The Honorable Phil Carruthers

Speaker of the House of Representatives

The State of Minnesota

Dear Speaker Carruthers:

It is my honor to inform you that I have received, approved, signed and deposited in the Office of the Secretary of State the following House Files:

Speaker of the House of Representatives

The Honorable Allan H. Spear

President of the Senate

I have the honor to inform you that the following enrolled Acts of the 1998 Session of the State Legislature have been received from the Office of the Governor and are deposited in the Office of the Secretary of State for preservation, pursuant to the State Constitution, Article IV, Section 23:

S.F. No.	H.F. No.	Session Laws Chapter No.	Time and Date Approved 1997	Date Filed 1997
	3040	274	10:20 a.m. March 16	March 16
	2642	275	10:23 a.m. March 16	March 16
	2809	276	10:24 a.m. March 16	March 16
	2616	277	10:26 a.m. March 16	March 16
	3071	278	10:27 a.m. March 16	March 16
2457		279	9:50 a.m. March 16	March 16
2047		280	9:52 a.m. March 16	March 16
1151		281	9:56 a.m. March 16	March 16
2402		282	9:58 a.m. March 16	March 16
2729		283	10:00 a.m. March 16	March 16
2669		284	10:04 a.m. March 16	March 16

Sincerely,

Joan Anderson Growe
Secretary of State

H. F. No. 3644, A bill for an act relating to telecommunications; modifying voting requirements for extended area service within combined school districts; amending Laws 1997, chapter 59, section 1, subdivision 3.

The bill was read for the third time, as amended by the Senate, and placed upon its repassage.

The question was taken on the repassage of the bill and the roll was called. There were 123 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erickson	Kalis	McGuire	Peterson	Sykora
Anderson, B.	Evans	Kelso	Milbert	Pugh	Tingelstad
Anderson, I.	Farrell	Kielkucki	Molnau	Rest	Tomassoni
Bakk	Finseth	Kinkel	Mulder	Reuter	Trimble
Bettermann	Folliard	Knoblach	Mullery	Rhodes	Tuma
Biernat	Garcia	Koskinen	Munger	Rifenberg	Tunheim
Boudreau	Goodno	Kraus	Murphy	Rostberg	Van Dellen
Bradley	Greenfield	Kubly	Ness	Rukavina	Vandeveer
Broecker	Greiling	Kuisle	Nornes	Schumacher	Wagenius
Carlson	Gunther	Leighton	Olson, E.	Seagren	Weaver
Chaudhary	Harder	Leppik	Olson, M.	Seifert	Wejcman
Clark, J.	Hasskamp	Lieder	Opatz	Sekhon	Wenzel
Clark, K.	Holsten	Lindner	Orfield	Skare	Westfall
Daggett	Huntley	Long	Osskopp	Skoglund	Westrom
Davids	Jaros	Macklin	Osthoff	Slawik	Winter
Dawkins	Jefferson	Mahon	Otremba, M.	Smith	Wolf
Dehler	Jennings	Mares	Ozment	Solberg	Workman
Delmont	Johnson, A.	Mariani	Paulsen	Stanek	Spk. Carruthers
Dempsey	Johnson, R.	Marko	Pawlenty	Stang
Dorn	Juhnke	McCollum	Paymar	Sviggum
Entenza	Kahn	McElroy	Pelowski	Swenson, H.

The bill was repassed, as amended by the Senate, and its title agreed to.

Winter from the Committee on Rules and Legislative Administration, pursuant to rule 1.09, designated the following bills as Special Orders to be acted upon today:

S. F. Nos. 2659, 2586, 908, 726, 2645, 2252, 2861, 2346 and 1181.

S. F. No. 2659, A bill for an act relating to insurance; regulating life insurance company investments and financial transactions; regulating qualified long-term care policies; modifying the definition of chronically ill individual; amending Minnesota Statutes 1996, section 61A.28, subdivisions 6, 9a, and 12; Minnesota Statutes 1997 Supplement, section 62S.01, subdivision 8.

The question was taken on the passage of the bill and the roll was called. There were 130 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Johnson, R.	Marko	Paymar	Swenson, H.
Anderson, B.	Erickson	Juhnke	McCollum	Pelowski	Sykora
Anderson, I.	Evans	Kahn	McElroy	Peterson	Tingelstad
Bakk	Farrell	Kalis	McGuire	Pugh	Tomassoni
Bettermann	Finseth	Kelso	Milbert	Rest	Tompkins
Biernat	Folliard	Kielkucki	Molnau	Reuter	Trimble
Bishop	Garcia	Kinkel	Mulder	Rhodes	Tuma
Boudreau	Goodno	Knoblach	Mullery	Rifenberg	Tunheim
Bradley	Greenfield	Koskinen	Munger	Rostberg	Van Dellen
Broecker	Greiling	Kraus	Murphy	Rukavina	Vandeveer
Carlson	Gunther	Kubly	Ness	Schumacher	Wagenius
Chaudhary	Haas	Kuisle	Nornes	Seagren	Weaver
Clark, J.	Harder	Larsen	Olson, E.	Seifert	Wejcman
Clark, K.	Hasskamp	Leighton	Olson, M.	Sekhon	Wenzel
Daggett	Hausman	Leppik	Opatz	Skare	Westfall
Davids	Hilty	Lieder	Orfield	Skoglund	Westrom
Dawkins	Holsten	Lindner	Osskopp	Slawik	Winter
Dehler	Huntley	Long	Osthoff	Smith	Wolf
Delmont	Jaros	Macklin	Otremba, M.	Solberg	Workman
Dempsey	Jefferson	Mahon	Ozment	Stanek	Spk. Carruthers
Dorn	Jennings	Mares	Paulsen	Stang
Entenza	Johnson, A.	Mariani	Pawlenty	Sviggum

The bill was passed and its title agreed to.

S. F. No. 2586 was reported to the House.

Bishop moved that S. F. No. 2586 be temporarily laid over on Special Orders. The motion prevailed.

S. F. No. 908 was reported to the House.

Anderson, I., moved to amend S. F. No. 908 as follows:

Page 45, after line 12, insert:

"Sec. 37. Minnesota Statutes 1997 Supplement, section 80A.28, subdivision 1, is amended to read:

Subdivision 1. (a) There shall be a filing fee of $100 for every application for registration or notice filing. There shall be an additional fee of one-tenth of one percent of the maximum aggregate offering price at which the securities are to be offered in this state, and the maximum combined fees shall not exceed $300.

(b) When an application for registration is withdrawn before the effective date or a preeffective stop order is entered under section 80A.13, subdivision 1, all but the $100 filing fee shall be returned. If an application to register securities is denied, the total of all fees received shall be retained.

fee of 1/20 of one percent of the maximum aggregate offering price at which the securities are to be offered in this state. If the filing is made in connection with redeemable securities issued by such a company or trust, there is no maximum fee for securities filings made according to this clause. If the filing is made in connection with any other federal covered security under Section 18(b)(2) of the Securities Act of 1933, there is an additional fee of one-tenth of one percent of the maximum aggregate offering price at which the securities are to be offered in this state, and the combined fees shall not exceed $300."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The motion prevailed and the amendment was adopted.

S. F. No. 908, A bill for an act relating to financial institutions; trust companies; providing for the organization, powers, and duties of trust companies; providing fiduciary provisions for trust companies and banks exercising trust powers; regulating interstate trust offices; making conforming changes; amending Minnesota Statutes 1996, sections 48.01, subdivision 1; 48.36, subdivision 1; 48.37; 48.39; 48.41; 48.42; 48.43; 48.44; 48.45; 48.46; 48.47; 50.085, subdivision 14; 303.25, subdivision 3; 525.551, subdivision 6; and 525.56, subdivision 4; Minnesota Statutes 1997 Supplement, sections 16A.6701, subdivision 1; and 48.01, subdivision 2; proposing coding for new law as Minnesota Statutes, chapter 48A; repealing Minnesota Statutes 1996, sections 48.38; 48.475; 48.65; 48.66; 48.67; 48.68; 48.69; 48.70; 48.71; 48.72; 48.73; 48.75; 48.76; 48.77; 48.78; 48.79; 48.80; 48.81; 48.82; 48.83; 48.84; 48.841; 48.845; 48.846; 48.85; and 48.86; and Minnesota Statutes 1997 Supplement, section 48.476.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 131 yeas and 1 nay as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Johnson, R.	Mariani	Pawlenty	Sviggum
Anderson, B.	Erickson	Juhnke	Marko	Paymar	Swenson, H.
Anderson, I.	Evans	Kahn	McCollum	Pelowski	Sykora
Bakk	Farrell	Kalis	McElroy	Peterson	Tingelstad
Bettermann	Finseth	Kelso	McGuire	Pugh	Tomassoni
Biernat	Folliard	Kielkucki	Milbert	Rest	Tompkins
Bishop	Garcia	Kinkel	Molnau	Reuter	Trimble
Boudreau	Goodno	Knoblach	Mulder	Rhodes	Tuma
Bradley	Greenfield	Koskinen	Mullery	Rifenberg	Tunheim
Broecker	Greiling	Kraus	Munger	Rostberg	Van Dellen
Carlson	Gunther	Krinkie	Murphy	Rukavina	Vandeveer
Chaudhary	Haas	Kubly	Ness	Schumacher	Wagenius
Clark, J.	Harder	Kuisle	Nornes	Seagren	Weaver
Clark, K.	Hasskamp	Larsen	Olson, E.	Seifert	Wejcman
Daggett	Hausman	Leighton	Olson, M.	Sekhon	Wenzel
Davids	Hilty	Leppik	Opatz	Skare	Westfall
Dawkins	Holsten	Lieder	Orfield	Skoglund	Westrom
Dehler	Huntley	Lindner	Osskopp	Slawik	Winter
Delmont	Jaros	Long	Osthoff	Smith	Wolf
Dempsey	Jefferson	Macklin	Otremba, M.	Solberg	Workman
Dorn	Jennings	Mahon	Ozment	Stanek	Spk. Carruthers
Entenza	Johnson, A.	Mares	Paulsen	Stang

Those who voted in the negative were:

Knight

S. F. No. 726 was reported to the House.

Kahn moved to amend S. F. No. 726 as follows:

Delete everything after the enacting clause and insert the following language of H. F. No. 384, the first engrossment:

Section 1. Minnesota Statutes 1996, section 15.054, is amended to read:

15.054 [PUBLIC EMPLOYEES NOT TO PURCHASE MERCHANDISE FROM GOVERNMENTAL AGENCIES; EXCEPTIONS; PENALTY.]

No officer or employee of the state or any of its political subdivisions shall sell or procure for sale or possess or control for sale to any other officer or employee of the state or the subdivision, as appropriate, any property or materials owned by the state or subdivision except pursuant to conditions provided in this section. Property or materials owned by the state or a subdivision, except real property, and not needed for public purposes, may be sold to an employee of the state or the subdivision after reasonable public notice at a public auction or by sealed bid if the employee is the highest responsible bidder and response, if the employee is not directly involved in the auction or process pertaining to the administration and collection of sealed bid process responses. Requirements for reasonable public notice may be prescribed by other law or ordinance so long as at least one week's published or posted notice is specified. A state An employee of the state or a political subdivision may purchase no more than one motor vehicle from the state in any 12-month period. A person violating the provisions of this section is guilty of a misdemeanor. This section shall not apply to the sale of property or materials acquired or produced by the state or subdivision for sale to the general public in the ordinary course of business. Nothing in this section shall prohibit an employee of the state or a political subdivision from selling or possessing for sale public property if the sale or possession for sale is in the ordinary course of business or normal course of the employee's duties.

Sec. 2. Minnesota Statutes 1996, section 16B.181, is amended to read:

16B.181 [PURCHASES FROM CORRECTIONS INDUSTRIES.]

Subdivision 1. [DEFINITIONS.] As used in this section:

(1) "public entity" or "public entities" includes the state and an agency, department, or institution of the state, any governmental unit as defined in section 471.59, the state legislative and judicial branches, and state colleges and universities; and

(2) "items" includes articles, products, supplies, and services.

Subd. 2. [PUBLIC ENTITIES; PURCHASES FROM CORRECTIONS INDUSTRIES.] (a) The commissioner of corrections, in consultation with the commissioner of administration, shall prepare updated lists of the items available for purchase from department of corrections industries and annually forward a copy of the most recent list to all public entities within the state. A public entity that is supported in whole or in part with funds from the state treasury shall may purchase items directly from corrections industries those items that are comparable in price, quality, and delivery time to items available from other vendors. An item is comparable in price if the price is no more than five percent higher than the lowest bid price. The bid solicitation process is not required for these purchases.

meet the needs of the public entity. The commissioner of administration shall require that all requests for bids or proposals, for items provided by corrections industries, be forwarded to the commissioner of corrections to enable corrections industries to submit bids. The commissioner of corrections shall consult with the commissioner of administration prior to introducing new products to the state agency market.

(c) No public entity may evade the intent of this section by adopting slight variations in specifications, when Minnesota corrections industry items meet the reasonable needs and specifications of the public entity.

(d) As part of its ongoing audit process, the legislative auditor is requested to ensure that state agencies are in compliance with this section. The commissioners of administration and corrections shall develop annual performance measures outlining goals to maximize inmate work program participation. The commissioners of administration and corrections shall appoint cochairs for a task force whose purpose is to determine additional methods to achieve the performance goals for public entity purchasing. The task force shall include representatives from the Minnesota house of representatives, Minnesota senate, the Minnesota state colleges and universities, University of Minnesota, Minnesota League of Cities, Minnesota Association of Counties, and administrators with purchasing responsibilities from the Minnesota state departments of corrections, public safety, finance, transportation, natural resources, human services, health, and economic security.

(e) The commissioners of administration and corrections shall appoint a joint task force to explore additional methods that support the philosophy of providing a substantial market opportunity to correctional industries that maximizes inmate work opportunities. The task force shall develop a plan and prepare a set of criteria with which to evaluate the effectiveness of the recommendations and initiatives in the plan. By February 15, 1997, the task force shall report to the chairs of the senate and house of representatives committees having jurisdiction over criminal justice funding. If performance goals for public entity purchasing are not achieved in two consecutive fiscal years, public entities shall purchase items available from corrections industries. The commissioner of administration shall be responsible for notifying public entities of this requirement.

Sec. 3. [16C.02] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] For purposes of this chapter, the following terms have the meanings given them, unless the context clearly indicates otherwise.

Subd. 2. [AGENCY.] "Agency" means any state officer, employee, board, commission, authority, department, entity, or organization of the executive branch of state government.

Unless specifically provided elsewhere in this chapter, agency does not include the Minnesota state colleges and universities.

Subd. 3. [AWARD.] "Award" means a commissioner's written acceptance of a bid or proposal to provide goods, services, or utilities.

Subd. 4. [BEST VALUE.] "Best value" describes a result intended in the acquisition of all goods and services. Price must be one of the evaluation criteria when acquiring goods and services. Other evaluation criteria may include, but are not limited to, environmental considerations, quality, and vendor performance.

Subd. 5. [COMMISSIONER.] "Commissioner" means the commissioner of administration.

Subd. 6. [CONTRACT.] "Contract" means any written instrument or electronic document containing the elements of offer, acceptance, and consideration to which an agency is a party.

Subd. 7. [FORMAL SOLICITATION.] "Formal solicitation" means a solicitation which requires a sealed response.

Subd. 8. [GOODS.] "Goods" means all types of personal property including commodities, materials, supplies, and equipment.

Subd. 10. [LEASE.] "Lease" means a contract conveying from one entity to another the use of real or personal property for a designated period of time in return for payment or other consideration.

Subd. 11. [REQUEST FOR BID OR RFB.] "Request for bid" or "RFB" means a solicitation in which the terms, conditions, and specifications are described and responses are not subject to negotiation.

Subd. 12. [REQUEST FOR PROPOSAL OR RFP.] "Request for proposal" or "RFP" means a solicitation in which it is not advantageous to set forth all the actual, detailed requirements at the time of solicitation and responses are subject to negotiation.

Subd. 13. [RESIDENT VENDOR.] "Resident vendor" means a person, firm, or corporation authorized to conduct business in the state of Minnesota on the date a solicitation for a contract is first advertised or announced. It includes a foreign corporation duly authorized to engage in business in Minnesota.

Subd. 14. [RESPONSE.] "Response" means the offer received from a vendor in response to a solicitation. A response includes submissions commonly referred to as "offers," "bids," "quotes," or "proposals."

Subd. 15. [SEALED.] "Sealed" means a method determined by the commissioner to prevent the contents being revealed or known before the deadline for submission of responses.

Subd. 16. [SERVICE CONTRACT.] "Service contract" means a contract for any nonprofessional or technical services.

Subd. 17. [SERVICES.] "Services" means, unless otherwise indicated, both professional or technical services and service performed under a service contract.

Subd. 18. [SINGLE SOURCE.] "Single source" means an acquisition where, after a search, only one supplier is determined to be reasonably available for the required product, service, or construction item.

Subd. 19. [SOLICITATION.] "Solicitation" means the process used to communicate procurement requirements and to request responses from interested vendors. A solicitation may be, but is not limited to, a request for bid and request for proposal.

Sec. 4. [16C.03] [COMMISSIONER'S AUTHORITY; POWERS AND DUTIES.]

Subdivision 1. [SCOPE.] The commissioner's authority in this section applies to an agency and is subject to other provisions of this chapter and chapter 16B. Unless otherwise provided, the provisions in this chapter and chapter 16B do not apply to the Minnesota state colleges and universities.

Subd. 2. [RULEMAKING AUTHORITY.] Subject to chapter 14, the commissioner may adopt rules, consistent with this chapter and chapter 16B, relating to the following topics:

(1) solicitations and responses to solicitations, bid security, vendor errors, opening of responses, award of contracts, tied bids, and award protest process;

(2) contract performance and failure to perform;

(3) authority to debar or suspend vendors, and reinstatement of vendors;

(4) contract cancellation; and

(5) procurement from rehabilitation facilities.

decisions regarding acquisition activities. The determination of the acquisition method and all decisions involved in the acquisition process, unless otherwise provided for by law, shall be based on best value which includes an evaluation of price and may include other considerations including, but not limited to, environmental considerations, quality, and vendor performance. A best value determination must be based on the evaluation criteria detailed in the solicitation document. Unless it is determined by the commissioner that an alternative solicitation method should be used to determine best value, a request for bid must be used to solicit formal responses for all building and construction contracts. Any or all responses may be rejected. When using the request for bid process, the bid must be awarded to the lowest responsive and responsible bidder, taking into consideration conformity with the specifications, terms of delivery, the purpose for which the contract or purchase is intended, the status and capability of the vendor, and other considerations imposed in the request for bids. The commissioner may decide which is the lowest responsible bidder for all purchases and may use the principles of life-cycle costing, where appropriate, in determining the lowest overall bid. The duties set forth in this subdivision are subject to delegation pursuant to this section.

Subd. 4. [CONTRACTING AUTHORITY.] The commissioner shall conduct all contracting by, for, and between agencies and perform all contract management and review functions for contracts, except those functions specifically delegated to be performed by the contracting agency, the attorney general, or otherwise provided for by law.

Subd. 5. [AMENDMENTS, CANCELLATIONS, AND APPEALS.] The commissioner shall, in addition to the duties set forth in subdivisions 3 and 4, make all decisions regarding amendments, cancellations, and appeals of all agency acquisition activities unless the duties are delegated pursuant to this section.

Subd. 6. [LEASE AND INSTALLMENT PURCHASES.] The commissioner is authorized to enter into lease purchases or installment purchases for periods not exceeding the anticipated useful life of the items acquired unless otherwise prohibited by law.

Subd. 7. [LEASE, RENTAL, AND INSTALLMENT AGREEMENTS.] The commissioner is authorized to enter into lease, lease purchase, rental, or installment agreements for the use or acquisition, whichever is applicable, of real or personal property.

Subd. 8. [POLICY AND PROCEDURES.] The commissioner is authorized to issue policies, procedures, and standards applicable to all acquisition activities by and for agencies.

Subd. 9. [EMPLOYEE PURCHASING.] The commissioner is authorized to enter into contracts under which a vendor agrees to sell computer equipment and related products to state employees, for their own use, at contract prices. Under no circumstances shall the state be liable for purchases made under this subdivision. The provisions of section 43A.38, subdivisions 4 and 5, clause (a), do not apply to this subdivision.

Subd. 10. [COOPERATIVE PURCHASING.] The commissioner is authorized to enter into a cooperative purchasing agreement for the provision of goods, services, and utilities with one or more other states or governmental units, as described in section 471.59, subdivision 1. The commissioner is authorized to enter into cooperative purchasing agreements for the purchase of goods, services, and utilities with health care facilities that are required to provide indigent care.

Subd. 11. [SURPLUS PROPERTY.] The commissioner is authorized to purchase, accept, transfer, warehouse, sell, distribute, or dispose of surplus property in accordance with state and federal rules and regulations. The commissioner may charge a fee to cover any expenses incurred in connection with any of these acts.

Subd. 12. [CENTRAL DISTRIBUTION CENTER.] The commissioner is authorized to provide and manage a central distribution center for federal and state surplus personal property, as defined in section 16C.25, and may provide and manage a warehouse facility.

Subd. 13. [CENTRAL STORES.] The commissioner is authorized to provide agencies with supplies and equipment and operate all central stores and supply rooms serving more than one agency.

Subd. 15. [REIMBURSEMENT FOR GOODS, SERVICES, AND UTILITIES.] The commissioner is authorized to charge a fee to cover costs and expenses associated with operating a revolving fund or an enterprise fund to acquire goods, services, and utilities. The fees are appropriated to the commissioner to administer and manage the programs and facilities covered under this section.

Subd. 16. [DELEGATION OF DUTIES.] The commissioner may delegate duties imposed by this chapter to the head of an agency and to any subordinate of the agency head. Delegated duties shall be exercised in the name of the commissioner and under the commissioner's direct supervision and control. A delegation of duties may include, but is not limited to, allowing individuals within agencies to acquire goods, services, and utilities within dollar limitations and for designated types of acquisitions. Delegation of contract management and review functions must be filed with the secretary of state and may not, except with respect to delegations within the department of administration, exceed two years in duration. The commissioner may withdraw any delegation at the commissioner's sole discretion.

Sec. 5. [16C.05] [ETHICAL PRACTICES AND CONFLICT OF INTEREST.]

Subdivision 1. [DUTY.] An employee of the executive branch involved directly or indirectly in the acquisition process, at any level, is subject to the code of ethics in section 43A.38.

Subd. 2. [CONFLICT OF INTEREST POLICY DEVELOPMENT.] (a) The commissioner must develop policies regarding code of ethics and conflict of interest designed to prevent conflicts of interest for employees involved in the acquisition of goods, services, and utilities. The policies must apply to employees who are directly or indirectly involved in the acquisition of goods, services, and utilities, developing requests for proposals, evaluating bids or proposals, awarding the contract, selecting the final vendor, drafting and entering into contracts, evaluating performance under these contracts, and authorizing payments under the contract.

(b) The policies must contain a process for making employees aware of policy and laws relating to conflict of interest, and for training employees on how to avoid and deal with potential conflicts.

(c) The policies must contain a process under which an employee who has a conflict of interest or a potential conflict of interest must disclose the matter, and a process under which work on the contract may be assigned to another employee if possible.

Sec. 6. [16C.06] [CONTRACT MANAGEMENT; VALIDITY AND REVIEW.]

Subdivision 1. [AGENCY COOPERATION.] Agencies shall fully cooperate with the commissioner in the management and review of state contracts.

Subd. 2. [CREATION AND VALIDITY OF CONTRACTS.] (a) A contract is not valid and the state is not bound by it unless:

(1) it has first been executed by the head of the agency or a delegate who is a party to the contract;

(2) it has been approved by the commissioner;

(3) it has been approved by the attorney general or a delegate as to form and execution;

(4) the accounting system shows an obligation in an expense budget or encumbrance for the amount of the contract liability; and

(5) the combined contract and amendments shall not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years unless the commissioner determines that a longer duration is in the best interest of the state.

(b) Grants, interagency agreements, purchase orders, and annual plans need not, in the discretion of the commissioner and attorney general, require the signature of the commissioner and/or the attorney general.

Subd. 3. [EXCEPTION.] The requirements of subdivision 2 do not apply to contracts of the department of economic security distributing state and federal funds for the purpose of subcontracting the provision of program services to eligible recipients. For these contracts, the commissioner of economic security is authorized to directly enter into agency contracts and encumber available funds. For contracts distributing state or federal funds pursuant to the federal Economic Dislocation and Worker Adjustment Assistance Act, United States Code, title 29, section 1651 et seq., or sections 268.9771, 268.978, 268.9781, and 268.9782, the commissioner of economic security is authorized to directly enter into agency contracts with approval of the workforce development council and encumber available funds to ensure a rapid response to the needs of dislocated workers. The commissioner of economic security shall adopt internal procedures to administer and monitor funds distributed under these contracts. This exception also applies to any contracts entered into by the commissioner of children, families, and learning that were previously entered into by the commissioner of economic security.

Subd. 4. [CONTRACT ADMINISTRATION.] A contracting agency shall diligently administer and monitor any contract it has entered into, pursuant to a delegation of duties from the commissioner. The commissioner may require an agency to report to the commissioner at any time on the status of any contracts to which the agency is a party.

Subd. 5. [SUBJECT TO AUDIT.] A contract or any pass- through disbursement of public funds to a vendor of goods or services or a grantee made by or under the supervision of the commissioner or any county or unit of local government must include, expressed or implied, an audit clause that provides that the books, records, documents, and accounting procedures and practices of the vendor or other party, that are relevant to the contract or transaction, are subject to examination by the contracting agency and either the legislative auditor or the state auditor, as appropriate, for a minimum of six years. If the contracting agency is a local unit of government, and the governing body of the local unit of government requests that the state auditor examine the books, records, documents, and accounting procedures and practices of the vendor or other party pursuant to this subdivision, the contracting agency shall be liable for the cost of the examination. If the contracting agency is a local unit of government, and the grantee, vendor, or other party requests that the state auditor examine all books, records, documents, and accounting procedures and practices related to the contract, the grantee, vendor, or other party that requested the examination shall be liable for the cost of the examination. An agency contract made for purchase, lease, or license of software and data from the state is not required to contain this audit clause.

Subd. 6. [AUTHORITY OF ATTORNEY GENERAL.] The attorney general may pursue remedies available by law to avoid the obligation of an agency to pay under a contract or to recover payments made if services performed or goods received under the contract are so unsatisfactory, incomplete, or inconsistent that payment would involve unjust enrichment. The contrary opinion of the contracting agency does not affect the power of the attorney general under this subdivision.

Subd. 7. [CONTRACTS WITH INDIAN TRIBES AND BANDS.] Notwithstanding any other law, an agency may not require an Indian tribe or band to deny its sovereignty as a requirement or condition of a contract with an agency.

Sec. 7. [16C.07] [ACQUISITIONS.]

Subdivision 1. [PUBLICATION REQUIREMENTS.] Notices of solicitations for acquisitions estimated to be more than $25,000 must be publicized in a manner designated by the commissioner.

Subd. 2. [SOLICITATION PROCESS.] (a) A formal solicitation must be used to acquire all goods, service contracts, and utilities estimated at or more than $25,000 unless otherwise provided for. All formal responses must be sealed when they are received and must be opened in public at the hour stated in the solicitation. Formal responses must be authenticated by the responder in a manner specified by the commissioner.

(b) An informal solicitation may be used to acquire all goods, service contracts, and utilities that are estimated at less than $25,000. The number of vendors required to receive solicitations may be determined by the commissioner. Informal responses must be authenticated by the responder in a manner specified by the commissioner.

process. All other information contained in a vendor's response to a request for proposal, other than the name of the vendor, is classified as nonpublic data, as defined in section 13.02, and remains nonpublic data until the completion of the evaluation process.

(b) All responses are public information at the time of the award unless otherwise provided for. All responses and documents pertaining to the final award of an acquisition must be retained and made a part of a permanent file or record and remain open to public inspection, after award, unless otherwise provided for by law.

Subd. 4. [MULTIPLE AWARDS.] The commissioner may award a contract to more than one vendor if, in the opinion of the commissioner, it is in the best interest of the state.

Subd. 5. [STATE AS RESPONDER.] The head of an agency, in consultation with the requesting agency and the commissioner, may respond to a solicitation or request if the goods and services meet the needs of the requesting agency and provide the state with the best value. When an agency responds to a solicitation, all work product relating to the response is nonpublic data as defined in section 13.02, and shall become public information in accordance with subdivision 3.

Subd. 6. [AWARDS.] Awards must be based on best value, which includes an evaluation of price, and may include other considerations including, but not limited to, environmental considerations, quality, and vendor performance.

Subd. 7. [OTHER STATES WITH RESIDENT PREFERENCE.] Acquisition of goods and services must be awarded according to the provisions of this chapter except that a resident vendor shall be allowed a preference over a nonresident vendor from a state that gives or requires a preference to vendors from that state. The preference shall be equal to the preference given or required by the state of the nonresident vendor.

Subd. 8. [FEDERALLY FUNDED PROJECTS EXEMPT.] Subdivision 7 does not apply to a contract for any project in which federal funds are expended.

Subd. 9. [REJECTION.] At the discretion of the commissioner, any or all responses may be rejected if it is determined to be in the best interest of the state.

Subd. 10. [PREFERENCES NOT CUMULATIVE.] The preferences provided for under subdivision 7 and sections 16B.121 and 16C.18 are not cumulative. The total percentage of preference granted on a contract may not exceed the highest percentage of preference allowed for that contract under any one of these statutory sections.

Sec. 8. [16C.08] [EMPLOYEE SKILLS INVENTORY.]

The commissioner of employee relations shall develop a directory of services that state agencies commonly provide that are professional or technical in nature.

Before an agency may seek approval of a professional or technical services contract valued at a total cost in excess of $25,000, it must certify to the commissioner that it has publicized the contract by posting notice at appropriate worksites within agencies and has made reasonable efforts to determine that no state employee or agency, including an employee or agency outside the contracting agency, is able and available to perform the required services. When possible, this posting should be done electronically.

Sec. 9. [16C.09] [PROFESSIONAL OR TECHNICAL SERVICES.]

Subdivision 1. [DEFINITION.] For the purposes of this section, "professional or technical services" means services that are intellectual in character, including consultation, analysis, evaluation, prediction, planning, programming, or recommendation, and result in the production of a report or the completion of a task. Professional or technical contracts do not include the provision of supplies or materials except by the approval of the commissioner or except as incidental to the provision of professional or technical services.

Subd. 2. [DUTIES OF CONTRACTING AGENCY.] Before an agency may seek approval of a professional or technical services contract valued in excess of $5,000, it must certify to the commissioner that:

(2) the normal competitive bidding mechanisms will not provide for adequate performance of the services;

(3) the contractor has certified that the product of the services will be original in character;

(4) reasonable efforts were made to publicize the availability of the contract to the public;

(5) the agency has received, reviewed, and accepted a detailed work plan from the contractor for performance under the contract, if applicable;

(6) the agency has developed, and fully intends to implement, a written plan providing for the assignment of specific agency personnel to a monitoring and liaison function, the periodic review of interim reports or other indications of past performance, and the ultimate utilization of the final product of the services; and

(7) the agency will not allow the contractor to begin work before funds are fully encumbered.

Subd. 3. [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES CONTRACTS.] Before approving a proposed contract for professional or technical services, the commissioner must determine, at least, that:

(1) all provisions of subdivision 2 and section 16C.18 have been verified or complied with;

(2) the work to be performed under the contract is necessary to the agency's achievement of its statutory responsibilities and there is statutory authority to enter into the contract;

(3) the contract will not establish an employment relationship between the state or the agency and any persons performing under the contract;

(4) the contractor and agents are not employees of the state;

(5) no agency has previously performed or contracted for the performance of tasks which would be substantially duplicated under the proposed contract;

(6) the contracting agency has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(7) the combined contract and amendments will not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years unless the commissioner determines that a longer duration is in the best interest of the state.

Subd. 4. [REPORTS.] (a) The commissioner shall submit to the governor, the chairs of the house ways and means and senate finance committees, and the legislative reference library a yearly listing of all contracts for professional or technical services executed. The report must identify the contractor, contract amount, duration, and services to be provided. The commissioner shall also issue yearly reports summarizing the contract review activities of the department by fiscal year.

(b) The fiscal year report must be submitted by September 1 of each year and must:

(1) be sorted by agency and by contractor;

(2) show the aggregate value of contracts issued by each agency and issued to each contractor;

(3) distinguish between contracts that are being issued for the first time and contracts that are being extended;

(4) state the termination date of each contract;

(6) show the number of sole source/single source and overload contracts for each agency as a percent of the total number of contracts for each agency; and

(7) show the number of contracts publicly advertised as a percent of the total number of contracts for each agency.

(c) Within 30 days of final completion of a contract over $40,000 covered by this subdivision, the head of the agency entering into the contract must submit a one-page report to the commissioner who must submit a copy to the legislative reference library. The report must:

(1) summarize the purpose of the contract, including why it was necessary to enter into a contract;

(2) state the amount spent on the contract; and

(3) explain why this amount was a cost-effective way to enable the agency to provide its services or products better or more efficiently.

Subd. 5. [CONTRACT TERMS.] (a) A professional or technical services contract must by its terms permit the commissioner to unilaterally terminate the contract prior to completion, upon payment of just compensation, if the commissioner determines that further performance under the contract would not serve agency purposes.

(b) The terms of a contract must provide that no more than 90 percent of the amount due under the contract may be paid until the final product has been reviewed by the head of the agency entering into the contract and the head of the agency has certified that the contractor has satisfactorily fulfilled the terms of the contract, unless specifically excluded in writing by the commissioner.

Subd. 6. [FILING COPY.] If the final product of the contract is a written report, a copy must be filed with the legislative reference library.

Subd. 7. [EXCLUSIONS.] This section does not apply to contracts with individuals or organizations for administration of employee pension plans authorized under chapter 354B or 354C.

Sec. 10. [16C.10] [PROCEDURE FOR SERVICE CONTRACTS.]

Before entering into or approving a service contract, the commissioner must determine, at least, that:

(1) no current state employee is able and available to perform the services called for by the contract;

(2) the work to be performed under the contract is necessary to the agency's achievement of its statutory responsibilities and there is statutory authority to enter into the contract;

(3) the contract will not establish an employment relationship between the state or the agency and any persons performing under the contract;

(4) the contractor and agents are not employees of the state;

(5) the contracting agency has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(6) the combined contract and amendments will not exceed five years, unless otherwise provided for by law. The term of the original contract must not exceed two years, unless the commissioner determines that a longer duration is in the best interest of the state.

For purposes of clause (1), employees are available if qualified and:

(i) are already doing the work in question; or

An employee is not available if the employee is doing other work, is retired, or has decided not to do the work in question.

Sec. 11. [16C.11] [EXCEPTIONS TO THE SOLICITATION PROCESS.]

Subdivision 1. [SINGLE SOURCE.] The solicitation process described in this chapter is not required when there is clearly and legitimately only a single source for the goods and services and the commissioner determines that the price has been fairly and reasonably established.

Subd. 2. [EMERGENCY ACQUISITION.] (a) For the purpose of this subdivision, "emergency" means a threat to public health, welfare, or safety that threatens the functioning of government, the protection of property, or the health or safety of people.

(b) The solicitation process described in this chapter is not required in emergencies. In emergencies, the commissioner may make any purchases necessary for the repair, rehabilitation, and improvement of a state-owned structure or may authorize an agency to do so and may purchase, or may authorize an agency to purchase, goods, services, or utility services directly for immediate use.

Subd. 3. [FEDERAL AGENCY PRICE SCHEDULES.] Notwithstanding anything in this chapter to the contrary, the commissioner may, instead of soliciting bids, contract for purchases with suppliers who have published schedules of prices effective for sales to any federal agency of the United States. These contracts may be entered into, regardless of the amount of the purchase price, if the commissioner considers them advantageous and if the purchase price of all the commodities purchased under the contract do not exceed the price specified by the schedule.

Subd. 4. [COOPERATIVE AGREEMENTS.] The solicitation process described in this chapter is not required for cooperative agreements. The commissioner may enter into contracts or accept prices effective for sales to any governmental unit as defined in section 471.59, through a cooperative agreement as defined in section 471.59.

Subd. 5. [SPECIFIC PURCHASES.] The solicitation process described in this chapter is not required for acquisition of the following:

(1) merchandise for resale purchased under policies determined by the commissioner;

(2) farm and garden products which, as determined by the commissioner, may be purchased at the prevailing market price on the date of sale;

(3) goods and services from the Minnesota correctional facilities;

(4) goods and services from rehabilitation facilities and sheltered workshops that are certified by the commissioner of economic security;

(5) goods and services for use by a community-based residential facility operated by the commissioner of human services;

(6) goods purchased at auction or when submitting a sealed bid at auction provided that before authorizing such an action, the commissioner consult with the requesting agency to determine a fair and reasonable value for the goods considering factors including, but not limited to, costs associated with submitting a bid, travel, transportation, and storage. This fair and reasonable value must represent the limit of the state's bid; and

(7) utility services where no competition exists or where rates are fixed by law or ordinance.

Sec. 12. [16C.12] [COOPERATIVE PURCHASING VENTURE; PURCHASING REVOLVING FUND.]

Sec. 13. [16C.13] [AGRICULTURAL FOOD PRODUCTS GROWN IN STATE.]

The commissioner shall encourage and make a reasonable attempt to identify and purchase food products that are grown in the state.

Sec. 14. [16C.14] [CERTAIN VEHICLES.]

Upon the written request of the commissioner of public safety, motor vehicles for use by investigative and undercover agents of the department of public safety may be purchased by the brand, make, and model specified by the agency.

Sec. 15. [16C.15] [ENERGY EFFICIENCY INSTALLMENT PURCHASES.]

Subdivision 1. [CONTRACT CONDITIONS.] The commissioner may contract to purchase by installment payments capital or other equipment or services intended to improve the energy efficiency of a state building or facility if:

(1) the term of the contract does not exceed ten years, with not more than a ten-year payback;

(2) the entire cost of the contract is a percentage of the resultant savings in energy costs only. "Savings in energy cost" means a comparison of energy cost and energy usage under the precontract conditions, including reasonable projections of energy cost and usage if no change is made to the precontract conditions, against energy cost and usage with the changes made under the contract. If it is impractical to directly measure energy cost and/or energy usage, reasonable engineering estimates may be substituted for measured results;

(3) the contract for purchase must be completed using a solicitation;

(4) the commissioner has determined that the contract vendor is a responsible vendor;

(5) the contract vendor can finance or obtain financing for the performance of the contract without state assistance or guarantee; and

(6) the state may unilaterally cancel the agreement if the legislature fails to appropriate funds to continue the contract or if the contractor at any time during the term of the contract fails to perform its contractual obligations, including failure to deliver or install equipment or materials, failure to replace faulty equipment or materials in a timely fashion, and failure to maintain the equipment as agreed in the contract.

Subd. 2. [ENERGY APPROPRIATION.] The commissioner may spend money appropriated for energy costs in payment of a contract under this section.

Subd. 3. [ENERGY CONSERVATION INCENTIVES.] Notwithstanding any other law to the contrary, fuel cost savings resulting from energy conservation actions shall be available at the managerial level at which the actions took place for expenditure for other purposes within the biennium in which the actions occur or in the case of a shared savings agreement for the contract period of the shared savings agreement. For purposes of this subdivision "shared savings agreement" means a contract meeting the terms and conditions of subdivision 1.

Subd. 4. [LEGISLATIVE INTENT.] The purpose of the energy efficiency installment purchase contracts authorized by this section is to save money on energy costs. The entire cost of the contract must be a percentage of the resultant savings in energy costs. Neither the state nor any agency is liable to make payments on the contract except to the extent that there are savings in energy costs that must be shared with other parties to the contract. The legislature intends not to appropriate any more money to pay for energy costs as a result of these contracts than would be payable without them.

Sec. 16. [16C.16] [SHELTERED WORKSHOPS AND SERVICES WORK ACTIVITY PROGRAMS.]

Sec. 17. [16C.18] [DESIGNATION OF PROCUREMENTS FROM SMALL BUSINESSES.]

Subdivision 1. [SMALL BUSINESS PROCUREMENTS.] The commissioner shall for each fiscal year ensure that small businesses receive at least 25 percent of the value of anticipated total state procurement of goods and services, including printing and construction. The commissioner shall divide the procurements so designated into contract award units of economically feasible production runs in order to facilitate offers or bids from small businesses. In making the annual designation of such procurements the commissioner shall attempt (1) to vary the included procurements so that a variety of goods and services produced by different small businesses are obtained each year, and (2) to designate small business procurements in a manner that will encourage proportional distribution of such awards among the geographical regions of the state. To promote the geographical distribution of awards, the commissioner may designate a portion of the small business procurement for award to bidders from a specified congressional district or other geographical region specified by the commissioner. The failure of the commissioner to designate particular procurements shall not be deemed to prohibit or discourage small businesses from seeking the procurement award through the normal process.

Subd. 2. [SMALL BUSINESS.] The commissioner shall adopt rules defining "small business" for purposes of sections 16C.18 to 16C.23, 137.31, 137.35, 161.321, and 473.142. The definition must include only businesses with their principal place of business in Minnesota. The definition must establish different size standards for various types of businesses. In establishing these standards, the commissioner must consider the differences among industries caused by the size of the market for goods or services and the relative size and market share of the competitors operating in those markets.

Subd. 3. [PROFESSIONAL OR TECHNICAL PROCUREMENTS.] Every state agency shall for each fiscal year designate for awarding to small businesses at least 25 percent of the value of anticipated procurements of that agency for professional or technical services. The set-aside under this subdivision is in addition to that provided by subdivision 1, but must otherwise comply with section 16C.10.

Subd. 4. [TARGETED GROUP PURCHASING.] The commissioner shall establish a program for purchasing goods and services from targeted group businesses, as designated in subdivision 5. The purpose of the program is to remedy the effects of past discrimination against members of targeted groups. In furtherance of this purpose, the commissioner shall attempt to ensure that purchases from targeted group businesses reflect a fair and equitable representation of all the state's purchasing.

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) 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.

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.

(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.

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.

Subd. 7. [ECONOMICALLY DISADVANTAGED AREAS.] The commissioner may award up to a four percent preference in the amount bid on state procurement to small businesses located in an economically disadvantaged area. A business is located in an economically disadvantaged area if:

(1) the owner resides in or the business is located in a county in which the median income for married couples is less than 70 percent of the state median income for married couples;

(2) the owner resides in or the business is located in an area designated a labor surplus area by the United States Department of Labor; or

(3) the business is a rehabilitation facility or work activity program.

The commissioner may designate one or more areas designated as targeted neighborhoods under section 469.202 or as enterprise zones under section 469.167 as economically disadvantaged areas for purposes of this subdivision if the commissioner determines that this designation would further the purposes of this section. If the owner of a small business resides or is employed in a designated area, the small business is eligible for any preference provided under this subdivision.

The department of revenue shall gather data necessary to make the determinations required by clause (1), and shall annually certify counties that qualify under clause (1). An area designated a labor surplus area retains that status for 120 days after certified small businesses in the area are notified of the termination of the designation by the United States Department of Labor.

Subd. 8. [SURETY BONDS.] Surety bonds guaranteed by the federal Small Business Administration and second party bonds are acceptable security for a construction award under this section. "Second party bond" means a bond that designates as principal, guarantor, or both, a person or persons in addition to the person to whom the contract is proposed for award.

Subd. 9. [DETERMINATION OF ABILITY TO PERFORM.] Before making an award under the preference programs established in subdivisions 4 to 7, the commissioner shall evaluate whether the small business or small targeted group business scheduled to receive the award is able to perform the contract. This determination shall include consideration of production and financial capacity and technical competence.

Subd. 10. [LIMITS.] At least 75 percent of the value of the subcontracts awarded to small businesses or small targeted group businesses under subdivision 6, paragraph (c), must be performed by the business to which the subcontract is awarded or by another small business or small targeted group business.

Subd. 11. [PROCUREMENT PROCEDURES.] All laws and rules pertaining to solicitations, bid evaluations, contract awards, and other procurement matters apply equally to procurements designated for small businesses or small targeted group businesses. In the event of conflict with other rules, section 16C.16 and rules adopted under it govern, if section 16C.16 applies. If it does not apply, sections 16C.18 to 16C.23 and rules adopted under those sections govern.

Subd. 12. [APPLICABILITY.] This section does not apply to construction contracts or contracts for professional or technical services under section 16C.09 that are financed in whole or in part with federal funds and that are subject to federal disadvantaged business enterprise regulations.

Sec. 18. [16C.19] [ENCOURAGEMENT OF PARTICIPATION; ADVISORY COUNCIL.]

through education, technical assistance, mentoring, and other means. When the commissioner of administration determines that a small business or small targeted group business is unable to perform under a program established in sections 16C.18 to 16C.23, the commissioner shall inform the commissioner of trade and economic development who shall assist the small business or small targeted group business in attempting to remedy the causes of the inability to perform the award. In assisting the small business or small targeted group business, the commissioner of trade and economic development in cooperation with the commissioner of administration shall use management or financial assistance programs made available by or through the department of trade and economic development, other state or governmental agencies, or private sources.

Subd. 2. [ADVISORY COUNCIL.] The small business procurement advisory council consists of 13 members appointed by the commissioner of administration. A chair of the advisory council shall be elected from among the members. The appointments are subject to the appointments program provided by section 15.0597. The terms, compensation, and removal of members are as provided in section 15.059.

Subd. 3. [DUTIES.] The small business procurement advisory council shall:

(1) advise the commissioner of administration on matters relating to the small business and small targeted group business procurement program;

(2) review complaints or grievances from small businesses and small targeted group businesses who are doing or attempting to do business under the program; and

(3) review the reports of the commissioners of administration and trade and economic development provided by section 16C.20 to ensure compliance with the goals of the program.

Sec. 19. [16C.20] [REPORTS.]

Subdivision 1. [COMMISSIONER OF ADMINISTRATION.] The commissioner shall submit an annual report pursuant to section 3.195 to the governor and the legislature with a copy to the commissioner of trade and economic development indicating the progress being made toward the objectives and goals of sections 16C.18 to 16C.23, 161.321, and 473.142 during the preceding fiscal year.

Subd. 2. [COMMISSIONER OF TRADE AND ECONOMIC DEVELOPMENT.] The commissioner of trade and economic development shall submit an annual report to the governor and the legislature pursuant to section 3.195 with a copy to the commissioner of administration. This report shall include the following information:

(1) the efforts undertaken to publicize the provisions of the small business and small targeted group business procurement program during the preceding fiscal year;

(2) the efforts undertaken to identify small businesses and small targeted group businesses and the efforts undertaken to encourage participation in the targeted group purchasing program;

(3) the efforts undertaken by the commissioner to remedy the inability of small businesses and small targeted group businesses to perform on potential awards; and

(4) the commissioner's recommendations for strengthening the small business and small targeted group business procurement program and delivery of services to small businesses.

Sec. 20. [16C.21] [ELIGIBILITY; RULES.]

(a) A small business wishing to participate in the programs under section 16C.18, subdivisions 4 to 7, must be certified by the commissioner. The commissioner shall adopt by rule standards and procedures for certifying that small businesses, small targeted group businesses, and small businesses located in economically disadvantaged areas are eligible to participate under the requirements of sections 16C.18 to 16C.23. The commissioner shall adopt by rule standards and procedures for hearing appeals and grievances and other rules necessary to carry out the duties set forth in sections 16C.18 to 16C.23.

(b) The commissioner may make rules which exclude or limit the participation of nonmanufacturing business, including third-party lessors, brokers, franchises, jobbers, manufacturers' representatives, and others from eligibility under sections 16C.18 to 16C.23.

(c) The commissioner may make rules that set time limits and other eligibility limits on business participation in programs under sections 16C.18 to 16C.23.

Sec. 21. [16C.22] [CERTIFICATION.]

A business that is certified by the commissioner of administration as a small business, small targeted group business or a small business located in an economically disadvantaged area is eligible to participate under the requirements of sections 137.31 and 161.321 and, if certified as a small business or small targeted group business, under section 473.142 without further certification by the contracting agency.

Sec. 22. [16C.23] [CRIMINAL PENALTY.]

A person who knowingly provides false information to a public official or employee for the purpose of obtaining or retaining certification as a small targeted group business or a small business located in an economically disadvantaged area under sections 16C.18 to 16C.22, 137.31, 137.35, 161.321, or 473.142 is guilty of a misdemeanor.

Sec. 23. [16C.24] [DISTRICT HEATING.]

Notwithstanding any other law, general or special, the commissioner is authorized to enter into or approve a written agreement not to exceed 31 years with a district heating utility that will specify, but not be limited to, the appropriate terms and conditions for the interchange of district heating services.

Sec. 24. [16C.25] [SURPLUS PROPERTY ACQUISITION, DISTRIBUTION, AND DISPOSAL.]

Subdivision 1. [DEFINITIONS.] "Governmental unit or nonprofit organization" means a governmental unit as defined in section 471.59, subdivision 1, an Indian tribal government, and any nonprofit and tax-exempt medical institution, hospital, clinic, health center, school, school system, college, university, or other institution organized and existing for any purpose authorized by federal law to accept surplus federal property.

Subd. 2. [SURPLUS PROPERTY.] "Surplus property" means state or federal commodities, equipment, materials, supplies, books, printed matter, buildings, and other personal or real property that is obsolete, unused, not needed for a public purpose, or ineffective for current use.

Subd. 3. [AUTHORIZATION.] (a) The commissioner is the state agency designated to transfer, purchase, accept, sell, or dispose of surplus property for the state and for the benefit of any other governmental unit or nonprofit organization for any purpose authorized by state and federal law and in accordance with state and federal rules and regulations. Any governmental unit or nonprofit organization may designate the commissioner to purchase or accept surplus property for it upon mutually agreeable terms and conditions. The commissioner may acquire, accept, warehouse, and distribute surplus property and charge a fee to cover any expenses incurred in connection with any of these acts.

(c) The commissioner shall develop a detailed plan for disposal of donated federal property in conformance with state law and federal regulations. The plan must be submitted to the governor for certification and submission to the federal administrator of general services.

(d) The commissioner, after consultation with one or more nonprofit organizations with an interest in providing housing for homeless veterans and their families, may acquire property from the United States government that is designated by the General Services Administration as surplus property. The commissioner may lease the property to a qualified nonprofit organization that agrees to develop or rehabilitate the property for the purpose of providing suitable housing for veterans and their families. The lease agreement with the nonprofit organization may require that the property be developed for use as housing for homeless and displaced veterans and their families and for veterans and their families who lose their housing.

Subd. 4. [DEPOSIT OF RECEIPTS.] The surplus services revolving fund is a separate fund in the state treasury. All money resulting from the acquisition, acceptance, warehousing, distribution, and public sale of surplus property, must be deposited in the fund. Money paid into the surplus services revolving fund is appropriated to the commissioner for the purposes of the programs and services referred to in this section.

Subd. 5. [TRANSFER OR SALE.] (a) When the state or an agency operating under a legislative appropriation obtains surplus property from the commissioner, the commissioner of finance must, at the commissioner's request, transfer the cost of the surplus property, including any expenses of acquiring, accepting, warehousing, and distributing the surplus property, from the appropriation of the agency receiving the surplus property to the surplus services revolving fund. The determination of the commissioner is final as to the cost of the surplus property to the agency receiving the property.

(b) When any governmental unit or nonprofit organization other than an agency receives surplus property from the commissioner, the governmental unit or nonprofit organization must reimburse the surplus services revolving fund for the cost of the property, including the expenses of acquiring, accepting, warehousing, and distributing it, in an amount the commissioner sets. The commissioner may, however, require the governmental unit or nonprofit organization to deposit in advance in the surplus services revolving fund the cost of the surplus property upon mutually agreeable terms and conditions.

(c) The commissioner may transfer or sell state surplus property to any person at public auction, at prepriced sale, or by sealed bid process in accordance with applicable state laws.

Subd. 6. [STATE SURPLUS PROPERTY.] The commissioner may do any of the following to dispose of state surplus property:

(1) transfer it to or between state agencies;

(2) transfer it to a governmental unit or nonprofit organization in Minnesota; or

(3) sell it and charge a fee to cover expenses incurred by the commissioner in the disposal of the surplus property.

The proceeds of the sale less the fee are appropriated to the agency for whose account the sale was made, to be used and expended by that agency to purchase similar state property.

Subd. 7. [GIFTS.] The commissioner is authorized to solicit and accept donated money and fixed and consumable property for the benefit of the state and any other governmental unit or nonprofit organization for any purpose authorized by state and federal law and in accordance with federal regulations and rules. The gift acceptance procedures of sections 7.09 to 7.12 do not apply to this subdivision.

Sec. 25. [16C.26] [RULES.]

Sec. 26. [174.18] [ADVERTISEMENT OF HIGHWAY CONTRACTS.]

Notwithstanding anything in chapter 16C to the contrary, all contracts for the repair, improvement, maintenance, or construction of highways or highway bridges must be advertised and let as provided by law for highway construction contracts.

Sec. 27. Minnesota Statutes 1997 Supplement, section 363.073, subdivision 1, is amended to read:

Subdivision 1. [SCOPE OF APPLICATION.] No department or agency of the state shall accept any bid or proposal for a contract or agreement (a) For all contracts for goods and services in excess of $100,000, no department or agency of the state shall accept any bid or proposal for a contract or agreement from any business having more than 40 full-time employees within this state on a single working day during the previous 12 months, unless the firm or business has an affirmative action plan for the employment of minority persons, women, and qualified disabled individuals, submitted to the commissioner of human rights for approval. No department or agency of the state shall execute any such contract or agreement for goods or services in excess of $100,000 with any business having more than 40 full-time employees, either within or outside this state, on a single working day during the previous 12 months, unless the firm or business has an until the affirmative action plan for the employment of minority persons, women, and the disabled that has been approved by the commissioner of human rights. Receipt of a certificate of compliance issued by the commissioner shall signify that a firm or business has an affirmative action plan that has been approved by the commissioner. A certificate shall be valid for a period of two years. A municipality as defined in section 466.01, subdivision 1, that receives state money for any reason is encouraged to prepare and implement an affirmative action plan for the employment of minority persons, women, and the qualified disabled and submit the plan to the commissioner of human rights.

(b) This paragraph applies to a contract for goods or services in excess of $100,000 to be entered into between a department or agency of the state, and a business that is not subject to paragraph (a), but that has more than 40 full-time employees on a single working day during the previous 12 months in the state where the business has its primary place of business. A department or agency of the state may not execute a contract or agreement with such a business unless the business has a certificate of compliance issued by the commissioner under paragraph (a) or the business certifies to the contracting agency: (1) that it is in compliance with any affirmative action plan requirements in the jurisdiction of its primary place of business; or (2) that the jurisdiction of its primary place of business does not have an affirmative action plan requirement.

Sec. 28. [REPORT.]

The commissioner of administration shall report to the legislature by January 1, 1999, in the biennial report required under Minnesota Statutes, section 115A.15, subdivision 5, on the potential use of measurable objectives as a means of tracking progress toward the purchase of recycled content goods.

Sec. 29. [REPEALER.]

Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; and Minnesota Statutes 1997 Supplement, sections 16B.18, subdivision 3; 16B.20, subdivision 2; and 16B.482, are repealed.

Sec. 30. [EFFECTIVE DATE.]

This article is effective July 1, 1998.

Section 1. Minnesota Statutes 1997 Supplement, section 3.225, subdivision 1, is amended to read:

Sec. 2. Minnesota Statutes 1996, section 3.225, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS FOR ALL CONTRACTS.] Before entering into a contract for professional or technical services, the contracting entity must determine that:

(1) all provisions of section 16B.19 16C.18, subdivision 2 3, have been verified or complied with;

(2) the work to be performed under the contract is necessary to the entity's achievement of its responsibilities;

(3) the contract will not establish an employment relationship between the state or the entity and any persons performing under the contract;

(4) no current legislative employees will engage in the performance of the contract;

(5) no state agency has previously performed or contracted for the performance of tasks which would be substantially duplicated under the proposed contract;

(6) the contracting entity has specified a satisfactory method of evaluating and using the results of the work to be performed; and

(7) the combined contract and amendments will not extend for more than five years.

Sec. 3. Minnesota Statutes 1996, section 3.732, subdivision 6, is amended to read:

Subd. 6. [SETTLEMENT.] The head of each department or agency, or a designee, acting on behalf of the state, may enter into structured settlements, through the negotiation, creation, and use of annuities or similar financial plans for claimants, to resolve claims arising from the alleged negligence of the state, its agencies, or employees. Sections 16B.06, 16B.07, 16B.08, and 16B.09 16C.03, subdivision 4, 16C.06, and 16C.07 do not apply to the state's selection of and contracts with structured settlement consultants or purveyors of structured settlement plans.

Sec. 4. Minnesota Statutes 1996, section 3.922, subdivision 5, is amended to read:

Subd. 5. [OFFICERS; PERSONNEL; AUTHORITY.] The council shall annually elect a chair and other officers as it may deem necessary. The chair may appoint subcommittees necessary to fulfill the duties of the council. It shall also employ and prescribe the duties of employees and agents as it deems necessary. The compensation of the executive director of the board is as provided by section 43A.18. All employees are in the unclassified service. The chair is an ex officio member of the state board of human rights. Appropriations and other funds of the council are subject to chapter 16B 16C. The council may contract in its own name. Contracts must be approved by a majority of the members of the council and executed by the chair and the executive director. The council may apply for, receive, and spend in its own name, grants and gifts of money consistent with the powers and duties specified in this section. The council shall maintain its primary office in Bemidji. It shall also maintain personnel and office space in St. Paul.

Sec. 5. Minnesota Statutes 1996, section 3C.10, subdivision 3, is amended to read:

Subd. 3. [NEGOTIATED CONTRACTS.] The revisor's office may negotiate for all or part of the editing, indexing, compiling, and printing of Minnesota Statutes, supplements to Minnesota Statutes, and Laws of Minnesota and contract with a law book publisher for these services. The provisions of chapter 16B 16C as they relate to competitive bidding do not apply to these contracts. No contract may be made until the revisor of statutes has consulted with the legislative coordinating commission. Failure or refusal of the commission to make a recommendation promptly shall be deemed an affirmative recommendation.

Sec. 6. Minnesota Statutes 1996, section 4A.04, is amended to read:

4A.04 [COOPERATIVE CONTRACTS.]

the University of Minnesota, and other educational institutions, and private persons as necessary to perform the director's duties. Contracts made pursuant to this section are not subject to the provisions of chapter 16B 16C, as they relate to competitive bidding.

(b) The director may apply for, receive, and expend money made available from federal sources or other sources for the purposes of carrying out the duties and responsibilities of the director relating to local and urban affairs.

(c) All money received by the director pursuant to this section shall be deposited in the state treasury and is appropriated to the director for the purposes for which the money has been received. The money shall not cancel and is available until expended.

Sec. 7. Minnesota Statutes 1996, section 6.551, is amended to read:

6.551 [EXAMINATION OF GRANTEES AND CONTRACTORS OF LOCAL GOVERNMENTS.]

The state auditor may examine the books, records, documents, and accounting procedures and practices of a contractor or grantee of a local government pursuant to section 16B.06 16C.06, subdivision 4 5. The examination shall be limited to the books, records, documents, and accounting procedures and practices that are relevant to the contract or transaction with the local government.

Sec. 8. Minnesota Statutes 1996, section 11A.24, subdivision 4, is amended to read:

Subd. 4. [OTHER OBLIGATIONS.] (a) The state board may invest funds in bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage securities and asset backed securities, repurchase agreements and reverse repurchase agreements, guaranteed investment contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance companies if they conform to the following provisions:

(1) bankers acceptances and deposit notes of United States banks are limited to those issued by banks rated in the highest four quality categories by a nationally recognized rating agency;

(2) certificates of deposit are limited to those issued by (i) United States banks and savings institutions that are rated in the top four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies; or (ii) credit unions in amounts up to the limit of insurance coverage provided by the National Credit Union Administration;

(3) commercial paper is limited to those issued by United States corporations or their Canadian subsidiaries and rated in the highest two quality categories by a nationally recognized rating agency;

(4) mortgage securities shall be rated in the top four quality categories by a nationally recognized rating agency;

(5) collateral for repurchase agreements and reverse repurchase agreements is limited to letters of credit and securities authorized in this section;

(6) guaranteed investment contracts are limited to those issued by insurance companies or banks rated in the top four quality categories by a nationally recognized rating agency or to alternative guaranteed investment contracts where the underlying assets comply with the requirements of this section;

(7) savings accounts are limited to those fully insured by federal agencies; and

(8) asset backed securities shall be rated in the top four quality categories by a nationally recognized rating agency.

(c) In addition to investments authorized by paragraph (a), clause (4), the state board may purchase from the Minnesota housing finance agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the agency. The state board may also enter into a commitment with the agency, at the time of any issue of bonds or notes, to purchase at a specified future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The state board may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the state board comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The state board may also enter into agreements with the agency for the investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal privileges, and any guaranteed rate of return.

Sec. 9. Minnesota Statutes 1996, section 12.221, subdivision 5, is amended to read:

Subd. 5. [REQUIREMENTS WAIVED.] Pursuant to any federal-state agreement entered into by the state director, serving as the governor's authorized representative, in the acceptance of federal money made available as a result of a disaster declaration, and upon the review and acceptance by the attorney general's office of the language contained in the subgrant agreement and any amendments to the agreement, the requirements of section 16B.06 16C.06, subdivision 2, paragraph (a), clause (3), must be waived.

Sec. 10. Minnesota Statutes 1996, section 15.061, is amended to read:

15.061 [PROFESSIONAL OR TECHNICAL SERVICES.]

In accordance with section 16B.17 sections 16C.03 and 16C.09, the head of a state department or agency may, with the approval of the commissioner of administration, contract for professional or technical services in connection with the operation of the department or agency. A contract negotiated under this section is not subject to the competitive bidding requirements of chapter 16B 16C.

Sec. 11. Minnesota Statutes 1996, section 16A.101, is amended to read:

16A.101 [SERVICE CONTRACTS.]

The state accounting system must list expenditures for professional and technical service contracts, as defined in section 16B.17 16C.09, subdivision 1, as a separate category. No other expenditures may be included in this category.

Sec. 12. Minnesota Statutes 1997 Supplement, section 16A.15, subdivision 3, is amended to read:

Subd. 3. [ALLOTMENT AND ENCUMBRANCE.] (a) A payment may not be made without prior obligation. An obligation may not be incurred against any fund, allotment, or appropriation unless the commissioner has certified a sufficient unencumbered balance or the accounting system shows sufficient allotment or encumbrance balance in the fund, allotment, or appropriation to meet it. The commissioner shall determine when the accounting system may be used to incur obligations without the commissioner's certification of a sufficient unencumbered balance. An expenditure or obligation authorized or incurred in violation of this chapter is invalid and ineligible for payment until made valid. A payment made in violation of this chapter is illegal. An employee authorizing or making the payment, or taking part in it, and a person receiving any part of the payment, are jointly and severally liable to the state for the amount paid or received. If an employee knowingly incurs an obligation or authorizes or makes an expenditure in violation of this chapter or takes part in the violation, the violation is just cause for the employee's removal by the appointing authority or by the governor if an appointing authority other than the governor fails to do so. In the latter case, the governor shall give notice of the violation and an opportunity to be heard on it to the employee and to the appointing authority. A claim presented against an appropriation without prior allotment or encumbrance may be made valid on investigation, review, and approval by the agency head in accordance with the commissioner's policy, if the services, materials, or supplies to be paid for were actually furnished in good faith without collusion and without intent to defraud. The commissioner may then draw a warrant to pay the claim just as properly allotted and encumbered claims are paid.

(c) To minimize potential construction delay claims, an agency with a project funded by a building appropriation may allow a contractor to proceed with supplemental work within the limits of the appropriation before money is encumbered. Under this circumstance, the agency may requisition funds and allow contractors to expeditiously proceed with a construction sequence. While the contractor is proceeding, the agency shall immediately act to encumber the required funds.

Sec. 13. Minnesota Statutes 1996, section 16A.85, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZATION.] The commissioner of administration may determine, in conjunction with the commissioner of finance, the personal property needs of the various state departments, agencies, boards, commissions and the legislature of the kinds of property identified in this subdivision that may be economically funded through a master lease program and request the commissioner of finance to execute a master lease. The master lease may be used only to finance the following kinds of purchases:

(a) The master lease may be used to finance purchases by the commissioner of administration with money from an internal services fund.

(b) The master lease may be used to refinance a purchase of equipment already purchased under a lease-purchase agreement.

(c) The master lease may be used to finance purchases of large equipment with a capital value of more than $100,000 and a useful life of more than ten years.

(d) The legislature may specifically authorize a particular purchase to be financed using the master lease. The legislature anticipates that this authorization will be given only to finance the purchase of major pieces of equipment with a capital value of more than $10,000.

The commissioner of finance may authorize the sale and issuance of certificates of participation relative to a master lease in an amount sufficient to fund these personal property needs. The term of the certificates must be less than the expected useful life of the equipment whose purchase is financed by the certificates. The commissioner of administration may use the proceeds from the master lease or the sale of the certificates of participation to acquire the personal property through the appropriate procurement procedure in chapter 16B 16C. Money appropriated for the lease or acquisition of this personal property is appropriated to the commissioner of finance to make master lease payments.

Sec. 14. Minnesota Statutes 1997 Supplement, section 16B.465, subdivision 7, is amended to read:

Subd. 7. [EXEMPTION.] The system is exempt from the five-year limitation on contracts set by section 16B.07, subdivision 2 sections 16C.06, subdivision 2, paragraph (a), clause (5), 16C.09, subdivision 3, clause (7), and 16C.10, clause (6).

Sec. 15. Minnesota Statutes 1997 Supplement, section 16E.07, subdivision 9, is amended to read:

Subd. 9. [AGGREGATION OF SERVICE DEMAND.] The office shall identify opportunities to aggregate demand for technical services required by government units for online activities and may contract with governmental or nongovernmental entities to provide services. These contracts are not subject to the requirements of chapter chapters 16B and 16C, except sections 16B.167, 16B.17, and 16B.175 16C.05, 16C.08, 16C.09, and 16C.10.

Sec. 16. Minnesota Statutes 1997 Supplement, section 17.03, subdivision 12, is amended to read:

Sec. 17. Minnesota Statutes 1996, section 17.1015, is amended to read:

17.1015 [PROMOTIONAL EXPENDITURES.]

In order to accomplish the purposes of section 17.101, the commissioner may participate jointly with private persons in appropriate programs and projects and may enter into contracts to carry out those programs and projects. The contracts may not include the acquisition of land or buildings and are not subject to the provisions of chapter 16B 16C relating to competitive bidding.

The commissioner may spend money appropriated for the purposes of section 17.101, and expenditures made pursuant to section 17.101 for food, lodging, or travel are not governed by the travel rules of the commissioner of employee relations.

Sec. 18. Minnesota Statutes 1996, section 41A.023, is amended to read:

41A.023 [POWERS.]

In addition to other powers granted by this chapter, the board may:

(1) sue and be sued;

(2) acquire, hold, lease, and transfer any interest in real and personal property for its corporate purposes;

(3) sell at public or private sale, at the price or prices determined by the board, any note, mortgage, lease, sublease, lease purchase, or other instrument or obligation evidencing or securing a loan made for the purpose of economic development, job creation, redevelopment, or community revitalization by a public agency to a business, for-profit or nonprofit organization, or an individual;

(4) obtain insurance on its property;

(5) obtain municipal bond insurance, letters of credit, surety obligations, or similar agreements from financial institutions;

(6) enter into other agreements or transactions, without regard to chapter 16B or 16C, that the board considers necessary or appropriate to carry out the purposes of this chapter with federal or state agencies, political subdivisions of the state, or other persons, firms, or corporations;

(7) establish and collect fees without regard to chapter 14 and section 16A.1285;

(8) accept appropriations, gifts, grants, and bequests;

(9) use money received from any source for any legal purpose or program of the board;

(10) participate in loans for agricultural resource projects in accordance with section 41A.035;

(11) provide small business development loans in accordance with section 41A.036; and

(12) guarantee or insure bonds or notes issued by the board.

Sec. 19. Minnesota Statutes 1997 Supplement, section 41D.03, subdivision 7, is amended to read:

Sec. 20. Minnesota Statutes 1996, section 43A.23, subdivision 1, is amended to read:

Subdivision 1. [GENERAL.] The commissioner is authorized to request bids from carriers or to negotiate with carriers and to enter into contracts with carriers which in the judgment of the commissioner are best qualified to underwrite and service the benefit plans. Contracts entered into with carriers are not subject to the requirements of sections 16B.19 to 16B.22 16C.18 to 16C.21. The commissioner may negotiate premium rates and coverage provisions with all carriers licensed under chapters 62A, 62C, and 62D. The commissioner may also negotiate reasonable restrictions to be applied to all carriers under chapters 62A, 62C, and 62D. Contracts to underwrite the benefit plans must be bid or negotiated separately from contracts to service the benefit plans, which may be awarded only on the basis of competitive bids. The commissioner shall consider the cost of the plans, conversion options relating to the contracts, service capabilities, character, financial position, and reputation of the carriers, and any other factors which the commissioner deems appropriate. Each benefit contract must be for a uniform term of at least one year, but may be made automatically renewable from term to term in the absence of notice of termination by either party. The commissioner shall, to the extent feasible, make hospital and medical benefits available from at least one carrier licensed to do business pursuant to each of chapters 62A, 62C, and 62D. The commissioner need not provide health maintenance organization services to an employee who resides in an area which is not served by a licensed health maintenance organization. The commissioner may refuse to allow a health maintenance organization to continue as a carrier. The commissioner may elect not to offer all three types of carriers if there are no bids or no acceptable bids by that type of carrier or if the offering of additional carriers would result in substantial additional administrative costs. A carrier licensed under chapter 62A is exempt from the tax imposed by section 60A.15 on premiums paid to it by the state.

Sec. 21. Minnesota Statutes 1996, section 44A.01, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The Minnesota world trade center corporation is a public corporation established to facilitate and support Minnesota world trade center programs and services and to promote the Minnesota world trade center. The corporation is a state agency, but is not subject to chapters 14, 16A, 16B, 16C, 43A, and 179A.

Sec. 22. Minnesota Statutes 1996, section 45.0291, is amended to read:

45.0291 [DEPARTMENT BONDS.]

Bonds issued under chapters 45 to 83, 309, 332, and sections 326.83 to 326.98, are not state bonds or contracts for purposes of sections 8.05 and 16B.06 16C.06, subdivision 2.

Sec. 23. Minnesota Statutes 1997 Supplement, section 61B.21, subdivision 1, is amended to read:

Subdivision 1. [FUNCTIONS.] The Minnesota life and health insurance guaranty association shall perform its functions under the plan of operation established and approved under section 61B.25, and shall exercise its powers through a board of directors. The association is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. For purposes of administration and assessment, the association shall establish and maintain two accounts:

(1) the life insurance and annuity account which includes the following subaccounts:

(i) the life insurance account;

(ii) the annuity account; and

(iii) the unallocated annuity account; and

(2) the health insurance account.

Sec. 24. Minnesota Statutes 1996, section 84.025, subdivision 7, is amended to read:

Sec. 25. Minnesota Statutes 1996, section 84.026, is amended to read:

84.026 [CONTRACTS FOR PROVISION OF NATURAL RESOURCES SERVICES.]

The commissioner of natural resources is authorized to enter into contractual agreements with any public or private entity for the provision of statutorily prescribed natural resources services by the department. The contracts shall specify the services to be provided and the amount and method of reimbursement. Funds generated in a contractual agreement made pursuant to this section shall be deposited in the special revenue fund and are appropriated to the department for purposes of providing the services specified in the contracts. All such contractual agreements shall be processed in accordance with the provisions of section 16B.06 16C.06. The commissioner shall report revenues collected and expenditures made under this section to the chairs of the committees on appropriations in the house and finance in the senate by January 1 of each odd-numbered year.

Sec. 26. Minnesota Statutes 1996, section 84.0845, is amended to read:

84.0845 [ADVANCE OF MATCHING FUNDS.]

The commissioner may advance funds appropriated for fish and wildlife programs to government agencies, the National Fish and Wildlife Foundation, federally recognized Indian tribes and bands, and private, nonprofit organizations for the purposes of securing nonstate matching funds for projects involving acquisition and improvement of fish and wildlife habitat and related research and management. The commissioner shall execute agreements for contracts with the matching parties under section 16B.06 sections 16C.03, subdivision 4, and 16C.06 prior to advancing any state funds. The agreement or contract shall contain provisions for return of the state's share and the matching funds within a period of time specified by the commissioner. The state's funds and the nonstate matching funds must be deposited in a separate account and expended solely for the purposes set forth in the agreement or contract. The commissioner shall enter into agreements or contracts only with the National Fish and Wildlife Foundation and federal and nonprofit authorities deemed by the commissioner to be dedicated to the purposes of the project.

Sec. 27. Minnesota Statutes 1996, section 85A.02, subdivision 3, is amended to read:

Subd. 3. The board may conduct research studies and programs, collect and analyze data and prepare reports, maps, charts and other information relating to the zoological garden or any wild or domestic animals or may contract for any of such services without complying with chapter 16B 16C.

Sec. 28. Minnesota Statutes 1997 Supplement, section 85A.02, subdivision 5b, is amended to read:

Subd. 5b. [EXEMPTIONS.] The board is not subject to sections 3.841 to 3.845, 15.057, 15.061, 16A.1285, and 16A.28; chapter chapters 16B and 16C, except for sections 16B.07, 16B.102, 16B.17, 16B.19, 16B.35, and 16B.55 16B.35, 16B.55, 16C.07, 16C.09, 16C.10, and 16C.18; and chapter 14, except section 14.386, paragraph (a), clauses (1) and (3). Section 14.386, paragraph (b), does not apply to the board's actions.

Sec. 29. Minnesota Statutes 1996, section 85A.02, subdivision 16, is amended to read:

Sec. 30. Minnesota Statutes 1996, section 85A.02, subdivision 18, is amended to read:

Subd. 18. [PURCHASING.] The board may contract for supplies, materials, purchase or rental of equipment, and utility services. Except as provided in subdivision 5b, chapter 16B 16C does not apply to these contracts.

Sec. 31. Minnesota Statutes 1996, section 103F.515, subdivision 3, is amended to read:

Subd. 3. [CONSERVATION EASEMENTS.] (a) The board may acquire, or accept by gift or donation, conservation easements on eligible land. An easement may be permanent or of limited duration. An easement acquired on land for windbreak purposes, under subdivision 2, may be only of permanent duration. An easement of limited duration may not be acquired if it is for a period less than 20 years. The negotiation and acquisition of easements authorized by this section are exempt from the contractual provisions of chapter chapters 16B and 16C.

(b) The board may acquire, or accept by gift or donation, flowage easements when necessary for completion of wetland restoration projects.

Sec. 32. Minnesota Statutes 1996, section 116.03, subdivision 2, is amended to read:

Subd. 2. The commissioner shall organize the agency and employ such assistants and other officers, employees and agents as the commissioner may deem necessary to discharge the functions of the commissioner's office, define the duties of such officers, employees and agents, and delegate to them any of the commissioner's powers, duties, and responsibilities, subject to the commissioner's control and under such conditions as the commissioner may prescribe. The commissioner may also contract with persons, firms, corporations, the federal government and any agency or instrumentality thereof, the water research center of the University of Minnesota or any other instrumentality of such university, for doing any of the work of the commissioner's office, and none of the provisions of chapter 16B 16C, relating to bids, shall apply to such contracts.

Sec. 33. Minnesota Statutes 1996, section 116J.035, subdivision 1, is amended to read:

Subdivision 1. [POWERS.] The commissioner may:

(a) apply for, receive, and expend money from municipal, county, regional, and other government agencies;

(b) apply for, accept, and disburse grants and other aids from other public or private sources;

(c) contract for professional services if such work or services cannot be satisfactorily performed by employees of the department or by any other state agency;

(d) enter into interstate compacts to jointly carry out such research and planning with other states or the federal government where appropriate;

(e) distribute informational material at no cost to the public upon reasonable request; and

(f) enter into contracts necessary for the performance of the commissioner's duties with federal, state, regional, metropolitan, local, and other agencies or units of government; educational institutions, including the University of Minnesota. Contracts made pursuant to this section shall not be subject to the competitive bidding requirements of chapter 16B 16C.

The commissioner may apply for, receive, and expend money made available from federal or other sources for the purpose of carrying out the duties and responsibilities of the commissioner pursuant to this chapter.

Sec. 34. Minnesota Statutes 1996, section 116J.402, is amended to read:

116J.402 [COOPERATIVE CONTRACTS.]

The commissioner of trade and economic development may apply for, receive, and spend money for community development from municipal, county, regional, and other planning agencies. The commissioner may also apply for, accept, and disburse grants and other aids for community development and related planning from the federal government and other sources. The commissioner may enter into contracts with agencies of the federal government, local governmental units, regional development commissions, and the metropolitan council, other state agencies, the University of Minnesota, and other educational institutions, and private persons as necessary to perform the commissioner's duties. Contracts made according to this section, except those with private persons, are not subject to the provisions of chapter 16B 16C concerning competitive bidding.

The commissioner may apply for, receive, and spend money made available from federal sources or other sources for the purposes of carrying out the duties and responsibilities of the commissioner.

Money received by the commissioner under this section must be deposited in the state treasury and is appropriated to the commissioner for the purposes for which the money has been received. The money does not cancel and is available until spent.

Sec. 35. Minnesota Statutes 1996, section 116J.58, subdivision 2, is amended to read:

Subd. 2. [PROMOTIONAL CONTRACTS.] In order to best carry out duties and responsibilities and to serve the people of the state in the promotion of tourism, trade, and economic development, the commissioner may engage in programs and projects jointly with a private person, firm, corporation or association and may enter into contracts under terms to be mutually agreed upon to carry out such programs and projects not including acquisition of land or buildings. Contracts may be negotiated and are not subject to the provisions of chapter 16B 16C relating to competitive bidding.

Sec. 36. Minnesota Statutes 1996, section 116J.68, subdivision 2, is amended to read:

Subd. 2. The bureau shall:

(a) provide information and assistance with respect to all aspects of business planning and business management related to the start-up, operation, or expansion of a small business in Minnesota;

(b) refer persons interested in the start-up, operation, or expansion of a small business in Minnesota to assistance programs sponsored by federal agencies, state agencies, educational institutions, chambers of commerce, civic organizations, community development groups, private industry associations, and other organizations or to the business assistance referral system established by the Minnesota Project Outreach Corporation;

(c) plan, develop, and implement a master file of information on small business assistance programs of federal, state, and local governments, and other public and private organizations so as to provide comprehensive, timely information to the bureau's clients;

(d) employ staff with adequate and appropriate skills and education and training for the delivery of information and assistance;

(e) seek out and utilize, to the extent practicable, contributed expertise and services of federal, state, and local governments, educational institutions, and other public and private organizations;

(g) develop an information system which will enable the commissioner and other state agencies to efficiently store, retrieve, analyze, and exchange data regarding small business development and growth in the state. All executive branch agencies of state government and the secretary of state shall to the extent practicable, assist the bureau in the development and implementation of the information system;

(h) establish and maintain a toll free telephone number so that all small business persons anywhere in the state can call the bureau office for assistance. An outreach program shall be established to make the existence of the bureau well known to its potential clientele throughout the state. If the small business person requires a referral to another provider the bureau may use the business assistance referral system established by the Minnesota Project Outreach Corporation;

(i) conduct research and provide data as required by the state legislature;

(j) develop and publish material on all aspects of the start-up, operation, or expansion of a small business in Minnesota;

(k) collect and disseminate information on state procurement opportunities, including information on the procurement process;

(l) develop a public awareness program through the use of newsletters, personal contacts, and electronic and print news media advertising about state assistance programs for small businesses, including those programs specifically for socially disadvantaged small business persons;

(m) enter into agreements with the federal government and other public and private entities to serve as the statewide coordinator or host agency for the federal small business development center program under United States Code, title 15, section 648; and

(n) assist providers in the evaluation of their programs and the assessment of their service area needs. The bureau may establish model evaluation techniques and performance standards for providers to use.

Sec. 37. Minnesota Statutes 1996, section 116J.966, subdivision 1, is amended to read:

Subdivision 1. [GENERALLY.] (a) The commissioner shall promote, develop, and facilitate trade and foreign investment in Minnesota. In furtherance of these goals, and in addition to the powers granted by section 116J.035, the commissioner may:

(1) locate, develop, and promote international markets for Minnesota products and services;

(2) arrange and lead trade missions to countries with promising international markets for Minnesota goods, technology, services, and agricultural products;

(3) promote Minnesota products and services at domestic and international trade shows;

(4) organize, promote, and present domestic and international trade shows featuring Minnesota products and services;

(5) host trade delegations and assist foreign traders in contacting appropriate Minnesota businesses and investments;

(6) develop contacts with Minnesota businesses and gather and provide information to assist them in locating and communicating with international trading or joint venture counterparts;

(7) provide information, education, and counseling services to Minnesota businesses regarding the economic, commercial, legal, and cultural contexts of international trade;

(9) locate, attract, and promote foreign direct investment and business development in Minnesota to enhance employment opportunities in Minnesota;

(10) provide foreign businesses and investors desiring to locate facilities in Minnesota information regarding sources of governmental, legal, real estate, financial, and business services;

(11) enter into contracts or other agreements with private persons and public entities, including agreements to establish and maintain offices and other types of representation in foreign countries, to carry out the purposes of promoting international trade and attracting investment from foreign countries to Minnesota and to carry out this section, without regard to sections 16B.07 and 16B.09 section 16C.07;

(12) enter into administrative, programming, and service partnerships with the Minnesota world trade center; and

(13) market trade-related materials to businesses and organizations, and the proceeds of which must be placed in a special revolving account and are appropriated to the commissioner to prepare and distribute trade-related materials.

(b) The programs and activities of the commissioner of trade and economic development and the Minnesota trade division may not duplicate programs and activities of the commissioner of agriculture or the Minnesota world trade center corporation.

(c) The commissioner shall notify the chairs of the senate finance and house appropriations committees of each agreement under this subdivision to establish and maintain an office or other type of representation in a foreign country.

Sec. 38. Minnesota Statutes 1997 Supplement, section 121.1113, subdivision 2, is amended to read:

Subd. 2. [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING ASSISTANCE.] The department of children, families, and learning shall contract for professional and technical services according to competitive bidding procedures under chapter 16B 16C for purposes of this section.

Sec. 39. Minnesota Statutes 1996, section 124.14, subdivision 1, is amended to read:

Subdivision 1. The commissioner shall supervise distribution of school aids and grants in accordance with law. It may make rules consistent with law for the distribution to enable districts to perform efficiently the services required by law and further education in the state, including reasonable requirements for the reports and accounts to it as will assure accurate and lawful apportionment of aids. State and federal aids and discretionary or entitlement grants distributed by the commissioner shall not be subject to the contract approval procedures of the commissioner of administration or to chapter 16A or, 16B, or 16C. The commissioner shall adopt internal procedures for administration and monitoring of aids and grants.

Sec. 40. Minnesota Statutes 1996, section 126.151, subdivision 2, is amended to read:

Subd. 2. [ACCOUNTS OF THE ORGANIZATION.] The commissioner and the board of trustees of the Minnesota state colleges and universities may retain dues and other money collected on behalf of students participating in approved vocational student organizations and may deposit the money in separate accounts. The money in these accounts shall be available for expenditures for state and national activities related to specific organizations. Administration of money collected under this section is not subject to the provisions of chapters 15, 16A, and 16B, and 16C, and may be deposited outside the state treasury. Money shall be administered under the policies of the applicable state board or agency relating to post-secondary and secondary vocational student organizations and is subject to audit by the legislative auditor. Any unexpended money shall not cancel but may be carried forward to the next fiscal year.

Sec. 41. Minnesota Statutes 1996, section 129C.10, subdivision 7, is amended to read:

Sec. 42. Minnesota Statutes 1996, section 136A.06, is amended to read:

136A.06 [FEDERAL FUNDS.]

The higher education services office is designated the state agency to apply for, receive, accept, and disburse to both public and private institutions of higher education all federal funds which are allocated to the state of Minnesota to support higher education programs, construction, or other activities and which require administration by a state higher education agency under the Higher Education Facilities Act of 1963, and any amendments thereof, the Higher Education Act of 1965, and any amendments thereof, and any other law which provides funds for higher education and requires administration by a state higher education agency as enacted or may be enacted by the Congress of the United States; provided that no commitment shall be made that shall bind the legislature to make appropriations beyond current allocations of funds. The office may apply for, receive, accept, and disburse all administrative funds available to the office for administering federal funds to support higher education programs, construction, or other activities. The office also may apply for, receive, accept, and disburse any research, planning, or program funds which are available for purposes consistent with the provisions of this chapter. In making application for and administering federal funds the office may comply with any and all requirements of federal law and federal rules and regulations to enable it to receive and accept such funds. The expenditure of any such funds received shall be governed by the laws of the state, except insofar as federal regulations may otherwise provide. The office may contract with both public and private institutions in administering federal funds, and such contracts shall not be subject to the provisions of chapter 16B 16C. All such money received by the office shall be deposited in the state treasury and are hereby appropriated to it annually for the purpose for which such funds are received. None of such moneys shall cancel but shall be available until expended.

Sec. 43. Minnesota Statutes 1996, section 136A.16, subdivision 1, is amended to read:

Subdivision 1. Notwithstanding chapter 16B 16C, the Minnesota higher education services office is designated as the administrative agency for carrying out the purposes and terms of sections 136A.15 to 136A.1702. The office may establish one or more loan programs.

Sec. 44. Minnesota Statutes 1996, section 136A.29, subdivision 6, is amended to read:

Subd. 6. The authority is authorized and empowered to determine the location and character of any project to be financed under the provisions of sections 136A.25 to 136A.42, and to construct, reconstruct, remodel, maintain, manage, enlarge, alter, add to, repair, operate, lease, as lessee or lessor, and regulate the same, to enter into contracts for any or all of such purposes, to enter into contracts for the management and operation of a project, and to designate a participating institution of higher education as its agent to determine the location and character of a project undertaken by such participating institution of higher education under the provisions of sections 136A.25 to 136A.42 and as the agent of the authority, to construct, reconstruct, remodel, maintain, manage, enlarge, alter, add to, repair, operate, lease, as lessee or lessor, and regulate the same, and as the agent of the authority, to enter into contracts for any or all of such purposes, including contracts for the management and operation of such project. Contracts of the authority or of a participating institution of higher education to acquire or to construct, reconstruct, remodel, maintain, enlarge, alter, add to, or repair projects shall not be subject to the provisions of chapter 16B 16C or section 574.26, or any other public contract or competitive bid law.

Sec. 45. Minnesota Statutes 1997 Supplement, section 136A.40, is amended to read:

136A.40 [ADMINISTRATION.]

Sec. 46. Minnesota Statutes 1996, section 136F.23, is amended to read:

136F.23 [STUDENT ASSOCIATIONS; PURCHASING AUTHORITY.]

Notwithstanding chapter 16A or 16B 16C, the student associations recognized by the board of trustees of the Minnesota state colleges and universities may purchase goods or materials through state purchasing authority for the ordinary day-to-day operations of the associations. The student associations must be nonprofit 501(c)(3) organizations in order to qualify for this authority. The department of administration may require that the purchase documents be approved by appropriate officials in the board's central office.

Sec. 47. Minnesota Statutes 1996, section 136F.56, subdivision 5, is amended to read:

Subd. 5. [SERVICE CONTRACTS.] The council may contract for the services it needs to carry out its function. The council may also contract to provide services to other organizations. The contracts are not subject to the contract approval procedures of the commissioner of administration or of chapter 16B 16C.

Sec. 48. Minnesota Statutes 1996, section 136F.581, subdivision 3, is amended to read:

Subd. 3. [PROCUREMENT FROM DESIGNATED BUSINESSES.] The policies and procedures must include provisions for procurement, including construction, from small targeted group businesses and businesses from economically disadvantaged areas designated under section 16B.19 16C.18. The board, colleges, and universities shall use the methods contained in section 471.345, subdivision 8, for such purchasing, or may develop additional methods in which the cost percentage preferences are consistent with the provision of section 16B.19 16C.18, subdivisions 2c and 2d 6, paragraph (a), and 7, or consistent with the provisions of the University of Minnesota's targeted group business purchasing program.

Sec. 49. Minnesota Statutes 1996, section 136F.66, is amended to read:

136F.66 [CAPITAL PROJECTS BIDDING PROCEDURES.]

In awarding contracts for capital projects under section 136F.64, the board shall consider the documentation provided by the bidders regarding their qualifications, including evidence of having successfully completed similar work, or delivering services or products comparable to that being requested. The board shall set procedures to administer this section, which must include practices that will assist in the economic development of small businesses, small targeted group businesses, and businesses in economically disadvantaged areas designated under section 16B.19 16C.18.

Sec. 50. Minnesota Statutes 1996, section 136F.72, subdivision 3, is amended to read:

Subd. 3. [ADMINISTRATION.] Each college and university, independent of other authority and notwithstanding chapters 16A and, 16B, and 16C, shall administer its activity funds. The board, independent of other authority and notwithstanding chapters 16A and, 16B, and 16C, shall administer the administrative fund established in the system office. All activity fund money collected shall be administered under the policies of the board subject to audit of the legislative auditor.

Sec. 51. Minnesota Statutes 1996, section 136F.96, is amended to read:

136F.96 [ADMINISTRATION.]

The administration of sections 136F.90 to 136F.98 shall be under the board of trustees of the Minnesota state colleges and universities independent of other authority and notwithstanding chapters 16A and, 16B, and 16C.

Sec. 52. Minnesota Statutes 1996, section 137.35, subdivision 1, is amended to read:

(b) The regents may designate a purchase of goods or services for award only to small targeted group businesses designated under section 16B.19 16C.18, subdivision 5, if the regents determine that at least three small targeted group businesses are likely to bid.

(c) The regents, as a condition of awarding a construction contract or approving a contract for consultant, professional, or technical services, may set goals that require the prime contractor to subcontract a portion of the contract to small targeted group businesses. The regents must establish a procedure for granting waivers from the subcontracting requirement when qualified small targeted group businesses are not reasonably available. The regents may establish financial incentives for prime contractors who exceed the goals for use of 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 targeted group businesses. At least 75 percent of the value of the subcontracts awarded to small targeted group businesses under this paragraph must be performed by the business to which the subcontract is awarded or by another small targeted group business.

(d) The regents may award up to a four percent preference in the amount bid on university procurement to small businesses located in an economically disadvantaged area as defined in section 16B.19 16C.18, subdivision 7.

(e) The regents may delegate responsibility under this section to university employees.

Sec. 53. Minnesota Statutes 1996, section 137.35, subdivision 2, is amended to read:

Subd. 2. [ELIGIBILITY.] The rules adopted by the commissioner of administration to define small businesses and to set time and other eligibility requirements for participation in programs under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply to this section.

Sec. 54. Minnesota Statutes 1996, section 137.35, subdivision 3, is amended to read:

Subd. 3. [NONCOMPETITIVE BIDS.] The regents are encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

Sec. 55. Minnesota Statutes 1997 Supplement, section 138.35, subdivision 1b, is amended to read:

Subd. 1b. [CONTRACTS; VOLUNTEERS; GRANTS AND GIFTS.] The state archaeologist may contract with the federal government, local governmental units, other states, the university and other educational institutions, and private persons or organizations as necessary in the performance of the duties in sections 138.31 to 138.42. Contracts made under this section for professional services shall not be subject to chapter 16B 16C, as it relates to competitive bidding. The state archaeologist may recruit, train, and accept, without regard to personnel laws or rules, the services of individuals as volunteers for or in aid of performance of the state archaeologist's duties, and may provide for the incidental expenses of volunteers, such as transportation, lodging, and subsistence. The state archaeologist may apply for, receive, and expend grants and gifts of money consistent with the powers and duties in sections 138.31 to 138.42. Any money so received is appropriated for the purpose for which it was granted.

Sec. 56. Minnesota Statutes 1996, section 144.0742, is amended to read:

144.0742 [CONTRACTS FOR PROVISION OF PUBLIC HEALTH SERVICES.]

Sec. 57. Minnesota Statutes 1996, section 144.95, subdivision 5, is amended to read:

Subd. 5. [GENERAL AUTHORITY.] (a) To carry out subdivisions 1 to 4, the commissioner of health may:

(1) accept money, property, or services from any source;

(2) receive and hold lands;

(3) accept gifts;

(4) cooperate with city, state, federal, or private agencies whose research on mosquito control or on other environmental matters may be affected by the commissioner's mosquito management and research activities; and

(5) enter into contracts with any public or private entity.

(b) The contracts must specify the duties performed, services provided, and the amount and method of reimbursement for them. Money collected by the commissioner under contracts made under this subdivision is appropriated to the commissioner for the purposes specified in the contracts. Contractual agreements must be processed under section 16B.17 16C.09.

Sec. 58. Minnesota Statutes 1996, section 161.315, subdivision 4, is amended to read:

Subd. 4. [EXCEPTIONS.] The commissioner may terminate a debarment by order, or the commissioner or a county, town, or home rule or statutory city may award a contract to a debarred or suspended person when:

(1) that person is the sole supplier of a material or service required by the commissioner or a county, town, or home rule or statutory city;

(2) the commissioner determines that an emergency exists as defined in section 161.32, subdivision 3;

(3) the commissioner of administration determines that an emergency exists as defined in section 16B.08 16C.11, subdivision 6 2;

(4) in the case of a contract to be awarded by a county, town, or home rule or statutory city, the governing body thereof determines by resolution that an emergency exists that will result in a road, street, or bridge being closed to travel; or

(5) the contract is for purchasing materials or renting equipment for routine road maintenance.

Sec. 59. Minnesota Statutes 1996, section 161.321, subdivision 1, is amended to read:

Subdivision 1. [DEFINITIONS.] For purposes of this section the following terms have the meanings given them, except where the context clearly indicates a different meaning is intended.

(a) "Award" means the granting of a contract in accordance with all applicable laws and rules governing competitive bidding except as otherwise provided in this section.

(b) "Contract" means an agreement entered into between a business entity and the state of Minnesota for the construction of transportation improvements.

(c) "Subcontractor" means a business entity which enters into a legally binding agreement with another business entity which is a party to a contract as defined in clause (b).

Sec. 60. Minnesota Statutes 1996, section 161.321, subdivision 2, is amended to read:

Subd. 2. [SMALL BUSINESS SET-ASIDES.] (a) The commissioner may award up to a six percent preference in the amount bid for specified construction work to small targeted group businesses.

(b) The commissioner may designate a contract for construction work for award only to small targeted group businesses if the commissioner determines that at least three small targeted group businesses are likely to bid.

(c) The commissioner, as a condition of awarding a construction contract, may set goals that require the prime contractor to subcontract a portion of the contract to small targeted group businesses. The commissioner must establish a procedure for granting waivers from the subcontracting requirement when qualified small targeted group businesses are not reasonably available. The commissioner may establish financial incentives for prime contractors who exceed the goals for use of 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 targeted group businesses.

(d) The commissioner may award up to a four percent preference in the amount bid on procurement to small businesses located in an economically disadvantaged area as defined in section 16B.19 16C.18, subdivision 7.

Sec. 61. Minnesota Statutes 1996, section 161.321, subdivision 5, is amended to read:

Subd. 5. [RECOURSE TO OTHER BUSINESSES.] If the commissioner is unable to award a contract pursuant to the provisions of subdivisions 2 and 3, the award may be placed pursuant to the normal solicitation and award provisions set forth in this chapter and chapter 16B 16C.

Sec. 62. Minnesota Statutes 1996, section 161.321, subdivision 6, is amended to read:

Subd. 6. [RULES.] The rules adopted by the commissioner of administration to define small businesses and to set time and other eligibility requirements for participation in programs under sections 16B.19 to 16B.22 16C.18 to 16C.21 apply to this section. The commissioner may promulgate other rules necessary to carry out this section.

Sec. 63. Minnesota Statutes 1996, section 161.321, subdivision 7, is amended to read:

Subd. 7. [NONCOMPETITIVE BIDS.] The commissioner is encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

Sec. 64. Minnesota Statutes 1996, section 161.41, subdivision 2, is amended to read:

Subd. 2. [DETERMINATION OF VALUE; DISPOSITION.] The commissioner shall administer all aspects of the disposition of property declared to be surplus under this section. The commissioner shall first determine the value of the surplus property. The commissioner may then transfer the possession of the surplus property to any state agency or political subdivision of this state or to the United States government upon receipt of payment in an amount equal to the value of the surplus property.

The commissioner may also sell the surplus property under the competitive bidding provisions of chapter 16B 16C if no state agency or political subdivision of this state offers to purchase the surplus property for its determined value.

Sec. 65. Minnesota Statutes 1997 Supplement, section 179A.03, subdivision 14, is amended to read:

Subd. 14. [PUBLIC EMPLOYEE.] "Public employee" or "employee" means any person appointed or employed by a public employer except:

(a) elected public officials;

(c) commissioned or enlisted personnel of the Minnesota national guard;

(d) emergency employees who are employed for emergency work caused by natural disaster;

(e) part-time employees whose service does not exceed the lesser of 14 hours per week or 35 percent of the normal work week in the employee's appropriate unit;

(f) employees whose positions are basically temporary or seasonal in character and: (1) are not for more than 67 working days in any calendar year; or (2) are not for more than 100 working days in any calendar year and the employees are under the age of 22, are full-time students enrolled in a nonprofit or public educational institution prior to being hired by the employer, and have indicated, either in an application for employment or by being enrolled at an educational institution for the next academic year or term, an intention to continue as students during or after their temporary employment;

(g) employees providing services for not more than two consecutive quarters to the board of trustees of the Minnesota state colleges and universities under the terms of a professional or technical services contract as defined in section 16B.17 16C.09, subdivision 1;

(h) employees of charitable hospitals as defined by section 179.35, subdivision 3;

(i) full-time undergraduate students employed by the school which they attend under a work-study program or in connection with the receipt of financial aid, irrespective of number of hours of service per week;

(j) an individual who is employed for less than 300 hours in a fiscal year as an instructor in an adult vocational education program;

(k) an individual hired by a school district or the board of trustees of the Minnesota state colleges and universities to teach one course for up to four credits for one quarter in a year.

The following individuals are public employees regardless of the exclusions of clauses (e) and (f):

(1) An employee hired by a school district or the board of trustees of the Minnesota state colleges and universities except at the university established in section 136F.13 or for community services or community education instruction offered on a noncredit basis: (i) to replace an absent teacher or faculty member who is a public employee, where the replacement employee is employed more than 30 working days as a replacement for that teacher or faculty member; or (ii) to take a teaching position created due to increased enrollment, curriculum expansion, courses which are a part of the curriculum whether offered annually or not, or other appropriate reasons; and

(2) An employee hired for a position under clause (f)(1) if that same position has already been filled under clause (f)(1) in the same calendar year and the cumulative number of days worked in that same position by all employees exceeds 67 calendar days in that year. For the purpose of this paragraph, "same position" includes a substantially equivalent position if it is not the same position solely due to a change in the classification or title of the position.

Sec. 66. Minnesota Statutes 1996, section 179A.23, is amended to read:

179A.23 [LIMITATION ON CONTRACTING-OUT OF SERVICES PROVIDED BY MEMBERS OF A STATE OF MINNESOTA OR UNIVERSITY OF MINNESOTA BARGAINING UNIT.]

Contracts entered into by the state of Minnesota for the purpose of providing court reporter services or transcription of the record of a hearing which was recorded by means of an audio magnetic recording device shall be subject to section 16B.17 16C.09 and the preferential employment provisions enumerated in this section. Any court reporter seeking a contract pursuant to the preferential employment provisions of this section shall be given preference when the services are needed only if that court reporter's charges for the services requested are no greater than the average of the charges made for the identical services by other court reporters in the same locality who are also under contract with the state for those services.

Sec. 67. Minnesota Statutes 1996, section 198.35, subdivision 1, is amended to read:

Subdivision 1. [ESTABLISHMENT.] The board may establish a veterans home in Silver Bay by renovating an existing facility owned by the city of Silver Bay if the city donates the building to the board at no cost. Contracts made by the board for the purposes of this subdivision are subject to chapter 16B 16C. Buildings used for the veterans home must comply with requirements established by federal agencies as conditions for the receipt of federal funds for the nursing and boarding care of veterans. The city of Silver Bay shall secure the state match requirement from sources other than the state general fund. Money from other sources must equal at least 35 percent of the total cost of the renovation with the remainder of the funds to be provided by the United States Veterans Administration.

Sec. 68. Minnesota Statutes 1996, section 216C.02, subdivision 1, is amended to read:

Subdivision 1. [POWERS.] (a) The commissioner may:

(1) apply for, receive, and spend money received from federal, municipal, county, regional, and other government agencies and private sources;

(2) apply for, accept, and disburse grants and other aids from public and private sources;

(3) contract for professional services if work or services required or authorized to be carried out by the commissioner cannot be satisfactorily performed by employees of the department or by another state agency;

(4) enter into interstate compacts to carry out research and planning jointly with other states or the federal government when appropriate;

(5) upon reasonable request, distribute informational material at no cost to the public; and

(6) enter into contracts for the performance of the commissioner's duties with federal, state, regional, metropolitan, local, and other agencies or units of government and educational institutions, including the University of Minnesota, without regard to the competitive bidding requirements of chapters 16A and 16B 16C.

(b) The commissioner shall collect information on conservation and other energy-related programs carried on by other agencies, by public utilities, by cooperative electric associations, by municipal power agencies, by other fuel suppliers, by political subdivisions, and by private organizations. Other agencies, cooperative electric associations, municipal power agencies, and political subdivisions shall cooperate with the commissioner by providing information requested by the commissioner. The commissioner may by rule require the submission of information by other program operators. The commissioner shall make the information available to other agencies and to the public and, as necessary, shall recommend to the legislature changes in the laws governing conservation and other energy-related programs to ensure that:

(1) expenditures on the programs are adequate to meet identified needs;

(2) the needs of low-income energy users are being adequately addressed;

(3) duplication of effort is avoided or eliminated;

(4) a program that is ineffective is improved or eliminated; and

The commissioner shall appoint an advisory task force to help evaluate the information collected and formulate recommendations to the legislature. The task force must include low-income energy users.

(c) By January 15 of each year, the commissioner shall report to the legislature on the projected amount of federal money likely to be available to the state during the next fiscal year, including grant money and money received by the state as a result of litigation or settlements of alleged violations of federal petroleum pricing regulations. The report must also estimate the amount of money projected as needed during the next fiscal year to finance a level of conservation and other energy-related programs adequate to meet projected needs, particularly the needs of low-income persons and households, and must recommend the amount of state appropriations needed to cover the difference between the projected availability of federal money and the projected needs.

Sec. 69. Minnesota Statutes 1997 Supplement, section 216D.03, subdivision 2, is amended to read:

Subd. 2. [ESTABLISHMENT OF NOTIFICATION CENTER; RULES.] (a) The notification center services must be provided by a nonprofit corporation approved in writing by the commissioner. The nonprofit corporation must be governed by a board of directors of up to 20 members, one of whom is the director of the office of pipeline safety. The other board members must represent and be elected by operators, excavators, and other persons eligible to participate in the center. In deciding to approve a nonprofit corporation, the commissioner shall consider whether it meets the requirements of this paragraph and whether it demonstrates that it has the ability to contract for and implement the notification center service.

(b) The commissioner shall adopt rules:

(1) establishing a notification process and competitive bidding procedure for selecting a vendor to provide the notification service;

(2) governing the operating procedures and technology needed for a statewide notification center; and

(3) setting forth the method for assessing the cost of the service among operators.

(c) The commissioner shall select a vendor to provide the notification center service. The commissioner may advertise for bids as provided in section 16B.07 16C.07, subdivision 3 subdivisions 1 and 2, and base the selection of a vendor on an identification of the lowest responsible bidder best value as provided in section 16B.09 16C.07, subdivision 1 6. The commissioner shall select and contract with the vendor to provide the notification center service, but all costs of the center must be paid by the operators. The commissioner may at any time appoint a task force to advise on the renewal of the contract or any other matter involving the center's operations.

(d) An operator may submit a bid and be selected to contract to provide the notification center service under paragraph (a) or (c). The commissioner shall annually review the services provided by the nonprofit corporation approved under paragraph (a) or the vendor selected under paragraph (c).

Sec. 70. Minnesota Statutes 1996, section 237.51, subdivision 5a, is amended to read:

Subd. 5a. [DEPARTMENT OF HUMAN SERVICES; DUTIES.] (a) In addition to any duties specified elsewhere in sections 237.51 to 237.56, the department of human services shall:

(1) define economic hardship, special needs, and household criteria so as to determine the priority of eligible applicants for initial distribution of devices and to determine circumstances necessitating provision of more than one communication device per household;

(2) establish a method to verify eligibility requirements;

(3) establish specifications for communication devices to be purchased under section 237.53, subdivision 3;

(5) notwithstanding any provision of chapter chapters 16B and 16C, develop guidelines for the purchase of some communication devices from local retailers and dispensers if the department determines that otherwise they will be economically harmed by implementation of sections 237.50 to 237.56.

(b) The department may establish an advisory board to advise the department in carrying out the duties specified in this section and to advise the department of public service in carrying out its duties under section 237.54. If so established, the advisory board must include, at a minimum, the following communication-impaired persons:

(1) at least one member who is deaf;

(2) at least one member who is speech impaired;

(3) at least one member who is mobility impaired; and

(4) at least one member who is hard-of-hearing.

The membership terms, compensation, and removal of members and the filling of membership vacancies are governed by section 15.059. Advisory board meetings shall be held at the discretion of the commissioner.

Sec. 71. Minnesota Statutes 1996, section 241.0221, subdivision 6, is amended to read:

Subd. 6. [APPLICATION REVIEW PROCESS FOR SUBSIDY FUNDS.] To qualify for a subsidy, a county or group of counties must enter into a memorandum of agreement with the commissioner agreeing to comply with the minimum standards and requirements established by the commissioner under subdivision 4. The memorandum of agreement is not subject to the contract approval procedures of the commissioner of administration or chapter chapters 16B and 16C. The commissioner shall provide forms and instructions for submission of subsidy applications.

The commissioner shall require a county or group of counties to document in its application that it is requesting subsidy funds for the least restrictive alternative appropriate to the county or counties detention needs. The commissioner shall evaluate applications and grant subsidies for local detention facilities and alternative detention programs described in this section in a manner consistent with the minimum standards and requirements established by the commissioner in subdivision 4 and within the limit appropriations made available by law.

Sec. 72. Minnesota Statutes 1996, section 241.27, subdivision 2, is amended to read:

Subd. 2. [REVOLVING FUND; USE OF FUND.] There is established in the department of corrections under the control of the commissioner of corrections the Minnesota correctional industries revolving fund to which shall be transferred the revolving funds authorized in Minnesota Statutes 1978, sections 243.41 and 243.85, clause (f), and any other industrial revolving funds heretofore established at any state correctional facility under the control of the commissioner of corrections. The revolving fund established shall be used for the conduct of the industrial and commercial activities now or hereafter established at any state correctional facility, including but not limited to the purchase of equipment, raw materials, the payment of salaries, wages and other expenses necessary and incident thereto. The purchase of materials and commodities for resale are not subject to the competitive bidding procedures of section 16B.07 16C.07, but are subject to all other provisions of chapter 16B chapters 16B and 16C. When practical, purchases must be made from small targeted group businesses designated under section 16B.19 16C.18. Additionally, the expenses of inmate vocational training and the inmate release fund may be financed from the correctional industries revolving fund in an amount to be determined by the commissioner. The proceeds and income from all industrial and commercial activities conducted at state correctional facilities shall be deposited in the correctional industries revolving fund subject to disbursement as hereinabove provided. The commissioner of corrections may request that money in the fund be invested pursuant to section 11A.25; the proceeds from the investment not currently needed shall be accounted for separately and credited to the fund.

Sec. 73. Minnesota Statutes 1997 Supplement, section 241.277, subdivision 2, is amended to read:

Sec. 74. Minnesota Statutes 1996, section 246.36, is amended to read:

246.36 [ACCEPTANCE OF VOLUNTARY, UNCOMPENSATED SERVICES.]

For the purpose of carrying out a duty, the commissioner of human services shall have authority to accept uncompensated and voluntary services and to enter into contracts or agreements with private or public agencies, or persons, for uncompensated and voluntary services, as the commissioner may deem practicable. Uncompensated and voluntary services do not include services mandated by licensure and certification requirements for health care facilities. The volunteer agencies, organizations, or persons who provide services to residents of state facilities operated under the authority of the commissioner are not subject to the procurement requirements of chapters 16A and 16B 16C. The agencies, organizations, or persons may purchase supplies, services, and equipment to be used in providing services to residents of state facilities through the department of administration.

Sec. 75. Minnesota Statutes 1996, section 246.57, subdivision 1, is amended to read:

Subdivision 1. [AUTHORIZED.] The commissioner of human services may authorize any state facility operated under the authority of the commissioner to enter into agreement with other governmental entities and both nonprofit and for-profit organizations for participation in shared service agreements that would be of mutual benefit to the state, other governmental entities and organizations involved, and the public. Notwithstanding section 16B.06 16C.06, subdivision 2, the commissioner of human services may delegate the execution of shared services contracts to the chief executive officers of the regional centers or state operated nursing homes. No additional employees shall be added to the legislatively approved complement for any regional center or state nursing home as a result of entering into any shared service agreement. However, positions funded by a shared service agreement may be authorized by the commissioner of finance for the duration of the shared service agreement. The charges for the services shall be on an actual cost basis. All receipts for shared services may be retained by the regional treatment center or state-operated nursing home that provided the services, in addition to other funding the regional treatment center or state-operated nursing home receives.

Sec. 76. Minnesota Statutes 1996, section 246.57, subdivision 6, is amended to read:

Subd. 6. [DENTAL SERVICES.] The commissioner of human services shall authorize any regional treatment center or state-operated nursing home under the commissioner's authority to provide dental services to disabled persons who are eligible for medical assistance and are not residing at the regional treatment center or state-operated nursing home, provided that the reimbursement received for these services is sufficient to cover actual costs. To provide these services, regional treatment centers and state-operated nursing homes may participate under contract with health networks in their service area. Notwithstanding section 16B.06 16C.06, subdivision 2, the commissioner of human services may delegate the execution of these dental services contracts to the chief executive officers of the regional centers or state-operated nursing homes. All receipts for these dental services shall be retained by the regional treatment center or state-operated nursing home that provides the services and shall be in addition to other funding the regional treatment center or state-operated nursing home receives.

Sec. 77. Minnesota Statutes 1996, section 256B.031, subdivision 1, is amended to read:

Sec. 78. Minnesota Statutes 1996, section 256B.04, subdivision 14, is amended to read:

Subd. 14. [COMPETITIVE BIDDING.] When determined to be effective, economical, and feasible, the commissioner may utilize volume purchase through competitive bidding and negotiation under the provisions of chapter 16B 16C, to provide items under the medical assistance program including but not limited to the following:

(1) eyeglasses;

(2) oxygen. The commissioner shall provide for oxygen needed in an emergency situation on a short-term basis, until the vendor can obtain the necessary supply from the contract dealer;

(3) hearing aids and supplies; and

(4) durable medical equipment, including but not limited to:

(a) hospital beds;

(b) commodes;

(c) glide-about chairs;

(d) patient lift apparatus;

(e) wheelchairs and accessories;

(f) oxygen administration equipment;

(g) respiratory therapy equipment;

(h) electronic diagnostic, therapeutic and life support systems;

(5) special transportation services; and

(6) drugs.

Sec. 79. Minnesota Statutes 1996, section 256B.04, subdivision 15, is amended to read:

Subd. 15. [UTILIZATION REVIEW.] (1) Establish on a statewide basis a new program to safeguard against unnecessary or inappropriate use of medical assistance services, against excess payments, against unnecessary or inappropriate hospital admissions or lengths of stay, and against underutilization of services in prepaid health plans, long-term care facilities or any health care delivery system subject to fixed rate reimbursement. In implementing the program, the state agency shall utilize both prepayment and postpayment review systems to determine if utilization is reasonable and necessary. The determination of whether services are reasonable and necessary shall be made by the commissioner in consultation with a professional services advisory group or health care consultant appointed by the commissioner.

(2) Contracts entered into for purposes of meeting the requirements of this subdivision shall not be subject to the set-aside provisions of chapter 16B 16C.

(4) The commissioner may select providers to provide case management services to recipients who use health care services inappropriately or to recipients who are eligible for other managed care projects. The providers shall be selected based upon criteria that may include a comparison with a peer group of providers related to the quality, quantity, or cost of health care services delivered or a review of sanctions previously imposed by health care services programs or the provider's professional licensing board.

Sec. 80. Minnesota Statutes 1997 Supplement, section 256B.19, subdivision 2a, is amended to read:

Subd. 2a. [DIVISION OF COSTS.] The county shall ensure that only the least costly, most appropriate transportation and travel expenses are used. The state may enter into volume purchase contracts, or use a competitive bidding process, whenever feasible, to minimize the costs of transportation services. If the state has entered into a volume purchase contract or used the competitive bidding procedures of chapter 16B 16C to arrange for transportation services, the county may be required to use such arrangements.

Sec. 81. Minnesota Statutes 1997 Supplement, section 256D.03, subdivision 6, is amended to read:

Subd. 6. [DIVISION OF COSTS.] The state share of county agency expenditures for general assistance medical care shall be 100 percent. Payments made under this subdivision shall be made according to sections 256B.041, subdivision 5 and 256B.19, subdivision 1. In counties where a pilot or demonstration project is operated for general assistance medical care services, the state may pay 100 percent of the costs of administering the pilot or demonstration project.

Notwithstanding any provision to the contrary, beginning July 1, 1991, the state shall pay 100 percent of the costs for centralized claims processing by the department of administration relative to claims beginning January 1, 1991, and submitted on behalf of general assistance medical care recipients by vendors in the general assistance medical care program.

Beginning July 1, 1991, the state shall reimburse counties up to the limit of state appropriations for general assistance medical care common carrier transportation and related travel expenses provided for medical purposes after December 31, 1990. For purposes of this subdivision, transportation shall have the meaning given it in Code of Federal Regulations, title 42, section 440.170(a), as amended through October 1, 1987, and travel expenses shall have the meaning given in Code of Federal Regulations, title 42, section 440.170(a)(3), as amended through October 1, 1987.

The county shall ensure that only the least costly most appropriate transportation and travel expenses are used. The state may enter into volume purchase contracts, or use a competitive bidding process, whenever feasible, to minimize the costs of transportation services. If the state has entered into a volume purchase contract or used the competitive bidding procedures of chapter 16B 16C to arrange for transportation services, the county may be required to use such arrangements to be eligible for state reimbursement for general assistance medical care common carrier transportation and related travel expenses provided for medical purposes.

In counties where prepaid health plans are under contract to the commissioner to provide services to general assistance medical care recipients, the cost of court ordered treatment that does not include diagnostic evaluation, recommendation, or referral for treatment by the prepaid health plan is the responsibility of the county of financial responsibility.

Sec. 82. Minnesota Statutes 1996, section 298.2211, subdivision 4, is amended to read:

Sec. 83. Minnesota Statutes 1996, section 349A.06, subdivision 1, is amended to read:

Subdivision 1. [CONTRACTS.] The director shall sell tickets for the lottery through lottery retailers with whom the director contracts. Contracts under this section are not subject to the provisions of sections 16B.06 to 16B.102, and 16B.17 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, and 16C.11, and are valid for a period of one year. The director may permit a retailer to sell tickets at more than one business location under a contract entered into under this section.

Sec. 84. Minnesota Statutes 1996, section 349A.07, subdivision 6, is amended to read:

Subd. 6. [EXEMPTIONS.] Lottery procurement contracts entered into by the director are not subject to the provisions of sections 16B.06 to 16B.102 or 16B.17 section 16C.03, 16C.06, 16C.07, 16C.09, 16C.10, or 16C.11, provided that the director must utilize an open and competitive bid process, and as nearly as practicable follow the procedures of chapter chapters 16B and 16C governing contracts, consistent with the provisions of this section.

Sec. 85. Minnesota Statutes 1996, section 352.03, subdivision 6, is amended to read:

Subd. 6. [DUTIES AND POWERS OF EXECUTIVE DIRECTOR.] The management of the system is vested in the director, who is the executive and administrative head of the system. The director shall be advisor to the board on matters pertaining to the system and shall also act as the secretary of the board. The director shall:

(1) attend meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate an assistant director with the approval of the board;

(5) appoint any employees, both permanent and temporary, that are necessary to carry out the provisions of this chapter;

(6) organize the work of the system as the director deems necessary to fulfill the functions of the system, and define the duties of its employees and delegate to them any powers or duties, subject to the control of the director and under conditions the director may prescribe. Appointments to exercise delegated power must be by written order and shall be filed with the secretary of state;

(7) with the advice and consent of the board, contract for the services of an approved actuary, professional management services, and any other consulting services as necessary and fix the compensation for those services. The contracts are not subject to competitive bidding under chapter 16B 16C. Any approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director, and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Professional management services may not be contracted for more often than once in six years. Copies of professional management survey reports must be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems are qualified to contract with the director;

(8) with the advice and consent of the board provide in-service training for the employees of the system;

(10) determine the amount of the annuities and disability benefits of employees covered by the system and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;

(11) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the system;

(12) certify funds available for investment to the state board of investment;

(13) with the advice and approval of the board request the state board of investment to sell securities when the director determines that funds are needed for the system;

(14) prepare and submit to the board and the legislature an annual financial report covering the operation of the system, as required by section 356.20;

(15) prepare and submit biennial and annual budgets to the board and with the approval of the board submit the budgets to the department of finance; and

(16) with the approval of the board, perform other duties required to administer the retirement and other provisions of this chapter and to do its business.

Sec. 86. Minnesota Statutes 1996, section 352.03, subdivision 16, is amended to read:

Subd. 16. [DATA PROCESSING SERVICES.] Notwithstanding chapter 16B, or 16C or any law to the contrary, the executive director of the system may use the services of the department of administration, information services division, for electronic data processing and related services or may contract for all or a part of the services.

Sec. 87. Minnesota Statutes 1997 Supplement, section 353.03, subdivision 3a, is amended to read:

Subd. 3a. [EXECUTIVE DIRECTOR.] (a) [APPOINTMENT.] The board shall appoint, with the advice and consent of the senate, an executive director on the basis of education, experience in the retirement field, and leadership ability. The executive director shall have had at least five years' experience in an executive level management position, which has included responsibility for pensions, deferred compensation, or employee benefits. The executive director serves at the pleasure of the board. The salary of the executive director is as provided by section 15A.0815.

(b) [DUTIES.] The management of the association is vested in the executive director who shall be the executive and administrative head of the association. The executive director shall act as adviser to the board on all matters pertaining to the association and shall also act as the secretary of the board. The executive director shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(4) designate, with the approval of the board, up to two persons who shall serve in the unclassified service and whose salary is set in accordance with section 43A.18, subdivision 3, appoint a confidential secretary in the unclassified service, and appoint employees to carry out this chapter, who are subject to chapters 43A and 179A in the same manner as are executive branch employees;

(6) with the approval of the board, contract for the services of an approved actuary, professional management services, and any other consulting services as necessary to fulfill the purposes of this chapter. All contracts are subject to chapter 16B 16C. The commissioner of administration shall not approve, and the association shall not enter into, any contract to provide lobbying services or legislative advocacy of any kind. Any approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Copies of professional management survey reports shall be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the same time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems shall be qualified to contract with the director hereunder;

(7) with the approval of the board provide in-service training for the employees of the association;

(8) make refunds of accumulated contributions to former members and to the designated beneficiary, surviving spouse, legal representative or next of kin of deceased members or deceased former members, as provided in this chapter;

(9) determine the amount of the annuities and disability benefits of members covered by the association and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, in accordance with the provisions of this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the association;

(11) prepare and submit to the board and the legislature an annual financial report covering the operation of the association, as required by section 356.20;

(12) prepare and submit biennial and annual budgets to the board for its approval and submit the approved budgets to the department of finance for approval by the commissioner;

(13) reduce all or part of the accrued interest payable under section 353.27, subdivisions 12, 12a, and 12b, or 353.28, subdivision 5, upon receipt of proof by the association of an unreasonable processing delay or other extenuating circumstances of the employing unit. The executive director shall prescribe and submit for approval by the board the conditions under which such interest may be reduced; and

(14) with the approval of the board, perform such other duties as may be required for the administration of the association and the other provisions of this chapter and for the transaction of its business.

Sec. 88. Minnesota Statutes 1996, section 354.06, subdivision 2a, is amended to read:

Subd. 2a. [DUTIES OF EXECUTIVE DIRECTOR.] The management of the association is vested in the executive director who shall be the executive and administrative head of the association. The executive director shall act as advisor to the board on all matters pertaining to the association and shall also act as the secretary of the board. The executive director shall:

(1) attend all meetings of the board;

(2) prepare and recommend to the board appropriate rules to carry out the provisions of this chapter;

(3) establish and maintain an adequate system of records and accounts following recognized accounting principles and controls;

(5) organize the work of the association as the director deems necessary to fulfill the functions of the association, and define the duties of its employees and delegate to them any powers or duties, subject to the director's control and under such conditions as the director may prescribe;

(6) with the approval of the board, contract and set the compensation for the services of an approved actuary, professional management services, and any other consulting services. These contracts are not subject to the competitive bidding procedure prescribed by chapter 16B 16C. An approved actuary retained by the executive director shall function as the actuarial advisor of the board and the executive director and may perform actuarial valuations and experience studies to supplement those performed by the actuary retained by the legislative commission on pensions and retirement. Any supplemental actuarial valuations or experience studies shall be filed with the executive director of the legislative commission on pensions and retirement. Copies of professional management survey reports must be transmitted to the secretary of the senate, the chief clerk of the house of representatives, and the legislative reference library as provided by section 3.195, to the executive director of the commission and to the legislative auditor at the same time as reports are furnished to the board. Only management firms experienced in conducting management surveys of federal, state, or local public retirement systems are qualified to contract with the executive director;

(7) with the approval of the board, provide in-service training for the employees of the association;

(8) make refunds of accumulated contributions to former members and to the designated beneficiary, surviving spouse, legal representative, or next of kin of deceased members or deceased former members, under this chapter;

(9) determine the amount of the annuities and disability benefits of members covered by the association and authorize payment of the annuities and benefits beginning as of the dates on which the annuities and benefits begin to accrue, under this chapter;

(10) pay annuities, refunds, survivor benefits, salaries, and necessary operating expenses of the association;

(11) prepare and submit to the board and the legislature an annual financial report covering the operation of the association, as required by section 356.20;

(12) certify funds available for investment to the state board of investment;

(13) with the advice and approval of the board, request the state board of investment to sell securities on determining that funds are needed for the purposes of the association;

(14) prepare and submit biennial and annual budgets to the board and with the approval of the board submit those budgets to the department of finance; and

(15) with the approval of the board, perform such other duties as may be required for the administration of the association and the other provisions of this chapter and for the transaction of its business. The executive director may:

(i) reduce all or part of the accrued interest and fines payable by an employing unit for reporting requirements under section 354.52, based on an evaluation of any extenuating circumstances of the employing unit;

(ii) assign association employees to conduct field audits of an employing unit to ensure compliance with the provisions of this chapter; and

(iii) recover overpayments, if not repaid to the association, by suspending or reducing the payment of a retirement annuity, refund, disability benefit, survivor benefit, or optional annuity under this chapter until the overpayment, plus interest, has been recovered.

Sec. 89. Minnesota Statutes 1996, section 354.07, subdivision 7, is amended to read:

Sec. 90. Minnesota Statutes 1996, section 356A.06, subdivision 7, is amended to read:

Subd. 7. [EXPANDED LIST OF AUTHORIZED INVESTMENT SECURITIES.] (a) [AUTHORITY.] Except to the extent otherwise authorized by law or bylaws, a covered pension plan not described by subdivision 6, paragraph (a), may invest its assets only in accordance with this subdivision.

(b) [SECURITIES GENERALLY.] The covered pension plan has the authority to purchase, sell, lend, or exchange the securities specified in paragraphs (c) to (g), including puts and call options and future contracts traded on a contract market regulated by a governmental agency or by a financial institution regulated by a governmental agency. These securities may be owned as units in commingled trusts that own the securities described in paragraphs (c) to (g).

(c) [GOVERNMENT OBLIGATIONS.] The covered pension plan may invest funds in governmental bonds, notes, bills, mortgages, and other evidences of indebtedness provided the issue is backed by the full faith and credit of the issuer or the issue is rated among the top four quality rating categories by a nationally recognized rating agency. The obligations in which funds may be invested under this paragraph include guaranteed or insured issues of (1) the United States, its agencies, its instrumentalities, or organizations created and regulated by an act of Congress; (2) Canada and its provinces, provided the principal and interest is payable in United States dollars; (3) the states and their municipalities, political subdivisions, agencies, or instrumentalities; (4) the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, or any other United States government sponsored organization of which the United States is a member, provided the principal and interest is payable in United States dollars.

(d) [CORPORATE OBLIGATIONS.] The covered pension plan may invest funds in bonds, notes, debentures, transportation equipment obligations, or any other longer term evidences of indebtedness issued or guaranteed by a corporation organized under the laws of the United States or any state thereof, or the Dominion of Canada or any province thereof if they conform to the following provisions:

(1) the principal and interest of obligations of corporations incorporated or organized under the laws of the Dominion of Canada or any province thereof must be payable in United States dollars; and

(2) obligations must be rated among the top four quality categories by a nationally recognized rating agency.

(e) [OTHER OBLIGATIONS.] (1) The covered pension plan may invest funds in bankers acceptances, certificates of deposit, deposit notes, commercial paper, mortgage participation certificates and pools, asset backed securities, repurchase agreements and reverse repurchase agreements, guaranteed investment contracts, savings accounts, and guaranty fund certificates, surplus notes, or debentures of domestic mutual insurance companies if they conform to the following provisions:

(i) bankers acceptances and deposit notes of United States banks are limited to those issued by banks rated in the highest four quality categories by a nationally recognized rating agency;

(ii) certificates of deposit are limited to those issued by (A) United States banks and savings institutions that are rated in the highest four quality categories by a nationally recognized rating agency or whose certificates of deposit are fully insured by federal agencies; or (B) credit unions in amounts up to the limit of insurance coverage provided by the National Credit Union Administration;

(iii) commercial paper is limited to those issued by United States corporations or their Canadian subsidiaries and rated in the highest two quality categories by a nationally recognized rating agency;

(iv) mortgage participation or pass through certificates evidencing interests in pools of first mortgages or trust deeds on improved real estate located in the United States where the loan to value ratio for each loan as calculated in accordance with section 61A.28, subdivision 3, does not exceed 80 percent for fully amortizable residential properties and in all other respects meets the requirements of section 61A.28, subdivision 3;

(vi) guaranteed investment contracts are limited to those issued by insurance companies or banks rated in the top four quality categories by a nationally recognized rating agency or to alternative guaranteed investment contracts where the underlying assets comply with the requirements of this subdivision;

(vii) savings accounts are limited to those fully insured by federal agencies; and

(viii) asset backed securities must be rated in the top four quality categories by a nationally recognized rating agency.

(2) Sections 16A.58 and 16B.06, 16C.03, subdivision 4, and 16C.06 do not apply to certificates of deposit and collateralization agreements executed by the covered pension plan under clause (1), item (ii).

(3) In addition to investments authorized by clause (1), item (iv), the covered pension plan may purchase from the Minnesota housing finance agency all or any part of a pool of residential mortgages, not in default, that has previously been financed by the issuance of bonds or notes of the agency. The covered pension plan may also enter into a commitment with the agency, at the time of any issue of bonds or notes, to purchase at a specified future date, not exceeding 12 years from the date of the issue, the amount of mortgage loans then outstanding and not in default that have been made or purchased from the proceeds of the bonds or notes. The covered pension plan may charge reasonable fees for any such commitment and may agree to purchase the mortgage loans at a price sufficient to produce a yield to the covered pension plan comparable, in its judgment, to the yield available on similar mortgage loans at the date of the bonds or notes. The covered pension plan may also enter into agreements with the agency for the investment of any portion of the funds of the agency. The agreement must cover the period of the investment, withdrawal privileges, and any guaranteed rate of return.

(f) [CORPORATE STOCKS.] The covered pension plan may invest funds in stocks or convertible issues of any corporation organized under the laws of the United States or the states thereof, the Dominion of Canada or its provinces, or any corporation listed on the New York Stock Exchange or the American Stock Exchange, if they conform to the following provisions:

(1) the aggregate value of corporate stock investments, as adjusted for realized profits and losses, must not exceed 85 percent of the market or book value, whichever is less, of a fund, less the aggregate value of investments according to subdivision 6;

(2) investments must not exceed five percent of the total outstanding shares of any one corporation.

(g) [OTHER INVESTMENTS.] (1) In addition to the investments authorized in paragraphs (b) to (f), and subject to the provisions in clause (2), the covered pension plan may invest funds in:

(i) venture capital investment businesses through participation in limited partnerships and corporations;

(ii) real estate ownership interests or loans secured by mortgages or deeds of trust through investment in limited partnerships, bank sponsored collective funds, trusts, and insurance company commingled accounts, including separate accounts;

(iii) regional and mutual funds through bank sponsored collective funds and open-end investment companies registered under the Federal Investment Company Act of 1940;

(iv) resource investments through limited partnerships, private placements, and corporations; and

(v) international securities.

(2) The investments authorized in clause (1) must conform to the following provisions:

(i) the aggregate value of all investments made according to clause (1) may not exceed 35 percent of the market value of the fund for which the covered pension plan is investing;

(iii) covered pension plan participation in an investment vehicle is limited to 20 percent thereof for investments made under clause (1), item (i), (ii), (iii), or (iv); and

(iv) covered pension plan participation in a limited partnership does not include a general partnership interest or other interest involving general liability. The covered pension plan may not engage in any activity as a limited partner which creates general liability.

Sec. 91. Minnesota Statutes 1996, section 446A.12, subdivision 5, is amended to read:

Subd. 5. [EXEMPTION.] The notes and bonds of the authority are not subject to section 16B.06 sections 16C.03, subdivision 4, and 16C.06.

Sec. 92. Minnesota Statutes 1996, section 462A.18, subdivision 2, is amended to read:

Subd. 2. [CONTRACTS AND SECURITY.] Notwithstanding the provisions of this section, the agency shall have power to contract with the holders of any of its notes or bonds, as to the custody, collection, securing, investment, and payment of any money of the agency, or any money held in trust or otherwise for the payment of notes or bonds, and to carry out such contract. Money held in trust or otherwise for the payment of notes or bonds or in any way to secure notes or bonds and deposits of such money may be secured in the same manner as money of the agency, and all banks and trust companies are authorized to give such security for such deposits. All money so paid to the state treasurer as agent of the agency, from whatever source, are appropriated to the agency. The agency's notes and bonds are not subject to section 16B.06 sections 16C.03, subdivision 4, and 16C.06.

Sec. 93. Minnesota Statutes 1996, section 471.345, subdivision 8, is amended to read:

Subd. 8. [PROCUREMENT FROM ECONOMICALLY DISADVANTAGED PERSONS.] For purposes of this subdivision, the following terms shall have the meanings herein ascribed to them:

(a) "Small targeted group business" means businesses designated under section 16B.19 16C.18.

(b) "Business entity" means an entity organized for profit, including an individual, partnership, corporation, joint venture, association, or cooperative.

Nothing in this section shall be construed to prohibit any municipality from adopting a resolution, rule, regulation, or ordinance which on an annual basis designates and sets aside for awarding to small targeted group businesses a percentage of the value of its anticipated total procurement of goods and services, including construction, and which uses either a negotiated price or bid contract procedure in the awarding of a procurement contract under a set-aside program as allowed in this subdivision, provided that any award based on a negotiated price shall not exceed by more than five percent the municipality's estimated price for the goods and services if they were purchased on the open market and not under the set-aside program.

Sec. 94. Minnesota Statutes 1996, section 473.142, is amended to read:

473.142 [SMALL BUSINESSES.]

(a) The metropolitan council and agencies specified in section 473.143, subdivision 1, may award up to a six percent preference in the amount bid for specified goods or services to small targeted group businesses designated under section 16B.19 16C.18.

(b) The council and each agency specified in section 473.143, subdivision 1, may designate a purchase of goods or services for award only to small targeted group businesses designated under section 16B.19 16C.18 if the council or agency determines that at least three small targeted group businesses are likely to bid.

qualified small targeted group businesses are not reasonably available. The council or agency may establish financial incentives for prime contractors who exceed the goals for use of 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 targeted group businesses. At least 75 percent of the value of the subcontracts awarded to small targeted group businesses under this paragraph must be performed by the business to which the subcontract is awarded or by another small targeted group business.

(d) The council and each agency listed in section 473.143, subdivision 1, are encouraged to purchase from small targeted group businesses designated under section 16B.19 16C.18 when making purchases that are not subject to competitive bidding procedures.

(e) The council and each agency may adopt rules to implement this section.

(f) Each council or agency contract must require the prime contractor to pay any subcontractor within ten days of the prime contractor's receipt of payment from the council or agency for undisputed services provided by the subcontractor. The contract must require the prime contractor to pay interest of 1-1/2 percent per month or any part of a month to the subcontractor on any undisputed amount not paid on time to the subcontractor. The minimum monthly interest penalty payment for an unpaid balance of $100 or more is $10. For an unpaid balance of less than $100, the prime contractor shall pay the actual penalty due to the subcontractor. A subcontractor who prevails in a civil action to collect interest penalties from a prime contractor must be awarded its costs and disbursements, including attorney fees, incurred in bringing the action.

(g) This section does not apply to procurement financed in whole or in part with federal funds if the procurement is subject to federal disadvantaged, minority, or women business enterprise regulations. The council and each agency shall report to the commissioner of administration on compliance with this section. The information must be reported at the time and in the manner requested by the commissioner.

Sec. 95. Minnesota Statutes 1996, section 473.556, subdivision 14, is amended to read:

Subd. 14. [SMALL BUSINESS CONTRACTS.] In exercising its powers to contract for the purchase of services, materials, supplies, and equipment, pursuant to subdivisions 5, 7, 8 and 10, the commission shall designate and set aside each fiscal year for awarding to small businesses approximately ten percent of the value of anticipated contracts and subcontracts of that kind for that year, in the manner required of the commissioner of administration for state procurement contracts pursuant to sections 16B.19 to 16B.22 16C.18 to 16C.21. The commission shall follow the rules promulgated by the commissioner of administration pursuant to section 16B.22 16C.21, and shall submit reports of the kinds required of the commissioners of administration and economic development by section 16B.21 16C.20.

Sec. 96. Minnesota Statutes 1996, section 480.09, subdivision 1, is amended to read:

Subdivision 1. The state library shall be maintained in the capitol and shall be under the supervision of the justices of the supreme court. Notwithstanding chapter 16B 16C or any other act inconsistent herewith or acts amendatory thereof or supplementary thereto, they shall direct the purchases of books, pamphlets, and documents therefor and the sales and exchanges therefrom upon such terms and conditions as they may deem just and proper. They may authorize the transfer of books and documents to the University of Minnesota or any department thereof, or to any state agency. They shall adopt rules for the government of the library and the management of its affairs, and prescribe penalties for the violation thereof.

Sec. 97. Minnesota Statutes 1996, section 626.90, subdivision 2, is amended to read:

Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The band has the powers of a law enforcement agency, as defined in section 626.84, subdivision 1, paragraph (h), if all of the requirements of clauses (1) to (4) are met:

(2) the band files with the board of peace officer standards and training a bond or certificate of insurance for liability coverage for the maximum amounts set forth in section 466.04;

(3) the band files with the board of peace officer standards and training a certificate of insurance for liability of its law enforcement officers, employees, and agents for lawsuits under the United States Constitution; and

(4) the band agrees to be subject to section 13.82 and any other laws of the state relating to data practices of law enforcement agencies.

(b) The band shall enter into mutual aid/cooperative agreements with the Mille Lacs county sheriff under section 471.59 to define and regulate the provision of law enforcement services under this section. The agreements must define the trust property involved in the joint powers agreement.

(c) The band shall have concurrent jurisdictional authority under this section with the Mille Lacs county sheriff's department only if the requirements of paragraph (a) are met and under the following circumstances:

(1) over all persons in the geographical boundaries of the property held by the United States in trust for the Mille Lacs band or the Minnesota Chippewa tribe;

(2) over all Minnesota Chippewa tribal members within the boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota; and

(3) concurrent jurisdiction over any person who commits or attempts to commit a crime in the presence of an appointed band peace officer within the boundaries of the Treaty of February 22, 1855, 10 Stat. 1165, in Mille Lacs county, Minnesota.

Sec. 98. Minnesota Statutes 1997 Supplement, section 626.91, subdivision 2, is amended to read:

Subd. 2. [LAW ENFORCEMENT AGENCY.] (a) The community has the powers of a law enforcement agency, as defined in section 626.84, subdivision 1, paragraph (h), if all of the requirements of clauses (1) to (4) are met:

(1) the community agrees to be subject to liability for its torts and those of its officers, employees, and agents acting within the scope of their employment or duties arising out of the law enforcement agency powers conferred by this section to the same extent as a municipality under chapter 466, and the community further agrees, notwithstanding section 16B.06 16C.06, subdivision 6 7, to waive its sovereign immunity with respect to claims arising from this liability;

(2) the community files with the board of peace officer standards and training a bond or certificate of insurance for liability coverage for the maximum amounts set forth in section 466.04;

(3) the community files with the board of peace officer standards and training a certificate of insurance for liability of its law enforcement officers, employees, and agents for lawsuits under the United States Constitution; and

(4) the community agrees to be subject to section 13.82 and any other laws of the state relating to data practices of law enforcement agencies.

(b) The community shall enter into an agreement under section 471.59 with the Redwood county sheriff to define and regulate the provision of law enforcement services under this section and to provide for mutual aid and cooperation. The agreement must identify and describe the trust property involved in the agreement. For purposes of entering into this agreement, the community shall be considered a "governmental unit" as that term is defined in section 471.59, subdivision 1.

Sec. 99. [EFFECTIVE DATE.]

Delete the title and insert:

"A bill for an act relating to state agencies; modifying procurement procedures; amending Minnesota Statutes 1996, sections 3.225, subdivision 2; 3.732, subdivision 6; 3.922, subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, subdivision 3; 116.03, subdivision 2; 116J.035, subdivision 1; 116J.402; 116J.58, subdivision 2; 116J.68, subdivision 2; 116J.966, subdivision 1; 124.14, subdivision 1; 126.151, subdivision 2; 129C.10, subdivision 7; 136A.06; 136A.16, subdivision 1; 136A.29, subdivision 6; 136F.23; 136F.56, subdivision 5; 136F.581, subdivision 3; 136F.66; 136F.72, subdivision 3; 136F.96; 137.35, subdivisions 1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 1; 216C.02, subdivision 1; 237.51, subdivision 5a; 241.0221, subdivision 6; 241.27, subdivision 2; 246.36; 246.57, subdivisions 1 and 6; 256B.031, subdivision 1; 256B.04, subdivisions 14 and 15; 298.2211, subdivision 4; 349A.06, subdivision 1; 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 354.06, subdivision 2a; 354.07, subdivision 7; 356A.06, subdivision 7; 446A.12, subdivision 5; 462A.18, subdivision 2; 471.345, subdivision 8; 473.142; 473.556, subdivision 14; 480.09, subdivision 1; and 626.90, subdivision 2; Minnesota Statutes 1997 Supplement, sections 3.225, subdivision 1; 16A.15, subdivision 3; 16B.465, subdivision 7; 16E.07, subdivision 9; 17.03, subdivision 12; 41D.03, subdivision 7; 61B.21, subdivision 1; 85A.02, subdivision 5b; 121.1113, subdivision 2; 136A.40; 138.35, subdivision 1b; 179A.03, subdivision 14; 216D.03, subdivision 2; 241.277, subdivision 2; 256B.19, subdivision 2a; 256D.03, subdivision 6; 353.03, subdivision 3a; 363.073, subdivision 1; and 626.91, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 16C; and 174; repealing Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, subdivision 3; 16B.20, subdivision 2; and 16B.482."

The motion prevailed and the amendment was adopted.

Kahn moved to amend S. F. No. 726, as amended, as follows:

Page 22, line 9, delete "may" and insert "must"

Page 25, line 2, delete "16C.10" and insert "16C.09"

Page 34, line 9, before the period, insert "until amended, repealed, or superseded by rules adopted under chapter 16B or this chapter."

Page 36, line 24, after the comma, insert "relating to purchases from small businesses,"

The motion prevailed and the amendment was adopted.

Kahn moved to amend S. F. No. 726, as amended, as follows:

Page 9, line 6, after "use" insert "related to work"

Page 9, line 6, after the period, insert "Employees may make only one purchase under this subdivision."

Kahn and Krinkie moved to amend S. F. No. 726, as amended, as follows:

Page 7, delete lines 26 and 27, and insert: "requests for bids, requests for proposals, or other methods provided by law, unless a section of law requires a particular method of acquisition to be used"

Page 7, line 28, delete "utilized"

Page 21, after line 23, insert:

"Subd. 6. [EXPENDITURES UNDER SPECIFIED AMOUNTS.] The solicitation process described in this chapter is not required for:

(1) acquisition of goods or services, other than professional or technical services, in an amount of $2,500 or less; or

(2) acquisition of professional or technical services in an amount of $5,000 or less, provided the requirements of section 16C.09, subdivisions 3 to 6, are met."

The motion prevailed and the amendment was adopted.

Sekhon moved to amend S. F. No. 726, as amended, as follows:

Page 3, after line 1, insert:

"Sec. 2. [16B.1205] [ENVIRONMENTALLY RESPONSIBLE PURCHASING.]

(a) The intent of sections 16B.121 and 16B.122 is to use the public sector's purchasing power to increase the acquisition of postconsumer recycled content and environmentally responsible goods and to provide a means of exceeding previous state and federal goals for the purchase of postconsumer recycled content and environmentally responsible goods.

(b) The definitions in section 16B.122 apply to this section.

Sec. 3. Minnesota Statutes 1996, section 16B.121, is amended to read:

16B.121 [PURCHASE OF RECYCLED, REPAIRABLE, AND DURABLE MATERIALS.]

(a) The commissioner and agencies shall take in all cases consider the postconsumer material and other recycled content and recyclability of commodities to be purchased into consideration in bid and environmentally responsible issues when writing specifications and determining best value as defined in section 16C.02. When feasible and when the price of recycled materials does not exceed the price of nonrecycled materials by more than ten percent, In order to maximize the quantity and quality of recycled content and environmentally responsible goods purchased, the commissioner, and state agencies when purchasing under delegated authority, shall purchase recycled materials may pay more for those goods when it is determined to be in the best interest of the state, as determined by best value as defined in section 16C.02. In order to maximize the quantity and quality of recycled materials purchased content and environmentally responsible goods, the commissioner, and state agencies when purchasing under delegated authority, may also use other appropriate procedures methods to acquire recycled materials at the most economical cost to the state content and environmentally responsible goods.

useful life and manage it appropriately or include recycling and liability costs when determining the award. The commissioner, and state agencies when purchasing under delegated authority, in developing bid specifications, shall in all cases consider the extent to which a commodity or product is the goods are durable, reusable, or returnable, recyclable, and marketable through the state resource recovery program and the extent to which the commodity or product contains goods contain postconsumer material. The commissioner and agencies may require, in the specifications, that all ingredients, including inert ingredients contained in the product, be identified by the vendor. The commissioner shall establish and publish a list of contracts that have recycled content or have environmentally responsible considerations. This list shall be updated at least on a semiannual basis.

(b) The definitions in section 16B.122 apply to this section.

Sec. 4. Minnesota Statutes 1996, section 16B.122, is amended to read:

16B.122 [PURCHASE AND USE OF PAPER STOCK; AND PRINTING MATERIALS, RECYCLED CONTENT, AND ENVIRONMENTALLY RESPONSIBLE GOODS.]

Subdivision 1. [DEFINITIONS.] The definitions in this subdivision apply to this section.

(a) "Copier paper" means paper purchased for use in copying copy machines.

(b) "Electronic products" means computers and peripherals, televisions and video monitors, copy machines, stereos and stereo components, telephones and telefacsimiles, video cassette recorders, motor vehicle components, major appliances, smoke detectors, paints, medical and laboratory equipment, thermostats, switches and relays, thermometers, temperature pressure and flow measurement devices, and mercury-containing products.

(c) "Environmentally responsible" describes an action taken that results in a lesser or reduced effect on human health and the environment when compared with procuring competing goods that serve the same purpose. An environmentally responsible action considers factors including, but not limited to, toxicity reduction, durability, reusability, postconsumer materials and other recycled content, recyclability, take-back potential, disassembly potential, energy efficiency, and water conservation throughout the product life cycle.

(d) "Office paper" means copier paper, printing paper, notepads, loose-leaf fillers, tablets, and other paper commonly used in offices.

(c) (e) "Postconsumer material" means a finished material that would normally be discarded as a solid waste, having completed its life cycle as a consumer item.

(d) (f) "Practicable" means capable of being used, consistent with sufficient in performance, in accordance with applicable specifications, and availability available at a reasonable price within a reasonable time.

(e) (g) "Preconsumer materials" means materials generated by manufacturers and product converters. It includes damaged or obsolete products, overruns, and trimmings, but does not include materials commonly reused in the manufacturing process.

(f) (h) "Printing paper" means paper designed for printing, other than newsprint, such as offset and publication paper.

(i) "Product life cycle" means the raw material acquisition, production, manufacturing, packaging, distribution, operation, use, maintenance, reuse, and disposal of a product and management of related wastes.

(j) "Public entity" means the state, an office, agency, or institution of the state, the metropolitan council, a metropolitan agency, the metropolitan mosquito control district, the legislature, the courts, a county, a statutory or home rule charter city, a town, a school district, another and other special taxing district, or any contractor acting pursuant to a contract with a public entity.

(l) "Soy-based "Vegetable-based ink" means printing ink made from soy oil vegetable oil such as soy, linseed, or corn or other agricultural products.

(h) "Uncoated" means not coated with plastic, clay, or other material used to create a glossy finish.

Subd. 2. [PURCHASES; PAPER; PRINTING.] (a) Whenever practicable, a public entity shall:

(1) purchase uncoated office paper and printing paper that contains the percentage of postconsumer recycled content that is determined by the commissioner, which shall be based on existing standards;

(2) purchase recycled content paper with at least ten percent postconsumer material by weight copy, duplicate, and print using environmentally responsible design, methods, materials, and equipment;

(3) purchase paper which has not been dyed with colors, excluding pastel colors;

(4) purchase recycled content paper that is manufactured using little or no chlorine bleach or chlorine derivatives;

(5) use no more than two colored inks colors of ink, standard or processed, except in formats where they are necessary to convey meaning;

(6) use reusable binding materials or staples and bind documents by methods that do not use glue;

(7) use soy-based vegetable-based inks; and

(8) produce reports, publications, and periodicals that are readily recyclable within the state resource recovery program can be recycled readily through the applicable local, regional, or state government resource recovery program or other recycling programs.

(b) Paragraph (a), clause (1), does not apply to coated paper that is made with at least 50 percent postconsumer material.

(c) A public entity shall print documents on both sides of the paper where commonly accepted publishing practices allow.

(d) (c) Notwithstanding paragraph (a), clause (2), and section 16B.121, copier paper purchased by a state the commissioner or an agency must contain at least ten percent postconsumer material by fiber content the percentage of postconsumer recycled content that has been determined by the commissioner, which shall be based on existing standards.

Subd. 3. [PUBLIC ENTITY PURCHASING.] (a) Notwithstanding section 365.37, 375.21, 412.311, or 473.705, a public entity may purchase recycled materials when content goods or other environmentally responsible goods even if the price of the recycled materials does not exceed exceeds the price of nonrecycled materials by more than ten percent goods or goods that are not environmentally responsible. In order to maximize the quantity and quality of environmentally responsible and recycled materials purchased content goods, a public entity also may use other appropriate procedures methods to acquire environmentally responsible and recycled materials content goods at the most economical cost best value, as defined in section 16C.02, to the public entity.

(b) When purchasing commodities goods and services, a public entity shall apply and promote the preferred waste management practices listed in section 115A.02, with special emphasis on reduction of the quantity and toxicity of materials in waste. A public entity, in developing bid specifications and evaluation criteria, shall consider the extent to which a commodity or product is the goods are durable, reusable, returnable, or recyclable and marketable through the applicable local or, regional, or state recycling program and the extent to which the commodity or product contains postconsumer material. When a project by a public entity involves the replacement of carpeting, the public entity may require all persons who wish to bid on the project respond to a solicitation to designate a carpet recycling company in their bids or proposals."

Renumber the sections in sequence and correct internal references

Amend the title accordingly

The question was taken on the Sekhon amendment and the roll was called. There were 36 yeas and 93 nays as follows:

Those who voted in the affirmative were:

Biernat	Entenza	Hausman	Kalis	Mullery	Sekhon
Carlson	Evans	Hilty	Leighton	Munger	Trimble
Chaudhary	Folliard	Jaros	Long	Orfield	Tuma
Clark, K.	Garcia	Johnson, A.	Mariani	Ozment	Wagenius
Dawkins	Greenfield	Johnson, R.	McCollum	Paymar	Wejcman
Dorn	Greiling	Kahn	McGuire	Rest	Spk. Carruthers

Those who voted in the negative were:

Abrams	Erickson	Knoblach	Molnau	Rhodes	Tingelstad
Anderson, B.	Farrell	Koskinen	Mulder	Rifenberg	Tomassoni
Anderson, I.	Finseth	Kraus	Murphy	Rostberg	Tompkins
Bakk	Goodno	Krinkie	Ness	Rukavina	Tunheim
Bettermann	Gunther	Kubly	Nornes	Schumacher	Van Dellen
Bishop	Haas	Kuisle	Olson, E.	Seagren	Vandeveer
Boudreau	Harder	Larsen	Olson, M.	Seifert	Weaver
Bradley	Holsten	Leppik	Opatz	Skare	Wenzel
Broecker	Huntley	Lieder	Osskopp	Slawik	Westfall
Clark, J.	Jefferson	Lindner	Otremba, M.	Smith	Westrom
Daggett	Jennings	Macklin	Paulsen	Solberg	Winter
Davids	Juhnke	Mahon	Pawlenty	Stanek	Wolf
Dehler	Kelso	Mares	Pelowski	Stang	Workman
Delmont	Kielkucki	Marko	Peterson	Sviggum
Dempsey	Kinkel	McElroy	Pugh	Swenson, H.
Erhardt	Knight	Milbert	Reuter	Sykora

The motion did not prevail and the amendment was not adopted.

Macklin was excused for the remainder of today's session.

Knight moved to amend S. F. No. 726, as amended, as follows:

Page 9, delete lines 3 to 10

Renumber the remaining subdivisions

A roll call was requested and properly seconded.

The question was taken on the Knight amendment and the roll was called. There were 56 yeas and 72 nays as follows:

Those who voted in the affirmative were:

Abrams	Dehler	Jennings	Mulder	Seagren	Van Dellen
Anderson, B.	Dempsey	Kielkucki	Nornes	Seifert	Vandeveer
Bettermann	Erhardt	Knight	Olson, M.	Stanek	Weaver
Bishop	Erickson	Kraus	Osskopp	Stang	Westfall
Boudreau	Finseth	Krinkie	Paulsen	Sviggum	Westrom
Bradley	Goodno	Kuisle	Pawlenty	Swenson, H.	Workman
Journal of the House - 93rd Day - Tuesday, March 17, 1998 - Top of Page 8452
Broecker	Gunther	Larsen	Reuter	Sykora
Clark, J.	Haas	Lindner	Rhodes	Tingelstad
Daggett	Harder	Mares	Rifenberg	Tompkins
Davids	Holsten	Molnau	Rostberg	Tuma

Those who voted in the negative were:

Anderson, I.	Folliard	Juhnke	Mahon	Opatz	Sekhon
Bakk	Garcia	Kahn	Mariani	Orfield	Skare
Biernat	Greenfield	Kalis	Marko	Osthoff	Slawik
Carlson	Greiling	Kelso	McCollum	Otremba, M.	Solberg
Chaudhary	Hasskamp	Kinkel	McElroy	Ozment	Tomassoni
Clark, K.	Hausman	Knoblach	McGuire	Paymar	Trimble
Dawkins	Hilty	Koskinen	Milbert	Pelowski	Tunheim
Delmont	Huntley	Kubly	Mullery	Peterson	Wejcman
Dorn	Jaros	Leighton	Munger	Pugh	Wenzel
Entenza	Jefferson	Leppik	Murphy	Rest	Winter
Evans	Johnson, A.	Lieder	Ness	Rukavina	Wolf
Farrell	Johnson, R.	Long	Olson, E.	Schumacher	Spk. Carruthers

The motion did not prevail and the amendment was not adopted.

S. F. No. 726, A bill for an act relating to state government; modifying the state procurement process; authorizing rulemaking; making various conforming amendments; appropriating money; amending Minnesota Statutes 1996, sections 3.225, subdivision 2; 3.732, subdivision 6; 3.922, subdivision 5; 3C.10, subdivision 3; 4A.04; 6.551; 11A.24, subdivision 4; 12.221, subdivision 5; 15.054; 15.061; 16A.101; 16A.85, subdivision 1; 16B.181; 17.1015; 41A.023; 43A.23, subdivision 1; 44A.01, subdivision 1; 45.0291; 84.025, subdivision 7; 84.026; 84.0845; 85A.02, subdivisions 3, 16, and 18; 103F.515, subdivision 3; 116.03, subdivision 2; 116J.035, subdivision 1; 116J.402; 116J.58, subdivision 2; 116J.68, subdivision 2; 116J.966, subdivision 1; 124.14, subdivision 1; 126.151, subdivision 2; 129C.10, subdivision 7; 136A.06; 136A.16, subdivision 1; 136A.29, subdivision 6; 136F.23; 136F.56, subdivision 5; 136F.581, subdivision 3; 136F.66; 136F.72, subdivision 3; 136F.96; 137.35, subdivisions 1, 2, and 3; 144.0742; 144.95, subdivision 5; 161.315, subdivision 4; 161.321, subdivisions 1, 2, 5, 6, and 7; 161.41, subdivision 2; 179A.23; 198.35, subdivision 1; 216C.02, subdivision 1; 237.51, subdivision 5a; 241.0221, subdivision 6; 241.27, subdivision 2; 246.36; 246.57, subdivisions 1 and 6; 256B.031, subdivision 1; 256B.04, subdivisions 14 and 15; 298.2211, subdivision 4; 349A.06, subdivision 1; 349A.07, subdivision 6; 352.03, subdivisions 6 and 16; 354.06, subdivision 2a; 354.07, subdivision 7; 356A.06, subdivision 7; 446A.12, subdivision 5; 462A.18, subdivision 2; 471.345, subdivision 8; 473.142; 473.556, subdivision 14; 480.09, subdivision 1; and 626.90, subdivision 2; Minnesota Statutes 1997 Supplement, sections 3.225, subdivision 1; 16A.15, subdivision 3; 16B.465, subdivision 7; 16E.07, subdivision 9; 17.03, subdivision 12; 41D.03, subdivision 7; 61B.21, subdivision 1; 85A.02, subdivision 5b; 121.1113, subdivision 2; 136A.40; 138.35, subdivision 1b; 179A.03, subdivision 14; 216D.03, subdivision 2; 241.277, subdivision 2; 256B.19, subdivision 2a; 256D.03, subdivision 6; 353.03, subdivision 3a; and 626.91, subdivision 2; proposing coding for new law in Minnesota Statutes, chapters 16C; and 174; repealing Minnesota Statutes 1996, sections 16B.06; 16B.07; 16B.08; 16B.09; 16B.101; 16B.102; 16B.103; 16B.123; 16B.13; 16B.14; 16B.15; 16B.16; 16B.167; 16B.17; 16B.175; 16B.18, subdivisions 1, 2, and 4; 16B.185; 16B.19; 16B.20, subdivisions 1 and 3; 16B.21; 16B.22; 16B.226; 16B.227; 16B.23; 16B.28; 16B.29; and 16B.89; Minnesota Statutes 1997 Supplement, sections 16B.18, subdivision 3; 16B.20, subdivision 2; and 16B.482.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 84 yeas and 46 nays as follows:

Those who voted in the affirmative were:

Anderson, I.	Folliard	Johnson, R.	Long	Orfield	Skare
Biernat	Garcia	Juhnke	Mahon	Osthoff	Skoglund
Bishop	Goodno	Kahn	Mares	Otremba, M.	Slawik
Broecker	Greenfield	Kalis	Mariani	Ozment	Solberg
Journal of the House - 93rd Day - Tuesday, March 17, 1998 - Top of Page 8453
Carlson	Greiling	Kelso	Marko	Paymar	Tomassoni
Chaudhary	Gunther	Kinkel	McCollum	Pelowski	Trimble
Clark, K.	Hasskamp	Knoblach	McGuire	Peterson	Tuma
Dawkins	Hausman	Koskinen	Milbert	Pugh	Tunheim
Dehler	Hilty	Krinkie	Mullery	Rest	Vandeveer
Delmont	Huntley	Kubly	Munger	Rhodes	Wagenius
Dorn	Jaros	Larsen	Murphy	Rostberg	Wejcman
Entenza	Jefferson	Leighton	Ness	Rukavina	Wenzel
Evans	Jennings	Leppik	Olson, E.	Schumacher	Winter
Farrell	Johnson, A.	Lieder	Opatz	Sekhon	Spk. Carruthers

Those who voted in the negative were:

Abrams	Dempsey	Knight	Olson, M.	Smith	Van Dellen
Anderson, B.	Erhardt	Kraus	Osskopp	Stanek	Weaver
Bettermann	Erickson	Kuisle	Paulsen	Stang	Westfall
Boudreau	Finseth	Lindner	Pawlenty	Sviggum	Westrom
Bradley	Haas	McElroy	Reuter	Swenson, H.	Wolf
Clark, J.	Harder	Molnau	Rifenberg	Sykora	Workman
Daggett	Holsten	Mulder	Seagren	Tingelstad
Davids	Kielkucki	Nornes	Seifert	Tompkins

The bill was passed, as amended, and its title agreed to.

S. F. No. 2645 was reported to the House.

Dawkins moved to amend S. F. No. 2645 as follows:

Page 1, line 10, before "For" insert "(a)"

Page 2, after line 4, insert:

"(b) This paragraph applies to a contract for goods or services in excess of $100,000 to be entered into between a department or agency of the state and a business that is not subject to paragraph (a), but that had more than 40 full-time employees on a single working day during the previous 12 months in the state where the business has its primary place of business. A department or agency of the state may not execute a contract or agreement with such a business unless the business has a certificate of compliance issued by the commissioner under paragraph (a) or the business certifies to the contracting agency: (1) that it is in compliance with any affirmative action plan requirements in the jurisdiction of its primary place of business; or (2) that the jurisdiction of its primary place of business does not have an affirmative action plan requirement."

The motion prevailed and the amendment was adopted.

Dawkins moved to amend S. F. No. 2645, as amended, as follows:

In the Dawkins amendment:

Page 1, line 7, delete "department or agency of the state" and insert "an agency of the metropolitan council"

Page 1, line 11, delete "A department or agency of the state" and insert "An agency of the metropolitan council"

The motion prevailed and the amendment was adopted.

S. F. No. 2645, A bill for an act relating to metropolitan government; modifying requirement for affirmative action plans by certain contractors; amending Minnesota Statutes 1996, section 473.144.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 129 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Johnson, R.	Marko	Paymar	Sykora
Anderson, B.	Erickson	Juhnke	McCollum	Pelowski	Tingelstad
Anderson, I.	Evans	Kahn	McElroy	Peterson	Tomassoni
Bakk	Farrell	Kalis	McGuire	Pugh	Tompkins
Bettermann	Finseth	Kelso	Milbert	Rest	Trimble
Biernat	Folliard	Kielkucki	Molnau	Reuter	Tuma
Bishop	Garcia	Kinkel	Mulder	Rhodes	Tunheim
Boudreau	Goodno	Knoblach	Mullery	Rifenberg	Van Dellen
Bradley	Greenfield	Koskinen	Munger	Rostberg	Vandeveer
Broecker	Greiling	Kraus	Murphy	Rukavina	Wagenius
Carlson	Gunther	Krinkie	Ness	Schumacher	Weaver
Chaudhary	Haas	Kubly	Nornes	Seagren	Wejcman
Clark, J.	Harder	Kuisle	Olson, E.	Seifert	Wenzel
Clark, K.	Hasskamp	Larsen	Olson, M.	Sekhon	Westfall
Daggett	Hausman	Leighton	Opatz	Skare	Westrom
Davids	Hilty	Leppik	Orfield	Skoglund	Winter
Dawkins	Holsten	Lieder	Osskopp	Slawik	Wolf
Dehler	Huntley	Lindner	Osthoff	Smith	Workman
Delmont	Jaros	Long	Otremba, M.	Solberg	Spk. Carruthers
Dempsey	Jefferson	Mahon	Ozment	Stanek
Dorn	Jennings	Mares	Paulsen	Stang
Entenza	Johnson, A.	Mariani	Pawlenty	Swenson, H.

Those who voted in the negative were:

	KnightSviggum

The bill was passed, as amended, and its title agreed to.

S. F. No. 2586 which was temporarily laid over earlier today on Special Orders was again reported to the House.

Bishop moved to amend S. F. No. 2586 as follows:

Page 5, lines 2 to 4, delete the new language

Page 5, line 5, reinstate the stricken "has" and delete "have"

Bishop moved to amend S. F. No. 2586, as amended, as follows:

Page 7, line 36, after the second "to" insert "offenders who are released from a federal correctional facility in Minnesota or another state and who intend to reside in Minnesota, and to"

Page 8, line 10, after "for" insert "federal offenders and"

Page 8, line 13, after "of" insert "federal or"

Page 9, line 30, after the first "the" insert "offender and the head of the facility shall designate the offender's likely residence upon release from the facility and the"

Page 9, line 32, after "services" insert "of the offender's likely residence at least 14 days before the offender's scheduled release date. The commissioner shall give this information to the law enforcement agency having jurisdiction over the offender's likely residence. The head of the facility also shall notify the commissioner of corrections or human services"

Page 11, after line 24, insert:

"Sec. 7. Minnesota Statutes 1996, section 609.3452, is amended by adding a subdivision to read:

Subd. 4. [IMMUNITY FROM CRIMINAL PROSECUTION.] If an offender is ordered by the court to undergo sex offender treatment as part of the offender's sentence, no statement made by the offender during the course of the treatment concerning crimes committed before the commencement of treatment may be used against the offender in any criminal prosecution."

The motion prevailed and the amendment was adopted.

S. F. No. 2586, A bill for an act relating to corrections; requiring sex offender treatment facilities to provide certain information regarding sex offenders; clarifying which law enforcement agency may request the end-of-confinement review committee to reassess the risk level to which an offender has been assigned; adjusting the time within which certain of the community notification law must be met; eliminating duplicative efforts on notifying victims of certain information; amending Minnesota Statutes 1996, sections 241.67, subdivision 8, and by adding a subdivision; 244.052, subdivision 1; and 611A.037, subdivision 2; Minnesota Statutes 1997 Supplement, section 244.052, subdivisions 3, 4, and 5.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 129 yeas and 2 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Johnson, R.	Mariani	Pawlenty	Swenson, H.
Anderson, B.	Erickson	Juhnke	Marko	Paymar	Sykora
Anderson, I.	Evans	Kahn	McCollum	Peterson	Tingelstad
Bakk	Farrell	Kalis	McElroy	Pugh	Tomassoni
Bettermann	Finseth	Kelso	McGuire	Rest	Tompkins
Biernat	Folliard	Kielkucki	Milbert	Reuter	Trimble
Bishop	Garcia	Kinkel	Molnau	Rhodes	Tuma
Boudreau	Goodno	Knight	Mulder	Rifenberg	Tunheim
Bradley	Greenfield	Knoblach	Mullery	Rostberg	Van Dellen
Broecker	Greiling	Koskinen	Munger	Rukavina	Vandeveer
Carlson	Gunther	Kraus	Murphy	Schumacher	Wagenius
Chaudhary	Haas	Krinkie	Ness	Seagren	Weaver
Clark, J.	Harder	Kubly	Nornes	Seifert	Wejcman
Clark, K.	Hasskamp	Kuisle	Olson, E.	Sekhon	Westfall
Daggett	Hausman	Larsen	Olson, M.	Skare	Westrom
Davids	Hilty	Leighton	Opatz	Skoglund	Winter
Dawkins	Holsten	Leppik	Orfield	Slawik	Wolf
Dehler	Huntley	Lieder	Osskopp	Smith	Workman
Journal of the House - 93rd Day - Tuesday, March 17, 1998 - Top of Page 8456
Delmont	Jaros	Lindner	Osthoff	Solberg	Spk. Carruthers
Dempsey	Jefferson	Long	Otremba, M.	Stanek
Dorn	Jennings	Mahon	Ozment	Stang
Entenza	Johnson, A.	Mares	Paulsen	Sviggum

Those who voted in the negative were:

	PelowskiWenzel

The bill was passed, as amended, and its title agreed to.

There being no objection, the order of business reverted to Reports of Standing Committees.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 2389, A bill for an act relating to crimes; lowering alcohol concentration limit for operating a motor vehicle or hunting from 0.10 to 0.08; crediting fee charged for reinstatement of impounded registration plates; requiring a study; amending Minnesota Statutes 1996, sections 97B.065, subdivision 1; 97B.066, subdivision 1; 168.042, subdivisions 12 and 15; 169.123, subdivisions 2 and 5a; 192A.555; and 609.21, subdivisions 1, 2, 2a, 2b, 3, and 4; Minnesota Statutes 1997 Supplement, sections 168.042, subdivision 11a; 169.121, subdivision 1; and 169.123, subdivisions 4 and 6.

Reported the same back with the following amendments:

Page 3, line 26, after "fee" insert "prior to June 30, 1999, and a $30 fee thereafter,"

Page 15, after line 36, insert:

"Sec. 19. [APPROPRIATIONS.]

Subdivision 1. [DEPARTMENT OF PUBLIC SAFETY; TRUNK HIGHWAY FUND.] $245,000 is appropriated from the trunk highway fund to the commissioner of public safety for the fiscal year ending June 30, 1999, for costs related to the provisions of sections 1 to 18, to be allocated as follows:

(1) $101,000 of this amount is for the driver and vehicle services division;

(2) $9,000 of this amount is for the state patrol; and

(3) $135,000 of this amount is for the bureau of criminal apprehension.

may conduct the campaign by including information in future editions of the driver's manual and by use of public service announcements, advertisements, and any other methods deemed appropriate by the commissioner. This is a one-time appropriation. The commissioner shall make an effort to obtain additional funds for this purpose from other sources, including private donations.

Subd. 3. [ATTORNEY GENERAL.] $82,000 is appropriated from the general fund to the attorney general for the fiscal year ending June 30, 1999, for costs related to the provisions of sections 1 to 18."

Page 16, line 1, delete "Sec. 19." and insert "Sec. 20."

Page 16, line 4, after the period, insert "Section 19 is effective July 1, 1998."

Amend the title as follows:

Page 1, line 5, after the second semicolon, insert "appropriating money;"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 2589, A bill for an act relating to transportation; authorizing advance payment when required by federal government for transportation project; providing for payment for costs of certain culverts when abutting landowner is a road authority; providing for bridge inspections; permitting transfer of extinguishment of access rights; regulating snow fence easements, highway closures, and signs; providing for the costs of town highways and bridges; providing for revisions of state transportation plan; transferring certain rules from transportation regulation board to commissioner of transportation; regulating charges for air transportation services; modifying contractor bond requirements for certain transportation projects; authorizing conveyance of certain tax-forfeited and acquired land that borders public water or natural wetlands in Hennepin county; removing routes from trunk highway system and changing descriptions of certain routes; requiring certain representation in study of commuter rail service; amending Minnesota Statutes 1996, sections 84.63; 117.21; 160.18, subdivision 1; 160.27, by adding a subdivision; 160.296, subdivision 1; 160.80, subdivision 1, and by adding a subdivision; 161.082, subdivision 2a; 161.115, subdivisions 38 and 87; 165.03; 169.26, subdivision 1; 174.03, subdivisions 1a and 2; 174A.06; 221.034, subdivisions 1 and 5; 270.077; 360.024; and 574.26, subdivision 1a; Laws 1997, chapter 159, article 2, section 51, subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 16B; repealing Minnesota Statutes 1996, section 161.115, subdivisions 57 and 219.

Reported the same back with the following amendments:

Page 5, line 28, delete everything after "premises"

Page 5, delete line 29

Page 5, line 30, delete "food"

Page 5, line 31, after the period, insert "Reheated, prepackaged, ready-to-eat food is not food prepared on the premises."

Page 6, line 27, delete "three" and insert "15" and delete everything after "direction" and insert a period

Page 6, delete lines 28 to 33

Page 12, line 19, delete "of a portion"

Page 12, line 31, delete "Section 15 is" and insert "Sections 5, 6, and 15 are"

Page 19, delete lines 6 to 11

Page 19, line 12, delete "Subd. 2." and insert "Subdivision 1."

Page 19, delete lines 19 to 31

Page 19, line 32, delete "5" and insert "2"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 2970, A bill for an act relating to retirement; various retirement plans; adjusting pension coverage for certain privatized public hospital employees; providing for increased survivor benefits relating to certain public employees murdered in the line of duty; authorizing certain service credit purchases; specifying prior service credit purchase payment amount determination procedures increasing salaries of various judges; modifying other judicial salaries; modifying the judges retirement plan member and employer contribution rates; authorizing the transfer of certain prior retirement contributions from the legislators retirement plan and from the elective state officers retirement plan; creating a contribution transfer account in the general fund of the state; appropriating money; reformulating the Columbia Heights volunteer firefighters relief association plan as a defined contribution plan under the general volunteer fire law; restructuring the Columbia Heights volunteer firefighter relief association board; modifying various higher education retirement plan provisions; modifying administrative expense provisions for various public pension plans; expanding the teacher retirement plans part-time teaching positions eligible to participate in the qualified full-time service credit for part-time teaching service program; making certain Minneapolis fire department relief association survivor benefit options retroactive; providing increased disability benefit coverage for certain local government correctional facility employees; increasing local government correctional employee and employer contribution rates; providing increased survivor benefits to certain Minneapolis employee retirement fund survivors; authorizing certain Hennepin county regional park employees to change retirement plan membership; amending Minnesota Statutes 1996, sections 136F.45, by adding a subdivision; 136F.48; 352.96, subdivision 4; 352D.09, subdivision 7; 352D.12; 353D.05, subdivision 3; 354.445; 354.66, subdivisions 2 and 3; 354A.094, subdivisions 2 and 3; 354B.23, by adding a subdivision; 354C.12, by adding a subdivision; 383B.52; 422A.23, subdivision 2; and 490.123, subdivisions 1a and 1b; Minnesota Statutes 1997 Supplement, sections 15A.083, subdivisions 5, 6a, and 7; 354B.25, subdivisions 1a and 5; and 354C.12, subdivision 4; and Laws 1997, Second Special Session chapter 3, section 16; proposing new law for coding in Minnesota Statutes, chapter 356; repealing Minnesota Statutes 1996, sections 11A.17, subdivisions 10a and 14; and 352D.09, subdivision 8; Minnesota Statutes 1997 Supplement, section 136F.45, subdivision 3.

Reported the same back with the following amendments:

Page 5, after line 2, insert:

"Section 1. Minnesota Statutes 1996, section 3A.13, is amended to read:

3A.13 [EXEMPTION FROM PROCESS AND TAXATION; HEALTH PREMIUM DEDUCTION.]

of the premium to a health insurance carrier covering state employees. To the extent permitted by federal and state laws, this deduction must be done in a manner that allows the health insurance premiums to be paid with pretax dollars."

Page 5, after line 27, insert:

"(e) In addition to the annuity investment providers or vendors selected prior to March 1, 1998, within 60 days of the effective date of this section, the board shall select at least 16 additional providers or vendors. Of the total number of providers or vendors, including those selected prior to March 1, 1998, at least ten providers or vendors must be insurance companies and at least ten providers or vendors must be mutual funds. The additional providers or vendors selected under this paragraph shall have the same contract expiration date as the providers or vendors selected prior to March 1, 1998. At the conclusion of those contracts, the board shall select at least 20 providers or vendors, of which at least ten must be insurance companies and at least ten must be mutual funds. Nothing in this paragraph may be deemed to require the board to solicit proposals beyond those solicited for the providers or vendors selected prior to March 1, 1998, during the 60-day additional provider or vendor selection period."

Page 17, line 11, delete "14" and insert "15"

Page 20, line 13, delete "1 and 19" and insert "2 and 20"

Page 20, line 15, delete "2, 6, 7, 8, 10, and 16" and insert "3, 7, 8, 9, 11, and 17"

Page 20, line 17, delete "3, 4, 5, 9, 11, 12, and 19" and insert "4, 5, 6, 10, 12, 13, and 20"

Page 20, line 19, delete "13" and insert "14"

Page 20, line 22, delete "14 and 15" and insert "15 and 16"

Page 44, after line 26, insert:

"Sec. 3. Laws 1995, chapter 262, article 10, section 1, is amended to read:

Section 1. [EVELETH POLICE AND FIREFIGHTERS; BENEFIT INCREASE.]

Notwithstanding any general or special law to the contrary, in addition to the current pensions and other retirement benefits payable, the pensions and retirement benefits payable to retired police officers and firefighters and their surviving spouses by the Eveleth police and fire trust fund are increased by $100 a month. Increases are retroactive to January 1, 1995. If the city of Eveleth fails to contribute an amount required in a given year sufficient to amortize the unfunded actuarial accrued liability of the police and fire trust fund by December 31, 1998, the increases under this section in the following year are not payable."

Page 44, after line 33, insert:

Section 1. Minnesota Statutes 1997 Supplement, section 3.85, subdivision 11, is amended to read:

Subd. 11. [VALUATIONS AND REPORTS TO LEGISLATURE.] (a) The commission shall contract with an established actuarial consulting firm to conduct annual actuarial valuations for the retirement plans named in paragraph (b). The contract must include provisions for performing cost analyses of proposals for changes in benefit and funding policies.

(b) The contract for actuarial valuation must include the following retirement plans:

(2) the general state employees retirement plan, Minnesota state retirement system;

(3) the correctional employees retirement plan, Minnesota state retirement system;

(4) the state patrol retirement plan, Minnesota state retirement system;

(5) the judges retirement plan, Minnesota state retirement system;

(6) the Minneapolis employees retirement plan, Minneapolis employees retirement fund;

(7) the public employees retirement plan, public employees retirement association;

(8) the public employees police and fire plan, public employees retirement association;

(9) the Duluth teachers retirement plan, Duluth teachers retirement fund association;

(10) the Minneapolis teachers retirement plan, Minneapolis teachers retirement fund association;

(11) the St. Paul teachers retirement plan, St. Paul teachers retirement fund association;

(12) the legislators retirement plan, Minnesota state retirement system; and

(13) the elective state officers retirement plan, Minnesota state retirement system.

(c) The contract must specify completion of annual actuarial valuation calculations on a fiscal year basis with their contents as specified in section 356.215, and the standards for actuarial work adopted by the commission.

The contract must specify completion of annual experience data collection and processing and a quadrennial published experience study for the plans listed in paragraph (b), clauses (1), (2), and (7), as provided for in the standards for actuarial work adopted by the commission. The experience data collection, processing, and analysis must evaluate the following:

(1) individual salary progression;

(2) rate of return on investments based on current asset value;

(3) payroll growth;

(4) mortality;

(5) retirement age;

(6) withdrawal; and

(7) disablement.

(e) If the actuarial gain and loss analysis in the actuarial valuation calculations indicates a persistent pattern of sizable gains or losses, as directed by the commission, the actuary retained by the commission shall prepare a special experience study for a plan listed in paragraph (b), clause (3), (4), (5), (6), (8), (9), (10), (11), (12), or (13), in the manner provided for in the standards for actuarial work adopted by the commission.

(f) The term of the contract between the commission and the actuary retained by the commission is two four years, plus not to exceed two one-year extensions before competitive bidding. The contract is subject to competitive bidding procedures as specified by the commission.

Sec. 2. Minnesota Statutes 1997 Supplement, section 356.215, subdivision 2, is amended to read:

Subd. 2. [REQUIREMENTS.] (a) It is the policy of the legislature that it is necessary and appropriate to determine annually the financial status of tax supported retirement and pension plans for public employees. To achieve this goal, the legislative commission on pensions and retirement shall have prepared by the actuary retained by the commission annual actuarial valuations of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), quadrennial experience studies of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), and, two years after each set of quadrennial experience studies, quadrennial projection valuations of at least one of the retirement plans enumerated in section 3.85, subdivision 11, paragraph (b), clauses (1), (2), and (7), and of any other retirement plan enumerated in section 3.85, subdivision 11, paragraph (b), for which it determines that the analysis is may be beneficial. The governing or managing board or administrative officials of each public pension and retirement fund or plan enumerated in section 356.20, subdivision 2, clauses (9), (10), and (12), shall have prepared by an approved actuary annual actuarial valuations of their respective funds as provided in this section. This requirement also applies to any fund that is the successor to any organization enumerated in section 356.20, subdivision 2, or to the governing or managing board or administrative officials of any newly formed retirement fund or association operating under the control or supervision of any public employee group, governmental unit, or institution receiving a portion of its support through legislative appropriations, and any local police or fire fund coming within the provisions of section 356.216.

(b) The A quadrennial projection valuations valuation required under paragraph (a) are is intended to serve as an additional analytical tool with which policy makers may assess the future funding status of public plans through forecasting and testing various potential outcomes over time if certain plan assumptions or valuation methods were to be modified. In consultation with the executive director of the legislative commission on pensions and retirement, the retirement fund directors, the state economist, the state demographer, the commissioner of finance, and the commissioner of employee relations, the actuary retained by the legislative commission on pensions and retirement shall perform the quadrennial projection valuations, testing future implications for plan funding by modifying assumptions and methods currently in place. The commission-retained actuary shall provide advice to the commission as to the periods over which such projections should be made, the nature and scope of the scenarios to be analyzed, and the measures of funding status to be employed, and shall report the results of these analyses in the same manner as for quadrennial experience studies.

Sec. 3. [EFFECTIVE DATE.]

Sections 1 and 2 are effective on the day following final enactment."

Renumber the sections in sequence

Amend the title as follows:

Page 1, line 4, after the semicolon, insert "providing for voluntary deduction of health insurance premiums from certain annuities;"

Page 1, line 38, after "membership;" insert "modifying benefit increase provision for Eveleth police and firefighters; modifying the length of the actuarial services contract of the legislative commission on pensions and retirement; modifying the scope of quadrennial projection valuations;" and after "sections" insert "3A.13;"

Page 2, line 1, delete the third "and"

Page 2, line 2, after "4;" insert "and 356.215, subdivision 2; Laws 1995, chapter 262, article 10, section 1;"

With the recommendation that when so amended the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 2983, A bill for an act relating to mortgages; enacting the Minnesota Residential Mortgage Originator and Servicer Licensing Act; establishing licensing and enforcement mechanisms; amending Minnesota Statutes 1996, sections 47.206, subdivision 1; 82.17, subdivision 4; 82.18; and 82.27, subdivision 1; proposing coding for new law as Minnesota Statutes, chapter 58; repealing Minnesota Statutes 1996, section 82.175.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3167, A bill for an act relating to children; proposing an amendment to the Minnesota Constitution by adding a section to article XI; establishing the children's endowment fund; appropriating money; proposing coding for new law as Minnesota Statutes, chapter 119C.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. [CONSTITUTIONAL AMENDMENT.]

An amendment to the Minnesota Constitution is proposed to the people. If the amendment is adopted, a section shall be added to article XI to read:

Sec. 15. The endowment fund for Minnesota's children is established in the state treasury. The assets of the fund must be appropriated by law for purposes that will enhance children's physical, emotional, and intellectual development through the age of four years so that children in Minnesota begin school ready to learn. The amount appropriated each fiscal year may not exceed 5-1/2 percent of the market value of the fund one year before the start of the biennium.

Sec. 2. [SCHEDULE AND QUESTION.]

The amendment shall be submitted to the people at the 1998 general election. The question submitted shall be:

"Shall the Minnesota Constitution be amended to create a permanent endowment fund to enhance the development of young children through the age of four? Yes .......

Sec. 3. [119C.01] [DEFINITIONS.]

Subdivision 1. [APPLICABILITY.] The definitions in this section apply to sections 119C.01 to 119C.05.

Subd. 2. [ENDOWMENT FUND.] "Endowment fund" means the children's endowment fund established in the Minnesota Constitution, article XI, section 15.

Subd. 3. [YOUNG CHILDREN.] "Young children" means children through the age of four.

Sec. 4. [119C.02] [ENDOWMENT FUND NOT TO SUPPLANT EXISTING FUNDING.]

The endowment fund may not be used as a substitute for traditional sources of funding activities for young children and their parents, but the endowment fund shall be used to supplement the traditional sources, including those sources used to support the activities in section 119C.04.

Sec. 5. [119C.03] [ENDOWMENT FUND ACCOUNT.]

Subdivision 1. [ESTABLISHMENT OF ACCOUNT AND INVESTMENT.] The children's endowment fund, under the Minnesota Constitution, article XI, section 15, is established as an account in the state treasury. The commissioner of finance shall credit to the endowment fund the amounts authorized under this section and section 119C.05. The state board of investment shall ensure that endowment fund money is invested under section 11A.24. All money earned by the endowment fund must be credited to the endowment fund. The principal of the endowment fund and any unexpended earnings must be invested and reinvested by the state board of investment.

Subd. 2. [REVENUE.] Nothing in sections 3 to 8 limits the source of contributions to the endowment fund.

Subd. 3. [GIFTS AND DONATIONS.] Gifts and donations may be made to the endowment fund. Noncash gifts and donations must be disposed of for cash as soon as the board prudently can maximize the value of the gift or donation. Gifts and donations of marketable securities may be held or disposed of for cash at the option of the board. The cash receipts of gifts and donations of cash or capital assets and marketable securities disposed of for cash must be credited immediately to the principal of the endowment fund. The value of marketable securities at the time the gift or donation is made must be credited to the principal of the endowment fund and any earnings from the marketable securities are earnings of the endowment fund.

Subd. 4. [AUDITS REQUIRED.] The legislative auditor shall audit endowment fund expenditures to ensure that the money is spent for the purposes under section 119C.04.

Sec. 6. [119C.04] [ENDOWMENT FUND EXPENDITURES.]

Money in the endowment fund may be spent for:

(1) research activities and programs that emphasize results in children through age three;

(2) research that contributes to increasing the understanding of the development of young children's brains or to developing new methods to increase the effectiveness of stimulation and educational activities that will improve brain development in young children;

(4) enhancement of public education, awareness, and understanding necessary for the promotion and encouragement of activities that protect and stimulate young children's development so that they begin school ready to learn;

(5) supplemental funding to those projects and programs that have demonstrated successful outcomes in improving and enhancing the development of young children so they begin school ready to learn;

(6) activities that link parenting education for parents to early childhood learning services for young children;

(7) activities that are designed to strengthen the quality of child care for young children and expand the supply of high quality child care services for young children;

(8) activities that increase the level of immunization and preventive health care screening and education for young children;

(9) activities that assist in the development and improved efficiency of community-based assistance activities for young children;

(10) activities that establish methods to evaluate how services can be more effectively delivered to young children and parents of young children;

(11) activities that strengthen families, neighborhoods, and communities by encouraging partnerships and collaborations on behalf of young children;

(12) activities that provide all three- and four-year-olds with access to a setting that offers both a high quality preschool experience and child care during the hours that parents work;

(13) activities that support every neighborhood in efforts to provide a family-friendly place from which infants and toddlers and their families would be provided home visiting, family support, early education, and other community-based supports reaching out to the youngest children and their parents;

(14) activities that ensure that all young children and pregnant women receive the health care they require;

(15) administrative and investment expenses incurred by the state board of investment in investing deposits to the endowment fund; and

(16) administrative expenses subject to the limits in section 119C.09.

Activities in clauses (6) to (14) may include pilot projects or demonstration projects.

Sec. 7. [119C.05] [ROYALTIES; COPYRIGHTS; PATENTS.]

This section applies to projects supported by the endowment fund. The endowment fund owns and shall take title to the percentage of a royalty, copyright, or patent resulting from a project supported by the fund equal to the percentage of the project's total funding provided by the fund. Cash receipts resulting from a royalty, copyright, or patent, or the sale of the endowment fund's rights to a royalty, copyright, or patent, must be credited immediately to the principal of the endowment fund.

Sec. 8. [GOVERNANCE.]

Sec. 9. [EFFECTIVE DATE.]

Sections 3 to 8 are effective the day after the constitutional amendment proposed in sections 1 and 2 is adopted."

Delete the title and insert:

"A bill for an act relating to children; proposing an amendment to the Minnesota Constitution by adding a section to article XI; establishing the children's endowment fund; proposing coding for new law as Minnesota Statutes, chapter 119C."

With the recommendation that when so amended the bill pass and be re-referred to the Committee on Rules and Legislative Administration.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3314, A bill for an act relating to tobacco litigation; requiring that the use of proceeds be subject to appropriation by law; proposing coding for new law in Minnesota Statutes, chapter 1.

Reported the same back with the recommendation that the bill pass.

The report was adopted.

Solberg from the Committee on Ways and Means to which was referred:

H. F. No. 3359, A bill for an act relating to the organization of state government; establishing an occupational regulatory coordinating council to facilitate and coordinate the work of executive branch agencies and boards charged with the regulation of health-related and non-health-related occupations; directing the commissioners of health and commerce to develop detailed proposals for the organization and operation of the council; establishing two task forces; requiring a report to the legislature; requiring a study of legislative review of occupational regulation; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 214.

Reported the same back with the following amendments:

Pages 1 to 4, delete sections 1 to 4

Page 4, line 5, delete "Sec. 5." and insert "Section 1."

Page 4, delete sections 6 and 7

Delete the title and insert:

"A bill for an act relating to state government; requiring a study relating to occupational regulation."

With the recommendation that when so amended the bill pass.

Solberg from the Committee on Ways and Means to which was referred:

S. F. No. 2407, A bill for an act relating to drivers' licenses; establishing youth-oriented driver improvement clinics; establishing a graduated licensing system with provisional license phase; restricting driving privileges for holders of instruction permits and provisional licenses and requiring violation-free period before advancement to next license stage; making technical changes; appropriating money; amending Minnesota Statutes 1996, sections 120.73, subdivision 1; 169.89, subdivision 5; 169.971, subdivision 1, and by adding a subdivision; 169.972; 169.973, subdivision 1; 171.01, subdivision 14; 171.04, subdivision 1; 171.05, subdivision 2, and by adding subdivisions; 171.06, subdivision 1; 171.10, subdivision 1; 171.12, subdivision 3; 171.16, subdivision 5; 171.17, subdivisions 2 and 3; 171.172; 171.173; 171.174; 171.20, subdivision 3; 171.27; and 171.39; Minnesota Statutes 1997 Supplement, sections 171.041; 171.06, subdivisions 2 and 4; and 171.171; proposing coding for new law in Minnesota Statutes, chapter 171.

Reported the same back with the following amendments:

Delete everything after the enacting clause and insert:

"Section 1. Minnesota Statutes 1996, section 120.73, subdivision 1, is amended to read:

Subdivision 1. A school board is authorized to require payment of fees in the following areas:

(a) in any program where the resultant product, in excess of minimum requirements and at the pupil's option, becomes the personal property of the pupil;

(b) admission fees or charges for extra curricular activities, where attendance is optional;

(c) a security deposit for the return of materials, supplies, or equipment;

(d) personal physical education and athletic equipment and apparel, although any pupil may personally provide it if it meets reasonable requirements and standards relating to health and safety established by the school board;

(e) items of personal use or products which a student has an option to purchase such as student publications, class rings, annuals, and graduation announcements;

(f) fees specifically permitted by any other statute, including but not limited to section 171.04, subdivision 1, clause (1) 171.05, subdivision 2; provided (1) driver education fees do not exceed the actual cost to the school and school district of providing driver education, and (2) the driver education courses are open to enrollment to persons between the ages of 15 and 18 who reside or attend school in the school district;

(g) field trips considered supplementary to a district educational program;

(h) any authorized voluntary student health and accident benefit plan;

(i) for the use of musical instruments owned or rented by the district, a reasonable rental fee not to exceed either the rental cost to the district or the annual depreciation plus the actual annual maintenance cost for each instrument;

(j) transportation of pupils to and from extra curricular activities conducted at locations other than school, where attendance is optional;

(k) transportation of pupils to and from school for which aid for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.223, subdivision 1, and for which levy for fiscal year 1996 is not authorized under Minnesota Statutes 1994, section 124.226, subdivision 5, if a district charging fees for transportation of pupils establishes guidelines for that transportation to ensure that no pupil is denied transportation solely because of inability to pay;

(m) transportation to and from post-secondary institutions for pupils enrolled under the post-secondary enrollment options program under section 123.39, subdivision 16. Fees collected for this service must be reasonable and shall be used to reduce the cost of operating the route. Families who qualify for mileage reimbursement under section 123.3514, subdivision 8, may use their state mileage reimbursement to pay this fee. If no fee is charged, districts shall allocate costs based on the number of pupils riding the route.

Sec. 2. Minnesota Statutes 1996, section 169.89, subdivision 5, is amended to read:

Subd. 5. [DRIVER IMPROVEMENT CLINICS; ATTENDANCE.] In conjunction with or in lieu of other penalties provided by law for violation of this chapter or a municipal ordinance enacted in conformance thereto, the trial court may in its judgment of conviction order the convicted person to attend and satisfactorily complete a course of study at an approved driver improvement clinic or youth-oriented driver improvement clinic. The commissioner of public safety may, upon the motion of the commissioner of public safety or upon recommendation of the court, suspend, for a period of not to exceed 30 days, the operator's license or, provisional license, permit, or nonresident operating privilege of any person who fails or refuses to comply with an order to attend a an approved driver improvement clinic or youth-oriented driver improvement clinic. The requirement of attendance at a an approved driver improvement clinic or youth-oriented driver improvement clinic is not a fine, imprisonment, or sentence within the meaning of section 609.02. The court may not order a convicted person to attend a any driver improvement clinic or youth-oriented driver improvement clinic which is located more than 35 miles from the person's residence. For the purposes of this section "an approved driver improvement clinic or youth-oriented driver improvement clinic" means a clinic whose curriculum and mode of instruction conform to standards promulgated by the commissioner of public safety.

Sec. 3. Minnesota Statutes 1996, section 169.971, subdivision 1, is amended to read:

Subdivision 1. [SCOPE.] For the purposes of Laws 1965, chapter 711 sections 169.971 to 169.973, the terms defined in this section have the meanings given them.

Sec. 4. Minnesota Statutes 1996, section 169.971, is amended by adding a subdivision to read:

Subd. 2a. [YOUTH-ORIENTED DRIVER IMPROVEMENT CLINIC.] "Youth-oriented driver improvement clinic" means a driver improvement clinic designed for traffic violators age 18 and under to assist them in correcting improper driving practices and review provisions of traffic law with a focus on driving problems common to young and novice drivers.

Sec. 5. Minnesota Statutes 1996, section 169.972, is amended to read:

169.972 [ESTABLISHMENT OF DRIVER IMPROVEMENT CLINIC; FEES.]

Subdivision 1. [AUTHORITY TO ESTABLISH CLINIC.] Subject to the provisions of Laws 1965, chapter 711 sections 169.971 to 169.973 and 171.20, subdivision 3, any court, municipality, association of municipalities, or any regularly established safety organization may establish and conduct a driver improvement clinic or a youth-oriented driver improvement clinic.

Subd. 2. [FEES.] The court, municipality or organization conducting a driver improvement clinic or a youth-oriented driver improvement clinic may establish reasonable tuition fees not to exceed $50, but not to exceed the actual cost of the course.

Sec. 6. Minnesota Statutes 1996, section 169.973, subdivision 1, is amended to read:

subdivision 3, shall conform to the standards promulgated by the commissioner of public safety. The course of study at a driver improvement clinic and youth-oriented driver improvement clinic may not exceed a cumulative total of nine hours with no single class session lasting more than three hours. The course of study at a driver improvement clinic and youth-oriented driver improvement clinic shall include instruction in railroad crossing safety.

Sec. 7. Minnesota Statutes 1996, section 171.01, subdivision 14, is amended to read:

Subd. 14. [LICENSE.] "License" means any operator's license or any other license or permit to operate a motor vehicle issued or issuable under the laws of this state by the commissioner of public safety including:

(a) any temporary license or, instruction permit, or provisional license;

(b) the privilege of any person to drive a motor vehicle whether or not such the person holds a valid license; and

(c) any nonresident's operating privilege as defined herein.

Sec. 8. Minnesota Statutes 1996, section 171.04, subdivision 1, is amended to read:

Subdivision 1. [PERSONS NOT ELIGIBLE.] The department shall not issue a driver's license hereunder:

(1) to any person who is under the age of 16 years; to any person under 18 years unless such person shall have successfully completed a course in driver education, including both classroom and behind-the-wheel instruction, approved by the state board of education for courses offered through the public schools, or, in the case of a course offered by a private, commercial driver education school or institute, by the department of public safety; except when such person has completed a course of driver education in another state or:

(i) the applicant is 16 or 17 years of age and has a previously issued valid license from another state or country or the applicant, for the 12 consecutive months preceding application, has held a provisional license and during that period has incurred no convictions related to driving; has a previously issued valid license from another state or country; nor to any person under 18 years unless

(ii) the application of for a license is approved by (A) either parent when both reside in the same household as the minor applicant or, if otherwise, then (B) the parent or spouse of the parent having custody or with whom the minor is living, in the event there is no court order for custody, then (C) the parent or spouse of the parent with whom the minor is living or, if subitems (A) to (C) do not apply, then (D) the guardian having the custody of such the minor, or, in the event a person under the age of 18 has no living father, mother, or guardian, the license shall not be issued to such person unless the application therefor is approved by then (E) the person's minor's employer. Driver education courses offered in any public school shall be open for enrollment to persons between the ages of 15 and 18 years residing in the school district or attending school therein. Any public school offering driver education courses may charge an enrollment fee for the driver education course which shall not exceed the actual cost thereof to the public school and the school district.; provided, that the approval required herein shall contain by this item contains a verification of the age of the applicant and the identity of the parent, guardian, or employer; and

(iii) the applicant presents a certification by the person who approves the application under item (ii), stating that the applicant has driven a motor vehicle accompanied by and under supervision of a licensed driver at least 21 years of age for at least ten hours during the period of provisional licensure;

(2) to any person who is under the age of 18 years unless the person has applied for, been issued, and possessed the appropriate instruction permit for a minimum of six months, and a provisional license for a minimum of 12 months;

(3) to any person whose license has been suspended during the period of suspension except that a suspended license may be reinstated during the period of suspension upon the licensee furnishing proof of financial responsibility in the same manner as provided in the Minnesota no-fault automobile insurance act;

(5) to any person who is a drug dependent person, as defined in section 254A.02, subdivision 5;

(6) to any person who has been adjudged legally incompetent by reason of mental illness, mental deficiency, or inebriation, and has not been restored to capacity, unless the department is satisfied that such the person is competent to operate a motor vehicle with safety to persons or property;

(7) to any person who is required by this chapter to take an a vision, knowledge, or road examination, unless such the person shall have has successfully passed such the examination. An applicant who fails four road tests must complete a minimum of six hours of behind-the-wheel instruction with an approved instructor before taking the road test again;

(8) to any person who is required under the provisions of the Minnesota no-fault automobile insurance act of this state to deposit proof of financial responsibility and who has not deposited such the proof;

(9) to any person when the commissioner has good cause to believe that the operation of a motor vehicle on the highways by such the person would be inimical to public safety or welfare;

(10) to any person when, in the opinion of the commissioner, such the person is afflicted with or suffering from such a physical or mental disability or disease as that will affect such the person in a manner as to prevent the person from exercising reasonable and ordinary control over a motor vehicle while operating the same it upon the highways; nor

(11) to a person who is unable to read and understand official signs regulating, warning, and directing traffic;

(11) (12) to a child for whom a court has ordered denial of driving privileges under section 260.191, subdivision 1, or 260.195, subdivision 3a, until the period of denial is completed; or

(12) (13) to any person whose license has been canceled, during the period of cancellation.

Sec. 9. Minnesota Statutes 1997 Supplement, section 171.041, is amended to read:

171.041 [RESTRICTED LICENSES FOR FARM WORK.]

Notwithstanding any provisions of section 171.04 relating to the age of an applicant to the contrary, the commissioner may issue a restricted farm work license to operate a motor vehicle to a person who has attained the age of 15 years and who, except for age, is qualified to hold a driver's license. The applicant is not required to comply with the six-month instruction permit possession provisions of sections 171.04, subdivision 1, clause (2), and 171.05, subdivision 2a, or with the 12-month provisional license possession provision of section 171.04, subdivision 1, clause (1)(i). The restricted license shall be issued solely for the purpose of authorizing the person to whom the restricted license is issued to assist the person's parents or guardians with farm work. A person holding this restricted license may operate a motor vehicle only during daylight hours and only within a radius of 20 miles of the parent's or guardian's farmhouse; however, in no case may a person holding the restricted license operate a motor vehicle in a city of the first class. An applicant for a restricted license shall apply to the commissioner for the license on forms prescribed by the commissioner. The application shall be accompanied by:

(1) a copy of a property tax statement showing that the applicant's parent or guardian owns land that is classified as agricultural land or a copy of a rental statement or agreement showing that the applicant's parent or guardian rents land classified as agricultural land; and

(2) a written verified statement by the applicant's parent or guardian setting forth the necessity for the license.

Sec. 10. Minnesota Statutes 1996, section 171.05, subdivision 2, is amended to read:

Subd. 2. [PERSONS LESS THAN 18 YEARS OF AGE.] (a) Notwithstanding any provision in subdivision 1 to the contrary, the department, upon application therefor, may issue an instruction permit to an applicant who is 15, 16, or 17 years of age and who:

the seat beside the permit holder. During and upon completion of the course, a 16 or 17 year old may operate a motor vehicle while accompanied by an adult licensed driver who is actually occupying a seat beside the driver. During and upon completion of the course, a 15 year old may operate a motor vehicle while accompanied by licensed parent or guardian or licensed adult driver authorized by the parent or guardian who also must occupy the seat beside the instruction permit holder, which has been approved by the state board of education for courses offered through the public schools, or, in the case of a course offered by a private, commercial driver education school or institute, by the department of public safety; except when the applicant has completed a course of driver education in another state or has a previously issued valid license from another state;

(2) has passed a test of the applicant's eyesight;

(3) has passed a test of the applicant's knowledge of traffic laws, which test must be administered by the department;

(4) has completed the required application, which must be approved by (i) either parent when both reside in the same household as the minor applicant or, if otherwise, then (ii) the parent or spouse of the parent having custody or, in the event there is no court order for custody, then (iii) the parent or spouse of the parent with whom the minor is living or, if items (i) to (iii) do not apply, then (iv) the guardian having custody of the minor or, in the event a person under the age of 18 has no living father, mother, or guardian, then (v) the applicant's employer; provided, that the approval required by this clause contains a verification of the age of the applicant and the identity of the parent, guardian, or employer; and

(5) has paid the fee required in section 171.06, subdivision 2.

(b) The instruction permit is valid for one year from the date of application and may be renewed upon payment of a fee equal to the fee for issuance of an instruction permit under section 171.06, subdivision 2.

Sec. 11. Minnesota Statutes 1996, section 171.05, is amended by adding a subdivision to read:

Subd. 2b. [INSTRUCTION PERMIT USE BY UNDERAGE PERSONS.] (a) An applicant who has applied for and received an instruction permit under subdivision 2, with the permit in possession may operate a motor vehicle, but must be accompanied by and under the supervision of a certified driver education instructor, the permit holder's parent or guardian, or another person over the age of 21 who has been licensed to drive for at least three years. The supervisor shall be the only other occupant of the front passenger section of the vehicle.

(b) The permit holder may operate a motor vehicle only when every occupant has a seat belt or child passenger restraint system properly fastened.

(c) The holder shall maintain a driving record free of convictions for moving violations and for violations of controlled substance or blood alcohol laws. If a holder of an instruction permit drives a motor vehicle in violation of law, the commissioner shall suspend, cancel, or revoke the permit in accordance with the statutory section violated. For purposes of this subdivision, "moving violations" includes violations of traffic regulations but does not include parking violations, vehicle equipment citations, or warning citations.

Sec. 12. [171.055] [PROVISIONAL LICENSE.]

Subdivision 1. [REQUIREMENTS FOR PROVISIONAL LICENSE.] The department may issue a provisional license, which must be distinctive in appearance from a driver's license, to an applicant who:

(1) has reached the age of 16 years;

(2) during the immediate six preceding months: has possessed an instruction permit; and has not been convicted of a moving violation, as described in section 171.05, subdivision 2b;

(4) completes the required application, which must be approved by (i) either parent when both reside in the same household as the minor applicant or, if otherwise, then (ii) the parent or spouse of the parent having custody or, in the event there is no court order for custody, then (iii) the parent or spouse of the parent with whom the minor is living or, if items (i) to (iii) do not apply, then (iv) the guardian having custody of the minor or, in the event a person under the age of 18 has no living father, mother, or guardian, then (v) the applicant's employer; provided, that the approval required by this clause contains a verification of the age of the applicant and the identity of the parent, guardian, or employer;

(5) presents certification by the person who approves the application under clause (4) stating that the applicant has driven a motor vehicle accompanied by and under the supervision of a licensed driver at least 21 years of age, for no less than 30 hours, at least ten of which were nighttime hours; and

(6) pays the fee required in section 171.06, subdivision 2.

Subd. 2. [USE OF PROVISIONAL LICENSE.] (a) A person who has applied for and received a provisional license pursuant to subdivision 1, with the provisional license in possession may operate a class D motor vehicle without supervision between 5:00 a.m. and 12:00 midnight. A provisional license holder may drive unsupervised at other times solely for employment or education and must possess a certificate stating the nature of the employment or educational purpose requiring driving between 12:00 midnight and 5:00 a.m. School-sponsored social, sporting, and entertainment events and events sponsored by a religious, social, or athletic organization are deemed to have an educational purpose. The certificate must be signed by (1) either parent when both reside in the same household as the minor applicant or, if otherwise, then (2) the parent or spouse of the parent having custody or, in the event there is no court order for custody, then (3) the parent or spouse of the parent with whom the minor is living or, if clauses (1) to (3) do not apply, then (4) the guardian having custody of the minor or, in the event a person under the age of 18 has no living father, mother, or guardian, then (5) the person's employer; provided, that the approval required by this paragraph contains a verification of the age of the applicant and the identity of the parent, guardian, or employer. At all other times, the provisional license holder must be accompanied by and under the supervision of a licensed driver at least 21 years of age, who shall be the only other occupant of the front passenger section of the vehicle.

(b) A provisional license holder may operate a class D motor vehicle only when every occupant has a seat belt or child passenger restraint system properly fastened.

(c) A provisional license holder may operate a class D motor vehicle only while the holder has a driving record free of convictions for moving violations and for violation of controlled substance or blood alcohol laws. If the holder of a provisional license drives a motor vehicle in violation of law, the commissioner shall suspend, cancel, or revoke the license, in accordance with the statutory section violated. For purposes of this subdivision, "moving violations" includes violations of traffic regulations but does not include parking violations, vehicle equipment citations, or warning citations.

Sec. 13. Minnesota Statutes 1996, section 171.06, subdivision 1, is amended to read:

Subdivision 1. [FORMS OF APPLICATION.] Every application for an instruction permit, for a provisional license, or for a driver's license shall be made upon a form furnished by the department, and every application shall be accompanied by the proper fee. All applications shall be signed in the presence of the person authorized to accept the applications, or the signature on the application may be verified by a notary public.

Sec. 14. Minnesota Statutes 1997 Supplement, section 171.06, subdivision 2, is amended to read:

Subd. 2. [FEES.] The fees for a license and Minnesota identification card are as follows:

Classified Driver License D-$18.50 C-$22.50 B-$29.50 A-$37.50

Classified Under 21 D.L. D-$18.50 C-$22.50 B-$29.50 A-$17.50

Instruction Permit $ 9.50

Provisional License $ 9.50

Duplicate License or

duplicate identification card $ 8.00

Minnesota identification card or Under-21 Minnesota identification card,

other than duplicate, except as otherwise provided in section 171.07,

Sec. 15. Minnesota Statutes 1997 Supplement, section 171.06, subdivision 4, is amended to read:

Subd. 4. [APPLICATION, FILING; FEE RETAINED FOR EXPENSES.] Any applicant for an instruction permit, a provisional license, driver's license, restricted license, or duplicate license may file an application with a court administrator of the district court or at a state office. The administrator or state office shall receive and accept the application. To cover all expenses involved in receiving, accepting, or forwarding to the department applications and fees, the court administrator of the district court may retain a county fee of $3.50 for each application for a Minnesota identification card, instruction permit, provisional license, duplicate license, driver driver's license, or restricted license. The amount allowed to be retained by the court administrator of the district court shall be paid into the county treasury and credited to the general revenue fund of the county. Before the end of the first working day following the final day of an established reporting period, the court administrator shall forward to the department all applications and fees collected during the reporting period, less the amount herein allowed to be retained for expenses. The court administrators of the district courts may appoint agents to assist in accepting applications, but the administrators shall require every agent to forward to the administrators by whom the agent is appointed all applications accepted and fees collected by the agent, except that an agent shall retain the county fee to cover the agent's expenses involved in receiving, accepting or forwarding the applications and fees. The court administrators shall be responsible for the acts of agents appointed by them and for the forwarding to the department of all applications accepted and those fees collected by agents and by themselves as are required to be forwarded to the department. The commissioner shall suspend or revoke the appointment of a license agent or issue a correction order to a license agent who violates any requirement of this section or when grounds exist that would justify revocation or suspension of a deputy registrar appointment under Minnesota Rules, parts 7406.0800 to 7406.1000. To revoke or suspend an appointment, the commissioner shall follow procedures for suspension and revocation hearings set forth in Minnesota Rules, parts 7406.1100 to 7406.2600.

Sec. 16. Minnesota Statutes 1996, section 171.10, subdivision 1, is amended to read:

Subdivision 1. [DUPLICATE LICENSE.] In the event that an instruction permit, provisional license, or driver's license issued under the provisions of this chapter is lost or destroyed, or becomes illegible, the person to whom the same was issued shall obtain a duplicate thereof, furnishing proof satisfactory to the department that such permit or license has been lost or destroyed or has become illegible, and make payment of the required fee.

Sec. 17. Minnesota Statutes 1996, section 171.12, subdivision 3, is amended to read:

Subd. 3. [APPLICATIONS AND RECORDS, WHEN DESTROYED.] The department may cause applications for drivers' licenses, provisional licenses, and instruction permits, and related records, to be destroyed immediately after the period for which issued, except that:

(1) the driver's record pertaining to revocations, suspensions, cancellations, disqualifications, convictions, and accidents shall be cumulative and kept for a period of at least five years; and

(2) the driver's record pertaining to the alcohol-related offenses and licensing actions listed in section 169.121, subdivision 3, and to violations of sections 169.1211 and 171.24, subdivision 5, shall be cumulative and kept for a period of at least 15 years.

Sec. 18. Minnesota Statutes 1996, section 171.16, subdivision 5, is amended to read:

Sec. 19. Minnesota Statutes 1996, section 171.17, subdivision 2, is amended to read:

Subd. 2. [OFFENSES BY JUVENILES.] When a juvenile court judge or duly authorized agent determines under a proceeding held under chapter 260 that a person under the age of 18 years has committed an offense defined in this section, the judge or authorized agent shall immediately report this determination to the department, and the commissioner shall immediately revoke the person's driver's license.

Sec. 20. Minnesota Statutes 1996, section 171.17, subdivision 3, is amended to read:

Subd. 3. [NOTICE.] Upon revoking a driver's license under this chapter, the department shall immediately notify the licensee, in writing, by depositing in the United States post office a notice addressed to the licensee at the licensee's last known address, with postage prepaid.

Sec. 21. Minnesota Statutes 1997 Supplement, section 171.171, is amended to read:

171.171 [SUSPENSION; ILLEGAL PURCHASE OF ALCOHOLIC BEVERAGES OR TOBACCO PRODUCTS.]

The commissioner shall suspend for a period of 90 days the license of a person who:

(1) is under the age of 21 years and is convicted of purchasing or attempting to purchase an alcoholic beverage in violation of section 340A.503 if the person used a drivers license, permit or Minnesota identification card to purchase or attempt to purchase the alcoholic beverage;

(2) is convicted under section 171.22, subdivision 1, clause (2), or 340A.503, subdivision 2, clause (3), of lending or knowingly permitting a person under the age of 21 years to use the person's driver's license, permit or Minnesota identification card to purchase or attempt to purchase an alcoholic beverage;

(3) is under the age of 18 years and is found by a court to have committed a petty misdemeanor under section 609.685, subdivision 3, if the person used a driver's license, permit, or Minnesota identification card to purchase or attempt to purchase the tobacco product; or

(4) is convicted under section 171.22, subdivision 1, clause (2), of lending or knowingly permitting a person under the age of 18 years to use the person's driver's license, permit, or Minnesota identification card to purchase or attempt to purchase a tobacco product.

Sec. 22. Minnesota Statutes 1996, section 171.172, is amended to read:

171.172 [REVOCATION; CONTROLLED SUBSTANCE OFFENSES.]

The commissioner of public safety shall revoke the driver's license of any person convicted of or any juvenile adjudicated for a controlled substance offense if the court has notified the commissioner of a determination made under section 152.0271 or 260.185, subdivision 1. The period of revocation shall be for the applicable time period specified in section 152.0271. If the person does not have a driver's license or if the person's driver's license is suspended or revoked at the time of the conviction or adjudication, the commissioner shall, upon the person's application for driver's license issuance or reinstatement, delay the issuance or reinstatement of the person's driver's license for the applicable time period specified in section 152.0271.

Sec. 23. Minnesota Statutes 1996, section 171.173, is amended to read:

171.173 [SUSPENSION; UNDERAGE DRINKING OFFENSES.]

is suspended or revoked at the time of the conviction or adjudication, the commissioner shall, upon the person's application for driver's license issuance or reinstatement, delay the issuance or reinstatement of the person's driver's license for the applicable time period specified in section 340A.503, subdivision 1, paragraph (c). Upon receipt of the court's order, the commissioner is authorized to take the licensing action without a hearing.

Sec. 24. Minnesota Statutes 1996, section 171.174, is amended to read:

171.174 [REVOCATION; FLEEING PEACE OFFICER OFFENSE.]

The commissioner of public safety shall revoke the driver's license of a person upon receipt of a certificate of conviction showing that the person has in a motor vehicle violated section 609.487, subdivision 3 or 4, or an ordinance in conformity with those subdivisions. The commissioner shall revoke the driver's license as follows:

(1) for the first offense under section 609.487, subdivision 3, for not less than one year;

(2) for the second offense or subsequent offenses under section 609.487, subdivision 3, for not less than three years;

(3) for an offense under section 609.487, subdivision 4, clause (a), for not less than ten years;

(4) for an offense under section 609.487, subdivision 4, clause (b), for not less than seven years; and

(5) for an offense under section 609.487, subdivision 4, clause (c), for not less than five years.

A limited license under section 171.30 may not be issued for one-half of the revocation period specified in clauses (1) to (5) and after that period is over only upon and as recommended by the adjudicating court.

Sec. 25. Minnesota Statutes 1996, section 171.20, subdivision 3, is amended to read:

Subd. 3. [DRIVER IMPROVEMENT CLINICS.] The commissioner may require, before reissuing a license which has been revoked or suspended, that the licensee complete a course of study at an approved driver improvement clinic or, in the case of a licensee who is age 18 or younger, a youth-oriented driver improvement clinic. The commissioner may not require the licensee to complete such a course unless an approved driver improvement clinic or youth-oriented driver improvement clinic is located within 35 miles of the licensee's residence. For purposes of this section "an approved driver improvement clinic" means a clinic whose curriculum and mode of instruction conform to standards promulgated by the commissioner.

Sec. 26. Minnesota Statutes 1996, section 171.27, is amended to read:

171.27 [EXPIRATION OF LICENSES.]

The expiration date for each driver's license, other than under-21 licenses, is the birthday of the driver in the fourth year following the date of issuance of the license. The birthday of the driver shall be as indicated on the application for a driver's license. A license may be renewed on or before expiration or within one year after expiration upon application, payment of the required fee, and passing the examination required of all drivers for renewal. Driving privileges shall be extended or renewed on or preceding the expiration date of an existing driver's license unless the commissioner believes that the licensee is no longer qualified as a driver.

The expiration date for each under-21 license shall be the 21st birthday of the licensee. Upon the licensee attaining the age of 21 and upon the application, payment of the required fee, and passing the examination required of all drivers for renewal, a driver's license shall be issued unless the commissioner determines that the licensee is no longer qualified as a driver.

Any valid Minnesota driver's license issued to a person then or subsequently on active duty with the Armed Forces of the United States, or the person's spouse, shall continue in full force and effect without requirement for renewal until 90 days after the date of the person's discharge from such service, provided that a spouse's license must be renewed if the spouse is residing within the state at the time the license expires or within 90 days after the spouse returns to Minnesota and resides within the state.

Sec. 27. Minnesota Statutes 1996, section 171.39, is amended to read:

171.39 [EXEMPTIONS.]

The provisions of sections 171.33 to 171.41 shall not apply to any person giving driver training lessons without charge, to employers maintaining driver training schools without charge for their employees only, to schools or classes conducted by colleges, universities and high schools as a part of the normal program for such institutions, nor to those schools or persons described in section 171.04, subdivision 1, clause (1) 171.05, subdivision 2. Any person who is a certificated driver training instructor in a high school driver training program may give driver training instruction to persons over the age of 18 without acquiring a driver training school license or instructor's license, and such instructors may make a charge for that instruction, if there is no private commercial driver training school licensed under this statute within 10 miles of the municipality where such instruction is given and there is no adult drivers training program in effect in the schools of the school district in which the trainee resides.

Sec. 28. [INSTRUCTION TO REVISOR.]

In the next editions of Minnesota Statutes and Minnesota Rules, the revisor of statutes shall change cross-references to clauses in Minnesota Statutes, section 171.04, subdivision 1, to the clauses as renumbered in section 8.

Sec. 29. [EFFECTIVE DATE.]

Sections 2 to 6 and 25 are effective January 1, 1999. Sections 1, 7 to 24, and 26 to 28 are effective January 1, 1999, and apply to licenses issued on and after that date."

Delete the title and insert:

"A bill for an act relating to drivers' licenses; establishing youth-oriented driver improvement clinics; establishing a graduated licensing system with provisional license phase; restricting driving privileges for holders of instruction permits and provisional licenses and requiring violation-free period before advancement to next license stage; making technical changes; amending Minnesota Statutes 1996, sections 120.73, subdivision 1; 169.89, subdivision 5; 169.971, subdivision 1, and by adding a subdivision; 169.972; 169.973, subdivision 1; 171.01, subdivision 14; 171.04, subdivision 1; 171.05, subdivision 2, and by adding a subdivision; 171.06, subdivision 1; 171.10, subdivision 1; 171.12, subdivision 3; 171.16, subdivision 5; 171.17, subdivisions 2 and 3; 171.172; 171.173; 171.174; 171.20, subdivision 3; 171.27; and 171.39; Minnesota Statutes 1997 Supplement, sections 171.041; 171.06, subdivisions 2 and 4; and 171.171; proposing coding for new law in Minnesota Statutes, chapter 171."

With the recommendation that when so amended the bill pass.

The report was adopted.

H. F. Nos. 2389, 2589, 2970, 2983, 3314 and 3359 were read for the second time.

S. F. No. 2407 was read for the second time.

S. F. No. 2252 was reported to the House.

Pugh moved to amend S. F. No. 2252, the unofficial engrossment, as follows:

Page 1, line 25, after "to" insert "consecutively"

Page 2, lines 10 and 22, after "to" insert "consecutively"

Page 3, lines 2, 14, and 28, after "to" insert "consecutively"

The motion prevailed and the amendment was adopted.

S. F. No. 2252, A bill for an act relating to crimes; modifying criminal penalties for DWI; authorizing sentences to programs of intensive supervision; making technical correction; amending Minnesota Statutes 1997 Supplement, section 169.121, subdivision 3e.

The bill was read for the third time, as amended, and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 128 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Erhardt	Juhnke	McCollum	Peterson	Tingelstad
Anderson, B.	Erickson	Kahn	McElroy	Pugh	Tomassoni
Anderson, I.	Evans	Kalis	McGuire	Rest	Tompkins
Bakk	Farrell	Kelso	Milbert	Reuter	Trimble
Bettermann	Finseth	Kielkucki	Molnau	Rhodes	Tuma
Biernat	Folliard	Kinkel	Mulder	Rifenberg	Tunheim
Bishop	Garcia	Knight	Mullery	Rostberg	Van Dellen
Boudreau	Goodno	Knoblach	Munger	Rukavina	Vandeveer
Bradley	Greiling	Koskinen	Murphy	Schumacher	Wagenius
Broecker	Gunther	Kraus	Ness	Seagren	Weaver
Carlson	Haas	Krinkie	Nornes	Seifert	Wejcman
Chaudhary	Harder	Kubly	Olson, E.	Sekhon	Wenzel
Clark, J.	Hasskamp	Kuisle	Olson, M.	Skare	Westfall
Clark, K.	Hausman	Larsen	Opatz	Skoglund	Westrom
Daggett	Hilty	Leighton	Orfield	Slawik	Winter
Davids	Holsten	Leppik	Osskopp	Smith	Wolf
Dawkins	Huntley	Lieder	Otremba, M.	Solberg	Workman
Dehler	Jaros	Lindner	Ozment	Stanek	Spk. Carruthers
Delmont	Jefferson	Long	Paulsen	Stang
Dempsey	Jennings	Mahon	Pawlenty	Sviggum
Dorn	Johnson, A.	Mares	Paymar	Swenson, H.
Entenza	Johnson, R.	Mariani	Pelowski	Sykora

The bill was passed, as amended, and its title agreed to.

S. F. No. 2861, A bill for an act relating to health; providing for the use of automatic external defibrillators; providing immunity from civil liability; amending Minnesota Statutes 1996, section 604A.01, subdivision 2.

The bill was read for the third time and placed upon its final passage.

The question was taken on the passage of the bill and the roll was called. There were 125 yeas and 0 nays as follows:

Those who voted in the affirmative were:

Abrams	Entenza	Johnson, A.	Mares	Pawlenty	Sviggum
Anderson, B.	Erhardt	Johnson, R.	Mariani	Paymar	Swenson, H.
Anderson, I.	Erickson	Juhnke	McCollum	Pelowski	Sykora
Bakk	Evans	Kahn	McElroy	Peterson	Tingelstad
Bettermann	Farrell	Kalis	McGuire	Pugh	Tomassoni
Biernat	Finseth	Kielkucki	Milbert	Rest	Trimble
Bishop	Folliard	Kinkel	Molnau	Reuter	Tuma
Boudreau	Garcia	Knight	Mulder	Rhodes	Tunheim
Bradley	Goodno	Knoblach	Mullery	Rifenberg	Van Dellen
Broecker	Greiling	Koskinen	Munger	Rostberg	Vandeveer
Carlson	Gunther	Kraus	Murphy	Rukavina	Wagenius
Chaudhary	Haas	Krinkie	Ness	Schumacher	Weaver
Clark, J.	Harder	Kubly	Nornes	Seagren	Wejcman
Clark, K.	Hasskamp	Kuisle	Olson, E.	Seifert	Wenzel
Daggett	Hausman	Larsen	Olson, M.	Sekhon	Westfall
Davids	Hilty	Leighton	Opatz	Skare	Westrom
Dawkins	Holsten	Leppik	Orfield	Skoglund	Winter
Dehler	Huntley	Lieder	Osskopp	Slawik	Wolf
Delmont	Jaros	Lindner	Otremba, M.	Solberg	Workman
Dempsey	Jefferson	Long	Ozment	Stanek	Spk. Carruthers
Dorn	Jennings	Mahon	Paulsen	Stang

The bill was passed and its title agreed to.

S. F. No. 2346 was reported to the House.

Wejcman moved that S. F. No. 2346 be continued on Special Orders. The motion prevailed.

S. F. No. 1181 was reported to the House.

Kahn moved that S. F. No. 1181 be continued on Special Orders. The motion prevailed.

Winter moved that the bills on General Orders for today be continued. The motion prevailed.

Dehler moved that the following statement be printed in the Journal of the House: "It was my intention to vote in the affirmative on Monday, March 16, 1998, when the vote was taken on the final passage of S. F. No. 2730, as amended." The motion prevailed.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 2708:

Juhnke; Johnson, R., and Swenson, H.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 2722:

McCollum, Wagenius and Kraus.

The Speaker announced the appointment of the following members of the House to a Conference Committee on H. F. No. 2736:

Hilty, Mariani and Kuisle.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 2119:

Jennings, Wolf and Hausman.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 2192:

Harder, Rest and Erhardt.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 2351:

Kalis, Osthoff and Sekhon.

The Speaker announced the appointment of the following members of the House to a Conference Committee on S. F. No. 2445:

Ozment, Jennings and Kahn.

The Speaker announced the following change in membership of the Conference Committee on S. F. No. 3354:

Delete the name of Jefferson and add the name of Mares.

Winter moved that when the House adjourns today it adjourn until 9:00 a.m., Wednesday, March 18, 1998. The motion prevailed.

Winter moved that the House adjourn. The motion prevailed, and the Speaker declared the House stands adjourned until 9:00 a.m., Wednesday, March 18, 1998.

Edward A. Burdick, Chief Clerk, House of Representatives