AN ACT PROHIBITING THE DEPARTMENT OF TRANSPORTATION AND THE TRANSPORTATION COMMISSION FROM ENTERING INTO CONTRACTS FOR HIGHWAY OR CONSTRUCTION PROJECTS WITH BIDDERS WHOSE OPERATIONS ARE NOT HEADQUARTERED IN THE UNITED STATES UNLESS A RECIPROCITY AGREEMENT IS IN PLACE; PROVIDING A CONTINGENT VOIDNESS PROVISION IF FEDERAL FUNDS ARE AT RISK; AMENDING SECTIONS 18-1-102 AND 60-2-112, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 18-1-102, MCA, is amended to read:

"18-1-102. State contracts to lowest bidder -- reciprocity. (1) (a) Except as provided in subsection (1)(b), in order to provide for an orderly administration of the business of the state of Montana in awarding public contracts for the purchase of goods and for construction, repair, and public works of all kinds, a public agency shall award:

(i) a public contract for construction, repair, or public works to the lowest responsible bidder without regard to residency. However, a resident bidder must be allowed a preference on a contract against the bid of any nonresident bidder from any state or country that enforces a preference for resident bidders. The preference given to resident bidders of this state must be equal to the preference given in the other state or country.

(ii) a public contract for the purchase of goods, if the goods are comparable in quality and performance, to the lowest responsible resident bidder whose:

(A) bid is not more than 3% higher than that of the lowest responsible nonresident bidder;

(B) offered goods are Montana-made and whose bid is not more than 5% higher than that of the lowest responsible nonresident bidder; or

(C) offered goods are Montana-made and whose bid is not more than 3% higher than that of the lowest responsible resident bidder whose offered goods are not Montana-made.

(b) The transportation commission or the department of transportation may not enter into a contract for [a federal-aid highway project,] a state-funded highway project[,] or a construction project with a bidder whose operations are not headquartered in the United States unless:

(i) the foreign country in which the bidder is headquartered affords companies based in the United States open, fair, and nondiscriminatory access to bidding on highway projects and construction projects located in the foreign country; and

(ii) the department of transportation has entered into a reciprocity agreement with the foreign country that addresses:

(A) the equal and fair treatment of bids originating in the United States and in the foreign country;

(B) specific ownership requirements and tax policies in the United States and in the foreign country that may result in the unequal treatment of all bids received, regardless of their origin;

(C) the means by which contractors from both the United States and the foreign country are notified of highway projects and construction projects available for bid; and

(D) any other differences in public policy or procedure that may result in the unequal treatment of bids originating in the United States or in the foreign country for projects located in either the United States or the foreign country.

(c) (i) If both subsections (1)(a)(ii)(B) and (1)(a)(ii)(C) are applicable to bids for a contract, the contract must be awarded to the resident bidder whose offered goods are Montana-made if the bid is:

(A) not more than 3% higher than that of a resident bidder whose offered goods are not Montana-made; and

(B) not more than 5% higher than that of the nonresident bidder.

(ii) However, a combination of preferences under this subsection (1)(c) may not exceed 5%.

(2) The preferences in this section apply:

(a) whether the law requires advertisement for bids or does not require advertisement for bids; and

(b) to contracts involving funds obtained from the federal government unless expressly prohibited by the laws of the United States or regulations adopted pursuant to federal laws."

Section 2. Section 60-2-112, MCA, is amended to read:

"60-2-112. Competitive bidding -- reciprocity. (1) Except as provided in subsections (2) through (5), when the estimated cost of any work exceeds $50,000, the commission shall let the contract by competitive bidding to the lowest responsible and responsive bidder. Award must be made upon the notice and terms that the commission prescribes by its rules. However, except when prohibited by federal law, the commission shall make awards and contracts in accordance with 18-1-102 and 18-1-112.

(2) The commission may let a contract by means other than competitive bidding if it determines that special circumstances so require. The commission shall specify the special circumstances in writing.

(3) The commission may enter into contracts with units of local government for the construction of projects without competitive bidding if it finds that the work can be accomplished at lower total costs, including total costs of labor, materials, supplies, equipment usage, engineering, supervision, clerical and accounting services, administrative costs, and reasonable estimates of other costs attributable to the project.

(4) The commission may delegate to the department the authority to enter, without competitive bidding, agreed-upon price contracts for projects costing $50,000 or less.

(5) The commission or the department may not enter into a contract for [a federal-aid highway project,] a state-funded highway project[,] or a construction project with a bidder whose operations are not headquartered in the United States unless:

(a) the foreign country in which the bidder is headquartered affords companies based in the United States open, fair, and nondiscriminatory access to bidding on highway projects and construction projects located in the foreign country; and

(b) the department has entered into a reciprocity agreement with the foreign country that addresses:

(i) the equal and fair treatment of bids originating in the United States and in the foreign country;

(ii) specific ownership requirements and tax policies in the United States and in the foreign country that may result in the unequal treatment of all bids received, regardless of their origin;

(iii) the means by which contractors from both the United States and the foreign country are notified of highway projects and construction projects available for bid; and

(iv) any other differences in public policy or procedure that may result in the unequal treatment of bids originating in the United States or in the foreign country for projects located in either the United States or the foreign country.

(6) For the purposes of subsection (5) "construction" has the same meaning as is provided in 18-2-101."

Section 3. Contingent voidness. (1) If the federal government notifies the state in writing that the enforcement of [this act] places at risk this state's eligibility to receive federal funds for highway projects, then the bracketed language in [this act] is void pursuant to subsection (2).

(2) The bracketed language in [this act] is void on the date that the director of the department of transportation certifies to the governor in writing that the director has received written notice of the federal government's intention to terminate allocation of highway funds to Montana because of the enforcement of [this act].

Section 4. Effective date. [This act] is effective on passage and approval.

- END -

I hereby certify that the within bill,

SB 0330, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 330

INTRODUCED BY A. MOHL, C. AHNER, T. BECK, W. CRISMORE, B. DEPRATU, G. DEVLIN, B. GLASER, J. HARP, R. HOLDEN, J. LYNCH, K. MESAROS, D. SHEA, C. SWYSGOOD, M. TAYLOR

AN ACT PROHIBITING THE DEPARTMENT OF TRANSPORTATION AND THE TRANSPORTATION COMMISSION FROM ENTERING INTO CONTRACTS FOR HIGHWAY OR CONSTRUCTION PROJECTS WITH BIDDERS WHOSE OPERATIONS ARE NOT HEADQUARTERED IN THE UNITED STATES UNLESS A RECIPROCITY AGREEMENT IS IN PLACE; PROVIDING A CONTINGENT VOIDNESS PROVISION IF FEDERAL FUNDS ARE AT RISK; AMENDING SECTIONS 18-1-102 AND 60-2-112, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.