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of 13.3 solicitations for acquisitions estimated to be more than $25,000 13.4 must be publicized in a manner designated by the commissioner. 13.5 Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation 13.6 must be used to acquire all goods, services, and utilities 13.7 estimated at or more than $25,000 unless otherwise provided 13.8 for. All formal responses must be sealed when they are received 13.9 and must be opened in public at the hour stated in the 13.10 solicitation. Formal responses must be authenticated by the 13.11 responder in a manner specified by the commissioner. 13.12 (b) An informal solicitation may be used to acquire all 13.13 goods, services, and utilities that are estimated at less than 13.14 $25,000. The number of vendors required to receive 13.15 solicitations may be determined by the commissioner. Informal 13.16 responses must be authenticated by the responder in a manner 13.17 specified by the commissioner. 13.18 Subd. 3. [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 13.19 name of the vendor and dollar amounts specified in a response to 13.20 a request for bids shall be read at the time of opening. Only 13.21 the name of the responding vendors to all requests for proposals 13.22 shall be read at the time of opening. All other information 13.23 contained in a vendor's response to a bid is classified as 13.24 nonpublic data, as defined in section 13.02, and remains 13.25 nonpublic data until completion of the selection process. All 13.26 other information contained in a vendor's response to a request 13.27 for proposal, other than the name of the vendor, is classified 13.28 as nonpublic data, as defined in section 13.02, and remains 13.29 nonpublic data until the completion of the evaluation process. 13.30 (b) All responses are public information at the time of the 13.31 award unless otherwise provided for. All responses and 13.32 documents pertaining to the final award of an acquisition must 13.33 be retained and made a part of a permanent file or record and 13.34 remain open to public inspection, after award, unless otherwise 13.35 provided for by law. 13.36 Subd. 4. [STRATEGIC ALLIANCES.] (a) For the purposes of 14.1 this subdivision, a "strategic alliance" means a contract 14.2 between an agency and a vendor forming a relationship that 14.3 exists throughout the development of a multiphase project. 14.4 Parties to the strategic alliance may share the roles, 14.5 responsibilities, risks, investments, and results of the project. 14.6 (b) A strategic alliance must be designated in advance by 14.7 means determined by the commissioner. The commissioner may 14.8 develop or approve development of strategic alliances during the 14.9 course of a contractual relationship between the state and a 14.10 vendor that jointly develop goods and services, not otherwise 14.11 available, that are cost-beneficial and provide best value to 14.12 the state. 14.13 Subd. 5. [MULTIPLE AWARDS.] The commissioner may award a 14.14 contract to more than one vendor if, in the opinion of the 14.15 commissioner, it is in the best interest of the state. 14.16 Subd. 6. [STATE AS RESPONDER.] The head of an agency, in 14.17 consultation with the requesting agency and the commissioner, 14.18 may respond to a solicitation or request if the goods and 14.19 services meet the needs of the requesting agency and provide the 14.20 state with the best value. When an agency responds to a 14.21 solicitation, all work product relating to the response is 14.22 nonpublic data as defined in section 13.02, and shall become 14.23 public information in accordance with subdivision 3. 14.24 Subd. 7. [AWARDS.] Awards must be based on best value, 14.25 which includes an evaluation of price, and may include other 14.26 considerations including, but not limited to, environmental 14.27 considerations, quality, and vendor performance. 14.28 Subd. 8. [OTHER STATES WITH RESIDENT 14.29 PREFERENCE.] Acquisition of goods and services must be awarded 14.30 according to the provisions of this chapter except that a 14.31 resident vendor shall be allowed a preference over a nonresident 14.32 vendor from a state that gives or requires a preference to 14.33 vendors from that state. The preference shall be equal to the 14.34 preference given or required by the state of the nonresident 14.35 vendor. 14.36 Subd. 9. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 8 15.1 does not apply to a contract for any project in which federal 15.2 funds are expended. 15.3 Subd. 10. [REJECTION.] At the discretion of the 15.4 commissioner, any or all responses may be rejected if it is 15.5 determined to be in the best interest of the state. 15.6 Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.] 15.7 The commissioner of employee relations shall develop a 15.8 directory of services that state agencies commonly provide. 15.9 Before an agency may seek approval of a professional or 15.10 technical services contract valued at a total cost in excess of 15.11 $25,000, it must certify to the commissioner that it has 15.12 publicized the contract by posting notice at appropriate 15.13 worksites within agencies and has made reasonable efforts to 15.14 determine that no state employee or agency, including an 15.15 employee or agency outside the contracting agency, is able and 15.16 available to perform the required services. When possible, this 15.17 posting should be done electronically. 15.18 Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 15.19 Subdivision 1. [DEFINITION.] For the purposes of this 15.20 section, "professional or technical services" means services 15.21 that are intellectual in character, including consultation, 15.22 analysis, evaluation, prediction, planning, programming, or 15.23 recommendation, and result in the production of a report or the 15.24 completion of a task. Professional or technical contracts do 15.25 not include the provision of supplies or materials except by the 15.26 approval of the commissioner or except as incidental to the 15.27 provision of professional or technical services. 15.28 Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency 15.29 may seek approval of a professional or technical services 15.30 contract valued in excess of $5,000, it must certify to the 15.31 commissioner that: 15.32 (1) no current state employee is able and available to 15.33 perform the services called for by the contract; 15.34 (2) the normal competitive bidding mechanisms will not 15.35 provide for adequate performance of the services; 15.36 (3) the contractor has certified that the product of the 16.1 services will be original in character; 16.2 (4) reasonable efforts were made to publicize the 16.3 availability of the contract to the public; 16.4 (5) the agency has received, reviewed, and accepted a 16.5 detailed work plan from the contractor for performance under the 16.6 contract, if applicable; 16.7 (6) the agency has developed, and fully intends to 16.8 implement, a written plan providing for the assignment of 16.9 specific agency personnel to a monitoring and liaison function, 16.10 the periodic review of interim reports or other indications of 16.11 past performance, and the ultimate utilization of the final 16.12 product of the services; and 16.13 (7) the agency will not allow the contractor to begin work 16.14 before funds are fully encumbered. 16.15 Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 16.16 CONTRACTS.] Before approving a proposed contract for 16.17 professional or technical services, the commissioner must 16.18 determine, at least, that: 16.19 (1) all provisions of subdivision 2 and section 16C.17 have 16.20 been verified or complied with; 16.21 (2) the work to be performed under the contract is 16.22 necessary to the agency's achievement of its statutory 16.23 responsibilities and there is statutory authority to enter into 16.24 the contract; 16.25 (3) the contract will not establish an employment 16.26 relationship between the state or the agency and any persons 16.27 performing under the contract; 16.28 (4) the contractor and agents are not employees of the 16.29 state; 16.30 (5) no agency has previously performed or contracted for 16.31 the performance of tasks which would be substantially duplicated 16.32 under the proposed contract; 16.33 (6) the contracting agency has specified a satisfactory 16.34 method of evaluating and using the results of the work to be 16.35 performed; and 16.36 (7) the combined contract and amendments will not exceed 17.1 five years, unless otherwise provided for by law. The term of 17.2 the original contract must not exceed two years unless the 17.3 commissioner determines that a longer duration is in the best 17.4 interest of the state. 17.5 Subd. 4. [REPORTS.] (a) The commissioner shall submit to 17.6 the governor, the chairs of the house ways and means and senate 17.7 finance committees, and the legislative reference library a 17.8 yearly listing of all contracts for professional or technical 17.9 services executed. The report must identify the contractor, 17.10 contract amount, duration, and services to be provided. The 17.11 commissioner shall also issue yearly reports summarizing the 17.12 contract review activities of the department by fiscal year. 17.13 (b) The fiscal year report must: 17.14 (1) be sorted by agency and by contractor; 17.15 (2) show the aggregate value of contracts issued by each 17.16 agency and issued to each contractor; 17.17 (3) distinguish between contracts that are being issued for 17.18 the first time and contracts that are being extended; 17.19 (4) state the termination date of each contract; and 17.20 (5) identify services by commodity code, including topics 17.21 such as contracts for training, contracts for research and 17.22 opinions, and contracts for computer systems. 17.23 (c) Within 30 days of final completion of a contract over 17.24 $40,000 covered by this subdivision, the head of the agency 17.25 entering into the contract must submit a one-page report to the 17.26 commissioner who must submit a copy to the legislative reference 17.27 library. The report must: 17.28 (1) summarize the purpose of the contract, including why it 17.29 was necessary to enter into a contract; 17.30 (2) state the amount spent on the contract; and 17.31 (3) explain why this amount was a cost-effective way to 17.32 enable the agency to provide its services or products better or 17.33 more efficiently. 17.34 Subd. 5. [CONTRACT TERMS.] (a) A professional or technical 17.35 services contract must by its terms permit the commissioner to 17.36 unilaterally terminate the contract prior to completion, upon 18.1 payment of just compensation, if the commissioner determines 18.2 that further performance under the contract would not serve 18.3 agency purposes. 18.4 (b) The terms of a contract must provide that no more than 18.5 90 percent of the amount due under the contract may be paid 18.6 until the final product has been reviewed by the head of the 18.7 agency entering into the contract and the head of the agency has 18.8 certified that the contractor has satisfactorily fulfilled the 18.9 terms of the contract, unless specifically excluded in writing 18.10 by the commissioner. 18.11 Subd. 6. [FILING COPY.] If the final product of the 18.12 contract is a written report, a copy must be filed with the 18.13 legislative reference library. 18.14 Subd. 7. [EXCLUSIONS.] This section does not apply to 18.15 contracts with individuals or organizations for administration 18.16 of employee pension plans authorized under chapter 354B or 354C. 18.17 Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 18.18 Before entering into or approving a service contract, the 18.19 commissioner must determine, at least, that: 18.20 (1) no current state employee is able and available to 18.21 perform the services called for by the contract; 18.22 (2) the work to be performed under the contract is 18.23 necessary to the agency's achievement of its statutory 18.24 responsibilities and there is statutory authority to enter into 18.25 the contract; 18.26 (3) the contract will not establish an employment 18.27 relationship between the state or the agency and any persons 18.28 performing under the contract; 18.29 (4) the contractor and agents are not employees of the 18.30 state; 18.31 (5) the contracting agency has specified a satisfactory 18.32 method of evaluating and using the results of the work to be 18.33 performed; and 18.34 (6) the combined contract and amendments will not exceed 18.35 five years, unless otherwise provided for by law. The term of 18.36 the original contract must not exceed two years, unless the 19.1 commissioner determines that a longer duration is in the best 19.2 interest of the state. 19.3 For purposes of clause (1), employees are available if qualified 19.4 and: 19.5 (1) are already doing the work in question; or 19.6 (2) are on layoff status in classes that can do the work in 19.7 question. 19.8 An employee is not available if the employee is doing other 19.9 work, is retired, or has decided not to do the work in question. 19.10 Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION 19.11 PROCESS.] 19.12 Subdivision 1. [SINGLE SOURCE.] The solicitation process 19.13 described in this chapter is not required when there is clearly 19.14 and legitimately only a single source for the goods and services 19.15 and the commissioner determines that the price has been fairly 19.16 and reasonably established. 19.17 Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of 19.18 this subdivision, "emergency" means a threat to public health, 19.19 welfare, or safety that threatens the functioning of government, 19.20 the protection of property, or the health or safety of people. 19.21 (b) The solicitation process described in this chapter is 19.22 not required in emergencies. In emergencies, the commissioner 19.23 may make any purchases necessary for the repair, rehabilitation, 19.24 and improvement of a state-owned structure or may authorize an 19.25 agency to do so and may purchase, or may authorize an agency to 19.26 purchase, goods, services, or utility services directly for 19.27 immediate use. 19.28 Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 19.29 anything in this chapter to the contrary, the commissioner may, 19.30 instead of soliciting bids, contract for purchases with 19.31 suppliers who have published schedules of prices effective for 19.32 sales to any federal agency of the United States. These 19.33 contracts may be entered into, regardless of the amount of the 19.34 purchase price, if the commissioner considers them advantageous 19.35 and if the purchase price of all the commodities purchased under 19.36 the contract do not exceed the price specified by the schedule. 20.1 Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation 20.2 process described in this chapter is not required for 20.3 cooperative agreements. The commissioner may enter into 20.4 contracts or accept prices effective for sales to any 20.5 governmental unit as defined in section 471.59, through a 20.6 cooperative agreement as defined in section 471.59. 20.7 Subd. 5. [SPECIFIC PURCHASES.] The solicitation process 20.8 described in this chapter is not required for acquisition of the 20.9 following: 20.10 (1) merchandise for resale purchased under policies 20.11 determined by the commissioner; 20.12 (2) farm and garden products which, as determined by the 20.13 commissioner, may be purchased at the prevailing market price on 20.14 the date of sale; 20.15 (3) goods and services from the Minnesota correctional 20.16 facilities; 20.17 (4) goods and services from rehabilitation facilities and 20.18 sheltered workshops that are certified by the commissioner of 20.19 economic security; 20.20 (5) goods and services for use by a community-based 20.21 residential facility operated by the commissioner of human 20.22 services; 20.23 (6) goods purchased at auction or when submitting a sealed 20.24 bid at auction provided that before authorizing such an action, 20.25 the commissioner consult with the requesting agency to determine 20.26 a fair and reasonable value for the goods considering factors 20.27 including, but not limited to, costs associated with submitting 20.28 a bid, travel, transportation, and storage. This fair and 20.29 reasonable value must represent the limit of the state's bid; 20.30 and 20.31 (7) utility services where no competition exists or where 20.32 rates are fixed by law or ordinance. 20.33 Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; 20.34 PURCHASING REVOLVING FUND.] 20.35 The commissioner may enter into joint or cooperative 20.36 purchasing agreements with any entity that is authorized under 21.1 section 471.59 to do so. The cooperative purchasing venture 21.2 revolving fund is a separate account in the state treasury. The 21.3 commissioner may charge a fee to cover the commissioner's 21.4 administrative expenses to governmental units that have joint or 21.5 cooperative purchasing agreements with the state under section 21.6 471.59. The fees collected must be deposited in the revolving 21.7 fund established by this section. Money in the fund is 21.8 appropriated to the commissioner to administer the programs and 21.9 services covered by this chapter. 21.10 Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 21.11 STATE.] 21.12 The commissioner shall encourage and make a reasonable 21.13 attempt to identify and purchase food products that are grown in 21.14 the state. 21.15 Sec. 14. [16C.14] [CERTAIN VEHICLES.] 21.16 Upon the written request of the commissioner of public 21.17 safety, motor vehicles for use by investigative and undercover 21.18 agents of the department of public safety must be purchased by 21.19 the brand, make, and model specified by the agency. 21.20 Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT 21.21 PURCHASES.] 21.22 Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may 21.23 contract to purchase by installment payments capital or other 21.24 equipment or services intended to improve the energy efficiency 21.25 of a state building or facility if: 21.26 (1) the term of the contract does not exceed ten years, 21.27 with not more than a ten-year payback; 21.28 (2) the entire cost of the contract is a percentage of the 21.29 resultant savings in energy costs only. "Savings in energy cost" 21.30 means a comparison of energy cost and energy usage under the 21.31 precontract conditions, including reasonable projections of 21.32 energy cost and usage if no change is made to the precontract 21.33 conditions, against energy cost and usage with the changes made 21.34 under the contract. If it is impractical to directly measure 21.35 energy cost and/or energy usage, reasonable engineering 21.36 estimates may be substituted for measured results; 22.1 (3) the contract for purchase must be completed using a 22.2 solicitation; 22.3 (4) the commissioner has determined that the contract 22.4 vendor is a responsible vendor; 22.5 (5) the contract vendor can finance or obtain financing for 22.6 the performance of the contract without state assistance or 22.7 guarantee; and 22.8 (6) the state may unilaterally cancel the agreement if the 22.9 legislature fails to appropriate funds to continue the contract 22.10 or if the contractor at any time during the term of the contract 22.11 fails to perform its contractual obligations, including failure 22.12 to deliver or install equipment or materials, failure to replace 22.13 faulty equipment or materials in a timely fashion, and failure 22.14 to maintain the equipment as agreed in the contract. 22.15 Subd. 2. [ENERGY APPROPRIATION.] The commissioner may 22.16 spend money appropriated for energy costs in payment of a 22.17 contract under this section. 22.18 Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 22.19 any other law to the contrary, fuel cost savings resulting from 22.20 energy conservation actions shall be available at the managerial 22.21 level at which the actions took place for expenditure for other 22.22 purposes within the biennium in which the actions occur or in 22.23 the case of a shared savings agreement for the contract period 22.24 of the shared savings agreement. For purposes of this 22.25 subdivision "shared savings agreement" means a contract meeting 22.26 the terms and conditions of subdivision 1. 22.27 Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 22.28 ACTIVITY PROGRAMS.] 22.29 The commissioner, in consultation with the commissioner of 22.30 economic security, shall prepare a list containing products and 22.31 services of state-certified rehabilitation facilities, sheltered 22.32 workshops, and work activity programs for acquisition by state 22.33 agencies and institutions. 22.34 Sec. 17. [16C.17] [DESIGNATION OF PROCUREMENTS FROM SMALL 22.35 BUSINESSES.] 22.36 Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The 23.1 commissioner shall for each fiscal year ensure that small 23.2 businesses receive at least 25 percent of the value of 23.3 anticipated total state procurement of goods and services, 23.4 including printing and construction. The commissioner shall 23.5 divide the procurements so designated into contract award units 23.6 of economically feasible production runs in order to facilitate 23.7 offers or bids from small businesses. In making the annual 23.8 designation of such procurements the commissioner shall attempt 23.9 (1) to vary the included procurements so that a variety of goods 23.10 and services produced by different small businesses are obtained 23.11 each year, and (2) to designate small business procurements in a 23.12 manner that will encourage proportional distribution of such 23.13 awards among the geographical regions of the state. To promote 23.14 the geographical distribution of awards, the commissioner may 23.15 designate a portion of the small business procurement for award 23.16 to bidders from a specified congressional district or other 23.17 geographical region specified by the commissioner. The failure 23.18 of the commissioner to designate particular procurements shall 23.19 not be deemed to prohibit or discourage small businesses from 23.20 seeking the procurement award through the normal process. 23.21 Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt 23.22 rules defining "small business" for purposes of sections 16C.17 23.23 to 16C.22, 137.31, 137.35, 161.321, and 473.142. The definition 23.24 must include only businesses with their principal place of 23.25 business in Minnesota. The definition must establish different 23.26 size standards for various types of businesses. In establishing 23.27 these standards, the commissioner must consider the differences 23.28 among industries caused by the size of the market for goods or 23.29 services and the relative size and market share of the 23.30 competitors operating in those markets. 23.31 Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 23.32 state agency shall for each fiscal year designate for awarding 23.33 to small businesses at least 25 percent of the value of 23.34 anticipated procurements of that agency for professional or 23.35 technical services. The set-aside under this subdivision is in 23.36 addition to that provided by subdivision 1, but must otherwise 24.1 comply with section 16C.10. 24.2 Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner 24.3 shall establish a program for purchasing goods and services from 24.4 targeted group businesses, as designated in subdivision 5. The 24.5 purpose of the program is to remedy the effects of past 24.6 discrimination against members of targeted groups. In 24.7 furtherance of this purpose, the commissioner shall attempt to 24.8 ensure that purchases from targeted group businesses reflect a 24.9 fair and equitable representation of all the state's purchasing. 24.10 Subd. 5. [DESIGNATION OF TARGETED GROUPS.] (a) The 24.11 commissioner of administration shall periodically designate 24.12 businesses that are majority owned and operated by women, 24.13 persons with a substantial physical disability, or specific 24.14 minorities as targeted group businesses within purchasing 24.15 categories as determined by the commissioner. A group may be 24.16 targeted within a purchasing category if the commissioner 24.17 determines there is a statistical disparity between the 24.18 percentage of purchasing from businesses owned by group members 24.19 and the representation of businesses owned by group members 24.20 among all businesses in the state in the purchasing category. 24.21 (b) In addition to designations under paragraph (a), an 24.22 individual business may be included as a targeted group business 24.23 if the commissioner determines that inclusion is necessary to 24.24 remedy discrimination against the owner based on race, gender, 24.25 or disability in attempting to operate a business that would 24.26 provide goods or services to public agencies. 24.27 (c) The designations of purchasing categories and 24.28 businesses under paragraphs (a) and (b) are not rules for 24.29 purposes of chapter 14, and are not subject to rulemaking 24.30 procedures of that chapter. 24.31 Subd. 6. [PURCHASING METHODS.] (a) The commissioner may 24.32 award up to a six percent preference in the amount bid for 24.33 specified goods or services to small targeted group businesses. 24.34 (b) The commissioner may designate a purchase of goods or 24.35 services for award only to small businesses or small targeted 24.36 group businesses if the commissioner determines that at least 25.1 three small businesses or small targeted group businesses are 25.2 likely to bid. 25.3 (c) The commissioner, as a condition of awarding a 25.4 construction contract or approving a contract for professional 25.5 or technical services, may set goals that require the prime 25.6 contractor to subcontract a portion of the contract to small 25.7 businesses or small targeted group businesses. The commissioner 25.8 must establish a procedure for granting waivers from the 25.9 subcontracting requirement when qualified small businesses or 25.10 small targeted group businesses are not reasonably available. 25.11 The commissioner may establish financial incentives for prime 25.12 contractors who exceed the goals for use of small business or 25.13 small targeted group business subcontractors and financial 25.14 penalties for prime contractors who fail to meet goals under 25.15 this paragraph. The subcontracting requirements of this 25.16 paragraph do not apply to prime contractors who are small 25.17 businesses or small targeted group businesses. 25.18 Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The 25.19 commissioner may award up to a four percent preference in the 25.20 amount bid on state procurement to small businesses located in 25.21 an economically disadvantaged area. A business is located in an 25.22 economically disadvantaged area if: 25.23 (1) the owner resides in or the business is located in a 25.24 county in which the median income for married couples is less 25.25 than 70 percent of the state median income for married couples; 25.26 (2) the owner resides in or the business is located in an 25.27 area designated a labor surplus area by the United States 25.28 Department of Labor; or 25.29 (3) the business is a rehabilitation facility or work 25.30 activity program. 25.31 The commissioner may designate one or more areas designated 25.32 as targeted neighborhoods under section 469.202 or as enterprise 25.33 zones under section 469.167 as economically disadvantaged areas 25.34 for purposes of this subdivision if the commissioner determines 25.35 that this designation would further the purposes of this 25.36 section. If the owner of a small business resides or is 26.1 employed in a designated area, the small business is eligible 26.2 for any preference provided under this subdivision. 26.3 The department of revenue shall gather data necessary to 26.4 make the determinations required by clause (1), and shall 26.5 annually certify counties that qualify under clause (1). An 26.6 area designated a labor surplus area retains that status for 120 26.7 days after certified small businesses in the area are notified 26.8 of the termination of the designation by the United States 26.9 Department of Labor. 26.10 Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the 26.11 federal Small Business Administration and second party bonds are 26.12 acceptable security for a construction award under this 26.13 section. "Second party bond" means a bond that designates as 26.14 principal, guarantor, or both, a person or persons in addition 26.15 to the person to whom the contract is proposed for award. 26.16 Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before 26.17 making an award under the preference programs established in 26.18 subdivisions 4 to 7, the commissioner shall evaluate whether the 26.19 small business or small targeted group business scheduled to 26.20 receive the award is able to perform the contract. This 26.21 determination shall include consideration of production and 26.22 financial capacity and technical competence. 26.23 Subd. 10. [LIMITS.] At least 75 percent of the value of 26.24 the subcontracts awarded to small businesses or small targeted 26.25 group businesses under subdivision 6, paragraph (c), must be 26.26 performed by the business to which the subcontract is awarded or 26.27 by another small business or small targeted group business. 26.28 Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules 26.29 pertaining to solicitations, bid evaluations, contract awards, 26.30 and other procurement matters apply equally to procurements 26.31 designated for small businesses or small targeted group 26.32 businesses. In the event of conflict with other rules, section 26.33 16C.16 and rules adopted under it govern, if section 16C.16 26.34 applies. If it does not apply, sections 16C.17 to 16C.22 and 26.35 rules adopted under those sections govern. 26.36 Subd. 12. [APPLICABILITY.] This section does not apply to 27.1 construction contracts or contracts for professional or 27.2 technical services under section 16C.09 that are financed in 27.3 whole or in part with federal funds and that are subject to 27.4 federal disadvantaged business enterprise regulations. 27.5 Sec. 18. [16C.18] [ENCOURAGEMENT OF PARTICIPATION; 27.6 ADVISORY COUNCIL.] 27.7 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 27.8 commissioners of administration and trade and economic 27.9 development shall publicize the provisions of the purchasing 27.10 programs in sections 16C.17 to 16C.22, attempt to locate small 27.11 businesses or small targeted group businesses able to perform 27.12 under the programs, and encourage participation through 27.13 education, technical assistance, mentoring, and other means. 27.14 When the commissioner of administration determines that a small 27.15 business or small targeted group business is unable to perform 27.16 under a program established in sections 16C.17 to 16C.22, the 27.17 commissioner shall inform the commissioner of trade and economic 27.18 development who shall assist the small business or small 27.19 targeted group business in attempting to remedy the causes of 27.20 the inability to perform the award. In assisting the small 27.21 business or small targeted group business, the commissioner of 27.22 trade and economic development in cooperation with the 27.23 commissioner of administration shall use management or financial 27.24 assistance programs made available by or through the department 27.25 of trade and economic development, other state or governmental 27.26 agencies, or private sources. 27.27 Subd. 2. [ADVISORY COUNCIL.] The small business 27.28 procurement advisory council consists of 13 members appointed by 27.29 the commissioner of administration. A chair of the advisory 27.30 council shall be elected from among the members. The 27.31 appointments are subject to the appointments program provided by 27.32 section 15.0597. The terms, compensation, and removal of 27.33 members are as provided in section 15.059. 27.34 Subd. 3. [DUTIES.] The small business procurement advisory 27.35 council shall: 27.36 (1) advise the commissioner of administration on matters 28.1 relating to the small business and small targeted group business 28.2 procurement program; 28.3 (2) review complaints or grievances from small businesses 28.4 and small targeted group businesses who are doing or attempting 28.5 to do business under the program; and 28.6 (3) review the reports of the commissioners of 28.7 administration and trade and economic development provided by 28.8 section 16C.19 to ensure compliance with the goals of the 28.9 program. 28.10 Sec. 19. [16C.19] [REPORTS.] 28.11 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 28.12 commissioner shall submit an annual report pursuant to section 28.13 3.195 to the governor and the legislature with a copy to the 28.14 commissioner of trade and economic development indicating the 28.15 progress being made toward the objectives and goals of sections 28.16 16C.17 to 16C.22, 161.321, and 473.142 during the preceding 28.17 fiscal year. 28.18 Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 28.19 The commissioner of trade and economic development shall submit 28.20 an annual report to the governor and the legislature pursuant to 28.21 section 3.195 with a copy to the commissioner of 28.22 administration. This report shall include the following 28.23 information: 28.24 (1) the efforts undertaken to publicize the provisions of 28.25 the small business and small targeted group business procurement 28.26 program during the preceding fiscal year; 28.27 (2) the efforts undertaken to identify small businesses and 28.28 small targeted group businesses and the efforts undertaken to 28.29 encourage participation in the targeted group purchasing 28.30 program; 28.31 (3) the efforts undertaken by the commissioner to remedy 28.32 the inability of small businesses and small targeted group 28.33 businesses to perform on potential awards; and 28.34 (4) the commissioner's recommendations for strengthening 28.35 the small business and small targeted group business procurement 28.36 program and delivery of services to small businesses. 29.1 Subd. 3. [REPORTS FROM OTHER AGENCIES.] The commissioner 29.2 of transportation, and each metropolitan agency listed in 29.3 section 473.143, subdivision 1, shall report to the commissioner 29.4 of administration all information that the commissioner requests 29.5 to make reports required under this section. The information 29.6 must be reported at the time and in the manner requested by the 29.7 commissioner of administration. 29.8 Sec. 20. [16C.20] [ELIGIBILITY; RULES.] 29.9 (a) A small business wishing to participate in the programs 29.10 under section 16C.17, subdivisions 4 to 7, must be certified by 29.11 the commissioner. The commissioner shall adopt by rule 29.12 standards and procedures for certifying that small businesses, 29.13 small targeted group businesses, and small businesses located in 29.14 economically disadvantaged areas are eligible to participate 29.15 under the requirements of sections 16C.17 to 16C.22. The 29.16 commissioner shall adopt by rule standards and procedures for 29.17 hearing appeals and grievances and other rules necessary to 29.18 carry out the duties set forth in sections 16C.17 to 16C.22. 29.19 (b) The commissioner may make rules which exclude or limit 29.20 the participation of nonmanufacturing business, including 29.21 third-party lessors, brokers, franchises, jobbers, 29.22 manufacturers' representatives, and others from eligibility 29.23 under sections 16C.17 to 16C.22. 29.24 (c) The commissioner may make rules that set time limits 29.25 and other eligibility limits on business participation in 29.26 programs under sections 16C.17 to 16C.22. 29.27 Sec. 21. [16C.21] [CERTIFICATION.] 29.28 A business that is certified by the commissioner of 29.29 administration as a small business, small targeted group 29.30 business or a small business located in an economically 29.31 disadvantaged area is eligible to participate under the 29.32 requirements of sections 137.31 and 161.321 and, if certified as 29.33 a small business or small targeted group business, under section 29.34 473.142 without further certification by the contracting agency. 29.35 Sec. 22. [16C.22] [CRIMINAL PENALTY.] 29.36 A person who knowingly provides false information to a 30.1 public official or employee for the purpose of obtaining or 30.2 retaining certification as a small targeted group business or a 30.3 small business located in an economically disadvantaged area 30.4 under sections 16C.17 to 16C.21, 137.31, 137.35, 161.321, or 30.5 473.142 is guilty of a misdemeanor. 30.6 Sec. 23. [16C.23] [DISTRICT HEATING.] 30.7 Notwithstanding any other law, general or special, the 30.8 commissioner is authorized to enter into or approve a written 30.9 agreement not to exceed 31 years with a district heating utility 30.10 that will specify, but not be limited to, the appropriate terms 30.11 and conditions for the interchange of district heating services. 30.12 Sec. 24. [16C.24] [SURPLUS PROPERTY ACQUISITION, 30.13 DISTRIBUTION, AND DISPOSAL.] 30.14 Subdivision 1. [DEFINITIONS.] "Governmental unit or 30.15 nonprofit organization" means a governmental unit as defined in 30.16 section 471.59, subdivision 1, an Indian tribal government, and 30.17 any nonprofit and tax-exempt medical institution, hospital, 30.18 clinic, health center, school, school system, college, 30.19 university, or other institution organized and existing for any 30.20 purpose authorized by federal law to accept surplus federal 30.21 property. 30.22 Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means 30.23 state or federal commodities, equipment, materials, supplies, 30.24 books, printed matter, buildings, and other personal or real 30.25 property that is obsolete, unused, not needed for a public 30.26 purpose, or ineffective for current use. 30.27 Subd. 3. [AUTHORIZATION.] (a) The commissioner is the 30.28 state agency designated to transfer, purchase, accept, sell, or 30.29 dispose of surplus property for the state and for the benefit of 30.30 any other governmental unit or nonprofit organization for any 30.31 purpose authorized by state and federal law and in accordance 30.32 with state and federal rules and regulations. Any governmental 30.33 unit or nonprofit organization may designate the commissioner to 30.34 purchase or accept surplus property for it upon mutually 30.35 agreeable terms and conditions. The commissioner may acquire, 30.36 accept, warehouse, and distribute surplus property and charge a 31.1 fee to cover any expenses incurred in connection with any of 31.2 these acts. 31.3 (b) Federal surplus property that has been transferred to 31.4 the state for donation to public agencies and nonprofit 31.5 organizations must be transferred or sold in accordance with the 31.6 plan developed under paragraph (c). Expenses incurred in 31.7 connection with the acquisition, warehousing, distribution, and 31.8 disposal of federal surplus property must be paid from the 31.9 surplus services revolving fund. Proceeds of sales, minus any 31.10 expenses, must be deposited in the surplus services revolving 31.11 fund. 31.12 (c) The commissioner shall develop a detailed plan for 31.13 disposal of donated federal property in conformance with state 31.14 law and federal regulations. The plan must be submitted to the 31.15 governor for certification and submission to the federal 31.16 administrator of general services. 31.17 (d) The commissioner, after consultation with one or more 31.18 nonprofit organizations with an interest in providing housing 31.19 for homeless veterans and their families, may acquire property 31.20 from the United States government that is designated by the 31.21 General Services Administration as surplus property. The 31.22 commissioner may lease the property to a qualified nonprofit 31.23 organization that agrees to develop or rehabilitate the property 31.24 for the purpose of providing suitable housing for veterans and 31.25 their families. The lease agreement with the nonprofit 31.26 organization may require that the property be developed for use 31.27 as housing for homeless and displaced veterans and their 31.28 families and for veterans and their families who lose their 31.29 housing. 31.30 Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services 31.31 revolving fund is a separate fund in the state treasury. All 31.32 money resulting from the acquisition, acceptance, warehousing, 31.33 distribution, and public sale of surplus property, must be 31.34 deposited in the fund. Money paid into the surplus services 31.35 revolving fund is appropriated to the commissioner for the 31.36 purposes of the programs and services referred to in this 32.1 section. 32.2 Subd. 5. [TRANSFER OR SALE.] (a) When the state or an 32.3 agency operating under a legislative appropriation obtains 32.4 surplus property from the commissioner, the commissioner of 32.5 finance must, at the commissioner's request, transfer the cost 32.6 of the surplus property, including any expenses of acquiring, 32.7 accepting, warehousing, and distributing the surplus property, 32.8 from the appropriation of the agency receiving the surplus 32.9 property to the surplus services revolving fund. The 32.10 determination of the commissioner is final as to the cost of the 32.11 surplus property to the agency receiving the property. 32.12 (b) When any governmental unit or nonprofit organization 32.13 other than an agency receives surplus property from the 32.14 commissioner, the governmental unit or nonprofit organization 32.15 must reimburse the surplus services revolving fund for the cost 32.16 of the property, including the expenses of acquiring, accepting, 32.17 warehousing, and distributing it, in an amount the commissioner 32.18 sets. The commissioner may, however, require the governmental 32.19 unit or nonprofit organization to deposit in advance in the 32.20 surplus services revolving fund the cost of the surplus property 32.21 upon mutually agreeable terms and conditions. 32.22 (c) The commissioner may transfer or sell state surplus 32.23 property to any person at public auction, at prepriced sale, or 32.24 by sealed bid process in accordance with applicable state laws. 32.25 Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do 32.26 any of the following to dispose of state surplus property: 32.27 (1) transfer it to or between state agencies; 32.28 (2) transfer it to a governmental unit or nonprofit 32.29 organization in Minnesota; or 32.30 (3) sell it and charge a fee to cover expenses incurred by 32.31 the commissioner in the disposal of the surplus property. 32.32 The proceeds of the sale less the fee are appropriated to 32.33 the agency for whose account the sale was made, to be used and 32.34 expended by that agency to purchase similar state property. 32.35 Subd. 7. [GIFTS.] The commissioner is authorized to 32.36 solicit and accept donated money and fixed and consumable 33.1 property for the benefit of the state and any other governmental 33.2 unit or nonprofit organization for any purpose authorized by 33.3 state and federal law and in accordance with federal regulations 33.4 and rules. The gift acceptance procedures of sections 7.09 to 33.5 7.12 do not apply to this subdivision. 33.6 Sec. 25. [16C.25] [RULES.] 33.7 Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 33.8 under chapter 16B, govern under this chapter. In the event 33.9 rules adopted under chapter 16B conflict with provisions of this 33.10 chapter, this chapter shall govern. 33.11 Sec. 26. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 33.12 Notwithstanding anything in chapter 16C to the contrary, 33.13 all contracts for the repair, improvement, maintenance, or 33.14 construction of highways or highway bridges must be advertised 33.15 and let as provided by law for highway construction contracts. 33.16 Sec. 27. Minnesota Statutes 1997 Supplement, section 33.17 363.073, subdivision 1, is amended to read: 33.18 Subdivision 1. [SCOPE OF APPLICATION.] No department or33.19 agency of the state shall accept any bid or proposal for a33.20 contract or agreementFor all contracts for goods and services 33.21 in excess of $100,000, no department or agency of the state 33.22 shall accept any bid or proposal for a contract or agreement 33.23 from any business having more than 40 full-time employees within 33.24 this state on a single working day during the previous 12 33.25 months, unless the firm or business has an affirmative action 33.26 plan for the employment of minority persons, women, and 33.27 qualified disabled individuals, submitted to the commissioner of 33.28 human rights for approval. No department or agency of the state 33.29 shall execute any such contract or agreement for goods or33.30 services in excess of $100,000 with any business having more33.31 than 40 full-time employees, either within or outside this33.32 state, on a single working day during the previous 12 months,33.33 unless the firm or business has anuntil the affirmative action 33.34 plan for the employment of minority persons, women, and the33.35 disabled thathas been approved by the commissioner of human 33.36 rights. Receipt of a certificate of compliance issued by the 34.1 commissioner shall signify that a firm or business has an 34.2 affirmative action plan that has been approved by the 34.3 commissioner. A certificate shall be valid for a period of two 34.4 years. A municipality as defined in section 466.01, subdivision 34.5 1, that receives state money for any reason is encouraged to 34.6 prepare and implement an affirmative action plan for the 34.7 employment of minority persons, women, and the qualified 34.8 disabled and submit the plan to the commissioner of human rights. 34.9 Sec. 28. [REPORT.] 34.10 The commissioner of administration shall report to the 34.11 legislature on the use of measurable objectives as a means of 34.12 tracking progress toward the purchase of recycled content goods 34.13 as a part of the commissioner's next report to the legislature 34.14 in accordance with Minnesota Statutes, section 115A.15, 34.15 subdivision 5, paragraph (a). 34.16 Sec. 29. [REPEALER.] 34.17 Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 34.18 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 34.19 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 34.20 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 34.21 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 34.22 16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, 34.23 subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 34.24 Sec. 30. [EFFECTIVE DATE.] 34.25 This article is effective July 1, 1998. 34.26 ARTICLE 2 34.27 CONFORMING AMENDMENTS 34.28 Section 1. Minnesota Statutes 1997 Supplement, section 34.29 3.225, subdivision 1, is amended to read: 34.30 Subdivision 1. [APPLICATION.] This section applies to a 34.31 contract for professional or technical services entered into by 34.32 the house of representatives, the senate, the legislative 34.33 coordinating commission, or any group under the jurisdiction of 34.34 the legislative coordinating commission. For purposes of this 34.35 section, "professional or technical services" has the meaning 34.36 defined in section 16B.1716C.09, subdivision 1, but does not 35.1 include legal services for official legislative business. 35.2 Sec. 2. Minnesota Statutes 1996, section 3.225, 35.3 subdivision 2, is amended to read: 35.4 Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 35.5 into a contract for professional or technical services, the 35.6 contracting entity must determine that: 35.7 (1) all provisions of section 16B.1916C.17, subdivision 235.8 3, have been verified or complied with; 35.9 (2) the work to be performed under the contract is 35.10 necessary to the entity's achievement of its responsibilities; 35.11 (3) the contract will not establish an employment 35.12 relationship between the state or the entity and any persons 35.13 performing under the contract; 35.14 (4) no current legislative employees will engage in the 35.15 performance of the contract; 35.16 (5) no state agency has previously performed or contracted 35.17 for the performance of tasks which would be substantially 35.18 duplicated under the proposed contract; 35.19 (6) the contracting entity has specified a satisfactory 35.20 method of evaluating and using the results of the work to be 35.21 performed; and 35.22 (7) the combined contract and amendments will not extend 35.23 for more than five years. 35.24 Sec. 3. Minnesota Statutes 1996, section 3.732, 35.25 subdivision 6, is amended to read: 35.26 Subd. 6. [SETTLEMENT.] The head of each department or 35.27 agency, or a designee, acting on behalf of the state, may enter 35.28 into structured settlements, through the negotiation, creation, 35.29 and use of annuities or similar financial plans for claimants, 35.30 to resolve claims arising from the alleged negligence of the 35.31 state, its agencies, or employees. Sections 16B.06, 16B.07,35.32 16B.08, and 16B.0916C.03, subdivision 4, 16C.06, and 16C.07 do 35.33 not apply to the state's selection of and contracts with 35.34 structured settlement consultants or purveyors of structured 35.35 settlement plans. 35.36 Sec. 4. Minnesota Statutes 1996, section 3.922, 36.1 subdivision 5, is amended to read: 36.2 Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council 36.3 shall annually elect a chair and other officers as it may deem 36.4 necessary. The chair may appoint subcommittees necessary to 36.5 fulfill the duties of the council. It shall also employ and 36.6 prescribe the duties of employees and agents as it deems 36.7 necessary. The compensation of the executive director of the 36.8 board is as provided by section 43A.18. All employees are in 36.9 the unclassified service. The chair is an ex officio member of 36.10 the state board of human rights. Appropriations and other funds 36.11 of the council are subject to chapter 16B16C. The council may 36.12 contract in its own name. Contracts must be approved by a 36.13 majority of the members of the council and executed by the chair 36.14 and the executive director. The council may apply for, receive, 36.15 and spend in its own name, grants and gifts of money consistent 36.16 with the powers and duties specified in this section. The 36.17 council shall maintain its primary office in Bemidji. It shall 36.18 also maintain personnel and office space in St. Paul. 36.19 Sec. 5. Minnesota Statutes 1996, section 3C.10, 36.20 subdivision 3, is amended to read: 36.21 Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may 36.22 negotiate for all or part of the editing, indexing, compiling, 36.23 and printing of Minnesota Statutes, supplements to Minnesota 36.24 Statutes, and Laws of Minnesota and contract with a law book 36.25 publisher for these services. The provisions of chapter 16B16C 36.26 as they relate to competitive bidding do not apply to these 36.27 contracts. No contract may be made until the revisor of 36.28 statutes has consulted with the legislative coordinating 36.29 commission. Failure or refusal of the commission to make a 36.30 recommendation promptly shall be deemed an affirmative 36.31 recommendation. 36.32 Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended 36.33 to read: 36.34 4A.04 [COOPERATIVE CONTRACTS.] 36.35 (a) The director may apply for, receive, and expend money 36.36 from municipal, county, regional, and other planning agencies; 37.1 apply for, accept, and disburse grants and other aids for 37.2 planning purposes from the federal government and from other 37.3 public or private sources; and may enter into contracts with 37.4 agencies of the federal government, local governmental units, 37.5 the University of Minnesota, and other educational institutions, 37.6 and private persons as necessary to perform the director's 37.7 duties. Contracts made pursuant to this section are not subject 37.8 to the provisions of chapter 16B16C, as they relate to 37.9 competitive bidding. 37.10 (b) The director may apply for, receive, and expend money 37.11 made available from federal sources or other sources for the 37.12 purposes of carrying out the duties and responsibilities of the 37.13 director relating to local and urban affairs. 37.14 (c) All money received by the director pursuant to this 37.15 section shall be deposited in the state treasury and is 37.16 appropriated to the director for the purposes for which the 37.17 money has been received. The money shall not cancel and is 37.18 available until expended. 37.19 Sec. 7. Minnesota Statutes 1996, section 6.551, is amended 37.20 to read: 37.21 6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 37.22 GOVERNMENTS.] 37.23 The state auditor may examine the books, records, 37.24 documents, and accounting procedures and practices of a 37.25 contractor or grantee of a local government pursuant to section 37.26 16B.0616C.06, subdivision 45. The examination shall be 37.27 limited to the books, records, documents, and accounting 37.28 procedures and practices that are relevant to the contract or 37.29 transaction with the local government. 37.30 Sec. 8. Minnesota Statutes 1996, section 11A.24, 37.31 subdivision 4, is amended to read: 37.32 Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may 37.33 invest funds in bankers acceptances, certificates of deposit, 37.34 deposit notes, commercial paper, mortgage securities and asset 37.35 backed securities, repurchase agreements and reverse repurchase 37.36 agreements, guaranteed investment contracts, savings accounts, 38.1 and guaranty fund certificates, surplus notes, or debentures of 38.2 domestic mutual insurance companies if they conform to the 38.3 following provisions: 38.4 (1) bankers acceptances and deposit notes of United States 38.5 banks are limited to those issued by banks rated in the highest 38.6 four quality categories by a nationally recognized rating 38.7 agency; 38.8 (2) certificates of deposit are limited to those issued by 38.9 (i) United States banks and savings institutions that are rated 38.10 in the top four quality categories by a nationally recognized 38.11 rating agency or whose certificates of deposit are fully insured 38.12 by federal agencies; or (ii) credit unions in amounts up to the 38.13 limit of insurance coverage provided by the National Credit 38.14 Union Administration; 38.15 (3) commercial paper is limited to those issued by United 38.16 States corporations or their Canadian subsidiaries and rated in 38.17 the highest two quality categories by a nationally recognized 38.18 rating agency; 38.19 (4) mortgage securities shall be rated in the top four 38.20 quality categories by a nationally recognized rating agency; 38.21 (5) collateral for repurchase agreements and reverse 38.22 repurchase agreements is limited to letters of credit and 38.23 securities authorized in this section; 38.24 (6) guaranteed investment contracts are limited to those 38.25 issued by insurance companies or banks rated in the top four 38.26 quality categories by a nationally recognized rating agency or 38.27 to alternative guaranteed investment contracts where the 38.28 underlying assets comply with the requirements of this section; 38.29 (7) savings accounts are limited to those fully insured by 38.30 federal agencies; and 38.31 (8) asset backed securities shall be rated in the top four 38.32 quality categories by a nationally recognized rating agency. 38.33 (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 38.34 16C.06 do not apply to certificates of deposit and 38.35 collateralization agreements executed by the state board under 38.36 paragraph (a), clause (2). 39.1 (c) In addition to investments authorized by paragraph (a), 39.2 clause (4), the state board may purchase from the Minnesota 39.3 housing finance agency all or any part of a pool of residential 39.4 mortgages, not in default, that has previously been financed by 39.5 the issuance of bonds or notes of the agency. The state board 39.6 may also enter into a commitment with the agency, at the time of 39.7 any issue of bonds or notes, to purchase at a specified future 39.8 date, not exceeding 12 years from the date of the issue, the 39.9 amount of mortgage loans then outstanding and not in default 39.10 that have been made or purchased from the proceeds of the bonds 39.11 or notes. The state board may charge reasonable fees for any 39.12 such commitment and may agree to purchase the mortgage loans at 39.13 a price sufficient to produce a yield to the state board 39.14 comparable, in its judgment, to the yield available on similar 39.15 mortgage loans at the date of the bonds or notes. The state 39.16 board may also enter into agreements with the agency for the 39.17 investment of any portion of the funds of the agency. The 39.18 agreement must cover the period of the investment, withdrawal 39.19 privileges, and any guaranteed rate of return. 39.20 Sec. 9. Minnesota Statutes 1996, section 12.221, 39.21 subdivision 5, is amended to read: 39.22 Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any 39.23 federal-state agreement entered into by the state director, 39.24 serving as the governor's authorized representative, in the 39.25 acceptance of federal money made available as a result of a 39.26 disaster declaration, and upon the review and acceptance by the 39.27 attorney general's office of the language contained in the 39.28 subgrant agreement and any amendments to the agreement, the 39.29 requirements of section 16B.0616C.06, subdivision 2, paragraph 39.30 (a), clause (3), must be waived. 39.31 Sec. 10. Minnesota Statutes 1996, section 15.061, is 39.32 amended to read: 39.33 15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 39.34 In accordance with section 16B.17sections 16C.03 and 39.35 16C.09, the head of a state department or agency may, with the 39.36 approval of the commissioner of administration, contract for 40.1 professional or technical services in connection with the 40.2 operation of the department or agency. A contract negotiated 40.3 under this section is not subject to the competitive bidding 40.4 requirements of chapter 16B16C. 40.5 Sec. 11. Minnesota Statutes 1996, section 16A.101, is 40.6 amended to read: 40.7 16A.101 [SERVICE CONTRACTS.] 40.8 The state accounting system must list expenditures for 40.9 professional and technical service contracts, as defined in 40.10 section 16B.1716C.09, subdivision 1, as a separate category. 40.11 No other expenditures may be included in this category. 40.12 Sec. 12. Minnesota Statutes 1997 Supplement, section 40.13 16A.15, subdivision 3, is amended to read: 40.14 Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 40.15 not be made without prior obligation. An obligation may not be 40.16 incurred against any fund, allotment, or appropriation unless 40.17 the commissioner has certified a sufficient unencumbered balance 40.18 or the accounting system shows sufficient allotment or 40.19 encumbrance balance in the fund, allotment, or appropriation to 40.20 meet it. The commissioner shall determine when the accounting 40.21 system may be used to incur obligations without the 40.22 commissioner's certification of a sufficient unencumbered 40.23 balance. An expenditure or obligation authorized or incurred in 40.24 violation of this chapter is invalid and ineligible for payment 40.25 until made valid. A payment made in violation of this chapter 40.26 is illegal. An employee authorizing or making the payment, or 40.27 taking part in it, and a person receiving any part of the 40.28 payment, are jointly and severally liable to the state for the 40.29 amount paid or received. If an employee knowingly incurs an 40.30 obligation or authorizes or makes an expenditure in violation of 40.31 this chapter or takes part in the violation, the violation is 40.32 just cause for the employee's removal by the appointing 40.33 authority or by the governor if an appointing authority other 40.34 than the governor fails to do so. In the latter case, the 40.35 governor shall give notice of the violation and an opportunity 40.36 to be heard on it to the employee and to the appointing 41.1 authority. A claim presented against an appropriation without 41.2 prior allotment or encumbrance may be made valid on 41.3 investigation, review, and approval by the agency head in 41.4 accordance with the commissioner's policy, if the services, 41.5 materials, or supplies to be paid for were actually furnished in 41.6 good faith without collusion and without intent to defraud. The 41.7 commissioner may then draw a warrant to pay the claim just as 41.8 properly allotted and encumbered claims are paid. 41.9 (b) The commissioner may approve payment for materials and 41.10 supplies in excess of the obligation amount when increases are 41.11 authorized by section 16B.0716C.03, subdivision 23. 41.12 (c) To minimize potential construction delay claims, an 41.13 agency with a project funded by a building appropriation may 41.14 allow a contractor to proceed with supplemental work within the 41.15 limits of the appropriation before money is encumbered. Under 41.16 this circumstance, the agency may requisition funds and allow 41.17 contractors to expeditiously proceed with a construction 41.18 sequence. While the contractor is proceeding, the agency shall 41.19 immediately act to encumber the required funds. 41.20 Sec. 13. Minnesota Statutes 1996, section 16A.85, 41.21 subdivision 1, is amended to read: 41.22 Subdivision 1. [AUTHORIZATION.] The commissioner of 41.23 administration may determine, in conjunction with the 41.24 commissioner of finance, the personal property needs of the 41.25 various state departments, agencies, boards, commissions and the 41.26 legislature of the kinds of property identified in this 41.27 subdivision that may be economically funded through a master 41.28 lease program and request the commissioner of finance to execute 41.29 a master lease. The master lease may be used only to finance 41.30 the following kinds of purchases: 41.31 (a) The master lease may be used to finance purchases by 41.32 the commissioner of administration with money from an internal 41.33 services fund. 41.34 (b) The master lease may be used to refinance a purchase of 41.35 equipment already purchased under a lease-purchase agreement. 41.36 (c) The master lease may be used to finance purchases of 42.1 large equipment with a capital value of more than $100,000 and a 42.2 useful life of more than ten years. 42.3 (d) The legislature may specifically authorize a particular 42.4 purchase to be financed using the master lease. The legislature 42.5 anticipates that this authorization will be given only to 42.6 finance the purchase of major pieces of equipment with a capital 42.7 value of more than $10,000. 42.8 The commissioner of finance may authorize the sale and 42.9 issuance of certificates of participation relative to a master 42.10 lease in an amount sufficient to fund these personal property 42.11 needs. The term of the certificates must be less than the 42.12 expected useful life of the equipment whose purchase is financed 42.13 by the certificates. The commissioner of administration may use 42.14 the proceeds from the master lease or the sale of the 42.15 certificates of participation to acquire the personal property 42.16 through the appropriate procurement procedure in chapter 16B16C. 42.17 Money appropriated for the lease or acquisition of this personal 42.18 property is appropriated to the commissioner of finance to make 42.19 master lease payments. 42.20 Sec. 14. Minnesota Statutes 1997 Supplement, section 42.21 16B.465, subdivision 7, is amended to read: 42.22 Subd. 7. [EXEMPTION.] The system is exempt from the 42.23 five-year limitation on contracts set by section 16B.07,42.24 subdivision 2sections 16C.06, subdivision 2, paragraph (a), 42.25 clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 42.26 clause (6). 42.27 Sec. 15. Minnesota Statutes 1997 Supplement, section 42.28 16E.07, subdivision 9, is amended to read: 42.29 Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall 42.30 identify opportunities to aggregate demand for technical 42.31 services required by government units for online activities and 42.32 may contract with governmental or nongovernmental entities to 42.33 provide services. These contracts are not subject to the 42.34 requirements of chapterchapters 16B and 16C, except 42.35 sections 16B.167, 16B.17, and 16B.17516C.05, 16C.08, 16C.09, 42.36 and 16C.10. 43.1 Sec. 16. Minnesota Statutes 1997 Supplement, section 43.2 17.03, subdivision 12, is amended to read: 43.3 Subd. 12. [CONTRACTS; APPROPRIATION.] The commissioner may 43.4 accept money as part of a contract with any public or private 43.5 entity to provide statutorily prescribed services by the 43.6 department. A contract must specify the services to be provided 43.7 by the department and the amount and method of reimbursement. 43.8 Money generated in a contractual agreement under this section 43.9 must be deposited in a special revenue fund and is appropriated 43.10 to the department for purposes of providing services specified 43.11 in the contracts. Contracts under this section must be 43.12 processed in accordance with section 16B.0616C.06. The 43.13 commissioner must report revenues collected and expenditures 43.14 made under this section to the chairs of the environment and 43.15 natural resources finance committee in the house of 43.16 representatives and the environment and agriculture budget 43.17 division in the senate by January 15 of each odd-numbered year. 43.18 Sec. 17. Minnesota Statutes 1996, section 17.1015, is 43.19 amended to read: 43.20 17.1015 [PROMOTIONAL EXPENDITURES.] 43.21 In order to accomplish the purposes of section 17.101, the 43.22 commissioner may participate jointly with private persons in 43.23 appropriate programs and projects and may enter into contracts 43.24 to carry out those programs and projects. The contracts may not 43.25 include the acquisition of land or buildings and are not subject 43.26 to the provisions of chapter 16B16C relating to competitive 43.27 bidding. 43.28 The commissioner may spend money appropriated for the 43.29 purposes of section 17.101, and expenditures made pursuant to 43.30 section 17.101 for food, lodging, or travel are not governed by 43.31 the travel rules of the commissioner of employee relations. 43.32 Sec. 18. Minnesota Statutes 1996, section 41A.023, is 43.33 amended to read: 43.34 41A.023 [POWERS.] 43.35 In addition to other powers granted by this chapter, the 43.36 board may: 44.1 (1) sue and be sued; 44.2 (2) acquire, hold, lease, and transfer any interest in real 44.3 and personal property for its corporate purposes; 44.4 (3) sell at public or private sale, at the price or prices 44.5 determined by the board, any note, mortgage, lease, sublease, 44.6 lease purchase, or other instrument or obligation evidencing or 44.7 securing a loan made for the purpose of economic development, 44.8 job creation, redevelopment, or community revitalization by a 44.9 public agency to a business, for-profit or nonprofit 44.10 organization, or an individual; 44.11 (4) obtain insurance on its property; 44.12 (5) obtain municipal bond insurance, letters of credit, 44.13 surety obligations, or similar agreements from financial 44.14 institutions; 44.15 (6) enter into other agreements or transactions, without 44.16 regard to chapter 16B or 16C, that the board considers necessary 44.17 or appropriate to carry out the purposes of this chapter with 44.18 federal or state agencies, political subdivisions of the state, 44.19 or other persons, firms, or corporations; 44.20 (7) establish and collect fees without regard to chapter 14 44.21 and section 16A.1285; 44.22 (8) accept appropriations, gifts, grants, and bequests; 44.23 (9) use money received from any source for any legal 44.24 purpose or program of the board; 44.25 (10) participate in loans for agricultural resource 44.26 projects in accordance with section 41A.035; 44.27 (11) provide small business development loans in accordance 44.28 with section 41A.036; and 44.29 (12) guarantee or insure bonds or notes issued by the board. 44.30 Sec. 19. Minnesota Statutes 1997 Supplement, section 44.31 41D.03, subdivision 7, is amended to read: 44.32 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 44.33 educational equipment may be procured for programs of the 44.34 Minnesota center for agriculture education by the council either 44.35 by brand designation or in accordance with standards and 44.36 specifications the council may adopt, notwithstanding chapter 45.1 16B16C. 45.2 Sec. 20. Minnesota Statutes 1996, section 43A.23, 45.3 subdivision 1, is amended to read: 45.4 Subdivision 1. [GENERAL.] The commissioner is authorized 45.5 to request bids from carriers or to negotiate with carriers and 45.6 to enter into contracts with carriers which in the judgment of 45.7 the commissioner are best qualified to underwrite and service 45.8 the benefit plans. Contracts entered into with carriers are not 45.9 subject to the requirements of sections 16B.19 to 16B.2216C.17 45.10 to 16C.20. The commissioner may negotiate premium rates and 45.11 coverage provisions with all carriers licensed under chapters 45.12 62A, 62C, and 62D. The commissioner may also negotiate 45.13 reasonable restrictions to be applied to all carriers under 45.14 chapters 62A, 62C, and 62D. Contracts to underwrite the benefit 45.15 plans must be bid or negotiated separately from contracts to 45.16 service the benefit plans, which may be awarded only on the 45.17 basis of competitive bids. The commissioner shall consider the 45.18 cost of the plans, conversion options relating to the contracts, 45.19 service capabilities, character, financial position, and 45.20 reputation of the carriers, and any other factors which the 45.21 commissioner deems appropriate. Each benefit contract must be 45.22 for a uniform term of at least one year, but may be made 45.23 automatically renewable from term to term in the absence of 45.24 notice of termination by either party. The commissioner shall, 45.25 to the extent feasible, make hospital and medical benefits 45.26 available from at least one carrier licensed to do business 45.27 pursuant to each of chapters 62A, 62C, and 62D. The 45.28 commissioner need not provide health maintenance organization 45.29 services to an employee who resides in an area which is not 45.30 served by a licensed health maintenance organization. The 45.31 commissioner may refuse to allow a health maintenance 45.32 organization to continue as a carrier. The commissioner may 45.33 elect not to offer all three types of carriers if there are no 45.34 bids or no acceptable bids by that type of carrier or if the 45.35 offering of additional carriers would result in substantial 45.36 additional administrative costs. A carrier licensed under 46.1 chapter 62A is exempt from the tax imposed by section 60A.15 on 46.2 premiums paid to it by the state. 46.3 Sec. 21. Minnesota Statutes 1996, section 44A.01, 46.4 subdivision 1, is amended to read: 46.5 Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade 46.6 center corporation is a public corporation established to 46.7 facilitate and support Minnesota world trade center programs and 46.8 services and to promote the Minnesota world trade center. The 46.9 corporation is a state agency, but is not subject to chapters 46.10 14, 16A, 16B, 16C, 43A, and 179A. 46.11 Sec. 22. Minnesota Statutes 1996, section 45.0291, is 46.12 amended to read: 46.13 45.0291 [DEPARTMENT BONDS.] 46.14 Bonds issued under chapters 45 to 83, 309, 332, and 46.15 sections 326.83 to 326.98, are not state bonds or contracts for 46.16 purposes of sections 8.05 and 16B.0616C.06, subdivision 2. 46.17 Sec. 23. Minnesota Statutes 1997 Supplement, section 46.18 61B.21, subdivision 1, is amended to read: 46.19 Subdivision 1. [FUNCTIONS.] The Minnesota life and health 46.20 insurance guaranty association shall perform its functions under 46.21 the plan of operation established and approved under section 46.22 61B.25, and shall exercise its powers through a board of 46.23 directors. The association is not a state agency for purposes 46.24 of chapter 16A, 16B, 16C, or 43A. For purposes of 46.25 administration and assessment, the association shall establish 46.26 and maintain two accounts: 46.27 (1) the life insurance and annuity account which includes 46.28 the following subaccounts: 46.29 (i) the life insurance account; 46.30 (ii) the annuity account; and 46.31 (iii) the unallocated annuity account; and 46.32 (2) the health insurance account. 46.33 Sec. 24. Minnesota Statutes 1996, section 84.025, 46.34 subdivision 7, is amended to read: 46.35 Subd. 7. [CONTRACTS.] The commissioner of natural 46.36 resources may contract with the federal government, local 47.1 governmental units, the University of Minnesota, and other 47.2 educational institutions, and private persons as may be 47.3 necessary in the performance of duties. Contracts made pursuant 47.4 to this section for professional services shall not be subject 47.5 to the provisions of chapter 16B16C, as they relate to 47.6 competitive bidding. 47.7 Sec. 25. Minnesota Statutes 1996, section 84.026, is 47.8 amended to read: 47.9 84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 47.10 SERVICES.] 47.11 The commissioner of natural resources is authorized to 47.12 enter into contractual agreements with any public or private 47.13 entity for the provision of statutorily prescribed natural 47.14 resources services by the department. The contracts shall 47.15 specify the services to be provided and the amount and method of 47.16 reimbursement. Funds generated in a contractual agreement made 47.17 pursuant to this section shall be deposited in the special 47.18 revenue fund and are appropriated to the department for purposes 47.19 of providing the services specified in the contracts. All such 47.20 contractual agreements shall be processed in accordance with the 47.21 provisions of section 16B.0616C.06. The commissioner shall 47.22 report revenues collected and expenditures made under this 47.23 section to the chairs of the committees on appropriations in the 47.24 house and finance in the senate by January 1 of each 47.25 odd-numbered year. 47.26 Sec. 26. Minnesota Statutes 1996, section 84.0845, is 47.27 amended to read: 47.28 84.0845 [ADVANCE OF MATCHING FUNDS.] 47.29 The commissioner may advance funds appropriated for fish 47.30 and wildlife programs to government agencies, the National Fish 47.31 and Wildlife Foundation, federally recognized Indian tribes and 47.32 bands, and private, nonprofit organizations for the purposes of 47.33 securing nonstate matching funds for projects involving 47.34 acquisition and improvement of fish and wildlife habitat and 47.35 related research and management. The commissioner shall execute 47.36 agreements for contracts with the matching parties under section48.1 16B.06sections 16C.03, subdivision 4, and 16C.06 prior to 48.2 advancing any state funds. The agreement or contract shall 48.3 contain provisions for return of the state's share and the 48.4 matching funds within a period of time specified by the 48.5 commissioner. The state's funds and the nonstate matching funds 48.6 must be deposited in a separate account and expended solely for 48.7 the purposes set forth in the agreement or contract. The 48.8 commissioner shall enter into agreements or contracts only with 48.9 the National Fish and Wildlife Foundation and federal and 48.10 nonprofit authorities deemed by the commissioner to be dedicated 48.11 to the purposes of the project. 48.12 Sec. 27. Minnesota Statutes 1996, section 85A.02, 48.13 subdivision 3, is amended to read: 48.14 Subd. 3. The board may conduct research studies and 48.15 programs, collect and analyze data and prepare reports, maps, 48.16 charts and other information relating to the zoological garden 48.17 or any wild or domestic animals or may contract for any of such 48.18 services without complying with chapter 16B16C. 48.19 Sec. 28. Minnesota Statutes 1997 Supplement, section 48.20 85A.02, subdivision 5b, is amended to read: 48.21 Subd. 5b. [EXEMPTIONS.] The board is not subject to 48.22 sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 48.23 chapterchapters 16B and 16C, except for sections 16B.07,48.24 16B.102, 16B.17, 16B.19, 16B.35, and 16B.5516B.35, 16B.55, 48.25 16C.07, 16C.09, 16C.10, and 16C.17; and chapter 14, except 48.26 section 14.386, paragraph (a), clauses (1) and (3). Section 48.27 14.386, paragraph (b), does not apply to the board's actions. 48.28 Sec. 29. Minnesota Statutes 1996, section 85A.02, 48.29 subdivision 16, is amended to read: 48.30 Subd. 16. The board may acquire by lease-purchase or 48.31 installment purchase contract, transportation systems, 48.32 facilities and equipment that it determines will substantially 48.33 enhance the public's opportunity to view, study or derive 48.34 information concerning the animals to be located in the 48.35 zoological garden, and will increase attendance at the garden. 48.36 The contracts may provide for: (1) the payment of money over a 49.1 12-year period, or over a longer period not exceeding 25 years 49.2 if approved by the board; (2) the payment of money from any 49.3 funds of the board not pledged or appropriated for another 49.4 purpose; (3) indemnification of the lessor or seller for damage 49.5 to property or injury to persons due primarily to the actions of 49.6 the board or its employees; (4) the transfer of title to the 49.7 property to the board upon execution of the contract or upon 49.8 payment of specified amounts; (5) the reservation to the lessor 49.9 or seller of a security interest in the property; and (6) any 49.10 other terms that the board determines to be commercially 49.11 reasonable. Property so acquired by the board, and its purchase 49.12 or use by the board, or by any nonprofit corporation having a 49.13 concession from the board requiring its purchase, shall not be 49.14 subject to taxation by the state or its political subdivisions. 49.15 Each contract shall be subject to the provisions of chapter 16B49.16 16C, relating to competitive bidding, provided that, 49.17 notwithstanding subdivision 5b, the board is not required to 49.18 readvertise for competitive proposals for any transportation 49.19 system, facilities and equipment heretofore selected from 49.20 competitive proposals. 49.21 Sec. 30. Minnesota Statutes 1996, section 85A.02, 49.22 subdivision 18, is amended to read: 49.23 Subd. 18. [PURCHASING.] The board may contract for 49.24 supplies, materials, purchase or rental of equipment, and 49.25 utility services. Except as provided in subdivision 5b, chapter 49.26 16B16C does not apply to these contracts. 49.27 Sec. 31. Minnesota Statutes 1996, section 103F.515, 49.28 subdivision 3, is amended to read: 49.29 Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may 49.30 acquire, or accept by gift or donation, conservation easements 49.31 on eligible land. An easement may be permanent or of limited 49.32 duration. An easement acquired on land for windbreak purposes, 49.33 under subdivision 2, may be only of permanent duration. An 49.34 easement of limited duration may not be acquired if it is for a 49.35 period less than 20 years. The negotiation and acquisition of 49.36 easements authorized by this section are exempt from the 50.1 contractual provisions of chapterchapters 16B and 16C. 50.2 (b) The board may acquire, or accept by gift or donation, 50.3 flowage easements when necessary for completion of wetland 50.4 restoration projects. 50.5 Sec. 32. Minnesota Statutes 1996, section 116.03, 50.6 subdivision 2, is amended to read: 50.7 Subd. 2. The commissioner shall organize the agency and 50.8 employ such assistants and other officers, employees and agents 50.9 as the commissioner may deem necessary to discharge the 50.10 functions of the commissioner's office, define the duties of 50.11 such officers, employees and agents, and delegate to them any of 50.12 the commissioner's powers, duties, and responsibilities, subject 50.13 to the commissioner's control and under such conditions as the 50.14 commissioner may prescribe. The commissioner may also contract 50.15 with persons, firms, corporations, the federal government and 50.16 any agency or instrumentality thereof, the water research center 50.17 of the University of Minnesota or any other instrumentality of 50.18 such university, for doing any of the work of the commissioner's 50.19 office, and none of the provisions of chapter 16B16C, relating 50.20 to bids, shall apply to such contracts. 50.21 Sec. 33. Minnesota Statutes 1996, section 116J.035, 50.22 subdivision 1, is amended to read: 50.23 Subdivision 1. [POWERS.] The commissioner may: 50.24 (a) apply for, receive, and expend money from municipal, 50.25 county, regional, and other government agencies; 50.26 (b) apply for, accept, and disburse grants and other aids 50.27 from other public or private sources; 50.28 (c) contract for professional services if such work or 50.29 services cannot be satisfactorily performed by employees of the 50.30 department or by any other state agency; 50.31 (d) enter into interstate compacts to jointly carry out 50.32 such research and planning with other states or the federal 50.33 government where appropriate; 50.34 (e) distribute informational material at no cost to the 50.35 public upon reasonable request; and 50.36 (f) enter into contracts necessary for the performance of 51.1 the commissioner's duties with federal, state, regional, 51.2 metropolitan, local, and other agencies or units of government; 51.3 educational institutions, including the University of 51.4 Minnesota. Contracts made pursuant to this section shall not be 51.5 subject to the competitive bidding requirements of chapter 16B51.6 16C. 51.7 The commissioner may apply for, receive, and expend money 51.8 made available from federal or other sources for the purpose of 51.9 carrying out the duties and responsibilities of the commissioner 51.10 pursuant to this chapter. 51.11 All moneys received by the commissioner pursuant to this 51.12 chapter shall be deposited in the state treasury and are 51.13 appropriated to the commissioner for the purpose for which the 51.14 moneys have been received. The money shall not cancel and shall 51.15 be available until expended. 51.16 Sec. 34. Minnesota Statutes 1996, section 116J.402, is 51.17 amended to read: 51.18 116J.402 [COOPERATIVE CONTRACTS.] 51.19 The commissioner of trade and economic development may 51.20 apply for, receive, and spend money for community development 51.21 from municipal, county, regional, and other planning agencies. 51.22 The commissioner may also apply for, accept, and disburse grants 51.23 and other aids for community development and related planning 51.24 from the federal government and other sources. The commissioner 51.25 may enter into contracts with agencies of the federal 51.26 government, local governmental units, regional development 51.27 commissions, and the metropolitan council, other state agencies, 51.28 the University of Minnesota, and other educational institutions, 51.29 and private persons as necessary to perform the commissioner's 51.30 duties. Contracts made according to this section, except those 51.31 with private persons, are not subject to the provisions of 51.32 chapter 16B16C concerning competitive bidding. 51.33 The commissioner may apply for, receive, and spend money 51.34 made available from federal sources or other sources for the 51.35 purposes of carrying out the duties and responsibilities of the 51.36 commissioner. 52.1 Money received by the commissioner under this section must 52.2 be deposited in the state treasury and is appropriated to the 52.3 commissioner for the purposes for which the money has been 52.4 received. The money does not cancel and is available until 52.5 spent. 52.6 Sec. 35. Minnesota Statutes 1996, section 116J.58, 52.7 subdivision 2, is amended to read: 52.8 Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry 52.9 out duties and responsibilities and to serve the people of the 52.10 state in the promotion of tourism, trade, and economic 52.11 development, the commissioner may engage in programs and 52.12 projects jointly with a private person, firm, corporation or 52.13 association and may enter into contracts under terms to be 52.14 mutually agreed upon to carry out such programs and projects not 52.15 including acquisition of land or buildings. Contracts may be 52.16 negotiated and are not subject to the provisions of chapter 16B52.17 16C relating to competitive bidding. 52.18 Sec. 36. Minnesota Statutes 1996, section 116J.68, 52.19 subdivision 2, is amended to read: 52.20 Subd. 2. The bureau shall: 52.21 (a) provide information and assistance with respect to all 52.22 aspects of business planning and business management related to 52.23 the start-up, operation, or expansion of a small business in 52.24 Minnesota; 52.25 (b) refer persons interested in the start-up, operation, or 52.26 expansion of a small business in Minnesota to assistance 52.27 programs sponsored by federal agencies, state agencies, 52.28 educational institutions, chambers of commerce, civic 52.29 organizations, community development groups, private industry 52.30 associations, and other organizations or to the business 52.31 assistance referral system established by the Minnesota Project 52.32 Outreach Corporation; 52.33 (c) plan, develop, and implement a master file of 52.34 information on small business assistance programs of federal, 52.35 state, and local governments, and other public and private 52.36 organizations so as to provide comprehensive, timely information 53.1 to the bureau's clients; 53.2 (d) employ staff with adequate and appropriate skills and 53.3 education and training for the delivery of information and 53.4 assistance; 53.5 (e) seek out and utilize, to the extent practicable, 53.6 contributed expertise and services of federal, state, and local 53.7 governments, educational institutions, and other public and 53.8 private organizations; 53.9 (f) maintain a close and continued relationship with the 53.10 director of the procurement program within the department of 53.11 administration so as to facilitate the department's duties and 53.12 responsibilities under sections 16B.19 to 16B.2216C.17 to 53.13 16C.20 relating to the small targeted group business and 53.14 economically disadvantaged business program of the state; 53.15 (g) develop an information system which will enable the 53.16 commissioner and other state agencies to efficiently store, 53.17 retrieve, analyze, and exchange data regarding small business 53.18 development and growth in the state. All executive branch 53.19 agencies of state government and the secretary of state shall to 53.20 the extent practicable, assist the bureau in the development and 53.21 implementation of the information system; 53.22 (h) establish and maintain a toll free telephone number so 53.23 that all small business persons anywhere in the state can call 53.24 the bureau office for assistance. An outreach program shall be 53.25 established to make the existence of the bureau well known to 53.26 its potential clientele throughout the state. If the small 53.27 business person requires a referral to another provider the 53.28 bureau may use the business assistance referral system 53.29 established by the Minnesota Project Outreach Corporation; 53.30 (i) conduct research and provide data as required by the 53.31 state legislature; 53.32 (j) develop and publish material on all aspects of the 53.33 start-up, operation, or expansion of a small business in 53.34 Minnesota; 53.35 (k) collect and disseminate information on state 53.36 procurement opportunities, including information on the 54.1 procurement process; 54.2 (l) develop a public awareness program through the use of 54.3 newsletters, personal contacts, and electronic and print news 54.4 media advertising about state assistance programs for small 54.5 businesses, including those programs specifically for socially 54.6 disadvantaged small business persons; 54.7 (m) enter into agreements with the federal government and 54.8 other public and private entities to serve as the statewide 54.9 coordinator or host agency for the federal small business 54.10 development center program under United States Code, title 15, 54.11 section 648; and 54.12 (n) assist providers in the evaluation of their programs 54.13 and the assessment of their service area needs. The bureau may 54.14 establish model evaluation techniques and performance standards 54.15 for providers to use. 54.16 Sec. 37. Minnesota Statutes 1996, section 116J.966, 54.17 subdivision 1, is amended to read: 54.18 Subdivision 1. [GENERALLY.] (a) The commissioner shall 54.19 promote, develop, and facilitate trade and foreign investment in 54.20 Minnesota. In furtherance of these goals, and in addition to 54.21 the powers granted by section 116J.035, the commissioner may: 54.22 (1) locate, develop, and promote international markets for 54.23 Minnesota products and services; 54.24 (2) arrange and lead trade missions to countries with 54.25 promising international markets for Minnesota goods, technology, 54.26 services, and agricultural products; 54.27 (3) promote Minnesota products and services at domestic and 54.28 international trade shows; 54.29 (4) organize, promote, and present domestic and 54.30 international trade shows featuring Minnesota products and 54.31 services; 54.32 (5) host trade delegations and assist foreign traders in 54.33 contacting appropriate Minnesota businesses and investments; 54.34 (6) develop contacts with Minnesota businesses and gather 54.35 and provide information to assist them in locating and 54.36 communicating with international trading or joint venture 55.1 counterparts; 55.2 (7) provide information, education, and counseling services 55.3 to Minnesota businesses regarding the economic, commercial, 55.4 legal, and cultural contexts of international trade; 55.5 (8) provide Minnesota businesses with international trade 55.6 leads and information about the availability and sources of 55.7 services relating to international trade, such as export 55.8 financing, licensing, freight forwarding, international 55.9 advertising, translation, and custom brokering; 55.10 (9) locate, attract, and promote foreign direct investment 55.11 and business development in Minnesota to enhance employment 55.12 opportunities in Minnesota; 55.13 (10) provide foreign businesses and investors desiring to 55.14 locate facilities in Minnesota information regarding sources of 55.15 governmental, legal, real estate, financial, and business 55.16 services; 55.17 (11) enter into contracts or other agreements with private 55.18 persons and public entities, including agreements to establish 55.19 and maintain offices and other types of representation in 55.20 foreign countries, to carry out the purposes of promoting 55.21 international trade and attracting investment from foreign 55.22 countries to Minnesota and to carry out this section, without 55.23 regard to sections 16B.07 and 16B.09section 16C.07; 55.24 (12) enter into administrative, programming, and service 55.25 partnerships with the Minnesota world trade center; and 55.26 (13) market trade-related materials to businesses and 55.27 organizations, and the proceeds of which must be placed in a 55.28 special revolving account and are appropriated to the 55.29 commissioner to prepare and distribute trade-related materials. 55.30 (b) The programs and activities of the commissioner of 55.31 trade and economic development and the Minnesota trade division 55.32 may not duplicate programs and activities of the commissioner of 55.33 agriculture or the Minnesota world trade center corporation. 55.34 (c) The commissioner shall notify the chairs of the senate 55.35 finance and house appropriations committees of each agreement 55.36 under this subdivision to establish and maintain an office or 56.1 other type of representation in a foreign country. 56.2 Sec. 38. Minnesota Statutes 1997 Supplement, section 56.3 121.1113, subdivision 2, is amended to read: 56.4 Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 56.5 ASSISTANCE.] The department of children, families, and learning 56.6 shall contract for professional and technical services according 56.7 to competitive bidding procedures under chapter 16B16C for 56.8 purposes of this section. 56.9 Sec. 39. Minnesota Statutes 1996, section 124.14, 56.10 subdivision 1, is amended to read: 56.11 Subdivision 1. The commissioner shall supervise 56.12 distribution of school aids and grants in accordance with law. 56.13 It may make rules consistent with law for the distribution to 56.14 enable districts to perform efficiently the services required by 56.15 law and further education in the state, including reasonable 56.16 requirements for the reports and accounts to it as will assure 56.17 accurate and lawful apportionment of aids. State and federal 56.18 aids and discretionary or entitlement grants distributed by the 56.19 commissioner shall not be subject to the contract approval 56.20 procedures of the commissioner of administration or to chapter 56.21 16A or, 16B, or 16C. The commissioner shall adopt internal 56.22 procedures for administration and monitoring of aids and grants. 56.23 Sec. 40. Minnesota Statutes 1996, section 126.151, 56.24 subdivision 2, is amended to read: 56.25 Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner 56.26 and the board of trustees of the Minnesota state colleges and 56.27 universities may retain dues and other money collected on behalf 56.28 of students participating in approved vocational student 56.29 organizations and may deposit the money in separate accounts. 56.30 The money in these accounts shall be available for expenditures 56.31 for state and national activities related to specific 56.32 organizations. Administration of money collected under this 56.33 section is not subject to the provisions of chapters 15, 56.34 16A, and16B, and 16C, and may be deposited outside the state 56.35 treasury. Money shall be administered under the policies of the 56.36 applicable state board or agency relating to post-secondary and 57.1 secondary vocational student organizations and is subject to 57.2 audit by the legislative auditor. Any unexpended money shall 57.3 not cancel but may be carried forward to the next fiscal year. 57.4 Sec. 41. Minnesota Statutes 1996, section 129C.10, 57.5 subdivision 7, is amended to read: 57.6 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 57.7 educational equipment may be procured for programs of the Lola 57.8 and Rudy Perpich Minnesota center for arts education by the 57.9 board either by brand designation or in accordance with 57.10 standards and specifications the board may adopt, 57.11 notwithstanding chapterchapters 16B and 16C. 57.12 Sec. 42. Minnesota Statutes 1996, section 136A.06, is 57.13 amended to read: 57.14 136A.06 [FEDERAL FUNDS.] 57.15 The higher education services office is designated the 57.16 state agency to apply for, receive, accept, and disburse to both 57.17 public and private institutions of higher education all federal 57.18 funds which are allocated to the state of Minnesota to support 57.19 higher education programs, construction, or other activities and 57.20 which require administration by a state higher education agency 57.21 under the Higher Education Facilities Act of 1963, and any 57.22 amendments thereof, the Higher Education Act of 1965, and any 57.23 amendments thereof, and any other law which provides funds for 57.24 higher education and requires administration by a state higher 57.25 education agency as enacted or may be enacted by the Congress of 57.26 the United States; provided that no commitment shall be made 57.27 that shall bind the legislature to make appropriations beyond 57.28 current allocations of funds. The office may apply for, 57.29 receive, accept, and disburse all administrative funds available 57.30 to the office for administering federal funds to support higher 57.31 education programs, construction, or other activities. The 57.32 office also may apply for, receive, accept, and disburse any 57.33 research, planning, or program funds which are available for 57.34 purposes consistent with the provisions of this chapter. In 57.35 making application for and administering federal funds the 57.36 office may comply with any and all requirements of federal law 58.1 and federal rules and regulations to enable it to receive and 58.2 accept such funds. The expenditure of any such funds received 58.3 shall be governed by the laws of the state, except insofar as 58.4 federal regulations may otherwise provide. The office may 58.5 contract with both public and private institutions in 58.6 administering federal funds, and such contracts shall not be 58.7 subject to the provisions of chapter 16B16C. All such money 58.8 received by the office shall be deposited in the state treasury 58.9 and are hereby appropriated to it annually for the purpose for 58.10 which such funds are received. None of such moneys shall cancel 58.11 but shall be available until expended. 58.12 Sec. 43. Minnesota Statutes 1996, section 136A.16, 58.13 subdivision 1, is amended to read: 58.14 Subdivision 1. Notwithstanding chapter 16B16C, the 58.15 Minnesota higher education services office is designated as the 58.16 administrative agency for carrying out the purposes and terms of 58.17 sections 136A.15 to 136A.1702. The office may establish one or 58.18 more loan programs. 58.19 Sec. 44. Minnesota Statutes 1996, section 136A.29, 58.20 subdivision 6, is amended to read: 58.21 Subd. 6. The authority is authorized and empowered to 58.22 determine the location and character of any project to be 58.23 financed under the provisions of sections 136A.25 to 136A.42, 58.24 and to construct, reconstruct, remodel, maintain, manage, 58.25 enlarge, alter, add to, repair, operate, lease, as lessee or 58.26 lessor, and regulate the same, to enter into contracts for any 58.27 or all of such purposes, to enter into contracts for the 58.28 management and operation of a project, and to designate a 58.29 participating institution of higher education as its agent to 58.30 determine the location and character of a project undertaken by 58.31 such participating institution of higher education under the 58.32 provisions of sections 136A.25 to 136A.42 and as the agent of 58.33 the authority, to construct, reconstruct, remodel, maintain, 58.34 manage, enlarge, alter, add to, repair, operate, lease, as 58.35 lessee or lessor, and regulate the same, and as the agent of the 58.36 authority, to enter into contracts for any or all of such 59.1 purposes, including contracts for the management and operation 59.2 of such project. Contracts of the authority or of a 59.3 participating institution of higher education to acquire or to 59.4 construct, reconstruct, remodel, maintain, enlarge, alter, add 59.5 to, or repair projects shall not be subject to the provisions of 59.6 chapter 16B16C or section 574.26, or any other public contract 59.7 or competitive bid law. 59.8 Sec. 45. Minnesota Statutes 1997 Supplement, section 59.9 136A.40, is amended to read: 59.10 136A.40 [ADMINISTRATION.] 59.11 The administration of sections 136A.25 to 136A.42, shall be 59.12 under the authority independent of other departments and 59.13 agencies and notwithstanding chapter 16B16C. The authority 59.14 shall not be subject to the provisions of chapter 14, including 59.15 section 14.386 in connection with the adoption of any rules, 59.16 rents, fees or charges or with the exercise of any other powers 59.17 or duties. 59.18 Sec. 46. Minnesota Statutes 1996, section 136F.23, is 59.19 amended to read: 59.20 136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 59.21 Notwithstanding chapter 16A or 16B16C, the student 59.22 associations recognized by the board of trustees of the 59.23 Minnesota state colleges and universities may purchase goods or 59.24 materials through state purchasing authority for the ordinary 59.25 day-to-day operations of the associations. The student 59.26 associations must be nonprofit 501(c)(3) organizations in order 59.27 to qualify for this authority. The department of administration 59.28 may require that the purchase documents be approved by 59.29 appropriate officials in the board's central office. 59.30 Sec. 47. Minnesota Statutes 1996, section 136F.56, 59.31 subdivision 5, is amended to read: 59.32 Subd. 5. [SERVICE CONTRACTS.] The council may contract for 59.33 the services it needs to carry out its function. The council 59.34 may also contract to provide services to other organizations. 59.35 The contracts are not subject to the contract approval 59.36 procedures of the commissioner of administration or of 60.1 chapter 16B16C. 60.2 Sec. 48. Minnesota Statutes 1996, section 136F.581, 60.3 subdivision 3, is amended to read: 60.4 Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 60.5 policies and procedures must include provisions for procurement, 60.6 including construction, from small targeted group businesses and 60.7 businesses from economically disadvantaged areas designated 60.8 under section 16B.1916C.17. The board, colleges, and 60.9 universities shall use the methods contained in section 471.345, 60.10 subdivision 8, for such purchasing, or may develop additional 60.11 methods in which the cost percentage preferences are consistent 60.12 with the provision of section 16B.1916C.17, subdivisions 2c and60.13 2d6, paragraph (a), and 7, or consistent with the provisions of 60.14 the University of Minnesota's targeted group business purchasing 60.15 program. 60.16 Sec. 49. Minnesota Statutes 1996, section 136F.66, is 60.17 amended to read: 60.18 136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 60.19 In awarding contracts for capital projects under section 60.20 136F.64, the board shall consider the documentation provided by 60.21 the bidders regarding their qualifications, including evidence 60.22 of having successfully completed similar work, or delivering 60.23 services or products comparable to that being requested. The 60.24 board shall set procedures to administer this section, which 60.25 must include practices that will assist in the economic 60.26 development of small businesses, small targeted group 60.27 businesses, and businesses in economically disadvantaged areas 60.28 designated under section 16B.1916C.17. 60.29 Sec. 50. Minnesota Statutes 1996, section 136F.72, 60.30 subdivision 3, is amended to read: 60.31 Subd. 3. [ADMINISTRATION.] Each college and university, 60.32 independent of other authority and notwithstanding chapters 60.33 16A and, 16B, and 16C, shall administer its activity funds. The 60.34 board, independent of other authority and notwithstanding 60.35 chapters 16A and, 16B, and 16C, shall administer the 60.36 administrative fund established in the system office. All 61.1 activity fund money collected shall be administered under the 61.2 policies of the board subject to audit of the legislative 61.3 auditor. 61.4 Sec. 51. Minnesota Statutes 1996, section 136F.96, is 61.5 amended to read: 61.6 136F.96 [ADMINISTRATION.] 61.7 The administration of sections 136F.90 to 136F.98 shall be 61.8 under the board of trustees of the Minnesota state colleges and 61.9 universities independent of other authority and notwithstanding 61.10 chapters 16A and, 16B, and 16C. 61.11 Sec. 52. Minnesota Statutes 1996, section 137.35, 61.12 subdivision 1, is amended to read: 61.13 Subdivision 1. [PURCHASING METHODS.] (a) The regents may 61.14 award up to a six percent preference in the amount bid for 61.15 specified goods and services to small targeted group businesses 61.16 designated under section 16B.1916C.17, subdivision 5. 61.17 (b) The regents may designate a purchase of goods or 61.18 services for award only to small targeted group businesses 61.19 designated under section 16B.1916C.17, subdivision 5, if the 61.20 regents determine that at least three small targeted group 61.21 businesses are likely to bid. 61.22 (c) The regents, as a condition of awarding a construction 61.23 contract or approving a contract for consultant, professional, 61.24 or technical services, may set goals that require the prime 61.25 contractor to subcontract a portion of the contract to small 61.26 targeted group businesses. The regents must establish a 61.27 procedure for granting waivers from the subcontracting 61.28 requirement when qualified small targeted group businesses are 61.29 not reasonably available. The regents may establish financial 61.30 incentives for prime contractors who exceed the goals for use of 61.31 subcontractors and financial penalties for prime contractors who 61.32 fail to meet goals under this paragraph. The subcontracting 61.33 requirements of this paragraph do not apply to prime contractors 61.34 who are small targeted group businesses. At least 75 percent of 61.35 the value of the subcontracts awarded to small targeted group 61.36 businesses under this paragraph must be performed by the 62.1 business to which the subcontract is awarded or by another small 62.2 targeted group business. 62.3 (d) The regents may award up to a four percent preference 62.4 in the amount bid on university procurement to small businesses 62.5 located in an economically disadvantaged area as defined in 62.6 section 16B.1916C.17, subdivision 7. 62.7 (e) The regents may delegate responsibility under this 62.8 section to university employees. 62.9 Sec. 53. Minnesota Statutes 1996, section 137.35, 62.10 subdivision 2, is amended to read: 62.11 Subd. 2. [ELIGIBILITY.] The rules adopted by the 62.12 commissioner of administration to define small businesses and to 62.13 set time and other eligibility requirements for participation in 62.14 programs under sections 16B.19 to 16B.2216C.17 to 16C.20 apply 62.15 to this section. 62.16 Sec. 54. Minnesota Statutes 1996, section 137.35, 62.17 subdivision 3, is amended to read: 62.18 Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged 62.19 to purchase from small targeted group businesses designated 62.20 under section 16B.1916C.17 when making purchases that are not 62.21 subject to competitive bidding procedures. 62.22 Sec. 55. Minnesota Statutes 1997 Supplement, section 62.23 138.35, subdivision 1b, is amended to read: 62.24 Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 62.25 state archaeologist may contract with the federal government, 62.26 local governmental units, other states, the university and other 62.27 educational institutions, and private persons or organizations 62.28 as necessary in the performance of the duties in sections 138.31 62.29 to 138.42. Contracts made under this section for professional 62.30 services shall not be subject to chapter 16B16C, as it relates 62.31 to competitive bidding. The state archaeologist may recruit, 62.32 train, and accept, without regard to personnel laws or rules, 62.33 the services of individuals as volunteers for or in aid of 62.34 performance of the state archaeologist's duties, and may provide 62.35 for the incidental expenses of volunteers, such as 62.36 transportation, lodging, and subsistence. The state 63.1 archaeologist may apply for, receive, and expend grants and 63.2 gifts of money consistent with the powers and duties in sections 63.3 138.31 to 138.42. Any money so received is appropriated for the 63.4 purpose for which it was granted. 63.5 Sec. 56. Minnesota Statutes 1996, section 144.0742, is 63.6 amended to read: 63.7 144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 63.8 SERVICES.] 63.9 The commissioner of health is authorized to enter into 63.10 contractual agreements with any public or private entity for the 63.11 provision of statutorily prescribed public health services by 63.12 the department. The contracts shall specify the services to be 63.13 provided and the amount and method of reimbursement therefor. 63.14 Funds generated in a contractual agreement made pursuant to this 63.15 section are appropriated to the department for purposes of 63.16 providing the services specified in the contracts. All such 63.17 contractual agreements shall be processed in accordance with the 63.18 provisions of chapter 16B16C. 63.19 Sec. 57. Minnesota Statutes 1996, section 144.95, 63.20 subdivision 5, is amended to read: 63.21 Subd. 5. [GENERAL AUTHORITY.] (a) To carry out 63.22 subdivisions 1 to 4, the commissioner of health may: 63.23 (1) accept money, property, or services from any source; 63.24 (2) receive and hold lands; 63.25 (3) accept gifts; 63.26 (4) cooperate with city, state, federal, or private 63.27 agencies whose research on mosquito control or on other 63.28 environmental matters may be affected by the commissioner's 63.29 mosquito management and research activities; and 63.30 (5) enter into contracts with any public or private entity. 63.31 (b) The contracts must specify the duties performed, 63.32 services provided, and the amount and method of reimbursement 63.33 for them. Money collected by the commissioner under contracts 63.34 made under this subdivision is appropriated to the commissioner 63.35 for the purposes specified in the contracts. Contractual 63.36 agreements must be processed under section 16B.1716C.09. 64.1 Sec. 58. Minnesota Statutes 1996, section 161.315, 64.2 subdivision 4, is amended to read: 64.3 Subd. 4. [EXCEPTIONS.] The commissioner may terminate a 64.4 debarment by order, or the commissioner or a county, town, or 64.5 home rule or statutory city may award a contract to a debarred 64.6 or suspended person when: 64.7 (1) that person is the sole supplier of a material or 64.8 service required by the commissioner or a county, town, or home 64.9 rule or statutory city; 64.10 (2) the commissioner determines that an emergency exists as 64.11 defined in section 161.32, subdivision 3; 64.12 (3) the commissioner of administration determines that an 64.13 emergency exists as defined in section 16B.0816C.11, 64.14 subdivision 62; 64.15 (4) in the case of a contract to be awarded by a county, 64.16 town, or home rule or statutory city, the governing body thereof 64.17 determines by resolution that an emergency exists that will 64.18 result in a road, street, or bridge being closed to travel; or 64.19 (5) the contract is for purchasing materials or renting 64.20 equipment for routine road maintenance. 64.21 Sec. 59. Minnesota Statutes 1996, section 161.321, 64.22 subdivision 1, is amended to read: 64.23 Subdivision 1. [DEFINITIONS.] For purposes of this section 64.24 the following terms have the meanings given them, except where 64.25 the context clearly indicates a different meaning is intended. 64.26 (a) "Award" means the granting of a contract in accordance 64.27 with all applicable laws and rules governing competitive bidding 64.28 except as otherwise provided in this section. 64.29 (b) "Contract" means an agreement entered into between a 64.30 business entity and the state of Minnesota for the construction 64.31 of transportation improvements. 64.32 (c) "Subcontractor" means a business entity which enters 64.33 into a legally binding agreement with another business entity 64.34 which is a party to a contract as defined in clause (b). 64.35 (d) "Targeted group business" means a business designated 64.36 under section 16B.1916C.17, subdivision 2b5. 65.1 Sec. 60. Minnesota Statutes 1996, section 161.321, 65.2 subdivision 2, is amended to read: 65.3 Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 65.4 may award up to a six percent preference in the amount bid for 65.5 specified construction work to small targeted group businesses. 65.6 (b) The commissioner may designate a contract for 65.7 construction work for award only to small targeted group 65.8 businesses if the commissioner determines that at least three 65.9 small targeted group businesses are likely to bid. 65.10 (c) The commissioner, as a condition of awarding a 65.11 construction contract, may set goals that require the prime 65.12 contractor to subcontract a portion of the contract to small 65.13 targeted group businesses. The commissioner must establish a 65.14 procedure for granting waivers from the subcontracting 65.15 requirement when qualified small targeted group businesses are 65.16 not reasonably available. The commissioner may establish 65.17 financial incentives for prime contractors who exceed the goals 65.18 for use of subcontractors and financial penalties for prime 65.19 contractors who fail to meet goals under this paragraph. The 65.20 subcontracting requirements of this paragraph do not apply to 65.21 prime contractors who are small targeted group businesses. 65.22 (d) The commissioner may award up to a four percent 65.23 preference in the amount bid on procurement to small businesses 65.24 located in an economically disadvantaged area as defined in 65.25 section 16B.1916C.17, subdivision 7. 65.26 Sec. 61. Minnesota Statutes 1996, section 161.321, 65.27 subdivision 5, is amended to read: 65.28 Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the 65.29 commissioner is unable to award a contract pursuant to the 65.30 provisions of subdivisions 2 and 3, the award may be placed 65.31 pursuant to the normal solicitation and award provisions set 65.32 forth in this chapter and chapter 16B16C. 65.33 Sec. 62. Minnesota Statutes 1996, section 161.321, 65.34 subdivision 6, is amended to read: 65.35 Subd. 6. [RULES.] The rules adopted by the commissioner of 65.36 administration to define small businesses and to set time and 66.1 other eligibility requirements for participation in programs 66.2 under sections 16B.19 to 16B.2216C.17 to 16C.20 apply to this 66.3 section. The commissioner may promulgate other rules necessary 66.4 to carry out this section. 66.5 Sec. 63. Minnesota Statutes 1996, section 161.321, 66.6 subdivision 7, is amended to read: 66.7 Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is 66.8 encouraged to purchase from small targeted group businesses 66.9 designated under section 16B.1916C.17 when making purchases 66.10 that are not subject to competitive bidding procedures. 66.11 Sec. 64. Minnesota Statutes 1996, section 161.41, 66.12 subdivision 2, is amended to read: 66.13 Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The 66.14 commissioner shall administer all aspects of the disposition of 66.15 property declared to be surplus under this section. The 66.16 commissioner shall first determine the value of the surplus 66.17 property. The commissioner may then transfer the possession of 66.18 the surplus property to any state agency or political 66.19 subdivision of this state or to the United States government 66.20 upon receipt of payment in an amount equal to the value of the 66.21 surplus property. 66.22 The commissioner may also sell the surplus property under 66.23 the competitive bidding provisions of chapter 16B16C if no 66.24 state agency or political subdivision of this state offers to 66.25 purchase the surplus property for its determined value. 66.26 Sec. 65. Minnesota Statutes 1997 Supplement, section 66.27 179A.03, subdivision 14, is amended to read: 66.28 Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or 66.29 "employee" means any person appointed or employed by a public 66.30 employer except: 66.31 (a) elected public officials; 66.32 (b) election officers; 66.33 (c) commissioned or enlisted personnel of the Minnesota 66.34 national guard; 66.35 (d) emergency employees who are employed for emergency work 66.36 caused by natural disaster; 67.1 (e) part-time employees whose service does not exceed the 67.2 lesser of 14 hours per week or 35 percent of the normal work 67.3 week in the employee's appropriate unit; 67.4 (f) employees whose positions are basically temporary or 67.5 seasonal in character and: (1) are not for more than 67 working 67.6 days in any calendar year; or (2) are not for more than 100 67.7 working days in any calendar year and the employees are under 67.8 the age of 22, are full-time students enrolled in a nonprofit or 67.9 public educational institution prior to being hired by the 67.10 employer, and have indicated, either in an application for 67.11 employment or by being enrolled at an educational institution 67.12 for the next academic year or term, an intention to continue as 67.13 students during or after their temporary employment; 67.14 (g) employees providing services for not more than two 67.15 consecutive quarters to the board of trustees of the Minnesota 67.16 state colleges and universities under the terms of a 67.17 professional or technical services contract as defined in 67.18 section 16B.1716C.09, subdivision 1; 67.19 (h) employees of charitable hospitals as defined by section 67.20 179.35, subdivision 3; 67.21 (i) full-time undergraduate students employed by the school 67.22 which they attend under a work-study program or in connection 67.23 with the receipt of financial aid, irrespective of number of 67.24 hours of service per week; 67.25 (j) an individual who is employed for less than 300 hours 67.26 in a fiscal year as an instructor in an adult vocational 67.27 education program; 67.28 (k) an individual hired by a school district or the board 67.29 of trustees of the Minnesota state colleges and universities to 67.30 teach one course for up to four credits for one quarter in a 67.31 year. 67.32 The following individuals are public employees regardless 67.33 of the exclusions of clauses (e) and (f): 67.34 (1) An employee hired by a school district or the board of 67.35 trustees of the Minnesota state colleges and universities except 67.36 at the university established in section 136F.13 or for 68.1 community services or community education instruction offered on 68.2 a noncredit basis: (i) to replace an absent teacher or faculty 68.3 member who is a public employee, where the replacement employee 68.4 is employed more than 30 working days as a replacement for that 68.5 teacher or faculty member; or (ii) to take a teaching position 68.6 created due to increased enrollment, curriculum expansion, 68.7 courses which are a part of the curriculum whether offered 68.8 annually or not, or other appropriate reasons; and 68.9 (2) An employee hired for a position under clause (f)(1) if 68.10 that same position has already been filled under clause (f)(1) 68.11 in the same calendar year and the cumulative number of days 68.12 worked in that same position by all employees exceeds 67 68.13 calendar days in that year. For the purpose of this paragraph, 68.14 "same position" includes a substantially equivalent position if 68.15 it is not the same position solely due to a change in the 68.16 classification or title of the position. 68.17 Sec. 66. Minnesota Statutes 1996, section 179A.23, is 68.18 amended to read: 68.19 179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 68.20 BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 68.21 BARGAINING UNIT.] 68.22 Any contract entered into after March 23, 1982, by the 68.23 state of Minnesota or the University of Minnesota involving 68.24 services, any part of which, in the absence of the contract, 68.25 would be performed by members of a unit provided in sections 68.26 179A.10 and 179A.11, shall be subject to section 16B.0716C.07 68.27 and shall provide for the preferential employment by a party of 68.28 members of that unit whose employment with the state of 68.29 Minnesota or the University of Minnesota is terminated as a 68.30 result of that contract. 68.31 Contracts entered into by the state of Minnesota for the 68.32 purpose of providing court reporter services or transcription of 68.33 the record of a hearing which was recorded by means of an audio 68.34 magnetic recording device shall be subject to section 16B.1768.35 16C.09 and the preferential employment provisions enumerated in 68.36 this section. Any court reporter seeking a contract pursuant to 69.1 the preferential employment provisions of this section shall be 69.2 given preference when the services are needed only if that court 69.3 reporter's charges for the services requested are no greater 69.4 than the average of the charges made for the identical services 69.5 by other court reporters in the same locality who are also under 69.6 contract with the state for those services. 69.7 Sec. 67. Minnesota Statutes 1996, section 198.35, 69.8 subdivision 1, is amended to read: 69.9 Subdivision 1. [ESTABLISHMENT.] The board may establish a 69.10 veterans home in Silver Bay by renovating an existing facility 69.11 owned by the city of Silver Bay if the city donates the building 69.12 to the board at no cost. Contracts made by the board for the 69.13 purposes of this subdivision are subject to chapter 16B16C. 69.14 Buildings used for the veterans home must comply with 69.15 requirements established by federal agencies as conditions for 69.16 the receipt of federal funds for the nursing and boarding care 69.17 of veterans. The city of Silver Bay shall secure the state 69.18 match requirement from sources other than the state general 69.19 fund. Money from other sources must equal at least 35 percent 69.20 of the total cost of the renovation with the remainder of the 69.21 funds to be provided by the United States Veterans 69.22 Administration. 69.23 Sec. 68. Minnesota Statutes 1996, section 216C.02, 69.24 subdivision 1, is amended to read: 69.25 Subdivision 1. [POWERS.] (a) The commissioner may: 69.26 (1) apply for, receive, and spend money received from 69.27 federal, municipal, county, regional, and other government 69.28 agencies and private sources; 69.29 (2) apply for, accept, and disburse grants and other aids 69.30 from public and private sources; 69.31 (3) contract for professional services if work or services 69.32 required or authorized to be carried out by the commissioner 69.33 cannot be satisfactorily performed by employees of the 69.34 department or by another state agency; 69.35 (4) enter into interstate compacts to carry out research 69.36 and planning jointly with other states or the federal government 70.1 when appropriate; 70.2 (5) upon reasonable request, distribute informational 70.3 material at no cost to the public; and 70.4 (6) enter into contracts for the performance of the 70.5 commissioner's duties with federal, state, regional, 70.6 metropolitan, local, and other agencies or units of government 70.7 and educational institutions, including the University of 70.8 Minnesota, without regard to the competitive bidding 70.9 requirements of chapters 16A and 16B16C. 70.10 (b) The commissioner shall collect information on 70.11 conservation and other energy-related programs carried on by 70.12 other agencies, by public utilities, by cooperative electric 70.13 associations, by municipal power agencies, by other fuel 70.14 suppliers, by political subdivisions, and by private 70.15 organizations. Other agencies, cooperative electric 70.16 associations, municipal power agencies, and political 70.17 subdivisions shall cooperate with the commissioner by providing 70.18 information requested by the commissioner. The commissioner may 70.19 by rule require the submission of information by other program 70.20 operators. The commissioner shall make the information 70.21 available to other agencies and to the public and, as necessary, 70.22 shall recommend to the legislature changes in the laws governing 70.23 conservation and other energy-related programs to ensure that: 70.24 (1) expenditures on the programs are adequate to meet 70.25 identified needs; 70.26 (2) the needs of low-income energy users are being 70.27 adequately addressed; 70.28 (3) duplication of effort is avoided or eliminated; 70.29 (4) a program that is ineffective is improved or 70.30 eliminated; and 70.31 (5) voluntary efforts are encouraged through incentives for 70.32 their operators. 70.33 The commissioner shall appoint an advisory task force to 70.34 help evaluate the information collected and formulate 70.35 recommendations to the legislature. The task force must include 70.36 low-income energy users. 71.1 (c) By January 15 of each year, the commissioner shall 71.2 report to the legislature on the projected amount of federal 71.3 money likely to be available to the state during the next fiscal 71.4 year, including grant money and money received by the state as a 71.5 result of litigation or settlements of alleged violations of 71.6 federal petroleum pricing regulations. The report must also 71.7 estimate the amount of money projected as needed during the next 71.8 fiscal year to finance a level of conservation and other 71.9 energy-related programs adequate to meet projected needs, 71.10 particularly the needs of low-income persons and households, and 71.11 must recommend the amount of state appropriations needed to 71.12 cover the difference between the projected availability of 71.13 federal money and the projected needs. 71.14 Sec. 69. Minnesota Statutes 1997 Supplement, section 71.15 216D.03, subdivision 2, is amended to read: 71.16 Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 71.17 (a) The notification center services must be provided by a 71.18 nonprofit corporation approved in writing by the commissioner. 71.19 The nonprofit corporation must be governed by a board of 71.20 directors of up to 20 members, one of whom is the director of 71.21 the office of pipeline safety. The other board members must 71.22 represent and be elected by operators, excavators, and other 71.23 persons eligible to participate in the center. In deciding to 71.24 approve a nonprofit corporation, the commissioner shall consider 71.25 whether it meets the requirements of this paragraph and whether 71.26 it demonstrates that it has the ability to contract for and 71.27 implement the notification center service. 71.28 (b) The commissioner shall adopt rules: 71.29 (1) establishing a notification process and competitive 71.30 bidding procedure for selecting a vendor to provide the 71.31 notification service; 71.32 (2) governing the operating procedures and technology 71.33 needed for a statewide notification center; and 71.34 (3) setting forth the method for assessing the cost of the 71.35 service among operators. 71.36 (c) The commissioner shall select a vendor to provide the 72.1 notification center service. The commissioner may advertise for 72.2 bids as provided in section 16B.0716C.07, subdivision72.3 3subdivisions 1 and 2, and base the selection of a vendor on an72.4 identification of the lowest responsible bidderbest value as 72.5 provided in section 16B.0916C.07, subdivision 17. The 72.6 commissioner shall select and contract with the vendor to 72.7 provide the notification center service, but all costs of the 72.8 center must be paid by the operators. The commissioner may at 72.9 any time appoint a task force to advise on the renewal of the 72.10 contract or any other matter involving the center's operations. 72.11 (d) An operator may submit a bid and be selected to 72.12 contract to provide the notification center service under 72.13 paragraph (a) or (c). The commissioner shall annually review 72.14 the services provided by the nonprofit corporation approved 72.15 under paragraph (a) or the vendor selected under paragraph (c). 72.16 Sec. 70. Minnesota Statutes 1996, section 237.51, 72.17 subdivision 5a, is amended to read: 72.18 Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 72.19 addition to any duties specified elsewhere in sections 237.51 to 72.20 237.56, the department of human services shall: 72.21 (1) define economic hardship, special needs, and household 72.22 criteria so as to determine the priority of eligible applicants 72.23 for initial distribution of devices and to determine 72.24 circumstances necessitating provision of more than one 72.25 communication device per household; 72.26 (2) establish a method to verify eligibility requirements; 72.27 (3) establish specifications for communication devices to 72.28 be purchased under section 237.53, subdivision 3; 72.29 (4) inform the public and specifically the community of 72.30 communication-impaired persons of the program; and 72.31 (5) notwithstanding any provision of chapterchapters 16B 72.32 and 16C, develop guidelines for the purchase of some 72.33 communication devices from local retailers and dispensers if the 72.34 department determines that otherwise they will be economically 72.35 harmed by implementation of sections 237.50 to 237.56. 72.36 (b) The department may establish an advisory board to 73.1 advise the department in carrying out the duties specified in 73.2 this section and to advise the department of public service in 73.3 carrying out its duties under section 237.54. If so 73.4 established, the advisory board must include, at a minimum, the 73.5 following communication-impaired persons: 73.6 (1) at least one member who is deaf; 73.7 (2) at least one member who is speech impaired; 73.8 (3) at least one member who is mobility impaired; and 73.9 (4) at least one member who is hard-of-hearing. 73.10 The membership terms, compensation, and removal of members 73.11 and the filling of membership vacancies are governed by section 73.12 15.059. Advisory board meetings shall be held at the discretion 73.13 of the commissioner. 73.14 Sec. 71. Minnesota Statutes 1996, section 241.0221, 73.15 subdivision 6, is amended to read: 73.16 Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 73.17 To qualify for a subsidy, a county or group of counties must 73.18 enter into a memorandum of agreement with the commissioner 73.19 agreeing to comply with the minimum standards and requirements 73.20 established by the commissioner under subdivision 4. The 73.21 memorandum of agreement is not subject to the contract approval 73.22 procedures of the commissioner of administration or chapter73.23 chapters 16B and 16C. The commissioner shall provide forms and 73.24 instructions for submission of subsidy applications. 73.25 The commissioner shall require a county or group of 73.26 counties to document in its application that it is requesting 73.27 subsidy funds for the least restrictive alternative appropriate 73.28 to the county or counties detention needs. The commissioner 73.29 shall evaluate applications and grant subsidies for local 73.30 detention facilities and alternative detention programs 73.31 described in this section in a manner consistent with the 73.32 minimum standards and requirements established by the 73.33 commissioner in subdivision 4 and within the limit 73.34 appropriations made available by law. 73.35 Sec. 72. Minnesota Statutes 1996, section 241.27, 73.36 subdivision 2, is amended to read: 74.1 Subd. 2. [REVOLVING FUND; USE OF FUND.] There is 74.2 established in the department of corrections under the control 74.3 of the commissioner of corrections the Minnesota correctional 74.4 industries revolving fund to which shall be transferred the 74.5 revolving funds authorized in Minnesota Statutes 1978, sections 74.6 243.41 and 243.85, clause (f), and any other industrial 74.7 revolving funds heretofore established at any state correctional 74.8 facility under the control of the commissioner of corrections. 74.9 The revolving fund established shall be used for the conduct of 74.10 the industrial and commercial activities now or hereafter 74.11 established at any state correctional facility, including but 74.12 not limited to the purchase of equipment, raw materials, the 74.13 payment of salaries, wages and other expenses necessary and 74.14 incident thereto. The purchase of materials and commodities for 74.15 resale are not subject to the competitive bidding procedures of 74.16 section 16B.0716C.07, but are subject to all other provisions 74.17 of chapter 16Bchapters 16B and 16C. When practical, purchases 74.18 must be made from small targeted group businesses designated 74.19 under section 16B.1916C.17. Additionally, the expenses of 74.20 inmate vocational training and the inmate release fund may be 74.21 financed from the correctional industries revolving fund in an 74.22 amount to be determined by the commissioner. The proceeds and 74.23 income from all industrial and commercial activities conducted 74.24 at state correctional facilities shall be deposited in the 74.25 correctional industries revolving fund subject to disbursement 74.26 as hereinabove provided. The commissioner of corrections may 74.27 request that money in the fund be invested pursuant to section 74.28 11A.25; the proceeds from the investment not currently needed 74.29 shall be accounted for separately and credited to the fund. 74.30 Sec. 73. Minnesota Statutes 1997 Supplement, section 74.31 241.277, subdivision 2, is amended to read: 74.32 Subd. 2. [REQUEST FOR PROPOSALS.] After consulting with 74.33 and considering the advice of the association of Minnesota 74.34 counties, the commissioner may issue a request for proposals and 74.35 select a vendor to operate the program. Section 16B.1716C.09 74.36 does not apply to the issuance of the request for proposals. 75.1 Sec. 74. Minnesota Statutes 1996, section 246.36, is 75.2 amended to read: 75.3 246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 75.4 For the purpose of carrying out a duty, the commissioner of 75.5 human services shall have authority to accept uncompensated and 75.6 voluntary services and to enter into contracts or agreements 75.7 with private or public agencies, or persons, for uncompensated 75.8 and voluntary services, as the commissioner may deem 75.9 practicable. Uncompensated and voluntary services do not 75.10 include services mandated by licensure and certification 75.11 requirements for health care facilities. The volunteer 75.12 agencies, organizations, or persons who provide services to 75.13 residents of state facilities operated under the authority of 75.14 the commissioner are not subject to the procurement requirements 75.15 of chapters 16A and 16B16C. The agencies, organizations, or 75.16 persons may purchase supplies, services, and equipment to be 75.17 used in providing services to residents of state facilities 75.18 through the department of administration. 75.19 Sec. 75. Minnesota Statutes 1996, section 246.57, 75.20 subdivision 1, is amended to read: 75.21 Subdivision 1. [AUTHORIZED.] The commissioner of human 75.22 services may authorize any state facility operated under the 75.23 authority of the commissioner to enter into agreement with other 75.24 governmental entities and both nonprofit and for-profit 75.25 organizations for participation in shared service agreements 75.26 that would be of mutual benefit to the state, other governmental 75.27 entities and organizations involved, and the public. 75.28 Notwithstanding section 16B.0616C.06, subdivision 2, the 75.29 commissioner of human services may delegate the execution of 75.30 shared services contracts to the chief executive officers of the 75.31 regional centers or state operated nursing homes. No additional 75.32 employees shall be added to the legislatively approved 75.33 complement for any regional center or state nursing home as a 75.34 result of entering into any shared service agreement. However, 75.35 positions funded by a shared service agreement may be authorized 75.36 by the commissioner of finance for the duration of the shared 76.1 service agreement. The charges for the services shall be on an 76.2 actual cost basis. All receipts for shared services may be 76.3 retained by the regional treatment center or state-operated 76.4 nursing home that provided the services, in addition to other 76.5 funding the regional treatment center or state-operated nursing 76.6 home receives. 76.7 Sec. 76. Minnesota Statutes 1996, section 246.57, 76.8 subdivision 6, is amended to read: 76.9 Subd. 6. [DENTAL SERVICES.] The commissioner of human 76.10 services shall authorize any regional treatment center or 76.11 state-operated nursing home under the commissioner's authority 76.12 to provide dental services to disabled persons who are eligible 76.13 for medical assistance and are not residing at the regional 76.14 treatment center or state-operated nursing home, provided that 76.15 the reimbursement received for these services is sufficient to 76.16 cover actual costs. To provide these services, regional 76.17 treatment centers and state-operated nursing homes may 76.18 participate under contract with health networks in their service 76.19 area. Notwithstanding section 16B.0616C.06, subdivision 2, the 76.20 commissioner of human services may delegate the execution of 76.21 these dental services contracts to the chief executive officers 76.22 of the regional centers or state-operated nursing homes. All 76.23 receipts for these dental services shall be retained by the 76.24 regional treatment center or state-operated nursing home that 76.25 provides the services and shall be in addition to other funding 76.26 the regional treatment center or state-operated nursing home 76.27 receives. 76.28 Sec. 77. Minnesota Statutes 1996, section 256B.031, 76.29 subdivision 1, is amended to read: 76.30 Subdivision 1. [CONTRACTS.] The commissioner may contract 76.31 with health insurers licensed and operating under chapters 60A 76.32 and 62A, nonprofit health service plans licensed and operating 76.33 under chapter 62C, health maintenance organizations licensed and 76.34 operating under chapter 62D, and vendors of medical care and 76.35 organizations participating in prepaid programs under section 76.36 256D.03, subdivision 4, clause (b), to provide medical services 77.1 to medical assistance recipients. Notwithstanding any other 77.2 law, health insurers may enter into contracts with the 77.3 commissioner under this section. As a condition of the 77.4 contract, health insurers and health service plan corporations 77.5 must agree to comply with the requirements of section 62D.04, 77.6 subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 77.7 a complaint procedure that satisfies the requirements of section 77.8 62D.11. Nothing in this section permits health insurers not 77.9 licensed as health maintenance organizations under chapter 62D 77.10 to offer a prepaid health plan as defined in section 256B.02, 77.11 subdivision 12, to persons other than those receiving medical 77.12 assistance or general assistance medical care under this 77.13 section. Contracts between the commissioner and a prepaid 77.14 health plan are exempt from the set-aside and preference 77.15 provisions of section 16B.1916C.17, subdivisions 5 and6, 77.16 paragraph (a), and 7. Contracts must specify the services that 77.17 are included in the per capita rate. Contracts must specify 77.18 those services that are to be eligible for risk sharing between 77.19 the prepaid health plan and the state. Contracts must also 77.20 state that payment must be made within 60 days after the month 77.21 of coverage. 77.22 Sec. 78. Minnesota Statutes 1996, section 256B.04, 77.23 subdivision 14, is amended to read: 77.24 Subd. 14. [COMPETITIVE BIDDING.] When determined to be 77.25 effective, economical, and feasible, the commissioner may 77.26 utilize volume purchase through competitive bidding and 77.27 negotiation under the provisions of chapter 16B16C, to provide 77.28 items under the medical assistance program including but not 77.29 limited to the following: 77.30 (1) eyeglasses; 77.31 (2) oxygen. The commissioner shall provide for oxygen 77.32 needed in an emergency situation on a short-term basis, until 77.33 the vendor can obtain the necessary supply from the contract 77.34 dealer; 77.35 (3) hearing aids and supplies; and 77.36 (4) durable medical equipment, including but not limited to: 78.1 (a) hospital beds; 78.2 (b) commodes; 78.3 (c) glide-about chairs; 78.4 (d) patient lift apparatus; 78.5 (e) wheelchairs and accessories; 78.6 (f) oxygen administration equipment; 78.7 (g) respiratory therapy equipment; 78.8 (h) electronic diagnostic, therapeutic and life support 78.9 systems; 78.10 (5) special transportation services; and 78.11 (6) drugs. 78.12 Sec. 79. Minnesota Statutes 1996, section 256B.04, 78.13 subdivision 15, is amended to read: 78.14 Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a 78.15 statewide basis a new program to safeguard against unnecessary 78.16 or inappropriate use of medical assistance services, against 78.17 excess payments, against unnecessary or inappropriate hospital 78.18 admissions or lengths of stay, and against underutilization of 78.19 services in prepaid health plans, long-term care facilities or 78.20 any health care delivery system subject to fixed rate 78.21 reimbursement. In implementing the program, the state agency 78.22 shall utilize both prepayment and postpayment review systems to 78.23 determine if utilization is reasonable and necessary. The 78.24 determination of whether services are reasonable and necessary 78.25 shall be made by the commissioner in consultation with a 78.26 professional services advisory group or health care consultant 78.27 appointed by the commissioner. 78.28 (2) Contracts entered into for purposes of meeting the 78.29 requirements of this subdivision shall not be subject to the 78.30 set-aside provisions of chapter 16B16C. 78.31 (3) A recipient aggrieved by the commissioner's termination 78.32 of services or denial of future services may appeal pursuant to 78.33 section 256.045. A vendor aggrieved by the commissioner's 78.34 determination that services provided were not reasonable or 78.35 necessary may appeal pursuant to the contested case procedures 78.36 of chapter 14. To appeal, the vendor shall notify the 79.1 commissioner in writing within 30 days of receiving the 79.2 commissioner's notice. The appeal request shall specify each 79.3 disputed item, the reason for the dispute, an estimate of the 79.4 dollar amount involved for each disputed item, the computation 79.5 that the vendor believes is correct, the authority in statute or 79.6 rule upon which the vendor relies for each disputed item, the 79.7 name and address of the person or firm with whom contacts may be 79.8 made regarding the appeal, and other information required by the 79.9 commissioner. 79.10 (4) The commissioner may select providers to provide case 79.11 management services to recipients who use health care services 79.12 inappropriately or to recipients who are eligible for other 79.13 managed care projects. The providers shall be selected based 79.14 upon criteria that may include a comparison with a peer group of 79.15 providers related to the quality, quantity, or cost of health 79.16 care services delivered or a review of sanctions previously 79.17 imposed by health care services programs or the provider's 79.18 professional licensing board. 79.19 Sec. 80. Minnesota Statutes 1997 Supplement, section 79.20 256B.19, subdivision 2a, is amended to read: 79.21 Subd. 2a. [DIVISION OF COSTS.] The county shall ensure 79.22 that only the least costly, most appropriate transportation and 79.23 travel expenses are used. The state may enter into volume 79.24 purchase contracts, or use a competitive bidding process, 79.25 whenever feasible, to minimize the costs of transportation 79.26 services. If the state has entered into a volume purchase 79.27 contract or used the competitive bidding procedures of chapter 79.28 16B16C to arrange for transportation services, the county may 79.29 be required to use such arrangements. 79.30 Sec. 81. Minnesota Statutes 1997 Supplement, section 79.31 256D.03, subdivision 6, is amended to read: 79.32 Subd. 6. [DIVISION OF COSTS.] The state share of county 79.33 agency expenditures for general assistance medical care shall be 79.34 100 percent. Payments made under this subdivision shall be made 79.35 according to sections 256B.041, subdivision 5 and 256B.19, 79.36 subdivision 1. In counties where a pilot or demonstration 80.1 project is operated for general assistance medical care 80.2 services, the state may pay 100 percent of the costs of 80.3 administering the pilot or demonstration project. 80.4 Notwithstanding any provision to the contrary, beginning 80.5 July 1, 1991, the state shall pay 100 percent of the costs for 80.6 centralized claims processing by the department of 80.7 administration relative to claims beginning January 1, 1991, and 80.8 submitted on behalf of general assistance medical care 80.9 recipients by vendors in the general assistance medical care 80.10 program. 80.11 Beginning July 1, 1991, the state shall reimburse counties 80.12 up to the limit of state appropriations for general assistance 80.13 medical care common carrier transportation and related travel 80.14 expenses provided for medical purposes after December 31, 1990. 80.15 For purposes of this subdivision, transportation shall have the 80.16 meaning given it in Code of Federal Regulations, title 42, 80.17 section 440.170(a), as amended through October 1, 1987, and 80.18 travel expenses shall have the meaning given in Code of Federal 80.19 Regulations, title 42, section 440.170(a)(3), as amended through 80.20 October 1, 1987. 80.21 The county shall ensure that only the least costly most 80.22 appropriate transportation and travel expenses are used. The 80.23 state may enter into volume purchase contracts, or use a 80.24 competitive bidding process, whenever feasible, to minimize the 80.25 costs of transportation services. If the state has entered into 80.26 a volume purchase contract or used the competitive bidding 80.27 procedures of chapter 16B16C to arrange for transportation 80.28 services, the county may be required to use such arrangements to 80.29 be eligible for state reimbursement for general assistance 80.30 medical care common carrier transportation and related travel 80.31 expenses provided for medical purposes. 80.32 In counties where prepaid health plans are under contract 80.33 to the commissioner to provide services to general assistance 80.34 medical care recipients, the cost of court ordered treatment 80.35 that does not include diagnostic evaluation, recommendation, or 80.36 referral for treatment by the prepaid health plan is the 81.1 responsibility of the county of financial responsibility. 81.2 Sec. 82. Minnesota Statutes 1996, section 298.2211, 81.3 subdivision 4, is amended to read: 81.4 Subd. 4. [OBLIGATIONS NOT STATE DEBT.] Bonds and other 81.5 obligations issued by the commissioner pursuant to this section, 81.6 along with all related documents, are not general obligations of 81.7 the state of Minnesota and are not subject to section 16B.0681.8 sections 16C.03, subdivision 4, and 16C.06. The full faith and 81.9 credit and taxing powers of the state are not and may not be 81.10 pledged for the payment of these bonds or other obligations, and 81.11 no person has the right to compel the levy of any state tax for 81.12 their payment or to compel the appropriation of any moneys of 81.13 the state for their payment except as specifically provided 81.14 herein. These bonds and obligations shall be payable solely 81.15 from the property and moneys derived by the commissioner 81.16 pursuant to the authority granted in this section that the 81.17 commissioner pledges to their payment. The legislature intends 81.18 not to appropriate money from the general fund to pay for these 81.19 bonds or other obligations. All these bonds or other 81.20 obligations must contain the provisions of this subdivision or 81.21 words to the same effect on their face. 81.22 Sec. 83. Minnesota Statutes 1996, section 349A.06, 81.23 subdivision 1, is amended to read: 81.24 Subdivision 1. [CONTRACTS.] The director shall sell 81.25 tickets for the lottery through lottery retailers with whom the 81.26 director contracts. Contracts under this section are not 81.27 subject to the provisions of sections 16B.06 to 16B.102, and81.28 16B.1716C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 81.29 are valid for a period of one year. The director may permit a 81.30 retailer to sell tickets at more than one business location 81.31 under a contract entered into under this section. 81.32 Sec. 84. Minnesota Statutes 1996, section 349A.07, 81.33 subdivision 6, is amended to read: 81.34 Subd. 6. [EXEMPTIONS.] Lottery procurement contracts 81.35 entered into by the director are not subject to the provisions 81.36 of sections 16B.06 to 16B.102 or 16B.17section 16C.03, 16C.06, 82.1 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 82.2 must utilize an open and competitive bid process, and as nearly 82.3 as practicable follow the procedures of chapterchapters 16B and 82.4 16C governing contracts, consistent with the provisions of this 82.5 section. 82.6 Sec. 85. Minnesota Statutes 1996, section 352.03, 82.7 subdivision 6, is amended to read: 82.8 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 82.9 management of the system is vested in the director, who is the 82.10 executive and administrative head of the system. The director 82.11 shall be advisor to the board on matters pertaining to the 82.12 system and shall also act as the secretary of the board. The 82.13 director shall: 82.14 (1) attend meetings of the board; 82.15 (2) prepare and recommend to the board appropriate rules to 82.16 carry out this chapter; 82.17 (3) establish and maintain an adequate system of records 82.18 and accounts following recognized accounting principles and 82.19 controls; 82.20 (4) designate an assistant director with the approval of 82.21 the board; 82.22 (5) appoint any employees, both permanent and temporary, 82.23 that are necessary to carry out the provisions of this chapter; 82.24 (6) organize the work of the system as the director deems 82.25 necessary to fulfill the functions of the system, and define the 82.26 duties of its employees and delegate to them any powers or 82.27 duties, subject to the control of the director and under 82.28 conditions the director may prescribe. Appointments to exercise 82.29 delegated power must be by written order and shall be filed with 82.30 the secretary of state; 82.31 (7) with the advice and consent of the board, contract for 82.32 the services of an approved actuary, professional management 82.33 services, and any other consulting services as necessary and fix 82.34 the compensation for those services. The contracts are not 82.35 subject to competitive bidding under chapter 16B16C. Any 82.36 approved actuary retained by the executive director shall 83.1 function as the actuarial advisor of the board and the executive 83.2 director, and may perform actuarial valuations and experience 83.3 studies to supplement those performed by the actuary retained by 83.4 the legislative commission on pensions and retirement. Any 83.5 supplemental actuarial valuations or experience studies shall be 83.6 filed with the executive director of the legislative commission 83.7 on pensions and retirement. Professional management services 83.8 may not be contracted for more often than once in six years. 83.9 Copies of professional management survey reports must be 83.10 transmitted to the secretary of the senate, the chief clerk of 83.11 the house of representatives, and the legislative reference 83.12 library as provided by section 3.195, to the executive director 83.13 of the commission and to the legislative auditor at the time as 83.14 reports are furnished to the board. Only management firms 83.15 experienced in conducting management surveys of federal, state, 83.16 or local public retirement systems are qualified to contract 83.17 with the director; 83.18 (8) with the advice and consent of the board provide 83.19 in-service training for the employees of the system; 83.20 (9) make refunds of accumulated contributions to former 83.21 state employees and to the designated beneficiary, surviving 83.22 spouse, legal representative, or next of kin of deceased state 83.23 employees or deceased former state employees, as provided in 83.24 this chapter; 83.25 (10) determine the amount of the annuities and disability 83.26 benefits of employees covered by the system and authorize 83.27 payment of the annuities and benefits beginning as of the dates 83.28 on which the annuities and benefits begin to accrue, in 83.29 accordance with the provisions of this chapter; 83.30 (11) pay annuities, refunds, survivor benefits, salaries, 83.31 and necessary operating expenses of the system; 83.32 (12) certify funds available for investment to the state 83.33 board of investment; 83.34 (13) with the advice and approval of the board request the 83.35 state board of investment to sell securities when the director 83.36 determines that funds are needed for the system; 84.1 (14) prepare and submit to the board and the legislature an 84.2 annual financial report covering the operation of the system, as 84.3 required by section 356.20; 84.4 (15) prepare and submit biennial and annual budgets to the 84.5 board and with the approval of the board submit the budgets to 84.6 the department of finance; and 84.7 (16) with the approval of the board, perform other duties 84.8 required to administer the retirement and other provisions of 84.9 this chapter and to do its business. 84.10 Sec. 86. Minnesota Statutes 1996, section 352.03, 84.11 subdivision 16, is amended to read: 84.12 Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding 84.13 chapter 16B ,or 16C or any law to the contrary, the executive 84.14 director of the system may use the services of the department of 84.15 administration, information services division, for electronic 84.16 data processing and related services or may contract for all or 84.17 a part of the services. 84.18 Sec. 87. Minnesota Statutes 1997 Supplement, section 84.19 353.03, subdivision 3a, is amended to read: 84.20 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 84.21 board shall appoint, with the advice and consent of the senate, 84.22 an executive director on the basis of education, experience in 84.23 the retirement field, and leadership ability. The executive 84.24 director shall have had at least five years' experience in an 84.25 executive level management position, which has included 84.26 responsibility for pensions, deferred compensation, or employee 84.27 benefits. The executive director serves at the pleasure of the 84.28 board. The salary of the executive director is as provided by 84.29 section 15A.0815. 84.30 (b) [DUTIES.] The management of the association is vested 84.31 in the executive director who shall be the executive and 84.32 administrative head of the association. The executive director 84.33 shall act as adviser to the board on all matters pertaining to 84.34 the association and shall also act as the secretary of the 84.35 board. The executive director shall: 84.36 (1) attend all meetings of the board; 85.1 (2) prepare and recommend to the board appropriate rules to 85.2 carry out the provisions of this chapter; 85.3 (3) establish and maintain an adequate system of records 85.4 and accounts following recognized accounting principles and 85.5 controls; 85.6 (4) designate, with the approval of the board, up to two 85.7 persons who shall serve in the unclassified service and whose 85.8 salary is set in accordance with section 43A.18, subdivision 3, 85.9 appoint a confidential secretary in the unclassified service, 85.10 and appoint employees to carry out this chapter, who are subject 85.11 to chapters 43A and 179A in the same manner as are executive 85.12 branch employees; 85.13 (5) organize the work of the association as the director 85.14 deems necessary to fulfill the functions of the association, and 85.15 define the duties of its employees and delegate to them any 85.16 powers or duties, subject to the control of, and under such 85.17 conditions as, the executive director may prescribe; 85.18 (6) with the approval of the board, contract for the 85.19 services of an approved actuary, professional management 85.20 services, and any other consulting services as necessary to 85.21 fulfill the purposes of this chapter. All contracts are subject 85.22 to chapter 16B16C. The commissioner of administration shall 85.23 not approve, and the association shall not enter into, any 85.24 contract to provide lobbying services or legislative advocacy of 85.25 any kind. Any approved actuary retained by the executive 85.26 director shall function as the actuarial advisor of the board 85.27 and the executive director and may perform actuarial valuations 85.28 and experience studies to supplement those performed by the 85.29 actuary retained by the legislative commission on pensions and 85.30 retirement. Any supplemental actuarial valuations or experience 85.31 studies shall be filed with the executive director of the 85.32 legislative commission on pensions and retirement. Copies of 85.33 professional management survey reports shall be transmitted to 85.34 the secretary of the senate, the chief clerk of the house of 85.35 representatives, and the legislative reference library as 85.36 provided by section 3.195, to the executive director of the 86.1 commission and to the legislative auditor at the same time as 86.2 reports are furnished to the board. Only management firms 86.3 experienced in conducting management surveys of federal, state, 86.4 or local public retirement systems shall be qualified to 86.5 contract with the director hereunder; 86.6 (7) with the approval of the board provide in-service 86.7 training for the employees of the association; 86.8 (8) make refunds of accumulated contributions to former 86.9 members and to the designated beneficiary, surviving spouse, 86.10 legal representative or next of kin of deceased members or 86.11 deceased former members, as provided in this chapter; 86.12 (9) determine the amount of the annuities and disability 86.13 benefits of members covered by the association and authorize 86.14 payment of the annuities and benefits beginning as of the dates 86.15 on which the annuities and benefits begin to accrue, in 86.16 accordance with the provisions of this chapter; 86.17 (10) pay annuities, refunds, survivor benefits, salaries, 86.18 and necessary operating expenses of the association; 86.19 (11) prepare and submit to the board and the legislature an 86.20 annual financial report covering the operation of the 86.21 association, as required by section 356.20; 86.22 (12) prepare and submit biennial and annual budgets to the 86.23 board for its approval and submit the approved budgets to the 86.24 department of finance for approval by the commissioner; 86.25 (13) reduce all or part of the accrued interest payable 86.26 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 86.27 subdivision 5, upon receipt of proof by the association of an 86.28 unreasonable processing delay or other extenuating circumstances 86.29 of the employing unit. The executive director shall prescribe 86.30 and submit for approval by the board the conditions under which 86.31 such interest may be reduced; and 86.32 (14) with the approval of the board, perform such other 86.33 duties as may be required for the administration of the 86.34 association and the other provisions of this chapter and for the 86.35 transaction of its business. 86.36 Sec. 88. Minnesota Statutes 1996, section 354.06, 87.1 subdivision 2a, is amended to read: 87.2 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 87.3 of the association is vested in the executive director who shall 87.4 be the executive and administrative head of the association. 87.5 The executive director shall act as advisor to the board on all 87.6 matters pertaining to the association and shall also act as the 87.7 secretary of the board. The executive director shall: 87.8 (1) attend all meetings of the board; 87.9 (2) prepare and recommend to the board appropriate rules to 87.10 carry out the provisions of this chapter; 87.11 (3) establish and maintain an adequate system of records 87.12 and accounts following recognized accounting principles and 87.13 controls; 87.14 (4) designate an assistant executive director in the 87.15 unclassified service and two assistant executive directors in 87.16 the classified service with the approval of the board, and 87.17 appoint such employees, both permanent and temporary, as are 87.18 necessary to carry out the provisions of this chapter; 87.19 (5) organize the work of the association as the director 87.20 deems necessary to fulfill the functions of the association, and 87.21 define the duties of its employees and delegate to them any 87.22 powers or duties, subject to the director's control and under 87.23 such conditions as the director may prescribe; 87.24 (6) with the approval of the board, contract and set the 87.25 compensation for the services of an approved actuary, 87.26 professional management services, and any other consulting 87.27 services. These contracts are not subject to the competitive 87.28 bidding procedure prescribed by chapter 16B16C. An approved 87.29 actuary retained by the executive director shall function as the 87.30 actuarial advisor of the board and the executive director and 87.31 may perform actuarial valuations and experience studies to 87.32 supplement those performed by the actuary retained by the 87.33 legislative commission on pensions and retirement. Any 87.34 supplemental actuarial valuations or experience studies shall be 87.35 filed with the executive director of the legislative commission 87.36 on pensions and retirement. Copies of professional management 88.1 survey reports must be transmitted to the secretary of the 88.2 senate, the chief clerk of the house of representatives, and the 88.3 legislative reference library as provided by section 3.195, to 88.4 the executive director of the commission and to the legislative 88.5 auditor at the same time as reports are furnished to the board. 88.6 Only management firms experienced in conducting management 88.7 surveys of federal, state, or local public retirement systems 88.8 are qualified to contract with the executive director; 88.9 (7) with the approval of the board, provide in-service 88.10 training for the employees of the association; 88.11 (8) make refunds of accumulated contributions to former 88.12 members and to the designated beneficiary, surviving spouse, 88.13 legal representative, or next of kin of deceased members or 88.14 deceased former members, under this chapter; 88.15 (9) determine the amount of the annuities and disability 88.16 benefits of members covered by the association and authorize 88.17 payment of the annuities and benefits beginning as of the dates 88.18 on which the annuities and benefits begin to accrue, under this 88.19 chapter; 88.20 (10) pay annuities, refunds, survivor benefits, salaries, 88.21 and necessary operating expenses of the association; 88.22 (11) prepare and submit to the board and the legislature an 88.23 annual financial report covering the operation of the 88.24 association, as required by section 356.20; 88.25 (12) certify funds available for investment to the state 88.26 board of investment; 88.27 (13) with the advice and approval of the board, request the 88.28 state board of investment to sell securities on determining that 88.29 funds are needed for the purposes of the association; 88.30 (14) prepare and submit biennial and annual budgets to the 88.31 board and with the approval of the board submit those budgets to 88.32 the department of finance; and 88.33 (15) with the approval of the board, perform such other 88.34 duties as may be required for the administration of the 88.35 association and the other provisions of this chapter and for the 88.36 transaction of its business. The executive director may: 89.1 (i) reduce all or part of the accrued interest and fines 89.2 payable by an employing unit for reporting requirements under 89.3 section 354.52, based on an evaluation of any extenuating 89.4 circumstances of the employing unit; 89.5 (ii) assign association employees to conduct field audits 89.6 of an employing unit to ensure compliance with the provisions of 89.7 this chapter; and 89.8 (iii) recover overpayments, if not repaid to the 89.9 association, by suspending or reducing the payment of a 89.10 retirement annuity, refund, disability benefit, survivor 89.11 benefit, or optional annuity under this chapter until the 89.12 overpayment, plus interest, has been recovered. 89.13 Sec. 89. Minnesota Statutes 1996, section 354.07, 89.14 subdivision 7, is amended to read: 89.15 Subd. 7. Notwithstanding chapter 16B ,or 16C or any law to 89.16 the contrary, the board may use the services of the department 89.17 of administration, information services division, for electronic 89.18 data processing and related services or may contract for all or 89.19 a portion of such services. 89.20 Sec. 90. Minnesota Statutes 1996, section 356A.06, 89.21 subdivision 7, is amended to read: 89.22 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 89.23 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 89.24 authorized by law or bylaws, a covered pension plan not 89.25 described by subdivision 6, paragraph (a), may invest its assets 89.26 only in accordance with this subdivision. 89.27 (b) [SECURITIES GENERALLY.] The covered pension plan has 89.28 the authority to purchase, sell, lend, or exchange the 89.29 securities specified in paragraphs (c) to (g), including puts 89.30 and call options and future contracts traded on a contract 89.31 market regulated by a governmental agency or by a financial 89.32 institution regulated by a governmental agency. These 89.33 securities may be owned as units in commingled trusts that own 89.34 the securities described in paragraphs (c) to (g). 89.35 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 89.36 invest funds in governmental bonds, notes, bills, mortgages, and 90.1 other evidences of indebtedness provided the issue is backed by 90.2 the full faith and credit of the issuer or the issue is rated 90.3 among the top four quality rating categories by a nationally 90.4 recognized rating agency. The obligations in which funds may be 90.5 invested under this paragraph include guaranteed or insured 90.6 issues of (1) the United States, its agencies, its 90.7 instrumentalities, or organizations created and regulated by an 90.8 act of Congress; (2) Canada and its provinces, provided the 90.9 principal and interest is payable in United States dollars; (3) 90.10 the states and their municipalities, political subdivisions, 90.11 agencies, or instrumentalities; (4) the International Bank for 90.12 Reconstruction and Development, the Inter-American Development 90.13 Bank, the Asian Development Bank, the African Development Bank, 90.14 or any other United States government sponsored organization of 90.15 which the United States is a member, provided the principal and 90.16 interest is payable in United States dollars. 90.17 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 90.18 invest funds in bonds, notes, debentures, transportation 90.19 equipment obligations, or any other longer term evidences of 90.20 indebtedness issued or guaranteed by a corporation organized 90.21 under the laws of the United States or any state thereof, or the 90.22 Dominion of Canada or any province thereof if they conform to 90.23 the following provisions: 90.24 (1) the principal and interest of obligations of 90.25 corporations incorporated or organized under the laws of the 90.26 Dominion of Canada or any province thereof must be payable in 90.27 United States dollars; and 90.28 (2) obligations must be rated among the top four quality 90.29 categories by a nationally recognized rating agency. 90.30 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 90.31 invest funds in bankers acceptances, certificates of deposit, 90.32 deposit notes, commercial paper, mortgage participation 90.33 certificates and pools, asset backed securities, repurchase 90.34 agreements and reverse repurchase agreements, guaranteed 90.35 investment contracts, savings accounts, and guaranty fund 90.36 certificates, surplus notes, or debentures of domestic mutual 91.1 insurance companies if they conform to the following provisions: 91.2 (i) bankers acceptances and deposit notes of United States 91.3 banks are limited to those issued by banks rated in the highest 91.4 four quality categories by a nationally recognized rating 91.5 agency; 91.6 (ii) certificates of deposit are limited to those issued by 91.7 (A) United States banks and savings institutions that are rated 91.8 in the highest four quality categories by a nationally 91.9 recognized rating agency or whose certificates of deposit are 91.10 fully insured by federal agencies; or (B) credit unions in 91.11 amounts up to the limit of insurance coverage provided by the 91.12 National Credit Union Administration; 91.13 (iii) commercial paper is limited to those issued by United 91.14 States corporations or their Canadian subsidiaries and rated in 91.15 the highest two quality categories by a nationally recognized 91.16 rating agency; 91.17 (iv) mortgage participation or pass through certificates 91.18 evidencing interests in pools of first mortgages or trust deeds 91.19 on improved real estate located in the United States where the 91.20 loan to value ratio for each loan as calculated in accordance 91.21 with section 61A.28, subdivision 3, does not exceed 80 percent 91.22 for fully amortizable residential properties and in all other 91.23 respects meets the requirements of section 61A.28, subdivision 91.24 3; 91.25 (v) collateral for repurchase agreements and reverse 91.26 repurchase agreements is limited to letters of credit and 91.27 securities authorized in this section; 91.28 (vi) guaranteed investment contracts are limited to those 91.29 issued by insurance companies or banks rated in the top four 91.30 quality categories by a nationally recognized rating agency or 91.31 to alternative guaranteed investment contracts where the 91.32 underlying assets comply with the requirements of this 91.33 subdivision; 91.34 (vii) savings accounts are limited to those fully insured 91.35 by federal agencies; and 91.36 (viii) asset backed securities must be rated in the top 92.1 four quality categories by a nationally recognized rating agency. 92.2 (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 92.3 16C.06 do not apply to certificates of deposit and 92.4 collateralization agreements executed by the covered pension 92.5 plan under clause (1), item (ii). 92.6 (3) In addition to investments authorized by clause (1), 92.7 item (iv), the covered pension plan may purchase from the 92.8 Minnesota housing finance agency all or any part of a pool of 92.9 residential mortgages, not in default, that has previously been 92.10 financed by the issuance of bonds or notes of the agency. The 92.11 covered pension plan may also enter into a commitment with the 92.12 agency, at the time of any issue of bonds or notes, to purchase 92.13 at a specified future date, not exceeding 12 years from the date 92.14 of the issue, the amount of mortgage loans then outstanding and 92.15 not in default that have been made or purchased from the 92.16 proceeds of the bonds or notes. The covered pension plan may 92.17 charge reasonable fees for any such commitment and may agree to 92.18 purchase the mortgage loans at a price sufficient to produce a 92.19 yield to the covered pension plan comparable, in its judgment, 92.20 to the yield available on similar mortgage loans at the date of 92.21 the bonds or notes. The covered pension plan may also enter 92.22 into agreements with the agency for the investment of any 92.23 portion of the funds of the agency. The agreement must cover 92.24 the period of the investment, withdrawal privileges, and any 92.25 guaranteed rate of return. 92.26 (f) [CORPORATE STOCKS.] The covered pension plan may 92.27 invest funds in stocks or convertible issues of any corporation 92.28 organized under the laws of the United States or the states 92.29 thereof, the Dominion of Canada or its provinces, or any 92.30 corporation listed on the New York Stock Exchange or the 92.31 American Stock Exchange, if they conform to the following 92.32 provisions: 92.33 (1) the aggregate value of corporate stock investments, as 92.34 adjusted for realized profits and losses, must not exceed 85 92.35 percent of the market or book value, whichever is less, of a 92.36 fund, less the aggregate value of investments according to 93.1 subdivision 6; 93.2 (2) investments must not exceed five percent of the total 93.3 outstanding shares of any one corporation. 93.4 (g) [OTHER INVESTMENTS.] (1) In addition to the 93.5 investments authorized in paragraphs (b) to (f), and subject to 93.6 the provisions in clause (2), the covered pension plan may 93.7 invest funds in: 93.8 (i) venture capital investment businesses through 93.9 participation in limited partnerships and corporations; 93.10 (ii) real estate ownership interests or loans secured by 93.11 mortgages or deeds of trust through investment in limited 93.12 partnerships, bank sponsored collective funds, trusts, and 93.13 insurance company commingled accounts, including separate 93.14 accounts; 93.15 (iii) regional and mutual funds through bank sponsored 93.16 collective funds and open-end investment companies registered 93.17 under the Federal Investment Company Act of 1940; 93.18 (iv) resource investments through limited partnerships, 93.19 private placements, and corporations; and 93.20 (v) international securities. 93.21 (2) The investments authorized in clause (1) must conform 93.22 to the following provisions: 93.23 (i) the aggregate value of all investments made according 93.24 to clause (1) may not exceed 35 percent of the market value of 93.25 the fund for which the covered pension plan is investing; 93.26 (ii) there must be at least four unrelated owners of the 93.27 investment other than the state board for investments made under 93.28 clause (1), item (i), (ii), (iii), or (iv); 93.29 (iii) covered pension plan participation in an investment 93.30 vehicle is limited to 20 percent thereof for investments made 93.31 under clause (1), item (i), (ii), (iii), or (iv); and 93.32 (iv) covered pension plan participation in a limited 93.33 partnership does not include a general partnership interest or 93.34 other interest involving general liability. The covered pension 93.35 plan may not engage in any activity as a limited partner which 93.36 creates general liability. 94.1 Sec. 91. Minnesota Statutes 1996, section 446A.12, 94.2 subdivision 5, is amended to read: 94.3 Subd. 5. [EXEMPTION.] The notes and bonds of the authority 94.4 are not subject to section 16B.06sections 16C.03, subdivision 94.5 4, and 16C.06. 94.6 Sec. 92. Minnesota Statutes 1996, section 462A.18, 94.7 subdivision 2, is amended to read: 94.8 Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the 94.9 provisions of this section, the agency shall have power to 94.10 contract with the holders of any of its notes or bonds, as to 94.11 the custody, collection, securing, investment, and payment of 94.12 any money of the agency, or any money held in trust or otherwise 94.13 for the payment of notes or bonds, and to carry out such 94.14 contract. Money held in trust or otherwise for the payment of 94.15 notes or bonds or in any way to secure notes or bonds and 94.16 deposits of such money may be secured in the same manner as 94.17 money of the agency, and all banks and trust companies are 94.18 authorized to give such security for such deposits. All money 94.19 so paid to the state treasurer as agent of the agency, from 94.20 whatever source, are appropriated to the agency. The agency's 94.21 notes and bonds are not subject to section 16B.06sections 94.22 16C.03, subdivision 4, and 16C.06. 94.23 Sec. 93. Minnesota Statutes 1996, section 471.345, 94.24 subdivision 8, is amended to read: 94.25 Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 94.26 PERSONS.] For purposes of this subdivision, the following terms 94.27 shall have the meanings herein ascribed to them: 94.28 (a) "Small targeted group business" means businesses 94.29 designated under section 16B.1916C.17. 94.30 (b) "Business entity" means an entity organized for profit, 94.31 including an individual, partnership, corporation, joint 94.32 venture, association, or cooperative. 94.33 Nothing in this section shall be construed to prohibit any 94.34 municipality from adopting a resolution, rule, regulation, or 94.35 ordinance which on an annual basis designates and sets aside for 94.36 awarding to small targeted group businesses a percentage of the 95.1 value of its anticipated total procurement of goods and 95.2 services, including construction, and which uses either a 95.3 negotiated price or bid contract procedure in the awarding of a 95.4 procurement contract under a set-aside program as allowed in 95.5 this subdivision, provided that any award based on a negotiated 95.6 price shall not exceed by more than five percent the 95.7 municipality's estimated price for the goods and services if 95.8 they were purchased on the open market and not under the 95.9 set-aside program. 95.10 Sec. 94. Minnesota Statutes 1996, section 473.142, is 95.11 amended to read: 95.12 473.142 [SMALL BUSINESSES.] 95.13 (a) The metropolitan council and agencies specified in 95.14 section 473.143, subdivision 1, may award up to a six percent 95.15 preference in the amount bid for specified goods or services to 95.16 small targeted group businesses designated under section 16B.1995.17 16C.17. 95.18 (b) The council and each agency specified in section 95.19 473.143, subdivision 1, may designate a purchase of goods or 95.20 services for award only to small targeted group businesses 95.21 designated under section 16B.1916C.17 if the council or agency 95.22 determines that at least three small targeted group businesses 95.23 are likely to bid. 95.24 (c) The council and each agency specified in section 95.25 473.143, subdivision 1, as a condition of awarding a 95.26 construction contract or approving a contract for consultant, 95.27 professional, or technical services, may set goals that require 95.28 the prime contractor to subcontract a portion of the contract to 95.29 small targeted group businesses designated under section 16B.1995.30 16C.17. The council or agency must establish a procedure for 95.31 granting waivers from the subcontracting requirement when 95.32 qualified small targeted group businesses are not reasonably 95.33 available. The council or agency may establish financial 95.34 incentives for prime contractors who exceed the goals for use of 95.35 subcontractors and financial penalties for prime contractors who 95.36 fail to meet goals under this paragraph. The subcontracting 96.1 requirements of this paragraph do not apply to prime contractors 96.2 who are small targeted group businesses. At least 75 percent of 96.3 the value of the subcontracts awarded to small targeted group 96.4 businesses under this paragraph must be performed by the 96.5 business to which the subcontract is awarded or by another small 96.6 targeted group business. 96.7 (d) The council and each agency listed in section 473.143, 96.8 subdivision 1, are encouraged to purchase from small targeted 96.9 group businesses designated under section 16B.1916C.17 when 96.10 making purchases that are not subject to competitive bidding 96.11 procedures. 96.12 (e) The council and each agency may adopt rules to 96.13 implement this section. 96.14 (f) Each council or agency contract must require the prime 96.15 contractor to pay any subcontractor within ten days of the prime 96.16 contractor's receipt of payment from the council or agency for 96.17 undisputed services provided by the subcontractor. The contract 96.18 must require the prime contractor to pay interest of 1-1/2 96.19 percent per month or any part of a month to the subcontractor on 96.20 any undisputed amount not paid on time to the subcontractor. 96.21 The minimum monthly interest penalty payment for an unpaid 96.22 balance of $100 or more is $10. For an unpaid balance of less 96.23 than $100, the prime contractor shall pay the actual penalty due 96.24 to the subcontractor. A subcontractor who prevails in a civil 96.25 action to collect interest penalties from a prime contractor 96.26 must be awarded its costs and disbursements, including attorney 96.27 fees, incurred in bringing the action. 96.28 (g) This section does not apply to procurement financed in 96.29 whole or in part with federal funds if the procurement is 96.30 subject to federal disadvantaged, minority, or women business 96.31 enterprise regulations. The council and each agency shall 96.32 report to the commissioner of administration on compliance with 96.33 this section. The information must be reported at the time and 96.34 in the manner requested by the commissioner. 96.35 Sec. 95. Minnesota Statutes 1996, section 473.556, 96.36 subdivision 14, is amended to read: 97.1 Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its 97.2 powers to contract for the purchase of services, materials, 97.3 supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 97.4 10, the commission shall designate and set aside each fiscal 97.5 year for awarding to small businesses approximately ten percent 97.6 of the value of anticipated contracts and subcontracts of that 97.7 kind for that year, in the manner required of the commissioner 97.8 of administration for state procurement contracts pursuant to 97.9 sections 16B.19 to 16B.2216C.17 to 16C.20. The commission 97.10 shall follow the rules promulgated by the commissioner of 97.11 administration pursuant to section 16B.2216C.20, and shall 97.12 submit reports of the kinds required of the commissioners of 97.13 administration and economic development by section 16B.2116C.19. 97.14 Sec. 96. Minnesota Statutes 1996, section 480.09, 97.15 subdivision 1, is amended to read: 97.16 Subdivision 1. The state library shall be maintained in 97.17 the capitol and shall be under the supervision of the justices 97.18 of the supreme court. Notwithstanding chapter 16B16C or any 97.19 other act inconsistent herewith or acts amendatory thereof or 97.20 supplementary thereto, they shall direct the purchases of books, 97.21 pamphlets, and documents therefor and the sales and exchanges 97.22 therefrom upon such terms and conditions as they may deem just 97.23 and proper. They may authorize the transfer of books and 97.24 documents to the University of Minnesota or any department 97.25 thereof, or to any state agency. They shall adopt rules for the 97.26 government of the library and the management of its affairs, and 97.27 prescribe penalties for the violation thereof. 97.28 Sec. 97. Minnesota Statutes 1996, section 626.90, 97.29 subdivision 2, is amended to read: 97.30 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the 97.31 powers of a law enforcement agency, as defined in section 97.32 626.84, subdivision 1, paragraph (h), if all of the requirements 97.33 of clauses (1) to (4) are met: 97.34 (1) the band agrees to be subject to liability for its 97.35 torts and those of its officers, employees, and agents acting 97.36 within the scope of their employment or duties arising out of a 98.1 law enforcement agency function conferred by this section, to 98.2 the same extent as a municipality under chapter 466, and the 98.3 band further agrees, notwithstanding section 16B.0616C.06, 98.4 subdivision 67, to waive its sovereign immunity for purposes of 98.5 claims of this liability; 98.6 (2) the band files with the board of peace officer 98.7 standards and training a bond or certificate of insurance for 98.8 liability coverage for the maximum amounts set forth in section 98.9 466.04; 98.10 (3) the band files with the board of peace officer 98.11 standards and training a certificate of insurance for liability 98.12 of its law enforcement officers, employees, and agents for 98.13 lawsuits under the United States Constitution; and 98.14 (4) the band agrees to be subject to section 13.82 and any 98.15 other laws of the state relating to data practices of law 98.16 enforcement agencies. 98.17 (b) The band shall enter into mutual aid/cooperative 98.18 agreements with the Mille Lacs county sheriff under section 98.19 471.59 to define and regulate the provision of law enforcement 98.20 services under this section. The agreements must define the 98.21 trust property involved in the joint powers agreement. 98.22 (c) The band shall have concurrent jurisdictional authority 98.23 under this section with the Mille Lacs county sheriff's 98.24 department only if the requirements of paragraph (a) are met and 98.25 under the following circumstances: 98.26 (1) over all persons in the geographical boundaries of the 98.27 property held by the United States in trust for the Mille Lacs 98.28 band or the Minnesota Chippewa tribe; 98.29 (2) over all Minnesota Chippewa tribal members within the 98.30 boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 98.31 Mille Lacs county, Minnesota; and 98.32 (3) concurrent jurisdiction over any person who commits or 98.33 attempts to commit a crime in the presence of an appointed band 98.34 peace officer within the boundaries of the Treaty of February 98.35 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 98.36 Sec. 98. Minnesota Statutes 1997 Supplement, section 99.1 626.91, subdivision 2, is amended to read: 99.2 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has 99.3 the powers of a law enforcement agency, as defined in section 99.4 626.84, subdivision 1, paragraph (h), if all of the requirements 99.5 of clauses (1) to (4) are met: 99.6 (1) the community agrees to be subject to liability for its 99.7 torts and those of its officers, employees, and agents acting 99.8 within the scope of their employment or duties arising out of 99.9 the law enforcement agency powers conferred by this section to 99.10 the same extent as a municipality under chapter 466, and the 99.11 community further agrees, notwithstanding section 16B.0616C.06, 99.12 subdivision 67, to waive its sovereign immunity with respect to 99.13 claims arising from this liability; 99.14 (2) the community files with the board of peace officer 99.15 standards and training a bond or certificate of insurance for 99.16 liability coverage for the maximum amounts set forth in section 99.17 466.04; 99.18 (3) the community files with the board of peace officer 99.19 standards and training a certificate of insurance for liability 99.20 of its law enforcement officers, employees, and agents for 99.21 lawsuits under the United States Constitution; and 99.22 (4) the community agrees to be subject to section 13.82 and 99.23 any other laws of the state relating to data practices of law 99.24 enforcement agencies. 99.25 (b) The community shall enter into an agreement under 99.26 section 471.59 with the Redwood county sheriff to define and 99.27 regulate the provision of law enforcement services under this 99.28 section and to provide for mutual aid and cooperation. The 99.29 agreement must identify and describe the trust property involved 99.30 in the agreement. For purposes of entering into this agreement, 99.31 the community shall be considered a "governmental unit" as that 99.32 term is defined in section 471.59, subdivision 1. 99.33 Sec. 99. [EFFECTIVE DATE.] 99.34 This article is effective July 1, 1998.