1.1                          A bill for an act 
  1.2             relating to state government; modifying provisions 
  1.3             relating to state contracting and state printing 
  1.4             services; amending Minnesota Statutes 2002, sections 
  1.5             16A.11, subdivision 3; 16B.465, subdivision 7; 16B.47; 
  1.6             16B.48, subdivision 2; 16B.49; 16C.05, subdivision 2; 
  1.7             16C.08, subdivisions 2, 3, 4, by adding a subdivision; 
  1.8             16C.09; 16E.07, subdivision 9; 116J.8771; 136F.77, 
  1.9             subdivision 3; 256B.435, subdivision 2a; 268.186; 
  1.10            proposing coding for new law in Minnesota Statutes, 
  1.11            chapter 16C; repealing Minnesota Statutes 2002, 
  1.12            sections 12.221, subdivision 5; 16B.50; 16C.07; 
  1.13            43A.047. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 2002, section 16A.11, 
  1.16  subdivision 3, is amended to read: 
  1.17     Subd. 3.  [PART TWO:  DETAILED BUDGET.] (a) Part two of the 
  1.18  budget, the detailed budget estimates both of expenditures and 
  1.19  revenues, must contain any statements on the financial plan 
  1.20  which the governor believes desirable or which may be required 
  1.21  by the legislature.  The detailed estimates shall include the 
  1.22  governor's budget arranged in tabular form. 
  1.23     (b) The detailed estimates must include a separate line 
  1.24  listing the total number of professional or technical service 
  1.25  contracts and the total cost of those professional and technical 
  1.26  service contracts for the prior biennium and the 
  1.27  projected number of professional or technical service contracts 
  1.28  and the projected costs of those contracts for the current and 
  1.29  upcoming biennium.  They must also include a summary of the 
  2.1   personnel employed by the agency, reflected as full-time 
  2.2   equivalent positions, and the number of professional or 
  2.3   technical service consultants for the current biennium. 
  2.4      (c) The detailed estimates for internal service funds must 
  2.5   include the number of full-time equivalents by program; detail 
  2.6   on any loans from the general fund, including dollar amounts by 
  2.7   program; proposed investments in technology or equipment of 
  2.8   $100,000 or more; an explanation of any operating losses or 
  2.9   increases in retained earnings; and a history of the rates that 
  2.10  have been charged, with an explanation of any rate changes and 
  2.11  the impact of the rate changes on affected agencies. 
  2.12     Sec. 2.  Minnesota Statutes 2002, section 16B.465, 
  2.13  subdivision 7, is amended to read: 
  2.14     Subd. 7.  [EXEMPTION.] The system is exempt from the 
  2.15  five-year limitation on contracts set by sections 16C.05, 
  2.16  subdivision 2, paragraph (a), clause (5) (b), 16C.08, 
  2.17  subdivision 3, clause (7) (5), and 16C.09, clause (6) (5). 
  2.18     Sec. 3.  Minnesota Statutes 2002, section 16B.47, is 
  2.19  amended to read: 
  2.20     16B.47 [MICROGRAPHICS.] 
  2.21     The commissioner shall may provide micrographics services 
  2.22  and products to meet agency needs.  Within available resources, 
  2.23  the commissioner may also provide micrographic services to 
  2.24  political subdivisions.  Agency plans and programs for 
  2.25  micrographics must be submitted to and receive the approval of 
  2.26  the commissioner prior to implementation.  Upon the 
  2.27  commissioner's approval, subsidiary or independent microfilm 
  2.28  operations may be implemented in other state agencies.  The 
  2.29  commissioner may direct that copies of official state documents 
  2.30  be distributed to official state depositories on microfilm.  
  2.31     Sec. 4.  Minnesota Statutes 2002, section 16B.48, 
  2.32  subdivision 2, is amended to read: 
  2.33     Subd. 2.  [PURPOSE OF FUNDS.] Money in the state treasury 
  2.34  credited to the general services revolving fund and money that 
  2.35  is deposited in the fund is appropriated annually to the 
  2.36  commissioner for the following purposes:  
  3.1      (1) to operate a central store and equipment service; 
  3.2      (2) to operate a central duplication and printing service; 
  3.3      (3) to operate the central mailing service, including 
  3.4   purchasing postage and related items and refunding postage 
  3.5   deposits; 
  3.6      (4) (3) to operate a documents service as prescribed by 
  3.7   section 16B.51; 
  3.8      (5) (4) to provide services for the maintenance, operation, 
  3.9   and upkeep of buildings and grounds managed by the commissioner 
  3.10  of administration; 
  3.11     (6) (5) to operate a materials handling service, including 
  3.12  interagency mail and product delivery, solid waste removal, 
  3.13  courier service, equipment rental, and vehicle and equipment 
  3.14  maintenance; 
  3.15     (7) (6) to provide analytical, statistical, and 
  3.16  organizational development services to state agencies, local 
  3.17  units of government, metropolitan and regional agencies, and 
  3.18  school districts; 
  3.19     (8) (7) to operate a records center and provide 
  3.20  micrographics products and services; and 
  3.21     (9) (8) to perform services for any other agency.  Money 
  3.22  may be expended for this purpose only when directed by the 
  3.23  governor. The agency receiving the services shall reimburse the 
  3.24  fund for their cost, and the commissioner shall make the 
  3.25  appropriate transfers when requested.  The term "services" as 
  3.26  used in this clause means compensation paid officers and 
  3.27  employees of the state government; supplies, materials, 
  3.28  equipment, and other articles and things used by or furnished to 
  3.29  an agency; and utility services and other services for the 
  3.30  maintenance, operation, and upkeep of buildings and offices of 
  3.31  the state government. 
  3.32     Sec. 5.  Minnesota Statutes 2002, section 16B.49, is 
  3.33  amended to read: 
  3.34     16B.49 [CENTRAL MAILING SYSTEM.] 
  3.35     The commissioner shall may maintain and operate for state 
  3.36  agencies, departments, institutions, and offices a central mail 
  4.1   handling unit.  Official, outgoing mail for units in St. Paul 
  4.2   must may be required to be delivered unstamped to the unit.  The 
  4.3   unit shall may also operate an interoffice mail distribution 
  4.4   system.  The department may add personnel and acquire equipment 
  4.5   that may be necessary to operate the unit efficiently and 
  4.6   cost-effectively.  Account must be kept of the postage required 
  4.7   on that mail, which is then a proper charge against the agency 
  4.8   delivering the mail.  To provide funds for the payment of 
  4.9   postage, each agency shall may be required to make advance 
  4.10  payments to the commissioner sufficient to cover its postage 
  4.11  obligations for at least 60 days.  For purposes of this section, 
  4.12  the Minnesota state colleges and universities is a state agency. 
  4.13     Sec. 6.  [16C.045] [REPORTING OF VIOLATIONS] 
  4.14     A state employee who discovers evidence of violation of 
  4.15  laws or rules governing state contracts is encouraged to report 
  4.16  the violation or suspected violation to the employee's 
  4.17  supervisor, the commissioner or the commissioner's designee, or 
  4.18  the legislative auditor.  The legislative auditor must report to 
  4.19  the legislative coordinating commission if there are multiple 
  4.20  complaints about the same agency.  The auditor's report to the 
  4.21  legislative coordinating commission under this section must 
  4.22  disclose only the number and type of violations alleged.  An 
  4.23  employee making a good faith report under this section is 
  4.24  covered by section 181.932, prohibiting the employer from 
  4.25  discriminating against the employee. 
  4.26     Sec. 7.  Minnesota Statutes 2002, section 16C.05, 
  4.27  subdivision 2, is amended to read: 
  4.28     Subd. 2.  [CREATION AND VALIDITY OF CONTRACTS.] (a) A 
  4.29  contract is not valid and the state is not bound by it and no 
  4.30  agency, without the prior written approval of the commissioner, 
  4.31  may authorize work to begin on it unless: 
  4.32     (1) it has first been executed by the head of the agency or 
  4.33  a delegate who is a party to the contract; 
  4.34     (2) it has been approved by the commissioner; and 
  4.35     (3) it has been approved by the attorney general or a 
  4.36  delegate as to form and execution; 
  5.1      (4) the accounting system shows an obligation in an expense 
  5.2   budget or encumbrance for the amount of the contract liability; 
  5.3   and. 
  5.4      (5) (b) The combined contract and amendments shall must not 
  5.5   exceed five years without specific, written approval by the 
  5.6   commissioner according to established policy, procedures, and 
  5.7   standards, or unless otherwise provided for by law.  The term of 
  5.8   the original contract must not exceed two years unless the 
  5.9   commissioner determines that a longer duration is in the best 
  5.10  interest of the state.  
  5.11     (b) (c) Grants, interagency agreements, purchase orders, 
  5.12  work orders, and annual plans need not, in the discretion of the 
  5.13  commissioner and attorney general, require the signature of the 
  5.14  commissioner and/or the attorney general.  A signature is not 
  5.15  required for work orders and amendments to work orders related 
  5.16  to department of transportation contracts.  Bond purchase 
  5.17  agreements by the Minnesota public facilities authority do not 
  5.18  require the approval of the commissioner.  
  5.19     (c) (d) A fully executed copy of every contract, amendments 
  5.20  to the contract, and performance evaluations relating to the 
  5.21  contract must be kept on file at the contracting agency for a 
  5.22  time equal to that specified for contract vendors and other 
  5.23  parties in subdivision 5. 
  5.24     (e) No action may be maintained by a contractor against an 
  5.25  employee or agency who discloses information about a current or 
  5.26  former contractor in a performance evaluation, including 
  5.27  performance evaluations required under section 16C.08, 
  5.28  subdivision 4a, unless the contractor demonstrates by clear and 
  5.29  convincing evidence that: 
  5.30     (1) the information was false and defamatory; 
  5.31     (2) the employee or agency knew or should have known the 
  5.32  information was false and acted with malicious intent to injure 
  5.33  the current or former contractor; and 
  5.34     (3) the information was acted upon in a manner that caused 
  5.35  harm to the current or former contractor. 
  5.36     Sec. 8.  Minnesota Statutes 2002, section 16C.08, 
  6.1   subdivision 2, is amended to read: 
  6.2      Subd. 2.  [DUTIES OF CONTRACTING AGENCY.] (a) Before an 
  6.3   agency may seek approval of a professional or technical services 
  6.4   contract valued in excess of $5,000, it must certify to the 
  6.5   commissioner that provide the following:  
  6.6      (1) a description of how the proposed contract or amendment 
  6.7   is necessary and reasonable to advance the statutory mission of 
  6.8   the agency; 
  6.9      (2) a description of the agency's plan to notify firms or 
  6.10  individuals who may be available to perform the services called 
  6.11  for in the solicitation; and 
  6.12     (3) a description of the performance measures or other 
  6.13  tools that will be used to monitor and evaluate contract 
  6.14  performance. 
  6.15     (b) In addition to the information in paragraph (a), 
  6.16  clauses (1) to (3), the agency must certify that: 
  6.17     (1) no current state employee is able and available to 
  6.18  perform the services called for by the contract; 
  6.19     (2) the normal competitive bidding mechanisms will not 
  6.20  provide for adequate performance of the services; 
  6.21     (3) the contractor has certified that the product of the 
  6.22  services will be original in character; 
  6.23     (4) (2) reasonable efforts were will be made to publicize 
  6.24  the availability of the contract to the public; 
  6.25     (5) the agency has received, reviewed, and accepted a 
  6.26  detailed work plan from the contractor for performance under the 
  6.27  contract, if applicable; 
  6.28     (6) (3) the agency has developed, will develop and fully 
  6.29  intends to implement, a written plan providing for the 
  6.30  assignment of specific agency personnel to a monitoring and 
  6.31  liaison function, the periodic review of interim reports or 
  6.32  other indications of past performance, and the ultimate 
  6.33  utilization of the final product of the services; and 
  6.34     (7) (4) the agency will not allow the contractor to begin 
  6.35  work before the contract is fully executed unless an exception 
  6.36  has been approved by the commissioner and funds are fully 
  7.1   encumbered.; 
  7.2      (5) the contract will not establish an employment 
  7.3   relationship between the state or the agency and any persons 
  7.4   performing under the contract; and 
  7.5      (6) in the event the results of the contract work will be 
  7.6   carried out or continued by state employees upon completion of 
  7.7   the contract, the contractor is required to include state 
  7.8   employees in development and training, to the extent necessary 
  7.9   to ensure that after completion of the contract, state employees 
  7.10  can perform any ongoing work related to the same function. 
  7.11     (c) A contract establishes an employment relationship for 
  7.12  purposes of paragraph (b), clause (5), if, under federal laws 
  7.13  governing the distinction between an employee and an independent 
  7.14  contractor, a person would be considered an employee. 
  7.15     Sec. 9.  Minnesota Statutes 2002, section 16C.08, 
  7.16  subdivision 3, is amended to read: 
  7.17     Subd. 3.  [PROCEDURE FOR PROFESSIONAL OR TECHNICAL SERVICES 
  7.18  CONTRACTS.] Before approving a proposed contract for 
  7.19  professional or technical services, the commissioner must 
  7.20  determine, at least, that: 
  7.21     (1) all provisions of subdivision 2 and section 16C.16 have 
  7.22  been verified or complied with; 
  7.23     (2) the agency has demonstrated that the work to be 
  7.24  performed under the contract is necessary to the agency's 
  7.25  achievement of its statutory responsibilities and there is 
  7.26  statutory authority to enter into the contract; 
  7.27     (3) the contract will not establish an employment 
  7.28  relationship between the state or the agency and any persons 
  7.29  performing under the contract; 
  7.30     (4) the contractor and agents are not employees of the 
  7.31  state; 
  7.32     (5) no agency has previously performed or contracted for 
  7.33  the performance of tasks which would be substantially duplicated 
  7.34  under the proposed contract; 
  7.35     (6) (4) the contracting agency has specified a satisfactory 
  7.36  method of evaluating and using the results of the work to be 
  8.1   performed; and 
  8.2      (7) (5) the combined contract and amendments will not 
  8.3   exceed five years, unless otherwise provided for by law.  The 
  8.4   term of the original contract must not exceed two years unless 
  8.5   the commissioner determines that a longer duration is in the 
  8.6   best interest of the state. 
  8.7      Before approving a contract amendment or extension, the 
  8.8   commissioner must determine that the tasks to be performed under 
  8.9   the amendment or extension are substantially similar to those in 
  8.10  the original contract, or that the tasks are so closely related 
  8.11  to the original contract that it would be impracticable for a 
  8.12  different contractor to perform the tasks. 
  8.13     Sec. 10.  Minnesota Statutes 2002, section 16C.08, 
  8.14  subdivision 4, is amended to read: 
  8.15     Subd. 4.  [REPORTS.] (a) The commissioner shall submit to 
  8.16  the governor, the chairs of the house ways and means and senate 
  8.17  finance committees, and the legislative reference library a 
  8.18  yearly listing of all contracts for professional or technical 
  8.19  services executed.  The report must identify the contractor, 
  8.20  contract amount, duration, and services to be provided.  The 
  8.21  commissioner shall also issue yearly reports summarizing the 
  8.22  contract review activities of the department by fiscal year. 
  8.23     (b) The fiscal year report must be submitted by September 1 
  8.24  of each year and must: 
  8.25     (1) be sorted by agency and by contractor; 
  8.26     (2) show the aggregate value of contracts issued by each 
  8.27  agency and issued to each contractor; 
  8.28     (3) distinguish between contracts that are being issued for 
  8.29  the first time and contracts that are being extended; 
  8.30     (4) state the termination date of each contract; and 
  8.31     (5) identify services by commodity code, including topics 
  8.32  such as contracts for training, contracts for research and 
  8.33  opinions, and contracts for computer systems. 
  8.34     (c) Within 30 days of final completion of a contract over 
  8.35  $40,000 $50,000 covered by this subdivision, the head of the 
  8.36  agency entering into the contract must submit a one-page report 
  9.1   to the commissioner who must submit a copy to the legislative 
  9.2   reference library.  The report must:  
  9.3      (1) summarize the purpose of the contract, including why it 
  9.4   was necessary to enter into a contract; 
  9.5      (2) state the amount spent on the contract; and 
  9.6      (3) explain why this amount was a cost-effective way to 
  9.7   enable the agency to provide its services or products better or 
  9.8   more efficiently be accompanied by the performance evaluation 
  9.9   prepared in accordance with subdivision 4a.  
  9.10     Sec. 11.  Minnesota Statutes 2002, section 16C.08, is 
  9.11  amended by adding a subdivision to read: 
  9.12     Subd. 4a.  [PERFORMANCE EVALUATION.] Upon completion of a 
  9.13  professional or technical services contract, an agency entering 
  9.14  into the contract must complete a written performance evaluation 
  9.15  of the work done under the contract.  The evaluation must 
  9.16  include an appraisal of the contractor's timeliness, quality, 
  9.17  cost, and overall performance in meeting the terms and 
  9.18  objectives of the contract.  Contractors may request copies of 
  9.19  evaluations prepared under this subdivision and may respond in 
  9.20  writing.  Contractor responses must be maintained with the 
  9.21  contract file. 
  9.22     Sec. 12.  Minnesota Statutes 2002, section 16C.09, is 
  9.23  amended to read: 
  9.24     16C.09 [PROCEDURE FOR SERVICE CONTRACTS.] 
  9.25     (a) Before entering into or approving a service contract, 
  9.26  the commissioner must determine, at least, that: 
  9.27     (1) no current state employee is able and available to 
  9.28  perform the services called for by the contract; 
  9.29     (2) the work to be performed under the contract is 
  9.30  necessary to the agency's achievement of its statutory 
  9.31  responsibilities and there is statutory authority to enter into 
  9.32  the contract; 
  9.33     (3) (2) the contract will not establish an employment 
  9.34  relationship between the state or the agency and any persons 
  9.35  performing under the contract; 
  9.36     (4) (3) the contractor and agents are not employees of the 
 10.1   state; 
 10.2      (5) (4) the contracting agency has specified a satisfactory 
 10.3   method of evaluating and using the results of the work to be 
 10.4   performed; and 
 10.5      (6) (5) the combined contract and amendments will not 
 10.6   exceed five years without specific, written approval by the 
 10.7   commissioner according to established policy, procedures, and 
 10.8   standards, or unless otherwise provided for by law.  The term of 
 10.9   the original contract must not exceed two years, unless the 
 10.10  commissioner determines that a longer duration is in the best 
 10.11  interest of the state.  
 10.12     (b) For purposes of paragraph (a), clause (1), employees 
 10.13  are available if qualified and: 
 10.14     (1) are already doing the work in question; or 
 10.15     (2) are on layoff status in classes that can do the work in 
 10.16  question. 
 10.17  An employee is not available if the employee is doing other 
 10.18  work, is retired, or has decided not to do the work in question. 
 10.19     Sec. 13.  Minnesota Statutes 2002, section 16E.07, 
 10.20  subdivision 9, is amended to read: 
 10.21     Subd. 9.  [AGGREGATION OF SERVICE DEMAND.] The office shall 
 10.22  identify opportunities to aggregate demand for technical 
 10.23  services required by government units for online activities and 
 10.24  may contract with governmental or nongovernmental entities to 
 10.25  provide services.  These contracts are not subject to the 
 10.26  requirements of chapters 16B and 16C, except sections 16C.04, 
 10.27  16C.07, 16C.08, and 16C.09. 
 10.28     Sec. 14.  Minnesota Statutes 2002, section 116J.8771, is 
 10.29  amended to read: 
 10.30     116J.8771 [WAIVER.] 
 10.31     The capital access program is exempt from section 16C.05, 
 10.32  subdivision 2, paragraph (a), clause (5) (b). 
 10.33     Sec. 15.  Minnesota Statutes 2002, section 136F.77, 
 10.34  subdivision 3, is amended to read: 
 10.35     Subd. 3.  [NO ABROGATION.] Nothing in this section shall 
 10.36  abrogate the provisions of sections 43A.047 and section 136F.581.
 11.1      Sec. 16.  Minnesota Statutes 2002, section 256B.435, 
 11.2   subdivision 2a, is amended to read: 
 11.3      Subd. 2a.  [DURATION AND TERMINATION OF CONTRACTS.] (a) All 
 11.4   contracts entered into under this section are for a term of one 
 11.5   year.  Either party may terminate this contract at any time 
 11.6   without cause by providing 90 calendar days' advance written 
 11.7   notice to the other party.  Notwithstanding section 16C.05, 
 11.8   subdivisions 2, paragraph (a) (b), and 5, if neither party 
 11.9   provides written notice of termination, the contract shall be 
 11.10  renegotiated for additional one-year terms or the terms of the 
 11.11  existing contract will be extended for one year.  The provisions 
 11.12  of the contract shall be renegotiated annually by the parties 
 11.13  prior to the expiration date of the contract.  The parties may 
 11.14  voluntarily renegotiate the terms of the contract at any time by 
 11.15  mutual agreement. 
 11.16     (b) If a nursing facility fails to comply with the terms of 
 11.17  a contract, the commissioner shall provide reasonable notice 
 11.18  regarding the breach of contract and a reasonable opportunity 
 11.19  for the facility to come into compliance.  If the facility fails 
 11.20  to come into compliance or to remain in compliance, the 
 11.21  commissioner may terminate the contract.  If a contract is 
 11.22  terminated, provisions of section 256B.48, subdivision 1a, shall 
 11.23  apply. 
 11.24     Sec. 17.  Minnesota Statutes 2002, section 268.186, is 
 11.25  amended to read: 
 11.26     268.186 [RECORDS.] 
 11.27     (a) Each employer shall keep true and accurate records for 
 11.28  the periods of time and containing the information the 
 11.29  commissioner may require.  For the purpose of administering this 
 11.30  chapter, the commissioner has the power to examine, or cause to 
 11.31  be supplied or copied, any books, correspondence, papers, 
 11.32  records, or memoranda that are relevant, whether the books, 
 11.33  correspondence, papers, records, or memoranda are the property 
 11.34  of or in the possession of the employer or any other person at 
 11.35  any reasonable time and as often as may be necessary. 
 11.36     (b) The commissioner may make summaries, compilations, 
 12.1   photographs, duplications, or reproductions of any records, or 
 12.2   reports that the commissioner considers advisable for the 
 12.3   preservation of the information contained therein.  Any 
 12.4   summaries, compilations, photographs, duplications, or 
 12.5   reproductions shall be admissible in any proceeding under this 
 12.6   chapter.  Regardless of any restrictions contained in section 
 12.7   16B.50, The commissioner may duplicate records, reports, 
 12.8   summaries, compilations, instructions, determinations, or any 
 12.9   other written or recorded matter pertaining to the 
 12.10  administration of this chapter. 
 12.11     (c) Regardless of any law to the contrary, the commissioner 
 12.12  may provide for the destruction of any records, reports, or 
 12.13  reproductions thereof, or other papers, that are more than two 
 12.14  years old, and that are no longer necessary for determining 
 12.15  employer liability or an applicant's unemployment benefit rights 
 12.16  or for the administration of this chapter, including any 
 12.17  required audit.  The commissioner may provide for the 
 12.18  destruction or disposition of any record, report, or other paper 
 12.19  that has been photographed, duplicated, or reproduced.  
 12.20     Sec. 18.  [REPEALER.] 
 12.21     Minnesota Statutes 2002, sections 12.221, subdivision 5; 
 12.22  16B.50; 16C.07; and 43A.047, are repealed. 
 12.23     Sec. 19.  [EFFECTIVE DATE.] 
 12.24     Sections 1 to 18 are effective the day following final 
 12.25  enactment.