HF4742

Purpose

This bill would prevent state agencies from entering into contracts to buy goods or services with a company that is owned by a person who has committed certain crimes or who has been liable for false claims against the state or the United States. The goal is to reduce contracting with entities tied to fraud or fraud-related wrongdoing.

Main provisions

• Prohibition on contracts with certain vendors: A state agency must not enter into a contract to procure goods or services with a company owned by a person who has:
  • been convicted of theft (as defined in section 609.52),
  • been convicted of perjury (609.48),
  • been convicted of aggravated forgery or forgery (609.625 and 609.63),
  • or convicted under substantially similar federal laws.
  • and/or been held liable for making false claims against the state (chapter 15C) or for making false claims against the United States under substantially similar federal laws.
• Scope of prohibition: The restriction applies to the ownership of the company, meaning the person with ownership stakes in the company is what triggers the prohibition.

Ownership definitions (how to apply the rule)

• Sole proprietorship: The sole proprietor of the company is treated as the owner for purposes of this provision.
• Partnership: Any one of the partners with an ownership interest in the company is treated as an owner for purposes of this provision.
• Corporation: Any person with an ownership interest in the company is treated as an owner for purposes of this provision.

Significance and potential impact

• Adds a targeted ban: The bill creates a new rule that filters out vendors tied to individuals with certain fraud-related crimes or false-claim liability from state contracting.
• Clarifies how ownership is determined: It provides specific criteria to determine who counts as an owner when applying the prohibition (sole proprietors, partners, or owners of corporations).

Inferred mechanisms (not fully detailed in the excerpt)

• State agencies would need to verify criminal and false-claims history of individuals with ownership interests in bidding companies.
• The rule likely affects both new contract awards and potentially ongoing contracts if ownership conflicts are identified, though enforcement and process details are not included in the excerpt provided.

Relevant Terms

• state agency
• contract to procure goods or services
• company owned by a person
• convicted of theft (section 609.52)
• perjury (section 609.48)
• aggravated forgery (609.625)
• forgery (609.63)
• false claims against the state (chapter 15C)
• false claims against the United States
• substantially similar federal laws
• sole proprietor
• partnership
• corporation
• ownership interest