1.1                          A bill for an act 
  1.2             relating to state agencies; modifying procurement 
  1.3             procedures; amending Minnesota Statutes 1996, sections 
  1.4             3.225, subdivision 2; 3.732, subdivision 6; 3.922, 
  1.5             subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 
  1.6             11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 
  1.7             15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 
  1.8             17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, 
  1.9             subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 
  1.10            84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, 
  1.11            subdivision 3; 116.03, subdivision 2; 116J.035, 
  1.12            subdivision 1; 116J.402; 116J.58, subdivision 2; 
  1.13            116J.68, subdivision 2; 116J.966, subdivision 1; 
  1.14            124.14, subdivision 1; 126.151, subdivision 2; 
  1.15            129C.10, subdivision 7; 136A.06; 136A.16, subdivision 
  1.16            1; 136A.29, subdivision 6; 136F.23; 136F.56, 
  1.17            subdivision 5; 136F.581, subdivision 3; 136F.66; 
  1.18            136F.72, subdivision 3; 136F.96; 137.35, subdivisions 
  1.19            1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, 
  1.20            subdivision 4; 161.32, by adding subdivisions; 
  1.21            161.321, subdivisions 1, 2, 5, 6, and 7; 161.41, 
  1.22            subdivision 2; 179A.23; 198.35, subdivision 1; 
  1.23            216C.02, subdivision 1; 237.51, subdivision 5a; 
  1.24            241.0221, subdivision 6; 241.27, subdivision 2; 
  1.25            246.36; 246.57, subdivisions 1 and 6; 256B.031, 
  1.26            subdivision 1; 256B.04, subdivisions 14 and 15; 
  1.27            298.2211, subdivision 4; 349A.06, subdivision 1; 
  1.28            349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 
  1.29            354.06, subdivision 2a; 354.07, subdivision 7; 
  1.30            356A.06, subdivision 7; 446A.12, subdivision 5; 
  1.31            462A.18, subdivision 2; 471.345, subdivision 8; 
  1.32            473.142; 473.556, subdivision 14; 480.09, subdivision 
  1.33            1; and 626.90, subdivision 2; Minnesota Statutes 1997 
  1.34            Supplement, sections 3.225, subdivision 1; 16A.15, 
  1.35            subdivision 3; 16B.465, subdivision 7; 16E.07, 
  1.36            subdivision 9; 17.03, subdivision 12; 41D.03, 
  1.37            subdivision 7; 61B.21, subdivision 1; 85A.02, 
  1.38            subdivision 5b; 121.1113, subdivision 2; 136A.40; 
  1.39            138.35, subdivision 1b; 179A.03, subdivision 14; 
  1.40            216D.03, subdivision 2; 241.277, subdivision 2; 
  1.41            256B.19, subdivision 2a; 256D.03, subdivision 6; 
  1.42            353.03, subdivision 3a; 363.073, subdivision 1; and 
  1.43            626.91, subdivision 2; proposing coding for new law in 
  1.44            Minnesota Statutes, chapters 16C; and 174; repealing 
  1.45            Minnesota Statutes 1996, sections 16B.06; 16B.07; 
  1.46            16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 
  2.1             16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 
  2.2             16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 
  2.3             16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 
  2.4             16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; 
  2.5             Minnesota Statutes 1997 Supplement, sections 16B.18, 
  2.6             subdivision 3; 16B.20, subdivision 2; and 16B.482. 
  2.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.8                              ARTICLE 1 
  2.9                          PROCUREMENT REFORM 
  2.10     Section 1.  Minnesota Statutes 1996, section 15.054, is 
  2.11  amended to read: 
  2.12     15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM 
  2.13  GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.] 
  2.14     No officer or employee of the state or any of its political 
  2.15  subdivisions shall sell or procure for sale or possess or 
  2.16  control for sale to any other officer or employee of the state 
  2.17  or the subdivision, as appropriate, any property or materials 
  2.18  owned by the state or subdivision except pursuant to conditions 
  2.19  provided in this section.  Property or materials owned by the 
  2.20  state or a subdivision, except real property, and not needed for 
  2.21  public purposes, may be sold to an employee of the state or the 
  2.22  subdivision after reasonable public notice at a public auction 
  2.23  or by sealed bid if the employee is the highest responsible 
  2.24  bidder and response, if the employee is not directly involved in 
  2.25  the auction or process pertaining to the administration and 
  2.26  collection of sealed bid process responses.  Requirements for 
  2.27  reasonable public notice may be prescribed by other law or 
  2.28  ordinance so long as at least one week's published or posted 
  2.29  notice is specified.  A state An employee of the state or a 
  2.30  political subdivision may purchase no more than one motor 
  2.31  vehicle from the state in any 12-month period.  A person 
  2.32  violating the provisions of this section is guilty of a 
  2.33  misdemeanor.  This section shall not apply to the sale of 
  2.34  property or materials acquired or produced by the state or 
  2.35  subdivision for sale to the general public in the ordinary 
  2.36  course of business.  Nothing in this section shall prohibit an 
  2.37  employee of the state or a political subdivision from selling or 
  2.38  possessing for sale public property if the sale or possession 
  3.1   for sale is in the ordinary course of business or normal course 
  3.2   of the employee's duties. 
  3.3      Sec. 2.  Minnesota Statutes 1996, section 16B.181, is 
  3.4   amended to read: 
  3.5      16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.] 
  3.6      Subdivision 1.  [DEFINITIONS.] As used in this section: 
  3.7      (1) "public entity" or "public entities" includes the state 
  3.8   and an agency, department, or institution of the state, any 
  3.9   governmental unit as defined in section 471.59, the state 
  3.10  legislative and judicial branches, and state colleges and 
  3.11  universities; and 
  3.12     (2) "items" includes articles, products, supplies, and 
  3.13  services. 
  3.14     Subd. 2.  [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS 
  3.15  INDUSTRIES.] (a) The commissioner of corrections, in 
  3.16  consultation with the commissioner of administration, shall 
  3.17  prepare updated lists of the items available for purchase from 
  3.18  department of corrections industries and annually forward a copy 
  3.19  of the most recent list to all public entities within the 
  3.20  state.  A public entity that is supported in whole or in part 
  3.21  with funds from the state treasury shall may purchase items 
  3.22  directly from corrections industries those items that are 
  3.23  comparable in price, quality, and delivery time to items 
  3.24  available from other vendors.  An item is comparable in price if 
  3.25  the price is no more than five percent higher than the lowest 
  3.26  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 market 
  3.34  price, the commissioner shall use competitive bidding, or shall 
  3.35  consider open bid prices in previous years for similar products 
  3.36  which meet the needs of the public entity.  The commissioner of 
  4.1   administration shall require that all requests for bids or 
  4.2   proposals, for items provided by corrections industries, be 
  4.3   forwarded to the commissioner of corrections to enable 
  4.4   corrections industries to submit bids.  The commissioner of 
  4.5   corrections shall consult with the commissioner of 
  4.6   administration prior to introducing new products to the state 
  4.7   agency market. 
  4.8      (c) No public entity may evade the intent of this section 
  4.9   by adopting slight variations in specifications, when Minnesota 
  4.10  corrections industry items meet the reasonable needs and 
  4.11  specifications of the public entity. 
  4.12     (d) As part of its ongoing audit process, the legislative 
  4.13  auditor is requested to ensure that state agencies are in 
  4.14  compliance with this section.  The commissioners of 
  4.15  administration and corrections shall develop annual performance 
  4.16  measures outlining goals to maximize inmate work program 
  4.17  participation.  The commissioners of administration and 
  4.18  corrections shall appoint cochairs for a task force whose 
  4.19  purpose is to determine additional methods to achieve the 
  4.20  performance goals for public entity purchasing.  The task force 
  4.21  shall include representatives from the Minnesota house of 
  4.22  representatives, Minnesota senate, the Minnesota state colleges 
  4.23  and universities, University of Minnesota, Minnesota League of 
  4.24  Cities, Minnesota Association of Counties, and administrators 
  4.25  with purchasing responsibilities from the Minnesota state 
  4.26  departments of corrections, public safety, finance, 
  4.27  transportation, natural resources, human services, health, and 
  4.28  economic security. 
  4.29     (e) The commissioners of administration and corrections 
  4.30  shall appoint a joint task force to explore additional methods 
  4.31  that support the philosophy of providing a substantial market 
  4.32  opportunity to correctional industries that maximizes inmate 
  4.33  work opportunities.  The task force shall develop a plan and 
  4.34  prepare a set of criteria with which to evaluate the 
  4.35  effectiveness of the recommendations and initiatives in the 
  4.36  plan.  By February 15, 1997, the task force shall report to the 
  5.1   chairs of the senate and house of representatives committees 
  5.2   having jurisdiction over criminal justice funding.  If 
  5.3   performance goals for public entity purchasing are not achieved 
  5.4   in two consecutive fiscal years, public entities shall purchase 
  5.5   items available from corrections industries.  The commissioner 
  5.6   of administration shall be responsible for notifying public 
  5.7   entities of this requirement. 
  5.8      Sec. 3.  [16C.02] [DEFINITIONS.] 
  5.9      Subdivision 1.  [APPLICABILITY.] For purposes of this 
  5.10  chapter, the following terms have the meanings given them, 
  5.11  unless the context clearly indicates otherwise.  
  5.12     Subd. 2.  [AGENCY.] "Agency" means any state officer, 
  5.13  employee, board, commission, authority, department, entity, or 
  5.14  organization of the executive branch of state government.  
  5.15     Unless specifically provided elsewhere in this chapter, 
  5.16  agency does not include the Minnesota state colleges and 
  5.17  universities. 
  5.18     Subd. 3.  [AWARD.] "Award" means a commissioner's written 
  5.19  acceptance of a bid or proposal to provide goods, services, or 
  5.20  utilities. 
  5.21     Subd. 4.  [BEST VALUE.] "Best value" describes a result 
  5.22  intended in the acquisition of all goods and services.  Price 
  5.23  must be one of the evaluation criteria when acquiring goods and 
  5.24  services.  Other evaluation criteria may include, but are not 
  5.25  limited to, environmental considerations, quality, and vendor 
  5.26  performance. 
  5.27     Subd. 5.  [COMMISSIONER.] "Commissioner" means the 
  5.28  commissioner of administration. 
  5.29     Subd. 6.  [CONTRACT.] "Contract" means any written 
  5.30  instrument or electronic document containing the elements of 
  5.31  offer, acceptance, and consideration to which an agency is a 
  5.32  party. 
  5.33     Subd. 7.  [FORMAL SOLICITATION.] "Formal solicitation" 
  5.34  means a solicitation which requires a sealed response. 
  5.35     Subd. 8.  [GOODS.] "Goods" means all types of personal 
  5.36  property including commodities, materials, supplies, and 
  6.1   equipment. 
  6.2      Subd. 9.  [INFORMAL SOLICITATION.] "Informal solicitation" 
  6.3   means a solicitation which does not require a sealed response. 
  6.4      Subd. 10.  [LEASE.] "Lease" means a contract conveying from 
  6.5   one entity to another the use of real or personal property for a 
  6.6   designated period of time in return for payment or other 
  6.7   consideration. 
  6.8      Subd. 11.  [REQUEST FOR BID OR RFB.] "Request for bid" or 
  6.9   "RFB" means a solicitation in which the terms, conditions, and 
  6.10  specifications are described and responses are not subject to 
  6.11  negotiation. 
  6.12     Subd. 12.  [REQUEST FOR PROPOSAL OR RFP.] "Request for 
  6.13  proposal" or "RFP" means a solicitation in which it is not 
  6.14  advantageous to set forth all the actual, detailed requirements 
  6.15  at the time of solicitation and responses are subject to 
  6.16  negotiation. 
  6.17     Subd. 13.  [RESIDENT VENDOR.] "Resident vendor" means a 
  6.18  person, firm, or corporation authorized to conduct business in 
  6.19  the state of Minnesota on the date a solicitation for a contract 
  6.20  is first advertised or announced.  It includes a foreign 
  6.21  corporation duly authorized to engage in business in Minnesota.  
  6.22     Subd. 14.  [RESPONSE.] "Response" means the offer received 
  6.23  from a vendor in response to a solicitation.  A response 
  6.24  includes submissions commonly referred to as "offers," "bids," 
  6.25  "quotes," or "proposals." 
  6.26     Subd. 15.  [SEALED.] "Sealed" means a method determined by 
  6.27  the commissioner to prevent the contents being revealed or known 
  6.28  before the deadline for submission of responses. 
  6.29     Subd. 16.  [SERVICE CONTRACT.] "Service contract" means a 
  6.30  contract for any nonprofessional or technical services. 
  6.31     Subd. 17.  [SERVICES.] "Services" means, unless otherwise 
  6.32  indicated, both professional or technical services and service 
  6.33  performed under a service contract. 
  6.34     Subd. 18.  [SINGLE SOURCE.] "Single source" means an 
  6.35  acquisition where, after a search, only one supplier is 
  6.36  determined to be reasonably available for the required product, 
  7.1   service, or construction item. 
  7.2      Subd. 19.  [SOLICITATION.] "Solicitation" means the process 
  7.3   used to communicate procurement requirements and to request 
  7.4   responses from interested vendors.  A solicitation may be, but 
  7.5   is not limited to, a request for bid and request for proposal. 
  7.6      Sec. 4.  [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND 
  7.7   DUTIES.] 
  7.8      Subdivision 1.  [SCOPE.] The commissioner's authority in 
  7.9   this section applies to an agency and is subject to other 
  7.10  provisions of this chapter and chapter 16B.  Unless otherwise 
  7.11  provided, the provisions in this chapter and chapter 16B do not 
  7.12  apply to the Minnesota state colleges and universities. 
  7.13     Subd. 2.  [RULEMAKING AUTHORITY.] Subject to chapter 14, 
  7.14  the commissioner may adopt rules, consistent with this chapter 
  7.15  and chapter 16B, relating to the following topics: 
  7.16     (1) solicitations and responses to solicitations, bid 
  7.17  security, vendor errors, opening of responses, award of 
  7.18  contracts, tied bids, and award protest process; 
  7.19     (2) contract performance and failure to perform; 
  7.20     (3) authority to debar or suspend vendors, and 
  7.21  reinstatement of vendors; 
  7.22     (4) contract cancellation; and 
  7.23     (5) procurement from rehabilitation facilities. 
  7.24     Subd. 3.  [ACQUISITION AUTHORITY.] The commissioner shall 
  7.25  acquire all goods, services, and utilities needed by agencies.  
  7.26  The commissioner shall acquire goods, services, and utilities by 
  7.27  requests for bids, requests for proposals, or other methods 
  7.28  provided by law, unless a section of law requires a particular 
  7.29  method of acquisition to be used.  The commissioner shall make 
  7.30  all decisions regarding acquisition activities.  The 
  7.31  determination of the acquisition method and all decisions 
  7.32  involved in the acquisition process, unless otherwise provided 
  7.33  for by law, shall be based on best value which includes an 
  7.34  evaluation of price and may include other considerations 
  7.35  including, but not limited to, environmental considerations, 
  7.36  quality, and vendor performance.  A best value determination 
  8.1   must be based on the evaluation criteria detailed in the 
  8.2   solicitation document.  If criteria other than price are used, 
  8.3   the solicitation document must state the relative importance of 
  8.4   price and other factors.  Unless it is determined by the 
  8.5   commissioner that an alternative solicitation method provided by 
  8.6   law should be used to determine best value, a request for bid 
  8.7   must be used to solicit formal responses for all building and 
  8.8   construction contracts.  Any or all responses may be rejected.  
  8.9   When using the request for bid process, the bid must be awarded 
  8.10  to the lowest responsive and responsible bidder, taking into 
  8.11  consideration conformity with the specifications, terms of 
  8.12  delivery, the purpose for which the contract or purchase is 
  8.13  intended, the status and capability of the vendor, and other 
  8.14  considerations imposed in the request for bids.  The 
  8.15  commissioner may decide which is the lowest responsible bidder 
  8.16  for all purchases and may use the principles of life-cycle 
  8.17  costing, where appropriate, in determining the lowest overall 
  8.18  bid.  The duties set forth in this subdivision are subject to 
  8.19  delegation pursuant to this section. 
  8.20     Subd. 4.  [CONTRACTING AUTHORITY.] The commissioner shall 
  8.21  conduct all contracting by, for, and between agencies and 
  8.22  perform all contract management and review functions for 
  8.23  contracts, except those functions specifically delegated to be 
  8.24  performed by the contracting agency, the attorney general, or 
  8.25  otherwise provided for by law. 
  8.26     Subd. 5.  [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The 
  8.27  commissioner shall, in addition to the duties set forth in 
  8.28  subdivisions 3 and 4, make all decisions regarding amendments, 
  8.29  cancellations, and appeals of all agency acquisition activities 
  8.30  unless the duties are delegated pursuant to this section. 
  8.31     Subd. 6.  [LEASE AND INSTALLMENT PURCHASES.] The 
  8.32  commissioner is authorized to enter into lease purchases or 
  8.33  installment purchases for periods not exceeding the anticipated 
  8.34  useful life of the items acquired unless otherwise prohibited by 
  8.35  law. 
  8.36     Subd. 7.  [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The 
  9.1   commissioner is authorized to enter into lease, lease purchase, 
  9.2   rental, or installment agreements for the use or acquisition, 
  9.3   whichever is applicable, of real or personal property. 
  9.4      Subd. 8.  [POLICY AND PROCEDURES.] The commissioner is 
  9.5   authorized to issue policies, procedures, and standards 
  9.6   applicable to all acquisition activities by and for agencies. 
  9.7      Subd. 9.  [EMPLOYEE PURCHASING.] The commissioner is 
  9.8   authorized to enter into contracts under which a vendor agrees 
  9.9   to sell computer equipment and related products to state 
  9.10  employees, for their own use related to work, at contract prices.
  9.11  Employees may make only one purchase under this subdivision.  
  9.12  Under no circumstances shall the state be liable for purchases 
  9.13  made under this subdivision.  The provisions of section 43A.38, 
  9.14  subdivisions 4 and 5, clause (a), do not apply to this 
  9.15  subdivision. 
  9.16     Subd. 10.  [COOPERATIVE PURCHASING.] The commissioner is 
  9.17  authorized to enter into a cooperative purchasing agreement for 
  9.18  the provision of goods, services, and utilities with one or more 
  9.19  other states or governmental units, as described in section 
  9.20  471.59, subdivision 1.  The commissioner is authorized to enter 
  9.21  into cooperative purchasing agreements for the purchase of 
  9.22  goods, services, and utilities with health care facilities that 
  9.23  are required to provide indigent care. 
  9.24     Subd. 11.  [SURPLUS PROPERTY.] The commissioner is 
  9.25  authorized to purchase, accept, transfer, warehouse, sell, 
  9.26  distribute, or dispose of surplus property in accordance with 
  9.27  state and federal rules and regulations.  The commissioner may 
  9.28  charge a fee to cover any expenses incurred in connection with 
  9.29  any of these acts. 
  9.30     Subd. 12.  [CENTRAL DISTRIBUTION CENTER.] The commissioner 
  9.31  is authorized to provide and manage a central distribution 
  9.32  center for federal and state surplus personal property, as 
  9.33  defined in section 16C.25, and may provide and manage a 
  9.34  warehouse facility. 
  9.35     Subd. 13.  [CENTRAL STORES.] The commissioner is authorized 
  9.36  to provide agencies with supplies and equipment and operate all 
 10.1   central stores and supply rooms serving more than one agency. 
 10.2      Subd. 14.  [PROVISION OF GOODS, SERVICES, AND 
 10.3   UTILITIES.] The commissioner has the authority to provide goods, 
 10.4   services, and utilities under this chapter to state legislative 
 10.5   and judicial branch agencies, political subdivisions, the 
 10.6   Minnesota state colleges and universities, the University of 
 10.7   Minnesota, and federal government agencies. 
 10.8      Subd. 15.  [REIMBURSEMENT FOR GOODS, SERVICES, AND 
 10.9   UTILITIES.] The commissioner is authorized to charge a fee to 
 10.10  cover costs and expenses associated with operating a revolving 
 10.11  fund or an enterprise fund to acquire goods, services, and 
 10.12  utilities.  The fees are appropriated to the commissioner to 
 10.13  administer and manage the programs and facilities covered under 
 10.14  this section. 
 10.15     Subd. 16.  [DELEGATION OF DUTIES.] The commissioner may 
 10.16  delegate duties imposed by this chapter to the head of an agency 
 10.17  and to any subordinate of the agency head.  Delegated duties 
 10.18  shall be exercised in the name of the commissioner and under the 
 10.19  commissioner's direct supervision and control.  A delegation of 
 10.20  duties may include, but is not limited to, allowing individuals 
 10.21  within agencies to acquire goods, services, and utilities within 
 10.22  dollar limitations and for designated types of acquisitions.  
 10.23  Delegation of contract management and review functions must be 
 10.24  filed with the secretary of state and may not, except with 
 10.25  respect to delegations within the department of administration, 
 10.26  exceed two years in duration.  The commissioner may withdraw any 
 10.27  delegation at the commissioner's sole discretion. 
 10.28     Sec. 5.  [16C.05] [ETHICAL PRACTICES AND CONFLICT OF 
 10.29  INTEREST.] 
 10.30     Subdivision 1.  [DUTY.] An employee of the executive branch 
 10.31  involved directly or indirectly in the acquisition process, at 
 10.32  any level, is subject to the code of ethics in section 43A.38. 
 10.33     Subd. 2.  [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) 
 10.34  The commissioner must develop policies regarding code of ethics 
 10.35  and conflict of interest designed to prevent conflicts of 
 10.36  interest for employees involved in the acquisition of goods, 
 11.1   services, and utilities.  The policies must apply to employees 
 11.2   who are directly or indirectly involved in the acquisition of 
 11.3   goods, services, and utilities, developing requests for 
 11.4   proposals, evaluating bids or proposals, awarding the contract, 
 11.5   selecting the final vendor, drafting and entering into 
 11.6   contracts, evaluating performance under these contracts, and 
 11.7   authorizing payments under the contract.  
 11.8      (b) The policies must contain a process for making 
 11.9   employees aware of policy and laws relating to conflict of 
 11.10  interest, and for training employees on how to avoid and deal 
 11.11  with potential conflicts.  
 11.12     (c) The policies must contain a process under which an 
 11.13  employee who has a conflict of interest or a potential conflict 
 11.14  of interest must disclose the matter, and a process under which 
 11.15  work on the contract may be assigned to another employee if 
 11.16  possible.  
 11.17     Sec. 6.  [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND 
 11.18  REVIEW.] 
 11.19     Subdivision 1.  [AGENCY COOPERATION.] Agencies shall fully 
 11.20  cooperate with the commissioner in the management and review of 
 11.21  state contracts. 
 11.22     Subd. 2.  [CREATION AND VALIDITY OF CONTRACTS.] (a) A 
 11.23  contract is not valid and the state is not bound by it unless: 
 11.24     (1) it has first been executed by the head of the agency or 
 11.25  a delegate who is a party to the contract; 
 11.26     (2) it has been approved by the commissioner; 
 11.27     (3) it has been approved by the attorney general or a 
 11.28  delegate as to form and execution; 
 11.29     (4) the accounting system shows an obligation in an expense 
 11.30  budget or encumbrance for the amount of the contract liability; 
 11.31  and 
 11.32     (5) the combined contract and amendments shall not exceed 
 11.33  five years, unless otherwise provided for by law.  The term of 
 11.34  the original contract must not exceed two years unless the 
 11.35  commissioner determines that a longer duration is in the best 
 11.36  interest of the state. 
 12.1      (b) Grants, interagency agreements, purchase orders, and 
 12.2   annual plans need not, in the discretion of the commissioner and 
 12.3   attorney general, require the signature of the commissioner 
 12.4   and/or the attorney general. 
 12.5      (c) A fully executed copy of every contract must be kept on 
 12.6   file at the contracting agency. 
 12.7      Subd. 3.  [EXCEPTION.] The requirements of subdivision 2 do 
 12.8   not apply to contracts of the department of economic security 
 12.9   distributing state and federal funds for the purpose of 
 12.10  subcontracting the provision of program services to eligible 
 12.11  recipients.  For these contracts, the commissioner of economic 
 12.12  security is authorized to directly enter into agency contracts 
 12.13  and encumber available funds.  For contracts distributing state 
 12.14  or federal funds pursuant to the federal Economic Dislocation 
 12.15  and Worker Adjustment Assistance Act, United States Code, title 
 12.16  29, section 1651 et seq., or sections 268.9771, 268.978, 
 12.17  268.9781, and 268.9782, the commissioner of economic security is 
 12.18  authorized to directly enter into agency contracts with approval 
 12.19  of the workforce development council and encumber available 
 12.20  funds to ensure a rapid response to the needs of dislocated 
 12.21  workers.  The commissioner of economic security shall adopt 
 12.22  internal procedures to administer and monitor funds distributed 
 12.23  under these contracts.  This exception also applies to any 
 12.24  contracts entered into by the commissioner of children, 
 12.25  families, and learning that were previously entered into by the 
 12.26  commissioner of economic security. 
 12.27     Subd. 4.  [CONTRACT ADMINISTRATION.] A contracting agency 
 12.28  shall diligently administer and monitor any contract it has 
 12.29  entered into, pursuant to a delegation of duties from the 
 12.30  commissioner.  The commissioner may require an agency to report 
 12.31  to the commissioner at any time on the status of any contracts 
 12.32  to which the agency is a party. 
 12.33     Subd. 5.  [SUBJECT TO AUDIT.] A contract or any 
 12.34  pass-through disbursement of public funds to a vendor of goods 
 12.35  or services or a grantee made by or under the supervision of the 
 12.36  commissioner or any county or unit of local government must 
 13.1   include, expressed or implied, an audit clause that provides 
 13.2   that the books, records, documents, and accounting procedures 
 13.3   and practices of the vendor or other party, that are relevant to 
 13.4   the contract or transaction, are subject to examination by the 
 13.5   contracting agency and either the legislative auditor or the 
 13.6   state auditor, as appropriate, for a minimum of six years.  If 
 13.7   the contracting agency is a local unit of government, and the 
 13.8   governing body of the local unit of government requests that the 
 13.9   state auditor examine the books, records, documents, and 
 13.10  accounting procedures and practices of the vendor or other party 
 13.11  pursuant to this subdivision, the contracting agency shall be 
 13.12  liable for the cost of the examination.  If the contracting 
 13.13  agency is a local unit of government, and the grantee, vendor, 
 13.14  or other party requests that the state auditor examine all 
 13.15  books, records, documents, and accounting procedures and 
 13.16  practices related to the contract, the grantee, vendor, or other 
 13.17  party that requested the examination shall be liable for the 
 13.18  cost of the examination.  An agency contract made for purchase, 
 13.19  lease, or license of software and data from the state is not 
 13.20  required to contain this audit clause. 
 13.21     Subd. 6.  [AUTHORITY OF ATTORNEY GENERAL.] The attorney 
 13.22  general may pursue remedies available by law to avoid the 
 13.23  obligation of an agency to pay under a contract or to recover 
 13.24  payments made if services performed or goods received under the 
 13.25  contract are so unsatisfactory, incomplete, or inconsistent that 
 13.26  payment would involve unjust enrichment.  The contrary opinion 
 13.27  of the contracting agency does not affect the power of the 
 13.28  attorney general under this subdivision. 
 13.29     Subd. 7.  [CONTRACTS WITH INDIAN TRIBES AND 
 13.30  BANDS.] Notwithstanding any other law, an agency may not require 
 13.31  an Indian tribe or band to deny its sovereignty as a requirement 
 13.32  or condition of a contract with an agency. 
 13.33     Sec. 7.  [16C.07] [ACQUISITIONS.] 
 13.34     Subdivision 1.  [PUBLICATION REQUIREMENTS.] Notices of 
 13.35  solicitations for acquisitions estimated to be more than $25,000 
 13.36  must be publicized in a manner designated by the commissioner. 
 14.1      Subd. 2.  [SOLICITATION PROCESS.] (a) A formal solicitation 
 14.2   must be used to acquire all goods, service contracts, and 
 14.3   utilities estimated at or more than $25,000 unless otherwise 
 14.4   provided for.  All formal responses must be sealed when they are 
 14.5   received and must be opened in public at the hour stated in the 
 14.6   solicitation.  Formal responses must be authenticated by the 
 14.7   responder in a manner specified by the commissioner.  
 14.8      (b) An informal solicitation may be used to acquire all 
 14.9   goods, service contracts, and utilities that are estimated at 
 14.10  less than $25,000.  The number of vendors required to receive 
 14.11  solicitations may be determined by the commissioner.  Informal 
 14.12  responses must be authenticated by the responder in a manner 
 14.13  specified by the commissioner. 
 14.14     Subd. 3.  [INFORMATION IN BIDS AND PROPOSALS.] (a) Only the 
 14.15  name of the vendor and dollar amounts specified in a response to 
 14.16  a request for bids shall be read at the time of opening.  Only 
 14.17  the name of the responding vendors to all requests for proposals 
 14.18  shall be read at the time of opening.  All other information 
 14.19  contained in a vendor's response to a bid is classified as 
 14.20  nonpublic data, as defined in section 13.02, and remains 
 14.21  nonpublic data until completion of the selection process.  All 
 14.22  other information contained in a vendor's response to a request 
 14.23  for proposal, other than the name of the vendor, is classified 
 14.24  as nonpublic data, as defined in section 13.02, and remains 
 14.25  nonpublic data until the completion of the evaluation process.  
 14.26     (b) All responses are public information at the time of the 
 14.27  award unless otherwise provided for.  All responses and 
 14.28  documents pertaining to the final award of an acquisition must 
 14.29  be retained and made a part of a permanent file or record and 
 14.30  remain open to public inspection, after award, unless otherwise 
 14.31  provided for by law. 
 14.32     Subd. 4.  [MULTIPLE AWARDS.] The commissioner may award a 
 14.33  contract to more than one vendor if, in the opinion of the 
 14.34  commissioner, it is in the best interest of the state. 
 14.35     Subd. 5.  [STATE AS RESPONDER.] The head of an agency, in 
 14.36  consultation with the requesting agency and the commissioner, 
 15.1   may respond to a solicitation or request if the goods and 
 15.2   services meet the needs of the requesting agency and provide the 
 15.3   state with the best value.  When an agency responds to a 
 15.4   solicitation, all work product relating to the response is 
 15.5   nonpublic data as defined in section 13.02, and shall become 
 15.6   public information in accordance with subdivision 3. 
 15.7      Subd. 6.  [AWARDS.] Awards must be based on best value, 
 15.8   which includes an evaluation of price, and may include other 
 15.9   considerations including, but not limited to, environmental 
 15.10  considerations, quality, and vendor performance.  If criteria 
 15.11  other than price are used, the solicitation document must state 
 15.12  the relative importance of price and other factors.  
 15.13     Subd. 7.  [OTHER STATES WITH RESIDENT 
 15.14  PREFERENCE.] Acquisition of goods and services must be awarded 
 15.15  according to the provisions of this chapter except that a 
 15.16  resident vendor shall be allowed a preference over a nonresident 
 15.17  vendor from a state that gives or requires a preference to 
 15.18  vendors from that state.  The preference shall be equal to the 
 15.19  preference given or required by the state of the nonresident 
 15.20  vendor.  
 15.21     Subd. 8.  [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 
 15.22  does not apply to a contract for any project in which federal 
 15.23  funds are expended. 
 15.24     Subd. 9.  [REJECTION.] At the discretion of the 
 15.25  commissioner, any or all responses may be rejected if it is 
 15.26  determined to be in the best interest of the state. 
 15.27     Subd. 10.  [PREFERENCES NOT CUMULATIVE.] The preferences 
 15.28  provided for under subdivision 7 and sections 16B.121 and 16C.18 
 15.29  are not cumulative.  The total percentage of preference granted 
 15.30  on a contract may not exceed the highest percentage of 
 15.31  preference allowed for that contract under any one of these 
 15.32  statutory sections. 
 15.33     Sec. 8.  [16C.08] [EMPLOYEE SKILLS INVENTORY.] 
 15.34     The commissioner of employee relations shall develop a 
 15.35  directory of services that state agencies commonly provide that 
 15.36  are professional or technical in nature.  
 16.1      Before an agency may seek approval of a professional or 
 16.2   technical services contract valued at a total cost in excess of 
 16.3   $25,000, it must certify to the commissioner that it has 
 16.4   publicized the contract by posting notice at appropriate 
 16.5   worksites within agencies and has made reasonable efforts to 
 16.6   determine that no state employee or agency, including an 
 16.7   employee or agency outside the contracting agency, is able and 
 16.8   available to perform the required services.  When possible, this 
 16.9   posting should be done electronically.  
 16.10     Sec. 9.  [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.] 
 16.11     Subdivision 1.  [DEFINITION.] For the purposes of this 
 16.12  section, "professional or technical services" means services 
 16.13  that are intellectual in character, including consultation, 
 16.14  analysis, evaluation, prediction, planning, programming, or 
 16.15  recommendation, and result in the production of a report or the 
 16.16  completion of a task.  Professional or technical contracts do 
 16.17  not include the provision of supplies or materials except by the 
 16.18  approval of the commissioner or except as incidental to the 
 16.19  provision of professional or technical services.  
 16.20     Subd. 2.  [DUTIES OF CONTRACTING AGENCY.] Before an agency 
 16.21  may seek approval of a professional or technical services 
 16.22  contract valued in excess of $5,000, it must certify to the 
 16.23  commissioner that: 
 16.24     (1) no current state employee is able and available to 
 16.25  perform the services called for by the contract; 
 16.26     (2) the normal competitive bidding mechanisms will not 
 16.27  provide for adequate performance of the services; 
 16.28     (3) the contractor has certified that the product of the 
 16.29  services will be original in character; 
 16.30     (4) reasonable efforts were made to publicize the 
 16.31  availability of the contract to the public; 
 16.32     (5) the agency has received, reviewed, and accepted a 
 16.33  detailed work plan from the contractor for performance under the 
 16.34  contract, if applicable; 
 16.35     (6) the agency has developed, and fully intends to 
 16.36  implement, a written plan providing for the assignment of 
 17.1   specific agency personnel to a monitoring and liaison function, 
 17.2   the periodic review of interim reports or other indications of 
 17.3   past performance, and the ultimate utilization of the final 
 17.4   product of the services; and 
 17.5      (7) the agency will not allow the contractor to begin work 
 17.6   before funds are fully encumbered.  
 17.7      Subd. 3.  [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 
 17.8   CONTRACTS.] Before approving a proposed contract for 
 17.9   professional or technical services, the commissioner must 
 17.10  determine, at least, that: 
 17.11     (1) all provisions of subdivision 2 and section 16C.18 have 
 17.12  been verified or complied with; 
 17.13     (2) the work to be performed under the contract is 
 17.14  necessary to the agency's achievement of its statutory 
 17.15  responsibilities and there is statutory authority to enter into 
 17.16  the contract; 
 17.17     (3) the contract will not establish an employment 
 17.18  relationship between the state or the agency and any persons 
 17.19  performing under the contract; 
 17.20     (4) the contractor and agents are not employees of the 
 17.21  state; 
 17.22     (5) no agency has previously performed or contracted for 
 17.23  the performance of tasks which would be substantially duplicated 
 17.24  under the proposed contract; 
 17.25     (6) the contracting agency has specified a satisfactory 
 17.26  method of evaluating and using the results of the work to be 
 17.27  performed; and 
 17.28     (7) the combined contract and amendments will not exceed 
 17.29  five years, unless otherwise provided for by law.  The term of 
 17.30  the original contract must not exceed two years unless the 
 17.31  commissioner determines that a longer duration is in the best 
 17.32  interest of the state. 
 17.33     Subd. 4.  [REPORTS.] (a) The commissioner shall submit to 
 17.34  the governor, the chairs of the house ways and means and senate 
 17.35  finance committees, and the legislative reference library a 
 17.36  yearly listing of all contracts for professional or technical 
 18.1   services executed.  The report must identify the contractor, 
 18.2   contract amount, duration, and services to be provided.  The 
 18.3   commissioner shall also issue yearly reports summarizing the 
 18.4   contract review activities of the department by fiscal year. 
 18.5      (b) The fiscal year report must be submitted by September 1 
 18.6   of each year and must: 
 18.7      (1) be sorted by agency and by contractor; 
 18.8      (2) show the aggregate value of contracts issued by each 
 18.9   agency and issued to each contractor; 
 18.10     (3) distinguish between contracts that are being issued for 
 18.11  the first time and contracts that are being extended; 
 18.12     (4) state the termination date of each contract; and 
 18.13     (5) identify services by commodity code, including topics 
 18.14  such as contracts for training, contracts for research and 
 18.15  opinions, and contracts for computer systems. 
 18.16     (c) Within 30 days of final completion of a contract over 
 18.17  $40,000 covered by this subdivision, the head of the agency 
 18.18  entering into the contract must submit a one-page report to the 
 18.19  commissioner who must submit a copy to the legislative reference 
 18.20  library.  The report must:  
 18.21     (1) summarize the purpose of the contract, including why it 
 18.22  was necessary to enter into a contract; 
 18.23     (2) state the amount spent on the contract; and 
 18.24     (3) explain why this amount was a cost-effective way to 
 18.25  enable the agency to provide its services or products better or 
 18.26  more efficiently.  
 18.27     Subd. 5.  [CONTRACT TERMS.] (a) A professional or technical 
 18.28  services contract must by its terms permit the commissioner to 
 18.29  unilaterally terminate the contract prior to completion, upon 
 18.30  payment of just compensation, if the commissioner determines 
 18.31  that further performance under the contract would not serve 
 18.32  agency purposes. 
 18.33     (b) The terms of a contract must provide that no more than 
 18.34  90 percent of the amount due under the contract may be paid 
 18.35  until the final product has been reviewed by the head of the 
 18.36  agency entering into the contract and the head of the agency has 
 19.1   certified that the contractor has satisfactorily fulfilled the 
 19.2   terms of the contract, unless specifically excluded in writing 
 19.3   by the commissioner.  
 19.4      Subd. 6.  [FILING COPY.] If the final product of the 
 19.5   contract is a written report, a copy must be filed with the 
 19.6   legislative reference library. 
 19.7      Subd. 7.  [EXCLUSIONS.] This section does not apply to 
 19.8   contracts with individuals or organizations for administration 
 19.9   of employee pension plans authorized under chapter 354B or 354C. 
 19.10     Sec. 10.  [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.] 
 19.11     Before entering into or approving a service contract, the 
 19.12  commissioner must determine, at least, that: 
 19.13     (1) no current state employee is able and available to 
 19.14  perform the services called for by the contract; 
 19.15     (2) the work to be performed under the contract is 
 19.16  necessary to the agency's achievement of its statutory 
 19.17  responsibilities and there is statutory authority to enter into 
 19.18  the contract; 
 19.19     (3) the contract will not establish an employment 
 19.20  relationship between the state or the agency and any persons 
 19.21  performing under the contract; 
 19.22     (4) the contractor and agents are not employees of the 
 19.23  state; 
 19.24     (5) the contracting agency has specified a satisfactory 
 19.25  method of evaluating and using the results of the work to be 
 19.26  performed; and 
 19.27     (6) the combined contract and amendments will not exceed 
 19.28  five years, unless otherwise provided for by law.  The term of 
 19.29  the original contract must not exceed two years, unless the 
 19.30  commissioner determines that a longer duration is in the best 
 19.31  interest of the state. 
 19.32  For purposes of clause (1), employees are available if qualified 
 19.33  and: 
 19.34     (i) are already doing the work in question; or 
 19.35     (ii) are on layoff status in classes that can do the work 
 19.36  in question. 
 20.1   An employee is not available if the employee is doing other 
 20.2   work, is retired, or has decided not to do the work in question. 
 20.3      Sec. 11.  [16C.11] [EXCEPTIONS TO THE SOLICITATION 
 20.4   PROCESS.] 
 20.5      Subdivision 1.  [SINGLE SOURCE.] The solicitation process 
 20.6   described in this chapter is not required when there is clearly 
 20.7   and legitimately only a single source for the goods and services 
 20.8   and the commissioner determines that the price has been fairly 
 20.9   and reasonably established. 
 20.10     Subd. 2.  [EMERGENCY ACQUISITION.] (a) For the purpose of 
 20.11  this subdivision, "emergency" means a threat to public health, 
 20.12  welfare, or safety that threatens the functioning of government, 
 20.13  the protection of property, or the health or safety of people.  
 20.14     (b) The solicitation process described in this chapter is 
 20.15  not required in emergencies.  In emergencies, the commissioner 
 20.16  may make any purchases necessary for the repair, rehabilitation, 
 20.17  and improvement of a state-owned structure or may authorize an 
 20.18  agency to do so and may purchase, or may authorize an agency to 
 20.19  purchase, goods, services, or utility services directly for 
 20.20  immediate use. 
 20.21     Subd. 3.  [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding 
 20.22  anything in this chapter to the contrary, the commissioner may, 
 20.23  instead of soliciting bids, contract for purchases with 
 20.24  suppliers who have published schedules of prices effective for 
 20.25  sales to any federal agency of the United States.  These 
 20.26  contracts may be entered into, regardless of the amount of the 
 20.27  purchase price, if the commissioner considers them advantageous 
 20.28  and if the purchase price of all the commodities purchased under 
 20.29  the contract do not exceed the price specified by the schedule. 
 20.30     Subd. 4.  [COOPERATIVE AGREEMENTS.] The solicitation 
 20.31  process described in this chapter is not required for 
 20.32  cooperative agreements.  The commissioner may enter into 
 20.33  contracts or accept prices effective for sales to any 
 20.34  governmental unit as defined in section 471.59, through a 
 20.35  cooperative agreement as defined in section 471.59. 
 20.36     Subd. 5.  [SPECIFIC PURCHASES.] The solicitation process 
 21.1   described in this chapter is not required for acquisition of the 
 21.2   following: 
 21.3      (1) merchandise for resale purchased under policies 
 21.4   determined by the commissioner; 
 21.5      (2) farm and garden products which, as determined by the 
 21.6   commissioner, may be purchased at the prevailing market price on 
 21.7   the date of sale; 
 21.8      (3) goods and services from the Minnesota correctional 
 21.9   facilities; 
 21.10     (4) goods and services from rehabilitation facilities and 
 21.11  sheltered workshops that are certified by the commissioner of 
 21.12  economic security; 
 21.13     (5) goods and services for use by a community-based 
 21.14  residential facility operated by the commissioner of human 
 21.15  services; 
 21.16     (6) goods purchased at auction or when submitting a sealed 
 21.17  bid at auction provided that before authorizing such an action, 
 21.18  the commissioner consult with the requesting agency to determine 
 21.19  a fair and reasonable value for the goods considering factors 
 21.20  including, but not limited to, costs associated with submitting 
 21.21  a bid, travel, transportation, and storage.  This fair and 
 21.22  reasonable value must represent the limit of the state's bid; 
 21.23  and 
 21.24     (7) utility services where no competition exists or where 
 21.25  rates are fixed by law or ordinance. 
 21.26     Subd. 6.  [EXPENDITURES UNDER SPECIFIED AMOUNTS.] The 
 21.27  solicitation process described in this chapter is not required 
 21.28  for: 
 21.29     (1) acquisition of goods or services, other than 
 21.30  professional or technical services, in an amount of $2,500 or 
 21.31  less; or 
 21.32     (2) acquisition of professional or technical services in an 
 21.33  amount of $5,000 or less, provided the requirements of section 
 21.34  16C.09, subdivisions 3 to 6, are met. 
 21.35     Sec. 12.  [16C.12] [COOPERATIVE PURCHASING VENTURE; 
 21.36  PURCHASING REVOLVING FUND.] 
 22.1      The commissioner may enter into joint or cooperative 
 22.2   purchasing agreements with any entity that is authorized under 
 22.3   section 471.59 to do so.  The cooperative purchasing venture 
 22.4   revolving fund is a separate account in the state treasury.  The 
 22.5   commissioner may charge a fee to cover the commissioner's 
 22.6   administrative expenses to governmental units that have joint or 
 22.7   cooperative purchasing agreements with the state under section 
 22.8   471.59.  The fees collected must be deposited in the revolving 
 22.9   fund established by this section.  Money in the fund is 
 22.10  appropriated to the commissioner to administer the programs and 
 22.11  services covered by this chapter. 
 22.12     Sec. 13.  [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN 
 22.13  STATE.] 
 22.14     The commissioner shall encourage and make a reasonable 
 22.15  attempt to identify and purchase food products that are grown in 
 22.16  the state.  
 22.17     Sec. 14.  [16C.14] [CERTAIN VEHICLES.] 
 22.18     Upon the written request of the commissioner of public 
 22.19  safety, motor vehicles for use by investigative and undercover 
 22.20  agents of the department of public safety must be purchased by 
 22.21  the brand, make, and model specified by the agency. 
 22.22     Sec. 15.  [16C.15] [ENERGY EFFICIENCY INSTALLMENT 
 22.23  PURCHASES.] 
 22.24     Subdivision 1.  [CONTRACT CONDITIONS.] The commissioner may 
 22.25  contract to purchase by installment payments capital or other 
 22.26  equipment or services intended to improve the energy efficiency 
 22.27  of a state building or facility if: 
 22.28     (1) the term of the contract does not exceed ten years, 
 22.29  with not more than a ten-year payback; 
 22.30     (2) the entire cost of the contract is a percentage of the 
 22.31  resultant savings in energy costs only.  "Savings in energy cost"
 22.32  means a comparison of energy cost and energy usage under the 
 22.33  precontract conditions, including reasonable projections of 
 22.34  energy cost and usage if no change is made to the precontract 
 22.35  conditions, against energy cost and usage with the changes made 
 22.36  under the contract.  If it is impractical to directly measure 
 23.1   energy cost and/or energy usage, reasonable engineering 
 23.2   estimates may be substituted for measured results; 
 23.3      (3) the contract for purchase must be completed using a 
 23.4   solicitation; 
 23.5      (4) the commissioner has determined that the contract 
 23.6   vendor is a responsible vendor; 
 23.7      (5) the contract vendor can finance or obtain financing for 
 23.8   the performance of the contract without state assistance or 
 23.9   guarantee; and 
 23.10     (6) the state may unilaterally cancel the agreement if the 
 23.11  legislature fails to appropriate funds to continue the contract 
 23.12  or if the contractor at any time during the term of the contract 
 23.13  fails to perform its contractual obligations, including failure 
 23.14  to deliver or install equipment or materials, failure to replace 
 23.15  faulty equipment or materials in a timely fashion, and failure 
 23.16  to maintain the equipment as agreed in the contract. 
 23.17     Subd. 2.  [ENERGY APPROPRIATION.] The commissioner may 
 23.18  spend money appropriated for energy costs in payment of a 
 23.19  contract under this section.  
 23.20     Subd. 3.  [ENERGY CONSERVATION INCENTIVES.] Notwithstanding 
 23.21  any other law to the contrary, fuel cost savings resulting from 
 23.22  energy conservation actions shall be available at the managerial 
 23.23  level at which the actions took place for expenditure for other 
 23.24  purposes within the biennium in which the actions occur or in 
 23.25  the case of a shared savings agreement for the contract period 
 23.26  of the shared savings agreement.  For purposes of this 
 23.27  subdivision "shared savings agreement" means a contract meeting 
 23.28  the terms and conditions of subdivision 1.  
 23.29     Subd. 4.  [ENERGY COSTS.] The entire cost of an energy 
 23.30  efficiency installment purchase contract must be a percentage of 
 23.31  the resultant savings in energy costs.  Neither the state nor 
 23.32  any agency is liable to make payments on the contract except to 
 23.33  the extent that there are savings in energy costs that must be 
 23.34  shared with other parties to the contract.  
 23.35     Sec. 16.  [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK 
 23.36  ACTIVITY PROGRAMS.] 
 24.1      The commissioner, in consultation with the commissioner of 
 24.2   economic security, shall prepare a list containing products and 
 24.3   services of state-certified rehabilitation facilities, sheltered 
 24.4   workshops, and work activity programs for acquisition by state 
 24.5   agencies and institutions. 
 24.6      Sec. 17.  [16C.18] [DESIGNATION OF PROCUREMENTS FROM SMALL 
 24.7   BUSINESSES.] 
 24.8      Subdivision 1.  [SMALL BUSINESS PROCUREMENTS.] The 
 24.9   commissioner shall for each fiscal year ensure that small 
 24.10  businesses receive at least 25 percent of the value of 
 24.11  anticipated total state procurement of goods and services, 
 24.12  including printing and construction.  The commissioner shall 
 24.13  divide the procurements so designated into contract award units 
 24.14  of economically feasible production runs in order to facilitate 
 24.15  offers or bids from small businesses.  In making the annual 
 24.16  designation of such procurements the commissioner shall attempt 
 24.17  (1) to vary the included procurements so that a variety of goods 
 24.18  and services produced by different small businesses are obtained 
 24.19  each year, and (2) to designate small business procurements in a 
 24.20  manner that will encourage proportional distribution of such 
 24.21  awards among the geographical regions of the state.  To promote 
 24.22  the geographical distribution of awards, the commissioner may 
 24.23  designate a portion of the small business procurement for award 
 24.24  to bidders from a specified congressional district or other 
 24.25  geographical region specified by the commissioner.  The failure 
 24.26  of the commissioner to designate particular procurements shall 
 24.27  not be deemed to prohibit or discourage small businesses from 
 24.28  seeking the procurement award through the normal process.  
 24.29     Subd. 2.  [SMALL BUSINESS.] The commissioner shall adopt 
 24.30  rules defining "small business" for purposes of sections 16C.18 
 24.31  to 16C.23, 137.31, 137.35, 161.321, and 473.142.  The definition 
 24.32  must include only businesses with their principal place of 
 24.33  business in Minnesota.  The definition must establish different 
 24.34  size standards for various types of businesses.  In establishing 
 24.35  these standards, the commissioner must consider the differences 
 24.36  among industries caused by the size of the market for goods or 
 25.1   services and the relative size and market share of the 
 25.2   competitors operating in those markets.  
 25.3      Subd. 3.  [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every 
 25.4   state agency must for each fiscal year designate for awarding to 
 25.5   small businesses at least 25 percent of the value of anticipated 
 25.6   procurements of that agency for professional or technical 
 25.7   services.  The set-aside under this subdivision is in addition 
 25.8   to that provided by subdivision 1, but must otherwise comply 
 25.9   with section 16C.09. 
 25.10     Subd. 4.  [TARGETED GROUP PURCHASING.] The commissioner 
 25.11  shall establish a program for purchasing goods and services from 
 25.12  targeted group businesses, as designated in subdivision 5.  The 
 25.13  purpose of the program is to remedy the effects of past 
 25.14  discrimination against members of targeted groups.  In 
 25.15  furtherance of this purpose, the commissioner shall attempt to 
 25.16  ensure that purchases from targeted group businesses reflect a 
 25.17  fair and equitable representation of all the state's purchasing. 
 25.18     Subd. 5.  [DESIGNATION OF TARGETED GROUPS.] (a) The 
 25.19  commissioner of administration shall periodically designate 
 25.20  businesses that are majority owned and operated by women, 
 25.21  persons with a substantial physical disability, or specific 
 25.22  minorities as targeted group businesses within purchasing 
 25.23  categories as determined by the commissioner.  A group may be 
 25.24  targeted within a purchasing category if the commissioner 
 25.25  determines there is a statistical disparity between the 
 25.26  percentage of purchasing from businesses owned by group members 
 25.27  and the representation of businesses owned by group members 
 25.28  among all businesses in the state in the purchasing category.  
 25.29     (b) In addition to designations under paragraph (a), an 
 25.30  individual business may be included as a targeted group business 
 25.31  if the commissioner determines that inclusion is necessary to 
 25.32  remedy discrimination against the owner based on race, gender, 
 25.33  or disability in attempting to operate a business that would 
 25.34  provide goods or services to public agencies. 
 25.35     (c) The designations of purchasing categories and 
 25.36  businesses under paragraphs (a) and (b) are not rules for 
 26.1   purposes of chapter 14, and are not subject to rulemaking 
 26.2   procedures of that chapter. 
 26.3      Subd. 6.  [PURCHASING METHODS.] (a) The commissioner may 
 26.4   award up to a six percent preference in the amount bid for 
 26.5   specified goods or services to small targeted group businesses. 
 26.6      (b) The commissioner may designate a purchase of goods or 
 26.7   services for award only to small businesses or small targeted 
 26.8   group businesses if the commissioner determines that at least 
 26.9   three small businesses or small targeted group businesses are 
 26.10  likely to bid. 
 26.11     (c) The commissioner, as a condition of awarding a 
 26.12  construction contract or approving a contract for professional 
 26.13  or technical services, may set goals that require the prime 
 26.14  contractor to subcontract a portion of the contract to small 
 26.15  businesses or small targeted group businesses.  The commissioner 
 26.16  must establish a procedure for granting waivers from the 
 26.17  subcontracting requirement when qualified small businesses or 
 26.18  small targeted group businesses are not reasonably available.  
 26.19  The commissioner may establish financial incentives for prime 
 26.20  contractors who exceed the goals for use of small business or 
 26.21  small targeted group business subcontractors and financial 
 26.22  penalties for prime contractors who fail to meet goals under 
 26.23  this paragraph.  The subcontracting requirements of this 
 26.24  paragraph do not apply to prime contractors who are small 
 26.25  businesses or small targeted group businesses. 
 26.26     Subd. 7.  [ECONOMICALLY DISADVANTAGED AREAS.] The 
 26.27  commissioner may award up to a four percent preference in the 
 26.28  amount bid on state procurement to small businesses located in 
 26.29  an economically disadvantaged area.  A business is located in an 
 26.30  economically disadvantaged area if: 
 26.31     (1) the owner resides in or the business is located in a 
 26.32  county in which the median income for married couples is less 
 26.33  than 70 percent of the state median income for married couples; 
 26.34     (2) the owner resides in or the business is located in an 
 26.35  area designated a labor surplus area by the United States 
 26.36  Department of Labor; or 
 27.1      (3) the business is a rehabilitation facility or work 
 27.2   activity program. 
 27.3      The commissioner may designate one or more areas designated 
 27.4   as targeted neighborhoods under section 469.202 or as enterprise 
 27.5   zones under section 469.167 as economically disadvantaged areas 
 27.6   for purposes of this subdivision if the commissioner determines 
 27.7   that this designation would further the purposes of this 
 27.8   section.  If the owner of a small business resides or is 
 27.9   employed in a designated area, the small business is eligible 
 27.10  for any preference provided under this subdivision. 
 27.11     The department of revenue shall gather data necessary to 
 27.12  make the determinations required by clause (1), and shall 
 27.13  annually certify counties that qualify under clause (1).  An 
 27.14  area designated a labor surplus area retains that status for 120 
 27.15  days after certified small businesses in the area are notified 
 27.16  of the termination of the designation by the United States 
 27.17  Department of Labor. 
 27.18     Subd. 8.  [SURETY BONDS.] Surety bonds guaranteed by the 
 27.19  federal Small Business Administration and second party bonds are 
 27.20  acceptable security for a construction award under this 
 27.21  section.  "Second party bond" means a bond that designates as 
 27.22  principal, guarantor, or both, a person or persons in addition 
 27.23  to the person to whom the contract is proposed for award.  
 27.24     Subd. 9.  [DETERMINATION OF ABILITY TO PERFORM.] Before 
 27.25  making an award under the preference programs established in 
 27.26  subdivisions 4 to 7, the commissioner shall evaluate whether the 
 27.27  small business or small targeted group business scheduled to 
 27.28  receive the award is able to perform the contract.  This 
 27.29  determination shall include consideration of production and 
 27.30  financial capacity and technical competence.  
 27.31     Subd. 10.  [LIMITS.] At least 75 percent of the value of 
 27.32  the subcontracts awarded to small businesses or small targeted 
 27.33  group businesses under subdivision 6, paragraph (c), must be 
 27.34  performed by the business to which the subcontract is awarded or 
 27.35  by another small business or small targeted group business.  
 27.36     Subd. 11.  [PROCUREMENT PROCEDURES.] All laws and rules 
 28.1   pertaining to solicitations, bid evaluations, contract awards, 
 28.2   and other procurement matters apply equally to procurements 
 28.3   designated for small businesses or small targeted group 
 28.4   businesses.  In the event of conflict with other rules, section 
 28.5   16C.16 and rules adopted under it govern, if section 16C.16 
 28.6   applies.  If it does not apply, sections 16C.18 to 16C.23 and 
 28.7   rules adopted under those sections govern.  
 28.8      Subd. 12.  [APPLICABILITY.] This section does not apply to 
 28.9   construction contracts or contracts for professional or 
 28.10  technical services under section 16C.09 that are financed in 
 28.11  whole or in part with federal funds and that are subject to 
 28.12  federal disadvantaged business enterprise regulations. 
 28.13     Sec. 18.  [16C.19] [ENCOURAGEMENT OF PARTICIPATION; 
 28.14  ADVISORY COUNCIL.] 
 28.15     Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
 28.16  commissioners of administration and trade and economic 
 28.17  development shall publicize the provisions of the purchasing 
 28.18  programs in sections 16C.18 to 16C.23, attempt to locate small 
 28.19  businesses or small targeted group businesses able to perform 
 28.20  under the programs, and encourage participation through 
 28.21  education, technical assistance, mentoring, and other means.  
 28.22  When the commissioner of administration determines that a small 
 28.23  business or small targeted group business is unable to perform 
 28.24  under a program established in sections 16C.18 to 16C.23, the 
 28.25  commissioner shall inform the commissioner of trade and economic 
 28.26  development who shall assist the small business or small 
 28.27  targeted group business in attempting to remedy the causes of 
 28.28  the inability to perform the award.  In assisting the small 
 28.29  business or small targeted group business, the commissioner of 
 28.30  trade and economic development in cooperation with the 
 28.31  commissioner of administration shall use management or financial 
 28.32  assistance programs made available by or through the department 
 28.33  of trade and economic development, other state or governmental 
 28.34  agencies, or private sources.  
 28.35     Subd. 2.  [ADVISORY COUNCIL.] The small business 
 28.36  procurement advisory council consists of 13 members appointed by 
 29.1   the commissioner of administration.  A chair of the advisory 
 29.2   council shall be elected from among the members.  The 
 29.3   appointments are subject to the appointments program provided by 
 29.4   section 15.0597.  The terms, compensation, and removal of 
 29.5   members are as provided in section 15.059. 
 29.6      Subd. 3.  [DUTIES.] The small business procurement advisory 
 29.7   council shall:  
 29.8      (1) advise the commissioner of administration on matters 
 29.9   relating to the small business and small targeted group business 
 29.10  procurement program; 
 29.11     (2) review complaints or grievances from small businesses 
 29.12  and small targeted group businesses who are doing or attempting 
 29.13  to do business under the program; and 
 29.14     (3) review the reports of the commissioners of 
 29.15  administration and trade and economic development provided by 
 29.16  section 16C.20 to ensure compliance with the goals of the 
 29.17  program.  
 29.18     Sec. 19.  [16C.20] [REPORTS.] 
 29.19     Subdivision 1.  [COMMISSIONER OF ADMINISTRATION.] The 
 29.20  commissioner shall submit an annual report pursuant to section 
 29.21  3.195 to the governor and the legislature with a copy to the 
 29.22  commissioner of trade and economic development indicating the 
 29.23  progress being made toward the objectives and goals of sections 
 29.24  16C.18 to 16C.23, 161.321, and 473.142 during the preceding 
 29.25  fiscal year. 
 29.26     Subd. 2.  [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] 
 29.27  The commissioner of trade and economic development shall submit 
 29.28  an annual report to the governor and the legislature pursuant to 
 29.29  section 3.195 with a copy to the commissioner of 
 29.30  administration.  This report shall include the following 
 29.31  information:  
 29.32     (1) the efforts undertaken to publicize the provisions of 
 29.33  the small business and small targeted group business procurement 
 29.34  program during the preceding fiscal year; 
 29.35     (2) the efforts undertaken to identify small businesses and 
 29.36  small targeted group businesses and the efforts undertaken to 
 30.1   encourage participation in the targeted group purchasing 
 30.2   program; 
 30.3      (3) the efforts undertaken by the commissioner to remedy 
 30.4   the inability of small businesses and small targeted group 
 30.5   businesses to perform on potential awards; and 
 30.6      (4) the commissioner's recommendations for strengthening 
 30.7   the small business and small targeted group business procurement 
 30.8   program and delivery of services to small businesses. 
 30.9      Subd. 3.  [REPORTS FROM OTHER AGENCIES.] The commissioner 
 30.10  of transportation, and each metropolitan agency listed in 
 30.11  section 473.143, subdivision 1, shall report to the commissioner 
 30.12  of administration all information that the commissioner requests 
 30.13  to make reports required under this section.  The information 
 30.14  must be reported at the time and in the manner requested by the 
 30.15  commissioner of administration. 
 30.16     Sec. 20.  [16C.21] [ELIGIBILITY; RULES.] 
 30.17     (a) A small business wishing to participate in the programs 
 30.18  under section 16C.18, subdivisions 4 to 7, must be certified by 
 30.19  the commissioner.  The commissioner shall adopt by rule 
 30.20  standards and procedures for certifying that small businesses, 
 30.21  small targeted group businesses, and small businesses located in 
 30.22  economically disadvantaged areas are eligible to participate 
 30.23  under the requirements of sections 16C.18 to 16C.23.  The 
 30.24  commissioner shall adopt by rule standards and procedures for 
 30.25  hearing appeals and grievances and other rules necessary to 
 30.26  carry out the duties set forth in sections 16C.18 to 16C.23.  
 30.27     (b) The commissioner may make rules which exclude or limit 
 30.28  the participation of nonmanufacturing business, including 
 30.29  third-party lessors, brokers, franchises, jobbers, 
 30.30  manufacturers' representatives, and others from eligibility 
 30.31  under sections 16C.18 to 16C.23. 
 30.32     (c) The commissioner may make rules that set time limits 
 30.33  and other eligibility limits on business participation in 
 30.34  programs under sections 16C.18 to 16C.23. 
 30.35     Sec. 21.  [16C.22] [CERTIFICATION.] 
 30.36     A business that is certified by the commissioner of 
 31.1   administration as a small business, small targeted group 
 31.2   business or a small business located in an economically 
 31.3   disadvantaged area is eligible to participate under the 
 31.4   requirements of sections 137.31 and 161.321 and, if certified as 
 31.5   a small business or small targeted group business, under section 
 31.6   473.142 without further certification by the contracting agency. 
 31.7      Sec. 22.  [16C.23] [CRIMINAL PENALTY.] 
 31.8      A person who knowingly provides false information to a 
 31.9   public official or employee for the purpose of obtaining or 
 31.10  retaining certification as a small targeted group business or a 
 31.11  small business located in an economically disadvantaged area 
 31.12  under sections 16C.18 to 16C.22, 137.31, 137.35, 161.321, or 
 31.13  473.142 is guilty of a misdemeanor. 
 31.14     Sec. 23.  [16C.24] [DISTRICT HEATING.] 
 31.15     Notwithstanding any other law, general or special, the 
 31.16  commissioner is authorized to enter into or approve a written 
 31.17  agreement not to exceed 31 years with a district heating utility 
 31.18  that will specify, but not be limited to, the appropriate terms 
 31.19  and conditions for the interchange of district heating services. 
 31.20     Sec. 24.  [16C.25] [SURPLUS PROPERTY ACQUISITION, 
 31.21  DISTRIBUTION, AND DISPOSAL.] 
 31.22     Subdivision 1.  [DEFINITIONS.] "Governmental unit or 
 31.23  nonprofit organization" means a governmental unit as defined in 
 31.24  section 471.59, subdivision 1, an Indian tribal government, and 
 31.25  any nonprofit and tax-exempt medical institution, hospital, 
 31.26  clinic, health center, school, school system, college, 
 31.27  university, or other institution organized and existing for any 
 31.28  purpose authorized by federal law to accept surplus federal 
 31.29  property.  
 31.30     Subd. 2.  [SURPLUS PROPERTY.] "Surplus property" means 
 31.31  state or federal commodities, equipment, materials, supplies, 
 31.32  books, printed matter, buildings, and other personal or real 
 31.33  property that is obsolete, unused, not needed for a public 
 31.34  purpose, or ineffective for current use. 
 31.35     Subd. 3.  [AUTHORIZATION.] (a) The commissioner is the 
 31.36  state agency designated to transfer, purchase, accept, sell, or 
 32.1   dispose of surplus property for the state and for the benefit of 
 32.2   any other governmental unit or nonprofit organization for any 
 32.3   purpose authorized by state and federal law and in accordance 
 32.4   with state and federal rules and regulations.  Any governmental 
 32.5   unit or nonprofit organization may designate the commissioner to 
 32.6   purchase or accept surplus property for it upon mutually 
 32.7   agreeable terms and conditions.  The commissioner may acquire, 
 32.8   accept, warehouse, and distribute surplus property and charge a 
 32.9   fee to cover any expenses incurred in connection with any of 
 32.10  these acts.  
 32.11     (b) Federal surplus property that has been transferred to 
 32.12  the state for donation to public agencies and nonprofit 
 32.13  organizations must be transferred or sold in accordance with the 
 32.14  plan developed under paragraph (c).  Expenses incurred in 
 32.15  connection with the acquisition, warehousing, distribution, and 
 32.16  disposal of federal surplus property must be paid from the 
 32.17  surplus services revolving fund.  Proceeds of sales, minus any 
 32.18  expenses, must be deposited in the surplus services revolving 
 32.19  fund. 
 32.20     (c) The commissioner shall develop a detailed plan for 
 32.21  disposal of donated federal property in conformance with state 
 32.22  law and federal regulations.  The plan must be submitted to the 
 32.23  governor for certification and submission to the federal 
 32.24  administrator of general services. 
 32.25     (d) The commissioner, after consultation with one or more 
 32.26  nonprofit organizations with an interest in providing housing 
 32.27  for homeless veterans and their families, may acquire property 
 32.28  from the United States government that is designated by the 
 32.29  General Services Administration as surplus property.  The 
 32.30  commissioner may lease the property to a qualified nonprofit 
 32.31  organization that agrees to develop or rehabilitate the property 
 32.32  for the purpose of providing suitable housing for veterans and 
 32.33  their families.  The lease agreement with the nonprofit 
 32.34  organization may require that the property be developed for use 
 32.35  as housing for homeless and displaced veterans and their 
 32.36  families and for veterans and their families who lose their 
 33.1   housing. 
 33.2      Subd. 4.  [DEPOSIT OF RECEIPTS.] The surplus services 
 33.3   revolving fund is a separate fund in the state treasury.  All 
 33.4   money resulting from the acquisition, acceptance, warehousing, 
 33.5   distribution, and public sale of surplus property, must be 
 33.6   deposited in the fund.  Money paid into the surplus services 
 33.7   revolving fund is appropriated to the commissioner for the 
 33.8   purposes of the programs and services referred to in this 
 33.9   section.  
 33.10     Subd. 5.  [TRANSFER OR SALE.] (a) When the state or an 
 33.11  agency operating under a legislative appropriation obtains 
 33.12  surplus property from the commissioner, the commissioner of 
 33.13  finance must, at the commissioner's request, transfer the cost 
 33.14  of the surplus property, including any expenses of acquiring, 
 33.15  accepting, warehousing, and distributing the surplus property, 
 33.16  from the appropriation of the agency receiving the surplus 
 33.17  property to the surplus services revolving fund.  The 
 33.18  determination of the commissioner is final as to the cost of the 
 33.19  surplus property to the agency receiving the property. 
 33.20     (b) When any governmental unit or nonprofit organization 
 33.21  other than an agency receives surplus property from the 
 33.22  commissioner, the governmental unit or nonprofit organization 
 33.23  must reimburse the surplus services revolving fund for the cost 
 33.24  of the property, including the expenses of acquiring, accepting, 
 33.25  warehousing, and distributing it, in an amount the commissioner 
 33.26  sets.  The commissioner may, however, require the governmental 
 33.27  unit or nonprofit organization to deposit in advance in the 
 33.28  surplus services revolving fund the cost of the surplus property 
 33.29  upon mutually agreeable terms and conditions.  
 33.30     (c) The commissioner may transfer or sell state surplus 
 33.31  property to any person at public auction, at prepriced sale, or 
 33.32  by sealed bid process in accordance with applicable state laws. 
 33.33     Subd. 6.  [STATE SURPLUS PROPERTY.] The commissioner may do 
 33.34  any of the following to dispose of state surplus property:  
 33.35     (1) transfer it to or between state agencies; 
 33.36     (2) transfer it to a governmental unit or nonprofit 
 34.1   organization in Minnesota; or 
 34.2      (3) sell it and charge a fee to cover expenses incurred by 
 34.3   the commissioner in the disposal of the surplus property.  
 34.4      The proceeds of the sale less the fee are appropriated to 
 34.5   the agency for whose account the sale was made, to be used and 
 34.6   expended by that agency to purchase similar state property. 
 34.7      Subd. 7.  [GIFTS.] The commissioner is authorized to 
 34.8   solicit and accept donated money and fixed and consumable 
 34.9   property for the benefit of the state and any other governmental 
 34.10  unit or nonprofit organization for any purpose authorized by 
 34.11  state and federal law and in accordance with federal regulations 
 34.12  and rules.  The gift acceptance procedures of sections 7.09 to 
 34.13  7.12 do not apply to this subdivision. 
 34.14     Sec. 25.  [16C.26] [RULES.] 
 34.15     Minnesota Rules, parts 1230.0100 to 1230.4300, adopted 
 34.16  under chapter 16B, govern under this chapter until amended, 
 34.17  repealed, or superseded by rules adopted under chapter 16B or 
 34.18  this chapter.  In the event rules adopted under chapter 16B 
 34.19  conflict with provisions of this chapter, this chapter governs. 
 34.20     Sec. 26.  [16C.27] [BUILDING AND CONSTRUCTION CONTRACTS.] 
 34.21     Notwithstanding any contrary law, the provisions of 
 34.22  Minnesota Statutes 1996, section 16B.07, 16B.08, 16B.09, and all 
 34.23  other laws applicable to competitive bidding for building and 
 34.24  construction contracts on the day before the effective date of 
 34.25  this section apply to building and construction contracts 
 34.26  entered into on or after the effective date of this section. 
 34.27     Sec. 27.  Minnesota Statutes 1996, section 161.32, is 
 34.28  amended by adding a subdivision to read: 
 34.29     Subd. 1a.  [STANDARD SPECIFICATIONS, SECURITY.] Contracts 
 34.30  under this section must be based on specifications prescribed by 
 34.31  the commissioner.  Each bidder for a contract must furnish 
 34.32  security approved by the commissioner to ensure completion of 
 34.33  the contract. 
 34.34     Sec. 28.  Minnesota Statutes 1996, section 161.32, is 
 34.35  amended by adding a subdivision to read: 
 34.36     Subd. 1b.  [LOWEST RESPONSIBLE BIDDER.] Trunk highway 
 35.1   construction contracts, including design-build contracts, must 
 35.2   be awarded to the lowest responsible bidder, taking into 
 35.3   consideration conformity with the specifications, the purpose 
 35.4   for which the contract or purchase is intended, the status and 
 35.5   capability of the vendor, and other considerations imposed in 
 35.6   the call for bids.  The commissioner may decide which is the 
 35.7   lowest responsible bidder for all contracts and may use the 
 35.8   principles of life cycle costing, where appropriate, in 
 35.9   determining the lowest overall bid.  Any or all bids may be 
 35.10  rejected.  In a case where competitive bids are required and 
 35.11  where all bids are rejected, new bids, if solicited, must be 
 35.12  called for as in the first instance, unless otherwise provided 
 35.13  by law.  
 35.14     Sec. 29.  Minnesota Statutes 1996, section 161.32, is 
 35.15  amended by adding a subdivision to read: 
 35.16     Subd. 1c.  [ALTERATIONS AND ERASURES.] A bid containing an 
 35.17  alteration or erasure of any price contained in the bid which is 
 35.18  used in determining the lowest responsible bid must be rejected 
 35.19  unless the alteration or erasure is corrected pursuant to this 
 35.20  subdivision.  An alteration or erasure may be crossed out and 
 35.21  the correction printed in ink or typewritten adjacent to it and 
 35.22  initialed in ink by the person signing the bid.  
 35.23     Sec. 30.  Minnesota Statutes 1996, section 161.32, is 
 35.24  amended by adding a subdivision to read: 
 35.25     Subd. 1d.  [SPECIAL CIRCUMSTANCES.] The commissioner may 
 35.26  reject the bid of any bidder who has failed to perform a 
 35.27  previous contract with the state.  In the case of identical low 
 35.28  bids from two or more bidders, the commissioner may use 
 35.29  negotiated procurement methods with the tied low bidders for 
 35.30  that particular transaction, so long as the price paid does not 
 35.31  exceed the low tied bid price.  The commissioner may award 
 35.32  contracts to more than one bidder in accordance with subdivision 
 35.33  1b, if doing so does not decrease the service level or diminish 
 35.34  the effect of competition. 
 35.35     Sec. 31.  Minnesota Statutes 1996, section 161.32, is 
 35.36  amended by adding a subdivision to read: 
 36.1      Subd. 1e.  [RECORD.] A record must be kept of all bids, 
 36.2   including names of bidders, amounts of bids, and each successful 
 36.3   bid.  This record is open to public inspection. 
 36.4      Sec. 32.  [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.] 
 36.5      Notwithstanding anything in chapter 16C to the contrary, 
 36.6   all contracts for the repair, improvement, maintenance, or 
 36.7   construction of highways or highway bridges must be advertised 
 36.8   and let as provided by law for highway construction contracts.  
 36.9      Sec. 33.  Minnesota Statutes 1997 Supplement, section 
 36.10  363.073, subdivision 1, is amended to read: 
 36.11     Subdivision 1.  [SCOPE OF APPLICATION.] No department or 
 36.12  agency of the state shall accept any bid or proposal for a 
 36.13  contract or agreement (a) For all contracts for goods and 
 36.14  services in excess of $100,000, no department or agency of the 
 36.15  state shall accept any bid or proposal for a contract or 
 36.16  agreement from any business having more than 40 full-time 
 36.17  employees within this state on a single working day during the 
 36.18  previous 12 months, unless the firm or business has an 
 36.19  affirmative action plan for the employment of minority persons, 
 36.20  women, and qualified disabled individuals, submitted to the 
 36.21  commissioner of human rights for approval.  No department or 
 36.22  agency of the state shall execute any such contract or agreement 
 36.23  for goods or services in excess of $100,000 with any business 
 36.24  having more than 40 full-time employees, either within or 
 36.25  outside this state, on a single working day during the previous 
 36.26  12 months, unless the firm or business has an until the 
 36.27  affirmative action plan for the employment of minority persons, 
 36.28  women, and the disabled that has been approved by the 
 36.29  commissioner of human rights.  Receipt of a certificate of 
 36.30  compliance issued by the commissioner shall signify that a firm 
 36.31  or business has an affirmative action plan that has been 
 36.32  approved by the commissioner.  A certificate shall be valid for 
 36.33  a period of two years.  A municipality as defined in section 
 36.34  466.01, subdivision 1, that receives state money for any reason 
 36.35  is encouraged to prepare and implement an affirmative action 
 36.36  plan for the employment of minority persons, women, and 
 37.1   the qualified disabled and submit the plan to the commissioner 
 37.2   of human rights. 
 37.3      (b) This paragraph applies to a contract for goods or 
 37.4   services in excess of $100,000 to be entered into between a 
 37.5   department or agency of the state and a business that is not 
 37.6   subject to paragraph (a), but that has more than 40 full-time 
 37.7   employees on a single working day during the previous 12 months 
 37.8   in the state where the business has its primary place of 
 37.9   business.  A department or agency of the state may not execute a 
 37.10  contract or agreement with a business covered by this paragraph 
 37.11  unless the business has a certificate of compliance issued by 
 37.12  the commissioner under paragraph (a) or the business certifies 
 37.13  that it is in compliance with federal affirmative action 
 37.14  requirements. 
 37.15     (c) This section does not apply to contracts entered into 
 37.16  by the state board of investment for investment options under 
 37.17  section 352.96. 
 37.18     Sec. 34.  [REPORT.] 
 37.19     The commissioner of administration shall report to the 
 37.20  legislature by January 15, 1999, in the biennial report required 
 37.21  under Minnesota Statutes, section 115A.15, subdivision 5, on the 
 37.22  potential use of measurable objectives as a means of tracking 
 37.23  progress toward the purchase of recycled content goods. 
 37.24     Sec. 35.  [REPEALER.] 
 37.25     Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 
 37.26  16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 
 37.27  16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 
 37.28  1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 
 37.29  16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 
 37.30  16B.89; and Minnesota Statutes 1997 Supplement, sections 16B.18, 
 37.31  subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed. 
 37.32     Sec. 36.  [EFFECTIVE DATE.] 
 37.33     Section 33 is effective May 1, 1998, except that it does 
 37.34  not apply to any part of the procurement process that results 
 37.35  from a solicitation dated before May 1, 1998.  The remainder of 
 37.36  this article is effective July 1, 1998, except that it does not 
 38.1   apply to any part of the procurement process that results from a 
 38.2   solicitation dated before July 1, 1998. 
 38.3                              ARTICLE 2 
 38.4                        CONFORMING AMENDMENTS 
 38.5      Section 1.  Minnesota Statutes 1997 Supplement, section 
 38.6   3.225, subdivision 1, is amended to read: 
 38.7      Subdivision 1.  [APPLICATION.] This section applies to a 
 38.8   contract for professional or technical services entered into by 
 38.9   the house of representatives, the senate, the legislative 
 38.10  coordinating commission, or any group under the jurisdiction of 
 38.11  the legislative coordinating commission.  For purposes of this 
 38.12  section, "professional or technical services" has the meaning 
 38.13  defined in section 16B.17 16C.09, subdivision 1, but does not 
 38.14  include legal services for official legislative business. 
 38.15     Sec. 2.  Minnesota Statutes 1996, section 3.225, 
 38.16  subdivision 2, is amended to read: 
 38.17     Subd. 2.  [REQUIREMENTS FOR ALL CONTRACTS.] Before entering 
 38.18  into a contract for professional or technical services, the 
 38.19  contracting entity must determine that: 
 38.20     (1) all provisions of section 16B.19 16C.18, subdivision 2 
 38.21  3, relating to purchases from small businesses, have been 
 38.22  verified or complied with; 
 38.23     (2) the work to be performed under the contract is 
 38.24  necessary to the entity's achievement of its responsibilities; 
 38.25     (3) the contract will not establish an employment 
 38.26  relationship between the state or the entity and any persons 
 38.27  performing under the contract; 
 38.28     (4) no current legislative employees will engage in the 
 38.29  performance of the contract; 
 38.30     (5) no state agency has previously performed or contracted 
 38.31  for the performance of tasks which would be substantially 
 38.32  duplicated under the proposed contract; 
 38.33     (6) the contracting entity has specified a satisfactory 
 38.34  method of evaluating and using the results of the work to be 
 38.35  performed; and 
 38.36     (7) the combined contract and amendments will not extend 
 39.1   for more than five years. 
 39.2      Sec. 3.  Minnesota Statutes 1996, section 3.732, 
 39.3   subdivision 6, is amended to read: 
 39.4      Subd. 6.  [SETTLEMENT.] The head of each department or 
 39.5   agency, or a designee, acting on behalf of the state, may enter 
 39.6   into structured settlements, through the negotiation, creation, 
 39.7   and use of annuities or similar financial plans for claimants, 
 39.8   to resolve claims arising from the alleged negligence of the 
 39.9   state, its agencies, or employees.  Sections 16B.06, 16B.07, 
 39.10  16B.08, and 16B.09 16C.03, subdivision 4, 16C.06, and 16C.07 do 
 39.11  not apply to the state's selection of and contracts with 
 39.12  structured settlement consultants or purveyors of structured 
 39.13  settlement plans.  
 39.14     Sec. 4.  Minnesota Statutes 1996, section 3.922, 
 39.15  subdivision 5, is amended to read: 
 39.16     Subd. 5.  [OFFICERS; PERSONNEL; AUTHORITY.] The council 
 39.17  shall annually elect a chair and other officers as it may deem 
 39.18  necessary.  The chair may appoint subcommittees necessary to 
 39.19  fulfill the duties of the council.  It shall also employ and 
 39.20  prescribe the duties of employees and agents as it deems 
 39.21  necessary.  The compensation of the executive director of the 
 39.22  board is as provided by section 43A.18.  All employees are in 
 39.23  the unclassified service.  The chair is an ex officio member of 
 39.24  the state board of human rights.  Appropriations and other funds 
 39.25  of the council are subject to chapter 16B 16C.  The council may 
 39.26  contract in its own name.  Contracts must be approved by a 
 39.27  majority of the members of the council and executed by the chair 
 39.28  and the executive director.  The council may apply for, receive, 
 39.29  and spend in its own name, grants and gifts of money consistent 
 39.30  with the powers and duties specified in this section.  The 
 39.31  council shall maintain its primary office in Bemidji.  It shall 
 39.32  also maintain personnel and office space in St. Paul. 
 39.33     Sec. 5.  Minnesota Statutes 1996, section 3C.10, 
 39.34  subdivision 3, is amended to read: 
 39.35     Subd. 3.  [NEGOTIATED CONTRACTS.] The revisor's office may 
 39.36  negotiate for all or part of the editing, indexing, compiling, 
 40.1   and printing of Minnesota Statutes, supplements to Minnesota 
 40.2   Statutes, and Laws of Minnesota and contract with a law book 
 40.3   publisher for these services.  The provisions of chapter 16B 16C 
 40.4   as they relate to competitive bidding do not apply to these 
 40.5   contracts.  No contract may be made until the revisor of 
 40.6   statutes has consulted with the legislative coordinating 
 40.7   commission.  Failure or refusal of the commission to make a 
 40.8   recommendation promptly shall be deemed an affirmative 
 40.9   recommendation.  
 40.10     Sec. 6.  Minnesota Statutes 1996, section 4A.04, is amended 
 40.11  to read: 
 40.12     4A.04 [COOPERATIVE CONTRACTS.] 
 40.13     (a) The director may apply for, receive, and expend money 
 40.14  from municipal, county, regional, and other planning agencies; 
 40.15  apply for, accept, and disburse grants and other aids for 
 40.16  planning purposes from the federal government and from other 
 40.17  public or private sources; and may enter into contracts with 
 40.18  agencies of the federal government, local governmental units, 
 40.19  the University of Minnesota, and other educational institutions, 
 40.20  and private persons as necessary to perform the director's 
 40.21  duties.  Contracts made pursuant to this section are not subject 
 40.22  to the provisions of chapter 16B 16C, as they relate to 
 40.23  competitive bidding. 
 40.24     (b) The director may apply for, receive, and expend money 
 40.25  made available from federal sources or other sources for the 
 40.26  purposes of carrying out the duties and responsibilities of the 
 40.27  director relating to local and urban affairs.  
 40.28     (c) All money received by the director pursuant to this 
 40.29  section shall be deposited in the state treasury and is 
 40.30  appropriated to the director for the purposes for which the 
 40.31  money has been received.  The money shall not cancel and is 
 40.32  available until expended.  
 40.33     Sec. 7.  Minnesota Statutes 1996, section 6.551, is amended 
 40.34  to read: 
 40.35     6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL 
 40.36  GOVERNMENTS.] 
 41.1      The state auditor may examine the books, records, 
 41.2   documents, and accounting procedures and practices of a 
 41.3   contractor or grantee of a local government pursuant to section 
 41.4   16B.06 16C.06, subdivision 4 5.  The examination shall be 
 41.5   limited to the books, records, documents, and accounting 
 41.6   procedures and practices that are relevant to the contract or 
 41.7   transaction with the local government. 
 41.8      Sec. 8.  Minnesota Statutes 1996, section 11A.24, 
 41.9   subdivision 4, is amended to read: 
 41.10     Subd. 4.  [OTHER OBLIGATIONS.] (a) The state board may 
 41.11  invest funds in bankers acceptances, certificates of deposit, 
 41.12  deposit notes, commercial paper, mortgage securities and asset 
 41.13  backed securities, repurchase agreements and reverse repurchase 
 41.14  agreements, guaranteed investment contracts, savings accounts, 
 41.15  and guaranty fund certificates, surplus notes, or debentures of 
 41.16  domestic mutual insurance companies if they conform to the 
 41.17  following provisions: 
 41.18     (1) bankers acceptances and deposit notes of United States 
 41.19  banks are limited to those issued by banks rated in the highest 
 41.20  four quality categories by a nationally recognized rating 
 41.21  agency; 
 41.22     (2) certificates of deposit are limited to those issued by 
 41.23  (i) United States banks and savings institutions that are rated 
 41.24  in the top four quality categories by a nationally recognized 
 41.25  rating agency or whose certificates of deposit are fully insured 
 41.26  by federal agencies; or (ii) credit unions in amounts up to the 
 41.27  limit of insurance coverage provided by the National Credit 
 41.28  Union Administration; 
 41.29     (3) commercial paper is limited to those issued by United 
 41.30  States corporations or their Canadian subsidiaries and rated in 
 41.31  the highest two quality categories by a nationally recognized 
 41.32  rating agency; 
 41.33     (4) mortgage securities shall be rated in the top four 
 41.34  quality categories by a nationally recognized rating agency; 
 41.35     (5) collateral for repurchase agreements and reverse 
 41.36  repurchase agreements is limited to letters of credit and 
 42.1   securities authorized in this section; 
 42.2      (6) guaranteed investment contracts are limited to those 
 42.3   issued by insurance companies or banks rated in the top four 
 42.4   quality categories by a nationally recognized rating agency or 
 42.5   to alternative guaranteed investment contracts where the 
 42.6   underlying assets comply with the requirements of this section; 
 42.7      (7) savings accounts are limited to those fully insured by 
 42.8   federal agencies; and 
 42.9      (8) asset backed securities shall be rated in the top four 
 42.10  quality categories by a nationally recognized rating agency. 
 42.11     (b) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 
 42.12  16C.06 do not apply to certificates of deposit and 
 42.13  collateralization agreements executed by the state board under 
 42.14  paragraph (a), clause (2). 
 42.15     (c) In addition to investments authorized by paragraph (a), 
 42.16  clause (4), the state board may purchase from the Minnesota 
 42.17  housing finance agency all or any part of a pool of residential 
 42.18  mortgages, not in default, that has previously been financed by 
 42.19  the issuance of bonds or notes of the agency.  The state board 
 42.20  may also enter into a commitment with the agency, at the time of 
 42.21  any issue of bonds or notes, to purchase at a specified future 
 42.22  date, not exceeding 12 years from the date of the issue, the 
 42.23  amount of mortgage loans then outstanding and not in default 
 42.24  that have been made or purchased from the proceeds of the bonds 
 42.25  or notes.  The state board may charge reasonable fees for any 
 42.26  such commitment and may agree to purchase the mortgage loans at 
 42.27  a price sufficient to produce a yield to the state board 
 42.28  comparable, in its judgment, to the yield available on similar 
 42.29  mortgage loans at the date of the bonds or notes.  The state 
 42.30  board may also enter into agreements with the agency for the 
 42.31  investment of any portion of the funds of the agency.  The 
 42.32  agreement must cover the period of the investment, withdrawal 
 42.33  privileges, and any guaranteed rate of return. 
 42.34     Sec. 9.  Minnesota Statutes 1996, section 12.221, 
 42.35  subdivision 5, is amended to read: 
 42.36     Subd. 5.  [REQUIREMENTS WAIVED.] Pursuant to any 
 43.1   federal-state agreement entered into by the state director, 
 43.2   serving as the governor's authorized representative, in the 
 43.3   acceptance of federal money made available as a result of a 
 43.4   disaster declaration, and upon the review and acceptance by the 
 43.5   attorney general's office of the language contained in the 
 43.6   subgrant agreement and any amendments to the agreement, the 
 43.7   requirements of section 16B.06 16C.06, subdivision 2, paragraph 
 43.8   (a), clause (3), must be waived. 
 43.9      Sec. 10.  Minnesota Statutes 1996, section 15.061, is 
 43.10  amended to read: 
 43.11     15.061 [PROFESSIONAL OR TECHNICAL SERVICES.] 
 43.12     In accordance with section 16B.17 sections 16C.03 and 
 43.13  16C.09, the head of a state department or agency may, with the 
 43.14  approval of the commissioner of administration, contract for 
 43.15  professional or technical services in connection with the 
 43.16  operation of the department or agency.  A contract negotiated 
 43.17  under this section is not subject to the competitive bidding 
 43.18  requirements of chapter 16B 16C. 
 43.19     Sec. 11.  Minnesota Statutes 1996, section 16A.101, is 
 43.20  amended to read: 
 43.21     16A.101 [SERVICE CONTRACTS.] 
 43.22     The state accounting system must list expenditures for 
 43.23  professional and technical service contracts, as defined in 
 43.24  section 16B.17 16C.09, subdivision 1, as a separate category.  
 43.25  No other expenditures may be included in this category. 
 43.26     Sec. 12.  Minnesota Statutes 1997 Supplement, section 
 43.27  16A.15, subdivision 3, is amended to read: 
 43.28     Subd. 3.  [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may 
 43.29  not be made without prior obligation.  An obligation may not be 
 43.30  incurred against any fund, allotment, or appropriation unless 
 43.31  the commissioner has certified a sufficient unencumbered balance 
 43.32  or the accounting system shows sufficient allotment or 
 43.33  encumbrance balance in the fund, allotment, or appropriation to 
 43.34  meet it.  The commissioner shall determine when the accounting 
 43.35  system may be used to incur obligations without the 
 43.36  commissioner's certification of a sufficient unencumbered 
 44.1   balance.  An expenditure or obligation authorized or incurred in 
 44.2   violation of this chapter is invalid and ineligible for payment 
 44.3   until made valid.  A payment made in violation of this chapter 
 44.4   is illegal.  An employee authorizing or making the payment, or 
 44.5   taking part in it, and a person receiving any part of the 
 44.6   payment, are jointly and severally liable to the state for the 
 44.7   amount paid or received.  If an employee knowingly incurs an 
 44.8   obligation or authorizes or makes an expenditure in violation of 
 44.9   this chapter or takes part in the violation, the violation is 
 44.10  just cause for the employee's removal by the appointing 
 44.11  authority or by the governor if an appointing authority other 
 44.12  than the governor fails to do so.  In the latter case, the 
 44.13  governor shall give notice of the violation and an opportunity 
 44.14  to be heard on it to the employee and to the appointing 
 44.15  authority.  A claim presented against an appropriation without 
 44.16  prior allotment or encumbrance may be made valid on 
 44.17  investigation, review, and approval by the agency head in 
 44.18  accordance with the commissioner's policy, if the services, 
 44.19  materials, or supplies to be paid for were actually furnished in 
 44.20  good faith without collusion and without intent to defraud.  The 
 44.21  commissioner may then draw a warrant to pay the claim just as 
 44.22  properly allotted and encumbered claims are paid. 
 44.23     (b) The commissioner may approve payment for materials and 
 44.24  supplies in excess of the obligation amount when increases are 
 44.25  authorized by section 16B.07 16C.03, subdivision 2 3. 
 44.26     (c) To minimize potential construction delay claims, an 
 44.27  agency with a project funded by a building appropriation may 
 44.28  allow a contractor to proceed with supplemental work within the 
 44.29  limits of the appropriation before money is encumbered.  Under 
 44.30  this circumstance, the agency may requisition funds and allow 
 44.31  contractors to expeditiously proceed with a construction 
 44.32  sequence.  While the contractor is proceeding, the agency shall 
 44.33  immediately act to encumber the required funds. 
 44.34     Sec. 13.  Minnesota Statutes 1996, section 16A.85, 
 44.35  subdivision 1, is amended to read: 
 44.36     Subdivision 1.  [AUTHORIZATION.] The commissioner of 
 45.1   administration may determine, in conjunction with the 
 45.2   commissioner of finance, the personal property needs of the 
 45.3   various state departments, agencies, boards, commissions and the 
 45.4   legislature of the kinds of property identified in this 
 45.5   subdivision that may be economically funded through a master 
 45.6   lease program and request the commissioner of finance to execute 
 45.7   a master lease.  The master lease may be used only to finance 
 45.8   the following kinds of purchases: 
 45.9      (a) The master lease may be used to finance purchases by 
 45.10  the commissioner of administration with money from an internal 
 45.11  services fund. 
 45.12     (b) The master lease may be used to refinance a purchase of 
 45.13  equipment already purchased under a lease-purchase agreement. 
 45.14     (c) The master lease may be used to finance purchases of 
 45.15  large equipment with a capital value of more than $100,000 and a 
 45.16  useful life of more than ten years. 
 45.17     (d) The legislature may specifically authorize a particular 
 45.18  purchase to be financed using the master lease.  The legislature 
 45.19  anticipates that this authorization will be given only to 
 45.20  finance the purchase of major pieces of equipment with a capital 
 45.21  value of more than $10,000. 
 45.22     The commissioner of finance may authorize the sale and 
 45.23  issuance of certificates of participation relative to a master 
 45.24  lease in an amount sufficient to fund these personal property 
 45.25  needs.  The term of the certificates must be less than the 
 45.26  expected useful life of the equipment whose purchase is financed 
 45.27  by the certificates.  The commissioner of administration may use 
 45.28  the proceeds from the master lease or the sale of the 
 45.29  certificates of participation to acquire the personal property 
 45.30  through the appropriate procurement procedure in chapter 16B 16C.
 45.31  Money appropriated for the lease or acquisition of this personal 
 45.32  property is appropriated to the commissioner of finance to make 
 45.33  master lease payments. 
 45.34     Sec. 14.  Minnesota Statutes 1997 Supplement, section 
 45.35  16B.465, subdivision 7, is amended to read: 
 45.36     Subd. 7.  [EXEMPTION.] The system is exempt from the 
 46.1   five-year limitation on contracts set by section 16B.07, 
 46.2   subdivision 2 sections 16C.06, subdivision 2, paragraph (a), 
 46.3   clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, 
 46.4   clause (6). 
 46.5      Sec. 15.  Minnesota Statutes 1997 Supplement, section 
 46.6   16E.07, subdivision 9, is amended to read: 
 46.7      Subd. 9.  [AGGREGATION OF SERVICE DEMAND.] The office shall 
 46.8   identify opportunities to aggregate demand for technical 
 46.9   services required by government units for online activities and 
 46.10  may contract with governmental or nongovernmental entities to 
 46.11  provide services.  These contracts are not subject to the 
 46.12  requirements of chapter chapters 16B and 16C, except 
 46.13  sections 16B.167, 16B.17, and 16B.175 16C.05, 16C.08, 16C.09, 
 46.14  and 16C.10. 
 46.15     Sec. 16.  Minnesota Statutes 1997 Supplement, section 
 46.16  17.03, subdivision 12, is amended to read: 
 46.17     Subd. 12.  [CONTRACTS; APPROPRIATION.] The commissioner may 
 46.18  accept money as part of a contract with any public or private 
 46.19  entity to provide statutorily prescribed services by the 
 46.20  department.  A contract must specify the services to be provided 
 46.21  by the department and the amount and method of reimbursement.  
 46.22  Money generated in a contractual agreement under this section 
 46.23  must be deposited in a special revenue fund and is appropriated 
 46.24  to the department for purposes of providing services specified 
 46.25  in the contracts.  Contracts under this section must be 
 46.26  processed in accordance with section 16B.06 16C.06.  The 
 46.27  commissioner must report revenues collected and expenditures 
 46.28  made under this section to the chairs of the environment and 
 46.29  natural resources finance committee in the house of 
 46.30  representatives and the environment and agriculture budget 
 46.31  division in the senate by January 15 of each odd-numbered year. 
 46.32     Sec. 17.  Minnesota Statutes 1996, section 17.1015, is 
 46.33  amended to read: 
 46.34     17.1015 [PROMOTIONAL EXPENDITURES.] 
 46.35     In order to accomplish the purposes of section 17.101, the 
 46.36  commissioner may participate jointly with private persons in 
 47.1   appropriate programs and projects and may enter into contracts 
 47.2   to carry out those programs and projects.  The contracts may not 
 47.3   include the acquisition of land or buildings and are not subject 
 47.4   to the provisions of chapter 16B 16C relating to competitive 
 47.5   bidding. 
 47.6      The commissioner may spend money appropriated for the 
 47.7   purposes of section 17.101, and expenditures made pursuant to 
 47.8   section 17.101 for food, lodging, or travel are not governed by 
 47.9   the travel rules of the commissioner of employee relations.  
 47.10     Sec. 18.  Minnesota Statutes 1996, section 41A.023, is 
 47.11  amended to read: 
 47.12     41A.023 [POWERS.] 
 47.13     In addition to other powers granted by this chapter, the 
 47.14  board may: 
 47.15     (1) sue and be sued; 
 47.16     (2) acquire, hold, lease, and transfer any interest in real 
 47.17  and personal property for its corporate purposes; 
 47.18     (3) sell at public or private sale, at the price or prices 
 47.19  determined by the board, any note, mortgage, lease, sublease, 
 47.20  lease purchase, or other instrument or obligation evidencing or 
 47.21  securing a loan made for the purpose of economic development, 
 47.22  job creation, redevelopment, or community revitalization by a 
 47.23  public agency to a business, for-profit or nonprofit 
 47.24  organization, or an individual; 
 47.25     (4) obtain insurance on its property; 
 47.26     (5) obtain municipal bond insurance, letters of credit, 
 47.27  surety obligations, or similar agreements from financial 
 47.28  institutions; 
 47.29     (6) enter into other agreements or transactions, without 
 47.30  regard to chapter 16B or 16C, that the board considers necessary 
 47.31  or appropriate to carry out the purposes of this chapter with 
 47.32  federal or state agencies, political subdivisions of the state, 
 47.33  or other persons, firms, or corporations; 
 47.34     (7) establish and collect fees without regard to chapter 14 
 47.35  and section 16A.1285; 
 47.36     (8) accept appropriations, gifts, grants, and bequests; 
 48.1      (9) use money received from any source for any legal 
 48.2   purpose or program of the board; 
 48.3      (10) participate in loans for agricultural resource 
 48.4   projects in accordance with section 41A.035; 
 48.5      (11) provide small business development loans in accordance 
 48.6   with section 41A.036; and 
 48.7      (12) guarantee or insure bonds or notes issued by the board.
 48.8      Sec. 19.  Minnesota Statutes 1997 Supplement, section 
 48.9   41D.03, subdivision 7, is amended to read: 
 48.10     Subd. 7.  [PURCHASING INSTRUCTIONAL ITEMS.] Technical 
 48.11  educational equipment may be procured for programs of the 
 48.12  Minnesota center for agriculture education by the council either 
 48.13  by brand designation or in accordance with standards and 
 48.14  specifications the council may adopt, notwithstanding chapter 
 48.15  16B 16C. 
 48.16     Sec. 20.  Minnesota Statutes 1996, section 43A.23, 
 48.17  subdivision 1, is amended to read: 
 48.18     Subdivision 1.  [GENERAL.] The commissioner is authorized 
 48.19  to request bids from carriers or to negotiate with carriers and 
 48.20  to enter into contracts with carriers which in the judgment of 
 48.21  the commissioner are best qualified to underwrite and service 
 48.22  the benefit plans.  Contracts entered into with carriers are not 
 48.23  subject to the requirements of sections 16B.19 to 16B.22 16C.18 
 48.24  to 16C.21.  The commissioner may negotiate premium rates and 
 48.25  coverage provisions with all carriers licensed under chapters 
 48.26  62A, 62C, and 62D.  The commissioner may also negotiate 
 48.27  reasonable restrictions to be applied to all carriers under 
 48.28  chapters 62A, 62C, and 62D.  Contracts to underwrite the benefit 
 48.29  plans must be bid or negotiated separately from contracts to 
 48.30  service the benefit plans, which may be awarded only on the 
 48.31  basis of competitive bids.  The commissioner shall consider the 
 48.32  cost of the plans, conversion options relating to the contracts, 
 48.33  service capabilities, character, financial position, and 
 48.34  reputation of the carriers, and any other factors which the 
 48.35  commissioner deems appropriate.  Each benefit contract must be 
 48.36  for a uniform term of at least one year, but may be made 
 49.1   automatically renewable from term to term in the absence of 
 49.2   notice of termination by either party.  The commissioner shall, 
 49.3   to the extent feasible, make hospital and medical benefits 
 49.4   available from at least one carrier licensed to do business 
 49.5   pursuant to each of chapters 62A, 62C, and 62D.  The 
 49.6   commissioner need not provide health maintenance organization 
 49.7   services to an employee who resides in an area which is not 
 49.8   served by a licensed health maintenance organization.  The 
 49.9   commissioner may refuse to allow a health maintenance 
 49.10  organization to continue as a carrier.  The commissioner may 
 49.11  elect not to offer all three types of carriers if there are no 
 49.12  bids or no acceptable bids by that type of carrier or if the 
 49.13  offering of additional carriers would result in substantial 
 49.14  additional administrative costs.  A carrier licensed under 
 49.15  chapter 62A is exempt from the tax imposed by section 60A.15 on 
 49.16  premiums paid to it by the state. 
 49.17     Sec. 21.  Minnesota Statutes 1996, section 44A.01, 
 49.18  subdivision 1, is amended to read: 
 49.19     Subdivision 1.  [ESTABLISHMENT.] The Minnesota world trade 
 49.20  center corporation is a public corporation established to 
 49.21  facilitate and support Minnesota world trade center programs and 
 49.22  services and to promote the Minnesota world trade center.  The 
 49.23  corporation is a state agency, but is not subject to chapters 
 49.24  14, 16A, 16B, 16C, 43A, and 179A.  
 49.25     Sec. 22.  Minnesota Statutes 1996, section 45.0291, is 
 49.26  amended to read: 
 49.27     45.0291 [DEPARTMENT BONDS.] 
 49.28     Bonds issued under chapters 45 to 83, 309, 332, and 
 49.29  sections 326.83 to 326.98, are not state bonds or contracts for 
 49.30  purposes of sections 8.05 and 16B.06 16C.06, subdivision 2. 
 49.31     Sec. 23.  Minnesota Statutes 1997 Supplement, section 
 49.32  61B.21, subdivision 1, is amended to read: 
 49.33     Subdivision 1.  [FUNCTIONS.] The Minnesota life and health 
 49.34  insurance guaranty association shall perform its functions under 
 49.35  the plan of operation established and approved under section 
 49.36  61B.25, and shall exercise its powers through a board of 
 50.1   directors.  The association is not a state agency for purposes 
 50.2   of chapter 16A, 16B, 16C, or 43A.  For purposes of 
 50.3   administration and assessment, the association shall establish 
 50.4   and maintain two accounts: 
 50.5      (1) the life insurance and annuity account which includes 
 50.6   the following subaccounts: 
 50.7      (i) the life insurance account; 
 50.8      (ii) the annuity account; and 
 50.9      (iii) the unallocated annuity account; and 
 50.10     (2) the health insurance account. 
 50.11     Sec. 24.  Minnesota Statutes 1996, section 84.025, 
 50.12  subdivision 7, is amended to read: 
 50.13     Subd. 7.  [CONTRACTS.] The commissioner of natural 
 50.14  resources may contract with the federal government, local 
 50.15  governmental units, the University of Minnesota, and other 
 50.16  educational institutions, and private persons as may be 
 50.17  necessary in the performance of duties.  Contracts made pursuant 
 50.18  to this section for professional services shall not be subject 
 50.19  to the provisions of chapter 16B 16C, as they relate to 
 50.20  competitive bidding. 
 50.21     Sec. 25.  Minnesota Statutes 1996, section 84.026, is 
 50.22  amended to read: 
 50.23     84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES 
 50.24  SERVICES.] 
 50.25     The commissioner of natural resources is authorized to 
 50.26  enter into contractual agreements with any public or private 
 50.27  entity for the provision of statutorily prescribed natural 
 50.28  resources services by the department.  The contracts shall 
 50.29  specify the services to be provided and the amount and method of 
 50.30  reimbursement.  Funds generated in a contractual agreement made 
 50.31  pursuant to this section shall be deposited in the special 
 50.32  revenue fund and are appropriated to the department for purposes 
 50.33  of providing the services specified in the contracts.  All such 
 50.34  contractual agreements shall be processed in accordance with the 
 50.35  provisions of section 16B.06 16C.06.  The commissioner shall 
 50.36  report revenues collected and expenditures made under this 
 51.1   section to the chairs of the committees on appropriations in the 
 51.2   house and finance in the senate by January 1 of each 
 51.3   odd-numbered year. 
 51.4      Sec. 26.  Minnesota Statutes 1996, section 84.0845, is 
 51.5   amended to read: 
 51.6      84.0845 [ADVANCE OF MATCHING FUNDS.] 
 51.7      The commissioner may advance funds appropriated for fish 
 51.8   and wildlife programs to government agencies, the National Fish 
 51.9   and Wildlife Foundation, federally recognized Indian tribes and 
 51.10  bands, and private, nonprofit organizations for the purposes of 
 51.11  securing nonstate matching funds for projects involving 
 51.12  acquisition and improvement of fish and wildlife habitat and 
 51.13  related research and management.  The commissioner shall execute 
 51.14  agreements for contracts with the matching parties under section 
 51.15  16B.06 sections 16C.03, subdivision 4, and 16C.06 prior to 
 51.16  advancing any state funds.  The agreement or contract shall 
 51.17  contain provisions for return of the state's share and the 
 51.18  matching funds within a period of time specified by the 
 51.19  commissioner.  The state's funds and the nonstate matching funds 
 51.20  must be deposited in a separate account and expended solely for 
 51.21  the purposes set forth in the agreement or contract.  The 
 51.22  commissioner shall enter into agreements or contracts only with 
 51.23  the National Fish and Wildlife Foundation and federal and 
 51.24  nonprofit authorities deemed by the commissioner to be dedicated 
 51.25  to the purposes of the project. 
 51.26     Sec. 27.  Minnesota Statutes 1996, section 85A.02, 
 51.27  subdivision 3, is amended to read: 
 51.28     Subd. 3.  The board may conduct research studies and 
 51.29  programs, collect and analyze data and prepare reports, maps, 
 51.30  charts and other information relating to the zoological garden 
 51.31  or any wild or domestic animals or may contract for any of such 
 51.32  services without complying with chapter 16B 16C. 
 51.33     Sec. 28.  Minnesota Statutes 1997 Supplement, section 
 51.34  85A.02, subdivision 5b, is amended to read: 
 51.35     Subd. 5b.  [EXEMPTIONS.] The board is not subject to 
 51.36  sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; 
 52.1   chapter chapters 16B and 16C, except for sections 16B.07, 
 52.2   16B.102, 16B.17, 16B.19, 16B.35, and 16B.55 16B.35, 16B.55, 
 52.3   16C.07, 16C.09, 16C.10, and 16C.18; and chapter 14, except 
 52.4   section 14.386, paragraph (a), clauses (1) and (3).  Section 
 52.5   14.386, paragraph (b), does not apply to the board's actions.  
 52.6      Sec. 29.  Minnesota Statutes 1996, section 85A.02, 
 52.7   subdivision 16, is amended to read: 
 52.8      Subd. 16.  The board may acquire by lease-purchase or 
 52.9   installment purchase contract, transportation systems, 
 52.10  facilities and equipment that it determines will substantially 
 52.11  enhance the public's opportunity to view, study or derive 
 52.12  information concerning the animals to be located in the 
 52.13  zoological garden, and will increase attendance at the garden.  
 52.14  The contracts may provide for:  (1) the payment of money over a 
 52.15  12-year period, or over a longer period not exceeding 25 years 
 52.16  if approved by the board; (2) the payment of money from any 
 52.17  funds of the board not pledged or appropriated for another 
 52.18  purpose; (3) indemnification of the lessor or seller for damage 
 52.19  to property or injury to persons due primarily to the actions of 
 52.20  the board or its employees; (4) the transfer of title to the 
 52.21  property to the board upon execution of the contract or upon 
 52.22  payment of specified amounts; (5) the reservation to the lessor 
 52.23  or seller of a security interest in the property; and (6) any 
 52.24  other terms that the board determines to be commercially 
 52.25  reasonable.  Property so acquired by the board, and its purchase 
 52.26  or use by the board, or by any nonprofit corporation having a 
 52.27  concession from the board requiring its purchase, shall not be 
 52.28  subject to taxation by the state or its political subdivisions.  
 52.29  Each contract shall be subject to the provisions of chapter 16B 
 52.30  16C, relating to competitive bidding, provided that, 
 52.31  notwithstanding subdivision 5b, the board is not required to 
 52.32  readvertise for competitive proposals for any transportation 
 52.33  system, facilities and equipment heretofore selected from 
 52.34  competitive proposals. 
 52.35     Sec. 30.  Minnesota Statutes 1996, section 85A.02, 
 52.36  subdivision 18, is amended to read: 
 53.1      Subd. 18.  [PURCHASING.] The board may contract for 
 53.2   supplies, materials, purchase or rental of equipment, and 
 53.3   utility services.  Except as provided in subdivision 5b, chapter 
 53.4   16B 16C does not apply to these contracts.  
 53.5      Sec. 31.  Minnesota Statutes 1996, section 103F.515, 
 53.6   subdivision 3, is amended to read: 
 53.7      Subd. 3.  [CONSERVATION EASEMENTS.] (a) The board may 
 53.8   acquire, or accept by gift or donation, conservation easements 
 53.9   on eligible land.  An easement may be permanent or of limited 
 53.10  duration.  An easement acquired on land for windbreak purposes, 
 53.11  under subdivision 2, may be only of permanent duration.  An 
 53.12  easement of limited duration may not be acquired if it is for a 
 53.13  period less than 20 years.  The negotiation and acquisition of 
 53.14  easements authorized by this section are exempt from the 
 53.15  contractual provisions of chapter chapters 16B and 16C.  
 53.16     (b) The board may acquire, or accept by gift or donation, 
 53.17  flowage easements when necessary for completion of wetland 
 53.18  restoration projects. 
 53.19     Sec. 32.  Minnesota Statutes 1996, section 116.03, 
 53.20  subdivision 2, is amended to read: 
 53.21     Subd. 2.  The commissioner shall organize the agency and 
 53.22  employ such assistants and other officers, employees and agents 
 53.23  as the commissioner may deem necessary to discharge the 
 53.24  functions of the commissioner's office, define the duties of 
 53.25  such officers, employees and agents, and delegate to them any of 
 53.26  the commissioner's powers, duties, and responsibilities, subject 
 53.27  to the commissioner's control and under such conditions as the 
 53.28  commissioner may prescribe.  The commissioner may also contract 
 53.29  with persons, firms, corporations, the federal government and 
 53.30  any agency or instrumentality thereof, the water research center 
 53.31  of the University of Minnesota or any other instrumentality of 
 53.32  such university, for doing any of the work of the commissioner's 
 53.33  office, and none of the provisions of chapter 16B 16C, relating 
 53.34  to bids, shall apply to such contracts.  
 53.35     Sec. 33.  Minnesota Statutes 1996, section 116J.035, 
 53.36  subdivision 1, is amended to read: 
 54.1      Subdivision 1.  [POWERS.] The commissioner may:  
 54.2      (a) apply for, receive, and expend money from municipal, 
 54.3   county, regional, and other government agencies; 
 54.4      (b) apply for, accept, and disburse grants and other aids 
 54.5   from other public or private sources; 
 54.6      (c) contract for professional services if such work or 
 54.7   services cannot be satisfactorily performed by employees of the 
 54.8   department or by any other state agency; 
 54.9      (d) enter into interstate compacts to jointly carry out 
 54.10  such research and planning with other states or the federal 
 54.11  government where appropriate; 
 54.12     (e) distribute informational material at no cost to the 
 54.13  public upon reasonable request; and 
 54.14     (f) enter into contracts necessary for the performance of 
 54.15  the commissioner's duties with federal, state, regional, 
 54.16  metropolitan, local, and other agencies or units of government; 
 54.17  educational institutions, including the University of 
 54.18  Minnesota.  Contracts made pursuant to this section shall not be 
 54.19  subject to the competitive bidding requirements of chapter 16B 
 54.20  16C.  
 54.21     The commissioner may apply for, receive, and expend money 
 54.22  made available from federal or other sources for the purpose of 
 54.23  carrying out the duties and responsibilities of the commissioner 
 54.24  pursuant to this chapter.  
 54.25     All moneys received by the commissioner pursuant to this 
 54.26  chapter shall be deposited in the state treasury and are 
 54.27  appropriated to the commissioner for the purpose for which the 
 54.28  moneys have been received.  The money shall not cancel and shall 
 54.29  be available until expended.  
 54.30     Sec. 34.  Minnesota Statutes 1996, section 116J.402, is 
 54.31  amended to read: 
 54.32     116J.402 [COOPERATIVE CONTRACTS.] 
 54.33     The commissioner of trade and economic development may 
 54.34  apply for, receive, and spend money for community development 
 54.35  from municipal, county, regional, and other planning agencies. 
 54.36  The commissioner may also apply for, accept, and disburse grants 
 55.1   and other aids for community development and related planning 
 55.2   from the federal government and other sources.  The commissioner 
 55.3   may enter into contracts with agencies of the federal 
 55.4   government, local governmental units, regional development 
 55.5   commissions, and the metropolitan council, other state agencies, 
 55.6   the University of Minnesota, and other educational institutions, 
 55.7   and private persons as necessary to perform the commissioner's 
 55.8   duties.  Contracts made according to this section, except those 
 55.9   with private persons, are not subject to the provisions of 
 55.10  chapter 16B 16C concerning competitive bidding.  
 55.11     The commissioner may apply for, receive, and spend money 
 55.12  made available from federal sources or other sources for the 
 55.13  purposes of carrying out the duties and responsibilities of the 
 55.14  commissioner.  
 55.15     Money received by the commissioner under this section must 
 55.16  be deposited in the state treasury and is appropriated to the 
 55.17  commissioner for the purposes for which the money has been 
 55.18  received.  The money does not cancel and is available until 
 55.19  spent.  
 55.20     Sec. 35.  Minnesota Statutes 1996, section 116J.58, 
 55.21  subdivision 2, is amended to read: 
 55.22     Subd. 2.  [PROMOTIONAL CONTRACTS.] In order to best carry 
 55.23  out duties and responsibilities and to serve the people of the 
 55.24  state in the promotion of tourism, trade, and economic 
 55.25  development, the commissioner may engage in programs and 
 55.26  projects jointly with a private person, firm, corporation or 
 55.27  association and may enter into contracts under terms to be 
 55.28  mutually agreed upon to carry out such programs and projects not 
 55.29  including acquisition of land or buildings.  Contracts may be 
 55.30  negotiated and are not subject to the provisions of chapter 16B 
 55.31  16C relating to competitive bidding.  
 55.32     Sec. 36.  Minnesota Statutes 1996, section 116J.68, 
 55.33  subdivision 2, is amended to read: 
 55.34     Subd. 2.  The bureau shall:  
 55.35     (a) provide information and assistance with respect to all 
 55.36  aspects of business planning and business management related to 
 56.1   the start-up, operation, or expansion of a small business in 
 56.2   Minnesota; 
 56.3      (b) refer persons interested in the start-up, operation, or 
 56.4   expansion of a small business in Minnesota to assistance 
 56.5   programs sponsored by federal agencies, state agencies, 
 56.6   educational institutions, chambers of commerce, civic 
 56.7   organizations, community development groups, private industry 
 56.8   associations, and other organizations or to the business 
 56.9   assistance referral system established by the Minnesota Project 
 56.10  Outreach Corporation; 
 56.11     (c) plan, develop, and implement a master file of 
 56.12  information on small business assistance programs of federal, 
 56.13  state, and local governments, and other public and private 
 56.14  organizations so as to provide comprehensive, timely information 
 56.15  to the bureau's clients; 
 56.16     (d) employ staff with adequate and appropriate skills and 
 56.17  education and training for the delivery of information and 
 56.18  assistance; 
 56.19     (e) seek out and utilize, to the extent practicable, 
 56.20  contributed expertise and services of federal, state, and local 
 56.21  governments, educational institutions, and other public and 
 56.22  private organizations; 
 56.23     (f) maintain a close and continued relationship with the 
 56.24  director of the procurement program within the department of 
 56.25  administration so as to facilitate the department's duties and 
 56.26  responsibilities under sections 16B.19 to 16B.22 16C.18 to 
 56.27  16C.21 relating to the small targeted group business and 
 56.28  economically disadvantaged business program of the state; 
 56.29     (g) develop an information system which will enable the 
 56.30  commissioner and other state agencies to efficiently store, 
 56.31  retrieve, analyze, and exchange data regarding small business 
 56.32  development and growth in the state.  All executive branch 
 56.33  agencies of state government and the secretary of state shall to 
 56.34  the extent practicable, assist the bureau in the development and 
 56.35  implementation of the information system; 
 56.36     (h) establish and maintain a toll free telephone number so 
 57.1   that all small business persons anywhere in the state can call 
 57.2   the bureau office for assistance.  An outreach program shall be 
 57.3   established to make the existence of the bureau well known to 
 57.4   its potential clientele throughout the state.  If the small 
 57.5   business person requires a referral to another provider the 
 57.6   bureau may use the business assistance referral system 
 57.7   established by the Minnesota Project Outreach Corporation; 
 57.8      (i) conduct research and provide data as required by the 
 57.9   state legislature; 
 57.10     (j) develop and publish material on all aspects of the 
 57.11  start-up, operation, or expansion of a small business in 
 57.12  Minnesota; 
 57.13     (k) collect and disseminate information on state 
 57.14  procurement opportunities, including information on the 
 57.15  procurement process; 
 57.16     (l) develop a public awareness program through the use of 
 57.17  newsletters, personal contacts, and electronic and print news 
 57.18  media advertising about state assistance programs for small 
 57.19  businesses, including those programs specifically for socially 
 57.20  disadvantaged small business persons; 
 57.21     (m) enter into agreements with the federal government and 
 57.22  other public and private entities to serve as the statewide 
 57.23  coordinator or host agency for the federal small business 
 57.24  development center program under United States Code, title 15, 
 57.25  section 648; and 
 57.26     (n) assist providers in the evaluation of their programs 
 57.27  and the assessment of their service area needs.  The bureau may 
 57.28  establish model evaluation techniques and performance standards 
 57.29  for providers to use. 
 57.30     Sec. 37.  Minnesota Statutes 1996, section 116J.966, 
 57.31  subdivision 1, is amended to read: 
 57.32     Subdivision 1.  [GENERALLY.] (a) The commissioner shall 
 57.33  promote, develop, and facilitate trade and foreign investment in 
 57.34  Minnesota.  In furtherance of these goals, and in addition to 
 57.35  the powers granted by section 116J.035, the commissioner may:  
 57.36     (1) locate, develop, and promote international markets for 
 58.1   Minnesota products and services; 
 58.2      (2) arrange and lead trade missions to countries with 
 58.3   promising international markets for Minnesota goods, technology, 
 58.4   services, and agricultural products; 
 58.5      (3) promote Minnesota products and services at domestic and 
 58.6   international trade shows; 
 58.7      (4) organize, promote, and present domestic and 
 58.8   international trade shows featuring Minnesota products and 
 58.9   services; 
 58.10     (5) host trade delegations and assist foreign traders in 
 58.11  contacting appropriate Minnesota businesses and investments; 
 58.12     (6) develop contacts with Minnesota businesses and gather 
 58.13  and provide information to assist them in locating and 
 58.14  communicating with international trading or joint venture 
 58.15  counterparts; 
 58.16     (7) provide information, education, and counseling services 
 58.17  to Minnesota businesses regarding the economic, commercial, 
 58.18  legal, and cultural contexts of international trade; 
 58.19     (8) provide Minnesota businesses with international trade 
 58.20  leads and information about the availability and sources of 
 58.21  services relating to international trade, such as export 
 58.22  financing, licensing, freight forwarding, international 
 58.23  advertising, translation, and custom brokering; 
 58.24     (9) locate, attract, and promote foreign direct investment 
 58.25  and business development in Minnesota to enhance employment 
 58.26  opportunities in Minnesota; 
 58.27     (10) provide foreign businesses and investors desiring to 
 58.28  locate facilities in Minnesota information regarding sources of 
 58.29  governmental, legal, real estate, financial, and business 
 58.30  services; 
 58.31     (11) enter into contracts or other agreements with private 
 58.32  persons and public entities, including agreements to establish 
 58.33  and maintain offices and other types of representation in 
 58.34  foreign countries, to carry out the purposes of promoting 
 58.35  international trade and attracting investment from foreign 
 58.36  countries to Minnesota and to carry out this section, without 
 59.1   regard to sections 16B.07 and 16B.09 section 16C.07; 
 59.2      (12) enter into administrative, programming, and service 
 59.3   partnerships with the Minnesota world trade center; and 
 59.4      (13) market trade-related materials to businesses and 
 59.5   organizations, and the proceeds of which must be placed in a 
 59.6   special revolving account and are appropriated to the 
 59.7   commissioner to prepare and distribute trade-related materials.  
 59.8      (b) The programs and activities of the commissioner of 
 59.9   trade and economic development and the Minnesota trade division 
 59.10  may not duplicate programs and activities of the commissioner of 
 59.11  agriculture or the Minnesota world trade center corporation. 
 59.12     (c) The commissioner shall notify the chairs of the senate 
 59.13  finance and house appropriations committees of each agreement 
 59.14  under this subdivision to establish and maintain an office or 
 59.15  other type of representation in a foreign country.  
 59.16     Sec. 38.  Minnesota Statutes 1997 Supplement, section 
 59.17  121.1113, subdivision 2, is amended to read: 
 59.18     Subd. 2.  [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 
 59.19  ASSISTANCE.] The department of children, families, and learning 
 59.20  shall contract for professional and technical services according 
 59.21  to competitive bidding procedures under chapter 16B 16C for 
 59.22  purposes of this section. 
 59.23     Sec. 39.  Minnesota Statutes 1996, section 124.14, 
 59.24  subdivision 1, is amended to read: 
 59.25     Subdivision 1.  The commissioner shall supervise 
 59.26  distribution of school aids and grants in accordance with law.  
 59.27  It may make rules consistent with law for the distribution to 
 59.28  enable districts to perform efficiently the services required by 
 59.29  law and further education in the state, including reasonable 
 59.30  requirements for the reports and accounts to it as will assure 
 59.31  accurate and lawful apportionment of aids.  State and federal 
 59.32  aids and discretionary or entitlement grants distributed by the 
 59.33  commissioner shall not be subject to the contract approval 
 59.34  procedures of the commissioner of administration or to chapter 
 59.35  16A or, 16B, or 16C.  The commissioner shall adopt internal 
 59.36  procedures for administration and monitoring of aids and grants. 
 60.1      Sec. 40.  Minnesota Statutes 1996, section 126.151, 
 60.2   subdivision 2, is amended to read: 
 60.3      Subd. 2.  [ACCOUNTS OF THE ORGANIZATION.] The commissioner 
 60.4   and the board of trustees of the Minnesota state colleges and 
 60.5   universities may retain dues and other money collected on behalf 
 60.6   of students participating in approved vocational student 
 60.7   organizations and may deposit the money in separate accounts.  
 60.8   The money in these accounts shall be available for expenditures 
 60.9   for state and national activities related to specific 
 60.10  organizations.  Administration of money collected under this 
 60.11  section is not subject to the provisions of chapters 15, 
 60.12  16A, and 16B, and 16C, and may be deposited outside the state 
 60.13  treasury.  Money shall be administered under the policies of the 
 60.14  applicable state board or agency relating to post-secondary and 
 60.15  secondary vocational student organizations and is subject to 
 60.16  audit by the legislative auditor.  Any unexpended money shall 
 60.17  not cancel but may be carried forward to the next fiscal year. 
 60.18     Sec. 41.  Minnesota Statutes 1996, section 129C.10, 
 60.19  subdivision 7, is amended to read: 
 60.20     Subd. 7.  [PURCHASING INSTRUCTIONAL ITEMS.] Technical 
 60.21  educational equipment may be procured for programs of the Lola 
 60.22  and Rudy Perpich Minnesota center for arts education by the 
 60.23  board either by brand designation or in accordance with 
 60.24  standards and specifications the board may adopt, 
 60.25  notwithstanding chapter chapters 16B and 16C. 
 60.26     Sec. 42.  Minnesota Statutes 1996, section 136A.06, is 
 60.27  amended to read: 
 60.28     136A.06 [FEDERAL FUNDS.] 
 60.29     The higher education services office is designated the 
 60.30  state agency to apply for, receive, accept, and disburse to both 
 60.31  public and private institutions of higher education all federal 
 60.32  funds which are allocated to the state of Minnesota to support 
 60.33  higher education programs, construction, or other activities and 
 60.34  which require administration by a state higher education agency 
 60.35  under the Higher Education Facilities Act of 1963, and any 
 60.36  amendments thereof, the Higher Education Act of 1965, and any 
 61.1   amendments thereof, and any other law which provides funds for 
 61.2   higher education and requires administration by a state higher 
 61.3   education agency as enacted or may be enacted by the Congress of 
 61.4   the United States; provided that no commitment shall be made 
 61.5   that shall bind the legislature to make appropriations beyond 
 61.6   current allocations of funds.  The office may apply for, 
 61.7   receive, accept, and disburse all administrative funds available 
 61.8   to the office for administering federal funds to support higher 
 61.9   education programs, construction, or other activities.  The 
 61.10  office also may apply for, receive, accept, and disburse any 
 61.11  research, planning, or program funds which are available for 
 61.12  purposes consistent with the provisions of this chapter.  In 
 61.13  making application for and administering federal funds the 
 61.14  office may comply with any and all requirements of federal law 
 61.15  and federal rules and regulations to enable it to receive and 
 61.16  accept such funds.  The expenditure of any such funds received 
 61.17  shall be governed by the laws of the state, except insofar as 
 61.18  federal regulations may otherwise provide.  The office may 
 61.19  contract with both public and private institutions in 
 61.20  administering federal funds, and such contracts shall not be 
 61.21  subject to the provisions of chapter 16B 16C.  All such money 
 61.22  received by the office shall be deposited in the state treasury 
 61.23  and are hereby appropriated to it annually for the purpose for 
 61.24  which such funds are received.  None of such moneys shall cancel 
 61.25  but shall be available until expended. 
 61.26     Sec. 43.  Minnesota Statutes 1996, section 136A.16, 
 61.27  subdivision 1, is amended to read: 
 61.28     Subdivision 1.  Notwithstanding chapter 16B 16C, the 
 61.29  Minnesota higher education services office is designated as the 
 61.30  administrative agency for carrying out the purposes and terms of 
 61.31  sections 136A.15 to 136A.1702.  The office may establish one or 
 61.32  more loan programs. 
 61.33     Sec. 44.  Minnesota Statutes 1996, section 136A.29, 
 61.34  subdivision 6, is amended to read: 
 61.35     Subd. 6.  The authority is authorized and empowered to 
 61.36  determine the location and character of any project to be 
 62.1   financed under the provisions of sections 136A.25 to 136A.42, 
 62.2   and to construct, reconstruct, remodel, maintain, manage, 
 62.3   enlarge, alter, add to, repair, operate, lease, as lessee or 
 62.4   lessor, and regulate the same, to enter into contracts for any 
 62.5   or all of such purposes, to enter into contracts for the 
 62.6   management and operation of a project, and to designate a 
 62.7   participating institution of higher education as its agent to 
 62.8   determine the location and character of a project undertaken by 
 62.9   such participating institution of higher education under the 
 62.10  provisions of sections 136A.25 to 136A.42 and as the agent of 
 62.11  the authority, to construct, reconstruct, remodel, maintain, 
 62.12  manage, enlarge, alter, add to, repair, operate, lease, as 
 62.13  lessee or lessor, and regulate the same, and as the agent of the 
 62.14  authority, to enter into contracts for any or all of such 
 62.15  purposes, including contracts for the management and operation 
 62.16  of such project.  Contracts of the authority or of a 
 62.17  participating institution of higher education to acquire or to 
 62.18  construct, reconstruct, remodel, maintain, enlarge, alter, add 
 62.19  to, or repair projects shall not be subject to the provisions of 
 62.20  chapter 16B 16C or section 574.26, or any other public contract 
 62.21  or competitive bid law. 
 62.22     Sec. 45.  Minnesota Statutes 1997 Supplement, section 
 62.23  136A.40, is amended to read: 
 62.24     136A.40 [ADMINISTRATION.] 
 62.25     The administration of sections 136A.25 to 136A.42, shall be 
 62.26  under the authority independent of other departments and 
 62.27  agencies and notwithstanding chapter 16B 16C.  The authority 
 62.28  shall not be subject to the provisions of chapter 14, including 
 62.29  section 14.386 in connection with the adoption of any rules, 
 62.30  rents, fees or charges or with the exercise of any other powers 
 62.31  or duties.  
 62.32     Sec. 46.  Minnesota Statutes 1996, section 136F.23, is 
 62.33  amended to read: 
 62.34     136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.] 
 62.35     Notwithstanding chapter 16A or 16B 16C, the student 
 62.36  associations recognized by the board of trustees of the 
 63.1   Minnesota state colleges and universities may purchase goods or 
 63.2   materials through state purchasing authority for the ordinary 
 63.3   day-to-day operations of the associations.  The student 
 63.4   associations must be nonprofit 501(c)(3) organizations in order 
 63.5   to qualify for this authority.  The department of administration 
 63.6   may require that the purchase documents be approved by 
 63.7   appropriate officials in the board's central office. 
 63.8      Sec. 47.  Minnesota Statutes 1996, section 136F.56, 
 63.9   subdivision 5, is amended to read: 
 63.10     Subd. 5.  [SERVICE CONTRACTS.] The council may contract for 
 63.11  the services it needs to carry out its function.  The council 
 63.12  may also contract to provide services to other organizations. 
 63.13  The contracts are not subject to the contract approval 
 63.14  procedures of the commissioner of administration or of 
 63.15  chapter 16B 16C.  
 63.16     Sec. 48.  Minnesota Statutes 1996, section 136F.581, 
 63.17  subdivision 3, is amended to read: 
 63.18     Subd. 3.  [PROCUREMENT FROM DESIGNATED BUSINESSES.] The 
 63.19  policies and procedures must include provisions for procurement, 
 63.20  including construction, from small targeted group businesses and 
 63.21  businesses from economically disadvantaged areas designated 
 63.22  under section 16B.19 16C.18.  The board, colleges, and 
 63.23  universities shall use the methods contained in section 471.345, 
 63.24  subdivision 8, for such purchasing, or may develop additional 
 63.25  methods in which the cost percentage preferences are consistent 
 63.26  with the provision of section 16B.19 16C.18, subdivisions 2c and 
 63.27  2d 6, paragraph (a), and 7, or consistent with the provisions of 
 63.28  the University of Minnesota's targeted group business purchasing 
 63.29  program. 
 63.30     Sec. 49.  Minnesota Statutes 1996, section 136F.66, is 
 63.31  amended to read: 
 63.32     136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.] 
 63.33     In awarding contracts for capital projects under section 
 63.34  136F.64, the board shall consider the documentation provided by 
 63.35  the bidders regarding their qualifications, including evidence 
 63.36  of having successfully completed similar work, or delivering 
 64.1   services or products comparable to that being requested.  The 
 64.2   board shall set procedures to administer this section, which 
 64.3   must include practices that will assist in the economic 
 64.4   development of small businesses, small targeted group 
 64.5   businesses, and businesses in economically disadvantaged areas 
 64.6   designated under section 16B.19 16C.18. 
 64.7      Sec. 50.  Minnesota Statutes 1996, section 136F.72, 
 64.8   subdivision 3, is amended to read: 
 64.9      Subd. 3.  [ADMINISTRATION.] Each college and university, 
 64.10  independent of other authority and notwithstanding chapters 
 64.11  16A and, 16B, and 16C, shall administer its activity funds.  The 
 64.12  board, independent of other authority and notwithstanding 
 64.13  chapters 16A and, 16B, and 16C, shall administer the 
 64.14  administrative fund established in the system office.  All 
 64.15  activity fund money collected shall be administered under the 
 64.16  policies of the board subject to audit of the legislative 
 64.17  auditor.  
 64.18     Sec. 51.  Minnesota Statutes 1996, section 136F.96, is 
 64.19  amended to read: 
 64.20     136F.96 [ADMINISTRATION.] 
 64.21     The administration of sections 136F.90 to 136F.98 shall be 
 64.22  under the board of trustees of the Minnesota state colleges and 
 64.23  universities independent of other authority and notwithstanding 
 64.24  chapters 16A and, 16B, and 16C. 
 64.25     Sec. 52.  Minnesota Statutes 1996, section 137.35, 
 64.26  subdivision 1, is amended to read: 
 64.27     Subdivision 1.  [PURCHASING METHODS.] (a) The regents may 
 64.28  award up to a six percent preference in the amount bid for 
 64.29  specified goods and services to small targeted group businesses 
 64.30  designated under section 16B.19 16C.18, subdivision 5. 
 64.31     (b) The regents may designate a purchase of goods or 
 64.32  services for award only to small targeted group businesses 
 64.33  designated under section 16B.19 16C.18, subdivision 5, if the 
 64.34  regents determine that at least three small targeted group 
 64.35  businesses are likely to bid. 
 64.36     (c) The regents, as a condition of awarding a construction 
 65.1   contract or approving a contract for consultant, professional, 
 65.2   or technical services, may set goals that require the prime 
 65.3   contractor to subcontract a portion of the contract to small 
 65.4   targeted group businesses.  The regents must establish a 
 65.5   procedure for granting waivers from the subcontracting 
 65.6   requirement when qualified small targeted group businesses are 
 65.7   not reasonably available.  The regents may establish financial 
 65.8   incentives for prime contractors who exceed the goals for use of 
 65.9   subcontractors and financial penalties for prime contractors who 
 65.10  fail to meet goals under this paragraph.  The subcontracting 
 65.11  requirements of this paragraph do not apply to prime contractors 
 65.12  who are small targeted group businesses.  At least 75 percent of 
 65.13  the value of the subcontracts awarded to small targeted group 
 65.14  businesses under this paragraph must be performed by the 
 65.15  business to which the subcontract is awarded or by another small 
 65.16  targeted group business. 
 65.17     (d) The regents may award up to a four percent preference 
 65.18  in the amount bid on university procurement to small businesses 
 65.19  located in an economically disadvantaged area as defined in 
 65.20  section 16B.19 16C.18, subdivision 7. 
 65.21     (e) The regents may delegate responsibility under this 
 65.22  section to university employees. 
 65.23     Sec. 53.  Minnesota Statutes 1996, section 137.35, 
 65.24  subdivision 2, is amended to read: 
 65.25     Subd. 2.  [ELIGIBILITY.] The rules adopted by the 
 65.26  commissioner of administration to define small businesses and to 
 65.27  set time and other eligibility requirements for participation in 
 65.28  programs under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply 
 65.29  to this section. 
 65.30     Sec. 54.  Minnesota Statutes 1996, section 137.35, 
 65.31  subdivision 3, is amended to read: 
 65.32     Subd. 3.  [NONCOMPETITIVE BIDS.] The regents are encouraged 
 65.33  to purchase from small targeted group businesses designated 
 65.34  under section 16B.19 16C.18 when making purchases that are not 
 65.35  subject to competitive bidding procedures. 
 65.36     Sec. 55.  Minnesota Statutes 1997 Supplement, section 
 66.1   138.35, subdivision 1b, is amended to read: 
 66.2      Subd. 1b.  [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The 
 66.3   state archaeologist may contract with the federal government, 
 66.4   local governmental units, other states, the university and other 
 66.5   educational institutions, and private persons or organizations 
 66.6   as necessary in the performance of the duties in sections 138.31 
 66.7   to 138.42.  Contracts made under this section for professional 
 66.8   services shall not be subject to chapter 16B 16C, as it relates 
 66.9   to competitive bidding.  The state archaeologist may recruit, 
 66.10  train, and accept, without regard to personnel laws or rules, 
 66.11  the services of individuals as volunteers for or in aid of 
 66.12  performance of the state archaeologist's duties, and may provide 
 66.13  for the incidental expenses of volunteers, such as 
 66.14  transportation, lodging, and subsistence.  The state 
 66.15  archaeologist may apply for, receive, and expend grants and 
 66.16  gifts of money consistent with the powers and duties in sections 
 66.17  138.31 to 138.42.  Any money so received is appropriated for the 
 66.18  purpose for which it was granted.  
 66.19     Sec. 56.  Minnesota Statutes 1996, section 144.0742, is 
 66.20  amended to read: 
 66.21     144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH 
 66.22  SERVICES.] 
 66.23     The commissioner of health is authorized to enter into 
 66.24  contractual agreements with any public or private entity for the 
 66.25  provision of statutorily prescribed public health services by 
 66.26  the department.  The contracts shall specify the services to be 
 66.27  provided and the amount and method of reimbursement therefor.  
 66.28  Funds generated in a contractual agreement made pursuant to this 
 66.29  section are appropriated to the department for purposes of 
 66.30  providing the services specified in the contracts.  All such 
 66.31  contractual agreements shall be processed in accordance with the 
 66.32  provisions of chapter 16B 16C.  
 66.33     Sec. 57.  Minnesota Statutes 1996, section 144.95, 
 66.34  subdivision 5, is amended to read: 
 66.35     Subd. 5.  [GENERAL AUTHORITY.] (a) To carry out 
 66.36  subdivisions 1 to 4, the commissioner of health may:  
 67.1      (1) accept money, property, or services from any source; 
 67.2      (2) receive and hold lands; 
 67.3      (3) accept gifts; 
 67.4      (4) cooperate with city, state, federal, or private 
 67.5   agencies whose research on mosquito control or on other 
 67.6   environmental matters may be affected by the commissioner's 
 67.7   mosquito management and research activities; and 
 67.8      (5) enter into contracts with any public or private entity. 
 67.9      (b) The contracts must specify the duties performed, 
 67.10  services provided, and the amount and method of reimbursement 
 67.11  for them.  Money collected by the commissioner under contracts 
 67.12  made under this subdivision is appropriated to the commissioner 
 67.13  for the purposes specified in the contracts.  Contractual 
 67.14  agreements must be processed under section 16B.17 16C.09.  
 67.15     Sec. 58.  Minnesota Statutes 1996, section 161.315, 
 67.16  subdivision 4, is amended to read: 
 67.17     Subd. 4.  [EXCEPTIONS.] The commissioner may terminate a 
 67.18  debarment by order, or the commissioner or a county, town, or 
 67.19  home rule or statutory city may award a contract to a debarred 
 67.20  or suspended person when: 
 67.21     (1) that person is the sole supplier of a material or 
 67.22  service required by the commissioner or a county, town, or home 
 67.23  rule or statutory city; 
 67.24     (2) the commissioner determines that an emergency exists as 
 67.25  defined in section 161.32, subdivision 3; 
 67.26     (3) the commissioner of administration determines that an 
 67.27  emergency exists as defined in section 16B.08 16C.11, 
 67.28  subdivision 6 2; 
 67.29     (4) in the case of a contract to be awarded by a county, 
 67.30  town, or home rule or statutory city, the governing body thereof 
 67.31  determines by resolution that an emergency exists that will 
 67.32  result in a road, street, or bridge being closed to travel; or 
 67.33     (5) the contract is for purchasing materials or renting 
 67.34  equipment for routine road maintenance. 
 67.35     Sec. 59.  Minnesota Statutes 1996, section 161.321, 
 67.36  subdivision 1, is amended to read: 
 68.1      Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 68.2   the following terms have the meanings given them, except where 
 68.3   the context clearly indicates a different meaning is intended. 
 68.4      (a) "Award" means the granting of a contract in accordance 
 68.5   with all applicable laws and rules governing competitive bidding 
 68.6   except as otherwise provided in this section. 
 68.7      (b) "Contract" means an agreement entered into between a 
 68.8   business entity and the state of Minnesota for the construction 
 68.9   of transportation improvements. 
 68.10     (c) "Subcontractor" means a business entity which enters 
 68.11  into a legally binding agreement with another business entity 
 68.12  which is a party to a contract as defined in clause (b). 
 68.13     (d) "Targeted group business" means a business designated 
 68.14  under section 16B.19 16C.18, subdivision 2b 5. 
 68.15     Sec. 60.  Minnesota Statutes 1996, section 161.321, 
 68.16  subdivision 2, is amended to read: 
 68.17     Subd. 2.  [SMALL BUSINESS SET-ASIDES.] (a) The commissioner 
 68.18  may award up to a six percent preference in the amount bid for 
 68.19  specified construction work to small targeted group businesses. 
 68.20     (b) The commissioner may designate a contract for 
 68.21  construction work for award only to small targeted group 
 68.22  businesses if the commissioner determines that at least three 
 68.23  small targeted group businesses are likely to bid. 
 68.24     (c) The commissioner, as a condition of awarding a 
 68.25  construction contract, may set goals that require the prime 
 68.26  contractor to subcontract a portion of the contract to small 
 68.27  targeted group businesses.  The commissioner must establish a 
 68.28  procedure for granting waivers from the subcontracting 
 68.29  requirement when qualified small targeted group businesses are 
 68.30  not reasonably available.  The commissioner may establish 
 68.31  financial incentives for prime contractors who exceed the goals 
 68.32  for use of subcontractors and financial penalties for prime 
 68.33  contractors who fail to meet goals under this paragraph.  The 
 68.34  subcontracting requirements of this paragraph do not apply to 
 68.35  prime contractors who are small targeted group businesses. 
 68.36     (d) The commissioner may award up to a four percent 
 69.1   preference in the amount bid on procurement to small businesses 
 69.2   located in an economically disadvantaged area as defined in 
 69.3   section 16B.19 16C.18, subdivision 7.  
 69.4      Sec. 61.  Minnesota Statutes 1996, section 161.321, 
 69.5   subdivision 5, is amended to read: 
 69.6      Subd. 5.  [RECOURSE TO OTHER BUSINESSES.] If the 
 69.7   commissioner is unable to award a contract pursuant to the 
 69.8   provisions of subdivisions 2 and 3, the award may be placed 
 69.9   pursuant to the normal solicitation and award provisions set 
 69.10  forth in this chapter and chapter 16B 16C. 
 69.11     Sec. 62.  Minnesota Statutes 1996, section 161.321, 
 69.12  subdivision 6, is amended to read: 
 69.13     Subd. 6.  [RULES.] The rules adopted by the commissioner of 
 69.14  administration to define small businesses and to set time and 
 69.15  other eligibility requirements for participation in programs 
 69.16  under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply to this 
 69.17  section.  The commissioner may promulgate other rules necessary 
 69.18  to carry out this section. 
 69.19     Sec. 63.  Minnesota Statutes 1996, section 161.321, 
 69.20  subdivision 7, is amended to read: 
 69.21     Subd. 7.  [NONCOMPETITIVE BIDS.] The commissioner is 
 69.22  encouraged to purchase from small targeted group businesses 
 69.23  designated under section 16B.19 16C.18 when making purchases 
 69.24  that are not subject to competitive bidding procedures. 
 69.25     Sec. 64.  Minnesota Statutes 1996, section 161.41, 
 69.26  subdivision 2, is amended to read: 
 69.27     Subd. 2.  [DETERMINATION OF VALUE; DISPOSITION.] The 
 69.28  commissioner shall administer all aspects of the disposition of 
 69.29  property declared to be surplus under this section.  The 
 69.30  commissioner shall first determine the value of the surplus 
 69.31  property.  The commissioner may then transfer the possession of 
 69.32  the surplus property to any state agency or political 
 69.33  subdivision of this state or to the United States government 
 69.34  upon receipt of payment in an amount equal to the value of the 
 69.35  surplus property. 
 69.36     The commissioner may also sell the surplus property under 
 70.1   the competitive bidding provisions of chapter 16B 16C if no 
 70.2   state agency or political subdivision of this state offers to 
 70.3   purchase the surplus property for its determined value.  
 70.4      Sec. 65.  Minnesota Statutes 1997 Supplement, section 
 70.5   179A.03, subdivision 14, is amended to read: 
 70.6      Subd. 14.  [PUBLIC EMPLOYEE.] "Public employee" or 
 70.7   "employee" means any person appointed or employed by a public 
 70.8   employer except:  
 70.9      (a) elected public officials; 
 70.10     (b) election officers; 
 70.11     (c) commissioned or enlisted personnel of the Minnesota 
 70.12  national guard; 
 70.13     (d) emergency employees who are employed for emergency work 
 70.14  caused by natural disaster; 
 70.15     (e) part-time employees whose service does not exceed the 
 70.16  lesser of 14 hours per week or 35 percent of the normal work 
 70.17  week in the employee's appropriate unit; 
 70.18     (f) employees whose positions are basically temporary or 
 70.19  seasonal in character and:  (1) are not for more than 67 working 
 70.20  days in any calendar year; or (2) are not for more than 100 
 70.21  working days in any calendar year and the employees are under 
 70.22  the age of 22, are full-time students enrolled in a nonprofit or 
 70.23  public educational institution prior to being hired by the 
 70.24  employer, and have indicated, either in an application for 
 70.25  employment or by being enrolled at an educational institution 
 70.26  for the next academic year or term, an intention to continue as 
 70.27  students during or after their temporary employment; 
 70.28     (g) employees providing services for not more than two 
 70.29  consecutive quarters to the board of trustees of the Minnesota 
 70.30  state colleges and universities under the terms of a 
 70.31  professional or technical services contract as defined in 
 70.32  section 16B.17 16C.09, subdivision 1; 
 70.33     (h) employees of charitable hospitals as defined by section 
 70.34  179.35, subdivision 3; 
 70.35     (i) full-time undergraduate students employed by the school 
 70.36  which they attend under a work-study program or in connection 
 71.1   with the receipt of financial aid, irrespective of number of 
 71.2   hours of service per week; 
 71.3      (j) an individual who is employed for less than 300 hours 
 71.4   in a fiscal year as an instructor in an adult vocational 
 71.5   education program; 
 71.6      (k) an individual hired by a school district or the board 
 71.7   of trustees of the Minnesota state colleges and universities to 
 71.8   teach one course for up to four credits for one quarter in a 
 71.9   year.  
 71.10     The following individuals are public employees regardless 
 71.11  of the exclusions of clauses (e) and (f):  
 71.12     (1) An employee hired by a school district or the board of 
 71.13  trustees of the Minnesota state colleges and universities except 
 71.14  at the university established in section 136F.13 or for 
 71.15  community services or community education instruction offered on 
 71.16  a noncredit basis:  (i) to replace an absent teacher or faculty 
 71.17  member who is a public employee, where the replacement employee 
 71.18  is employed more than 30 working days as a replacement for that 
 71.19  teacher or faculty member; or (ii) to take a teaching position 
 71.20  created due to increased enrollment, curriculum expansion, 
 71.21  courses which are a part of the curriculum whether offered 
 71.22  annually or not, or other appropriate reasons; and 
 71.23     (2) An employee hired for a position under clause (f)(1) if 
 71.24  that same position has already been filled under clause (f)(1) 
 71.25  in the same calendar year and the cumulative number of days 
 71.26  worked in that same position by all employees exceeds 67 
 71.27  calendar days in that year.  For the purpose of this paragraph, 
 71.28  "same position" includes a substantially equivalent position if 
 71.29  it is not the same position solely due to a change in the 
 71.30  classification or title of the position. 
 71.31     Sec. 66.  Minnesota Statutes 1996, section 179A.23, is 
 71.32  amended to read: 
 71.33     179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED 
 71.34  BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA 
 71.35  BARGAINING UNIT.] 
 71.36     Any contract entered into after March 23, 1982, by the 
 72.1   state of Minnesota or the University of Minnesota involving 
 72.2   services, any part of which, in the absence of the contract, 
 72.3   would be performed by members of a unit provided in sections 
 72.4   179A.10 and 179A.11, shall be subject to section 16B.07 16C.07 
 72.5   and shall provide for the preferential employment by a party of 
 72.6   members of that unit whose employment with the state of 
 72.7   Minnesota or the University of Minnesota is terminated as a 
 72.8   result of that contract.  
 72.9      Contracts entered into by the state of Minnesota for the 
 72.10  purpose of providing court reporter services or transcription of 
 72.11  the record of a hearing which was recorded by means of an audio 
 72.12  magnetic recording device shall be subject to section 16B.17 
 72.13  16C.09 and the preferential employment provisions enumerated in 
 72.14  this section.  Any court reporter seeking a contract pursuant to 
 72.15  the preferential employment provisions of this section shall be 
 72.16  given preference when the services are needed only if that court 
 72.17  reporter's charges for the services requested are no greater 
 72.18  than the average of the charges made for the identical services 
 72.19  by other court reporters in the same locality who are also under 
 72.20  contract with the state for those services.  
 72.21     Sec. 67.  Minnesota Statutes 1996, section 198.35, 
 72.22  subdivision 1, is amended to read: 
 72.23     Subdivision 1.  [ESTABLISHMENT.] The board may establish a 
 72.24  veterans home in Silver Bay by renovating an existing facility 
 72.25  owned by the city of Silver Bay if the city donates the building 
 72.26  to the board at no cost.  Contracts made by the board for the 
 72.27  purposes of this subdivision are subject to chapter 16B 16C.  
 72.28  Buildings used for the veterans home must comply with 
 72.29  requirements established by federal agencies as conditions for 
 72.30  the receipt of federal funds for the nursing and boarding care 
 72.31  of veterans.  The city of Silver Bay shall secure the state 
 72.32  match requirement from sources other than the state general 
 72.33  fund.  Money from other sources must equal at least 35 percent 
 72.34  of the total cost of the renovation with the remainder of the 
 72.35  funds to be provided by the United States Veterans 
 72.36  Administration. 
 73.1      Sec. 68.  Minnesota Statutes 1996, section 216C.02, 
 73.2   subdivision 1, is amended to read: 
 73.3      Subdivision 1.  [POWERS.] (a) The commissioner may: 
 73.4      (1) apply for, receive, and spend money received from 
 73.5   federal, municipal, county, regional, and other government 
 73.6   agencies and private sources; 
 73.7      (2) apply for, accept, and disburse grants and other aids 
 73.8   from public and private sources; 
 73.9      (3) contract for professional services if work or services 
 73.10  required or authorized to be carried out by the commissioner 
 73.11  cannot be satisfactorily performed by employees of the 
 73.12  department or by another state agency; 
 73.13     (4) enter into interstate compacts to carry out research 
 73.14  and planning jointly with other states or the federal government 
 73.15  when appropriate; 
 73.16     (5) upon reasonable request, distribute informational 
 73.17  material at no cost to the public; and 
 73.18     (6) enter into contracts for the performance of the 
 73.19  commissioner's duties with federal, state, regional, 
 73.20  metropolitan, local, and other agencies or units of government 
 73.21  and educational institutions, including the University of 
 73.22  Minnesota, without regard to the competitive bidding 
 73.23  requirements of chapters 16A and 16B 16C.  
 73.24     (b) The commissioner shall collect information on 
 73.25  conservation and other energy-related programs carried on by 
 73.26  other agencies, by public utilities, by cooperative electric 
 73.27  associations, by municipal power agencies, by other fuel 
 73.28  suppliers, by political subdivisions, and by private 
 73.29  organizations.  Other agencies, cooperative electric 
 73.30  associations, municipal power agencies, and political 
 73.31  subdivisions shall cooperate with the commissioner by providing 
 73.32  information requested by the commissioner.  The commissioner may 
 73.33  by rule require the submission of information by other program 
 73.34  operators.  The commissioner shall make the information 
 73.35  available to other agencies and to the public and, as necessary, 
 73.36  shall recommend to the legislature changes in the laws governing 
 74.1   conservation and other energy-related programs to ensure that: 
 74.2      (1) expenditures on the programs are adequate to meet 
 74.3   identified needs; 
 74.4      (2) the needs of low-income energy users are being 
 74.5   adequately addressed; 
 74.6      (3) duplication of effort is avoided or eliminated; 
 74.7      (4) a program that is ineffective is improved or 
 74.8   eliminated; and 
 74.9      (5) voluntary efforts are encouraged through incentives for 
 74.10  their operators.  
 74.11     The commissioner shall appoint an advisory task force to 
 74.12  help evaluate the information collected and formulate 
 74.13  recommendations to the legislature.  The task force must include 
 74.14  low-income energy users. 
 74.15     (c) By January 15 of each year, the commissioner shall 
 74.16  report to the legislature on the projected amount of federal 
 74.17  money likely to be available to the state during the next fiscal 
 74.18  year, including grant money and money received by the state as a 
 74.19  result of litigation or settlements of alleged violations of 
 74.20  federal petroleum pricing regulations.  The report must also 
 74.21  estimate the amount of money projected as needed during the next 
 74.22  fiscal year to finance a level of conservation and other 
 74.23  energy-related programs adequate to meet projected needs, 
 74.24  particularly the needs of low-income persons and households, and 
 74.25  must recommend the amount of state appropriations needed to 
 74.26  cover the difference between the projected availability of 
 74.27  federal money and the projected needs. 
 74.28     Sec. 69.  Minnesota Statutes 1997 Supplement, section 
 74.29  216D.03, subdivision 2, is amended to read: 
 74.30     Subd. 2.  [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] 
 74.31  (a) The notification center services must be provided by a 
 74.32  nonprofit corporation approved in writing by the commissioner.  
 74.33  The nonprofit corporation must be governed by a board of 
 74.34  directors of up to 20 members, one of whom is the director of 
 74.35  the office of pipeline safety.  The other board members must 
 74.36  represent and be elected by operators, excavators, and other 
 75.1   persons eligible to participate in the center.  In deciding to 
 75.2   approve a nonprofit corporation, the commissioner shall consider 
 75.3   whether it meets the requirements of this paragraph and whether 
 75.4   it demonstrates that it has the ability to contract for and 
 75.5   implement the notification center service. 
 75.6      (b) The commissioner shall adopt rules: 
 75.7      (1) establishing a notification process and competitive 
 75.8   bidding procedure for selecting a vendor to provide the 
 75.9   notification service; 
 75.10     (2) governing the operating procedures and technology 
 75.11  needed for a statewide notification center; and 
 75.12     (3) setting forth the method for assessing the cost of the 
 75.13  service among operators.  
 75.14     (c) The commissioner shall select a vendor to provide the 
 75.15  notification center service.  The commissioner may advertise for 
 75.16  bids as provided in section 16B.07 16C.07, subdivision 
 75.17  3 subdivisions 1 and 2, and base the selection of a vendor on an 
 75.18  identification of the lowest responsible bidder best value as 
 75.19  provided in section 16B.09 16C.07, subdivision 1 6.  The 
 75.20  commissioner shall select and contract with the vendor to 
 75.21  provide the notification center service, but all costs of the 
 75.22  center must be paid by the operators.  The commissioner may at 
 75.23  any time appoint a task force to advise on the renewal of the 
 75.24  contract or any other matter involving the center's operations. 
 75.25     (d) An operator may submit a bid and be selected to 
 75.26  contract to provide the notification center service under 
 75.27  paragraph (a) or (c).  The commissioner shall annually review 
 75.28  the services provided by the nonprofit corporation approved 
 75.29  under paragraph (a) or the vendor selected under paragraph (c). 
 75.30     Sec. 70.  Minnesota Statutes 1996, section 237.51, 
 75.31  subdivision 5a, is amended to read: 
 75.32     Subd. 5a.  [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In 
 75.33  addition to any duties specified elsewhere in sections 237.51 to 
 75.34  237.56, the department of human services shall: 
 75.35     (1) define economic hardship, special needs, and household 
 75.36  criteria so as to determine the priority of eligible applicants 
 76.1   for initial distribution of devices and to determine 
 76.2   circumstances necessitating provision of more than one 
 76.3   communication device per household; 
 76.4      (2) establish a method to verify eligibility requirements; 
 76.5      (3) establish specifications for communication devices to 
 76.6   be purchased under section 237.53, subdivision 3; 
 76.7      (4) inform the public and specifically the community of 
 76.8   communication-impaired persons of the program; and 
 76.9      (5) notwithstanding any provision of chapter chapters 16B 
 76.10  and 16C, develop guidelines for the purchase of some 
 76.11  communication devices from local retailers and dispensers if the 
 76.12  department determines that otherwise they will be economically 
 76.13  harmed by implementation of sections 237.50 to 237.56. 
 76.14     (b) The department may establish an advisory board to 
 76.15  advise the department in carrying out the duties specified in 
 76.16  this section and to advise the department of public service in 
 76.17  carrying out its duties under section 237.54.  If so 
 76.18  established, the advisory board must include, at a minimum, the 
 76.19  following communication-impaired persons: 
 76.20     (1) at least one member who is deaf; 
 76.21     (2) at least one member who is speech impaired; 
 76.22     (3) at least one member who is mobility impaired; and 
 76.23     (4) at least one member who is hard-of-hearing. 
 76.24     The membership terms, compensation, and removal of members 
 76.25  and the filling of membership vacancies are governed by section 
 76.26  15.059.  Advisory board meetings shall be held at the discretion 
 76.27  of the commissioner. 
 76.28     Sec. 71.  Minnesota Statutes 1996, section 241.0221, 
 76.29  subdivision 6, is amended to read: 
 76.30     Subd. 6.  [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] 
 76.31  To qualify for a subsidy, a county or group of counties must 
 76.32  enter into a memorandum of agreement with the commissioner 
 76.33  agreeing to comply with the minimum standards and requirements 
 76.34  established by the commissioner under subdivision 4.  The 
 76.35  memorandum of agreement is not subject to the contract approval 
 76.36  procedures of the commissioner of administration or chapter 
 77.1   chapters 16B and 16C.  The commissioner shall provide forms and 
 77.2   instructions for submission of subsidy applications.  
 77.3      The commissioner shall require a county or group of 
 77.4   counties to document in its application that it is requesting 
 77.5   subsidy funds for the least restrictive alternative appropriate 
 77.6   to the county or counties detention needs.  The commissioner 
 77.7   shall evaluate applications and grant subsidies for local 
 77.8   detention facilities and alternative detention programs 
 77.9   described in this section in a manner consistent with the 
 77.10  minimum standards and requirements established by the 
 77.11  commissioner in subdivision 4 and within the limit 
 77.12  appropriations made available by law.  
 77.13     Sec. 72.  Minnesota Statutes 1996, section 241.27, 
 77.14  subdivision 2, is amended to read: 
 77.15     Subd. 2.  [REVOLVING FUND; USE OF FUND.] There is 
 77.16  established in the department of corrections under the control 
 77.17  of the commissioner of corrections the Minnesota correctional 
 77.18  industries revolving fund to which shall be transferred the 
 77.19  revolving funds authorized in Minnesota Statutes 1978, sections 
 77.20  243.41 and 243.85, clause (f), and any other industrial 
 77.21  revolving funds heretofore established at any state correctional 
 77.22  facility under the control of the commissioner of corrections.  
 77.23  The revolving fund established shall be used for the conduct of 
 77.24  the industrial and commercial activities now or hereafter 
 77.25  established at any state correctional facility, including but 
 77.26  not limited to the purchase of equipment, raw materials, the 
 77.27  payment of salaries, wages and other expenses necessary and 
 77.28  incident thereto.  The purchase of materials and commodities for 
 77.29  resale are not subject to the competitive bidding procedures of 
 77.30  section 16B.07 16C.07, but are subject to all other provisions 
 77.31  of chapter 16B chapters 16B and 16C.  When practical, purchases 
 77.32  must be made from small targeted group businesses designated 
 77.33  under section 16B.19 16C.18.  Additionally, the expenses of 
 77.34  inmate vocational training and the inmate release fund may be 
 77.35  financed from the correctional industries revolving fund in an 
 77.36  amount to be determined by the commissioner.  The proceeds and 
 78.1   income from all industrial and commercial activities conducted 
 78.2   at state correctional facilities shall be deposited in the 
 78.3   correctional industries revolving fund subject to disbursement 
 78.4   as hereinabove provided.  The commissioner of corrections may 
 78.5   request that money in the fund be invested pursuant to section 
 78.6   11A.25; the proceeds from the investment not currently needed 
 78.7   shall be accounted for separately and credited to the fund. 
 78.8      Sec. 73.  Minnesota Statutes 1997 Supplement, section 
 78.9   241.277, subdivision 2, is amended to read: 
 78.10     Subd. 2.  [REQUEST FOR PROPOSALS.] After consulting with 
 78.11  and considering the advice of the association of Minnesota 
 78.12  counties, the commissioner may issue a request for proposals and 
 78.13  select a vendor to operate the program.  Section 16B.17 16C.09 
 78.14  does not apply to the issuance of the request for proposals. 
 78.15     Sec. 74.  Minnesota Statutes 1996, section 246.36, is 
 78.16  amended to read: 
 78.17     246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.] 
 78.18     For the purpose of carrying out a duty, the commissioner of 
 78.19  human services shall have authority to accept uncompensated and 
 78.20  voluntary services and to enter into contracts or agreements 
 78.21  with private or public agencies, or persons, for uncompensated 
 78.22  and voluntary services, as the commissioner may deem 
 78.23  practicable.  Uncompensated and voluntary services do not 
 78.24  include services mandated by licensure and certification 
 78.25  requirements for health care facilities.  The volunteer 
 78.26  agencies, organizations, or persons who provide services to 
 78.27  residents of state facilities operated under the authority of 
 78.28  the commissioner are not subject to the procurement requirements 
 78.29  of chapters 16A and 16B 16C.  The agencies, organizations, or 
 78.30  persons may purchase supplies, services, and equipment to be 
 78.31  used in providing services to residents of state facilities 
 78.32  through the department of administration. 
 78.33     Sec. 75.  Minnesota Statutes 1996, section 246.57, 
 78.34  subdivision 1, is amended to read: 
 78.35     Subdivision 1.  [AUTHORIZED.] The commissioner of human 
 78.36  services may authorize any state facility operated under the 
 79.1   authority of the commissioner to enter into agreement with other 
 79.2   governmental entities and both nonprofit and for-profit 
 79.3   organizations for participation in shared service agreements 
 79.4   that would be of mutual benefit to the state, other governmental 
 79.5   entities and organizations involved, and the public.  
 79.6   Notwithstanding section 16B.06 16C.06, subdivision 2, the 
 79.7   commissioner of human services may delegate the execution of 
 79.8   shared services contracts to the chief executive officers of the 
 79.9   regional centers or state operated nursing homes.  No additional 
 79.10  employees shall be added to the legislatively approved 
 79.11  complement for any regional center or state nursing home as a 
 79.12  result of entering into any shared service agreement.  However, 
 79.13  positions funded by a shared service agreement may be authorized 
 79.14  by the commissioner of finance for the duration of the shared 
 79.15  service agreement.  The charges for the services shall be on an 
 79.16  actual cost basis.  All receipts for shared services may be 
 79.17  retained by the regional treatment center or state-operated 
 79.18  nursing home that provided the services, in addition to other 
 79.19  funding the regional treatment center or state-operated nursing 
 79.20  home receives. 
 79.21     Sec. 76.  Minnesota Statutes 1996, section 246.57, 
 79.22  subdivision 6, is amended to read: 
 79.23     Subd. 6.  [DENTAL SERVICES.] The commissioner of human 
 79.24  services shall authorize any regional treatment center or 
 79.25  state-operated nursing home under the commissioner's authority 
 79.26  to provide dental services to disabled persons who are eligible 
 79.27  for medical assistance and are not residing at the regional 
 79.28  treatment center or state-operated nursing home, provided that 
 79.29  the reimbursement received for these services is sufficient to 
 79.30  cover actual costs.  To provide these services, regional 
 79.31  treatment centers and state-operated nursing homes may 
 79.32  participate under contract with health networks in their service 
 79.33  area.  Notwithstanding section 16B.06 16C.06, subdivision 2, the 
 79.34  commissioner of human services may delegate the execution of 
 79.35  these dental services contracts to the chief executive officers 
 79.36  of the regional centers or state-operated nursing homes.  All 
 80.1   receipts for these dental services shall be retained by the 
 80.2   regional treatment center or state-operated nursing home that 
 80.3   provides the services and shall be in addition to other funding 
 80.4   the regional treatment center or state-operated nursing home 
 80.5   receives. 
 80.6      Sec. 77.  Minnesota Statutes 1996, section 256B.031, 
 80.7   subdivision 1, is amended to read: 
 80.8      Subdivision 1.  [CONTRACTS.] The commissioner may contract 
 80.9   with health insurers licensed and operating under chapters 60A 
 80.10  and 62A, nonprofit health service plans licensed and operating 
 80.11  under chapter 62C, health maintenance organizations licensed and 
 80.12  operating under chapter 62D, and vendors of medical care and 
 80.13  organizations participating in prepaid programs under section 
 80.14  256D.03, subdivision 4, clause (b), to provide medical services 
 80.15  to medical assistance recipients.  Notwithstanding any other 
 80.16  law, health insurers may enter into contracts with the 
 80.17  commissioner under this section.  As a condition of the 
 80.18  contract, health insurers and health service plan corporations 
 80.19  must agree to comply with the requirements of section 62D.04, 
 80.20  subdivision 1, clauses (a), (b), (c), (d), and (f), and provide 
 80.21  a complaint procedure that satisfies the requirements of section 
 80.22  62D.11.  Nothing in this section permits health insurers not 
 80.23  licensed as health maintenance organizations under chapter 62D 
 80.24  to offer a prepaid health plan as defined in section 256B.02, 
 80.25  subdivision 12, to persons other than those receiving medical 
 80.26  assistance or general assistance medical care under this 
 80.27  section.  Contracts between the commissioner and a prepaid 
 80.28  health plan are exempt from the set-aside and preference 
 80.29  provisions of section 16B.19 16C.18, subdivisions 5 and 6, 
 80.30  paragraph (a), and 7.  Contracts must specify the services that 
 80.31  are included in the per capita rate.  Contracts must specify 
 80.32  those services that are to be eligible for risk sharing between 
 80.33  the prepaid health plan and the state.  Contracts must also 
 80.34  state that payment must be made within 60 days after the month 
 80.35  of coverage. 
 80.36     Sec. 78.  Minnesota Statutes 1996, section 256B.04, 
 81.1   subdivision 14, is amended to read: 
 81.2      Subd. 14.  [COMPETITIVE BIDDING.] When determined to be 
 81.3   effective, economical, and feasible, the commissioner may 
 81.4   utilize volume purchase through competitive bidding and 
 81.5   negotiation under the provisions of chapter 16B 16C, to provide 
 81.6   items under the medical assistance program including but not 
 81.7   limited to the following: 
 81.8      (1) eyeglasses; 
 81.9      (2) oxygen.  The commissioner shall provide for oxygen 
 81.10  needed in an emergency situation on a short-term basis, until 
 81.11  the vendor can obtain the necessary supply from the contract 
 81.12  dealer; 
 81.13     (3) hearing aids and supplies; and 
 81.14     (4) durable medical equipment, including but not limited to:
 81.15     (a) hospital beds; 
 81.16     (b) commodes; 
 81.17     (c) glide-about chairs; 
 81.18     (d) patient lift apparatus; 
 81.19     (e) wheelchairs and accessories; 
 81.20     (f) oxygen administration equipment; 
 81.21     (g) respiratory therapy equipment; 
 81.22     (h) electronic diagnostic, therapeutic and life support 
 81.23  systems; 
 81.24     (5) special transportation services; and 
 81.25     (6) drugs. 
 81.26     Sec. 79.  Minnesota Statutes 1996, section 256B.04, 
 81.27  subdivision 15, is amended to read: 
 81.28     Subd. 15.  [UTILIZATION REVIEW.] (1) Establish on a 
 81.29  statewide basis a new program to safeguard against unnecessary 
 81.30  or inappropriate use of medical assistance services, against 
 81.31  excess payments, against unnecessary or inappropriate hospital 
 81.32  admissions or lengths of stay, and against underutilization of 
 81.33  services in prepaid health plans, long-term care facilities or 
 81.34  any health care delivery system subject to fixed rate 
 81.35  reimbursement.  In implementing the program, the state agency 
 81.36  shall utilize both prepayment and postpayment review systems to 
 82.1   determine if utilization is reasonable and necessary.  The 
 82.2   determination of whether services are reasonable and necessary 
 82.3   shall be made by the commissioner in consultation with a 
 82.4   professional services advisory group or health care consultant 
 82.5   appointed by the commissioner.  
 82.6      (2) Contracts entered into for purposes of meeting the 
 82.7   requirements of this subdivision shall not be subject to the 
 82.8   set-aside provisions of chapter 16B 16C. 
 82.9      (3) A recipient aggrieved by the commissioner's termination 
 82.10  of services or denial of future services may appeal pursuant to 
 82.11  section 256.045.  A vendor aggrieved by the commissioner's 
 82.12  determination that services provided were not reasonable or 
 82.13  necessary may appeal pursuant to the contested case procedures 
 82.14  of chapter 14.  To appeal, the vendor shall notify the 
 82.15  commissioner in writing within 30 days of receiving the 
 82.16  commissioner's notice.  The appeal request shall specify each 
 82.17  disputed item, the reason for the dispute, an estimate of the 
 82.18  dollar amount involved for each disputed item, the computation 
 82.19  that the vendor believes is correct, the authority in statute or 
 82.20  rule upon which the vendor relies for each disputed item, the 
 82.21  name and address of the person or firm with whom contacts may be 
 82.22  made regarding the appeal, and other information required by the 
 82.23  commissioner. 
 82.24     (4) The commissioner may select providers to provide case 
 82.25  management services to recipients who use health care services 
 82.26  inappropriately or to recipients who are eligible for other 
 82.27  managed care projects.  The providers shall be selected based 
 82.28  upon criteria that may include a comparison with a peer group of 
 82.29  providers related to the quality, quantity, or cost of health 
 82.30  care services delivered or a review of sanctions previously 
 82.31  imposed by health care services programs or the provider's 
 82.32  professional licensing board. 
 82.33     Sec. 80.  Minnesota Statutes 1997 Supplement, section 
 82.34  256B.19, subdivision 2a, is amended to read: 
 82.35     Subd. 2a.  [DIVISION OF COSTS.] The county shall ensure 
 82.36  that only the least costly, most appropriate transportation and 
 83.1   travel expenses are used.  The state may enter into volume 
 83.2   purchase contracts, or use a competitive bidding process, 
 83.3   whenever feasible, to minimize the costs of transportation 
 83.4   services.  If the state has entered into a volume purchase 
 83.5   contract or used the competitive bidding procedures of chapter 
 83.6   16B 16C to arrange for transportation services, the county may 
 83.7   be required to use such arrangements. 
 83.8      Sec. 81.  Minnesota Statutes 1997 Supplement, section 
 83.9   256D.03, subdivision 6, is amended to read: 
 83.10     Subd. 6.  [DIVISION OF COSTS.] The state share of county 
 83.11  agency expenditures for general assistance medical care shall be 
 83.12  100 percent.  Payments made under this subdivision shall be made 
 83.13  according to sections 256B.041, subdivision 5 and 256B.19, 
 83.14  subdivision 1.  In counties where a pilot or demonstration 
 83.15  project is operated for general assistance medical care 
 83.16  services, the state may pay 100 percent of the costs of 
 83.17  administering the pilot or demonstration project.  
 83.18     Notwithstanding any provision to the contrary, beginning 
 83.19  July 1, 1991, the state shall pay 100 percent of the costs for 
 83.20  centralized claims processing by the department of 
 83.21  administration relative to claims beginning January 1, 1991, and 
 83.22  submitted on behalf of general assistance medical care 
 83.23  recipients by vendors in the general assistance medical care 
 83.24  program. 
 83.25     Beginning July 1, 1991, the state shall reimburse counties 
 83.26  up to the limit of state appropriations for general assistance 
 83.27  medical care common carrier transportation and related travel 
 83.28  expenses provided for medical purposes after December 31, 1990.  
 83.29  For purposes of this subdivision, transportation shall have the 
 83.30  meaning given it in Code of Federal Regulations, title 42, 
 83.31  section 440.170(a), as amended through October 1, 1987, and 
 83.32  travel expenses shall have the meaning given in Code of Federal 
 83.33  Regulations, title 42, section 440.170(a)(3), as amended through 
 83.34  October 1, 1987. 
 83.35     The county shall ensure that only the least costly most 
 83.36  appropriate transportation and travel expenses are used.  The 
 84.1   state may enter into volume purchase contracts, or use a 
 84.2   competitive bidding process, whenever feasible, to minimize the 
 84.3   costs of transportation services.  If the state has entered into 
 84.4   a volume purchase contract or used the competitive bidding 
 84.5   procedures of chapter 16B 16C to arrange for transportation 
 84.6   services, the county may be required to use such arrangements to 
 84.7   be eligible for state reimbursement for general assistance 
 84.8   medical care common carrier transportation and related travel 
 84.9   expenses provided for medical purposes. 
 84.10     In counties where prepaid health plans are under contract 
 84.11  to the commissioner to provide services to general assistance 
 84.12  medical care recipients, the cost of court ordered treatment 
 84.13  that does not include diagnostic evaluation, recommendation, or 
 84.14  referral for treatment by the prepaid health plan is the 
 84.15  responsibility of the county of financial responsibility. 
 84.16     Sec. 82.  Minnesota Statutes 1996, section 298.2211, 
 84.17  subdivision 4, is amended to read: 
 84.18     Subd. 4.  [OBLIGATIONS NOT STATE DEBT.] Bonds and other 
 84.19  obligations issued by the commissioner pursuant to this section, 
 84.20  along with all related documents, are not general obligations of 
 84.21  the state of Minnesota and are not subject to section 16B.06 
 84.22  sections 16C.03, subdivision 4, and 16C.06.  The full faith and 
 84.23  credit and taxing powers of the state are not and may not be 
 84.24  pledged for the payment of these bonds or other obligations, and 
 84.25  no person has the right to compel the levy of any state tax for 
 84.26  their payment or to compel the appropriation of any moneys of 
 84.27  the state for their payment except as specifically provided 
 84.28  herein.  These bonds and obligations shall be payable solely 
 84.29  from the property and moneys derived by the commissioner 
 84.30  pursuant to the authority granted in this section that the 
 84.31  commissioner pledges to their payment.  The legislature intends 
 84.32  not to appropriate money from the general fund to pay for these 
 84.33  bonds or other obligations.  All these bonds or other 
 84.34  obligations must contain the provisions of this subdivision or 
 84.35  words to the same effect on their face.  
 84.36     Sec. 83.  Minnesota Statutes 1996, section 349A.06, 
 85.1   subdivision 1, is amended to read: 
 85.2      Subdivision 1.  [CONTRACTS.] The director shall sell 
 85.3   tickets for the lottery through lottery retailers with whom the 
 85.4   director contracts.  Contracts under this section are not 
 85.5   subject to the provisions of sections 16B.06 to 16B.102, and 
 85.6   16B.17 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and 
 85.7   are valid for a period of one year.  The director may permit a 
 85.8   retailer to sell tickets at more than one business location 
 85.9   under a contract entered into under this section. 
 85.10     Sec. 84.  Minnesota Statutes 1996, section 349A.07, 
 85.11  subdivision 6, is amended to read: 
 85.12     Subd. 6.  [EXEMPTIONS.] Lottery procurement contracts 
 85.13  entered into by the director are not subject to the provisions 
 85.14  of sections 16B.06 to 16B.102 or 16B.17 section 16C.03, 16C.06, 
 85.15  16C.07, 16C.09, 16C.10, or 16C.11, provided that the director 
 85.16  must utilize an open and competitive bid process, and as nearly 
 85.17  as practicable follow the procedures of chapter chapters 16B and 
 85.18  16C governing contracts, consistent with the provisions of this 
 85.19  section.  
 85.20     Sec. 85.  Minnesota Statutes 1996, section 352.03, 
 85.21  subdivision 6, is amended to read: 
 85.22     Subd. 6.  [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The 
 85.23  management of the system is vested in the director, who is the 
 85.24  executive and administrative head of the system.  The director 
 85.25  shall be advisor to the board on matters pertaining to the 
 85.26  system and shall also act as the secretary of the board.  The 
 85.27  director shall: 
 85.28     (1) attend meetings of the board; 
 85.29     (2) prepare and recommend to the board appropriate rules to 
 85.30  carry out this chapter; 
 85.31     (3) establish and maintain an adequate system of records 
 85.32  and accounts following recognized accounting principles and 
 85.33  controls; 
 85.34     (4) designate an assistant director with the approval of 
 85.35  the board; 
 85.36     (5) appoint any employees, both permanent and temporary, 
 86.1   that are necessary to carry out the provisions of this chapter; 
 86.2      (6) organize the work of the system as the director deems 
 86.3   necessary to fulfill the functions of the system, and define the 
 86.4   duties of its employees and delegate to them any powers or 
 86.5   duties, subject to the control of the director and under 
 86.6   conditions the director may prescribe.  Appointments to exercise 
 86.7   delegated power must be by written order and shall be filed with 
 86.8   the secretary of state; 
 86.9      (7) with the advice and consent of the board, contract for 
 86.10  the services of an approved actuary, professional management 
 86.11  services, and any other consulting services as necessary and fix 
 86.12  the compensation for those services.  The contracts are not 
 86.13  subject to competitive bidding under chapter 16B 16C.  Any 
 86.14  approved actuary retained by the executive director shall 
 86.15  function as the actuarial advisor of the board and the executive 
 86.16  director, and may perform actuarial valuations and experience 
 86.17  studies to supplement those performed by the actuary retained by 
 86.18  the legislative commission on pensions and retirement.  Any 
 86.19  supplemental actuarial valuations or experience studies shall be 
 86.20  filed with the executive director of the legislative commission 
 86.21  on pensions and retirement.  Professional management services 
 86.22  may not be contracted for more often than once in six years.  
 86.23  Copies of professional management survey reports must be 
 86.24  transmitted to the secretary of the senate, the chief clerk of 
 86.25  the house of representatives, and the legislative reference 
 86.26  library as provided by section 3.195, to the executive director 
 86.27  of the commission and to the legislative auditor at the time as 
 86.28  reports are furnished to the board.  Only management firms 
 86.29  experienced in conducting management surveys of federal, state, 
 86.30  or local public retirement systems are qualified to contract 
 86.31  with the director; 
 86.32     (8) with the advice and consent of the board provide 
 86.33  in-service training for the employees of the system; 
 86.34     (9) make refunds of accumulated contributions to former 
 86.35  state employees and to the designated beneficiary, surviving 
 86.36  spouse, legal representative, or next of kin of deceased state 
 87.1   employees or deceased former state employees, as provided in 
 87.2   this chapter; 
 87.3      (10) determine the amount of the annuities and disability 
 87.4   benefits of employees covered by the system and authorize 
 87.5   payment of the annuities and benefits beginning as of the dates 
 87.6   on which the annuities and benefits begin to accrue, in 
 87.7   accordance with the provisions of this chapter; 
 87.8      (11) pay annuities, refunds, survivor benefits, salaries, 
 87.9   and necessary operating expenses of the system; 
 87.10     (12) certify funds available for investment to the state 
 87.11  board of investment; 
 87.12     (13) with the advice and approval of the board request the 
 87.13  state board of investment to sell securities when the director 
 87.14  determines that funds are needed for the system; 
 87.15     (14) prepare and submit to the board and the legislature an 
 87.16  annual financial report covering the operation of the system, as 
 87.17  required by section 356.20; 
 87.18     (15) prepare and submit biennial and annual budgets to the 
 87.19  board and with the approval of the board submit the budgets to 
 87.20  the department of finance; and 
 87.21     (16) with the approval of the board, perform other duties 
 87.22  required to administer the retirement and other provisions of 
 87.23  this chapter and to do its business. 
 87.24     Sec. 86.  Minnesota Statutes 1996, section 352.03, 
 87.25  subdivision 16, is amended to read: 
 87.26     Subd. 16.  [DATA PROCESSING SERVICES.] Notwithstanding 
 87.27  chapter 16B, or 16C or any law to the contrary, the executive 
 87.28  director of the system may use the services of the department of 
 87.29  administration, information services division, for electronic 
 87.30  data processing and related services or may contract for all or 
 87.31  a part of the services. 
 87.32     Sec. 87.  Minnesota Statutes 1997 Supplement, section 
 87.33  353.03, subdivision 3a, is amended to read: 
 87.34     Subd. 3a.  [EXECUTIVE DIRECTOR.] (a)  [APPOINTMENT.] The 
 87.35  board shall appoint, with the advice and consent of the senate, 
 87.36  an executive director on the basis of education, experience in 
 88.1   the retirement field, and leadership ability.  The executive 
 88.2   director shall have had at least five years' experience in an 
 88.3   executive level management position, which has included 
 88.4   responsibility for pensions, deferred compensation, or employee 
 88.5   benefits.  The executive director serves at the pleasure of the 
 88.6   board.  The salary of the executive director is as provided by 
 88.7   section 15A.0815. 
 88.8      (b)  [DUTIES.] The management of the association is vested 
 88.9   in the executive director who shall be the executive and 
 88.10  administrative head of the association.  The executive director 
 88.11  shall act as adviser to the board on all matters pertaining to 
 88.12  the association and shall also act as the secretary of the 
 88.13  board.  The executive director shall: 
 88.14     (1) attend all meetings of the board; 
 88.15     (2) prepare and recommend to the board appropriate rules to 
 88.16  carry out the provisions of this chapter; 
 88.17     (3) establish and maintain an adequate system of records 
 88.18  and accounts following recognized accounting principles and 
 88.19  controls; 
 88.20     (4) designate, with the approval of the board, up to two 
 88.21  persons who shall serve in the unclassified service and whose 
 88.22  salary is set in accordance with section 43A.18, subdivision 3, 
 88.23  appoint a confidential secretary in the unclassified service, 
 88.24  and appoint employees to carry out this chapter, who are subject 
 88.25  to chapters 43A and 179A in the same manner as are executive 
 88.26  branch employees; 
 88.27     (5) organize the work of the association as the director 
 88.28  deems necessary to fulfill the functions of the association, and 
 88.29  define the duties of its employees and delegate to them any 
 88.30  powers or duties, subject to the control of, and under such 
 88.31  conditions as, the executive director may prescribe; 
 88.32     (6) with the approval of the board, contract for the 
 88.33  services of an approved actuary, professional management 
 88.34  services, and any other consulting services as necessary to 
 88.35  fulfill the purposes of this chapter.  All contracts are subject 
 88.36  to chapter 16B 16C.  The commissioner of administration shall 
 89.1   not approve, and the association shall not enter into, any 
 89.2   contract to provide lobbying services or legislative advocacy of 
 89.3   any kind.  Any approved actuary retained by the executive 
 89.4   director shall function as the actuarial advisor of the board 
 89.5   and the executive director and may perform actuarial valuations 
 89.6   and experience studies to supplement those performed by the 
 89.7   actuary retained by the legislative commission on pensions and 
 89.8   retirement.  Any supplemental actuarial valuations or experience 
 89.9   studies shall be filed with the executive director of the 
 89.10  legislative commission on pensions and retirement.  Copies of 
 89.11  professional management survey reports shall be transmitted to 
 89.12  the secretary of the senate, the chief clerk of the house of 
 89.13  representatives, and the legislative reference library as 
 89.14  provided by section 3.195, to the executive director of the 
 89.15  commission and to the legislative auditor at the same time as 
 89.16  reports are furnished to the board.  Only management firms 
 89.17  experienced in conducting management surveys of federal, state, 
 89.18  or local public retirement systems shall be qualified to 
 89.19  contract with the director hereunder; 
 89.20     (7) with the approval of the board provide in-service 
 89.21  training for the employees of the association; 
 89.22     (8) make refunds of accumulated contributions to former 
 89.23  members and to the designated beneficiary, surviving spouse, 
 89.24  legal representative or next of kin of deceased members or 
 89.25  deceased former members, as provided in this chapter; 
 89.26     (9) determine the amount of the annuities and disability 
 89.27  benefits of members covered by the association and authorize 
 89.28  payment of the annuities and benefits beginning as of the dates 
 89.29  on which the annuities and benefits begin to accrue, in 
 89.30  accordance with the provisions of this chapter; 
 89.31     (10) pay annuities, refunds, survivor benefits, salaries, 
 89.32  and necessary operating expenses of the association; 
 89.33     (11) prepare and submit to the board and the legislature an 
 89.34  annual financial report covering the operation of the 
 89.35  association, as required by section 356.20; 
 89.36     (12) prepare and submit biennial and annual budgets to the 
 90.1   board for its approval and submit the approved budgets to the 
 90.2   department of finance for approval by the commissioner; 
 90.3      (13) reduce all or part of the accrued interest payable 
 90.4   under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, 
 90.5   subdivision 5, upon receipt of proof by the association of an 
 90.6   unreasonable processing delay or other extenuating circumstances 
 90.7   of the employing unit.  The executive director shall prescribe 
 90.8   and submit for approval by the board the conditions under which 
 90.9   such interest may be reduced; and 
 90.10     (14) with the approval of the board, perform such other 
 90.11  duties as may be required for the administration of the 
 90.12  association and the other provisions of this chapter and for the 
 90.13  transaction of its business.  
 90.14     Sec. 88.  Minnesota Statutes 1996, section 354.06, 
 90.15  subdivision 2a, is amended to read: 
 90.16     Subd. 2a.  [DUTIES OF EXECUTIVE DIRECTOR.] The management 
 90.17  of the association is vested in the executive director who shall 
 90.18  be the executive and administrative head of the association.  
 90.19  The executive director shall act as advisor to the board on all 
 90.20  matters pertaining to the association and shall also act as the 
 90.21  secretary of the board.  The executive director shall: 
 90.22     (1) attend all meetings of the board; 
 90.23     (2) prepare and recommend to the board appropriate rules to 
 90.24  carry out the provisions of this chapter; 
 90.25     (3) establish and maintain an adequate system of records 
 90.26  and accounts following recognized accounting principles and 
 90.27  controls; 
 90.28     (4) designate an assistant executive director in the 
 90.29  unclassified service and two assistant executive directors in 
 90.30  the classified service with the approval of the board, and 
 90.31  appoint such employees, both permanent and temporary, as are 
 90.32  necessary to carry out the provisions of this chapter; 
 90.33     (5) organize the work of the association as the director 
 90.34  deems necessary to fulfill the functions of the association, and 
 90.35  define the duties of its employees and delegate to them any 
 90.36  powers or duties, subject to the director's control and under 
 91.1   such conditions as the director may prescribe; 
 91.2      (6) with the approval of the board, contract and set the 
 91.3   compensation for the services of an approved actuary, 
 91.4   professional management services, and any other consulting 
 91.5   services.  These contracts are not subject to the competitive 
 91.6   bidding procedure prescribed by chapter 16B 16C.  An approved 
 91.7   actuary retained by the executive director shall function as the 
 91.8   actuarial advisor of the board and the executive director and 
 91.9   may perform actuarial valuations and experience studies to 
 91.10  supplement those performed by the actuary retained by the 
 91.11  legislative commission on pensions and retirement.  Any 
 91.12  supplemental actuarial valuations or experience studies shall be 
 91.13  filed with the executive director of the legislative commission 
 91.14  on pensions and retirement.  Copies of professional management 
 91.15  survey reports must be transmitted to the secretary of the 
 91.16  senate, the chief clerk of the house of representatives, and the 
 91.17  legislative reference library as provided by section 3.195, to 
 91.18  the executive director of the commission and to the legislative 
 91.19  auditor at the same time as reports are furnished to the board.  
 91.20  Only management firms experienced in conducting management 
 91.21  surveys of federal, state, or local public retirement systems 
 91.22  are qualified to contract with the executive director; 
 91.23     (7) with the approval of the board, provide in-service 
 91.24  training for the employees of the association; 
 91.25     (8) make refunds of accumulated contributions to former 
 91.26  members and to the designated beneficiary, surviving spouse, 
 91.27  legal representative, or next of kin of deceased members or 
 91.28  deceased former members, under this chapter; 
 91.29     (9) determine the amount of the annuities and disability 
 91.30  benefits of members covered by the association and authorize 
 91.31  payment of the annuities and benefits beginning as of the dates 
 91.32  on which the annuities and benefits begin to accrue, under this 
 91.33  chapter; 
 91.34     (10) pay annuities, refunds, survivor benefits, salaries, 
 91.35  and necessary operating expenses of the association; 
 91.36     (11) prepare and submit to the board and the legislature an 
 92.1   annual financial report covering the operation of the 
 92.2   association, as required by section 356.20; 
 92.3      (12) certify funds available for investment to the state 
 92.4   board of investment; 
 92.5      (13) with the advice and approval of the board, request the 
 92.6   state board of investment to sell securities on determining that 
 92.7   funds are needed for the purposes of the association; 
 92.8      (14) prepare and submit biennial and annual budgets to the 
 92.9   board and with the approval of the board submit those budgets to 
 92.10  the department of finance; and 
 92.11     (15) with the approval of the board, perform such other 
 92.12  duties as may be required for the administration of the 
 92.13  association and the other provisions of this chapter and for the 
 92.14  transaction of its business.  The executive director may: 
 92.15     (i) reduce all or part of the accrued interest and fines 
 92.16  payable by an employing unit for reporting requirements under 
 92.17  section 354.52, based on an evaluation of any extenuating 
 92.18  circumstances of the employing unit; 
 92.19     (ii) assign association employees to conduct field audits 
 92.20  of an employing unit to ensure compliance with the provisions of 
 92.21  this chapter; and 
 92.22     (iii) recover overpayments, if not repaid to the 
 92.23  association, by suspending or reducing the payment of a 
 92.24  retirement annuity, refund, disability benefit, survivor 
 92.25  benefit, or optional annuity under this chapter until the 
 92.26  overpayment, plus interest, has been recovered. 
 92.27     Sec. 89.  Minnesota Statutes 1996, section 354.07, 
 92.28  subdivision 7, is amended to read: 
 92.29     Subd. 7.  Notwithstanding chapter 16B, or 16C or any law to 
 92.30  the contrary, the board may use the services of the department 
 92.31  of administration, information services division, for electronic 
 92.32  data processing and related services or may contract for all or 
 92.33  a portion of such services. 
 92.34     Sec. 90.  Minnesota Statutes 1996, section 356A.06, 
 92.35  subdivision 7, is amended to read: 
 92.36     Subd. 7.  [EXPANDED LIST OF AUTHORIZED INVESTMENT 
 93.1   SECURITIES.] (a)  [AUTHORITY.] Except to the extent otherwise 
 93.2   authorized by law or bylaws, a covered pension plan not 
 93.3   described by subdivision 6, paragraph (a), may invest its assets 
 93.4   only in accordance with this subdivision. 
 93.5      (b)  [SECURITIES GENERALLY.] The covered pension plan has 
 93.6   the authority to purchase, sell, lend, or exchange the 
 93.7   securities specified in paragraphs (c) to (g), including puts 
 93.8   and call options and future contracts traded on a contract 
 93.9   market regulated by a governmental agency or by a financial 
 93.10  institution regulated by a governmental agency.  These 
 93.11  securities may be owned as units in commingled trusts that own 
 93.12  the securities described in paragraphs (c) to (g).  
 93.13     (c)  [GOVERNMENT OBLIGATIONS.] The covered pension plan may 
 93.14  invest funds in governmental bonds, notes, bills, mortgages, and 
 93.15  other evidences of indebtedness provided the issue is backed by 
 93.16  the full faith and credit of the issuer or the issue is rated 
 93.17  among the top four quality rating categories by a nationally 
 93.18  recognized rating agency.  The obligations in which funds may be 
 93.19  invested under this paragraph include guaranteed or insured 
 93.20  issues of (1) the United States, its agencies, its 
 93.21  instrumentalities, or organizations created and regulated by an 
 93.22  act of Congress; (2) Canada and its provinces, provided the 
 93.23  principal and interest is payable in United States dollars; (3) 
 93.24  the states and their municipalities, political subdivisions, 
 93.25  agencies, or instrumentalities; (4) the International Bank for 
 93.26  Reconstruction and Development, the Inter-American Development 
 93.27  Bank, the Asian Development Bank, the African Development Bank, 
 93.28  or any other United States government sponsored organization of 
 93.29  which the United States is a member, provided the principal and 
 93.30  interest is payable in United States dollars. 
 93.31     (d)  [CORPORATE OBLIGATIONS.] The covered pension plan may 
 93.32  invest funds in bonds, notes, debentures, transportation 
 93.33  equipment obligations, or any other longer term evidences of 
 93.34  indebtedness issued or guaranteed by a corporation organized 
 93.35  under the laws of the United States or any state thereof, or the 
 93.36  Dominion of Canada or any province thereof if they conform to 
 94.1   the following provisions: 
 94.2      (1) the principal and interest of obligations of 
 94.3   corporations incorporated or organized under the laws of the 
 94.4   Dominion of Canada or any province thereof must be payable in 
 94.5   United States dollars; and 
 94.6      (2) obligations must be rated among the top four quality 
 94.7   categories by a nationally recognized rating agency. 
 94.8      (e)  [OTHER OBLIGATIONS.] (1) The covered pension plan may 
 94.9   invest funds in bankers acceptances, certificates of deposit, 
 94.10  deposit notes, commercial paper, mortgage participation 
 94.11  certificates and pools, asset backed securities, repurchase 
 94.12  agreements and reverse repurchase agreements, guaranteed 
 94.13  investment contracts, savings accounts, and guaranty fund 
 94.14  certificates, surplus notes, or debentures of domestic mutual 
 94.15  insurance companies if they conform to the following provisions: 
 94.16     (i) bankers acceptances and deposit notes of United States 
 94.17  banks are limited to those issued by banks rated in the highest 
 94.18  four quality categories by a nationally recognized rating 
 94.19  agency; 
 94.20     (ii) certificates of deposit are limited to those issued by 
 94.21  (A) United States banks and savings institutions that are rated 
 94.22  in the highest four quality categories by a nationally 
 94.23  recognized rating agency or whose certificates of deposit are 
 94.24  fully insured by federal agencies; or (B) credit unions in 
 94.25  amounts up to the limit of insurance coverage provided by the 
 94.26  National Credit Union Administration; 
 94.27     (iii) commercial paper is limited to those issued by United 
 94.28  States corporations or their Canadian subsidiaries and rated in 
 94.29  the highest two quality categories by a nationally recognized 
 94.30  rating agency; 
 94.31     (iv) mortgage participation or pass through certificates 
 94.32  evidencing interests in pools of first mortgages or trust deeds 
 94.33  on improved real estate located in the United States where the 
 94.34  loan to value ratio for each loan as calculated in accordance 
 94.35  with section 61A.28, subdivision 3, does not exceed 80 percent 
 94.36  for fully amortizable residential properties and in all other 
 95.1   respects meets the requirements of section 61A.28, subdivision 
 95.2   3; 
 95.3      (v) collateral for repurchase agreements and reverse 
 95.4   repurchase agreements is limited to letters of credit and 
 95.5   securities authorized in this section; 
 95.6      (vi) guaranteed investment contracts are limited to those 
 95.7   issued by insurance companies or banks rated in the top four 
 95.8   quality categories by a nationally recognized rating agency or 
 95.9   to alternative guaranteed investment contracts where the 
 95.10  underlying assets comply with the requirements of this 
 95.11  subdivision; 
 95.12     (vii) savings accounts are limited to those fully insured 
 95.13  by federal agencies; and 
 95.14     (viii) asset backed securities must be rated in the top 
 95.15  four quality categories by a nationally recognized rating agency.
 95.16     (2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 
 95.17  16C.06 do not apply to certificates of deposit and 
 95.18  collateralization agreements executed by the covered pension 
 95.19  plan under clause (1), item (ii). 
 95.20     (3) In addition to investments authorized by clause (1), 
 95.21  item (iv), the covered pension plan may purchase from the 
 95.22  Minnesota housing finance agency all or any part of a pool of 
 95.23  residential mortgages, not in default, that has previously been 
 95.24  financed by the issuance of bonds or notes of the agency.  The 
 95.25  covered pension plan may also enter into a commitment with the 
 95.26  agency, at the time of any issue of bonds or notes, to purchase 
 95.27  at a specified future date, not exceeding 12 years from the date 
 95.28  of the issue, the amount of mortgage loans then outstanding and 
 95.29  not in default that have been made or purchased from the 
 95.30  proceeds of the bonds or notes.  The covered pension plan may 
 95.31  charge reasonable fees for any such commitment and may agree to 
 95.32  purchase the mortgage loans at a price sufficient to produce a 
 95.33  yield to the covered pension plan comparable, in its judgment, 
 95.34  to the yield available on similar mortgage loans at the date of 
 95.35  the bonds or notes.  The covered pension plan may also enter 
 95.36  into agreements with the agency for the investment of any 
 96.1   portion of the funds of the agency.  The agreement must cover 
 96.2   the period of the investment, withdrawal privileges, and any 
 96.3   guaranteed rate of return. 
 96.4      (f)  [CORPORATE STOCKS.] The covered pension plan may 
 96.5   invest funds in stocks or convertible issues of any corporation 
 96.6   organized under the laws of the United States or the states 
 96.7   thereof, the Dominion of Canada or its provinces, or any 
 96.8   corporation listed on the New York Stock Exchange or the 
 96.9   American Stock Exchange, if they conform to the following 
 96.10  provisions: 
 96.11     (1) the aggregate value of corporate stock investments, as 
 96.12  adjusted for realized profits and losses, must not exceed 85 
 96.13  percent of the market or book value, whichever is less, of a 
 96.14  fund, less the aggregate value of investments according to 
 96.15  subdivision 6; 
 96.16     (2) investments must not exceed five percent of the total 
 96.17  outstanding shares of any one corporation. 
 96.18     (g)  [OTHER INVESTMENTS.] (1) In addition to the 
 96.19  investments authorized in paragraphs (b) to (f), and subject to 
 96.20  the provisions in clause (2), the covered pension plan may 
 96.21  invest funds in:  
 96.22     (i) venture capital investment businesses through 
 96.23  participation in limited partnerships and corporations; 
 96.24     (ii) real estate ownership interests or loans secured by 
 96.25  mortgages or deeds of trust through investment in limited 
 96.26  partnerships, bank sponsored collective funds, trusts, and 
 96.27  insurance company commingled accounts, including separate 
 96.28  accounts; 
 96.29     (iii) regional and mutual funds through bank sponsored 
 96.30  collective funds and open-end investment companies registered 
 96.31  under the Federal Investment Company Act of 1940; 
 96.32     (iv) resource investments through limited partnerships, 
 96.33  private placements, and corporations; and 
 96.34     (v) international securities. 
 96.35     (2) The investments authorized in clause (1) must conform 
 96.36  to the following provisions:  
 97.1      (i) the aggregate value of all investments made according 
 97.2   to clause (1) may not exceed 35 percent of the market value of 
 97.3   the fund for which the covered pension plan is investing; 
 97.4      (ii) there must be at least four unrelated owners of the 
 97.5   investment other than the state board for investments made under 
 97.6   clause (1), item (i), (ii), (iii), or (iv); 
 97.7      (iii) covered pension plan participation in an investment 
 97.8   vehicle is limited to 20 percent thereof for investments made 
 97.9   under clause (1), item (i), (ii), (iii), or (iv); and 
 97.10     (iv) covered pension plan participation in a limited 
 97.11  partnership does not include a general partnership interest or 
 97.12  other interest involving general liability.  The covered pension 
 97.13  plan may not engage in any activity as a limited partner which 
 97.14  creates general liability. 
 97.15     Sec. 91.  Minnesota Statutes 1996, section 446A.12, 
 97.16  subdivision 5, is amended to read: 
 97.17     Subd. 5.  [EXEMPTION.] The notes and bonds of the authority 
 97.18  are not subject to section 16B.06 sections 16C.03, subdivision 
 97.19  4, and 16C.06. 
 97.20     Sec. 92.  Minnesota Statutes 1996, section 462A.18, 
 97.21  subdivision 2, is amended to read: 
 97.22     Subd. 2.  [CONTRACTS AND SECURITY.] Notwithstanding the 
 97.23  provisions of this section, the agency shall have power to 
 97.24  contract with the holders of any of its notes or bonds, as to 
 97.25  the custody, collection, securing, investment, and payment of 
 97.26  any money of the agency, or any money held in trust or otherwise 
 97.27  for the payment of notes or bonds, and to carry out such 
 97.28  contract.  Money held in trust or otherwise for the payment of 
 97.29  notes or bonds or in any way to secure notes or bonds and 
 97.30  deposits of such money may be secured in the same manner as 
 97.31  money of the agency, and all banks and trust companies are 
 97.32  authorized to give such security for such deposits.  All money 
 97.33  so paid to the state treasurer as agent of the agency, from 
 97.34  whatever source, are appropriated to the agency.  The agency's 
 97.35  notes and bonds are not subject to section 16B.06 sections 
 97.36  16C.03, subdivision 4, and 16C.06.  
 98.1      Sec. 93.  Minnesota Statutes 1996, section 471.345, 
 98.2   subdivision 8, is amended to read: 
 98.3      Subd. 8.  [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED 
 98.4   PERSONS.] For purposes of this subdivision, the following terms 
 98.5   shall have the meanings herein ascribed to them: 
 98.6      (a) "Small targeted group business" means businesses 
 98.7   designated under section 16B.19 16C.18.  
 98.8      (b) "Business entity" means an entity organized for profit, 
 98.9   including an individual, partnership, corporation, joint 
 98.10  venture, association, or cooperative.  
 98.11     Nothing in this section shall be construed to prohibit any 
 98.12  municipality from adopting a resolution, rule, regulation, or 
 98.13  ordinance which on an annual basis designates and sets aside for 
 98.14  awarding to small targeted group businesses a percentage of the 
 98.15  value of its anticipated total procurement of goods and 
 98.16  services, including construction, and which uses either a 
 98.17  negotiated price or bid contract procedure in the awarding of a 
 98.18  procurement contract under a set-aside program as allowed in 
 98.19  this subdivision, provided that any award based on a negotiated 
 98.20  price shall not exceed by more than five percent the 
 98.21  municipality's estimated price for the goods and services if 
 98.22  they were purchased on the open market and not under the 
 98.23  set-aside program. 
 98.24     Sec. 94.  Minnesota Statutes 1996, section 473.142, is 
 98.25  amended to read: 
 98.26     473.142 [SMALL BUSINESSES.] 
 98.27     (a) The metropolitan council and agencies specified in 
 98.28  section 473.143, subdivision 1, may award up to a six percent 
 98.29  preference in the amount bid for specified goods or services to 
 98.30  small targeted group businesses designated under section 16B.19 
 98.31  16C.18. 
 98.32     (b) The council and each agency specified in section 
 98.33  473.143, subdivision 1, may designate a purchase of goods or 
 98.34  services for award only to small targeted group businesses 
 98.35  designated under section 16B.19 16C.18 if the council or agency 
 98.36  determines that at least three small targeted group businesses 
 99.1   are likely to bid. 
 99.2      (c) The council and each agency specified in section 
 99.3   473.143, subdivision 1, as a condition of awarding a 
 99.4   construction contract or approving a contract for consultant, 
 99.5   professional, or technical services, may set goals that require 
 99.6   the prime contractor to subcontract a portion of the contract to 
 99.7   small targeted group businesses designated under section 16B.19 
 99.8   16C.18.  The council or agency must establish a procedure for 
 99.9   granting waivers from the subcontracting requirement when 
 99.10  qualified small targeted group businesses are not reasonably 
 99.11  available.  The council or agency may establish financial 
 99.12  incentives for prime contractors who exceed the goals for use of 
 99.13  subcontractors and financial penalties for prime contractors who 
 99.14  fail to meet goals under this paragraph.  The subcontracting 
 99.15  requirements of this paragraph do not apply to prime contractors 
 99.16  who are small targeted group businesses.  At least 75 percent of 
 99.17  the value of the subcontracts awarded to small targeted group 
 99.18  businesses under this paragraph must be performed by the 
 99.19  business to which the subcontract is awarded or by another small 
 99.20  targeted group business. 
 99.21     (d) The council and each agency listed in section 473.143, 
 99.22  subdivision 1, are encouraged to purchase from small targeted 
 99.23  group businesses designated under section 16B.19 16C.18 when 
 99.24  making purchases that are not subject to competitive bidding 
 99.25  procedures. 
 99.26     (e) The council and each agency may adopt rules to 
 99.27  implement this section. 
 99.28     (f) Each council or agency contract must require the prime 
 99.29  contractor to pay any subcontractor within ten days of the prime 
 99.30  contractor's receipt of payment from the council or agency for 
 99.31  undisputed services provided by the subcontractor.  The contract 
 99.32  must require the prime contractor to pay interest of 1-1/2 
 99.33  percent per month or any part of a month to the subcontractor on 
 99.34  any undisputed amount not paid on time to the subcontractor.  
 99.35  The minimum monthly interest penalty payment for an unpaid 
 99.36  balance of $100 or more is $10.  For an unpaid balance of less 
100.1   than $100, the prime contractor shall pay the actual penalty due 
100.2   to the subcontractor.  A subcontractor who prevails in a civil 
100.3   action to collect interest penalties from a prime contractor 
100.4   must be awarded its costs and disbursements, including attorney 
100.5   fees, incurred in bringing the action. 
100.6      (g) This section does not apply to procurement financed in 
100.7   whole or in part with federal funds if the procurement is 
100.8   subject to federal disadvantaged, minority, or women business 
100.9   enterprise regulations.  The council and each agency shall 
100.10  report to the commissioner of administration on compliance with 
100.11  this section.  The information must be reported at the time and 
100.12  in the manner requested by the commissioner. 
100.13     Sec. 95.  Minnesota Statutes 1996, section 473.556, 
100.14  subdivision 14, is amended to read: 
100.15     Subd. 14.  [SMALL BUSINESS CONTRACTS.] In exercising its 
100.16  powers to contract for the purchase of services, materials, 
100.17  supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 
100.18  10, the commission shall designate and set aside each fiscal 
100.19  year for awarding to small businesses approximately ten percent 
100.20  of the value of anticipated contracts and subcontracts of that 
100.21  kind for that year, in the manner required of the commissioner 
100.22  of administration for state procurement contracts pursuant to 
100.23  sections 16B.19 to 16B.22 16C.18 to 16C.21.  The commission 
100.24  shall follow the rules promulgated by the commissioner of 
100.25  administration pursuant to section 16B.22 16C.21, and shall 
100.26  submit reports of the kinds required of the commissioners of 
100.27  administration and economic development by section 16B.21 16C.20.
100.28     Sec. 96.  Minnesota Statutes 1996, section 480.09, 
100.29  subdivision 1, is amended to read: 
100.30     Subdivision 1.  The state library shall be maintained in 
100.31  the capitol and shall be under the supervision of the justices 
100.32  of the supreme court.  Notwithstanding chapter 16B 16C or any 
100.33  other act inconsistent herewith or acts amendatory thereof or 
100.34  supplementary thereto, they shall direct the purchases of books, 
100.35  pamphlets, and documents therefor and the sales and exchanges 
100.36  therefrom upon such terms and conditions as they may deem just 
101.1   and proper.  They may authorize the transfer of books and 
101.2   documents to the University of Minnesota or any department 
101.3   thereof, or to any state agency.  They shall adopt rules for the 
101.4   government of the library and the management of its affairs, and 
101.5   prescribe penalties for the violation thereof.  
101.6      Sec. 97.  Minnesota Statutes 1996, section 626.90, 
101.7   subdivision 2, is amended to read: 
101.8      Subd. 2.  [LAW ENFORCEMENT AGENCY.] (a) The band has the 
101.9   powers of a law enforcement agency, as defined in section 
101.10  626.84, subdivision 1, paragraph (h), if all of the requirements 
101.11  of clauses (1) to (4) are met: 
101.12     (1) the band agrees to be subject to liability for its 
101.13  torts and those of its officers, employees, and agents acting 
101.14  within the scope of their employment or duties arising out of a 
101.15  law enforcement agency function conferred by this section, to 
101.16  the same extent as a municipality under chapter 466, and the 
101.17  band further agrees, notwithstanding section 16B.06 16C.06, 
101.18  subdivision 6 7, to waive its sovereign immunity for purposes of 
101.19  claims of this liability; 
101.20     (2) the band files with the board of peace officer 
101.21  standards and training a bond or certificate of insurance for 
101.22  liability coverage for the maximum amounts set forth in section 
101.23  466.04; 
101.24     (3) the band files with the board of peace officer 
101.25  standards and training a certificate of insurance for liability 
101.26  of its law enforcement officers, employees, and agents for 
101.27  lawsuits under the United States Constitution; and 
101.28     (4) the band agrees to be subject to section 13.82 and any 
101.29  other laws of the state relating to data practices of law 
101.30  enforcement agencies. 
101.31     (b) The band shall enter into mutual aid/cooperative 
101.32  agreements with the Mille Lacs county sheriff under section 
101.33  471.59 to define and regulate the provision of law enforcement 
101.34  services under this section.  The agreements must define the 
101.35  trust property involved in the joint powers agreement. 
101.36     (c) The band shall have concurrent jurisdictional authority 
102.1   under this section with the Mille Lacs county sheriff's 
102.2   department only if the requirements of paragraph (a) are met and 
102.3   under the following circumstances: 
102.4      (1) over all persons in the geographical boundaries of the 
102.5   property held by the United States in trust for the Mille Lacs 
102.6   band or the Minnesota Chippewa tribe; 
102.7      (2) over all Minnesota Chippewa tribal members within the 
102.8   boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in 
102.9   Mille Lacs county, Minnesota; and 
102.10     (3) concurrent jurisdiction over any person who commits or 
102.11  attempts to commit a crime in the presence of an appointed band 
102.12  peace officer within the boundaries of the Treaty of February 
102.13  22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota. 
102.14     Sec. 98.  Minnesota Statutes 1997 Supplement, section 
102.15  626.91, subdivision 2, is amended to read: 
102.16     Subd. 2.  [LAW ENFORCEMENT AGENCY.] (a) The community has 
102.17  the powers of a law enforcement agency, as defined in section 
102.18  626.84, subdivision 1, paragraph (h), if all of the requirements 
102.19  of clauses (1) to (4) are met: 
102.20     (1) the community agrees to be subject to liability for its 
102.21  torts and those of its officers, employees, and agents acting 
102.22  within the scope of their employment or duties arising out of 
102.23  the law enforcement agency powers conferred by this section to 
102.24  the same extent as a municipality under chapter 466, and the 
102.25  community further agrees, notwithstanding section 16B.06 16C.06, 
102.26  subdivision 6 7, to waive its sovereign immunity with respect to 
102.27  claims arising from this liability; 
102.28     (2) the community files with the board of peace officer 
102.29  standards and training a bond or certificate of insurance for 
102.30  liability coverage for the maximum amounts set forth in section 
102.31  466.04; 
102.32     (3) the community files with the board of peace officer 
102.33  standards and training a certificate of insurance for liability 
102.34  of its law enforcement officers, employees, and agents for 
102.35  lawsuits under the United States Constitution; and 
102.36     (4) the community agrees to be subject to section 13.82 and 
103.1   any other laws of the state relating to data practices of law 
103.2   enforcement agencies. 
103.3      (b) The community shall enter into an agreement under 
103.4   section 471.59 with the Redwood county sheriff to define and 
103.5   regulate the provision of law enforcement services under this 
103.6   section and to provide for mutual aid and cooperation.  The 
103.7   agreement must identify and describe the trust property involved 
103.8   in the agreement.  For purposes of entering into this agreement, 
103.9   the community shall be considered a "governmental unit" as that 
103.10  term is defined in section 471.59, subdivision 1. 
103.11     Sec. 99.  [EFFECTIVE DATE.] 
103.12     This article is effective July 1, 1998, except that it does 
103.13  not apply to any part of the procurement process that results 
103.14  from a solicitation dated before July 1, 1998.