HF 2522

as introduced - 89th Legislature (2015 - 2016) Posted on 04/06/2016 12:52pm

A bill for an act
relating to state government; modifying provisions governing purchasing
preferences for targeted group businesses; amending Minnesota Statutes 2014,
section 16C.16, subdivisions 5, 6.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 16C.16, subdivision 5, is amended to read:

Subd. 5.

Designation of targeted groups.

(a) The commissioner of administration
shall periodically designate businesses that are majority owned and operated by women,
persons with a substantial physical disability, or specific minorities as targeted group
businesses within purchasing categories as determined by the commissioner. A group
may be targeted within a purchasing category if the commissioner determines there is a
statistical disparity between the percentage of purchasing from businesses owned by
group members and the representation of businesses owned by group members among all
businesses in the state in the purchasing category.

(b) In addition to designations under paragraph (a), an individual business may be
included as a targeted group business if the commissioner determines that inclusion is
necessary to remedy discrimination against the owner based on race, gender, or disability
in attempting to operate a business that would provide goods or services to public agencies.

(c) new text begin By January 1 of each odd-numbered year, the commissioner must review the
percentage of purchasing from each category of targeted group businesses in each
purchasing area for which a preference has been established. The review must cover
purchasing during the two-year period ending June 30 of the prior year.
new text end

new text begin (d) new text end The designations of purchasing categories and businesses under paragraphs
(a) and (b) are not rules for purposes of chapter 14, and are not subject to rulemaking
procedures of that chapter.

Sec. 2.

Minnesota Statutes 2014, section 16C.16, subdivision 6, is amended to read:

Subd. 6.

Purchasing methods.

(a) The commissioner may award up to a six
percent preference in the amount bid for specified goods or services to small targeted
group businesses. new text begin If the commissioner determines under subdivision 5, paragraph (c), that
purchasing preferences have been significantly less effective in eliminating disparities for
one or more categories of small targeted group businesses than for other categories, the
commissioner must award a larger preference to businesses in the categories in which the
preference has been significantly less effective than to other targeted group businesses.
The new preference amounts must be effective for contracts awarded on or after July 1 of
the year in which the review under subdivision 5, paragraph (c), occurs.
new text end

(b) The commissioner may designate a purchase of goods or services for award only
to small businesses or small targeted group businesses if the commissioner determines that
at least three small businesses or small targeted group businesses are likely to bid.

(c) The commissioner, as a condition of awarding a construction contract or
approving a contract for professional or technical services, may set goals that require the
prime contractor to subcontract a portion of the contract to small businesses or small
targeted group businesses. new text begin If the commissioner determines under subdivision 5, paragraph
(c), that purchasing preferences and subcontracting goals have been significantly less
effective in eliminating disparities for one or more categories of small targeted group
businesses than for other categories, the commissioner must set higher subcontracting
goals for businesses in the categories in which the preferences and goals have been
significantly less effective than for other targeted group businesses. The new goals must
be effective for contracts awarded on or after July 1 of the year in which the review under
subdivision 5, paragraph (c), occurs. new text end The commissioner must establish a procedure for
granting waivers from the subcontracting requirement when qualified small businesses
or small targeted group businesses are not reasonably available. The commissioner may
establish financial incentives for prime contractors who exceed the goals for use of small
business or small targeted group business subcontractors and financial penalties for prime
contractors who fail to meet goals under this paragraph. The subcontracting requirements
of this paragraph do not apply to prime contractors who are small businesses or small
targeted group businesses.