2nd 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; and 626.91, subdivision 2; 1.44 proposing coding for new law in Minnesota Statutes, 1.45 chapters 16C; and 174; repealing Minnesota Statutes 1.46 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 2.1 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 2.2 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, 2.3 subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, 2.4 subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 2.5 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; Minnesota 2.6 Statutes 1997 Supplement, sections 16B.18, subdivision 2.7 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 pursuant to section 16B.09,or contracts to enable 3.30 public entities to purchase items directly from corrections 3.31 industries. The commissioner of administration, in consultation 3.32 with the commissioner of corrections, shall determine the fair 3.33 market price for listed items. In determining fair market3.34 price, the commissioner shall use competitive bidding, or shall3.35 consider open bid prices in previous years for similar products3.36 which meet the needs of the public entity.The commissioner of 4.1 administration shall require that all requests for bids or 4.2 4.3 proposals, for items provided by corrections industries, be 4.4 forwarded to the commissioner of corrections to enable 4.5 corrections industries to submit bids. The commissioner of 4.6 corrections shall consult with the commissioner of 4.7 administration prior to introducing new products to the state 4.8 agency market. 4.9 (c) No public entity may evade the intent of this section 4.10 by adopting slight variations in specifications, when Minnesota 4.11 corrections industry items meet the reasonable needs and 4.12 specifications of the public entity. 4.13 (d) As part of its ongoing audit process, the legislative4.14 auditor is requested to ensure that state agencies are in4.15 compliance with this section.The commissioners of 4.16 administration and corrections shall develop annual performance 4.17 measures outlining goals to maximize inmate work program 4.18 participation. The commissioners of administration and 4.19 corrections shall appoint cochairs for a task force whose 4.20 purpose is to determine additional methods to achieve the 4.21 performance goals for public entity purchasing. The task force 4.22 shall include representatives from the Minnesota house of 4.23 representatives, Minnesota senate, the Minnesota state colleges 4.24 and universities, University of Minnesota, Minnesota League of 4.25 Cities, Minnesota Association of Counties, and administrators 4.26 with purchasing responsibilities from the Minnesota state 4.27 departments of corrections, public safety, finance, 4.28 transportation, natural resources, human services, health, and 4.29 economic security. 4.30 (e) The commissioners of administration and corrections4.31 shall appoint a joint task force to explore additional methods4.32 that support the philosophy of providing a substantial market4.33 opportunity to correctional industries that maximizes inmate4.34 work opportunities. The task force shall develop a plan and4.35 prepare a set of criteria with which to evaluate the4.36 effectiveness of the recommendations and initiatives in the4.37 plan. By February 15, 1997, the task force shall report to the5.1 chairs of the senate and house of representatives committees5.2 having jurisdiction over criminal justice funding.If 5.3 performance goals for public entity purchasing are not achieved 5.4 in two consecutive fiscal years, public entities shall purchase 5.5 items available from corrections industries. The commissioner 5.6 of administration shall be responsible for notifying public 5.7 entities of this requirement. 5.8 Sec. 3. [16C.02] [DEFINITIONS.] 5.9 Subdivision 1. [APPLICABILITY.] For purposes of this 5.10 chapter, the following terms have the meanings given them, 5.11 unless the context clearly indicates otherwise. 5.12 Subd. 2. [AGENCY.] "Agency" means any state officer, 5.13 employee, board, commission, authority, department, entity, or 5.14 organization of the executive branch of state government. 5.15 Unless specifically provided elsewhere in this chapter, 5.16 agency does not include the Minnesota state colleges and 5.17 universities. 5.18 Subd. 3. [AWARD.] "Award" means a commissioner's written 5.19 acceptance of a bid or proposal to provide goods, services, or 5.20 utilities. 5.21 Subd. 4. [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 to which an agency is a 5.26 party. 5.27 Subd. 6. [FORMAL SOLICITATION.] "Formal solicitation" 5.28 means a solicitation which requires a sealed response. 5.29 Subd. 7. [GOODS.] "Goods" means all types of personal 5.30 property including commodities, materials, supplies, and 5.31 equipment. 5.32 Subd. 8. [INFORMAL SOLICITATION.] "Informal solicitation" 5.33 means a solicitation which does not require a sealed response. 5.34 Subd. 9. [LEASE.] "Lease" means a contract conveying from 5.35 one entity to another the use of real or personal property for a 5.36 designated period of time in return for payment or other 6.1 consideration. 6.2 Subd. 10. [REQUEST FOR BID OR RFB.] "Request for bid" or 6.3 "RFB" means a solicitation in which the terms, conditions, and 6.4 specifications are described and responses are not subject to 6.5 negotiation. 6.6 Subd. 11. [REQUEST FOR PROPOSAL OR RFP.] "Request for 6.7 proposal" or "RFP" means a solicitation in which it is not 6.8 advantageous to set forth all the actual, detailed requirements 6.9 at the time of solicitation and responses are subject to 6.10 negotiation. 6.11 Subd. 12. [RESIDENT VENDOR.] "Resident vendor" means a 6.12 person, firm, or corporation authorized to conduct business in 6.13 the state of Minnesota on the date a solicitation for a contract 6.14 is first advertised or announced. It includes a foreign 6.15 corporation duly authorized to engage in business in Minnesota. 6.16 Subd. 13. [RESPONSE.] "Response" means the offer received 6.17 from a vendor in response to a solicitation. A response 6.18 includes submissions commonly referred to as "offers," "bids," 6.19 "quotes," or "proposals." 6.20 Subd. 14. [SEALED.] "Sealed" means a method determined by 6.21 the commissioner to prevent the contents being revealed or known 6.22 before the deadline for submission of responses. 6.23 Subd. 15. [SERVICE CONTRACT.] "Service contract" means a 6.24 contract for any nonprofessional or technical services. 6.25 Subd. 16. [SERVICES.] "Services" means, unless otherwise 6.26 indicated, both professional or technical services and service 6.27 performed under a service contract. 6.28 Subd. 17. [SINGLE SOURCE.] "Single source" means an 6.29 acquisition where, after a search, only one supplier is 6.30 determined to be reasonably available for the required product, 6.31 service, or construction item. 6.32 Subd. 18. [SOLICITATION.] "Solicitation" means the process 6.33 used to communicate procurement requirements and to request 6.34 responses from interested vendors. A solicitation may be, but 6.35 is not limited to, a request for bid and request for proposal. 6.36 Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 7.1 DUTIES.] 7.2 Subdivision 1. [SCOPE.] The commissioner's authority in 7.3 this section applies to an agency and is subject to other 7.4 provisions of this chapter and chapter 16B. Unless otherwise 7.5 provided, the provisions in this chapter and chapter 16B do not 7.6 apply to the Minnesota state colleges and universities. 7.7 Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, 7.8 the commissioner may adopt rules, consistent with this chapter 7.9 and chapter 16B, relating to the following topics: 7.10 (1) solicitations and responses to solicitations, bid 7.11 security, vendor errors, opening of responses, award of 7.12 contracts, tied bids, and award protest process; 7.13 (2) contract performance and failure to perform; 7.14 (3) authority to debar or suspend vendors, and 7.15 reinstatement of vendors; 7.16 (4) contract cancellation; and 7.17 (5) procurement from rehabilitation facilities. 7.18 Subd. 3. [ACQUISITION AUTHORITY.] The commissioner shall 7.19 acquire all goods, services, and utilities needed by agencies. 7.20 The commissioner shall acquire goods, services, and utilities by 7.21 requests for bids, requests for proposals, or other method 7.22 provided for by law, unless another section of law requires a 7.23 particular method of acquisition be utilized. The commissioner 7.24 shall make all decisions regarding acquisition activities. The 7.25 determination of the acquisition method and all decisions 7.26 involved in the acquisition process, unless otherwise provided 7.27 for by law, shall be based on best value which includes an 7.28 evaluation of price and may include other considerations 7.29 including, but not limited to, environmental considerations, 7.30 quality, and vendor performance. A best value determination 7.31 must be based on the evaluation criteria detailed in the 7.32 solicitation document. Unless it is determined by the 7.33 commissioner that an alternative solicitation method should be 7.34 used to determine best value, a request for bid must be used to 7.35 solicit formal responses for all building and construction 7.36 contracts. Any or all responses may be rejected. When using 8.1 the request for bid process, the bid must be awarded to the 8.2 lowest responsive and responsible bidder, taking into 8.3 consideration conformity with the specifications, terms of 8.4 delivery, the purpose for which the contract or purchase is 8.5 intended, the status and capability of the vendor, and other 8.6 considerations imposed in the request for bids. The 8.7 commissioner may decide which is the lowest responsible bidder 8.8 for all purchases and may use the principles of life cycle 8.9 costing, where appropriate, in determining the lowest overall 8.10 bid. The duties set forth in this subdivision are subject to 8.11 delegation pursuant to this section. 8.12 Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall 8.13 conduct all contracting by, for, and between agencies and 8.14 perform all contract management and review functions for 8.15 contracts, except those functions specifically delegated to be 8.16 performed by the contracting agency, the attorney general, or 8.17 otherwise provided for by law. 8.18 Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 8.19 commissioner shall, in addition to the duties set forth in 8.20 subdivisions 3 and 4, make all decisions regarding amendments, 8.21 cancellations, and appeals of all agency acquisition activities 8.22 unless the duties are delegated pursuant to this section. 8.23 Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The 8.24 commissioner is authorized to enter into lease purchases or 8.25 installment purchases for periods not exceeding the anticipated 8.26 useful life of the items acquired unless otherwise prohibited by 8.27 law. 8.28 Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 8.29 commissioner is authorized to enter into lease, lease purchase, 8.30 rental, or installment agreements for the use or acquisition, 8.31 whichever is applicable, of real or personal property. 8.32 Subd. 8. [POLICY AND PROCEDURES.] The commissioner is 8.33 authorized to issue policies, procedures, and standards 8.34 applicable to all acquisition activities by and for agencies. 8.35 Subd. 9. [COOPERATIVE PURCHASING.] The commissioner is 8.36 authorized to enter into a cooperative purchasing agreement for 9.1 the provision of goods, services, and utilities with one or more 9.2 other states or governmental units, as described in section 9.3 471.59, subdivision 1. The commissioner is authorized to enter 9.4 into cooperative purchasing agreements for the purchase of 9.5 goods, services, and utilities with health care facilities that 9.6 are required to provide indigent care. 9.7 Subd. 10. [SURPLUS PROPERTY.] The commissioner is 9.8 authorized to purchase, accept, transfer, warehouse, sell, 9.9 distribute, or dispose of surplus property in accordance with 9.10 state and federal rules and regulations. The commissioner may 9.11 charge a fee to cover any expenses incurred in connection with 9.12 any of these acts. 9.13 Subd. 11. [CENTRAL DISTRIBUTION CENTER.] The commissioner 9.14 is authorized to provide and manage a central distribution 9.15 center for federal and state surplus personal property, as 9.16 defined in section 16C.24, and may provide and manage a 9.17 warehouse facility. 9.18 Subd. 12. [CENTRAL STORES.] The commissioner is authorized 9.19 to provide agencies with supplies and equipment and operate all 9.20 central stores and supply rooms serving more than one agency. 9.21 Subd. 13. [PROVISION OF GOODS, SERVICES, AND 9.22 UTILITIES.] The commissioner has the authority to provide goods, 9.23 services, and utilities under this chapter to state legislative 9.24 and judicial branch agencies, political subdivisions, the 9.25 Minnesota state colleges and universities, the University of 9.26 Minnesota, and federal government agencies. 9.27 Subd. 14. [REIMBURSEMENT FOR GOODS, SERVICES, AND 9.28 UTILITIES.] The commissioner is authorized to charge a fee to 9.29 cover costs and expenses associated with operating a revolving 9.30 fund or an enterprise fund to acquire goods, services, and 9.31 utilities. The fees are appropriated to the commissioner to 9.32 administer and manage the programs and facilities covered under 9.33 this section. 9.34 Subd. 15. [DELEGATION OF DUTIES.] The commissioner may 9.35 delegate duties imposed by this chapter to the head of an agency 9.36 and to any subordinate of the agency head. Delegated duties 10.1 shall be exercised in the name of the commissioner and under the 10.2 commissioner's direct supervision and control. A delegation of 10.3 duties may include, but is not limited to, allowing individuals 10.4 within agencies to acquire goods, services, and utilities within 10.5 dollar limitations and for designated types of acquisitions. 10.6 Delegation of contract management and review functions must be 10.7 filed with the secretary of state and may not, except with 10.8 respect to delegations within the department of administration, 10.9 exceed two years in duration. The commissioner may withdraw any 10.10 delegation at the commissioner's sole discretion. 10.11 Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 10.12 INTEREST.] 10.13 Subdivision 1. [DUTY.] An employee of the executive branch 10.14 involved directly or indirectly in the acquisition process, at 10.15 any level, is subject to the code of ethics in section 43A.38. 10.16 Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 10.17 The commissioner must develop policies regarding code of ethics 10.18 and conflict of interest designed to prevent conflicts of 10.19 interest for employees involved in the acquisition of goods, 10.20 services, and utilities. The policies must apply to employees 10.21 who are directly or indirectly involved in the acquisition of 10.22 goods, services, and utilities, developing requests for 10.23 proposals, evaluating bids or proposals, awarding the contract, 10.24 selecting the final vendor, drafting and entering into 10.25 contracts, evaluating performance under these contracts, and 10.26 authorizing payments under the contract. 10.27 (b) The policies must contain a process for making 10.28 employees aware of policy and laws relating to conflict of 10.29 interest, and for training employees on how to avoid and deal 10.30 with potential conflicts. 10.31 (c) The policies must contain a process under which an 10.32 employee who has a conflict of interest or a potential conflict 10.33 of interest must disclose the matter, and a process under which 10.34 work on the contract may be assigned to another employee if 10.35 possible. 10.36 Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 11.1 REVIEW.] 11.2 Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully 11.3 cooperate with the commissioner in the management and review of 11.4 state contracts. 11.5 Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A 11.6 contract is not valid and the state is not bound by it unless: 11.7 (1) it has first been executed by the head of the agency or 11.8 a delegate who is a party to the contract; 11.9 (2) it has been approved by the commissioner; 11.10 (3) it has been approved by the attorney general or a 11.11 delegate as to form and execution; 11.12 (4) the accounting system shows an obligation in an expense 11.13 budget or encumbrance for the amount of the contract liability; 11.14 and 11.15 (5) the combined contract and amendments shall not exceed 11.16 five years, unless otherwise provided for by law. The term of 11.17 the original contract must not exceed two years unless the 11.18 commissioner determines that a longer duration is in the best 11.19 interest of the state. 11.20 (b) Grants, interagency agreements, purchase orders, and 11.21 annual plans need not, in the discretion of the commissioner and 11.22 attorney general, require the signature of the commissioner 11.23 and/or the attorney general. 11.24 (c) A fully executed copy of every contract must be kept on 11.25 file at the contracting agency. 11.26 Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do 11.27 not apply to contracts of the department of economic security 11.28 distributing state and federal funds for the purpose of 11.29 subcontracting the provision of program services to eligible 11.30 recipients. For these contracts, the commissioner of economic 11.31 security is authorized to directly enter into agency contracts 11.32 and encumber available funds. For contracts distributing state 11.33 or federal funds pursuant to the federal Economic Dislocation 11.34 and Worker Adjustment Assistance Act, United States Code, title 11.35 29, section 1651 et seq., or sections 268.9771, 268.978, 11.36 268.9781, and 268.9782, the commissioner of economic security is 12.1 authorized to directly enter into agency contracts with approval 12.2 of the workforce development council and encumber available 12.3 funds to ensure a rapid response to the needs of dislocated 12.4 workers. The commissioner of economic security shall adopt 12.5 internal procedures to administer and monitor funds distributed 12.6 under these contracts. This exception also applies to any 12.7 contracts entered into by the commissioner of children, 12.8 families, and learning that were previously entered into by the 12.9 commissioner of economic security. 12.10 Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency 12.11 shall diligently administer and monitor any contract it has 12.12 entered into, pursuant to a delegation of duties from the 12.13 commissioner. The commissioner may require an agency to report 12.14 to the commissioner at any time on the status of any contracts 12.15 to which the agency is a party. 12.16 Subd. 5. [SUBJECT TO AUDIT.] A contract or any pass- 12.17 through disbursement of public funds to a vendor of goods or 12.18 services or a grantee made by or under the supervision of the 12.19 commissioner or any county or unit of local government must 12.20 include, expressed or implied, an audit clause that provides 12.21 that the books, records, documents, and accounting procedures 12.22 and practices of the vendor or other party, that are relevant to 12.23 the contract or transaction, are subject to examination by the 12.24 contracting agency and either the legislative auditor or the 12.25 state auditor, as appropriate, for a minimum of six years. If 12.26 the contracting agency is a local unit of government, and the 12.27 governing body of the local unit of government requests that the 12.28 state auditor examine the books, records, documents, and 12.29 accounting procedures and practices of the vendor or other party 12.30 pursuant to this subdivision, the contracting agency shall be 12.31 liable for the cost of the examination. If the contracting 12.32 agency is a local unit of government, and the grantee, vendor, 12.33 or other party requests that the state auditor examine all 12.34 books, records, documents, and accounting procedures and 12.35 practices related to the contract, the grantee, vendor, or other 12.36 party that requested the examination shall be liable for the 13.1 cost of the examination. An agency contract made for purchase, 13.2 lease, or license of software and data from the state is not 13.3 required to contain this audit clause. 13.4 Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney 13.5 general may pursue remedies available by law to avoid the 13.6 obligation of an agency to pay under a contract or to recover 13.7 payments made if services performed or goods received under the 13.8 contract are so unsatisfactory, incomplete, or inconsistent that 13.9 payment would involve unjust enrichment. The contrary opinion 13.10 of the contracting agency does not affect the power of the 13.11 attorney general under this subdivision. 13.12 Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND 13.13 BANDS.] Notwithstanding any other law, an agency may not require 13.14 an Indian tribe or band to deny its sovereignty as a requirement 13.15 or condition of a contract with an agency. 13.16 Sec. 7. [16C.07] [ACQUISITIONS.] 13.17 Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of 13.18 solicitations for acquisitions estimated to be more than $25,000 13.19 must be publicized in a manner designated by the commissioner. 13.20 Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation 13.21 must be used to acquire all goods, service contracts, and 13.22 utilities estimated at or more than $25,000 unless otherwise 13.23 provided for. All formal responses must be sealed when they are 13.24 received and must be opened in public at the hour stated in the 13.25 solicitation. Formal responses must be authenticated by the 13.26 responder in a manner specified by the commissioner. 13.27 (b) An informal solicitation may be used to acquire all 13.28 goods, service contracts, and utilities that are estimated at 13.29 less than $25,000. The number of vendors required to receive 13.30 solicitations may be determined by the commissioner. Informal 13.31 responses must be authenticated by the responder in a manner 13.32 specified by the commissioner. 13.33 Subd. 3. [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 13.34 name of the vendor and dollar amounts specified in a response to 13.35 a request for bids shall be read at the time of opening. Only 13.36 the name of the responding vendors to all requests for proposals 14.1 shall be read at the time of opening. All other information 14.2 contained in a vendor's response to a bid is classified as 14.3 nonpublic data, as defined in section 13.02, and remains 14.4 nonpublic data until completion of the selection process. All 14.5 other information contained in a vendor's response to a request 14.6 for proposal, other than the name of the vendor, is classified 14.7 as nonpublic data, as defined in section 13.02, and remains 14.8 nonpublic data until the completion of the evaluation process. 14.9 (b) All responses are public information at the time of the 14.10 award unless otherwise provided for. All responses and 14.11 documents pertaining to the final award of an acquisition must 14.12 be retained and made a part of a permanent file or record and 14.13 remain open to public inspection, after award, unless otherwise 14.14 provided for by law. 14.15 Subd. 4. [MULTIPLE AWARDS.] The commissioner may award a 14.16 contract to more than one vendor if, in the opinion of the 14.17 commissioner, it is in the best interest of the state. 14.18 Subd. 5. [STATE AS RESPONDER.] The head of an agency, in 14.19 consultation with the requesting agency and the commissioner, 14.20 may respond to a solicitation or request if the goods and 14.21 services meet the needs of the requesting agency and provide the 14.22 state with the best value. When an agency responds to a 14.23 solicitation, all work product relating to the response is 14.24 nonpublic data as defined in section 13.02, and shall become 14.25 public information in accordance with subdivision 3. 14.26 Subd. 6. [AWARDS.] Awards must be based on best value, 14.27 which includes an evaluation of price, and may include other 14.28 considerations including, but not limited to, environmental 14.29 considerations, quality, and vendor performance. 14.30 Subd. 7. [OTHER STATES WITH RESIDENT 14.31 PREFERENCE.] Acquisition of goods and services must be awarded 14.32 according to the provisions of this chapter except that a 14.33 resident vendor shall be allowed a preference over a nonresident 14.34 vendor from a state that gives or requires a preference to 14.35 vendors from that state. The preference shall be equal to the 14.36 preference given or required by the state of the nonresident 15.1 vendor. 15.2 Subd. 8. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 15.3 does not apply to a contract for any project in which federal 15.4 funds are expended. 15.5 Subd. 9. [REJECTION.] At the discretion of the 15.6 commissioner, any or all responses may be rejected if it is 15.7 determined to be in the best interest of the state. 15.8 Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.] 15.9 The commissioner of employee relations shall develop a 15.10 directory of services that state agencies commonly provide. 15.11 Before an agency may seek approval of a professional or 15.12 technical services contract valued at a total cost in excess of 15.13 $25,000, it must certify to the commissioner that it has 15.14 publicized the contract by posting notice at appropriate 15.15 worksites within agencies and has made reasonable efforts to 15.16 determine that no state employee or agency, including an 15.17 employee or agency outside the contracting agency, is able and 15.18 available to perform the required services. When possible, this 15.19 posting should be done electronically. 15.20 Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 15.21 Subdivision 1. [DEFINITION.] For the purposes of this 15.22 section, "professional or technical services" means services 15.23 that are intellectual in character, including consultation, 15.24 analysis, evaluation, prediction, planning, programming, or 15.25 recommendation, and result in the production of a report or the 15.26 completion of a task. Professional or technical contracts do 15.27 not include the provision of supplies or materials except by the 15.28 approval of the commissioner or except as incidental to the 15.29 provision of professional or technical services. 15.30 Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency 15.31 may seek approval of a professional or technical services 15.32 contract valued in excess of $5,000, it must certify to the 15.33 commissioner that: 15.34 (1) no current state employee is able and available to 15.35 perform the services called for by the contract; 15.36 (2) the normal competitive bidding mechanisms will not 16.1 provide for adequate performance of the services; 16.2 (3) the contractor has certified that the product of the 16.3 services will be original in character; 16.4 (4) reasonable efforts were made to publicize the 16.5 availability of the contract to the public; 16.6 (5) the agency has received, reviewed, and accepted a 16.7 detailed work plan from the contractor for performance under the 16.8 contract, if applicable; 16.9 (6) the agency has developed, and fully intends to 16.10 implement, a written plan providing for the assignment of 16.11 specific agency personnel to a monitoring and liaison function, 16.12 the periodic review of interim reports or other indications of 16.13 past performance, and the ultimate utilization of the final 16.14 product of the services; and 16.15 (7) the agency will not allow the contractor to begin work 16.16 before funds are fully encumbered. 16.17 Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 16.18 CONTRACTS.] Before approving a proposed contract for 16.19 professional or technical services, the commissioner must 16.20 determine, at least, that: 16.21 (1) all provisions of subdivision 2 and section 16C.17 have 16.22 been verified or complied with; 16.23 (2) the work to be performed under the contract is 16.24 necessary to the agency's achievement of its statutory 16.25 responsibilities and there is statutory authority to enter into 16.26 the contract; 16.27 (3) the contract will not establish an employment 16.28 relationship between the state or the agency and any persons 16.29 performing under the contract; 16.30 (4) the contractor and agents are not employees of the 16.31 state; 16.32 (5) no agency has previously performed or contracted for 16.33 the performance of tasks which would be substantially duplicated 16.34 under the proposed contract; 16.35 (6) the contracting agency has specified a satisfactory 16.36 method of evaluating and using the results of the work to be 17.1 performed; and 17.2 (7) the combined contract and amendments will not exceed 17.3 five years, unless otherwise provided for by law. The term of 17.4 the original contract must not exceed two years unless the 17.5 commissioner determines that a longer duration is in the best 17.6 interest of the state. 17.7 Subd. 4. [REPORTS.] (a) The commissioner shall submit to 17.8 the governor, the chairs of the house ways and means and senate 17.9 finance committees, and the legislative reference library a 17.10 yearly listing of all contracts for professional or technical 17.11 services executed. The report must identify the contractor, 17.12 contract amount, duration, and services to be provided. The 17.13 commissioner shall also issue yearly reports summarizing the 17.14 contract review activities of the department by fiscal year. 17.15 (b) The fiscal year report must: 17.16 (1) be sorted by agency and by contractor; 17.17 (2) show the aggregate value of contracts issued by each 17.18 agency and issued to each contractor; 17.19 (3) distinguish between contracts that are being issued for 17.20 the first time and contracts that are being extended; 17.21 (4) state the termination date of each contract; and 17.22 (5) identify services by commodity code, including topics 17.23 such as contracts for training, contracts for research and 17.24 opinions, and contracts for computer systems. 17.25 (c) Within 30 days of final completion of a contract over 17.26 $40,000 covered by this subdivision, the head of the agency 17.27 entering into the contract must submit a one-page report to the 17.28 commissioner who must submit a copy to the legislative reference 17.29 library. The report must: 17.30 (1) summarize the purpose of the contract, including why it 17.31 was necessary to enter into a contract; 17.32 (2) state the amount spent on the contract; and 17.33 (3) explain why this amount was a cost-effective way to 17.34 enable the agency to provide its services or products better or 17.35 more efficiently. 17.36 Subd. 5. [CONTRACT TERMS.] (a) A professional or technical 18.1 services contract must by its terms permit the commissioner to 18.2 unilaterally terminate the contract prior to completion, upon 18.3 payment of just compensation, if the commissioner determines 18.4 that further performance under the contract would not serve 18.5 agency purposes. 18.6 (b) The terms of a contract must provide that no more than 18.7 90 percent of the amount due under the contract may be paid 18.8 until the final product has been reviewed by the head of the 18.9 agency entering into the contract and the head of the agency has 18.10 certified that the contractor has satisfactorily fulfilled the 18.11 terms of the contract, unless specifically excluded in writing 18.12 by the commissioner. 18.13 Subd. 6. [FILING COPY.] If the final product of the 18.14 contract is a written report, a copy must be filed with the 18.15 legislative reference library. 18.16 Subd. 7. [EXCLUSIONS.] This section does not apply to 18.17 contracts with individuals or organizations for administration 18.18 of employee pension plans authorized under chapter 354B or 354C. 18.19 Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 18.20 Before entering into or approving a service contract, the 18.21 commissioner must determine, at least, that: 18.22 (1) no current state employee is able and available to 18.23 perform the services called for by the contract; 18.24 (2) the work to be performed under the contract is 18.25 necessary to the agency's achievement of its statutory 18.26 responsibilities and there is statutory authority to enter into 18.27 the contract; 18.28 (3) the contract will not establish an employment 18.29 relationship between the state or the agency and any persons 18.30 performing under the contract; 18.31 (4) the contractor and agents are not employees of the 18.32 state; 18.33 (5) the contracting agency has specified a satisfactory 18.34 method of evaluating and using the results of the work to be 18.35 performed; and 18.36 (6) the combined contract and amendments will not exceed 19.1 five years, unless otherwise provided for by law. The term of 19.2 the original contract must not exceed two years, unless the 19.3 commissioner determines that a longer duration is in the best 19.4 interest of the state. 19.5 For purposes of clause (1), employees are available if qualified 19.6 and: 19.7 (1) are already doing the work in question; or 19.8 (2) are on layoff status in classes that can do the work in 19.9 question. 19.10 An employee is not available if the employee is doing other 19.11 work, is retired, or has decided not to do the work in question. 19.12 Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION 19.13 PROCESS.] 19.14 Subdivision 1. [SINGLE SOURCE.] The solicitation process 19.15 described in this chapter is not required when there is clearly 19.16 and legitimately only a single source for the goods and services 19.17 and the commissioner determines that the price has been fairly 19.18 and reasonably established. 19.19 Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of 19.20 this subdivision, "emergency" means a threat to public health, 19.21 welfare, or safety that threatens the functioning of government, 19.22 the protection of property, or the health or safety of people. 19.23 (b) The solicitation process described in this chapter is 19.24 not required in emergencies. In emergencies, the commissioner 19.25 may make any purchases necessary for the repair, rehabilitation, 19.26 and improvement of a state-owned structure or may authorize an 19.27 agency to do so and may purchase, or may authorize an agency to 19.28 purchase, goods, services, or utility services directly for 19.29 immediate use. 19.30 Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 19.31 anything in this chapter to the contrary, the commissioner may, 19.32 instead of soliciting bids, contract for purchases with 19.33 suppliers who have published schedules of prices effective for 19.34 sales to any federal agency of the United States. These 19.35 contracts may be entered into, regardless of the amount of the 19.36 purchase price, if the commissioner considers them advantageous 20.1 and if the purchase price of all the commodities purchased under 20.2 the contract do not exceed the price specified by the schedule. 20.3 Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation 20.4 process described in this chapter is not required for 20.5 cooperative agreements. The commissioner may enter into 20.6 contracts or accept prices effective for sales to any 20.7 governmental unit as defined in section 471.59, through a 20.8 cooperative agreement as defined in section 471.59. 20.9 Subd. 5. [SPECIFIC PURCHASES.] The solicitation process 20.10 described in this chapter is not required for acquisition of the 20.11 following: 20.12 (1) merchandise for resale purchased under policies 20.13 determined by the commissioner; 20.14 (2) farm and garden products which, as determined by the 20.15 commissioner, may be purchased at the prevailing market price on 20.16 the date of sale; 20.17 (3) goods and services from the Minnesota correctional 20.18 facilities; 20.19 (4) goods and services from rehabilitation facilities and 20.20 sheltered workshops that are certified by the commissioner of 20.21 economic security; 20.22 (5) goods and services for use by a community-based 20.23 residential facility operated by the commissioner of human 20.24 services; 20.25 (6) goods purchased at auction or when submitting a sealed 20.26 bid at auction provided that before authorizing such an action, 20.27 the commissioner consult with the requesting agency to determine 20.28 a fair and reasonable value for the goods considering factors 20.29 including, but not limited to, costs associated with submitting 20.30 a bid, travel, transportation, and storage. This fair and 20.31 reasonable value must represent the limit of the state's bid; 20.32 and 20.33 (7) utility services where no competition exists or where 20.34 rates are fixed by law or ordinance. 20.35 Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; 20.36 PURCHASING REVOLVING FUND.] 21.1 The commissioner may enter into joint or cooperative 21.2 purchasing agreements with any entity that is authorized under 21.3 section 471.59 to do so. The cooperative purchasing venture 21.4 revolving fund is a separate account in the state treasury. The 21.5 commissioner may charge a fee to cover the commissioner's 21.6 administrative expenses to governmental units that have joint or 21.7 cooperative purchasing agreements with the state under section 21.8 471.59. The fees collected must be deposited in the revolving 21.9 fund established by this section. Money in the fund is 21.10 appropriated to the commissioner to administer the programs and 21.11 services covered by this chapter. 21.12 Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 21.13 STATE.] 21.14 The commissioner shall encourage and make a reasonable 21.15 attempt to identify and purchase food products that are grown in 21.16 the state. 21.17 Sec. 14. [16C.14] [CERTAIN VEHICLES.] 21.18 Upon the written request of the commissioner of public 21.19 safety, motor vehicles for use by investigative and undercover 21.20 agents of the department of public safety must be purchased by 21.21 the brand, make, and model specified by the agency. 21.22 Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT 21.23 PURCHASES.] 21.24 Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may 21.25 contract to purchase by installment payments capital or other 21.26 equipment or services intended to improve the energy efficiency 21.27 of a state building or facility if: 21.28 (1) the term of the contract does not exceed ten years, 21.29 with not more than a ten-year payback; 21.30 (2) the entire cost of the contract is a percentage of the 21.31 resultant savings in energy costs only. "Savings in energy cost" 21.32 means a comparison of energy cost and energy usage under the 21.33 precontract conditions, including reasonable projections of 21.34 energy cost and usage if no change is made to the precontract 21.35 conditions, against energy cost and usage with the changes made 21.36 under the contract. If it is impractical to directly measure 22.1 energy cost and/or energy usage, reasonable engineering 22.2 estimates may be substituted for measured results; 22.3 (3) the contract for purchase must be completed using a 22.4 solicitation; 22.5 (4) the commissioner has determined that the contract 22.6 vendor is a responsible vendor; 22.7 (5) the contract vendor can finance or obtain financing for 22.8 the performance of the contract without state assistance or 22.9 guarantee; and 22.10 (6) the state may unilaterally cancel the agreement if the 22.11 legislature fails to appropriate funds to continue the contract 22.12 or if the contractor at any time during the term of the contract 22.13 fails to perform its contractual obligations, including failure 22.14 to deliver or install equipment or materials, failure to replace 22.15 faulty equipment or materials in a timely fashion, and failure 22.16 to maintain the equipment as agreed in the contract. 22.17 Subd. 2. [ENERGY APPROPRIATION.] The commissioner may 22.18 spend money appropriated for energy costs in payment of a 22.19 contract under this section. 22.20 Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 22.21 any other law to the contrary, fuel cost savings resulting from 22.22 energy conservation actions shall be available at the managerial 22.23 level at which the actions took place for expenditure for other 22.24 purposes within the biennium in which the actions occur or in 22.25 the case of a shared savings agreement for the contract period 22.26 of the shared savings agreement. For purposes of this 22.27 subdivision "shared savings agreement" means a contract meeting 22.28 the terms and conditions of subdivision 1. 22.29 Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 22.30 ACTIVITY PROGRAMS.] 22.31 The commissioner, in consultation with the commissioner of 22.32 economic security, shall prepare a list containing products and 22.33 services of state-certified rehabilitation facilities, sheltered 22.34 workshops, and work activity programs for acquisition by state 22.35 agencies and institutions. 22.36 Sec. 17. [16C.17] [DESIGNATION OF PROCUREMENTS FROM SMALL 23.1 BUSINESSES.] 23.2 Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The 23.3 commissioner shall for each fiscal year ensure that small 23.4 businesses receive at least 25 percent of the value of 23.5 anticipated total state procurement of goods and services, 23.6 including printing and construction. The commissioner shall 23.7 divide the procurements so designated into contract award units 23.8 of economically feasible production runs in order to facilitate 23.9 offers or bids from small businesses. In making the annual 23.10 designation of such procurements the commissioner shall attempt 23.11 (1) to vary the included procurements so that a variety of goods 23.12 and services produced by different small businesses are obtained 23.13 each year, and (2) to designate small business procurements in a 23.14 manner that will encourage proportional distribution of such 23.15 awards among the geographical regions of the state. To promote 23.16 the geographical distribution of awards, the commissioner may 23.17 designate a portion of the small business procurement for award 23.18 to bidders from a specified congressional district or other 23.19 geographical region specified by the commissioner. The failure 23.20 of the commissioner to designate particular procurements shall 23.21 not be deemed to prohibit or discourage small businesses from 23.22 seeking the procurement award through the normal process. 23.23 Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt 23.24 rules defining "small business" for purposes of sections 16C.17 23.25 to 16C.22, 137.31, 137.35, 161.321, and 473.142. The definition 23.26 must include only businesses with their principal place of 23.27 business in Minnesota. The definition must establish different 23.28 size standards for various types of businesses. In establishing 23.29 these standards, the commissioner must consider the differences 23.30 among industries caused by the size of the market for goods or 23.31 services and the relative size and market share of the 23.32 competitors operating in those markets. 23.33 Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 23.34 state agency shall for each fiscal year designate for awarding 23.35 to small businesses at least 25 percent of the value of 23.36 anticipated procurements of that agency for professional or 24.1 technical services. The set-aside under this subdivision is in 24.2 addition to that provided by subdivision 1, but must otherwise 24.3 comply with section 16C.10. 24.4 Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner 24.5 shall establish a program for purchasing goods and services from 24.6 targeted group businesses, as designated in subdivision 5. The 24.7 purpose of the program is to remedy the effects of past 24.8 discrimination against members of targeted groups. In 24.9 furtherance of this purpose, the commissioner shall attempt to 24.10 ensure that purchases from targeted group businesses reflect a 24.11 fair and equitable representation of all the state's purchasing. 24.12 Subd. 5. [DESIGNATION OF TARGETED GROUPS.] (a) The 24.13 commissioner of administration shall periodically designate 24.14 businesses that are majority owned and operated by women, 24.15 persons with a substantial physical disability, or specific 24.16 minorities as targeted group businesses within purchasing 24.17 categories as determined by the commissioner. A group may be 24.18 targeted within a purchasing category if the commissioner 24.19 determines there is a statistical disparity between the 24.20 percentage of purchasing from businesses owned by group members 24.21 and the representation of businesses owned by group members 24.22 among all businesses in the state in the purchasing category. 24.23 (b) In addition to designations under paragraph (a), an 24.24 individual business may be included as a targeted group business 24.25 if the commissioner determines that inclusion is necessary to 24.26 remedy discrimination against the owner based on race, gender, 24.27 or disability in attempting to operate a business that would 24.28 provide goods or services to public agencies. 24.29 (c) The designations of purchasing categories and 24.30 businesses under paragraphs (a) and (b) are not rules for 24.31 purposes of chapter 14, and are not subject to rulemaking 24.32 procedures of that chapter. 24.33 Subd. 6. [PURCHASING METHODS.] (a) The commissioner may 24.34 award up to a six percent preference in the amount bid for 24.35 specified goods or services to small targeted group businesses. 24.36 (b) The commissioner may designate a purchase of goods or 25.1 services for award only to small businesses or small targeted 25.2 group businesses if the commissioner determines that at least 25.3 three small businesses or small targeted group businesses are 25.4 likely to bid. 25.5 (c) The commissioner, as a condition of awarding a 25.6 construction contract or approving a contract for professional 25.7 or technical services, may set goals that require the prime 25.8 contractor to subcontract a portion of the contract to small 25.9 businesses or small targeted group businesses. The commissioner 25.10 must establish a procedure for granting waivers from the 25.11 subcontracting requirement when qualified small businesses or 25.12 small targeted group businesses are not reasonably available. 25.13 The commissioner may establish financial incentives for prime 25.14 contractors who exceed the goals for use of small business or 25.15 small targeted group business subcontractors and financial 25.16 penalties for prime contractors who fail to meet goals under 25.17 this paragraph. The subcontracting requirements of this 25.18 paragraph do not apply to prime contractors who are small 25.19 businesses or small targeted group businesses. 25.20 Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The 25.21 commissioner may award up to a four percent preference in the 25.22 amount bid on state procurement to small businesses located in 25.23 an economically disadvantaged area. A business is located in an 25.24 economically disadvantaged area if: 25.25 (1) the owner resides in or the business is located in a 25.26 county in which the median income for married couples is less 25.27 than 70 percent of the state median income for married couples; 25.28 (2) the owner resides in or the business is located in an 25.29 area designated a labor surplus area by the United States 25.30 Department of Labor; or 25.31 (3) the business is a rehabilitation facility or work 25.32 activity program. 25.33 The commissioner may designate one or more areas designated 25.34 as targeted neighborhoods under section 469.202 or as enterprise 25.35 zones under section 469.167 as economically disadvantaged areas 25.36 for purposes of this subdivision if the commissioner determines 26.1 that this designation would further the purposes of this 26.2 section. If the owner of a small business resides or is 26.3 employed in a designated area, the small business is eligible 26.4 for any preference provided under this subdivision. 26.5 The department of revenue shall gather data necessary to 26.6 make the determinations required by clause (1), and shall 26.7 annually certify counties that qualify under clause (1). An 26.8 area designated a labor surplus area retains that status for 120 26.9 days after certified small businesses in the area are notified 26.10 of the termination of the designation by the United States 26.11 Department of Labor. 26.12 Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the 26.13 federal Small Business Administration and second party bonds are 26.14 acceptable security for a construction award under this 26.15 section. "Second party bond" means a bond that designates as 26.16 principal, guarantor, or both, a person or persons in addition 26.17 to the person to whom the contract is proposed for award. 26.18 Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before 26.19 making an award under the preference programs established in 26.20 subdivisions 4 to 7, the commissioner shall evaluate whether the 26.21 small business or small targeted group business scheduled to 26.22 receive the award is able to perform the contract. This 26.23 determination shall include consideration of production and 26.24 financial capacity and technical competence. 26.25 Subd. 10. [LIMITS.] At least 75 percent of the value of 26.26 the subcontracts awarded to small businesses or small targeted 26.27 group businesses under subdivision 6, paragraph (c), must be 26.28 performed by the business to which the subcontract is awarded or 26.29 by another small business or small targeted group business. 26.30 Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules 26.31 pertaining to solicitations, bid evaluations, contract awards, 26.32 and other procurement matters apply equally to procurements 26.33 designated for small businesses or small targeted group 26.34 businesses. In the event of conflict with other rules, section 26.35 16C.16 and rules adopted under it govern, if section 16C.16 26.36 applies. If it does not apply, sections 16C.17 to 16C.22 and 27.1 rules adopted under those sections govern. 27.2 Subd. 12. [APPLICABILITY.] This section does not apply to 27.3 construction contracts or contracts for professional or 27.4 technical services under section 16C.09 that are financed in 27.5 whole or in part with federal funds and that are subject to 27.6 federal disadvantaged business enterprise regulations. 27.7 Sec. 18. [16C.18] [ENCOURAGEMENT OF PARTICIPATION; 27.8 ADVISORY COUNCIL.] 27.9 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 27.10 commissioners of administration and trade and economic 27.11 development shall publicize the provisions of the purchasing 27.12 programs in sections 16C.17 to 16C.22, attempt to locate small 27.13 businesses or small targeted group businesses able to perform 27.14 under the programs, and encourage participation through 27.15 education, technical assistance, mentoring, and other means. 27.16 When the commissioner of administration determines that a small 27.17 business or small targeted group business is unable to perform 27.18 under a program established in sections 16C.17 to 16C.22, the 27.19 commissioner shall inform the commissioner of trade and economic 27.20 development who shall assist the small business or small 27.21 targeted group business in attempting to remedy the causes of 27.22 the inability to perform the award. In assisting the small 27.23 business or small targeted group business, the commissioner of 27.24 trade and economic development in cooperation with the 27.25 commissioner of administration shall use management or financial 27.26 assistance programs made available by or through the department 27.27 of trade and economic development, other state or governmental 27.28 agencies, or private sources. 27.29 Subd. 2. [ADVISORY COUNCIL.] The small business 27.30 procurement advisory council consists of 13 members appointed by 27.31 the commissioner of administration. A chair of the advisory 27.32 council shall be elected from among the members. The 27.33 appointments are subject to the appointments program provided by 27.34 section 15.0597. The terms, compensation, and removal of 27.35 members are as provided in section 15.059. 27.36 Subd. 3. [DUTIES.] The small business procurement advisory 28.1 council shall: 28.2 (1) advise the commissioner of administration on matters 28.3 relating to the small business and small targeted group business 28.4 procurement program; 28.5 (2) review complaints or grievances from small businesses 28.6 and small targeted group businesses who are doing or attempting 28.7 to do business under the program; and 28.8 (3) review the reports of the commissioners of 28.9 administration and trade and economic development provided by 28.10 section 16C.19 to ensure compliance with the goals of the 28.11 program. 28.12 Sec. 19. [16C.19] [REPORTS.] 28.13 Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The 28.14 commissioner shall submit an annual report pursuant to section 28.15 3.195 to the governor and the legislature with a copy to the 28.16 commissioner of trade and economic development indicating the 28.17 progress being made toward the objectives and goals of sections 28.18 16C.17 to 16C.22, 161.321, and 473.142 during the preceding 28.19 fiscal year. 28.20 Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 28.21 The commissioner of trade and economic development shall submit 28.22 an annual report to the governor and the legislature pursuant to 28.23 section 3.195 with a copy to the commissioner of 28.24 administration. This report shall include the following 28.25 information: 28.26 (1) the efforts undertaken to publicize the provisions of 28.27 the small business and small targeted group business procurement 28.28 program during the preceding fiscal year; 28.29 (2) the efforts undertaken to identify small businesses and 28.30 small targeted group businesses and the efforts undertaken to 28.31 encourage participation in the targeted group purchasing 28.32 program; 28.33 (3) the efforts undertaken by the commissioner to remedy 28.34 the inability of small businesses and small targeted group 28.35 businesses to perform on potential awards; and 28.36 (4) the commissioner's recommendations for strengthening 29.1 the small business and small targeted group business procurement 29.2 program and delivery of services to small businesses. 29.3 Subd. 3. [REPORTS FROM OTHER AGENCIES.] The commissioner 29.4 of transportation, and each metropolitan agency listed in 29.5 section 473.143, subdivision 1, shall report to the commissioner 29.6 of administration all information that the commissioner requests 29.7 to make reports required under this section. The information 29.8 must be reported at the time and in the manner requested by the 29.9 commissioner of administration. 29.10 Sec. 20. [16C.20] [ELIGIBILITY; RULES.] 29.11 (a) A small business wishing to participate in the programs 29.12 under section 16C.17, subdivisions 4 to 7, must be certified by 29.13 the commissioner. The commissioner shall adopt by rule 29.14 standards and procedures for certifying that small businesses, 29.15 small targeted group businesses, and small businesses located in 29.16 economically disadvantaged areas are eligible to participate 29.17 under the requirements of sections 16C.17 to 16C.22. The 29.18 commissioner shall adopt by rule standards and procedures for 29.19 hearing appeals and grievances and other rules necessary to 29.20 carry out the duties set forth in sections 16C.17 to 16C.22. 29.21 (b) The commissioner may make rules which exclude or limit 29.22 the participation of nonmanufacturing business, including 29.23 third-party lessors, brokers, franchises, jobbers, 29.24 manufacturers' representatives, and others from eligibility 29.25 under sections 16C.17 to 16C.22. 29.26 (c) The commissioner may make rules that set time limits 29.27 and other eligibility limits on business participation in 29.28 programs under sections 16C.17 to 16C.22. 29.29 Sec. 21. [16C.21] [CERTIFICATION.] 29.30 A business that is certified by the commissioner of 29.31 administration as a small business, small targeted group 29.32 business or a small business located in an economically 29.33 disadvantaged area is eligible to participate under the 29.34 requirements of sections 137.31 and 161.321 and, if certified as 29.35 a small business or small targeted group business, under section 29.36 473.142 without further certification by the contracting agency. 30.1 Sec. 22. [16C.22] [CRIMINAL PENALTY.] 30.2 A person who knowingly provides false information to a 30.3 public official or employee for the purpose of obtaining or 30.4 retaining certification as a small targeted group business or a 30.5 small business located in an economically disadvantaged area 30.6 under sections 16C.17 to 16C.21, 137.31, 137.35, 161.321, or 30.7 473.142 is guilty of a misdemeanor. 30.8 Sec. 23. [16C.23] [DISTRICT HEATING.] 30.9 Notwithstanding any other law, general or special, the 30.10 commissioner is authorized to enter into or approve a written 30.11 agreement not to exceed 31 years with a district heating utility 30.12 that will specify, but not be limited to, the appropriate terms 30.13 and conditions for the interchange of district heating services. 30.14 Sec. 24. [16C.24] [SURPLUS PROPERTY ACQUISITION, 30.15 DISTRIBUTION, AND DISPOSAL.] 30.16 Subdivision 1. [DEFINITIONS.] "Governmental unit or 30.17 nonprofit organization" means a governmental unit as defined in 30.18 section 471.59, subdivision 1, an Indian tribal government, and 30.19 any nonprofit and tax-exempt medical institution, hospital, 30.20 clinic, health center, school, school system, college, 30.21 university, or other institution organized and existing for any 30.22 purpose authorized by federal law to accept surplus federal 30.23 property. 30.24 Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means 30.25 state or federal commodities, equipment, materials, supplies, 30.26 books, printed matter, buildings, and other personal or real 30.27 property that is obsolete, unused, not needed for a public 30.28 purpose, or ineffective for current use. 30.29 Subd. 3. [AUTHORIZATION.] (a) The commissioner is the 30.30 state agency designated to transfer, purchase, accept, sell, or 30.31 dispose of surplus property for the state and for the benefit of 30.32 any other governmental unit or nonprofit organization for any 30.33 purpose authorized by state and federal law and in accordance 30.34 with state and federal rules and regulations. Any governmental 30.35 unit or nonprofit organization may designate the commissioner to 30.36 purchase or accept surplus property for it upon mutually 31.1 agreeable terms and conditions. The commissioner may acquire, 31.2 accept, warehouse, and distribute surplus property and charge a 31.3 fee to cover any expenses incurred in connection with any of 31.4 these acts. 31.5 (b) Federal surplus property that has been transferred to 31.6 the state for donation to public agencies and nonprofit 31.7 organizations must be transferred or sold in accordance with the 31.8 plan developed under paragraph (c). Expenses incurred in 31.9 connection with the acquisition, warehousing, distribution, and 31.10 disposal of federal surplus property must be paid from the 31.11 surplus services revolving fund. Proceeds of sales, minus any 31.12 expenses, must be deposited in the surplus services revolving 31.13 fund. 31.14 (c) The commissioner shall develop a detailed plan for 31.15 disposal of donated federal property in conformance with state 31.16 law and federal regulations. The plan must be submitted to the 31.17 governor for certification and submission to the federal 31.18 administrator of general services. 31.19 (d) The commissioner, after consultation with one or more 31.20 nonprofit organizations with an interest in providing housing 31.21 for homeless veterans and their families, may acquire property 31.22 from the United States government that is designated by the 31.23 General Services Administration as surplus property. The 31.24 commissioner may lease the property to a qualified nonprofit 31.25 organization that agrees to develop or rehabilitate the property 31.26 for the purpose of providing suitable housing for veterans and 31.27 their families. The lease agreement with the nonprofit 31.28 organization may require that the property be developed for use 31.29 as housing for homeless and displaced veterans and their 31.30 families and for veterans and their families who lose their 31.31 housing. 31.32 Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services 31.33 revolving fund is a separate fund in the state treasury. All 31.34 money resulting from the acquisition, acceptance, warehousing, 31.35 distribution, and public sale of surplus property, must be 31.36 deposited in the fund. Money paid into the surplus services 32.1 revolving fund is appropriated to the commissioner for the 32.2 purposes of the programs and services referred to in this 32.3 section. 32.4 Subd. 5. [TRANSFER OR SALE.] (a) When the state or an 32.5 agency operating under a legislative appropriation obtains 32.6 surplus property from the commissioner, the commissioner of 32.7 finance must, at the commissioner's request, transfer the cost 32.8 of the surplus property, including any expenses of acquiring, 32.9 accepting, warehousing, and distributing the surplus property, 32.10 from the appropriation of the agency receiving the surplus 32.11 property to the surplus services revolving fund. The 32.12 determination of the commissioner is final as to the cost of the 32.13 surplus property to the agency receiving the property. 32.14 (b) When any governmental unit or nonprofit organization 32.15 other than an agency receives surplus property from the 32.16 commissioner, the governmental unit or nonprofit organization 32.17 must reimburse the surplus services revolving fund for the cost 32.18 of the property, including the expenses of acquiring, accepting, 32.19 warehousing, and distributing it, in an amount the commissioner 32.20 sets. The commissioner may, however, require the governmental 32.21 unit or nonprofit organization to deposit in advance in the 32.22 surplus services revolving fund the cost of the surplus property 32.23 upon mutually agreeable terms and conditions. 32.24 (c) The commissioner may transfer or sell state surplus 32.25 property to any person at public auction, at prepriced sale, or 32.26 by sealed bid process in accordance with applicable state laws. 32.27 Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do 32.28 any of the following to dispose of state surplus property: 32.29 (1) transfer it to or between state agencies; 32.30 (2) transfer it to a governmental unit or nonprofit 32.31 organization in Minnesota; or 32.32 (3) sell it and charge a fee to cover expenses incurred by 32.33 the commissioner in the disposal of the surplus property. 32.34 The proceeds of the sale less the fee are appropriated to 32.35 the agency for whose account the sale was made, to be used and 32.36 expended by that agency to purchase similar state property. 33.1 Subd. 7. [GIFTS.] The commissioner is authorized to 33.2 solicit and accept donated money and fixed and consumable 33.3 property for the benefit of the state and any other governmental 33.4 unit or nonprofit organization for any purpose authorized by 33.5 state and federal law and in accordance with federal regulations 33.6 and rules. The gift acceptance procedures of sections 7.09 to 33.7 7.12 do not apply to this subdivision. 33.8 Sec. 25. [16C.25] [RULES.] 33.9 Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 33.10 under chapter 16B, govern under this chapter. In the event 33.11 rules adopted under chapter 16B conflict with provisions of this 33.12 chapter, this chapter shall govern. 33.13 Sec. 26. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 33.14 Notwithstanding anything in chapter 16C to the contrary, 33.15 all contracts for the repair, improvement, maintenance, or 33.16 construction of highways or highway bridges must be advertised 33.17 and let as provided by law for highway construction contracts. 33.18 Sec. 27. [REPORT.] 33.19 The commissioner of administration shall report to the 33.20 legislature on the use of measurable objectives as a means of 33.21 tracking progress toward the purchase of recycled content goods 33.22 as a part of the commissioner's next report to the legislature 33.23 in accordance with Minnesota Statutes, section 115A.15, 33.24 subdivision 5, paragraph (a). 33.25 Sec. 28. [REPEALER.] 33.26 Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 33.27 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 33.28 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 33.29 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 33.30 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 33.31 16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, 33.32 subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 33.33 Sec. 29. [EFFECTIVE DATE.] 33.34 This article is effective July 1, 1998. 33.35 ARTICLE 2 33.36 CONFORMING AMENDMENTS 34.1 Section 1. Minnesota Statutes 1997 Supplement, section 34.2 3.225, subdivision 1, is amended to read: 34.3 Subdivision 1. [APPLICATION.] This section applies to a 34.4 contract for professional or technical services entered into by 34.5 the house of representatives, the senate, the legislative 34.6 coordinating commission, or any group under the jurisdiction of 34.7 the legislative coordinating commission. For purposes of this 34.8 section, "professional or technical services" has the meaning 34.9 defined in section 16B.1716C.09, subdivision 1, but does not 34.10 include legal services for official legislative business. 34.11 Sec. 2. Minnesota Statutes 1996, section 3.225, 34.12 subdivision 2, is amended to read: 34.13 Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 34.14 into a contract for professional or technical services, the 34.15 contracting entity must determine that: 34.16 (1) all provisions of section 16B.1916C.17, subdivision 234.17 3, have been verified or complied with; 34.18 (2) the work to be performed under the contract is 34.19 necessary to the entity's achievement of its responsibilities; 34.20 (3) the contract will not establish an employment 34.21 relationship between the state or the entity and any persons 34.22 performing under the contract; 34.23 (4) no current legislative employees will engage in the 34.24 performance of the contract; 34.25 (5) no state agency has previously performed or contracted 34.26 for the performance of tasks which would be substantially 34.27 duplicated under the proposed contract; 34.28 (6) the contracting entity has specified a satisfactory 34.29 method of evaluating and using the results of the work to be 34.30 performed; and 34.31 (7) the combined contract and amendments will not extend 34.32 for more than five years. 34.33 Sec. 3. Minnesota Statutes 1996, section 3.732, 34.34 subdivision 6, is amended to read: 34.35 Subd. 6. [SETTLEMENT.] The head of each department or 34.36 agency, or a designee, acting on behalf of the state, may enter 35.1 into structured settlements, through the negotiation, creation, 35.2 and use of annuities or similar financial plans for claimants, 35.3 to resolve claims arising from the alleged negligence of the 35.4 state, its agencies, or employees. Sections 16B.06, 16B.07,35.5 16B.08, and 16B.0916C.03, subdivision 4, 16C.06, and 16C.07 do 35.6 not apply to the state's selection of and contracts with 35.7 structured settlement consultants or purveyors of structured 35.8 settlement plans. 35.9 Sec. 4. Minnesota Statutes 1996, section 3.922, 35.10 subdivision 5, is amended to read: 35.11 Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council 35.12 shall annually elect a chair and other officers as it may deem 35.13 necessary. The chair may appoint subcommittees necessary to 35.14 fulfill the duties of the council. It shall also employ and 35.15 prescribe the duties of employees and agents as it deems 35.16 necessary. The compensation of the executive director of the 35.17 board is as provided by section 43A.18. All employees are in 35.18 the unclassified service. The chair is an ex officio member of 35.19 the state board of human rights. Appropriations and other funds 35.20 of the council are subject to chapter 16B16C. The council may 35.21 contract in its own name. Contracts must be approved by a 35.22 majority of the members of the council and executed by the chair 35.23 and the executive director. The council may apply for, receive, 35.24 and spend in its own name, grants and gifts of money consistent 35.25 with the powers and duties specified in this section. The 35.26 council shall maintain its primary office in Bemidji. It shall 35.27 also maintain personnel and office space in St. Paul. 35.28 Sec. 5. Minnesota Statutes 1996, section 3C.10, 35.29 subdivision 3, is amended to read: 35.30 Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may 35.31 negotiate for all or part of the editing, indexing, compiling, 35.32 and printing of Minnesota Statutes, supplements to Minnesota 35.33 Statutes, and Laws of Minnesota and contract with a law book 35.34 publisher for these services. The provisions of chapter 16B16C 35.35 as they relate to competitive bidding do not apply to these 35.36 contracts. No contract may be made until the revisor of 36.1 statutes has consulted with the legislative coordinating 36.2 commission. Failure or refusal of the commission to make a 36.3 recommendation promptly shall be deemed an affirmative 36.4 recommendation. 36.5 Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended 36.6 to read: 36.7 4A.04 [COOPERATIVE CONTRACTS.] 36.8 (a) The director may apply for, receive, and expend money 36.9 from municipal, county, regional, and other planning agencies; 36.10 apply for, accept, and disburse grants and other aids for 36.11 planning purposes from the federal government and from other 36.12 public or private sources; and may enter into contracts with 36.13 agencies of the federal government, local governmental units, 36.14 the University of Minnesota, and other educational institutions, 36.15 and private persons as necessary to perform the director's 36.16 duties. Contracts made pursuant to this section are not subject 36.17 to the provisions of chapter 16B16C, as they relate to 36.18 competitive bidding. 36.19 (b) The director may apply for, receive, and expend money 36.20 made available from federal sources or other sources for the 36.21 purposes of carrying out the duties and responsibilities of the 36.22 director relating to local and urban affairs. 36.23 (c) All money received by the director pursuant to this 36.24 section shall be deposited in the state treasury and is 36.25 appropriated to the director for the purposes for which the 36.26 money has been received. The money shall not cancel and is 36.27 available until expended. 36.28 Sec. 7. Minnesota Statutes 1996, section 6.551, is amended 36.29 to read: 36.30 6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 36.31 GOVERNMENTS.] 36.32 The state auditor may examine the books, records, 36.33 documents, and accounting procedures and practices of a 36.34 contractor or grantee of a local government pursuant to section 36.35 16B.0616C.06, subdivision 45. The examination shall be 36.36 limited to the books, records, documents, and accounting 37.1 procedures and practices that are relevant to the contract or 37.2 transaction with the local government. 37.3 Sec. 8. Minnesota Statutes 1996, section 11A.24, 37.4 subdivision 4, is amended to read: 37.5 Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may 37.6 invest funds in bankers acceptances, certificates of deposit, 37.7 deposit notes, commercial paper, mortgage securities and asset 37.8 backed securities, repurchase agreements and reverse repurchase 37.9 agreements, guaranteed investment contracts, savings accounts, 37.10 and guaranty fund certificates, surplus notes, or debentures of 37.11 domestic mutual insurance companies if they conform to the 37.12 following provisions: 37.13 (1) bankers acceptances and deposit notes of United States 37.14 banks are limited to those issued by banks rated in the highest 37.15 four quality categories by a nationally recognized rating 37.16 agency; 37.17 (2) certificates of deposit are limited to those issued by 37.18 (i) United States banks and savings institutions that are rated 37.19 in the top four quality categories by a nationally recognized 37.20 rating agency or whose certificates of deposit are fully insured 37.21 by federal agencies; or (ii) credit unions in amounts up to the 37.22 limit of insurance coverage provided by the National Credit 37.23 Union Administration; 37.24 (3) commercial paper is limited to those issued by United 37.25 States corporations or their Canadian subsidiaries and rated in 37.26 the highest two quality categories by a nationally recognized 37.27 rating agency; 37.28 (4) mortgage securities shall be rated in the top four 37.29 quality categories by a nationally recognized rating agency; 37.30 (5) collateral for repurchase agreements and reverse 37.31 repurchase agreements is limited to letters of credit and 37.32 securities authorized in this section; 37.33 (6) guaranteed investment contracts are limited to those 37.34 issued by insurance companies or banks rated in the top four 37.35 quality categories by a nationally recognized rating agency or 37.36 to alternative guaranteed investment contracts where the 38.1 underlying assets comply with the requirements of this section; 38.2 (7) savings accounts are limited to those fully insured by 38.3 federal agencies; and 38.4 (8) asset backed securities shall be rated in the top four 38.5 quality categories by a nationally recognized rating agency. 38.6 (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 38.7 16C.06 do not apply to certificates of deposit and 38.8 collateralization agreements executed by the state board under 38.9 paragraph (a), clause (2). 38.10 (c) In addition to investments authorized by paragraph (a), 38.11 clause (4), the state board may purchase from the Minnesota 38.12 housing finance agency all or any part of a pool of residential 38.13 mortgages, not in default, that has previously been financed by 38.14 the issuance of bonds or notes of the agency. The state board 38.15 may also enter into a commitment with the agency, at the time of 38.16 any issue of bonds or notes, to purchase at a specified future 38.17 date, not exceeding 12 years from the date of the issue, the 38.18 amount of mortgage loans then outstanding and not in default 38.19 that have been made or purchased from the proceeds of the bonds 38.20 or notes. The state board may charge reasonable fees for any 38.21 such commitment and may agree to purchase the mortgage loans at 38.22 a price sufficient to produce a yield to the state board 38.23 comparable, in its judgment, to the yield available on similar 38.24 mortgage loans at the date of the bonds or notes. The state 38.25 board may also enter into agreements with the agency for the 38.26 investment of any portion of the funds of the agency. The 38.27 agreement must cover the period of the investment, withdrawal 38.28 privileges, and any guaranteed rate of return. 38.29 Sec. 9. Minnesota Statutes 1996, section 12.221, 38.30 subdivision 5, is amended to read: 38.31 Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any 38.32 federal-state agreement entered into by the state director, 38.33 serving as the governor's authorized representative, in the 38.34 acceptance of federal money made available as a result of a 38.35 disaster declaration, and upon the review and acceptance by the 38.36 attorney general's office of the language contained in the 39.1 subgrant agreement and any amendments to the agreement, the 39.2 requirements of section 16B.0616C.06, subdivision 2, paragraph 39.3 (a), clause (3), must be waived. 39.4 Sec. 10. Minnesota Statutes 1996, section 15.061, is 39.5 amended to read: 39.6 15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 39.7 In accordance with section 16B.17sections 16C.03 and 39.8 16C.09, the head of a state department or agency may, with the 39.9 approval of the commissioner of administration, contract for 39.10 professional or technical services in connection with the 39.11 operation of the department or agency. A contract negotiated 39.12 under this section is not subject to the competitive bidding 39.13 requirements of chapter 16B16C. 39.14 Sec. 11. Minnesota Statutes 1996, section 16A.101, is 39.15 amended to read: 39.16 16A.101 [SERVICE CONTRACTS.] 39.17 The state accounting system must list expenditures for 39.18 professional and technical service contracts, as defined in 39.19 section 16B.1716C.09, subdivision 1, as a separate category. 39.20 No other expenditures may be included in this category. 39.21 Sec. 12. Minnesota Statutes 1997 Supplement, section 39.22 16A.15, subdivision 3, is amended to read: 39.23 Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 39.24 not be made without prior obligation. An obligation may not be 39.25 incurred against any fund, allotment, or appropriation unless 39.26 the commissioner has certified a sufficient unencumbered balance 39.27 or the accounting system shows sufficient allotment or 39.28 encumbrance balance in the fund, allotment, or appropriation to 39.29 meet it. The commissioner shall determine when the accounting 39.30 system may be used to incur obligations without the 39.31 commissioner's certification of a sufficient unencumbered 39.32 balance. An expenditure or obligation authorized or incurred in 39.33 violation of this chapter is invalid and ineligible for payment 39.34 until made valid. A payment made in violation of this chapter 39.35 is illegal. An employee authorizing or making the payment, or 39.36 taking part in it, and a person receiving any part of the 40.1 payment, are jointly and severally liable to the state for the 40.2 amount paid or received. If an employee knowingly incurs an 40.3 obligation or authorizes or makes an expenditure in violation of 40.4 this chapter or takes part in the violation, the violation is 40.5 just cause for the employee's removal by the appointing 40.6 authority or by the governor if an appointing authority other 40.7 than the governor fails to do so. In the latter case, the 40.8 governor shall give notice of the violation and an opportunity 40.9 to be heard on it to the employee and to the appointing 40.10 authority. A claim presented against an appropriation without 40.11 prior allotment or encumbrance may be made valid on 40.12 investigation, review, and approval by the agency head in 40.13 accordance with the commissioner's policy, if the services, 40.14 materials, or supplies to be paid for were actually furnished in 40.15 good faith without collusion and without intent to defraud. The 40.16 commissioner may then draw a warrant to pay the claim just as 40.17 properly allotted and encumbered claims are paid. 40.18 (b) The commissioner may approve payment for materials and 40.19 supplies in excess of the obligation amount when increases are 40.20 authorized by section 16B.0716C.03, subdivision 23. 40.21 (c) To minimize potential construction delay claims, an 40.22 agency with a project funded by a building appropriation may 40.23 allow a contractor to proceed with supplemental work within the 40.24 limits of the appropriation before money is encumbered. Under 40.25 this circumstance, the agency may requisition funds and allow 40.26 contractors to expeditiously proceed with a construction 40.27 sequence. While the contractor is proceeding, the agency shall 40.28 immediately act to encumber the required funds. 40.29 Sec. 13. Minnesota Statutes 1996, section 16A.85, 40.30 subdivision 1, is amended to read: 40.31 Subdivision 1. [AUTHORIZATION.] The commissioner of 40.32 administration may determine, in conjunction with the 40.33 commissioner of finance, the personal property needs of the 40.34 various state departments, agencies, boards, commissions and the 40.35 legislature of the kinds of property identified in this 40.36 subdivision that may be economically funded through a master 41.1 lease program and request the commissioner of finance to execute 41.2 a master lease. The master lease may be used only to finance 41.3 the following kinds of purchases: 41.4 (a) The master lease may be used to finance purchases by 41.5 the commissioner of administration with money from an internal 41.6 services fund. 41.7 (b) The master lease may be used to refinance a purchase of 41.8 equipment already purchased under a lease-purchase agreement. 41.9 (c) The master lease may be used to finance purchases of 41.10 large equipment with a capital value of more than $100,000 and a 41.11 useful life of more than ten years. 41.12 (d) The legislature may specifically authorize a particular 41.13 purchase to be financed using the master lease. The legislature 41.14 anticipates that this authorization will be given only to 41.15 finance the purchase of major pieces of equipment with a capital 41.16 value of more than $10,000. 41.17 The commissioner of finance may authorize the sale and 41.18 issuance of certificates of participation relative to a master 41.19 lease in an amount sufficient to fund these personal property 41.20 needs. The term of the certificates must be less than the 41.21 expected useful life of the equipment whose purchase is financed 41.22 by the certificates. The commissioner of administration may use 41.23 the proceeds from the master lease or the sale of the 41.24 certificates of participation to acquire the personal property 41.25 through the appropriate procurement procedure in chapter 16B16C. 41.26 Money appropriated for the lease or acquisition of this personal 41.27 property is appropriated to the commissioner of finance to make 41.28 master lease payments. 41.29 Sec. 14. Minnesota Statutes 1997 Supplement, section 41.30 16B.465, subdivision 7, is amended to read: 41.31 Subd. 7. [EXEMPTION.] The system is exempt from the 41.32 five-year limitation on contracts set by section 16B.07,41.33 subdivision 2sections 16C.06, subdivision 2, paragraph (a), 41.34 clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 41.35 clause (6). 41.36 Sec. 15. Minnesota Statutes 1997 Supplement, section 42.1 16E.07, subdivision 9, is amended to read: 42.2 Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall 42.3 identify opportunities to aggregate demand for technical 42.4 services required by government units for online activities and 42.5 may contract with governmental or nongovernmental entities to 42.6 provide services. These contracts are not subject to the 42.7 requirements of chapterchapters 16B and 16C, except 42.8 sections 16B.167, 16B.17, and 16B.17516C.05, 16C.08, 16C.09, 42.9 and 16C.10. 42.10 Sec. 16. Minnesota Statutes 1997 Supplement, section 42.11 17.03, subdivision 12, is amended to read: 42.12 Subd. 12. [CONTRACTS; APPROPRIATION.] The commissioner may 42.13 accept money as part of a contract with any public or private 42.14 entity to provide statutorily prescribed services by the 42.15 department. A contract must specify the services to be provided 42.16 by the department and the amount and method of reimbursement. 42.17 Money generated in a contractual agreement under this section 42.18 must be deposited in a special revenue fund and is appropriated 42.19 to the department for purposes of providing services specified 42.20 in the contracts. Contracts under this section must be 42.21 processed in accordance with section 16B.0616C.06. The 42.22 commissioner must report revenues collected and expenditures 42.23 made under this section to the chairs of the environment and 42.24 natural resources finance committee in the house of 42.25 representatives and the environment and agriculture budget 42.26 division in the senate by January 15 of each odd-numbered year. 42.27 Sec. 17. Minnesota Statutes 1996, section 17.1015, is 42.28 amended to read: 42.29 17.1015 [PROMOTIONAL EXPENDITURES.] 42.30 In order to accomplish the purposes of section 17.101, the 42.31 commissioner may participate jointly with private persons in 42.32 appropriate programs and projects and may enter into contracts 42.33 to carry out those programs and projects. The contracts may not 42.34 include the acquisition of land or buildings and are not subject 42.35 to the provisions of chapter 16B16C relating to competitive 42.36 bidding. 43.1 The commissioner may spend money appropriated for the 43.2 purposes of section 17.101, and expenditures made pursuant to 43.3 section 17.101 for food, lodging, or travel are not governed by 43.4 the travel rules of the commissioner of employee relations. 43.5 Sec. 18. Minnesota Statutes 1996, section 41A.023, is 43.6 amended to read: 43.7 41A.023 [POWERS.] 43.8 In addition to other powers granted by this chapter, the 43.9 board may: 43.10 (1) sue and be sued; 43.11 (2) acquire, hold, lease, and transfer any interest in real 43.12 and personal property for its corporate purposes; 43.13 (3) sell at public or private sale, at the price or prices 43.14 determined by the board, any note, mortgage, lease, sublease, 43.15 lease purchase, or other instrument or obligation evidencing or 43.16 securing a loan made for the purpose of economic development, 43.17 job creation, redevelopment, or community revitalization by a 43.18 public agency to a business, for-profit or nonprofit 43.19 organization, or an individual; 43.20 (4) obtain insurance on its property; 43.21 (5) obtain municipal bond insurance, letters of credit, 43.22 surety obligations, or similar agreements from financial 43.23 institutions; 43.24 (6) enter into other agreements or transactions, without 43.25 regard to chapter 16B or 16C, that the board considers necessary 43.26 or appropriate to carry out the purposes of this chapter with 43.27 federal or state agencies, political subdivisions of the state, 43.28 or other persons, firms, or corporations; 43.29 (7) establish and collect fees without regard to chapter 14 43.30 and section 16A.1285; 43.31 (8) accept appropriations, gifts, grants, and bequests; 43.32 (9) use money received from any source for any legal 43.33 purpose or program of the board; 43.34 (10) participate in loans for agricultural resource 43.35 projects in accordance with section 41A.035; 43.36 (11) provide small business development loans in accordance 44.1 with section 41A.036; and 44.2 (12) guarantee or insure bonds or notes issued by the board. 44.3 Sec. 19. Minnesota Statutes 1997 Supplement, section 44.4 41D.03, subdivision 7, is amended to read: 44.5 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 44.6 educational equipment may be procured for programs of the 44.7 Minnesota center for agriculture education by the council either 44.8 by brand designation or in accordance with standards and 44.9 specifications the council may adopt, notwithstanding chapter 44.10 16B16C. 44.11 Sec. 20. Minnesota Statutes 1996, section 43A.23, 44.12 subdivision 1, is amended to read: 44.13 Subdivision 1. [GENERAL.] The commissioner is authorized 44.14 to request bids from carriers or to negotiate with carriers and 44.15 to enter into contracts with carriers which in the judgment of 44.16 the commissioner are best qualified to underwrite and service 44.17 the benefit plans. Contracts entered into with carriers are not 44.18 subject to the requirements of sections 16B.19 to 16B.2216C.17 44.19 to 16C.20. The commissioner may negotiate premium rates and 44.20 coverage provisions with all carriers licensed under chapters 44.21 62A, 62C, and 62D. The commissioner may also negotiate 44.22 reasonable restrictions to be applied to all carriers under 44.23 chapters 62A, 62C, and 62D. Contracts to underwrite the benefit 44.24 plans must be bid or negotiated separately from contracts to 44.25 service the benefit plans, which may be awarded only on the 44.26 basis of competitive bids. The commissioner shall consider the 44.27 cost of the plans, conversion options relating to the contracts, 44.28 service capabilities, character, financial position, and 44.29 reputation of the carriers, and any other factors which the 44.30 commissioner deems appropriate. Each benefit contract must be 44.31 for a uniform term of at least one year, but may be made 44.32 automatically renewable from term to term in the absence of 44.33 notice of termination by either party. The commissioner shall, 44.34 to the extent feasible, make hospital and medical benefits 44.35 available from at least one carrier licensed to do business 44.36 pursuant to each of chapters 62A, 62C, and 62D. The 45.1 commissioner need not provide health maintenance organization 45.2 services to an employee who resides in an area which is not 45.3 served by a licensed health maintenance organization. The 45.4 commissioner may refuse to allow a health maintenance 45.5 organization to continue as a carrier. The commissioner may 45.6 elect not to offer all three types of carriers if there are no 45.7 bids or no acceptable bids by that type of carrier or if the 45.8 offering of additional carriers would result in substantial 45.9 additional administrative costs. A carrier licensed under 45.10 chapter 62A is exempt from the tax imposed by section 60A.15 on 45.11 premiums paid to it by the state. 45.12 Sec. 21. Minnesota Statutes 1996, section 44A.01, 45.13 subdivision 1, is amended to read: 45.14 Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade 45.15 center corporation is a public corporation established to 45.16 facilitate and support Minnesota world trade center programs and 45.17 services and to promote the Minnesota world trade center. The 45.18 corporation is a state agency, but is not subject to chapters 45.19 14, 16A, 16B, 16C, 43A, and 179A. 45.20 Sec. 22. Minnesota Statutes 1996, section 45.0291, is 45.21 amended to read: 45.22 45.0291 [DEPARTMENT BONDS.] 45.23 Bonds issued under chapters 45 to 83, 309, 332, and 45.24 sections 326.83 to 326.98, are not state bonds or contracts for 45.25 purposes of sections 8.05 and 16B.0616C.06, subdivision 2. 45.26 Sec. 23. Minnesota Statutes 1997 Supplement, section 45.27 61B.21, subdivision 1, is amended to read: 45.28 Subdivision 1. [FUNCTIONS.] The Minnesota life and health 45.29 insurance guaranty association shall perform its functions under 45.30 the plan of operation established and approved under section 45.31 61B.25, and shall exercise its powers through a board of 45.32 directors. The association is not a state agency for purposes 45.33 of chapter 16A, 16B, 16C, or 43A. For purposes of 45.34 administration and assessment, the association shall establish 45.35 and maintain two accounts: 45.36 (1) the life insurance and annuity account which includes 46.1 the following subaccounts: 46.2 (i) the life insurance account; 46.3 (ii) the annuity account; and 46.4 (iii) the unallocated annuity account; and 46.5 (2) the health insurance account. 46.6 Sec. 24. Minnesota Statutes 1996, section 84.025, 46.7 subdivision 7, is amended to read: 46.8 Subd. 7. [CONTRACTS.] The commissioner of natural 46.9 resources may contract with the federal government, local 46.10 governmental units, the University of Minnesota, and other 46.11 educational institutions, and private persons as may be 46.12 necessary in the performance of duties. Contracts made pursuant 46.13 to this section for professional services shall not be subject 46.14 to the provisions of chapter 16B16C, as they relate to 46.15 competitive bidding. 46.16 Sec. 25. Minnesota Statutes 1996, section 84.026, is 46.17 amended to read: 46.18 84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 46.19 SERVICES.] 46.20 The commissioner of natural resources is authorized to 46.21 enter into contractual agreements with any public or private 46.22 entity for the provision of statutorily prescribed natural 46.23 resources services by the department. The contracts shall 46.24 specify the services to be provided and the amount and method of 46.25 reimbursement. Funds generated in a contractual agreement made 46.26 pursuant to this section shall be deposited in the special 46.27 revenue fund and are appropriated to the department for purposes 46.28 of providing the services specified in the contracts. All such 46.29 contractual agreements shall be processed in accordance with the 46.30 provisions of section 16B.0616C.06. The commissioner shall 46.31 report revenues collected and expenditures made under this 46.32 section to the chairs of the committees on appropriations in the 46.33 house and finance in the senate by January 1 of each 46.34 odd-numbered year. 46.35 Sec. 26. Minnesota Statutes 1996, section 84.0845, is 46.36 amended to read: 47.1 84.0845 [ADVANCE OF MATCHING FUNDS.] 47.2 The commissioner may advance funds appropriated for fish 47.3 and wildlife programs to government agencies, the National Fish 47.4 and Wildlife Foundation, federally recognized Indian tribes and 47.5 bands, and private, nonprofit organizations for the purposes of 47.6 securing nonstate matching funds for projects involving 47.7 acquisition and improvement of fish and wildlife habitat and 47.8 related research and management. The commissioner shall execute 47.9 agreements for contracts with the matching parties under section47.10 16B.06sections 16C.03, subdivision 4, and 16C.06 prior to 47.11 advancing any state funds. The agreement or contract shall 47.12 contain provisions for return of the state's share and the 47.13 matching funds within a period of time specified by the 47.14 commissioner. The state's funds and the nonstate matching funds 47.15 must be deposited in a separate account and expended solely for 47.16 the purposes set forth in the agreement or contract. The 47.17 commissioner shall enter into agreements or contracts only with 47.18 the National Fish and Wildlife Foundation and federal and 47.19 nonprofit authorities deemed by the commissioner to be dedicated 47.20 to the purposes of the project. 47.21 Sec. 27. Minnesota Statutes 1996, section 85A.02, 47.22 subdivision 3, is amended to read: 47.23 Subd. 3. The board may conduct research studies and 47.24 programs, collect and analyze data and prepare reports, maps, 47.25 charts and other information relating to the zoological garden 47.26 or any wild or domestic animals or may contract for any of such 47.27 services without complying with chapter 16B16C. 47.28 Sec. 28. Minnesota Statutes 1997 Supplement, section 47.29 85A.02, subdivision 5b, is amended to read: 47.30 Subd. 5b. [EXEMPTIONS.] The board is not subject to 47.31 sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 47.32 chapterchapters 16B and 16C, except for sections 16B.07,47.33 16B.102, 16B.17, 16B.19, 16B.35, and 16B.5516B.35, 16B.55, 47.34 16C.07, 16C.09, 16C.10, and 16C.17; and chapter 14, except 47.35 section 14.386, paragraph (a), clauses (1) and (3). Section 47.36 14.386, paragraph (b), does not apply to the board's actions. 48.1 Sec. 29. Minnesota Statutes 1996, section 85A.02, 48.2 subdivision 16, is amended to read: 48.3 Subd. 16. The board may acquire by lease-purchase or 48.4 installment purchase contract, transportation systems, 48.5 facilities and equipment that it determines will substantially 48.6 enhance the public's opportunity to view, study or derive 48.7 information concerning the animals to be located in the 48.8 zoological garden, and will increase attendance at the garden. 48.9 The contracts may provide for: (1) the payment of money over a 48.10 12-year period, or over a longer period not exceeding 25 years 48.11 if approved by the board; (2) the payment of money from any 48.12 funds of the board not pledged or appropriated for another 48.13 purpose; (3) indemnification of the lessor or seller for damage 48.14 to property or injury to persons due primarily to the actions of 48.15 the board or its employees; (4) the transfer of title to the 48.16 property to the board upon execution of the contract or upon 48.17 payment of specified amounts; (5) the reservation to the lessor 48.18 or seller of a security interest in the property; and (6) any 48.19 other terms that the board determines to be commercially 48.20 reasonable. Property so acquired by the board, and its purchase 48.21 or use by the board, or by any nonprofit corporation having a 48.22 concession from the board requiring its purchase, shall not be 48.23 subject to taxation by the state or its political subdivisions. 48.24 Each contract shall be subject to the provisions of chapter 16B48.25 16C, relating to competitive bidding, provided that, 48.26 notwithstanding subdivision 5b, the board is not required to 48.27 readvertise for competitive proposals for any transportation 48.28 system, facilities and equipment heretofore selected from 48.29 competitive proposals. 48.30 Sec. 30. Minnesota Statutes 1996, section 85A.02, 48.31 subdivision 18, is amended to read: 48.32 Subd. 18. [PURCHASING.] The board may contract for 48.33 supplies, materials, purchase or rental of equipment, and 48.34 utility services. Except as provided in subdivision 5b, chapter 48.35 16B16C does not apply to these contracts. 48.36 Sec. 31. Minnesota Statutes 1996, section 103F.515, 49.1 subdivision 3, is amended to read: 49.2 Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may 49.3 acquire, or accept by gift or donation, conservation easements 49.4 on eligible land. An easement may be permanent or of limited 49.5 duration. An easement acquired on land for windbreak purposes, 49.6 under subdivision 2, may be only of permanent duration. An 49.7 easement of limited duration may not be acquired if it is for a 49.8 period less than 20 years. The negotiation and acquisition of 49.9 easements authorized by this section are exempt from the 49.10 contractual provisions of chapterchapters 16B and 16C. 49.11 (b) The board may acquire, or accept by gift or donation, 49.12 flowage easements when necessary for completion of wetland 49.13 restoration projects. 49.14 Sec. 32. Minnesota Statutes 1996, section 116.03, 49.15 subdivision 2, is amended to read: 49.16 Subd. 2. The commissioner shall organize the agency and 49.17 employ such assistants and other officers, employees and agents 49.18 as the commissioner may deem necessary to discharge the 49.19 functions of the commissioner's office, define the duties of 49.20 such officers, employees and agents, and delegate to them any of 49.21 the commissioner's powers, duties, and responsibilities, subject 49.22 to the commissioner's control and under such conditions as the 49.23 commissioner may prescribe. The commissioner may also contract 49.24 with persons, firms, corporations, the federal government and 49.25 any agency or instrumentality thereof, the water research center 49.26 of the University of Minnesota or any other instrumentality of 49.27 such university, for doing any of the work of the commissioner's 49.28 office, and none of the provisions of chapter 16B16C, relating 49.29 to bids, shall apply to such contracts. 49.30 Sec. 33. Minnesota Statutes 1996, section 116J.035, 49.31 subdivision 1, is amended to read: 49.32 Subdivision 1. [POWERS.] The commissioner may: 49.33 (a) apply for, receive, and expend money from municipal, 49.34 county, regional, and other government agencies; 49.35 (b) apply for, accept, and disburse grants and other aids 49.36 from other public or private sources; 50.1 (c) contract for professional services if such work or 50.2 services cannot be satisfactorily performed by employees of the 50.3 department or by any other state agency; 50.4 (d) enter into interstate compacts to jointly carry out 50.5 such research and planning with other states or the federal 50.6 government where appropriate; 50.7 (e) distribute informational material at no cost to the 50.8 public upon reasonable request; and 50.9 (f) enter into contracts necessary for the performance of 50.10 the commissioner's duties with federal, state, regional, 50.11 metropolitan, local, and other agencies or units of government; 50.12 educational institutions, including the University of 50.13 Minnesota. Contracts made pursuant to this section shall not be 50.14 subject to the competitive bidding requirements of chapter 16B50.15 16C. 50.16 The commissioner may apply for, receive, and expend money 50.17 made available from federal or other sources for the purpose of 50.18 carrying out the duties and responsibilities of the commissioner 50.19 pursuant to this chapter. 50.20 All moneys received by the commissioner pursuant to this 50.21 chapter shall be deposited in the state treasury and are 50.22 appropriated to the commissioner for the purpose for which the 50.23 moneys have been received. The money shall not cancel and shall 50.24 be available until expended. 50.25 Sec. 34. Minnesota Statutes 1996, section 116J.402, is 50.26 amended to read: 50.27 116J.402 [COOPERATIVE CONTRACTS.] 50.28 The commissioner of trade and economic development may 50.29 apply for, receive, and spend money for community development 50.30 from municipal, county, regional, and other planning agencies. 50.31 The commissioner may also apply for, accept, and disburse grants 50.32 and other aids for community development and related planning 50.33 from the federal government and other sources. The commissioner 50.34 may enter into contracts with agencies of the federal 50.35 government, local governmental units, regional development 50.36 commissions, and the metropolitan council, other state agencies, 51.1 the University of Minnesota, and other educational institutions, 51.2 and private persons as necessary to perform the commissioner's 51.3 duties. Contracts made according to this section, except those 51.4 with private persons, are not subject to the provisions of 51.5 chapter 16B16C concerning competitive bidding. 51.6 The commissioner may apply for, receive, and spend money 51.7 made available from federal sources or other sources for the 51.8 purposes of carrying out the duties and responsibilities of the 51.9 commissioner. 51.10 Money received by the commissioner under this section must 51.11 be deposited in the state treasury and is appropriated to the 51.12 commissioner for the purposes for which the money has been 51.13 received. The money does not cancel and is available until 51.14 spent. 51.15 Sec. 35. Minnesota Statutes 1996, section 116J.58, 51.16 subdivision 2, is amended to read: 51.17 Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry 51.18 out duties and responsibilities and to serve the people of the 51.19 state in the promotion of tourism, trade, and economic 51.20 development, the commissioner may engage in programs and 51.21 projects jointly with a private person, firm, corporation or 51.22 association and may enter into contracts under terms to be 51.23 mutually agreed upon to carry out such programs and projects not 51.24 including acquisition of land or buildings. Contracts may be 51.25 negotiated and are not subject to the provisions of chapter 16B51.26 16C relating to competitive bidding. 51.27 Sec. 36. Minnesota Statutes 1996, section 116J.68, 51.28 subdivision 2, is amended to read: 51.29 Subd. 2. The bureau shall: 51.30 (a) provide information and assistance with respect to all 51.31 aspects of business planning and business management related to 51.32 the start-up, operation, or expansion of a small business in 51.33 Minnesota; 51.34 (b) refer persons interested in the start-up, operation, or 51.35 expansion of a small business in Minnesota to assistance 51.36 programs sponsored by federal agencies, state agencies, 52.1 educational institutions, chambers of commerce, civic 52.2 organizations, community development groups, private industry 52.3 associations, and other organizations or to the business 52.4 assistance referral system established by the Minnesota Project 52.5 Outreach Corporation; 52.6 (c) plan, develop, and implement a master file of 52.7 information on small business assistance programs of federal, 52.8 state, and local governments, and other public and private 52.9 organizations so as to provide comprehensive, timely information 52.10 to the bureau's clients; 52.11 (d) employ staff with adequate and appropriate skills and 52.12 education and training for the delivery of information and 52.13 assistance; 52.14 (e) seek out and utilize, to the extent practicable, 52.15 contributed expertise and services of federal, state, and local 52.16 governments, educational institutions, and other public and 52.17 private organizations; 52.18 (f) maintain a close and continued relationship with the 52.19 director of the procurement program within the department of 52.20 administration so as to facilitate the department's duties and 52.21 responsibilities under sections 16B.19 to 16B.2216C.17 to 52.22 16C.20 relating to the small targeted group business and 52.23 economically disadvantaged business program of the state; 52.24 (g) develop an information system which will enable the 52.25 commissioner and other state agencies to efficiently store, 52.26 retrieve, analyze, and exchange data regarding small business 52.27 development and growth in the state. All executive branch 52.28 agencies of state government and the secretary of state shall to 52.29 the extent practicable, assist the bureau in the development and 52.30 implementation of the information system; 52.31 (h) establish and maintain a toll free telephone number so 52.32 that all small business persons anywhere in the state can call 52.33 the bureau office for assistance. An outreach program shall be 52.34 established to make the existence of the bureau well known to 52.35 its potential clientele throughout the state. If the small 52.36 business person requires a referral to another provider the 53.1 bureau may use the business assistance referral system 53.2 established by the Minnesota Project Outreach Corporation; 53.3 (i) conduct research and provide data as required by the 53.4 state legislature; 53.5 (j) develop and publish material on all aspects of the 53.6 start-up, operation, or expansion of a small business in 53.7 Minnesota; 53.8 (k) collect and disseminate information on state 53.9 procurement opportunities, including information on the 53.10 procurement process; 53.11 (l) develop a public awareness program through the use of 53.12 newsletters, personal contacts, and electronic and print news 53.13 media advertising about state assistance programs for small 53.14 businesses, including those programs specifically for socially 53.15 disadvantaged small business persons; 53.16 (m) enter into agreements with the federal government and 53.17 other public and private entities to serve as the statewide 53.18 coordinator or host agency for the federal small business 53.19 development center program under United States Code, title 15, 53.20 section 648; and 53.21 (n) assist providers in the evaluation of their programs 53.22 and the assessment of their service area needs. The bureau may 53.23 establish model evaluation techniques and performance standards 53.24 for providers to use. 53.25 Sec. 37. Minnesota Statutes 1996, section 116J.966, 53.26 subdivision 1, is amended to read: 53.27 Subdivision 1. [GENERALLY.] (a) The commissioner shall 53.28 promote, develop, and facilitate trade and foreign investment in 53.29 Minnesota. In furtherance of these goals, and in addition to 53.30 the powers granted by section 116J.035, the commissioner may: 53.31 (1) locate, develop, and promote international markets for 53.32 Minnesota products and services; 53.33 (2) arrange and lead trade missions to countries with 53.34 promising international markets for Minnesota goods, technology, 53.35 services, and agricultural products; 53.36 (3) promote Minnesota products and services at domestic and 54.1 international trade shows; 54.2 (4) organize, promote, and present domestic and 54.3 international trade shows featuring Minnesota products and 54.4 services; 54.5 (5) host trade delegations and assist foreign traders in 54.6 contacting appropriate Minnesota businesses and investments; 54.7 (6) develop contacts with Minnesota businesses and gather 54.8 and provide information to assist them in locating and 54.9 communicating with international trading or joint venture 54.10 counterparts; 54.11 (7) provide information, education, and counseling services 54.12 to Minnesota businesses regarding the economic, commercial, 54.13 legal, and cultural contexts of international trade; 54.14 (8) provide Minnesota businesses with international trade 54.15 leads and information about the availability and sources of 54.16 services relating to international trade, such as export 54.17 financing, licensing, freight forwarding, international 54.18 advertising, translation, and custom brokering; 54.19 (9) locate, attract, and promote foreign direct investment 54.20 and business development in Minnesota to enhance employment 54.21 opportunities in Minnesota; 54.22 (10) provide foreign businesses and investors desiring to 54.23 locate facilities in Minnesota information regarding sources of 54.24 governmental, legal, real estate, financial, and business 54.25 services; 54.26 (11) enter into contracts or other agreements with private 54.27 persons and public entities, including agreements to establish 54.28 and maintain offices and other types of representation in 54.29 foreign countries, to carry out the purposes of promoting 54.30 international trade and attracting investment from foreign 54.31 countries to Minnesota and to carry out this section, without 54.32 regard to sections 16B.07 and 16B.09section 16C.07; 54.33 (12) enter into administrative, programming, and service 54.34 partnerships with the Minnesota world trade center; and 54.35 (13) market trade-related materials to businesses and 54.36 organizations, and the proceeds of which must be placed in a 55.1 special revolving account and are appropriated to the 55.2 commissioner to prepare and distribute trade-related materials. 55.3 (b) The programs and activities of the commissioner of 55.4 trade and economic development and the Minnesota trade division 55.5 may not duplicate programs and activities of the commissioner of 55.6 agriculture or the Minnesota world trade center corporation. 55.7 (c) The commissioner shall notify the chairs of the senate 55.8 finance and house appropriations committees of each agreement 55.9 under this subdivision to establish and maintain an office or 55.10 other type of representation in a foreign country. 55.11 Sec. 38. Minnesota Statutes 1997 Supplement, section 55.12 121.1113, subdivision 2, is amended to read: 55.13 Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 55.14 ASSISTANCE.] The department of children, families, and learning 55.15 shall contract for professional and technical services according 55.16 to competitive bidding procedures under chapter 16B16C for 55.17 purposes of this section. 55.18 Sec. 39. Minnesota Statutes 1996, section 124.14, 55.19 subdivision 1, is amended to read: 55.20 Subdivision 1. The commissioner shall supervise 55.21 distribution of school aids and grants in accordance with law. 55.22 It may make rules consistent with law for the distribution to 55.23 enable districts to perform efficiently the services required by 55.24 law and further education in the state, including reasonable 55.25 requirements for the reports and accounts to it as will assure 55.26 accurate and lawful apportionment of aids. State and federal 55.27 aids and discretionary or entitlement grants distributed by the 55.28 commissioner shall not be subject to the contract approval 55.29 procedures of the commissioner of administration or to chapter 55.30 16A or, 16B, or 16C. The commissioner shall adopt internal 55.31 procedures for administration and monitoring of aids and grants. 55.32 Sec. 40. Minnesota Statutes 1996, section 126.151, 55.33 subdivision 2, is amended to read: 55.34 Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner 55.35 and the board of trustees of the Minnesota state colleges and 55.36 universities may retain dues and other money collected on behalf 56.1 of students participating in approved vocational student 56.2 organizations and may deposit the money in separate accounts. 56.3 The money in these accounts shall be available for expenditures 56.4 for state and national activities related to specific 56.5 organizations. Administration of money collected under this 56.6 section is not subject to the provisions of chapters 15, 56.7 16A, and16B, and 16C, and may be deposited outside the state 56.8 treasury. Money shall be administered under the policies of the 56.9 applicable state board or agency relating to post-secondary and 56.10 secondary vocational student organizations and is subject to 56.11 audit by the legislative auditor. Any unexpended money shall 56.12 not cancel but may be carried forward to the next fiscal year. 56.13 Sec. 41. Minnesota Statutes 1996, section 129C.10, 56.14 subdivision 7, is amended to read: 56.15 Subd. 7. [PURCHASING INSTRUCTIONAL ITEMS.] Technical 56.16 educational equipment may be procured for programs of the Lola 56.17 and Rudy Perpich Minnesota center for arts education by the 56.18 board either by brand designation or in accordance with 56.19 standards and specifications the board may adopt, 56.20 notwithstanding chapterchapters 16B and 16C. 56.21 Sec. 42. Minnesota Statutes 1996, section 136A.06, is 56.22 amended to read: 56.23 136A.06 [FEDERAL FUNDS.] 56.24 The higher education services office is designated the 56.25 state agency to apply for, receive, accept, and disburse to both 56.26 public and private institutions of higher education all federal 56.27 funds which are allocated to the state of Minnesota to support 56.28 higher education programs, construction, or other activities and 56.29 which require administration by a state higher education agency 56.30 under the Higher Education Facilities Act of 1963, and any 56.31 amendments thereof, the Higher Education Act of 1965, and any 56.32 amendments thereof, and any other law which provides funds for 56.33 higher education and requires administration by a state higher 56.34 education agency as enacted or may be enacted by the Congress of 56.35 the United States; provided that no commitment shall be made 56.36 that shall bind the legislature to make appropriations beyond 57.1 current allocations of funds. The office may apply for, 57.2 receive, accept, and disburse all administrative funds available 57.3 to the office for administering federal funds to support higher 57.4 education programs, construction, or other activities. The 57.5 office also may apply for, receive, accept, and disburse any 57.6 research, planning, or program funds which are available for 57.7 purposes consistent with the provisions of this chapter. In 57.8 making application for and administering federal funds the 57.9 office may comply with any and all requirements of federal law 57.10 and federal rules and regulations to enable it to receive and 57.11 accept such funds. The expenditure of any such funds received 57.12 shall be governed by the laws of the state, except insofar as 57.13 federal regulations may otherwise provide. The office may 57.14 contract with both public and private institutions in 57.15 administering federal funds, and such contracts shall not be 57.16 subject to the provisions of chapter 16B16C. All such money 57.17 received by the office shall be deposited in the state treasury 57.18 and are hereby appropriated to it annually for the purpose for 57.19 which such funds are received. None of such moneys shall cancel 57.20 but shall be available until expended. 57.21 Sec. 43. Minnesota Statutes 1996, section 136A.16, 57.22 subdivision 1, is amended to read: 57.23 Subdivision 1. Notwithstanding chapter 16B16C, the 57.24 Minnesota higher education services office is designated as the 57.25 administrative agency for carrying out the purposes and terms of 57.26 sections 136A.15 to 136A.1702. The office may establish one or 57.27 more loan programs. 57.28 Sec. 44. Minnesota Statutes 1996, section 136A.29, 57.29 subdivision 6, is amended to read: 57.30 Subd. 6. The authority is authorized and empowered to 57.31 determine the location and character of any project to be 57.32 financed under the provisions of sections 136A.25 to 136A.42, 57.33 and to construct, reconstruct, remodel, maintain, manage, 57.34 enlarge, alter, add to, repair, operate, lease, as lessee or 57.35 lessor, and regulate the same, to enter into contracts for any 57.36 or all of such purposes, to enter into contracts for the 58.1 management and operation of a project, and to designate a 58.2 participating institution of higher education as its agent to 58.3 determine the location and character of a project undertaken by 58.4 such participating institution of higher education under the 58.5 provisions of sections 136A.25 to 136A.42 and as the agent of 58.6 the authority, to construct, reconstruct, remodel, maintain, 58.7 manage, enlarge, alter, add to, repair, operate, lease, as 58.8 lessee or lessor, and regulate the same, and as the agent of the 58.9 authority, to enter into contracts for any or all of such 58.10 purposes, including contracts for the management and operation 58.11 of such project. Contracts of the authority or of a 58.12 participating institution of higher education to acquire or to 58.13 construct, reconstruct, remodel, maintain, enlarge, alter, add 58.14 to, or repair projects shall not be subject to the provisions of 58.15 chapter 16B16C or section 574.26, or any other public contract 58.16 or competitive bid law. 58.17 Sec. 45. Minnesota Statutes 1997 Supplement, section 58.18 136A.40, is amended to read: 58.19 136A.40 [ADMINISTRATION.] 58.20 The administration of sections 136A.25 to 136A.42, shall be 58.21 under the authority independent of other departments and 58.22 agencies and notwithstanding chapter 16B16C. The authority 58.23 shall not be subject to the provisions of chapter 14, including 58.24 section 14.386 in connection with the adoption of any rules, 58.25 rents, fees or charges or with the exercise of any other powers 58.26 or duties. 58.27 Sec. 46. Minnesota Statutes 1996, section 136F.23, is 58.28 amended to read: 58.29 136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 58.30 Notwithstanding chapter 16A or 16B16C, the student 58.31 associations recognized by the board of trustees of the 58.32 Minnesota state colleges and universities may purchase goods or 58.33 materials through state purchasing authority for the ordinary 58.34 day-to-day operations of the associations. The student 58.35 associations must be nonprofit 501(c)(3) organizations in order 58.36 to qualify for this authority. The department of administration 59.1 may require that the purchase documents be approved by 59.2 appropriate officials in the board's central office. 59.3 Sec. 47. Minnesota Statutes 1996, section 136F.56, 59.4 subdivision 5, is amended to read: 59.5 Subd. 5. [SERVICE CONTRACTS.] The council may contract for 59.6 the services it needs to carry out its function. The council 59.7 may also contract to provide services to other organizations. 59.8 The contracts are not subject to the contract approval 59.9 procedures of the commissioner of administration or of 59.10 chapter 16B16C. 59.11 Sec. 48. Minnesota Statutes 1996, section 136F.581, 59.12 subdivision 3, is amended to read: 59.13 Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 59.14 policies and procedures must include provisions for procurement, 59.15 including construction, from small targeted group businesses and 59.16 businesses from economically disadvantaged areas designated 59.17 under section 16B.1916C.17. The board, colleges, and 59.18 universities shall use the methods contained in section 471.345, 59.19 subdivision 8, for such purchasing, or may develop additional 59.20 methods in which the cost percentage preferences are consistent 59.21 with the provision of section 16B.1916C.17, subdivisions 2c and59.22 2d6, paragraph (a), and 7, or consistent with the provisions of 59.23 the University of Minnesota's targeted group business purchasing 59.24 program. 59.25 Sec. 49. Minnesota Statutes 1996, section 136F.66, is 59.26 amended to read: 59.27 136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 59.28 In awarding contracts for capital projects under section 59.29 136F.64, the board shall consider the documentation provided by 59.30 the bidders regarding their qualifications, including evidence 59.31 of having successfully completed similar work, or delivering 59.32 services or products comparable to that being requested. The 59.33 board shall set procedures to administer this section, which 59.34 must include practices that will assist in the economic 59.35 development of small businesses, small targeted group 59.36 businesses, and businesses in economically disadvantaged areas 60.1 designated under section 16B.1916C.17. 60.2 Sec. 50. Minnesota Statutes 1996, section 136F.72, 60.3 subdivision 3, is amended to read: 60.4 Subd. 3. [ADMINISTRATION.] Each college and university, 60.5 independent of other authority and notwithstanding chapters 60.6 16A and, 16B, and 16C, shall administer its activity funds. The 60.7 board, independent of other authority and notwithstanding 60.8 chapters 16A and, 16B, and 16C, shall administer the 60.9 administrative fund established in the system office. All 60.10 activity fund money collected shall be administered under the 60.11 policies of the board subject to audit of the legislative 60.12 auditor. 60.13 Sec. 51. Minnesota Statutes 1996, section 136F.96, is 60.14 amended to read: 60.15 136F.96 [ADMINISTRATION.] 60.16 The administration of sections 136F.90 to 136F.98 shall be 60.17 under the board of trustees of the Minnesota state colleges and 60.18 universities independent of other authority and notwithstanding 60.19 chapters 16A and, 16B, and 16C. 60.20 Sec. 52. Minnesota Statutes 1996, section 137.35, 60.21 subdivision 1, is amended to read: 60.22 Subdivision 1. [PURCHASING METHODS.] (a) The regents may 60.23 award up to a six percent preference in the amount bid for 60.24 specified goods and services to small targeted group businesses 60.25 designated under section 16B.1916C.17, subdivision 5. 60.26 (b) The regents may designate a purchase of goods or 60.27 services for award only to small targeted group businesses 60.28 designated under section 16B.1916C.17, subdivision 5, if the 60.29 regents determine that at least three small targeted group 60.30 businesses are likely to bid. 60.31 (c) The regents, as a condition of awarding a construction 60.32 contract or approving a contract for consultant, professional, 60.33 or technical services, may set goals that require the prime 60.34 contractor to subcontract a portion of the contract to small 60.35 targeted group businesses. The regents must establish a 60.36 procedure for granting waivers from the subcontracting 61.1 requirement when qualified small targeted group businesses are 61.2 not reasonably available. The regents may establish financial 61.3 incentives for prime contractors who exceed the goals for use of 61.4 subcontractors and financial penalties for prime contractors who 61.5 fail to meet goals under this paragraph. The subcontracting 61.6 requirements of this paragraph do not apply to prime contractors 61.7 who are small targeted group businesses. At least 75 percent of 61.8 the value of the subcontracts awarded to small targeted group 61.9 businesses under this paragraph must be performed by the 61.10 business to which the subcontract is awarded or by another small 61.11 targeted group business. 61.12 (d) The regents may award up to a four percent preference 61.13 in the amount bid on university procurement to small businesses 61.14 located in an economically disadvantaged area as defined in 61.15 section 16B.1916C.17, subdivision 7. 61.16 (e) The regents may delegate responsibility under this 61.17 section to university employees. 61.18 Sec. 53. Minnesota Statutes 1996, section 137.35, 61.19 subdivision 2, is amended to read: 61.20 Subd. 2. [ELIGIBILITY.] The rules adopted by the 61.21 commissioner of administration to define small businesses and to 61.22 set time and other eligibility requirements for participation in 61.23 programs under sections 16B.19 to 16B.2216C.17 to 16C.20 apply 61.24 to this section. 61.25 Sec. 54. Minnesota Statutes 1996, section 137.35, 61.26 subdivision 3, is amended to read: 61.27 Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged 61.28 to purchase from small targeted group businesses designated 61.29 under section 16B.1916C.17 when making purchases that are not 61.30 subject to competitive bidding procedures. 61.31 Sec. 55. Minnesota Statutes 1997 Supplement, section 61.32 138.35, subdivision 1b, is amended to read: 61.33 Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 61.34 state archaeologist may contract with the federal government, 61.35 local governmental units, other states, the university and other 61.36 educational institutions, and private persons or organizations 62.1 as necessary in the performance of the duties in sections 138.31 62.2 to 138.42. Contracts made under this section for professional 62.3 services shall not be subject to chapter 16B16C, as it relates 62.4 to competitive bidding. The state archaeologist may recruit, 62.5 train, and accept, without regard to personnel laws or rules, 62.6 the services of individuals as volunteers for or in aid of 62.7 performance of the state archaeologist's duties, and may provide 62.8 for the incidental expenses of volunteers, such as 62.9 transportation, lodging, and subsistence. The state 62.10 archaeologist may apply for, receive, and expend grants and 62.11 gifts of money consistent with the powers and duties in sections 62.12 138.31 to 138.42. Any money so received is appropriated for the 62.13 purpose for which it was granted. 62.14 Sec. 56. Minnesota Statutes 1996, section 144.0742, is 62.15 amended to read: 62.16 144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 62.17 SERVICES.] 62.18 The commissioner of health is authorized to enter into 62.19 contractual agreements with any public or private entity for the 62.20 provision of statutorily prescribed public health services by 62.21 the department. The contracts shall specify the services to be 62.22 provided and the amount and method of reimbursement therefor. 62.23 Funds generated in a contractual agreement made pursuant to this 62.24 section are appropriated to the department for purposes of 62.25 providing the services specified in the contracts. All such 62.26 contractual agreements shall be processed in accordance with the 62.27 provisions of chapter 16B16C. 62.28 Sec. 57. Minnesota Statutes 1996, section 144.95, 62.29 subdivision 5, is amended to read: 62.30 Subd. 5. [GENERAL AUTHORITY.] (a) To carry out 62.31 subdivisions 1 to 4, the commissioner of health may: 62.32 (1) accept money, property, or services from any source; 62.33 (2) receive and hold lands; 62.34 (3) accept gifts; 62.35 (4) cooperate with city, state, federal, or private 62.36 agencies whose research on mosquito control or on other 63.1 environmental matters may be affected by the commissioner's 63.2 mosquito management and research activities; and 63.3 (5) enter into contracts with any public or private entity. 63.4 (b) The contracts must specify the duties performed, 63.5 services provided, and the amount and method of reimbursement 63.6 for them. Money collected by the commissioner under contracts 63.7 made under this subdivision is appropriated to the commissioner 63.8 for the purposes specified in the contracts. Contractual 63.9 agreements must be processed under section 16B.1716C.09. 63.10 Sec. 58. Minnesota Statutes 1996, section 161.315, 63.11 subdivision 4, is amended to read: 63.12 Subd. 4. [EXCEPTIONS.] The commissioner may terminate a 63.13 debarment by order, or the commissioner or a county, town, or 63.14 home rule or statutory city may award a contract to a debarred 63.15 or suspended person when: 63.16 (1) that person is the sole supplier of a material or 63.17 service required by the commissioner or a county, town, or home 63.18 rule or statutory city; 63.19 (2) the commissioner determines that an emergency exists as 63.20 defined in section 161.32, subdivision 3; 63.21 (3) the commissioner of administration determines that an 63.22 emergency exists as defined in section 16B.0816C.11, 63.23 subdivision 62; 63.24 (4) in the case of a contract to be awarded by a county, 63.25 town, or home rule or statutory city, the governing body thereof 63.26 determines by resolution that an emergency exists that will 63.27 result in a road, street, or bridge being closed to travel; or 63.28 (5) the contract is for purchasing materials or renting 63.29 equipment for routine road maintenance. 63.30 Sec. 59. Minnesota Statutes 1996, section 161.321, 63.31 subdivision 1, is amended to read: 63.32 Subdivision 1. [DEFINITIONS.] For purposes of this section 63.33 the following terms have the meanings given them, except where 63.34 the context clearly indicates a different meaning is intended. 63.35 (a) "Award" means the granting of a contract in accordance 63.36 with all applicable laws and rules governing competitive bidding 64.1 except as otherwise provided in this section. 64.2 (b) "Contract" means an agreement entered into between a 64.3 business entity and the state of Minnesota for the construction 64.4 of transportation improvements. 64.5 (c) "Subcontractor" means a business entity which enters 64.6 into a legally binding agreement with another business entity 64.7 which is a party to a contract as defined in clause (b). 64.8 (d) "Targeted group business" means a business designated 64.9 under section 16B.1916C.17, subdivision 2b5. 64.10 Sec. 60. Minnesota Statutes 1996, section 161.321, 64.11 subdivision 2, is amended to read: 64.12 Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 64.13 may award up to a six percent preference in the amount bid for 64.14 specified construction work to small targeted group businesses. 64.15 (b) The commissioner may designate a contract for 64.16 construction work for award only to small targeted group 64.17 businesses if the commissioner determines that at least three 64.18 small targeted group businesses are likely to bid. 64.19 (c) The commissioner, as a condition of awarding a 64.20 construction contract, may set goals that require the prime 64.21 contractor to subcontract a portion of the contract to small 64.22 targeted group businesses. The commissioner must establish a 64.23 procedure for granting waivers from the subcontracting 64.24 requirement when qualified small targeted group businesses are 64.25 not reasonably available. The commissioner may establish 64.26 financial incentives for prime contractors who exceed the goals 64.27 for use of subcontractors and financial penalties for prime 64.28 contractors who fail to meet goals under this paragraph. The 64.29 subcontracting requirements of this paragraph do not apply to 64.30 prime contractors who are small targeted group businesses. 64.31 (d) The commissioner may award up to a four percent 64.32 preference in the amount bid on procurement to small businesses 64.33 located in an economically disadvantaged area as defined in 64.34 section 16B.1916C.17, subdivision 7. 64.35 Sec. 61. Minnesota Statutes 1996, section 161.321, 64.36 subdivision 5, is amended to read: 65.1 Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the 65.2 commissioner is unable to award a contract pursuant to the 65.3 provisions of subdivisions 2 and 3, the award may be placed 65.4 pursuant to the normal solicitation and award provisions set 65.5 forth in this chapter and chapter 16B16C. 65.6 Sec. 62. Minnesota Statutes 1996, section 161.321, 65.7 subdivision 6, is amended to read: 65.8 Subd. 6. [RULES.] The rules adopted by the commissioner of 65.9 administration to define small businesses and to set time and 65.10 other eligibility requirements for participation in programs 65.11 under sections 16B.19 to 16B.2216C.17 to 16C.20 apply to this 65.12 section. The commissioner may promulgate other rules necessary 65.13 to carry out this section. 65.14 Sec. 63. Minnesota Statutes 1996, section 161.321, 65.15 subdivision 7, is amended to read: 65.16 Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is 65.17 encouraged to purchase from small targeted group businesses 65.18 designated under section 16B.1916C.17 when making purchases 65.19 that are not subject to competitive bidding procedures. 65.20 Sec. 64. Minnesota Statutes 1996, section 161.41, 65.21 subdivision 2, is amended to read: 65.22 Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The 65.23 commissioner shall administer all aspects of the disposition of 65.24 property declared to be surplus under this section. The 65.25 commissioner shall first determine the value of the surplus 65.26 property. The commissioner may then transfer the possession of 65.27 the surplus property to any state agency or political 65.28 subdivision of this state or to the United States government 65.29 upon receipt of payment in an amount equal to the value of the 65.30 surplus property. 65.31 The commissioner may also sell the surplus property under 65.32 the competitive bidding provisions of chapter 16B16C if no 65.33 state agency or political subdivision of this state offers to 65.34 purchase the surplus property for its determined value. 65.35 Sec. 65. Minnesota Statutes 1997 Supplement, section 65.36 179A.03, subdivision 14, is amended to read: 66.1 Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or 66.2 "employee" means any person appointed or employed by a public 66.3 employer except: 66.4 (a) elected public officials; 66.5 (b) election officers; 66.6 (c) commissioned or enlisted personnel of the Minnesota 66.7 national guard; 66.8 (d) emergency employees who are employed for emergency work 66.9 caused by natural disaster; 66.10 (e) part-time employees whose service does not exceed the 66.11 lesser of 14 hours per week or 35 percent of the normal work 66.12 week in the employee's appropriate unit; 66.13 (f) employees whose positions are basically temporary or 66.14 seasonal in character and: (1) are not for more than 67 working 66.15 days in any calendar year; or (2) are not for more than 100 66.16 working days in any calendar year and the employees are under 66.17 the age of 22, are full-time students enrolled in a nonprofit or 66.18 public educational institution prior to being hired by the 66.19 employer, and have indicated, either in an application for 66.20 employment or by being enrolled at an educational institution 66.21 for the next academic year or term, an intention to continue as 66.22 students during or after their temporary employment; 66.23 (g) employees providing services for not more than two 66.24 consecutive quarters to the board of trustees of the Minnesota 66.25 state colleges and universities under the terms of a 66.26 professional or technical services contract as defined in 66.27 section 16B.1716C.09, subdivision 1; 66.28 (h) employees of charitable hospitals as defined by section 66.29 179.35, subdivision 3; 66.30 (i) full-time undergraduate students employed by the school 66.31 which they attend under a work-study program or in connection 66.32 with the receipt of financial aid, irrespective of number of 66.33 hours of service per week; 66.34 (j) an individual who is employed for less than 300 hours 66.35 in a fiscal year as an instructor in an adult vocational 66.36 education program; 67.1 (k) an individual hired by a school district or the board 67.2 of trustees of the Minnesota state colleges and universities to 67.3 teach one course for up to four credits for one quarter in a 67.4 year. 67.5 The following individuals are public employees regardless 67.6 of the exclusions of clauses (e) and (f): 67.7 (1) An employee hired by a school district or the board of 67.8 trustees of the Minnesota state colleges and universities except 67.9 at the university established in section 136F.13 or for 67.10 community services or community education instruction offered on 67.11 a noncredit basis: (i) to replace an absent teacher or faculty 67.12 member who is a public employee, where the replacement employee 67.13 is employed more than 30 working days as a replacement for that 67.14 teacher or faculty member; or (ii) to take a teaching position 67.15 created due to increased enrollment, curriculum expansion, 67.16 courses which are a part of the curriculum whether offered 67.17 annually or not, or other appropriate reasons; and 67.18 (2) An employee hired for a position under clause (f)(1) if 67.19 that same position has already been filled under clause (f)(1) 67.20 in the same calendar year and the cumulative number of days 67.21 worked in that same position by all employees exceeds 67 67.22 calendar days in that year. For the purpose of this paragraph, 67.23 "same position" includes a substantially equivalent position if 67.24 it is not the same position solely due to a change in the 67.25 classification or title of the position. 67.26 Sec. 66. Minnesota Statutes 1996, section 179A.23, is 67.27 amended to read: 67.28 179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 67.29 BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 67.30 BARGAINING UNIT.] 67.31 Any contract entered into after March 23, 1982, by the 67.32 state of Minnesota or the University of Minnesota involving 67.33 services, any part of which, in the absence of the contract, 67.34 would be performed by members of a unit provided in sections 67.35 179A.10 and 179A.11, shall be subject to section 16B.0716C.07 67.36 and shall provide for the preferential employment by a party of 68.1 members of that unit whose employment with the state of 68.2 Minnesota or the University of Minnesota is terminated as a 68.3 result of that contract. 68.4 Contracts entered into by the state of Minnesota for the 68.5 purpose of providing court reporter services or transcription of 68.6 the record of a hearing which was recorded by means of an audio 68.7 magnetic recording device shall be subject to section 16B.1768.8 16C.09 and the preferential employment provisions enumerated in 68.9 this section. Any court reporter seeking a contract pursuant to 68.10 the preferential employment provisions of this section shall be 68.11 given preference when the services are needed only if that court 68.12 reporter's charges for the services requested are no greater 68.13 than the average of the charges made for the identical services 68.14 by other court reporters in the same locality who are also under 68.15 contract with the state for those services. 68.16 Sec. 67. Minnesota Statutes 1996, section 198.35, 68.17 subdivision 1, is amended to read: 68.18 Subdivision 1. [ESTABLISHMENT.] The board may establish a 68.19 veterans home in Silver Bay by renovating an existing facility 68.20 owned by the city of Silver Bay if the city donates the building 68.21 to the board at no cost. Contracts made by the board for the 68.22 purposes of this subdivision are subject to chapter 16B16C. 68.23 Buildings used for the veterans home must comply with 68.24 requirements established by federal agencies as conditions for 68.25 the receipt of federal funds for the nursing and boarding care 68.26 of veterans. The city of Silver Bay shall secure the state 68.27 match requirement from sources other than the state general 68.28 fund. Money from other sources must equal at least 35 percent 68.29 of the total cost of the renovation with the remainder of the 68.30 funds to be provided by the United States Veterans 68.31 Administration. 68.32 Sec. 68. Minnesota Statutes 1996, section 216C.02, 68.33 subdivision 1, is amended to read: 68.34 Subdivision 1. [POWERS.] (a) The commissioner may: 68.35 (1) apply for, receive, and spend money received from 68.36 federal, municipal, county, regional, and other government 69.1 agencies and private sources; 69.2 (2) apply for, accept, and disburse grants and other aids 69.3 from public and private sources; 69.4 (3) contract for professional services if work or services 69.5 required or authorized to be carried out by the commissioner 69.6 cannot be satisfactorily performed by employees of the 69.7 department or by another state agency; 69.8 (4) enter into interstate compacts to carry out research 69.9 and planning jointly with other states or the federal government 69.10 when appropriate; 69.11 (5) upon reasonable request, distribute informational 69.12 material at no cost to the public; and 69.13 (6) enter into contracts for the performance of the 69.14 commissioner's duties with federal, state, regional, 69.15 metropolitan, local, and other agencies or units of government 69.16 and educational institutions, including the University of 69.17 Minnesota, without regard to the competitive bidding 69.18 requirements of chapters 16A and 16B16C. 69.19 (b) The commissioner shall collect information on 69.20 conservation and other energy-related programs carried on by 69.21 other agencies, by public utilities, by cooperative electric 69.22 associations, by municipal power agencies, by other fuel 69.23 suppliers, by political subdivisions, and by private 69.24 organizations. Other agencies, cooperative electric 69.25 associations, municipal power agencies, and political 69.26 subdivisions shall cooperate with the commissioner by providing 69.27 information requested by the commissioner. The commissioner may 69.28 by rule require the submission of information by other program 69.29 operators. The commissioner shall make the information 69.30 available to other agencies and to the public and, as necessary, 69.31 shall recommend to the legislature changes in the laws governing 69.32 conservation and other energy-related programs to ensure that: 69.33 (1) expenditures on the programs are adequate to meet 69.34 identified needs; 69.35 (2) the needs of low-income energy users are being 69.36 adequately addressed; 70.1 (3) duplication of effort is avoided or eliminated; 70.2 (4) a program that is ineffective is improved or 70.3 eliminated; and 70.4 (5) voluntary efforts are encouraged through incentives for 70.5 their operators. 70.6 The commissioner shall appoint an advisory task force to 70.7 help evaluate the information collected and formulate 70.8 recommendations to the legislature. The task force must include 70.9 low-income energy users. 70.10 (c) By January 15 of each year, the commissioner shall 70.11 report to the legislature on the projected amount of federal 70.12 money likely to be available to the state during the next fiscal 70.13 year, including grant money and money received by the state as a 70.14 result of litigation or settlements of alleged violations of 70.15 federal petroleum pricing regulations. The report must also 70.16 estimate the amount of money projected as needed during the next 70.17 fiscal year to finance a level of conservation and other 70.18 energy-related programs adequate to meet projected needs, 70.19 particularly the needs of low-income persons and households, and 70.20 must recommend the amount of state appropriations needed to 70.21 cover the difference between the projected availability of 70.22 federal money and the projected needs. 70.23 Sec. 69. Minnesota Statutes 1997 Supplement, section 70.24 216D.03, subdivision 2, is amended to read: 70.25 Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 70.26 (a) The notification center services must be provided by a 70.27 nonprofit corporation approved in writing by the commissioner. 70.28 The nonprofit corporation must be governed by a board of 70.29 directors of up to 20 members, one of whom is the director of 70.30 the office of pipeline safety. The other board members must 70.31 represent and be elected by operators, excavators, and other 70.32 persons eligible to participate in the center. In deciding to 70.33 approve a nonprofit corporation, the commissioner shall consider 70.34 whether it meets the requirements of this paragraph and whether 70.35 it demonstrates that it has the ability to contract for and 70.36 implement the notification center service. 71.1 (b) The commissioner shall adopt rules: 71.2 (1) establishing a notification process and competitive 71.3 bidding procedure for selecting a vendor to provide the 71.4 notification service; 71.5 (2) governing the operating procedures and technology 71.6 needed for a statewide notification center; and 71.7 (3) setting forth the method for assessing the cost of the 71.8 service among operators. 71.9 (c) The commissioner shall select a vendor to provide the 71.10 notification center service. The commissioner may advertise for 71.11 bids as provided in section 16B.0716C.07, subdivision71.12 3subdivisions 1 and 2, and base the selection of a vendor on an71.13 identification of the lowest responsible bidderbest value as 71.14 provided in section 16B.0916C.07, subdivision 17. The 71.15 commissioner shall select and contract with the vendor to 71.16 provide the notification center service, but all costs of the 71.17 center must be paid by the operators. The commissioner may at 71.18 any time appoint a task force to advise on the renewal of the 71.19 contract or any other matter involving the center's operations. 71.20 (d) An operator may submit a bid and be selected to 71.21 contract to provide the notification center service under 71.22 paragraph (a) or (c). The commissioner shall annually review 71.23 the services provided by the nonprofit corporation approved 71.24 under paragraph (a) or the vendor selected under paragraph (c). 71.25 Sec. 70. Minnesota Statutes 1996, section 237.51, 71.26 subdivision 5a, is amended to read: 71.27 Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 71.28 addition to any duties specified elsewhere in sections 237.51 to 71.29 237.56, the department of human services shall: 71.30 (1) define economic hardship, special needs, and household 71.31 criteria so as to determine the priority of eligible applicants 71.32 for initial distribution of devices and to determine 71.33 circumstances necessitating provision of more than one 71.34 communication device per household; 71.35 (2) establish a method to verify eligibility requirements; 71.36 (3) establish specifications for communication devices to 72.1 be purchased under section 237.53, subdivision 3; 72.2 (4) inform the public and specifically the community of 72.3 communication-impaired persons of the program; and 72.4 (5) notwithstanding any provision of chapterchapters 16B 72.5 and 16C, develop guidelines for the purchase of some 72.6 communication devices from local retailers and dispensers if the 72.7 department determines that otherwise they will be economically 72.8 harmed by implementation of sections 237.50 to 237.56. 72.9 (b) The department may establish an advisory board to 72.10 advise the department in carrying out the duties specified in 72.11 this section and to advise the department of public service in 72.12 carrying out its duties under section 237.54. If so 72.13 established, the advisory board must include, at a minimum, the 72.14 following communication-impaired persons: 72.15 (1) at least one member who is deaf; 72.16 (2) at least one member who is speech impaired; 72.17 (3) at least one member who is mobility impaired; and 72.18 (4) at least one member who is hard-of-hearing. 72.19 The membership terms, compensation, and removal of members 72.20 and the filling of membership vacancies are governed by section 72.21 15.059. Advisory board meetings shall be held at the discretion 72.22 of the commissioner. 72.23 Sec. 71. Minnesota Statutes 1996, section 241.0221, 72.24 subdivision 6, is amended to read: 72.25 Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 72.26 To qualify for a subsidy, a county or group of counties must 72.27 enter into a memorandum of agreement with the commissioner 72.28 agreeing to comply with the minimum standards and requirements 72.29 established by the commissioner under subdivision 4. The 72.30 memorandum of agreement is not subject to the contract approval 72.31 procedures of the commissioner of administration or chapter72.32 chapters 16B and 16C. The commissioner shall provide forms and 72.33 instructions for submission of subsidy applications. 72.34 The commissioner shall require a county or group of 72.35 counties to document in its application that it is requesting 72.36 subsidy funds for the least restrictive alternative appropriate 73.1 to the county or counties detention needs. The commissioner 73.2 shall evaluate applications and grant subsidies for local 73.3 detention facilities and alternative detention programs 73.4 described in this section in a manner consistent with the 73.5 minimum standards and requirements established by the 73.6 commissioner in subdivision 4 and within the limit 73.7 appropriations made available by law. 73.8 Sec. 72. Minnesota Statutes 1996, section 241.27, 73.9 subdivision 2, is amended to read: 73.10 Subd. 2. [REVOLVING FUND; USE OF FUND.] There is 73.11 established in the department of corrections under the control 73.12 of the commissioner of corrections the Minnesota correctional 73.13 industries revolving fund to which shall be transferred the 73.14 revolving funds authorized in Minnesota Statutes 1978, sections 73.15 243.41 and 243.85, clause (f), and any other industrial 73.16 revolving funds heretofore established at any state correctional 73.17 facility under the control of the commissioner of corrections. 73.18 The revolving fund established shall be used for the conduct of 73.19 the industrial and commercial activities now or hereafter 73.20 established at any state correctional facility, including but 73.21 not limited to the purchase of equipment, raw materials, the 73.22 payment of salaries, wages and other expenses necessary and 73.23 incident thereto. The purchase of materials and commodities for 73.24 resale are not subject to the competitive bidding procedures of 73.25 section 16B.0716C.07, but are subject to all other provisions 73.26 of chapter 16Bchapters 16B and 16C. When practical, purchases 73.27 must be made from small targeted group businesses designated 73.28 under section 16B.1916C.17. Additionally, the expenses of 73.29 inmate vocational training and the inmate release fund may be 73.30 financed from the correctional industries revolving fund in an 73.31 amount to be determined by the commissioner. The proceeds and 73.32 income from all industrial and commercial activities conducted 73.33 at state correctional facilities shall be deposited in the 73.34 correctional industries revolving fund subject to disbursement 73.35 as hereinabove provided. The commissioner of corrections may 73.36 request that money in the fund be invested pursuant to section 74.1 11A.25; the proceeds from the investment not currently needed 74.2 shall be accounted for separately and credited to the fund. 74.3 Sec. 73. Minnesota Statutes 1997 Supplement, section 74.4 241.277, subdivision 2, is amended to read: 74.5 Subd. 2. [REQUEST FOR PROPOSALS.] After consulting with 74.6 and considering the advice of the association of Minnesota 74.7 counties, the commissioner may issue a request for proposals and 74.8 select a vendor to operate the program. Section 16B.1716C.09 74.9 does not apply to the issuance of the request for proposals. 74.10 Sec. 74. Minnesota Statutes 1996, section 246.36, is 74.11 amended to read: 74.12 246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 74.13 For the purpose of carrying out a duty, the commissioner of 74.14 human services shall have authority to accept uncompensated and 74.15 voluntary services and to enter into contracts or agreements 74.16 with private or public agencies, or persons, for uncompensated 74.17 and voluntary services, as the commissioner may deem 74.18 practicable. Uncompensated and voluntary services do not 74.19 include services mandated by licensure and certification 74.20 requirements for health care facilities. The volunteer 74.21 agencies, organizations, or persons who provide services to 74.22 residents of state facilities operated under the authority of 74.23 the commissioner are not subject to the procurement requirements 74.24 of chapters 16A and 16B16C. The agencies, organizations, or 74.25 persons may purchase supplies, services, and equipment to be 74.26 used in providing services to residents of state facilities 74.27 through the department of administration. 74.28 Sec. 75. Minnesota Statutes 1996, section 246.57, 74.29 subdivision 1, is amended to read: 74.30 Subdivision 1. [AUTHORIZED.] The commissioner of human 74.31 services may authorize any state facility operated under the 74.32 authority of the commissioner to enter into agreement with other 74.33 governmental entities and both nonprofit and for-profit 74.34 organizations for participation in shared service agreements 74.35 that would be of mutual benefit to the state, other governmental 74.36 entities and organizations involved, and the public. 75.1 Notwithstanding section 16B.0616C.06, subdivision 2, the 75.2 commissioner of human services may delegate the execution of 75.3 shared services contracts to the chief executive officers of the 75.4 regional centers or state operated nursing homes. No additional 75.5 employees shall be added to the legislatively approved 75.6 complement for any regional center or state nursing home as a 75.7 result of entering into any shared service agreement. However, 75.8 positions funded by a shared service agreement may be authorized 75.9 by the commissioner of finance for the duration of the shared 75.10 service agreement. The charges for the services shall be on an 75.11 actual cost basis. All receipts for shared services may be 75.12 retained by the regional treatment center or state-operated 75.13 nursing home that provided the services, in addition to other 75.14 funding the regional treatment center or state-operated nursing 75.15 home receives. 75.16 Sec. 76. Minnesota Statutes 1996, section 246.57, 75.17 subdivision 6, is amended to read: 75.18 Subd. 6. [DENTAL SERVICES.] The commissioner of human 75.19 services shall authorize any regional treatment center or 75.20 state-operated nursing home under the commissioner's authority 75.21 to provide dental services to disabled persons who are eligible 75.22 for medical assistance and are not residing at the regional 75.23 treatment center or state-operated nursing home, provided that 75.24 the reimbursement received for these services is sufficient to 75.25 cover actual costs. To provide these services, regional 75.26 treatment centers and state-operated nursing homes may 75.27 participate under contract with health networks in their service 75.28 area. Notwithstanding section 16B.0616C.06, subdivision 2, the 75.29 commissioner of human services may delegate the execution of 75.30 these dental services contracts to the chief executive officers 75.31 of the regional centers or state-operated nursing homes. All 75.32 receipts for these dental services shall be retained by the 75.33 regional treatment center or state-operated nursing home that 75.34 provides the services and shall be in addition to other funding 75.35 the regional treatment center or state-operated nursing home 75.36 receives. 76.1 Sec. 77. Minnesota Statutes 1996, section 256B.031, 76.2 subdivision 1, is amended to read: 76.3 Subdivision 1. [CONTRACTS.] The commissioner may contract 76.4 with health insurers licensed and operating under chapters 60A 76.5 and 62A, nonprofit health service plans licensed and operating 76.6 under chapter 62C, health maintenance organizations licensed and 76.7 operating under chapter 62D, and vendors of medical care and 76.8 organizations participating in prepaid programs under section 76.9 256D.03, subdivision 4, clause (b), to provide medical services 76.10 to medical assistance recipients. Notwithstanding any other 76.11 law, health insurers may enter into contracts with the 76.12 commissioner under this section. As a condition of the 76.13 contract, health insurers and health service plan corporations 76.14 must agree to comply with the requirements of section 62D.04, 76.15 subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 76.16 a complaint procedure that satisfies the requirements of section 76.17 62D.11. Nothing in this section permits health insurers not 76.18 licensed as health maintenance organizations under chapter 62D 76.19 to offer a prepaid health plan as defined in section 256B.02, 76.20 subdivision 12, to persons other than those receiving medical 76.21 assistance or general assistance medical care under this 76.22 section. Contracts between the commissioner and a prepaid 76.23 health plan are exempt from the set-aside and preference 76.24 provisions of section 16B.1916C.17, subdivisions 5 and6, 76.25 paragraph (a), and 7. Contracts must specify the services that 76.26 are included in the per capita rate. Contracts must specify 76.27 those services that are to be eligible for risk sharing between 76.28 the prepaid health plan and the state. Contracts must also 76.29 state that payment must be made within 60 days after the month 76.30 of coverage. 76.31 Sec. 78. Minnesota Statutes 1996, section 256B.04, 76.32 subdivision 14, is amended to read: 76.33 Subd. 14. [COMPETITIVE BIDDING.] When determined to be 76.34 effective, economical, and feasible, the commissioner may 76.35 utilize volume purchase through competitive bidding and 76.36 negotiation under the provisions of chapter 16B16C, to provide 77.1 items under the medical assistance program including but not 77.2 limited to the following: 77.3 (1) eyeglasses; 77.4 (2) oxygen. The commissioner shall provide for oxygen 77.5 needed in an emergency situation on a short-term basis, until 77.6 the vendor can obtain the necessary supply from the contract 77.7 dealer; 77.8 (3) hearing aids and supplies; and 77.9 (4) durable medical equipment, including but not limited to: 77.10 (a) hospital beds; 77.11 (b) commodes; 77.12 (c) glide-about chairs; 77.13 (d) patient lift apparatus; 77.14 (e) wheelchairs and accessories; 77.15 (f) oxygen administration equipment; 77.16 (g) respiratory therapy equipment; 77.17 (h) electronic diagnostic, therapeutic and life support 77.18 systems; 77.19 (5) special transportation services; and 77.20 (6) drugs. 77.21 Sec. 79. Minnesota Statutes 1996, section 256B.04, 77.22 subdivision 15, is amended to read: 77.23 Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a 77.24 statewide basis a new program to safeguard against unnecessary 77.25 or inappropriate use of medical assistance services, against 77.26 excess payments, against unnecessary or inappropriate hospital 77.27 admissions or lengths of stay, and against underutilization of 77.28 services in prepaid health plans, long-term care facilities or 77.29 any health care delivery system subject to fixed rate 77.30 reimbursement. In implementing the program, the state agency 77.31 shall utilize both prepayment and postpayment review systems to 77.32 determine if utilization is reasonable and necessary. The 77.33 determination of whether services are reasonable and necessary 77.34 shall be made by the commissioner in consultation with a 77.35 professional services advisory group or health care consultant 77.36 appointed by the commissioner. 78.1 (2) Contracts entered into for purposes of meeting the 78.2 requirements of this subdivision shall not be subject to the 78.3 set-aside provisions of chapter 16B16C. 78.4 (3) A recipient aggrieved by the commissioner's termination 78.5 of services or denial of future services may appeal pursuant to 78.6 section 256.045. A vendor aggrieved by the commissioner's 78.7 determination that services provided were not reasonable or 78.8 necessary may appeal pursuant to the contested case procedures 78.9 of chapter 14. To appeal, the vendor shall notify the 78.10 commissioner in writing within 30 days of receiving the 78.11 commissioner's notice. The appeal request shall specify each 78.12 disputed item, the reason for the dispute, an estimate of the 78.13 dollar amount involved for each disputed item, the computation 78.14 that the vendor believes is correct, the authority in statute or 78.15 rule upon which the vendor relies for each disputed item, the 78.16 name and address of the person or firm with whom contacts may be 78.17 made regarding the appeal, and other information required by the 78.18 commissioner. 78.19 (4) The commissioner may select providers to provide case 78.20 management services to recipients who use health care services 78.21 inappropriately or to recipients who are eligible for other 78.22 managed care projects. The providers shall be selected based 78.23 upon criteria that may include a comparison with a peer group of 78.24 providers related to the quality, quantity, or cost of health 78.25 care services delivered or a review of sanctions previously 78.26 imposed by health care services programs or the provider's 78.27 professional licensing board. 78.28 Sec. 80. Minnesota Statutes 1997 Supplement, section 78.29 256B.19, subdivision 2a, is amended to read: 78.30 Subd. 2a. [DIVISION OF COSTS.] The county shall ensure 78.31 that only the least costly, most appropriate transportation and 78.32 travel expenses are used. The state may enter into volume 78.33 purchase contracts, or use a competitive bidding process, 78.34 whenever feasible, to minimize the costs of transportation 78.35 services. If the state has entered into a volume purchase 78.36 contract or used the competitive bidding procedures of chapter 79.1 16B16C to arrange for transportation services, the county may 79.2 be required to use such arrangements. 79.3 Sec. 81. Minnesota Statutes 1997 Supplement, section 79.4 256D.03, subdivision 6, is amended to read: 79.5 Subd. 6. [DIVISION OF COSTS.] The state share of county 79.6 agency expenditures for general assistance medical care shall be 79.7 100 percent. Payments made under this subdivision shall be made 79.8 according to sections 256B.041, subdivision 5 and 256B.19, 79.9 subdivision 1. In counties where a pilot or demonstration 79.10 project is operated for general assistance medical care 79.11 services, the state may pay 100 percent of the costs of 79.12 administering the pilot or demonstration project. 79.13 Notwithstanding any provision to the contrary, beginning 79.14 July 1, 1991, the state shall pay 100 percent of the costs for 79.15 centralized claims processing by the department of 79.16 administration relative to claims beginning January 1, 1991, and 79.17 submitted on behalf of general assistance medical care 79.18 recipients by vendors in the general assistance medical care 79.19 program. 79.20 Beginning July 1, 1991, the state shall reimburse counties 79.21 up to the limit of state appropriations for general assistance 79.22 medical care common carrier transportation and related travel 79.23 expenses provided for medical purposes after December 31, 1990. 79.24 For purposes of this subdivision, transportation shall have the 79.25 meaning given it in Code of Federal Regulations, title 42, 79.26 section 440.170(a), as amended through October 1, 1987, and 79.27 travel expenses shall have the meaning given in Code of Federal 79.28 Regulations, title 42, section 440.170(a)(3), as amended through 79.29 October 1, 1987. 79.30 The county shall ensure that only the least costly most 79.31 appropriate transportation and travel expenses are used. The 79.32 state may enter into volume purchase contracts, or use a 79.33 competitive bidding process, whenever feasible, to minimize the 79.34 costs of transportation services. If the state has entered into 79.35 a volume purchase contract or used the competitive bidding 79.36 procedures of chapter 16B16C to arrange for transportation 80.1 services, the county may be required to use such arrangements to 80.2 be eligible for state reimbursement for general assistance 80.3 medical care common carrier transportation and related travel 80.4 expenses provided for medical purposes. 80.5 In counties where prepaid health plans are under contract 80.6 to the commissioner to provide services to general assistance 80.7 medical care recipients, the cost of court ordered treatment 80.8 that does not include diagnostic evaluation, recommendation, or 80.9 referral for treatment by the prepaid health plan is the 80.10 responsibility of the county of financial responsibility. 80.11 Sec. 82. Minnesota Statutes 1996, section 298.2211, 80.12 subdivision 4, is amended to read: 80.13 Subd. 4. [OBLIGATIONS NOT STATE DEBT.] Bonds and other 80.14 obligations issued by the commissioner pursuant to this section, 80.15 along with all related documents, are not general obligations of 80.16 the state of Minnesota and are not subject to section 16B.0680.17 sections 16C.03, subdivision 4, and 16C.06. The full faith and 80.18 credit and taxing powers of the state are not and may not be 80.19 pledged for the payment of these bonds or other obligations, and 80.20 no person has the right to compel the levy of any state tax for 80.21 their payment or to compel the appropriation of any moneys of 80.22 the state for their payment except as specifically provided 80.23 herein. These bonds and obligations shall be payable solely 80.24 from the property and moneys derived by the commissioner 80.25 pursuant to the authority granted in this section that the 80.26 commissioner pledges to their payment. The legislature intends 80.27 not to appropriate money from the general fund to pay for these 80.28 bonds or other obligations. All these bonds or other 80.29 obligations must contain the provisions of this subdivision or 80.30 words to the same effect on their face. 80.31 Sec. 83. Minnesota Statutes 1996, section 349A.06, 80.32 subdivision 1, is amended to read: 80.33 Subdivision 1. [CONTRACTS.] The director shall sell 80.34 tickets for the lottery through lottery retailers with whom the 80.35 director contracts. Contracts under this section are not 80.36 subject to the provisions of sections 16B.06 to 16B.102, and81.1 16B.1716C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 81.2 are valid for a period of one year. The director may permit a 81.3 retailer to sell tickets at more than one business location 81.4 under a contract entered into under this section. 81.5 Sec. 84. Minnesota Statutes 1996, section 349A.07, 81.6 subdivision 6, is amended to read: 81.7 Subd. 6. [EXEMPTIONS.] Lottery procurement contracts 81.8 entered into by the director are not subject to the provisions 81.9 of sections 16B.06 to 16B.102 or 16B.17section 16C.03, 16C.06, 81.10 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 81.11 must utilize an open and competitive bid process, and as nearly 81.12 as practicable follow the procedures of chapterchapters 16B and 81.13 16C governing contracts, consistent with the provisions of this 81.14 section. 81.15 Sec. 85. Minnesota Statutes 1996, section 352.03, 81.16 subdivision 6, is amended to read: 81.17 Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 81.18 management of the system is vested in the director, who is the 81.19 executive and administrative head of the system. The director 81.20 shall be advisor to the board on matters pertaining to the 81.21 system and shall also act as the secretary of the board. The 81.22 director shall: 81.23 (1) attend meetings of the board; 81.24 (2) prepare and recommend to the board appropriate rules to 81.25 carry out this chapter; 81.26 (3) establish and maintain an adequate system of records 81.27 and accounts following recognized accounting principles and 81.28 controls; 81.29 (4) designate an assistant director with the approval of 81.30 the board; 81.31 (5) appoint any employees, both permanent and temporary, 81.32 that are necessary to carry out the provisions of this chapter; 81.33 (6) organize the work of the system as the director deems 81.34 necessary to fulfill the functions of the system, and define the 81.35 duties of its employees and delegate to them any powers or 81.36 duties, subject to the control of the director and under 82.1 conditions the director may prescribe. Appointments to exercise 82.2 delegated power must be by written order and shall be filed with 82.3 the secretary of state; 82.4 (7) with the advice and consent of the board, contract for 82.5 the services of an approved actuary, professional management 82.6 services, and any other consulting services as necessary and fix 82.7 the compensation for those services. The contracts are not 82.8 subject to competitive bidding under chapter 16B16C. Any 82.9 approved actuary retained by the executive director shall 82.10 function as the actuarial advisor of the board and the executive 82.11 director, and may perform actuarial valuations and experience 82.12 studies to supplement those performed by the actuary retained by 82.13 the legislative commission on pensions and retirement. Any 82.14 supplemental actuarial valuations or experience studies shall be 82.15 filed with the executive director of the legislative commission 82.16 on pensions and retirement. Professional management services 82.17 may not be contracted for more often than once in six years. 82.18 Copies of professional management survey reports must be 82.19 transmitted to the secretary of the senate, the chief clerk of 82.20 the house of representatives, and the legislative reference 82.21 library as provided by section 3.195, to the executive director 82.22 of the commission and to the legislative auditor at the time as 82.23 reports are furnished to the board. Only management firms 82.24 experienced in conducting management surveys of federal, state, 82.25 or local public retirement systems are qualified to contract 82.26 with the director; 82.27 (8) with the advice and consent of the board provide 82.28 in-service training for the employees of the system; 82.29 (9) make refunds of accumulated contributions to former 82.30 state employees and to the designated beneficiary, surviving 82.31 spouse, legal representative, or next of kin of deceased state 82.32 employees or deceased former state employees, as provided in 82.33 this chapter; 82.34 (10) determine the amount of the annuities and disability 82.35 benefits of employees covered by the system and authorize 82.36 payment of the annuities and benefits beginning as of the dates 83.1 on which the annuities and benefits begin to accrue, in 83.2 accordance with the provisions of this chapter; 83.3 (11) pay annuities, refunds, survivor benefits, salaries, 83.4 and necessary operating expenses of the system; 83.5 (12) certify funds available for investment to the state 83.6 board of investment; 83.7 (13) with the advice and approval of the board request the 83.8 state board of investment to sell securities when the director 83.9 determines that funds are needed for the system; 83.10 (14) prepare and submit to the board and the legislature an 83.11 annual financial report covering the operation of the system, as 83.12 required by section 356.20; 83.13 (15) prepare and submit biennial and annual budgets to the 83.14 board and with the approval of the board submit the budgets to 83.15 the department of finance; and 83.16 (16) with the approval of the board, perform other duties 83.17 required to administer the retirement and other provisions of 83.18 this chapter and to do its business. 83.19 Sec. 86. Minnesota Statutes 1996, section 352.03, 83.20 subdivision 16, is amended to read: 83.21 Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding 83.22 chapter 16B ,or 16C or any law to the contrary, the executive 83.23 director of the system may use the services of the department of 83.24 administration, information services division, for electronic 83.25 data processing and related services or may contract for all or 83.26 a part of the services. 83.27 Sec. 87. Minnesota Statutes 1997 Supplement, section 83.28 353.03, subdivision 3a, is amended to read: 83.29 Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The 83.30 board shall appoint, with the advice and consent of the senate, 83.31 an executive director on the basis of education, experience in 83.32 the retirement field, and leadership ability. The executive 83.33 director shall have had at least five years' experience in an 83.34 executive level management position, which has included 83.35 responsibility for pensions, deferred compensation, or employee 83.36 benefits. The executive director serves at the pleasure of the 84.1 board. The salary of the executive director is as provided by 84.2 section 15A.0815. 84.3 (b) [DUTIES.] The management of the association is vested 84.4 in the executive director who shall be the executive and 84.5 administrative head of the association. The executive director 84.6 shall act as adviser to the board on all matters pertaining to 84.7 the association and shall also act as the secretary of the 84.8 board. The executive director shall: 84.9 (1) attend all meetings of the board; 84.10 (2) prepare and recommend to the board appropriate rules to 84.11 carry out the provisions of this chapter; 84.12 (3) establish and maintain an adequate system of records 84.13 and accounts following recognized accounting principles and 84.14 controls; 84.15 (4) designate, with the approval of the board, up to two 84.16 persons who shall serve in the unclassified service and whose 84.17 salary is set in accordance with section 43A.18, subdivision 3, 84.18 appoint a confidential secretary in the unclassified service, 84.19 and appoint employees to carry out this chapter, who are subject 84.20 to chapters 43A and 179A in the same manner as are executive 84.21 branch employees; 84.22 (5) organize the work of the association as the director 84.23 deems necessary to fulfill the functions of the association, and 84.24 define the duties of its employees and delegate to them any 84.25 powers or duties, subject to the control of, and under such 84.26 conditions as, the executive director may prescribe; 84.27 (6) with the approval of the board, contract for the 84.28 services of an approved actuary, professional management 84.29 services, and any other consulting services as necessary to 84.30 fulfill the purposes of this chapter. All contracts are subject 84.31 to chapter 16B16C. The commissioner of administration shall 84.32 not approve, and the association shall not enter into, any 84.33 contract to provide lobbying services or legislative advocacy of 84.34 any kind. Any approved actuary retained by the executive 84.35 director shall function as the actuarial advisor of the board 84.36 and the executive director and may perform actuarial valuations 85.1 and experience studies to supplement those performed by the 85.2 actuary retained by the legislative commission on pensions and 85.3 retirement. Any supplemental actuarial valuations or experience 85.4 studies shall be filed with the executive director of the 85.5 legislative commission on pensions and retirement. Copies of 85.6 professional management survey reports shall be transmitted to 85.7 the secretary of the senate, the chief clerk of the house of 85.8 representatives, and the legislative reference library as 85.9 provided by section 3.195, to the executive director of the 85.10 commission and to the legislative auditor at the same time as 85.11 reports are furnished to the board. Only management firms 85.12 experienced in conducting management surveys of federal, state, 85.13 or local public retirement systems shall be qualified to 85.14 contract with the director hereunder; 85.15 (7) with the approval of the board provide in-service 85.16 training for the employees of the association; 85.17 (8) make refunds of accumulated contributions to former 85.18 members and to the designated beneficiary, surviving spouse, 85.19 legal representative or next of kin of deceased members or 85.20 deceased former members, as provided in this chapter; 85.21 (9) determine the amount of the annuities and disability 85.22 benefits of members covered by the association and authorize 85.23 payment of the annuities and benefits beginning as of the dates 85.24 on which the annuities and benefits begin to accrue, in 85.25 accordance with the provisions of this chapter; 85.26 (10) pay annuities, refunds, survivor benefits, salaries, 85.27 and necessary operating expenses of the association; 85.28 (11) prepare and submit to the board and the legislature an 85.29 annual financial report covering the operation of the 85.30 association, as required by section 356.20; 85.31 (12) prepare and submit biennial and annual budgets to the 85.32 board for its approval and submit the approved budgets to the 85.33 department of finance for approval by the commissioner; 85.34 (13) reduce all or part of the accrued interest payable 85.35 under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 85.36 subdivision 5, upon receipt of proof by the association of an 86.1 unreasonable processing delay or other extenuating circumstances 86.2 of the employing unit. The executive director shall prescribe 86.3 and submit for approval by the board the conditions under which 86.4 such interest may be reduced; and 86.5 (14) with the approval of the board, perform such other 86.6 duties as may be required for the administration of the 86.7 association and the other provisions of this chapter and for the 86.8 transaction of its business. 86.9 Sec. 88. Minnesota Statutes 1996, section 354.06, 86.10 subdivision 2a, is amended to read: 86.11 Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management 86.12 of the association is vested in the executive director who shall 86.13 be the executive and administrative head of the association. 86.14 The executive director shall act as advisor to the board on all 86.15 matters pertaining to the association and shall also act as the 86.16 secretary of the board. The executive director shall: 86.17 (1) attend all meetings of the board; 86.18 (2) prepare and recommend to the board appropriate rules to 86.19 carry out the provisions of this chapter; 86.20 (3) establish and maintain an adequate system of records 86.21 and accounts following recognized accounting principles and 86.22 controls; 86.23 (4) designate an assistant executive director in the 86.24 unclassified service and two assistant executive directors in 86.25 the classified service with the approval of the board, and 86.26 appoint such employees, both permanent and temporary, as are 86.27 necessary to carry out the provisions of this chapter; 86.28 (5) organize the work of the association as the director 86.29 deems necessary to fulfill the functions of the association, and 86.30 define the duties of its employees and delegate to them any 86.31 powers or duties, subject to the director's control and under 86.32 such conditions as the director may prescribe; 86.33 (6) with the approval of the board, contract and set the 86.34 compensation for the services of an approved actuary, 86.35 professional management services, and any other consulting 86.36 services. These contracts are not subject to the competitive 87.1 bidding procedure prescribed by chapter 16B16C. An approved 87.2 actuary retained by the executive director shall function as the 87.3 actuarial advisor of the board and the executive director and 87.4 may perform actuarial valuations and experience studies to 87.5 supplement those performed by the actuary retained by the 87.6 legislative commission on pensions and retirement. Any 87.7 supplemental actuarial valuations or experience studies shall be 87.8 filed with the executive director of the legislative commission 87.9 on pensions and retirement. Copies of professional management 87.10 survey reports must be transmitted to the secretary of the 87.11 senate, the chief clerk of the house of representatives, and the 87.12 legislative reference library as provided by section 3.195, to 87.13 the executive director of the commission and to the legislative 87.14 auditor at the same time as reports are furnished to the board. 87.15 Only management firms experienced in conducting management 87.16 surveys of federal, state, or local public retirement systems 87.17 are qualified to contract with the executive director; 87.18 (7) with the approval of the board, provide in-service 87.19 training for the employees of the association; 87.20 (8) make refunds of accumulated contributions to former 87.21 members and to the designated beneficiary, surviving spouse, 87.22 legal representative, or next of kin of deceased members or 87.23 deceased former members, under this chapter; 87.24 (9) determine the amount of the annuities and disability 87.25 benefits of members covered by the association and authorize 87.26 payment of the annuities and benefits beginning as of the dates 87.27 on which the annuities and benefits begin to accrue, under this 87.28 chapter; 87.29 (10) pay annuities, refunds, survivor benefits, salaries, 87.30 and necessary operating expenses of the association; 87.31 (11) prepare and submit to the board and the legislature an 87.32 annual financial report covering the operation of the 87.33 association, as required by section 356.20; 87.34 (12) certify funds available for investment to the state 87.35 board of investment; 87.36 (13) with the advice and approval of the board, request the 88.1 state board of investment to sell securities on determining that 88.2 funds are needed for the purposes of the association; 88.3 (14) prepare and submit biennial and annual budgets to the 88.4 board and with the approval of the board submit those budgets to 88.5 the department of finance; and 88.6 (15) with the approval of the board, perform such other 88.7 duties as may be required for the administration of the 88.8 association and the other provisions of this chapter and for the 88.9 transaction of its business. The executive director may: 88.10 (i) reduce all or part of the accrued interest and fines 88.11 payable by an employing unit for reporting requirements under 88.12 section 354.52, based on an evaluation of any extenuating 88.13 circumstances of the employing unit; 88.14 (ii) assign association employees to conduct field audits 88.15 of an employing unit to ensure compliance with the provisions of 88.16 this chapter; and 88.17 (iii) recover overpayments, if not repaid to the 88.18 association, by suspending or reducing the payment of a 88.19 retirement annuity, refund, disability benefit, survivor 88.20 benefit, or optional annuity under this chapter until the 88.21 overpayment, plus interest, has been recovered. 88.22 Sec. 89. Minnesota Statutes 1996, section 354.07, 88.23 subdivision 7, is amended to read: 88.24 Subd. 7. Notwithstanding chapter 16B ,or 16C or any law to 88.25 the contrary, the board may use the services of the department 88.26 of administration, information services division, for electronic 88.27 data processing and related services or may contract for all or 88.28 a portion of such services. 88.29 Sec. 90. Minnesota Statutes 1996, section 356A.06, 88.30 subdivision 7, is amended to read: 88.31 Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT 88.32 SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise 88.33 authorized by law or bylaws, a covered pension plan not 88.34 described by subdivision 6, paragraph (a), may invest its assets 88.35 only in accordance with this subdivision. 88.36 (b) [SECURITIES GENERALLY.] The covered pension plan has 89.1 the authority to purchase, sell, lend, or exchange the 89.2 securities specified in paragraphs (c) to (g), including puts 89.3 and call options and future contracts traded on a contract 89.4 market regulated by a governmental agency or by a financial 89.5 institution regulated by a governmental agency. These 89.6 securities may be owned as units in commingled trusts that own 89.7 the securities described in paragraphs (c) to (g). 89.8 (c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may 89.9 invest funds in governmental bonds, notes, bills, mortgages, and 89.10 other evidences of indebtedness provided the issue is backed by 89.11 the full faith and credit of the issuer or the issue is rated 89.12 among the top four quality rating categories by a nationally 89.13 recognized rating agency. The obligations in which funds may be 89.14 invested under this paragraph include guaranteed or insured 89.15 issues of (1) the United States, its agencies, its 89.16 instrumentalities, or organizations created and regulated by an 89.17 act of Congress; (2) Canada and its provinces, provided the 89.18 principal and interest is payable in United States dollars; (3) 89.19 the states and their municipalities, political subdivisions, 89.20 agencies, or instrumentalities; (4) the International Bank for 89.21 Reconstruction and Development, the Inter-American Development 89.22 Bank, the Asian Development Bank, the African Development Bank, 89.23 or any other United States government sponsored organization of 89.24 which the United States is a member, provided the principal and 89.25 interest is payable in United States dollars. 89.26 (d) [CORPORATE OBLIGATIONS.] The covered pension plan may 89.27 invest funds in bonds, notes, debentures, transportation 89.28 equipment obligations, or any other longer term evidences of 89.29 indebtedness issued or guaranteed by a corporation organized 89.30 under the laws of the United States or any state thereof, or the 89.31 Dominion of Canada or any province thereof if they conform to 89.32 the following provisions: 89.33 (1) the principal and interest of obligations of 89.34 corporations incorporated or organized under the laws of the 89.35 Dominion of Canada or any province thereof must be payable in 89.36 United States dollars; and 90.1 (2) obligations must be rated among the top four quality 90.2 categories by a nationally recognized rating agency. 90.3 (e) [OTHER OBLIGATIONS.] (1) The covered pension plan may 90.4 invest funds in bankers acceptances, certificates of deposit, 90.5 deposit notes, commercial paper, mortgage participation 90.6 certificates and pools, asset backed securities, repurchase 90.7 agreements and reverse repurchase agreements, guaranteed 90.8 investment contracts, savings accounts, and guaranty fund 90.9 certificates, surplus notes, or debentures of domestic mutual 90.10 insurance companies if they conform to the following provisions: 90.11 (i) bankers acceptances and deposit notes of United States 90.12 banks are limited to those issued by banks rated in the highest 90.13 four quality categories by a nationally recognized rating 90.14 agency; 90.15 (ii) certificates of deposit are limited to those issued by 90.16 (A) United States banks and savings institutions that are rated 90.17 in the highest four quality categories by a nationally 90.18 recognized rating agency or whose certificates of deposit are 90.19 fully insured by federal agencies; or (B) credit unions in 90.20 amounts up to the limit of insurance coverage provided by the 90.21 National Credit Union Administration; 90.22 (iii) commercial paper is limited to those issued by United 90.23 States corporations or their Canadian subsidiaries and rated in 90.24 the highest two quality categories by a nationally recognized 90.25 rating agency; 90.26 (iv) mortgage participation or pass through certificates 90.27 evidencing interests in pools of first mortgages or trust deeds 90.28 on improved real estate located in the United States where the 90.29 loan to value ratio for each loan as calculated in accordance 90.30 with section 61A.28, subdivision 3, does not exceed 80 percent 90.31 for fully amortizable residential properties and in all other 90.32 respects meets the requirements of section 61A.28, subdivision 90.33 3; 90.34 (v) collateral for repurchase agreements and reverse 90.35 repurchase agreements is limited to letters of credit and 90.36 securities authorized in this section; 91.1 (vi) guaranteed investment contracts are limited to those 91.2 issued by insurance companies or banks rated in the top four 91.3 quality categories by a nationally recognized rating agency or 91.4 to alternative guaranteed investment contracts where the 91.5 underlying assets comply with the requirements of this 91.6 subdivision; 91.7 (vii) savings accounts are limited to those fully insured 91.8 by federal agencies; and 91.9 (viii) asset backed securities must be rated in the top 91.10 four quality categories by a nationally recognized rating agency. 91.11 (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 91.12 16C.06 do not apply to certificates of deposit and 91.13 collateralization agreements executed by the covered pension 91.14 plan under clause (1), item (ii). 91.15 (3) In addition to investments authorized by clause (1), 91.16 item (iv), the covered pension plan may purchase from the 91.17 Minnesota housing finance agency all or any part of a pool of 91.18 residential mortgages, not in default, that has previously been 91.19 financed by the issuance of bonds or notes of the agency. The 91.20 covered pension plan may also enter into a commitment with the 91.21 agency, at the time of any issue of bonds or notes, to purchase 91.22 at a specified future date, not exceeding 12 years from the date 91.23 of the issue, the amount of mortgage loans then outstanding and 91.24 not in default that have been made or purchased from the 91.25 proceeds of the bonds or notes. The covered pension plan may 91.26 charge reasonable fees for any such commitment and may agree to 91.27 purchase the mortgage loans at a price sufficient to produce a 91.28 yield to the covered pension plan comparable, in its judgment, 91.29 to the yield available on similar mortgage loans at the date of 91.30 the bonds or notes. The covered pension plan may also enter 91.31 into agreements with the agency for the investment of any 91.32 portion of the funds of the agency. The agreement must cover 91.33 the period of the investment, withdrawal privileges, and any 91.34 guaranteed rate of return. 91.35 (f) [CORPORATE STOCKS.] The covered pension plan may 91.36 invest funds in stocks or convertible issues of any corporation 92.1 organized under the laws of the United States or the states 92.2 thereof, the Dominion of Canada or its provinces, or any 92.3 corporation listed on the New York Stock Exchange or the 92.4 American Stock Exchange, if they conform to the following 92.5 provisions: 92.6 (1) the aggregate value of corporate stock investments, as 92.7 adjusted for realized profits and losses, must not exceed 85 92.8 percent of the market or book value, whichever is less, of a 92.9 fund, less the aggregate value of investments according to 92.10 subdivision 6; 92.11 (2) investments must not exceed five percent of the total 92.12 outstanding shares of any one corporation. 92.13 (g) [OTHER INVESTMENTS.] (1) In addition to the 92.14 investments authorized in paragraphs (b) to (f), and subject to 92.15 the provisions in clause (2), the covered pension plan may 92.16 invest funds in: 92.17 (i) venture capital investment businesses through 92.18 participation in limited partnerships and corporations; 92.19 (ii) real estate ownership interests or loans secured by 92.20 mortgages or deeds of trust through investment in limited 92.21 partnerships, bank sponsored collective funds, trusts, and 92.22 insurance company commingled accounts, including separate 92.23 accounts; 92.24 (iii) regional and mutual funds through bank sponsored 92.25 collective funds and open-end investment companies registered 92.26 under the Federal Investment Company Act of 1940; 92.27 (iv) resource investments through limited partnerships, 92.28 private placements, and corporations; and 92.29 (v) international securities. 92.30 (2) The investments authorized in clause (1) must conform 92.31 to the following provisions: 92.32 (i) the aggregate value of all investments made according 92.33 to clause (1) may not exceed 35 percent of the market value of 92.34 the fund for which the covered pension plan is investing; 92.35 (ii) there must be at least four unrelated owners of the 92.36 investment other than the state board for investments made under 93.1 clause (1), item (i), (ii), (iii), or (iv); 93.2 (iii) covered pension plan participation in an investment 93.3 vehicle is limited to 20 percent thereof for investments made 93.4 under clause (1), item (i), (ii), (iii), or (iv); and 93.5 (iv) covered pension plan participation in a limited 93.6 partnership does not include a general partnership interest or 93.7 other interest involving general liability. The covered pension 93.8 plan may not engage in any activity as a limited partner which 93.9 creates general liability. 93.10 Sec. 91. Minnesota Statutes 1996, section 446A.12, 93.11 subdivision 5, is amended to read: 93.12 Subd. 5. [EXEMPTION.] The notes and bonds of the authority 93.13 are not subject to section 16B.06sections 16C.03, subdivision 93.14 4, and 16C.06. 93.15 Sec. 92. Minnesota Statutes 1996, section 462A.18, 93.16 subdivision 2, is amended to read: 93.17 Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the 93.18 provisions of this section, the agency shall have power to 93.19 contract with the holders of any of its notes or bonds, as to 93.20 the custody, collection, securing, investment, and payment of 93.21 any money of the agency, or any money held in trust or otherwise 93.22 for the payment of notes or bonds, and to carry out such 93.23 contract. Money held in trust or otherwise for the payment of 93.24 notes or bonds or in any way to secure notes or bonds and 93.25 deposits of such money may be secured in the same manner as 93.26 money of the agency, and all banks and trust companies are 93.27 authorized to give such security for such deposits. All money 93.28 so paid to the state treasurer as agent of the agency, from 93.29 whatever source, are appropriated to the agency. The agency's 93.30 notes and bonds are not subject to section 16B.06sections 93.31 16C.03, subdivision 4, and 16C.06. 93.32 Sec. 93. Minnesota Statutes 1996, section 471.345, 93.33 subdivision 8, is amended to read: 93.34 Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 93.35 PERSONS.] For purposes of this subdivision, the following terms 93.36 shall have the meanings herein ascribed to them: 94.1 (a) "Small targeted group business" means businesses 94.2 designated under section 16B.1916C.17. 94.3 (b) "Business entity" means an entity organized for profit, 94.4 including an individual, partnership, corporation, joint 94.5 venture, association, or cooperative. 94.6 Nothing in this section shall be construed to prohibit any 94.7 municipality from adopting a resolution, rule, regulation, or 94.8 ordinance which on an annual basis designates and sets aside for 94.9 awarding to small targeted group businesses a percentage of the 94.10 value of its anticipated total procurement of goods and 94.11 services, including construction, and which uses either a 94.12 negotiated price or bid contract procedure in the awarding of a 94.13 procurement contract under a set-aside program as allowed in 94.14 this subdivision, provided that any award based on a negotiated 94.15 price shall not exceed by more than five percent the 94.16 municipality's estimated price for the goods and services if 94.17 they were purchased on the open market and not under the 94.18 set-aside program. 94.19 Sec. 94. Minnesota Statutes 1996, section 473.142, is 94.20 amended to read: 94.21 473.142 [SMALL BUSINESSES.] 94.22 (a) The metropolitan council and agencies specified in 94.23 section 473.143, subdivision 1, may award up to a six percent 94.24 preference in the amount bid for specified goods or services to 94.25 small targeted group businesses designated under section 16B.1994.26 16C.17. 94.27 (b) The council and each agency specified in section 94.28 473.143, subdivision 1, may designate a purchase of goods or 94.29 services for award only to small targeted group businesses 94.30 designated under section 16B.1916C.17 if the council or agency 94.31 determines that at least three small targeted group businesses 94.32 are likely to bid. 94.33 (c) The council and each agency specified in section 94.34 473.143, subdivision 1, as a condition of awarding a 94.35 construction contract or approving a contract for consultant, 94.36 professional, or technical services, may set goals that require 95.1 the prime contractor to subcontract a portion of the contract to 95.2 small targeted group businesses designated under section 16B.1995.3 16C.17. The council or agency must establish a procedure for 95.4 granting waivers from the subcontracting requirement when 95.5 qualified small targeted group businesses are not reasonably 95.6 available. The council or agency may establish financial 95.7 incentives for prime contractors who exceed the goals for use of 95.8 subcontractors and financial penalties for prime contractors who 95.9 fail to meet goals under this paragraph. The subcontracting 95.10 requirements of this paragraph do not apply to prime contractors 95.11 who are small targeted group businesses. At least 75 percent of 95.12 the value of the subcontracts awarded to small targeted group 95.13 businesses under this paragraph must be performed by the 95.14 business to which the subcontract is awarded or by another small 95.15 targeted group business. 95.16 (d) The council and each agency listed in section 473.143, 95.17 subdivision 1, are encouraged to purchase from small targeted 95.18 group businesses designated under section 16B.1916C.17 when 95.19 making purchases that are not subject to competitive bidding 95.20 procedures. 95.21 (e) The council and each agency may adopt rules to 95.22 implement this section. 95.23 (f) Each council or agency contract must require the prime 95.24 contractor to pay any subcontractor within ten days of the prime 95.25 contractor's receipt of payment from the council or agency for 95.26 undisputed services provided by the subcontractor. The contract 95.27 must require the prime contractor to pay interest of 1-1/2 95.28 percent per month or any part of a month to the subcontractor on 95.29 any undisputed amount not paid on time to the subcontractor. 95.30 The minimum monthly interest penalty payment for an unpaid 95.31 balance of $100 or more is $10. For an unpaid balance of less 95.32 than $100, the prime contractor shall pay the actual penalty due 95.33 to the subcontractor. A subcontractor who prevails in a civil 95.34 action to collect interest penalties from a prime contractor 95.35 must be awarded its costs and disbursements, including attorney 95.36 fees, incurred in bringing the action. 96.1 (g) This section does not apply to procurement financed in 96.2 whole or in part with federal funds if the procurement is 96.3 subject to federal disadvantaged, minority, or women business 96.4 enterprise regulations. The council and each agency shall 96.5 report to the commissioner of administration on compliance with 96.6 this section. The information must be reported at the time and 96.7 in the manner requested by the commissioner. 96.8 Sec. 95. Minnesota Statutes 1996, section 473.556, 96.9 subdivision 14, is amended to read: 96.10 Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its 96.11 powers to contract for the purchase of services, materials, 96.12 supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 96.13 10, the commission shall designate and set aside each fiscal 96.14 year for awarding to small businesses approximately ten percent 96.15 of the value of anticipated contracts and subcontracts of that 96.16 kind for that year, in the manner required of the commissioner 96.17 of administration for state procurement contracts pursuant to 96.18 sections 16B.19 to 16B.2216C.17 to 16C.20. The commission 96.19 shall follow the rules promulgated by the commissioner of 96.20 administration pursuant to section 16B.2216C.20, and shall 96.21 submit reports of the kinds required of the commissioners of 96.22 administration and economic development by section 16B.2116C.19. 96.23 Sec. 96. Minnesota Statutes 1996, section 480.09, 96.24 subdivision 1, is amended to read: 96.25 Subdivision 1. The state library shall be maintained in 96.26 the capitol and shall be under the supervision of the justices 96.27 of the supreme court. Notwithstanding chapter 16B16C or any 96.28 other act inconsistent herewith or acts amendatory thereof or 96.29 supplementary thereto, they shall direct the purchases of books, 96.30 pamphlets, and documents therefor and the sales and exchanges 96.31 therefrom upon such terms and conditions as they may deem just 96.32 and proper. They may authorize the transfer of books and 96.33 documents to the University of Minnesota or any department 96.34 thereof, or to any state agency. They shall adopt rules for the 96.35 government of the library and the management of its affairs, and 96.36 prescribe penalties for the violation thereof. 97.1 Sec. 97. Minnesota Statutes 1996, section 626.90, 97.2 subdivision 2, is amended to read: 97.3 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the 97.4 powers of a law enforcement agency, as defined in section 97.5 626.84, subdivision 1, paragraph (h), if all of the requirements 97.6 of clauses (1) to (4) are met: 97.7 (1) the band agrees to be subject to liability for its 97.8 torts and those of its officers, employees, and agents acting 97.9 within the scope of their employment or duties arising out of a 97.10 law enforcement agency function conferred by this section, to 97.11 the same extent as a municipality under chapter 466, and the 97.12 band further agrees, notwithstanding section 16B.0616C.06, 97.13 subdivision 67, to waive its sovereign immunity for purposes of 97.14 claims of this liability; 97.15 (2) the band files with the board of peace officer 97.16 standards and training a bond or certificate of insurance for 97.17 liability coverage for the maximum amounts set forth in section 97.18 466.04; 97.19 (3) the band files with the board of peace officer 97.20 standards and training a certificate of insurance for liability 97.21 of its law enforcement officers, employees, and agents for 97.22 lawsuits under the United States Constitution; and 97.23 (4) the band agrees to be subject to section 13.82 and any 97.24 other laws of the state relating to data practices of law 97.25 enforcement agencies. 97.26 (b) The band shall enter into mutual aid/cooperative 97.27 agreements with the Mille Lacs county sheriff under section 97.28 471.59 to define and regulate the provision of law enforcement 97.29 services under this section. The agreements must define the 97.30 trust property involved in the joint powers agreement. 97.31 (c) The band shall have concurrent jurisdictional authority 97.32 under this section with the Mille Lacs county sheriff's 97.33 department only if the requirements of paragraph (a) are met and 97.34 under the following circumstances: 97.35 (1) over all persons in the geographical boundaries of the 97.36 property held by the United States in trust for the Mille Lacs 98.1 band or the Minnesota Chippewa tribe; 98.2 (2) over all Minnesota Chippewa tribal members within the 98.3 boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 98.4 Mille Lacs county, Minnesota; and 98.5 (3) concurrent jurisdiction over any person who commits or 98.6 attempts to commit a crime in the presence of an appointed band 98.7 peace officer within the boundaries of the Treaty of February 98.8 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 98.9 Sec. 98. Minnesota Statutes 1997 Supplement, section 98.10 626.91, subdivision 2, is amended to read: 98.11 Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has 98.12 the powers of a law enforcement agency, as defined in section 98.13 626.84, subdivision 1, paragraph (h), if all of the requirements 98.14 of clauses (1) to (4) are met: 98.15 (1) the community agrees to be subject to liability for its 98.16 torts and those of its officers, employees, and agents acting 98.17 within the scope of their employment or duties arising out of 98.18 the law enforcement agency powers conferred by this section to 98.19 the same extent as a municipality under chapter 466, and the 98.20 community further agrees, notwithstanding section 16B.0616C.06, 98.21 subdivision 67, to waive its sovereign immunity with respect to 98.22 claims arising from this liability; 98.23 (2) the community files with the board of peace officer 98.24 standards and training a bond or certificate of insurance for 98.25 liability coverage for the maximum amounts set forth in section 98.26 466.04; 98.27 (3) the community files with the board of peace officer 98.28 standards and training a certificate of insurance for liability 98.29 of its law enforcement officers, employees, and agents for 98.30 lawsuits under the United States Constitution; and 98.31 (4) the community agrees to be subject to section 13.82 and 98.32 any other laws of the state relating to data practices of law 98.33 enforcement agencies. 98.34 (b) The community shall enter into an agreement under 98.35 section 471.59 with the Redwood county sheriff to define and 98.36 regulate the provision of law enforcement services under this 99.1 section and to provide for mutual aid and cooperation. The 99.2 agreement must identify and describe the trust property involved 99.3 in the agreement. For purposes of entering into this agreement, 99.4 the community shall be considered a "governmental unit" as that 99.5 term is defined in section 471.59, subdivision 1. 99.6 Sec. 99. [EFFECTIVE DATE.] 99.7 This article is effective July 1, 1998.