Committee adopts oral amendment and lays over state contracting bill clarifying prohibited contract terms and subcontracting goals

Chair Cleburne presented House File 2,232 on March 18, a Department of Administration‑sponsored bill to clarify permissible and impermissible contract terms for state agreements, extend subcontracting goal requirements to all prime contractors, and eliminate an underutilized data analytics enterprise contract program.

The committee adopted an oral amendment exempting certain State Board of Investment contracts from two specific provisions (choice‑of‑law and unilateral third‑party amendment prohibitions) because those terms can be difficult to modify in commingled investment structures such as limited partnerships. John Muellay, general counsel and legislative liaison for the State Board of Investment, explained the rationale for the narrow exemption: “There are a couple of wrinkles…we have a portion of our portfolio invested in what are called commingled investments…The two parts that we identified were the choice of law provision…[and] prohibition on unilateral amendments by a third party,” he said.

Rachel Dowdy from the Office of State Procurement testified the bill would centralize prohibited contract terms, require the Office of State Procurement to post notice of the statute on its website, and help streamline negotiations by flagging terms that conflict with the Minnesota Constitution or statutes. Dowdy said click‑through agreements and mandatory arbitration clauses can raise constitutional and appropriation issues under Article XI and chapter 16A of state law if they create unknown future financial obligations.

After adopting the oral amendment to address the State Board of Investment’s concerns, the committee laid House File 2,232, as amended, over for possible inclusion. The transcript records the oral amendment language and the committee’s layover action but does not show a roll‑call vote on the bill.