Senate File 276 - Introduced SENATE FILE 276 BY SODDERS A BILL FOR An Act relating to reciprocal preferences for bidders on public 1 improvement contracts and including effective date and 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2468SS (2) 84 je/rj
S.F. 276 Section 1. Section 73A.21, Code 2011, is amended to read as 1 follows: 2 73A.21 Reciprocal resident bidder and resident labor force 3 preference by state, its agencies, and political subdivisions —— 4 penalties . 5 1. For purposes of this section : 6 a. “Commissioner” means the labor commissioner appointed 7 pursuant to section 91.2, or the labor commissioner’s designee. 8 b. “Division” means the division of labor of the department 9 of workforce development. 10 c. “Nonresident bidder” means a person or entity who does 11 not meet the definition of a resident bidder. 12 d. “Public body” means the state and any of its political 13 subdivisions, including a school district, public utility, or 14 the state board of regents. 15 a. e. “Public improvement” means public improvements as 16 defined in section 73A.1 a building or other construction work 17 to be paid for in whole or in part by the use of funds of the 18 state, its agencies, and any of its political subdivisions and 19 includes road construction, reconstruction, and maintenance 20 projects. 21 f. “Public utility” includes municipally owned utilities and 22 municipally owned waterworks. 23 b. g. “Resident bidder” means a person or entity authorized 24 to transact business in this state and having a place of 25 business for transacting business within the state at which 26 it is conducting and has conducted business for at least six 27 months three years prior to the date of the first advertisement 28 for the public improvement and in the case of a corporation, 29 having at least fifty percent of its common stock owned by 30 residents of this state . If another state or foreign country 31 has a more stringent definition of a resident bidder, the more 32 stringent definition is applicable as to bidders from that 33 state or foreign country. 34 h. “Resident labor force preference” means a requirement in 35 -1- LSB 2468SS (2) 84 je/rj 1/ 7
S.F. 276 which all or a portion of a labor force working on a public 1 improvement is a resident of a particular state or country. 2 2. Notwithstanding this chapter , chapter 73 , chapter 309 , 3 chapter 310 , chapter 331 , or chapter 384 , when a contract for a 4 public improvement is to be awarded to the lowest responsible 5 bidder, a resident bidder shall be allowed a preference as 6 against a nonresident bidder from a state or foreign country 7 which if that state or foreign country gives or requires a 8 any preference to bidders from that state or foreign country , 9 including but not limited to any preference to bidders, the 10 imposition of any type of labor force preference, or any other 11 form of preferential treatment to bidders or laborers from that 12 state or foreign country . The preference is allowed shall 13 be equal to the preference given or required by the state or 14 foreign country in which the nonresident bidder is a resident. 15 In the instance of a resident labor force preference, a 16 nonresident bidder shall apply the same resident labor force 17 preference to a public improvement in this state as would be 18 required in the construction of a public improvement by the 19 state or foreign country in which the nonresident bidder is a 20 resident. 21 3. This section applies to the state, its agencies, and any 22 political subdivisions of the state. 23 4. 3. If it is determined that this may cause denial of 24 federal funds which would otherwise be available, or would 25 otherwise be inconsistent with requirements of any federal law 26 or regulation , this section shall be suspended, but only to the 27 extent necessary to prevent denial of the funds or to eliminate 28 the inconsistency with federal requirements. 29 4. The public body involved in a public improvement shall 30 require a nonresident bidder to specify on all project bid 31 specifications and contract documents whether any preference 32 as described in subsection 2 is in effect in the nonresident 33 bidder’s state or country of domicile at the time of a bid 34 submittal. 35 -2- LSB 2468SS (2) 84 je/rj 2/ 7
S.F. 276 5. The commissioner and the division shall administer and 1 enforce this section, and the commissioner shall adopt rules 2 for the administration and enforcement of this section as 3 provided in section 91.6. 4 6. The commissioner shall have the following powers and 5 duties for the purposes of this section: 6 a. The commissioner may hold hearings and investigate 7 charges of violations of this section. 8 b. The commissioner may, consistent with due process of law, 9 enter any place of employment to inspect records concerning 10 labor force residency, to question an employer or employee, and 11 to investigate such facts, conditions, or matters as are deemed 12 appropriate in determining whether any person has violated the 13 provisions of this section. The commissioner shall only make 14 such an entry in response to a written complaint. 15 c. The commissioner shall develop a written complaint form 16 applicable to this section and make it available in division 17 offices and on the department of workforce development’s 18 internet site. 19 d. The commissioner may sue for injunctive relief against 20 the awarding of a contract, the undertaking of a public 21 improvement, or the continuation of a public improvement in 22 response to a violation of this section. 23 e. The commissioner may investigate and ascertain the 24 residency of a worker engaged in any public improvement in this 25 state. 26 f. The commissioner may administer oaths, take or cause to 27 be taken deposition of witnesses, and require by subpoena the 28 attendance and testimony of witnesses and the production of all 29 books, registers, payrolls, and other evidence relevant to a 30 matter under investigation or hearing. 31 g. The commissioner shall require a contractor or 32 subcontractor to file, within ten days of receipt of a request, 33 any records enumerated in subsection 8. If the contractor or 34 subcontractor fails to provide the requested records within ten 35 -3- LSB 2468SS (2) 84 je/rj 3/ 7
S.F. 276 days, the commissioner may direct, within fifteen days after 1 the end of the ten-day period, that the fiscal or financial 2 office charged with the custody and disbursement of funds of 3 the public body that contracted for construction of the public 4 improvement or undertook the public improvement, to immediately 5 withhold from payment to the contractor or subcontractor 6 up to twenty-five percent of the amount to be paid to the 7 contractor or subcontractor under the terms of the contract 8 or written instrument under which the public improvement is 9 being performed. The amount withheld shall be immediately 10 released upon receipt by the public body of a notice from 11 the commissioner indicating that the request for records as 12 required by this section has been satisfied. 13 7. While participating in a public improvement, a 14 nonresident bidder domiciled in a state or country that 15 has established a resident labor force preference shall 16 make and keep, for a period of not less than three years, 17 accurate records of all workers employed by the contractor or 18 subcontractor on the public improvement. The records shall 19 include each worker’s name, address, telephone number when 20 available, social security number, trade classification, and 21 the starting and ending time of employment. 22 8. Any person or entity that violates the provisions of 23 this section is subject to a civil penalty in an amount not to 24 exceed one thousand dollars for each violation found in a first 25 investigation by the division, not to exceed five thousand 26 dollars for each violation found in a second investigation 27 by the division, and not to exceed fifteen thousand dollars 28 for a third or subsequent violation found in any subsequent 29 investigation by the division. Each violation of this section 30 for each worker and for each day the violation continues 31 constitutes a separate and distinct violation. In determining 32 the amount of the penalty, the division shall consider the 33 appropriateness of the penalty to the person or entity charged, 34 upon determination of the gravity of the violations. The 35 -4- LSB 2468SS (2) 84 je/rj 4/ 7
S.F. 276 collection of these penalties shall be enforced in a civil 1 action brought by the attorney general on behalf of the 2 division. 3 9. A party seeking review of the division’s determination 4 pursuant to this section may file a written request for an 5 informal conference. The request must be received by the 6 division within fifteen days after the date of issuance of 7 the division’s determination. During the conference, the 8 party seeking review may present written or oral information 9 and arguments as to why the division’s determination should 10 be amended or vacated. The division shall consider the 11 information and arguments presented and issue a written 12 decision advising all parties of the outcome of the conference. 13 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 14 immediate importance, takes effect upon enactment. 15 Sec. 3. APPLICABILITY. This Act applies to all public 16 improvement projects, and to public improvement contracts 17 entered into on or after July 1, 2011. 18 EXPLANATION 19 This bill requires the labor commissioner to administer 20 and enforce Code section 73A.21, which allows the state 21 and political subdivisions awarding a contract for a public 22 improvement to give a preference to an Iowa resident bidder 23 over a nonresident bidder. The preference must be reciprocal 24 to any preference given to in-state resident bidders over 25 nonresident bidders by the state or foreign country of a 26 nonresident bidder. The bill directs the labor commissioner to 27 adopt rules as necessary to administer Code section 73A.21. 28 The bill includes in the reciprocity requirement nonresident 29 bidders from a state or foreign country which gives any type 30 of labor force preference or any other form of preference 31 to resident bidders or laborers. The bill provides that if 32 the provisions of Code section 73A.21 may cause denial of 33 federal funds which would otherwise be available, or would 34 otherwise be inconsistent with requirements of any federal law 35 -5- LSB 2468SS (2) 84 je/rj 5/ 7
S.F. 276 or regulation, the Code section will be suspended, but only 1 to the extent necessary to prevent denial of the funds or to 2 eliminate the inconsistency with federal requirements. The 3 bill requires a public body involved in a public improvement to 4 require all nonresident bidders to specify on all project bid 5 specifications and contract documents whether the nonresident 6 bidder’s state or country of residence has any type of resident 7 bidder preference in effect at the time of a bid submittal. 8 The bill provides the labor commissioner with certain powers 9 relating to nonresident bidders for public improvement projects 10 to enforce Code section 73A.21. The bill provides the labor 11 commissioner with investigative powers concerning nonresident 12 bidders. Such powers include the power to hold hearings, to 13 enter a place of employment to inspect records regarding labor 14 force residency, to question employees, and to take depositions 15 and subpoenas. The bill provides that the labor commissioner 16 may sue for injunctive relief for violations of Code section 17 73A.21. The bill requires the labor commissioner to develop 18 a written complaint form for violations. The bill requires a 19 nonresident contractor domiciled in a state or country that 20 has a resident labor force preference to keep for at least 21 three years accurate records containing certain identifying 22 information including residency for all workers employed by 23 the contractor. The bill provides that the labor commissioner 24 may direct that up to 25 percent of the contract price be 25 withheld from the contractor if the contractor does not file 26 such records until the records are filed. The bill provides 27 for a civil penalty of $1,000 for each violation found during 28 a first investigation, $5,000 for each violation found during 29 a second investigation, and $15,000 for each violation found 30 during a subsequent investigation. The bill provides that a 31 separate and distinct violation occurs for each worker employed 32 by the contractor for each day the worker is employed by the 33 contractor. The bill provides for a review process with the 34 division of labor and sets out procedural requirements. The 35 -6- LSB 2468SS (2) 84 je/rj 6/ 7
S.F. 276 bill modifies and adds applicable definitions for Code section 1 73A.21. 2 The bill is effective upon enactment. 3 The bill applies to all public improvement projects, and to 4 public improvement contracts entered into on or after July 1, 5 2011. 6 -7- LSB 2468SS (2) 84 je/rj 7/ 7