1.1.................... moves to amend H.F. No. 1284, the first engrossment, as amended by
1.2the delete-everything amendment (A12-0559), as follows:
1.3Page 4, after line 24, insert:

1.4    "Sec. 9. Minnesota Statutes 2010, section 161.321, is amended to read:
1.5161.321 SMALL BUSINESS CONTRACTS.
1.6    Subdivision 1. Definitions. For purposes of this section the following terms have
1.7the meanings given them, except where the context clearly indicates a different meaning is
1.8intended.
1.9(a) "Award" means the granting of a contract in accordance with all applicable laws
1.10and rules governing competitive bidding except as otherwise provided in this section.
1.11(b) "Contract" means an agreement entered into between a business entity and the
1.12state of Minnesota for the construction of transportation improvements.
1.13(c) "Subcontractor" means a business entity which enters into a legally binding
1.14agreement with another business entity which is a party to a contract as defined in
1.15paragraph (b).
1.16(d) "Targeted group business" means a business designated under section 16C.16,
1.17subdivision 5 .
1.18(e) "Veteran-owned small business" means a business designated under section
1.1916C.16, subdivision 6a .
1.20    Subd. 2. Small business set-asides; procurement and construction contract
1.21preferences. (a) The commissioner may award up to a six percent preference in the
1.22amount bid for specified construction work to small targeted group businesses and
1.23veteran-owned small businesses.
1.24(b) The commissioner may designate a contract for construction work for award only
1.25to small targeted group businesses if the commissioner determines that at least three small
1.26targeted group businesses are likely to bid. The commissioner may designate a contract for
2.1construction work for award only to veteran-owned small businesses if the commissioner
2.2determines that at least three veteran-owned small businesses are likely to bid.
2.3(c) The commissioner, as a condition of awarding a construction contract, may
2.4set goals that require the prime contractor to subcontract a portion of the contract to
2.5small targeted group businesses and veteran-owned small businesses. The commissioner
2.6must establish a procedure for granting waivers from the subcontracting requirement
2.7when qualified small targeted group businesses and veteran-owned small businesses
2.8are not reasonably available. The commissioner may establish financial incentives for
2.9prime contractors who exceed the goals for use of subcontractors and financial penalties
2.10for prime contractors who fail to meet goals under this paragraph. The subcontracting
2.11requirements of this paragraph do not apply to prime contractors who are small targeted
2.12group businesses or veteran-owned small businesses.
2.13(d) The commissioner may award up to a four percent preference in the amount
2.14bid on procurement for specified construction work to small businesses located in an
2.15economically disadvantaged area as defined in section 16C.16, subdivision 7.
2.16    Subd. 2a. Subcontracting goals. (a) The commissioner, as a condition of awarding
2.17a construction contract, may set goals that require the prime contractor to subcontract
2.18portions of the contract to small targeted group businesses and veteran-owned small
2.19businesses. Prime contractors must demonstrate good faith efforts to meet the project
2.20goals. The commissioner shall establish a procedure for granting waivers from the
2.21subcontracting requirement when either qualified small targeted group businesses or
2.22veteran-owned small businesses, or both, are not reasonably available. The commissioner
2.23may establish (1) financial incentives for prime contractors who exceed the goals set for
2.24the use of subcontractors under this subdivision and (2) sanctions for prime contractors
2.25who fail to make good faith efforts to meet the goals set under this subdivision.
2.26(b) The small targeted group business subcontracting requirements of this
2.27subdivision do not apply to prime contractors who are small targeted group businesses.
2.28The veteran-owned small business subcontracting requirements of this subdivision do not
2.29apply to prime contractors who are veteran-owned small businesses.
2.30    Subd. 3. Subcontract awards to small businesses. At least 75 percent of
2.31subcontracts awarded to small targeted group businesses must be performed by the
2.32business to which the subcontract is awarded or another small targeted group business.
2.33At least 75 percent of subcontracts awarded to veteran-owned small businesses must be
2.34performed by the business to which the subcontract is awarded or another veteran-owned
2.35small business.
3.1    Subd. 4. Contract awards, limitations. Contracts awarded pursuant to this
3.2section are subject to all limitations contained in rules adopted by the commissioner
3.3of administration.
3.4    Subd. 4a. Limited duration and reevaluation. The commissioner shall cooperate
3.5with the commissioner of administration to periodically reevaluate the targeted group
3.6businesses to determine that there is a statistical disparity between the percentage of
3.7construction contracts awarded to businesses owned by targeted group members and the
3.8representation of businesses owned by targeted group members among all businesses in
3.9the state in the construction category. The commissioner of administration shall designate
3.10targeted groups pursuant to section 16C.16, subdivision 5.
3.11    Subd. 5. Recourse to other businesses. If the commissioner is unable to award
3.12a contract pursuant to the provisions of subdivisions 2 and 3 to 4a, the award may be
3.13placed pursuant to the normal solicitation and award provisions set forth in this chapter
3.14and chapter 16C.
3.15    Subd. 6. Rules; eligibility. (a) The rules adopted by the commissioner of
3.16administration to define small businesses and to set time and other eligibility requirements
3.17for participation in programs under sections 16C.16 to 16C.19 apply to this section. The
3.18commissioner may promulgate other rules necessary to carry out this section.
3.19(b) In addition to other eligibility requirements, a small targeted group business or
3.20veteran-owned small business is eligible for the bid preferences under this section only
3.21for eight years following the later of (1) the effective date of this act, or (2) the date of
3.22initial designation as a small targeted group business or veteran-owned small business by
3.23the commissioner of administration under section 16C.16.
3.24    Subd. 7. Noncompetitive bids. The commissioner is encouraged to purchase
3.25from small targeted group businesses and veteran-owned small businesses designated
3.26under section 16C.16 when making purchases that are not subject to competitive bidding
3.27procedures.
3.28    Subd. 8. Report by commissioner Reporting. (a) The commissioner of
3.29transportation shall report to the commissioner of administration on compliance with this
3.30section. The information must be reported at the time and in the manner requested by the
3.31commissioner of administration.
3.32(b) By February 1 of each even-numbered year, the commissioner shall submit a
3.33report to the chairs and ranking minority members of the legislative committees with
3.34jurisdiction over transportation policy and finance concerning contract awards under this
3.35section. At a minimum, the report must include:
3.36(1) a summary of the program;
4.1(2) a review of the use of preferences for contracting, including frequency of
4.2establishment of a preference and frequency of contract award to a small targeted group
4.3business or veteran-owned small business;
4.4(3) a review of goals and good faith efforts to use small targeted group businesses
4.5and veteran-owned small businesses in subcontracts, including analysis of methods used
4.6for, and effectiveness of, good faith efforts;
4.7(4) a summary of any financial incentives or sanctions imposed;
4.8(5) information on each reevaluation under subdivision 4a, including details on the
4.9methodology for reevaluation; and
4.10(6) any recommendations for legislative or programmatic changes.

4.11    Sec. 10. Minnesota Statutes 2010, section 161.3212, is amended to read:
4.12161.3212 WORKING CAPITAL FUND.
4.13The commissioner, to the extent allowed by other law or contract, may grant
4.14available money that has been appropriated for socially or economically disadvantaged
4.15business programs to a guaranty fund administered by a nonprofit organization that makes
4.16or guarantees working capital loans to businesses small business concerns owned and
4.17operated by socially or and economically disadvantaged persons as defined individuals.
4.18"Small business concern" and "socially and economically disadvantaged individual" have
4.19the meanings given them in Code of Federal Regulations, title 49, section 23.5 26.5. The
4.20purpose of loans made or guaranteed by the organization must be to provide short-term
4.21working capital to enable eligible businesses to be awarded contracts for goods and
4.22services or for construction-related services from government agencies.
4.23Money contributed from a constitutionally or statutorily dedicated fund must be used
4.24only for purposes consistent with the purposes of the dedicated fund."
4.25Renumber the sections in sequence and correct the internal references
4.26Amend the title accordingly