On May 17, 2015, the Minnesota legislature passed a bill amending Minnesota's "Responsible Contractor" statute that  became effective on January 1, 2015. The "Responsible Contractor" statute, found in Minnesota Statute 16C.285, is intended to prevent contractors that have committed unlawful practices from performing public work. The new statute sets up a series of steps that a contractor must take to be considered "responsible." These steps require contractors bidding on a public project to provide the contracting authority with a signed statement under oath verifying that the contractor complies with the minimum criteria identified in the statute.  Under the January 2015 version of the statute, the contractor is currently required to provide this signed statement at the time it bids on a project.  Failure to satisfy this statute will stopcontractors from bidding on and performing public work.

Shortly after the statute was enacted, the construction industry began to complain that the statute imposed significant and unnecessary burdens on contractors who are bidding on publicly-funded projects.  The Minnesota House of Representatives authored and passed a bill (HR1257) on May 13, 2015, that intends to lessen the burdens imposed on contractors by the Responsible Contractor statute.  This bill was introduced to the Senate, and passed on May 17, 2015. 

Among other amendments, the newly-passed bill will update the state's Responsible Contractor statute allowing contractors to submit their documentation proving that they are in compliance with the statute after their bid is accepted, rather than during the bidding process.  This is intended to make the bidding process run smoothly and allow more contractors to bid. 

The newly-passed bill also amended the definition of "Contractor" in Minn. Stat. 16C.285, subdivision 1, to clarify that a "Contractor" means "a prime contractor or subcontractor" and does not include a "design professional or a material supplier."  The bill then goes on to define "design professional" as a business or person who is required to be licensed by Minn. Stat. Sec. 326.02, and who is retained to perform services on a construction project.  The bill also defines "material supplier" as a business or person who delivers and unloads materials to a construction project, but specifically states that this definition does not include suppliers that deliver "mineral aggregate such as sand, gravel, or stone that is incorporated into the work ... by depositing the material substantially in place, directly or through spreaders, from the transporting vehicle."

Other technical amendments to the statute include:  

• Removal of the requirement that a statement verifying compliance with responsible contractor requirements be sworn;
• Apply the consequences of failing to verify compliance apply to prime contractors, subcontractors and motor carriers;
• Clarify that a failure to pay statutorily-required wages or penalties under specified circumstances is only considered "repeated" if it involves two or more separate and distinct instances of underpayment in a three-year period; and
• Provide that, when determining the value of a publicly- owned or financed project and whether the Responsible Contractor provisions should apply, the value of tax-increment financing must be excluded.