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S.F. No. 2738 - Targeted Group Business Program for Certain Larger Businesses (First Engrossment)
Author: Senator Jeff Hayden
Prepared By: Stephanie James, Senate Counsel (651/296-0103)
Date: April 11, 2016



Section 1 [Procurement From Other Targeted and Veteran-Owned Businesses]

Subdivision 1. [Designation of eligible groups] permits the Commissioner of Administration to establish a category of businesses that are eligible for certain preferences under state contracting laws. The new category includes businesses that do not meet the definition of “small” (for purposes of existing preferences for certain small businesses) but are majority-owned and operated by women, persons with a substantial physical disability, specific minorities, or veterans.

Subdivision 2 [Preference] permits the Commissioner of Administration to award  up to three percent preference for contracts for specified goods, services, or construction.

Subdivision 3 [Limitations on preference] precludes application of this preference where the preference would preclude the business from receiving an award under existing preference programs for targeted businesses.

Subdivision 4 [Subcontracting incentives and penalties] establishes incentives and penalties for prime contractors for using subcontractors that meet the designation of subdivision 1.  These incentives and penalties are the same as in existing laws with respect to subcontracting with small targeted-group businesses.

 Subdivision 5 [Mentoring program] requires the Commissioner of Administration to collaborate with organizations that represent targeted-group and veteran-owned businesses to prepare recommendations for establishing a mentoring program to incentivize larger businesses to mentor targeted-group businesses and veteran-owned businesses.

Section 2 [Eligibility; Rules] permits the Commissioner of Administration to use a nationally recognized certifying organization to certify businesses as owned by targeted groups or veterans to be eligible for preferences in state contracting, under existing preference programs and under the new program established under section 1.  This section requires the Commissioner of Administration to adopt rules, using expedited procedures, to certify businesses for eligibility for preferences.

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