Senate Bill No. 568
(By Senator Anderson)
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[Introduced March 22, 1993; referred to the Committee
on Finance.]
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A BILL to amend and reenact section thirty-seven, article three,
chapter five-a of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to purchasing
by the state generally; preference for resident vendors;
including corporation nonresident vendors which have an
affiliate or subsidiary in this state as being eligible for
the resident vendor preference which is based on the vendor
having its principal place of business or headquarters in
West Virginia; increasing from sixty percent to seventy-five
percent the number of resident employees required for a
vendor to qualify for the vendor preference based on the
number of West Virginia residents employed by the vendor;
and including corporation nonresident vendors which have an
affiliate or a subsidiary in this state within the
preference.
Be it enacted by the Legislature of West Virginia:
That section thirty-seven, article three, chapter five-a ofthe code of West Virginia, one thousand nine hundred thirty-one,
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; exceptions.
(a) Other provisions of this article notwithstanding,
effective the first day of July, one thousand nine hundred
ninety, through the thirtieth day of June, one thousand nine
hundred ninety-four, in any instance involving the purchase of
construction services or for the construction, repair or
improvement of any buildings or portions thereof, where the total
aggregate cost thereof, whether one or a series of contracts are
awarded in completing the project, is estimated by the director
to exceed the sum of fifty thousand dollars, and where the
director or any state department is required under the provisions
of this article to make such purchase, construction, repair or
improvement upon competitive bids, the successful bid shall be
determined as provided in this section. Effective beginning the
first day of July, one thousand nine hundred ninety-two, 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 tax and revenue shall
promulgate such rules and regulations necessary to (i) determine
that vendors have met the residence requirements described inthis section; (ii) establish the procedure for vendors to certify
such 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 such rules and regulations, 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, or corporation resident vendor, or a
corporation nonresident vendor which has an affiliate or
subsidiary 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 such resident 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 such resident
vendor has made written claim for such preference at the time the
bid was submitted:
Provided,
That for purposes of this
subparagraph (1), any partnership, association or corporation
resident vendor of this state, which does not meet the
requirements of this subparagraph solely because of thecontinuous four-year residence requirement, shall be deemed to
meet such requirement if at least eighty percent of the ownership
interest of such resident vendor is held by another individual,
partnership, association or corporation resident vendor who
otherwise meets the requirements of this subparagraph, including
the continuous four-year residency requirement:
Provided,
however,
That the secretary of the department of tax and revenue
shall promulgate rules and regulations relating to attribution of
ownership among several such resident vendors for purposes of
determining the eighty percent ownership requirement; or
(2) From a resident or nonresident vendor, if, for purposes
of producing or distributing the commodities or completing the
project which is the subject of such vendor's bid and
continuously over the entire term of such project, on average at
least sixty seventy-five percent of such vendor's employees or
seventy-five percent of the employees of an affiliate or
subsidiary of a corporation nonresident vendor are residents of
West Virginia who have resided in the state continuously for the
two immediately preceding years and such 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 such
vendor has certified the residency requirements above and made
written claim for such preference, at the time the bid was
submitted; or
(3) From a vendor who meets the requirements of both
subparagraphs (1) and (2) set forth above, if such bid does notexceed the lowest qualified bid from a nonresident vendor by more
than five percent of the latter bid, and if such resident vendor
has certified the residency requirements above and made written
claim for such preference at the time the bid was submitted.
(b) If the secretary of the department of tax and revenue
determines under any audit procedure that a vendor who received
a preference under this section fails to continue to meet the
requirements for such preference at any time during the term of
the project for which such preference was received the secretary
may: (1) Reject such vendor's bid; or (2) assess a penalty
against such vendor of not more than five percent of such
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 such 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 such
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 such business
and occupation taxes as will be paid to such municipality:
Provided,
That prior to soliciting any such competitive bids, any
such political subdivision may, by majority vote of all itsmembers in a public meeting where all such votes shall be
recorded, elect not to exclude from the bid the amount of
business and occupation taxes as provided herein.
(d) If any of the requirements or provisions set forth in
this section jeopardize the receipt of federal funds, then such
requirement or provisions shall be 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, such 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 declared to be severable.
(f) This section may be cited as the "Jobs for West
Virginians Act of 1990."
NOTE: The purpose of this bill is to include corporation
nonresident vendors which have an affiliate or a subsidiary in
this state as being eligible for the resident vendor preference
which is based on the vendor having its principal place of
business or headquarters in West Virginia. The bill also
increases from sixty percent to seventy-five percent the number
of resident employees required for a vendor to qualify for the
vendor preference based on the number of West Virginia residents
employed by the vendor and includes corporation nonresident
vendors which have an affiliate or a subsidiary in this state
within the preference.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.