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H0597......................................................by STATE AFFAIRS
BEST VALUE IN CONTRACTING ACT - Adds to existing law to provide for the
consideration of projected tax revenue impacts in the award of certain
public contracts; to provide a procedure; to provide for default; to
provide for a rating factor; to prohibit certain bidders; and to authorize
the Department of Administration to promulgate rules.
02/02 House intro - 1st rdg - to printing
02/03 Rpt prt - to St Aff
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 597
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO PUBLIC WORKS CONTRACTS; AMENDING CHAPTER 23, TITLE 67, IDAHO CODE,
3 BY THE ADDITION OF A NEW SECTION 67-2351, IDAHO CODE, TO PROVIDE A SHORT
4 TITLE; AMENDING CHAPTER 23, TITLE 67, IDAHO CODE, BY THE ADDITION OF A NEW
5 SECTION 67-2352, IDAHO CODE, TO PROVIDE LEGISLATIVE INTENT; AND AMENDING
6 CHAPTER 23, TITLE 67, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
7 67-2353, IDAHO CODE, TO PROVIDE FOR THE CONSIDERATION OF PROJECTED TAX
8 REVENUE IMPACT IN THE AWARD OF CERTAIN PUBLIC CONTRACTS, TO PROVIDE A PRO-
9 CEDURE, TO PROVIDE FOR DEFAULT, TO PROVIDE FOR A RATING FACTOR, TO PRO-
10 HIBIT CERTAIN BIDDERS AND TO AUTHORIZE THE DEPARTMENT OF ADMINISTRATION TO
11 PROMULGATE RULES.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Chapter 23, Title 67, Idaho Code, be, and the same is
14 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
15 ignated as Section 67-2351, Idaho Code, and to read as follows:
16 67-2351. SHORT TITLE. This act shall be referred to as the "Best Value in
17 Contracting Act."
18 SECTION 2. That Chapter 23, Title 67, Idaho Code, be, and the same is
19 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
20 ignated as Section 67-2352, Idaho Code, and to read as follows:
21 67-2352. LEGISLATIVE INTENT. The purpose of this act is to refine con-
22 tracting procedures of the state of Idaho to account for the full economic
23 impact of public contract awards by including consideration of the tax and
24 revenue effects of those decisions. The provisions of this act will increase
25 economic activity in Idaho by keeping jobs in the state that are created by
26 the expenditure of public funds.
27 SECTION 3. That Chapter 23, Title 67, Idaho Code, be, and the same is
28 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
29 ignated as Section 67-2353, Idaho Code, and to read as follows:
30 67-2353. PUBLIC CONTRACTS -- PROJECTED TAX REVENUE IMPACT. (1) Whenever
31 the state of Idaho, or any department, division, bureau or agency thereof,
32 shall let for bid any contract or subcontract to a contractor for services or
33 public works in any amount exceeding fifty thousand dollars ($50,000), the
34 projected tax revenue impact on the state of Idaho shall be considered pursu-
35 ant to the provisions of this section in awarding the contract.
36 (2) Any entity contracting or subcontracting for or on behalf of the
37 state of Idaho for public works or services shall request that all bids sub-
38 mitted identify that portion of the contract value projected to be spent for
39 employment, the number of Idaho residents projected to be employed in perfor-
2
1 mance of the contract, and the compensation projected to be paid to those
2 Idaho resident employees. In the event that a bidder fails to submit all or
3 any part of this data, only that data submitted shall be used to calculate the
4 tax revenue impact.
5 (3) For bid evaluation purposes only, the contracting entity shall reduce
6 the amount of each bid by the application of a rating factor that approximates
7 tax revenues projected to result to the state in the event a contract is
8 awarded to a bidder. The amount of the reduction shall be determined by apply-
9 ing the rating factor to the compensation projected to be paid to Idaho resi-
10 dent employees according to the data supplied by the bidder pursuant to the
11 provisions of subsection (2) of this section. The rating factor shall be
12 established according to the provisions of subsection (5) of this section. The
13 bid, as revised by the tax revenue impact, shall be the amount considered by
14 the contracting entity in its determination of the contract award.
15 (4) Any contractor that fails to fulfill its projections of Idaho resi-
16 dent employment and compensation which were considered in the award of the bid
17 shall be deemed in default of the entire contract and shall be required to
18 repay the state the full amount of the tax revenue impact revision awarded in
19 the bid process pursuant to subsection (3) of this section as well as statu-
20 tory interest on that amount, in addition to any other costs, damages or pen-
21 alties incurred as a result of default.
22 (5) At a minimum of once every four (4) years, during the first two (2)
23 weeks of a legislative session, the Idaho legislature shall hold a hearing to
24 assess the tax revenue and economic considerations that would affect the tax
25 revenue impact of public contracts, and to set a rating factor which repre-
26 sents the estimated tax revenue impact of using Idaho labor which shall be
27 used in bid evaluations. The rating factor is hereby initially set at five
28 percent (5%).
29 (6) Any person or entity determined to be in default pursuant to the pro-
30 visions of subsection (4) of this section three (3) or more times, shall be
31 permanently barred from bidding on any public contract of the state of Idaho.
32 (7) The department of administration is hereby authorized and directed to
33 establish, adopt and promulgate rules necessary for the implementation of the
34 provisions of this section.
STATEMENT OF PURPOSE
RS 13816
The purpose of this act is to refine contracting procedures of
the state of Idaho to account for the full economic impact of
public contract awards by including consideration of the tax and
revenue effects of those decisions. The provisions of this act
will increase economic activity in Idaho by keeping jobs in the
State that are created by the expenditure of public funds.
FISCAL IMPACT
This legislation will have a positive net effect on the general
fund. Any higher contract costs will be more than offset by the
increased tax revenues created by additional Idaho jobs and
income.
Contact
Name: Rep. David Langhorst
Phone: 208/332-1000
Sen. Mike Burkett
STATEMENT OF PURPOSE/FISCAL NOTE H 597