1.1.................... moves to amend H.F. No. 2685, the second engrossment, as follows:
1.2Page 11, delete section 10 and insert:

1.3    "Sec. 10. Minnesota Statutes 2010, section 161.321, is amended to read:
1.4161.321 SMALL BUSINESS CONTRACTS.
1.5    Subdivision 1. Definitions. For purposes of this section the following terms have
1.6the meanings given them, except where the context clearly indicates a different meaning is
1.7intended.
1.8(a) "Award" means the granting of a contract in accordance with all applicable laws
1.9and rules governing competitive bidding except as otherwise provided in this section.
1.10(b) "Contract" means an agreement entered into between a business entity and the
1.11state of Minnesota for the construction of transportation improvements.
1.12(c) "Subcontractor" means a business entity which enters into a legally binding
1.13agreement with another business entity which is a party to a contract as defined in
1.14paragraph (b).
1.15(d) "Targeted group business" means a business designated under section 16C.16,
1.16subdivision 5 .
1.17(e) "Veteran-owned small business" means a business designated under section
1.1816C.16, subdivision 6a .
1.19    Subd. 2. Small targeted group business, small business set-asides; contract
1.20preferences. (a) The commissioner may award up to a six percent preference in the
1.21amount bid for specified construction work to small targeted group businesses and
1.22veteran-owned small businesses.
1.23(b) The commissioner may designate a contract for construction work for award only
1.24to small targeted group businesses if the commissioner determines that at least three small
1.25targeted 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) (c) 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. Small targeted group business; subcontracting goals. (a) The
2.17commissioner, as a condition of awarding a construction contract, may set goals that
2.18require the prime contractor to subcontract portions of the contract to small targeted
2.19group businesses. Prime contractors must demonstrate good faith efforts to meet the
2.20project goals. The commissioner shall establish a procedure for granting waivers from
2.21the subcontracting requirement when qualified small targeted group businesses are not
2.22reasonably available. The commissioner may establish (1) financial incentives for prime
2.23contractors who exceed the goals set for the use of subcontractors under this subdivision;
2.24and (2) sanctions for prime contractors who fail to make good faith efforts to meet the
2.25goals 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.
2.28    Subd. 2b. Veteran-owned small business; contract preferences. (a) The
2.29commissioner may award up to a six percent preference in the amount bid for specified
2.30construction work to veteran-owned small businesses, except when prohibited by the
2.31federal government as a condition of receiving federal funds. When a bid preference is
2.32provided under this subdivision, the percentage of preference in bid amount may not be
2.33less than the percentage of bid preference provided to any small targeted group business
2.34under subdivision 2.
2.35(b) When a bid preference is provided under this subdivision, the commissioner
2.36must be as inclusive as possible in specifying contracts for construction work, as well
3.1as for construction-related professional and technical services, available under this bid
3.2preference program for veteran-owned small businesses. The term "construction" must be
3.3given broad meaning for purposes of specifying and letting contracts for veteran-owned
3.4small businesses and must include, but is not limited to, preplanning, planning, and all
3.5other construction-related professional and technical services.
3.6(c) When a bid preference is provided under this subdivision, the commissioner
3.7must strive to ensure that contracts will be awarded on a proportional basis with contracts
3.8awarded under subdivision 2.
3.9(d) The commissioner may designate a contract for construction work for award
3.10only to veteran-owned small businesses, if the commissioner determines that at least three
3.11veteran-owned small businesses are likely to bid.
3.12    Subd. 2c. Veteran-owned small business; subcontracting goals. (a) The
3.13commissioner, as a condition of awarding a construction contract, may set goals that
3.14require the prime contractor to subcontract portions of the contract to veteran-owned small
3.15businesses, except when prohibited by federal law or rule as a condition of receiving
3.16federal funds. Prime contractors must demonstrate good faith efforts to meet the project
3.17goals. The commissioner shall establish a procedure for granting waivers from the
3.18subcontracting requirement when qualified veteran-owned small businesses are not
3.19reasonably available. The commissioner may establish (1) financial incentives for prime
3.20contractors who exceed the goals set for the use of subcontractors under this subdivision;
3.21and (2) sanctions for prime contractors who have not been granted a waiver and fail
3.22to meet goals set under this subdivision.
3.23(b) The subcontracting requirements of this subdivision do not apply to prime
3.24contractors who are veteran-owned small businesses.
3.25    Subd. 3. Small targeted group business subcontract awards to small businesses.
3.26At least 75 percent of subcontracts awarded to small targeted group businesses must be
3.27performed by the business to which the subcontract is awarded or another small targeted
3.28group business.
3.29    Subd. 3a. Veteran-owned small business; subcontract awards. At least 75
3.30percent of subcontracts awarded to veteran-owned small businesses must be performed by
3.31the business to which the subcontract is awarded or another veteran-owned small business.
3.32    Subd. 4. Contract awards, limitations. Contracts awarded pursuant to this
3.33section are subject to all limitations contained in rules adopted by the commissioner
3.34of administration.
3.35    Subd. 4a. Small targeted group business; limited duration and reevaluation.
3.36The commissioner shall cooperate with the commissioner of administration to periodically
4.1reevaluate the targeted group businesses to determine whether there is a statistical disparity
4.2between the percentage of construction contracts awarded to businesses owned by targeted
4.3group members and the representation of businesses owned by targeted group members
4.4among all businesses in the state in the construction category. The commissioner of
4.5administration shall designate targeted groups pursuant to section 16C.16, subdivision 5.
4.6    Subd. 5. Recourse to other businesses. If the commissioner is unable to award
4.7a contract pursuant to the provisions of subdivisions 2 and 3 to 4a, the award may be
4.8placed pursuant to the normal solicitation and award provisions set forth in this chapter
4.9and chapter 16C.
4.10    Subd. 6. Rules; eligibility. (a) The rules adopted by the commissioner of
4.11administration to define small businesses and to set time and other eligibility requirements
4.12for participation in programs under sections 16C.16 to 16C.19 apply to this section. The
4.13commissioner may promulgate other rules necessary to carry out this section.
4.14(b) In addition to other eligibility requirements, a small targeted group business or
4.15veteran-owned small business is eligible for the bid preferences under this section only for
4.16eight years following the latest of:
4.17(1) the effective date of this section;
4.18(2) for a targeted group business, the date of initial certification by the commissioner
4.19of administration, as provided under section 16C.19;
4.20(3) for a veteran-owned small business, the date of initial certification by the United
4.21States Department of Veterans Affairs, as provided under section 16C.19, paragraph (d); or
4.22(4) for a veteran-owned small business, the release or discharge of any one of the
4.23owners from military active service, as defined in section 190.05, subdivision 5, lasting for
4.24a period of 179 days or longer.
4.25    Subd. 7. Noncompetitive bids. The commissioner is encouraged to purchase
4.26from small targeted group businesses and veteran-owned small businesses designated
4.27under section 16C.16 when making purchases that are not subject to competitive bidding
4.28procedures.
4.29    Subd. 8. Report by commissioner Reporting. (a) The commissioner of
4.30transportation shall report to the commissioner of administration on compliance with this
4.31section. The information must be reported at the time and in the manner requested by the
4.32commissioner of administration.
4.33(b) By February 1 of each even-numbered year, the commissioner of transportation
4.34shall submit a report to the chairs and ranking minority members of the legislative
4.35committees with jurisdiction over transportation policy and finance and veterans policy
5.1and finance concerning contract awards during the preceding biennium under this section.
5.2At a minimum, the report must include:
5.3(1) a summary of the program;
5.4(2) a review of the use of preferences for contracting during the preceding biennium,
5.5including frequency of establishment of a preference and frequency and amount of
5.6contract awards to:
5.7(i) small targeted group businesses; and
5.8(ii) veteran-owned small businesses;
5.9(3) a review of goals and good faith efforts to use small targeted group businesses
5.10and veteran-owned small businesses in subcontracts, including analysis of methods used
5.11for, and effectiveness of, good faith efforts;
5.12(4) a summary of any financial incentives used or sanctions imposed;
5.13(5) agency commentary on any perceived impediments, whether statutory,
5.14administrative, or otherwise, that may be limiting the participation of small targeted
5.15group businesses and veteran-owned small businesses in the agency's contract preference
5.16program;
5.17(6) information on each reevaluation under subdivision 4a, including details on the
5.18methodology for reevaluation; and
5.19(7) any recommendations for legislative or programmatic changes.
5.20    Subd. 9. Veteran-owned small business; purpose. The purpose of the state
5.21contracting bid preference program for veteran-owned small businesses is to facilitate
5.22the healthy transition of veterans from military to civilian life, and to help compensate
5.23veterans for their sacrifices including, but not limited to, their sacrifice of health and
5.24time to the state and nation during their military service, as well as to enhance economic
5.25development within Minnesota.
5.26EFFECTIVE DATE.This section is effective the day following final enactment,
5.27and applies to contracts let on or after July 1, 2012."
5.28Page 49, after line 25, insert:

5.29    "Sec. 60. [375.771] VETERAN-OWNED SMALL BUSINESS CONTRACTS.
5.30    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
5.31section.
5.32(b) "Award" means the granting of a contract in accordance with all applicable laws
5.33and rules governing competitive bidding, except as otherwise provided in this section.
6.1(c) "Contract" means an agreement entered into between a business entity and the
6.2county for procurement of goods and services including both technical and nontechnical
6.3goods and services, printing, and construction.
6.4(d) "County board" or "board" has the meaning given in section 375.01.
6.5(e) "County purchasing department" has the meaning given in section 375.72.
6.6(f) "Director of purchasing" has the meaning given in section 375.74.
6.7(g) "Subcontractor" means a business entity that enters into a legally binding
6.8agreement with another business entity that is a party to a contract as defined in paragraph
6.9(c).
6.10(h) "Veteran" has the meaning given in section 197.447.
6.11(i) "Veteran-owned small business" means a business designated under section
6.1216C.16, subdivision 6a.
6.13    Subd. 2. Policy; purpose; director. (a) A county board may establish a program
6.14within the county in accordance with this section to provide a bid preference for
6.15awarding contracts to designated veteran-owned small businesses for the procurement of
6.16technical and nontechnical goods and services including, but not limited to, printing and
6.17construction, broadly defined to include all phases of the construction process.
6.18(b) The purpose of this program is to facilitate the transition of veterans from
6.19military to civilian life, and to help compensate veterans for their sacrifices including, but
6.20not limited to, their sacrifice of health and time to the community, state, and nation during
6.21their military service, as well as to enhance economic development throughout Minnesota.
6.22(c) The county board may direct the county director of purchasing, or other
6.23designated official within the county purchasing department, to administer this program in
6.24accordance with county policy established by the board.
6.25    Subd. 3. Small business set-asides. (a) The county director of purchasing may
6.26award up to a six percent preference in the amount bid for procurement of goods and
6.27services including, but not limited to, technical and nontechnical goods and services,
6.28printing, and construction to veteran-owned small businesses having their principal place
6.29of business in Minnesota.
6.30(b) The board, as a condition of awarding a construction contract, may set goals that
6.31require the prime contractor to subcontract a portion of the contract to veteran-owned
6.32small businesses. The board must establish a procedure for granting waivers from the
6.33subcontracting requirement when qualified veteran-owned small businesses are not
6.34reasonably available. The board may establish financial incentives for prime contractors
6.35who exceed the goals for use of veteran-owned small business subcontractors and
6.36financial penalties for prime contractors who fail to meet goals under this paragraph. The
7.1subcontracting requirements of this paragraph do not apply to prime contractors who are
7.2veteran-owned small businesses.
7.3    Subd. 4. Awards to small businesses. At least 75 percent of subcontracts awarded
7.4to veteran-owned small businesses must be performed by the business to which the
7.5subcontract is awarded or another veteran-owned small business.
7.6    Subd. 5. Awards, limitations. Contracts awarded under this section are subject to
7.7all limitations adopted by the board.
7.8    Subd. 6. Recourse to other businesses. If the director is unable to award a contract
7.9under subdivisions 3 and 4, the award may be placed under normal solicitation and award
7.10statutes and rules.
7.11    Subd. 7. Noncompetitive bids. The board is encouraged to purchase from
7.12veteran-owned small businesses designated under section 16C.16, subdivision 6a, when
7.13making purchases that are not subject to competitive bidding procedures.
7.14    Subd. 8. Report to board. At the request of the county board, the county treasurer
7.15shall report to the board on compliance with this section. The information must be
7.16reported at the time and in the manner requested by the board.
7.17EFFECTIVE DATE.This section is effective July 1, 2012, for contracts awarded
7.18by counties on or after that date."
7.19Renumber the sections in sequence and correct the internal references
7.20Amend the title accordingly