Senate Bill No. 512

(By Senators Hunter, Dempsey, Jenkins, Barnes, Unger and Love)

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[Introduced March 11, 2005; referred to the Committee

on Military; and then to the Committee on Finance.]

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A BILL to amend and reenact §5A-3-37 and §5A-3-37a of the Code of West Virginia, 1931, as amended, all relating to providing preference on bids for certain state and local government contracts to resident West Virginia vendors who qualify for veteran status.

Be it enacted by the Legislature of West Virginia:
That §5A-3-37 and §5A-3-37a of the Code of West Virginia, 1931, as amended, be amended and reenacted, all 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 any rules and regulations necessary to propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code 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) set standards to determine when resident West Virginia vendors qualify for veterans status and establish procedures for certifying veterans status at the time of submitting bids; (iii) (iv) establish a procedure to audit bids which make a claim for preference permitted by this section and to reject noncomplying bids; and (iv) (v) 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 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 Tax and Revenue shall promulgate rules and regulations propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code relating to attribution of ownership among several resident vendors for purposes of determining the eighty percent ownership requirement: Provided further, That a resident West Virginia vendor who meets the requirements of this subdivision and who qualifies for veteran status shall receive preference as against a nonveteran resident West Virginia vendor; 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: Provided, That a resident West Virginia vendor who meets the requirements of this subdivision and who qualifies for veteran status shall receive preference as against a nonveteran resident West Virginia vendor; 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 principle 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 affiliates 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: Provided, That a resident West Virginia vendor who meets the requirements of this subdivision and who qualifies for veteran status shall receive preference as against a nonveteran resident West Virginia vendor.
(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 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."
§5A-3-37a. Preference for resident vendors; exceptions; reciprocal preference.

Except where the provisions of section thirty-seven of this article may apply, in any instance where a purchase of commodities or printing by the director or by a state spending unit is required under the provisions of this article to be made upon competitive bids, preference shall be given to vendors resident in West Virginia as against vendors resident in any state that gives or requires a preference for the purchase of commodities or printing produced, manufactured or performed in that state: Provided, That a resident West Virginia vendor who qualifies for veterans status under rules promulgated by the Secretary of the Department of Revenue pursuant to section thirty-seven of this article, shall receive preference as against a nonveteran resident West Virginia vendor. The amount of the preference shall be equal to the amount of the preference applied by the other state.
A vendor shall be deemed to be a resident of this state if such vendor is an individual, partnership, association or corporation in good standing under the laws of the State of West Virginia who: (1) Is a resident of the state or a foreign corporation authorized to transact business in the state; (2) maintains an office in the state; (3) has paid personal property taxes pursuant to article five, chapter eleven of this code on equipment used in the regular course of supplying services of the general type offered; and (4) has paid business taxes pursuant to chapter eleven of this code. In addition, in the case of a vendor selling tangible personal property, a resident vendor is one who has a stock of materials held in West Virginia for sale in the ordinary course of business, which stock is of the general type offered, and which is reasonably sufficient in quantity to meet the ordinary requirements of customers.
If any of the requirements or provisions set forth in this section jeopardize the receipt of federal funds, then such requirements or provision shall be void and of no force and effect.


NOTE: The purpose of this bill is to provide preference on bids for certain state or local government contracts to resident West Virginia vendors who qualify for veterans status.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.