S.F. 438 Section 1. Section 26.9, Code 2017, is amended to read as 1 follows: 2 26.9 Award of contract. 3 1. The contract for the public improvement must be awarded 4 to the lowest responsive, responsible bidder. However, 5 contracts relating to public utilities or extensions or 6 improvements thereof, as described in sections 384.80 through 7 384.94 , may be awarded by the city as it deems to be in the best 8 interests of the city. This section shall not be construed to 9 prohibit a governmental entity in the award of a contract for a 10 public improvement or a governing body of a city utility from 11 providing, in the award of a contract for a public improvement, 12 an enhancement of payments upon early completion of the public 13 improvement if the availability of the enhancement payments is 14 included in the notice to bidders, the enhancement payments are 15 competitively neutral to potential bidders, the enhancement 16 payments are considered as a separate item in the public 17 hearing on the award of contract, and the total value of the 18 enhancement payments does not exceed ten percent of the value 19 of the contract. 20 2. A governmental entity shall not require a potential 21 bidder on a public improvement to provide any information which 22 the potential bidder may deem to be confidential or proprietary 23 as a requirement for being deemed a responsive, responsible 24 bidder. This subsection shall not be construed to prohibit a 25 governmental entity from obtaining information from the lowest 26 responsive bidder to determine the bidder’s responsibility 27 relating to the bidder’s experience, number of employees, 28 and ability to finance the cost of the public improvement. 29 However, a governmental entity shall require nonresident 30 bidders to comply with section 73A.21, subsection 4. 31 Sec. 2. NEW SECTION . 26.16 Prequalification requirements 32 prohibited. 33 A governmental entity shall not by ordinance, rule, or any 34 other action relating to contracts for public improvements 35 -1- LSB 1698SV (1) 87 je/rj 1/ 8

S.F. 438 for which competitive bids are required by this chapter 1 impose any requirement that directly or indirectly restricts 2 potential bidders to any predetermined class of bidders defined 3 by experience on similar projects, size of company, union 4 membership, or any other criteria. However, a governmental 5 entity shall require nonresident bidders to comply with section 6 73A.21, subsection 4. 7 Sec. 3. Section 73A.1, Code 2017, is amended to read as 8 follows: 9 73A.1 Definitions. 10 As used in this subchapter: 11 1. “Appeal board” as used in this chapter means the state 12 appeal board, composed of the auditor of state, treasurer of 13 state, and the director of the department of management. 14 2. “Municipality” as used in this chapter means township or 15 the state fair board. 16 3. “Public improvement” as used in this chapter means a 17 building or other construction work to be paid for in whole or 18 in part by the use of funds of any municipality. 19 Sec. 4. Section 73A.16, Code 2017, is amended to read as 20 follows: 21 73A.16 Bonds and taxes void. 22 Any bonds or other evidence of indebtedness issued contrary 23 to the provisions of this chapter subchapter , and any tax 24 levied or attempted to be levied for the payment of any such 25 bonds or interest thereon, shall be null and void. 26 Sec. 5. NEW SECTION . 73A.25 Title. 27 This subchapter shall be known as the “Fair and Open 28 Competition in Governmental Construction Act” . 29 Sec. 6. NEW SECTION . 73A.26 Purpose. 30 The purpose of this chapter is to provide for more 31 economical, nondiscriminatory, neutral, and efficient 32 procurement of construction-related goods and services by this 33 state and political subdivisions of this state. 34 Sec. 7. NEW SECTION . 73A.27 Definitions. 35 -2- LSB 1698SV (1) 87 je/rj 2/ 8

S.F. 438 As used in this subchapter, unless the context clearly 1 indicates otherwise: 2 1. “Governmental entity” means the state, political 3 subdivisions of the state, public school corporations, and all 4 officers, boards, or commissions empowered by law to enter into 5 contracts for the construction of public improvements. 6 2. “Public improvement” means any building or construction 7 work which is constructed, repaired, remodeled, or demolished 8 under the control of a governmental entity and is paid for 9 in whole or in part with funds of the governmental entity, 10 including a building or improvement constructed or operated 11 jointly with any other public or private agency. 12 Sec. 8. NEW SECTION . 73A.28 Public improvement contracts —— 13 prohibited terms and exemptions. 14 1. A governmental entity awarding a contract for the 15 construction, repair, remodeling, or demolition of a public 16 improvement and any construction manager acting on its behalf 17 shall not, in any bid specifications, project agreements, or 18 other controlling documents do any of the following: 19 a. Require a bidder, offeror, contractor, or subcontractor 20 to enter into or adhere to an agreement with one or more labor 21 organizations in regard to the public improvement or a related 22 public improvement project. 23 b. Prohibit a bidder, offeror, contractor, or subcontractor 24 from entering into or adhering to an agreement with one or more 25 labor organizations in regard to the public improvement or a 26 related public improvement project. 27 c. Discriminate against a bidder, offeror, contractor, or 28 subcontractor for becoming or remaining or refusing to become 29 or remain a signatory to, or for adhering or refusing to adhere 30 to, an agreement with one or more labor organizations in regard 31 to the public improvement or a related public improvement 32 project. 33 2. A governmental entity shall not award a grant, tax 34 abatement, or tax credit that is conditioned upon a requirement 35 -3- LSB 1698SV (1) 87 je/rj 3/ 8

S.F. 438 that the awardee include a term described in subsection 1 1 in a contract document for any construction, improvement, 2 maintenance, or renovation to real property or fixtures that is 3 the subject of the grant, tax abatement, or tax credit. 4 3. This section shall not be construed to do any of the 5 following: 6 a. Prohibit a governmental entity from awarding a contract, 7 grant, tax abatement, or tax credit to a private owner, bidder, 8 contractor, or subcontractor who enters into or who is party to 9 an agreement with a labor organization, if being or becoming 10 a party or adhering to an agreement with a labor organization 11 is not a condition for award of the contract, grant, tax 12 abatement, or tax credit, and if the governmental entity does 13 not discriminate against a private owner, bidder, contractor, 14 or subcontractor in the awarding of that contract, grant, 15 tax abatement, or tax credit based upon the private owner’s, 16 bidder’s, contractor’s, or subcontractor’s status as being or 17 becoming, or the willingness or refusal to become, a party to 18 an agreement with a labor organization. 19 b. Prohibit a contractor or subcontractor from voluntarily 20 entering into or complying with an agreement entered into with 21 one or more labor organizations in regard to a contract with a 22 governmental entity or funded in whole or in part from a grant, 23 tax abatement, or tax credit from the governmental entity. 24 c. Prohibit employers or other parties from entering into 25 agreements or engaging in any other activity protected by the 26 federal National Labor Relations Act, 29 U.S.C. §151 et seq. 27 d. Interfere with labor relations of parties that are not 28 regulated under the federal National Labor Relations Act, 29 29 U.S.C. §151 et seq. 30 Sec. 9. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 31 immediate importance, takes effect upon enactment. 32 Sec. 10. APPLICABILITY. This Act applies to notices to 33 bidders for public improvements, bids awarded for public 34 improvements, and contracts for public improvements entered 35 -4- LSB 1698SV (1) 87 je/rj 4/ 8

S.F. 438 into on and after the effective date of this Act. 1 EXPLANATION 2 The inclusion of this explanation does not constitute agreement with 3 the explanation’s substance by the members of the general assembly. 4 IOWA CONSTRUCTION BIDDING PROCEDURES ACT. This bill 5 prohibits a governmental entity from requiring a potential 6 bidder on a public improvement to provide any information which 7 the potential bidder may deem to be confidential or proprietary 8 as a requirement for being deemed a responsive, responsible 9 bidder. This provision shall not be construed to prohibit a 10 governmental entity from obtaining information from the lowest 11 responsive bidder to determine the bidder’s responsibility 12 relating to the bidder’s experience, number of employees, 13 and ability to finance the cost of the public improvement. 14 However, the bill provides that a governmental entity must 15 still require nonresident bidders to comply with the preference 16 disclosure requirements of Code section 73A.21, subsection 4. 17 The bill also prohibits a governmental entity from imposing 18 any requirement that directly or indirectly restricts potential 19 bidders to any predetermined class of bidders by ordinance, 20 rule, or any other action relating to contracts for public 21 improvements for which competitive bids are required by Code 22 chapter 26. However, the bill provides that a governmental 23 entity must still require nonresident bidders to comply with 24 the preference disclosure requirements of Code section 73A.21, 25 subsection 4. 26 Current Code chapter 26 defines “governmental entity” 27 as the state, political subdivisions of the state, public 28 school corporations, and all officers, boards, or commissions 29 empowered by law to enter into contracts for the construction 30 of public improvements, excluding the state board of regents 31 and the state department of transportation. Code chapter 26 32 also defines “public improvement” as a building or construction 33 work which is constructed under the control of a governmental 34 entity and is paid for in whole or in part with funds of the 35 -5- LSB 1698SV (1) 87 je/rj 5/ 8

S.F. 438 governmental entity, including a building or improvement 1 constructed or operated jointly with any other public or 2 private agency, but excluding urban renewal demolition and 3 low-rent housing projects, industrial aid projects authorized 4 under Code chapter 419, emergency work or repair or maintenance 5 work performed by employees of a governmental entity, and 6 excluding a highway, bridge, or culvert project, and excluding 7 construction or repair or maintenance work performed for a city 8 utility under Code chapter 388 by its employees or performed 9 for a rural water district under Code chapter 357A by its 10 employees. 11 FAIR AND OPEN COMPETITION IN GOVERNMENTAL CONSTRUCTION 12 ACT. The bill creates a new subchapter of Code chapter 73A, 13 the fair and open competition in governmental construction 14 Act. The purpose of the Act is to provide for more economical, 15 nondiscriminatory, neutral, and efficient procurement of 16 construction-related goods and services by this state and 17 political subdivisions of this state. 18 The bill prohibits a governmental entity from awarding 19 a contract for the construction, repair, remodeling, or 20 demolition of a public improvement and any construction manager 21 acting on its behalf from engaging in certain activities in any 22 bid specifications, project agreements, or other controlling 23 documents. 24 The governmental entity or construction manager is 25 prohibited from requiring a bidder, offeror, contractor, or 26 subcontractor to enter into or adhere to an agreement with one 27 or more labor organizations in regard to the public improvement 28 or a related public improvement project. 29 The governmental entity or construction manager is 30 prohibited from prohibiting a bidder, offeror, contractor, or 31 subcontractor from entering into or adhering to an agreement 32 with one or more labor organizations in regard to the public 33 improvement or a related public improvement project. 34 The governmental entity or construction manager is 35 -6- LSB 1698SV (1) 87 je/rj 6/ 8

S.F. 438 prohibited from discriminating against a bidder, offeror, 1 contractor, or subcontractor for becoming or remaining or 2 refusing to become or remain a signatory to, or for adhering 3 or refusing to adhere to, an agreement with one or more labor 4 organizations in regard to the public improvement or a related 5 public improvement project. 6 The bill also prohibits a governmental entity from awarding 7 a grant, tax abatement, or tax credit that is conditioned 8 upon a requirement that the awardee include a term which the 9 governmental entity is prohibited by the bill from imposing 10 in a contract document for any construction, improvement, 11 maintenance, or renovation to real property or fixtures that is 12 the subject of the grant, tax abatement, or tax credit. 13 The bill specifies certain activities which the bill shall 14 not be construed to prohibit. 15 The new subchapter of Code chapter 73A defines “governmental 16 entity” as the state, political subdivisions of the state, 17 public school corporations, and all officers, boards, or 18 commissions empowered by law to enter into contracts for the 19 construction of public improvements, and defines “public 20 improvement” as any building or construction work which is 21 constructed repaired, remodeled, or demolished under the 22 control of a governmental entity and is paid for in whole or 23 in part with funds of the governmental entity, including a 24 building or improvement constructed or operated jointly with 25 any other public or private agency. 26 Under Code section 24.24, failure on the part of a public 27 official to perform any of the duties prescribed in Code 28 chapter 73A constitutes a simple misdemeanor and is sufficient 29 ground for removal from office. A simple misdemeanor is 30 punishable by confinement for no more than 30 days or a fine of 31 at least $65 but not more than $625 or by both. 32 GENERAL PROVISIONS. The bill takes effect upon enactment. 33 The bill applies to notices to bidders for public improvements, 34 bids awarded for public improvements, and contracts for public 35 -7- LSB 1698SV (1) 87 je/rj 7/ 8