FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
to the Committee on Agriculture and Rural Development; and then to the
Committee on Government Organization
A BILL to amend and
reenact §5A-3-37 of the Code of West
Virginia, 1931, as amended, relating to providing for resident farm vendor’s
bidding preference.
Be it enacted by the
Legislature of West Virginia:
That §5A-3-37 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 3. PURCHASING DIVISION.
§5A-3-37. Preference for resident vendors; preference for
vendors employing state residents; preference for veteran residents;
exceptions.
(a) Effective beginning July
1, 1992, in any instance that a purchase of commodities or printing by the
director or by a state department is required under the provisions of this
article to be made upon competitive bids, the successful bid shall be
determined as provided in this section. The Secretary of the Department of
Revenue shall promulgate any rules necessary to: (i) Determine that vendors
have met the residence requirements described in this section; (ii) establish
the procedure for vendors to certify the residency requirements at the time of
submitting their bids; (iii) establish a procedure to audit bids which make a
claim for preference permitted by this section and to reject noncomplying bids;
and (iv) otherwise accomplish the objectives of this section. In prescribing the
rules, the secretary shall use a strict construction of the residence
requirements set forth in this section. For purposes of this section, a
successful bid shall be determined and accepted as follows:
(1) From an individual
resident vendor who has resided in West Virginia continuously for the four
years immediately preceding the date on which the bid is submitted or from a
partnership, association, corporation resident vendor, or from a corporation
nonresident vendor which has an affiliate or subsidiary which employs a minimum
of one hundred state residents and which has maintained its headquarters or
principal place of business within West Virginia continuously for four years
immediately preceding the date on which the bid is submitted, if the vendor's bid does not exceed the lowest qualified bid from a
nonresident vendor by more than two and one-half percent of the latter bid, and
if the vendor has made written claim for the preference at the time the bid was
submitted: Provided, That for purposes of this subdivision, any
partnership, association or corporation resident vendor of this state, which
does not meet the requirements of this subdivision solely because of the
continuous four-year residence requirement, shall be considered to meet the
requirement if at least eighty percent of the ownership interest of the
resident vendor is held by another individual, partnership, association or
corporation resident vendor who otherwise meets the requirements of this
subdivision, including the continuous four-year residency requirement: Provided,
however, That the Secretary of the Department of Revenue shall promulgate
rules relating to attribution of ownership among several resident vendors for
purposes of determining the eighty percent ownership requirement; or
(2) From a resident vendor,
if, for purposes of producing or distributing the commodities or completing the
project which is the subject of the vendor's
bid and continuously over the entire term of the project, on average at least
seventy-five percent of the vendor's employees are residents of West Virginia
who have resided in the state continuously for the two immediately preceding
years, and the vendor's bid does not
exceed the lowest qualified bid from a nonresident vendor by more than two and
one-half percent of the latter bid, and if the vendor has certified the
residency requirements of this subdivision and made written claim for the
preference, at the time the bid was submitted; or
(3) From a nonresident
vendor, which employs a minimum of one hundred state residents or a nonresident
vendor which has an affiliate or subsidiary which maintains its headquarters or
principal place of business within West Virginia and which employs a minimum of
one hundred state residents, if, for purposes of producing or distributing the
commodities or completing the project which is the subject of the vendor's bid and continuously over the entire term of the
project, on average at least seventy-five percent of the vendor's employees or the vendor's affiliate's or
subsidiary's employees are residents of West Virginia who have resided in the
state continuously for the two immediately preceding years and the vendor's bid does not exceed the lowest qualified bid from a
nonresident vendor by more than two and one-half percent of the latter bid, and
if the vendor has certified the residency requirements of this subdivision and
made written claim for the preference, at the time the bid was submitted; or
(4) From a vendor who meets
either the requirements of both subdivisions (1) and (2) of this subsection or
subdivisions (1) and (3) of this subsection, if the bid does not exceed the
lowest qualified bid from a nonresident vendor by more than five percent of the
latter bid, and if the vendor has certified the residency requirements above
and made written claim for the preference at the time the bid was submitted; or
(5) From an individual
resident vendor who is a veteran of the United States Armed Forces, the Reserves or the National Guard and
has resided in West Virginia continuously for the four years immediately
preceding the date on which the bid is submitted, if the vendor's bid does not
exceed the lowest qualified bid from a nonresident vendor by more than three
and one-half percent of the latter bid, and if the vendor has made written
claim for the preference at the time the bid was submitted; or
(6) From a resident vendor
who is a veteran of the United States Armed
Forces, the Reserves or the National Guard, if, for purposes of producing or
distributing the commodities or completing the project which is the subject of
the vendor's bid and continuously over
the entire term of the project, on average at least seventy-five percent of the
vendor's employees are residents of West
Virginia who have resided in the state continuously for the two immediately
preceding years and the vendor's bid does
not exceed the lowest qualified bid from a nonresident vendor by more than
three and one-half percent of the latter bid, and if the vendor has certified
the residency requirements of this subdivision and made written claim for the
preference, at the time the bid was submitted; or
(7) From a resident farm
vendor who operates a farm business incorporated and located in West Virginia
as defined by section three, article twenty-three, chapter eleven of this code if the farm vendor’s bid does not
exceed the lowest qualified bid from a nonresident farm vendor by more than
eight percent of the latter bid, and if the vendor has made written claim for
the preference at the time the bid was submitted, with the goal that at least
fifteen percent of the products being procured be grown by a West Virginia farm
vendor by 2025; or
(7) (8) Notwithstanding any provisions of
subdivisions (1), (2), (3), (4), (5) or (6) of this subsection to the contrary,
if any nonresident vendor that is bidding on the purchase of commodities or
printing by the director or by a state department is also certified as a small,
women or minority-owned business pursuant to section fifty-nine of this
article, the nonresident vendor shall be provided the same preference made
available to any resident vendor under the provisions of this subsection.
(b) If the Secretary of the
Department of Revenue determines under any audit procedure that a vendor who
received a preference under this section fails to continue to meet the
requirements for the preference at any time during the term of the project for
which the preference was received the secretary may: (1) Reject the vendor's
bid; or (2) assess a penalty against the vendor of not more than five percent
of the vendor's bid on the project.
(c) Political subdivisions
of the state including county boards of education may grant the same
preferences to any vendor of this state who has made a written claim for the
preference at the time a bid is submitted, but for the purposes of this
subsection, in determining the lowest bid, any political subdivision shall
exclude from the bid the amount of business occupation taxes which must be paid
by a resident vendor to any municipality within the county comprising or
located within the political subdivision as a result of being awarded the
contract which is the object of the bid; in the case of a bid received by a
municipality, the municipality shall exclude only the business and occupation
taxes as will be paid to the municipality: Provided, That prior to
soliciting any competitive bids, any political subdivision may, by majority
vote of all its members in a public meeting where all the votes are recorded,
elect not to exclude from the bid the amount of business and occupation taxes
as provided in this subsection.
(d) If any of the
requirements or provisions set forth in this section jeopardize the receipt of
federal funds, then the requirement or provisions are void and of no force and
effect for that specific project.
(e) If any provision or
clause of this section or application thereof to any person or circumstance is
held invalid, the invalidity shall not affect other provisions or applications
of this section which can be given effect without the invalid provision or
application, and to this end the provisions of this section are severable.
(f) This section may be
cited as the "Jobs for West
Virginians Act of 1990."
NOTE: The purpose of this bill is
to provide for a resident farm vendor’s bidding preference.
Strike-throughs indicate language
that would be stricken from a heading or the present law, and underscoring
indicates new language that would be added.