H. B. 2497
(By Delegates Harrison, Williams, Staton, Miller,
Azinger, Michael and J. Martin)
[Introduced February 15, 1995; referred to the
Committee on the Judiciary.]
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 the
department of administration; purchasing division;
preference for resident vendors; preference for vendors
employing state residents; and providing exceptions.
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
one thousand nine hundred ninety-five, 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 ten 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, one thousand nine
hundred ninety-five in any instance that a purchase of
commodities, or printing, equipment or services 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: (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 or from a
partnership, association a corporation resident vendor which has
maintained its headquarters or principal place of business within
West Virginia continuously for two years immediately preceding
the date on which the bid is submitted, provided such vendor who
has resided in West Virginia continuously for the four two years
immediately preceding the date on which the bid is submitted, 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, or has paid business taxes pursuant to section one, article one, chapter
eleven of this code, and 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. 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 seven 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 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
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 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 ten 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 "West Virginian
Vendor's Preference Act of 1990 1995."
NOTE: This bill makes changes in the contract preferences for resident vendors.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.