Senate Bill No. 84
(By Senators Oliverio, Minear, Hunter, Prezioso, Mitchell,
McKenzie and Minard)
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[Introduced January 14, 2000; referred to the Committee
on the Judiciary.]
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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 requiring
political subdivisions of the state to give preference to
resident vendors and vendors employing state residents.
Be it enacted by the Legislature of West Virginia:
That section thirty-seven, article three, chapter five-a of
the 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 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 the 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 propose, subject
to legislative approval, any rules and regulations 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, 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 one year
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 one
year 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 one-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 one-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
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.
(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 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 shall 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 of this section to any person or circumstance is held invalid, the invalidity shall does 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 require political
subdivisions to give preference to resident vendors and vendors
employing state residents for purchases.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.