"NEW SECTION.  Sec. 1   A new section is added to chapter 39.04 RCW to read as follows:
     (1) The department of general administration must conduct a survey to determine which states provide a preference for its resident contractors bidding on public works projects, and provide details on the type of preference, the amount of the preference, and how the preference is applied. The survey must be completed by November 1, 2011, and by December 1, 2011, the department must submit a report to the appropriate committees of the legislature on the results of the survey. The report must also include recommendations necessary to implement the intent of this section and section 2 of this act.
     (2) The department of general administration must distribute the results of the survey, along with the requirements of this section and section 2 of this act, to all state and local agencies with the authority to procure public works. The department may adopt rules and procedures to implement the reciprocity requirements in subsection (3) of this section or may determine that such rules and procedures are not necessary to implement the intent of this section and section 2 of this act.
     (3) In any bidding process for public works in which a bid is received from a nonresident contractor from a state that provides a percentage bidding preference, a comparable percentage disadvantage must be applied to the bid of that nonresident contractor. This subsection does not take effect until the department of general administration has adopted the rules and procedures for reciprocity under subsection (2) of this section.     
     (4) A nonresident contractor from a state that provides a percentage bid preference means a contractor that:
     (a) Is from a state with a percentage bid preference; and
     (b) At the time of bidding on a public works project, does not have a physical office located in Washington.     
     (5) The state of residence for a nonresident contractor shall be the state in which the contractor was incorporated or, if not a corporation, the state where the contractor's business entity was formed.
     (6) This section does not apply to public works procured pursuant to RCW 39.04.155 or 39.04.280, or any other procurement where competitive bidding is exempt.

NEW SECTION.  Sec. 2   If any part of this act is found to be in conflict with federal requirements that are a prescribed condition to the allocation of federal funds to the state, the conflicting part of this act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this act in its application to the agencies concerned. Rules adopted under this act must meet federal requirements that are a necessary condition to the receipt of federal funds by the state."