Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 278-S.F.No. 1790
An act relating to public administration; increasing
the flexibility of local government contracting;
increasing the purchasing authority of city managers
in plan B cities; increasing the competitive bidding
threshold for small cities; authorizing the use of
reverse auction and electronic bidding and selling;
clarifying the division of proceeds of state bond
financed property; permitting Ramsey County to collect
and retain up to a $1 criminal surcharge in order to
fund Ramsey County's petty misdemeanor diversion
program; amending Minnesota Statutes 2002, sections
16A.695, subdivision 3; 373.01, subdivision 1;
412.691; 429.041, subdivisions 1, 2; 469.015,
subdivisions 1, 3; 471.345, subdivisions 3, 4, by
adding subdivisions; Minnesota Statutes 2003
Supplement, section 357.021, subdivisions 6, 7.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, section 16A.695,
subdivision 3, is amended to read:
Subd. 3. [SALE OF PROPERTY.] A public officer or agency
shall not sell any state bond financed property unless the
public officer or agency determines by official action that the
property is no longer usable or needed by the public officer or
agency to carry out the governmental program for which it was
acquired or constructed, the sale is made as authorized by law,
the sale is made for fair market value, and the sale is approved
by the commissioner. If any state bonds issued to purchase or
better the state bond financed property that is sold remain
outstanding on the date of sale, the net proceeds of sale must
be applied as follows:
(1) if the state bond financed property was acquired and
bettered solely with state bond proceeds, the net proceeds of
sale must be paid to the commissioner, deposited in the state
bond fund, and used to pay or redeem or defease the outstanding
state bonds in accordance with the commissioner's order
authorizing their issuance, and the proceeds are appropriated
for this purpose; or
(2) if the state bond financed property was acquired or
bettered partly with state bond proceeds and partly with other
money, the net proceeds of sale must be used: first, to pay to
the state the amount of state bond proceeds used to acquire or
better the property; second, to pay in full any outstanding
public or private debt incurred to acquire or better the
property; and third, any excess over the amount needed for those
purposes must be divided in proportion to the shares contributed
to the acquisition or betterment of the property and paid to the
interested public and private entities, other than any private
lender already paid in full, and the proceeds are appropriated
for this purpose. In calculating the share contributed by each
entity, the amount to be attributed to the owner of the property
shall be the fair market value of the property that was bettered
by state bond proceeds at the time the betterment began.
When all of the net proceeds of sale have been applied as
provided in this subdivision, this section no longer applies to
the property.
[EFFECTIVE DATE.] This section is effective the day
following final enactment.
Sec. 2. Minnesota Statutes 2003 Supplement, section
357.021, subdivision 6, is amended to read:
Subd. 6. [SURCHARGES ON CRIMINAL AND TRAFFIC OFFENDERS.]
(a) The court shall impose and the court administrator shall
collect a $60 surcharge on every person convicted of any felony,
gross misdemeanor, misdemeanor, or petty misdemeanor offense,
other than a violation of a law or ordinance relating to vehicle
parking, for which there shall be a $3 surcharge. In the second
judicial district, the court shall impose, and the court
administrator shall collect, an additional $1 surcharge on every
person convicted of any felony, gross misdemeanor, or petty
misdemeanor offense, other than a violation of a law or
ordinance relating to vehicle parking, if the Ramsey County
Board of Commissioners authorizes the $1 surcharge. The
surcharge shall be imposed whether or not the person is
sentenced to imprisonment or the sentence is stayed.
(b) If the court fails to impose a surcharge as required by
this subdivision, the court administrator shall show the
imposition of the surcharge, collect the surcharge and correct
the record.
(c) The court may not waive payment of the surcharge
required under this subdivision. Upon a showing of indigency or
undue hardship upon the convicted person or the convicted
person's immediate family, the sentencing court may authorize
payment of the surcharge in installments.
(d) The court administrator or other entity collecting a
surcharge shall forward it to the commissioner of finance.
(e) If the convicted person is sentenced to imprisonment
and has not paid the surcharge before the term of imprisonment
begins, the chief executive officer of the correctional facility
in which the convicted person is incarcerated shall collect the
surcharge from any earnings the inmate accrues from work
performed in the facility or while on conditional release. The
chief executive officer shall forward the amount collected to
the commissioner of finance.
[EFFECTIVE DATE.] This section is effective either the day
after the governing body of Ramsey County authorizes imposition
of the surcharge, or August 1, 2004, whichever is the later
date, and applies to convictions on or after the effective date.
Sec. 3. Minnesota Statutes 2003 Supplement, section
357.021, subdivision 7, is amended to read:
Subd. 7. [DISBURSEMENT OF SURCHARGES BY COMMISSIONER OF
FINANCE.] (a) Except as provided in paragraphs (b) and, (c), and
(d), the commissioner of finance shall disburse surcharges
received under subdivision 6 and section 97A.065, subdivision 2,
as follows:
(1) one percent shall be credited to the game and fish fund
to provide peace officer training for employees of the
Department of Natural Resources who are licensed under sections
626.84 to 626.863, and who possess peace officer authority for
the purpose of enforcing game and fish laws;
(2) 39 percent shall be credited to the peace officers
training account in the special revenue fund; and
(3) 60 percent shall be credited to the general fund.
(b) The commissioner of finance shall credit $3 of each
surcharge received under subdivision 6 and section 97A.065,
subdivision 2, to the general fund.
(c) In addition to any amounts credited under paragraph
(a), the commissioner of finance shall credit $32 of each
surcharge received under subdivision 6 and section 97A.065,
subdivision 2, and the $3 parking surcharge, to the general fund.
(d) If the Ramsey County Board of Commissioners authorizes
imposition of the additional $1 surcharge provided for in
subdivision 6, paragraph (a), the court administrator in the
second judicial district shall withhold $1 from each surcharge
collected under subdivision 6. The court administrator must use
the withheld funds solely to fund the petty misdemeanor
diversion program administered by the Ramsey County Violations
Bureau. The court administrator must transfer any unencumbered
portion of the funds received under this subdivision to the
commissioner of finance for distribution according to paragraphs
(a) to (c).
[EFFECTIVE DATE.] This section is effective either the day
after the governing body of Ramsey County authorizes imposition
of the surcharge, or August 1, 2004, whichever is the later
date, and applies to convictions on or after the effective date.
Sec. 4. Minnesota Statutes 2002, section 373.01,
subdivision 1, is amended to read:
Subdivision 1. [PUBLIC CORPORATION; LISTED POWERS.] (a)
Each county is a body politic and corporate and may:
(1) Sue and be sued.
(2) Acquire and hold real and personal property for the use
of the county, and lands sold for taxes as provided by law.
(3) Purchase and hold for the benefit of the county real
estate sold by virtue of judicial proceedings, to which the
county is a party.
(4) Sell, lease, and convey real or personal estate owned
by the county, and give contracts or options to sell, lease, or
convey it, and make orders respecting it as deemed conducive to
the interests of the county's inhabitants.
(5) Make all contracts and do all other acts in relation to
the property and concerns of the county necessary to the
exercise of its corporate powers.
(b) No sale, lease, or conveyance of real estate owned by
the county, except the lease of a residence acquired for the
furtherance of an approved capital improvement project, nor any
contract or option for it, shall be valid, without first
advertising for bids or proposals in the official newspaper of
the county for three consecutive weeks and once in a newspaper
of general circulation in the area where the property is
located. The notice shall state the time and place of
considering the proposals, contain a legal description of any
real estate, and a brief description of any personal property.
Leases that do not exceed $15,000 for any one year may be
negotiated and are not subject to the competitive bid procedures
of this section. All proposals estimated to exceed $15,000 in
any one year shall be considered at the time set for the bid
opening, and the one most favorable to the county accepted, but
the county board may, in the interest of the county, reject any
or all proposals.
(c) Sales of personal property the value of which is
estimated to be $15,000 or more shall be made only after
advertising for bids or proposals as provided for real estate in
the county's official newspaper, on the county's Web site, or in
a recognized industry trade journal. At the same time it posts
on its Web site or publishes in a trade journal, the county must
publish in the official newspaper, either as part of the minutes
of a regular meeting of the county board or in a separate
notice, a summary of all requests for bids or proposals that the
county advertises on its Web site or in a trade journal. After
publication in the official newspaper, on the Web site, or in a
trade journal, bids or proposals may be solicited and accepted
by the electronic selling process authorized in section 471.345,
subdivision 17. Sales of personal property the value of which
is estimated to be less than $15,000 may be made either on
competitive bids or in the open market, in the discretion of the
county board. "Web site" means a specific, addressable location
provided on a server connected to the Internet and hosting World
Wide Web pages and other files that are generally accessible on
the Internet all or most of a day.
(d) Notwithstanding anything to the contrary herein, the
county may, when acquiring real property for county highway
right-of-way, exchange parcels of real property of substantially
similar or equal value without advertising for bids. The
estimated values for these parcels shall be determined by the
county assessor.
(e) If real estate or personal property remains unsold
after advertising for and consideration of bids or proposals the
county may employ a broker to sell the property. The broker may
sell the property for not less than 90 percent of its appraised
market value as determined by the county. The broker's fee
shall be set by agreement with the county but may not exceed ten
percent of the sale price and must be paid from the proceeds of
the sale.
(f) A county or its agent may rent a county-owned residence
acquired for the furtherance of an approved capital improvement
project subject to the conditions set by the county board and
not subject to the conditions for lease otherwise provided by
this clause paragraph (a), clause (4), and paragraphs (b), (c),
(d), (e), and (g).
(g) In no case shall lands be disposed of without there
being reserved to the county all iron ore and other valuable
minerals in and upon the lands, with right to explore for, mine
and remove the iron ore and other valuable minerals, nor shall
the minerals and mineral rights be disposed of, either before or
after disposition of the surface rights, otherwise than by
mining lease, in similar general form to that provided by
section 93.20 for mining leases affecting state lands. The
lease shall be for a term not exceeding 50 years, and be issued
on a royalty basis, the royalty to be not less than 25 cents per
ton of 2,240 pounds, and fix a minimum amount of royalty payable
during each year, whether mineral is removed or not.
Prospecting options for mining leases may be granted for periods
not exceeding one year. The options shall require, among other
things, periodical showings to the county board of the results
of exploration work done.
(5) Make all contracts and do all other acts in relation to
the property and concerns of the county necessary to the
exercise of its corporate powers.
Sec. 5. Minnesota Statutes 2002, section 412.691, is
amended to read:
412.691 [MANAGER IS PURCHASING AGENT; AUDIT AND APPROVAL.]
The manager shall be the chief purchasing agent of the
city. All purchases for the city and all contracts shall be
made or let by the manager when the amount of the purchase or
contract does not exceed $15,000 $20,000 unless a lower limit is
provided by the city council; but all claims resulting therefrom
shall be audited and approved by the council as provided in
section 412.271. All other purchases shall be made and all
other contracts let by the council after the recommendation of
the manager has first been obtained. All contracts, bonds and
instruments of every kind to which the city is a party shall be
signed by the mayor and the manager on behalf of the city and
shall be executed in the name of the city.
Sec. 6. Minnesota Statutes 2002, section 429.041,
subdivision 1, is amended to read:
Subdivision 1. [PLANS AND SPECIFICATIONS, ADVERTISEMENT
FOR BIDS.] When the council determines to make any improvement,
it shall let the contract for all or part of the work, or order
all or part of the work done by day labor or otherwise as
authorized by subdivision 2, no later than one year after the
adoption of the resolution ordering such improvement, unless a
different time limit is specifically stated in the resolution
ordering the improvement. The council shall cause plans and
specifications of the improvement to be made, or if previously
made, to be modified, if necessary, and to be approved and filed
with the clerk, and if the estimated cost exceeds $35,000 for
municipalities of less than 2,500 population, or $50,000 for all
others, shall advertise for bids for the improvement in the
newspaper and such other papers and for such length of time as
it may deem advisable. If the estimated cost exceeds $100,000,
publication shall be made no less than three weeks before the
last day for submission of bids once in the newspaper and at
least once in either a newspaper published in a city of the
first class or a trade paper. To be eligible as such a trade
paper, a publication shall have all the qualifications of a
legal newspaper except that instead of the requirement that it
shall contain general and local news, such trade paper shall
contain building and construction news of interest to
contractors in this state, among whom it shall have a general
circulation. The advertisement shall specify the work to be
done, shall state the time when the bids will be publicly opened
for consideration by the council, which shall be not less than
ten days after the first publication of the advertisement when
the estimated cost is less than $100,000 and not less than three
weeks after such publication in other cases, and shall state
that no bids will be considered unless sealed and filed with the
clerk and accompanied by a cash deposit, cashier's check, bid
bond, or certified check payable to the clerk, for such
percentage of the amount of the bid as the council may specify.
In providing for the advertisement for bids the council may
direct that the bids shall be opened publicly by two or more
designated officers or agents of the municipality and tabulated
in advance of the meeting at which they are to be considered by
the council. Nothing herein shall prevent the council from
advertising separately for various portions of the work involved
in an improvement, or from itself, supplying by such means as
may be otherwise authorized by law, all or any part of the
materials, supplies, or equipment to be used in the improvement
or from combining two or more improvements in a single set of
plans and specifications or a single contract.
Sec. 7. Minnesota Statutes 2002, section 429.041,
subdivision 2, is amended to read:
Subd. 2. [CONTRACTS; DAY LABOR.] In contracting for an
improvement, the council shall require the execution of one or
more written contracts and bonds, conditioned as required by
law. The council shall award the contract to the lowest
responsible bidder or it may reject all bids. If any bidder to
whom a contract is awarded fails to enter promptly into a
written contract and to furnish the required bond, the
defaulting bidder shall forfeit to the municipality the amount
of the defaulter's cash deposit, cashier's check, bid bond, or
certified check, and the council may thereupon award the
contract to the next lowest responsible bidder. When it appears
to the council that the cost of the entire work projected will
be less than $35,000 for municipalities of less than 2,500
population, or $50,000 for all others, or whenever no bid is
submitted after proper advertisement or the only bids submitted
are higher than the engineer's estimate, the council may
advertise for new bids or, without advertising for bids,
directly purchase the materials for the work and do it by the
employment of day labor or in any other manner the council
considers proper. The council may have the work supervised by
the city engineer or other qualified person but shall have the
work supervised by a registered engineer if done by day labor
and it appears to the council that the entire cost of all work
and materials for the improvement will be more than $25,000. In
case of improper construction or unreasonable delay in the
prosecution of the work by the contractor, the council may order
and cause the suspension of the work at any time and relet the
contract, or order a reconstruction of any portion of the work
improperly done, and where the cost of completion or
reconstruction necessary will be less than $35,000 for
municipalities of less than 2,500 population, or $50,000 for all
others, the council may do it by the employment of day labor.
Sec. 8. Minnesota Statutes 2002, section 469.015,
subdivision 1, is amended to read:
Subdivision 1. [BIDS; NOTICE.] All construction work, and
work of demolition or clearing, and every purchase of equipment,
supplies, or materials, necessary in carrying out the purposes
of sections 469.001 to 469.047, that involve expenditure
of $35,000 for an authority whose area of operation is less than
2,500 population and $50,000 for all other authorities or more
shall be awarded by contract. Before receiving bids the
authority shall publish, once a week for two consecutive weeks
in an official newspaper of general circulation in the community
a notice that bids will be received for that construction work,
or that purchase of equipment, supplies, or materials. The
notice shall state the nature of the work and the terms and
conditions upon which the contract is to be let, naming a time
and place where bids will be received, opened and read publicly,
which time shall be not less than seven days after the date of
the last publication. After the bids have been received, opened
and read publicly and recorded, the authority shall award the
contract to the lowest responsible bidder, provided that the
authority reserves the right to reject any or all bids. Each
contract shall be executed in writing, and the person to whom
the contract is awarded shall give sufficient bond to the
authority for its faithful performance. If no satisfactory bid
is received, the authority may readvertise. The authority may
establish reasonable qualifications to determine the fitness and
responsibility of bidders and to require bidders to meet the
qualifications before bids are accepted.
Sec. 9. Minnesota Statutes 2002, section 469.015,
subdivision 3, is amended to read:
Subd. 3. [PERFORMANCE AND PAYMENT BONDS.] Performance and
payment bonds shall be required from contractors for any works
of construction as provided in and subject to all the provisions
of sections 574.26 to 574.31 except for contracts entered into
by an authority for an expenditure of less than $35,000 for an
authority whose area of operation is less than 2,500 population
and $50,000 for all others.
Sec. 10. Minnesota Statutes 2002, section 471.345,
subdivision 3, is amended to read:
Subd. 3. [CONTRACTS OVER $35,000 FOR MUNICIPALITIES OF
LESS THAN 2,500 POPULATION; $50,000 FOR ALL OTHERS.] If the
amount of the contract is estimated to exceed $35,000 for
municipalities of less than 2,500 population, or $50,000 for all
others, sealed bids shall be solicited by public notice in the
manner and subject to the requirements of the law governing
contracts by the particular municipality or class thereof
provided that with regard to repairs and maintenance of ditches,
bids shall not be required if the estimated amount of the
contract does not exceed the amount specified in section
103E.705, subdivisions 5, 6, and 7.
Sec. 11. Minnesota Statutes 2002, section 471.345,
subdivision 4, is amended to read:
Subd. 4. [CONTRACTS FROM $10,000 TO $35,000 FOR
MUNICIPALITIES OF LESS THAN 2,500 POPULATION; $50,000 FOR ALL
OTHERS.] If the amount of the contract is estimated to exceed
$10,000 but not to exceed $35,000 for municipalities of less
than 2,500 population, or $50,000 for all others, the contract
may be made either upon sealed bids or by direct negotiation, by
obtaining two or more quotations for the purchase or sale when
possible, and without advertising for bids or otherwise
complying with the requirements of competitive bidding. All
quotations obtained shall be kept on file for a period of at
least one year after receipt thereof.
Sec. 12. Minnesota Statutes 2002, section 471.345, is
amended by adding a subdivision to read:
Subd. 16. [REVERSE AUCTION.] Notwithstanding any other
procedural requirements of this section, a municipality may
contract to purchase supplies, materials, and equipment using an
electronic purchasing process in which vendors compete to
provide the supplies, materials, or equipment at the lowest
selling price in an open and interactive environment. A
municipality may not use this process to contract for services,
as defined by section 16C.02, subdivision 17, or a service
contract, as defined by section 16C.02, subdivision 16. Nothing
in this subdivision must be construed to prohibit a municipality
from adopting a resolution, rule, regulation, or ordinance
relating to minimum labor standards under subdivision 7, or
procurement from economically disadvantaged persons under
subdivision 8.
Sec. 13. Minnesota Statutes 2002, section 471.345, is
amended by adding a subdivision to read:
Subd. 17. [ELECTRONIC SALE OF SURPLUS SUPPLIES, MATERIALS,
AND EQUIPMENT.] Notwithstanding any other procedural
requirements of this section, a municipality may contract to
sell supplies, materials, and equipment which is surplus,
obsolete, or unused using an electronic selling process in which
purchasers compete to purchase the surplus supplies, materials,
or equipment at the highest purchase price in an open and
interactive environment.
Sec. 14. Minnesota Statutes 2002, section 471.345, is
amended by adding a subdivision to read:
Subd. 18. [ELECTRONIC BIDDING.] Notwithstanding any other
procedural requirements of this section, vendors may submit
bids, quotations, and proposals electronically in a form and
manner required by the municipality. A municipality may allow
bid, performance, or payment bonds, or other security, to be
furnished electronically.
Sec. 15. [EFFECTIVE DATE.]
Sections 4 to 14 are effective the day following final
enactment.
Presented to the governor May 18, 2004
Signed by the governor May 29, 2004, 8:25 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes