Bill Text: MN HF1984 | 2013-2014 | 88th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Public construction accountability and transparency enhanced, and responsible contractor definition and requirement established.
Spectrum: Moderate Partisan Bill (Democrat 11-3)
Status: (Passed) 2014-05-16 - Secretary of State Chapter 253 [HF1984 Detail]
Download: Minnesota-2013-HF1984-Introduced.html
Bill Title: Public construction accountability and transparency enhanced, and responsible contractor definition and requirement established.
Spectrum: Moderate Partisan Bill (Democrat 11-3)
Status: (Passed) 2014-05-16 - Secretary of State Chapter 253 [HF1984 Detail]
Download: Minnesota-2013-HF1984-Introduced.html
1.2relating to state government; providing for enhancement of accountability
1.3and transparency in public construction; establishing a requirement for and a
1.4definition of responsible contractor;proposing coding for new law in Minnesota
1.5Statutes, chapter 16C.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [16C.285] RESPONSIBLE CONTRACTOR REQUIREMENT
1.8DEFINED.
1.9 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
1.10subdivision have the meanings given them.
1.11(b) "Construction contract" means a contract for building, erection, construction,
1.12alteration, remodeling, or repair work entered into by or at the direction of a state agency,
1.13the Minnesota State Colleges and Universities, or a municipality where the amount of the
1.14contract is estimated to exceed $25,000.
1.15(c) "Contractor" means a vendor that performs building, erection, construction,
1.16alteration, remodeling, or repair work and who submits a bid or proposal or otherwise
1.17responds to a solicitation document of a contracting authority.
1.18(d) "Contracting authority" means a state agency, the Minnesota State Colleges and
1.19Universities, or a municipality that enters into a construction contract or authorizes or
1.20directs entering into a construction contract.
1.21(e) "Municipality" means a county, town, city, school district, or other municipal
1.22corporation or political subdivision of the state authorized by law to enter into contracts.
1.23(f) "Project" means building, erection, construction, alteration, remodeling, or repair
1.24work performed pursuant to a construction contract.
2.1(g) "Related entity" means a firm, partnership, corporation, joint venture, or other
2.2legal entity substantially under the control of a contractor or vendor; a predecessor
2.3corporation or other legal entity having one or more of the same owners or principals as a
2.4contractor or vendor; a subsidiary of a contractor or vendor; one or more principals of a
2.5contractor or vendor; and a person, firm, partnership, corporation, joint venture, or other
2.6legal entity that substantially controls a contractor or vendor.
2.7(h) "Solicitation document" means an invitation to bid, bid specifications, request
2.8for proposals, request for qualifications, or other solicitation of contractors or vendors for
2.9purposes of a construction contract.
2.10(i) "Vendor" means a business, including a construction contractor or a natural
2.11person, and includes both if the natural person is engaged in a business.
2.12 Subd. 2. Responsible contractor required. A contractor or vendor must meet the
2.13minimum criteria in subdivision 3 to be eligible to be awarded a construction contract
2.14as the lowest responsible bidder or the vendor or contractor offering the best value as
2.15provided in section 16C.28, 123B.52, or 471.345.
2.16 Subd. 3. Minimum criteria. "Responsible contractor" means a contractor or vendor
2.17that conforms to the requirements in the solicitation document and certifies that it meets
2.18the following minimum criteria:
2.19(1) the contractor or vendor is in compliance with all applicable licensing
2.20requirements, bonding requirements, and insurance requirements, including workers'
2.21compensation and unemployment insurance; is currently registered with the Department
2.22of Revenue and the Department of Employment and Economic Development if it has
2.23employees; has a valid federal tax identification number or a valid Social Security number
2.24if an individual; and has complied with the applicable laws prerequisite to doing business
2.25in Minnesota;
2.26(2) the contractor, vendor, or related entity is in compliance with and, during the
2.27five-year period before responding to the solicitation document, has not violated section
2.28177.24, 177.25, 177.30, 177.41 to 177.44, 181.13, 181.14, or 181.722, and has not violated
2.29United States Code, title 29, sections 201 to 209, or United States Code, title 40, sections
2.303141 to 3148. For purposes of this subdivision, a violation occurs when a contractor,
2.31vendor, or related entity fails to pay statutorily required wages or penalties of $10,000 or
2.32more, has been issued an order to comply, failed to maintain required records, or has been
2.33found liable in an action brought in a court having jurisdiction;
2.34(3) the contractor, vendor, or related entity is in compliance with and, during
2.35the five-year period before responding to the solicitation document, has not violated
2.36any municipality's ordinance, resolution, policy, or contractual provision establishing
3.1requirements for payment of wages for construction work performed for that municipality.
3.2For purposes of this subdivision, a violation occurs when a contractor, vendor, or related
3.3entity fails to pay legally required wages or penalties of $10,000 or more. A final
3.4adjudication is not necessary for a violation to occur, but the contracting municipality
3.5must have determined that the contractor did not comply with its wage requirements;
3.6(4) the contractor, vendor, or related entity is in compliance with and, during the
3.7five-year period before responding to the solicitation document, has not violated section
3.8181.723 or chapter 326B. For purposes of this subdivision, a violation occurs when a
3.9contractor, vendor, or related entity has been issued a final administrative or licensing order;
3.10(5) the contractor, vendor, or related entity has no current tax liens or tax
3.11delinquencies;
3.12(6) the contractor, vendor, or related entity has not operated under false names or
3.13fronts as a small business, a socially or economically disadvantaged small business, or a
3.14disadvantaged business enterprise;
3.15(7) the contractor, vendor, or related entity is not currently debarred by the federal
3.16government, the state, or a municipality; and
3.17(8) all subcontractors or vendors of whatever tier the contractor intends to use to
3.18perform project work have verified through written confirmation to the contractor that
3.19they meet the minimum criteria listed in clauses (1) to (7).
3.20 Subd. 4. Verification of compliance. The contractor or vendor must submit a
3.21signed statement under oath by an owner or officer verifying compliance with each of the
3.22minimum criteria in subdivision 3. A contracting authority may accept a sworn statement
3.23as sufficient to demonstrate that a contractor or vendor is a responsible contractor. Failure
3.24to verify compliance with any one of the minimum criteria will render the contractor
3.25or vendor ineligible to be awarded a contract. A false statement under oath verifying
3.26compliance with any of the minimum criteria may result in termination of the contract
3.27awarded to the contractor, subcontractor, or vendor that submits a false statement, and
3.28will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
3.29by a contracting authority or allowed to perform work under a construction contract, as
3.30defined in subdivision 1, for a period of three years. The contractor or vendor responding
3.31to the solicitation document shall be responsible for ensuring that all subcontractors or
3.32vendors performing project work meet the minimum criteria. Nothing in this section
3.33shall restrict the discretion of a contracting authority to establish additional criteria for
3.34defining a responsible contractor.
3.35 Subd. 5. Implementation. The definition of responsible contractor, as defined in
3.36subdivision 3, must be included in the solicitation document for all construction projects
4.1covered by this section. The solicitation document for any project must state that any
4.2contractor or vendor that does not meet the minimum criteria in subdivision 3 is not
4.3a responsible contractor and is not eligible to be awarded the construction contract for
4.4the project. The solicitation document must provide that a false statement under oath
4.5verifying compliance with any of the minimum criteria may result in termination of the
4.6contract awarded to the contractor, subcontractor, or vendor that submits a false statement,
4.7and will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
4.8by a contracting authority or allowed to perform work under a construction contract, as
4.9defined in subdivision 1, for a period of three years.
4.10 Subd. 6. Severability. If any provision of this section is declared legally invalid
4.11or unenforceable, or if any part of this section is suspended or restrained by a court of
4.12competent jurisdiction, the remaining provisions shall remain in full force and effect.
1.3and transparency in public construction; establishing a requirement for and a
1.4definition of responsible contractor;proposing coding for new law in Minnesota
1.5Statutes, chapter 16C.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [16C.285] RESPONSIBLE CONTRACTOR REQUIREMENT
1.8DEFINED.
1.9 Subdivision 1. Definitions. (a) For purposes of this section, the terms defined in this
1.10subdivision have the meanings given them.
1.11(b) "Construction contract" means a contract for building, erection, construction,
1.12alteration, remodeling, or repair work entered into by or at the direction of a state agency,
1.13the Minnesota State Colleges and Universities, or a municipality where the amount of the
1.14contract is estimated to exceed $25,000.
1.15(c) "Contractor" means a vendor that performs building, erection, construction,
1.16alteration, remodeling, or repair work and who submits a bid or proposal or otherwise
1.17responds to a solicitation document of a contracting authority.
1.18(d) "Contracting authority" means a state agency, the Minnesota State Colleges and
1.19Universities, or a municipality that enters into a construction contract or authorizes or
1.20directs entering into a construction contract.
1.21(e) "Municipality" means a county, town, city, school district, or other municipal
1.22corporation or political subdivision of the state authorized by law to enter into contracts.
1.23(f) "Project" means building, erection, construction, alteration, remodeling, or repair
1.24work performed pursuant to a construction contract.
2.1(g) "Related entity" means a firm, partnership, corporation, joint venture, or other
2.2legal entity substantially under the control of a contractor or vendor; a predecessor
2.3corporation or other legal entity having one or more of the same owners or principals as a
2.4contractor or vendor; a subsidiary of a contractor or vendor; one or more principals of a
2.5contractor or vendor; and a person, firm, partnership, corporation, joint venture, or other
2.6legal entity that substantially controls a contractor or vendor.
2.7(h) "Solicitation document" means an invitation to bid, bid specifications, request
2.8for proposals, request for qualifications, or other solicitation of contractors or vendors for
2.9purposes of a construction contract.
2.10(i) "Vendor" means a business, including a construction contractor or a natural
2.11person, and includes both if the natural person is engaged in a business.
2.12 Subd. 2. Responsible contractor required. A contractor or vendor must meet the
2.13minimum criteria in subdivision 3 to be eligible to be awarded a construction contract
2.14as the lowest responsible bidder or the vendor or contractor offering the best value as
2.15provided in section 16C.28, 123B.52, or 471.345.
2.16 Subd. 3. Minimum criteria. "Responsible contractor" means a contractor or vendor
2.17that conforms to the requirements in the solicitation document and certifies that it meets
2.18the following minimum criteria:
2.19(1) the contractor or vendor is in compliance with all applicable licensing
2.20requirements, bonding requirements, and insurance requirements, including workers'
2.21compensation and unemployment insurance; is currently registered with the Department
2.22of Revenue and the Department of Employment and Economic Development if it has
2.23employees; has a valid federal tax identification number or a valid Social Security number
2.24if an individual; and has complied with the applicable laws prerequisite to doing business
2.25in Minnesota;
2.26(2) the contractor, vendor, or related entity is in compliance with and, during the
2.27five-year period before responding to the solicitation document, has not violated section
2.28177.24, 177.25, 177.30, 177.41 to 177.44, 181.13, 181.14, or 181.722, and has not violated
2.29United States Code, title 29, sections 201 to 209, or United States Code, title 40, sections
2.303141 to 3148. For purposes of this subdivision, a violation occurs when a contractor,
2.31vendor, or related entity fails to pay statutorily required wages or penalties of $10,000 or
2.32more, has been issued an order to comply, failed to maintain required records, or has been
2.33found liable in an action brought in a court having jurisdiction;
2.34(3) the contractor, vendor, or related entity is in compliance with and, during
2.35the five-year period before responding to the solicitation document, has not violated
2.36any municipality's ordinance, resolution, policy, or contractual provision establishing
3.1requirements for payment of wages for construction work performed for that municipality.
3.2For purposes of this subdivision, a violation occurs when a contractor, vendor, or related
3.3entity fails to pay legally required wages or penalties of $10,000 or more. A final
3.4adjudication is not necessary for a violation to occur, but the contracting municipality
3.5must have determined that the contractor did not comply with its wage requirements;
3.6(4) the contractor, vendor, or related entity is in compliance with and, during the
3.7five-year period before responding to the solicitation document, has not violated section
3.8181.723 or chapter 326B. For purposes of this subdivision, a violation occurs when a
3.9contractor, vendor, or related entity has been issued a final administrative or licensing order;
3.10(5) the contractor, vendor, or related entity has no current tax liens or tax
3.11delinquencies;
3.12(6) the contractor, vendor, or related entity has not operated under false names or
3.13fronts as a small business, a socially or economically disadvantaged small business, or a
3.14disadvantaged business enterprise;
3.15(7) the contractor, vendor, or related entity is not currently debarred by the federal
3.16government, the state, or a municipality; and
3.17(8) all subcontractors or vendors of whatever tier the contractor intends to use to
3.18perform project work have verified through written confirmation to the contractor that
3.19they meet the minimum criteria listed in clauses (1) to (7).
3.20 Subd. 4. Verification of compliance. The contractor or vendor must submit a
3.21signed statement under oath by an owner or officer verifying compliance with each of the
3.22minimum criteria in subdivision 3. A contracting authority may accept a sworn statement
3.23as sufficient to demonstrate that a contractor or vendor is a responsible contractor. Failure
3.24to verify compliance with any one of the minimum criteria will render the contractor
3.25or vendor ineligible to be awarded a contract. A false statement under oath verifying
3.26compliance with any of the minimum criteria may result in termination of the contract
3.27awarded to the contractor, subcontractor, or vendor that submits a false statement, and
3.28will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
3.29by a contracting authority or allowed to perform work under a construction contract, as
3.30defined in subdivision 1, for a period of three years. The contractor or vendor responding
3.31to the solicitation document shall be responsible for ensuring that all subcontractors or
3.32vendors performing project work meet the minimum criteria. Nothing in this section
3.33shall restrict the discretion of a contracting authority to establish additional criteria for
3.34defining a responsible contractor.
3.35 Subd. 5. Implementation. The definition of responsible contractor, as defined in
3.36subdivision 3, must be included in the solicitation document for all construction projects
4.1covered by this section. The solicitation document for any project must state that any
4.2contractor or vendor that does not meet the minimum criteria in subdivision 3 is not
4.3a responsible contractor and is not eligible to be awarded the construction contract for
4.4the project. The solicitation document must provide that a false statement under oath
4.5verifying compliance with any of the minimum criteria may result in termination of the
4.6contract awarded to the contractor, subcontractor, or vendor that submits a false statement,
4.7and will render that contractor, subcontractor, or vendor ineligible to be awarded a contract
4.8by a contracting authority or allowed to perform work under a construction contract, as
4.9defined in subdivision 1, for a period of three years.
4.10 Subd. 6. Severability. If any provision of this section is declared legally invalid
4.11or unenforceable, or if any part of this section is suspended or restrained by a court of
4.12competent jurisdiction, the remaining provisions shall remain in full force and effect.
