Senate Bill No. 74
(By Senators Oliverio, Minard, Minear, Hunter, McKenzie,
Mitchell, Ross, Sprouse and Craigo)
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[Introduced January9, 2002; referred to the Committee
on Government Organization; and then 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
lowering residency requirements for 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 lower residency
requirements to receive 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.