SF5154

Purpose

Expand Minnesota state procurement programs to include small businesses owned by people who identify as lesbian, gay, bisexual, transgender, queer, intersex, or other nonbinary genders as eligible for targeted group designation. The bill updates the criteria used to promote supplier diversity in state purchasing.

Main Provisions

• Targeted group designation expanded: The commissioner of administration must periodically designate targeted group businesses that are majority owned and operated by:
  • Women
  • Persons with a substantial physical disability
  • Specific minority groups
  • Businesses certified by the National LGBT Chamber of Commerce (NGLCC) as majority owned and operated by people who identify as lesbian, gay, bisexual, transgender, or queer
• Disparity-based targeting: A group may be targeted within a purchasing category if there is a statistical disparity between the share of state purchases from group-owned businesses and the share of such businesses in the state's overall business population within that category.
• Individual business inclusion: In addition to group designations, an individual business may be included as a targeted group business if the commissioner determines inclusion is necessary to remedy discrimination based on race, gender, or disability when operating a business that would provide goods or services to public agencies.
• Scope of designations: The designations of purchasing categories and targeted group businesses are determined by the commissioner and are not rules for purposes of Minnesota’s administrative rulemaking.
• Legal basis and reference: The changes are made to Minnesota Statutes 2024, section 16C.16, subdivision 5, as applicable to purchasing and procurement.

Significant Changes to Existing Law

• Adds LGBT-owned and LGBT-identified businesses to the list of eligible targeted group designations for state procurement.
• Establishes a process to routinely identify and designate targeted groups and purchasing categories based on measured disparities in procurement.
• Allows individual businesses to be added to targeted designations to address discrimination in securing work with public agencies.
• Clarifies that these designations and categories are not formal rules under chapter 14 and are not subject to typical rulemaking procedures.

Practical Impact

• More procurement opportunities for LGBT-owned businesses and those seeking to support supplier diversity goals.
• Use of disparity analysis to justify when a particular category should include targeted group suppliers.
• Administrative process operates outside standard rulemaking, potentially accelerating designation decisions.

Relevant Terms - targeted group businesses - purchasing categories - commissioner of administration - Minnesota Statutes 2024 section 16C.16 subdivision 5 - statistical disparity - procurement / state procurement - National LGBT Chamber of Commerce (NGLCC) - lesbian, gay, bisexual, transgender, queer (LGBTQ) - remedy discrimination - public agencies - rulemaking (chapter 14)