Senate Counsel, Research
and Fiscal Analysis
Minnesota Senate Bldg.
95 University Avenue W. Suite 3300
St. Paul, MN 55155
(651) 296-4791
Tom Bottern
Director
   Senate   
State of Minnesota
 
 
 
 
 
S.F. No. 2611 - Omnibus Jobs and Economic Development Bill - First Engrossment
 
Author: Senator Eric R. Pratt
 
Prepared By: Carlon D. Fontaine, Senate Counsel (651/296-4395)
 
Date: April 15, 2019



 

Article 1 - Appropriations

Section 1.  Jobs and economic development appropriations.  Specifies definitions of fiscal years.

Section 2.  Department of Employment and Economic Development.  Provides appropriations for the Department of Employment and Economic Development. See spreadsheet for details.

Section 3.  Department of Labor and Industry. Provides appropriations for the Department of Labor and Industry. See spreadsheet for details.

Section 4.  Bureau of Mediation Services.  Provides appropriations for the Bureau of Mediation Services.  See spreadsheet for details.

Section 5.  Workers’ Compensation Court of Appeals.  Provides appropriations for the Workers’ Compensation Court of Appeals.  See spreadsheet for details.

Section 6. Reduction in appropriations for unfilled positions. Requires the commissioner of management and budget to reduce general fund and non-general fund appropriations to the Department of Employment and Economic Development and the Department of Labor and Industry as a result of unfilled positions. Requires the commissioner to report to the legislature on the amount of reductions.

Article 2 - Jobs Policy

Section 1. Monitoring pass-through grant recipients. Reduces the amount that the commissioner may retain for administrative costs for monitoring programs funded by legislative appropriations and administered by the department on a pass-through basis from five percent to two percent.

Section 2.  Airport infrastructure renewal (AIR) grant program. Establishes a grant program to be administered by the commissioner of employment and economic development (DEED) for grants to counties, airport authorities, or cities to provide up to 50 percent of the capital costs of redevelopment of an existing facility or construction of a new facility; and for public or private infrastructure costs, including broadband infrastructure costs, necessary for an eligible airport infrastructure renewal economic development project. Allows grants to be for manufacturing, technology, warehousing and distribution, or research and development projects. Prohibits grants for retail or office space development, except as incidental to an eligible purpose. Specifies that the maximum grant amount is $250,000 in two years for one or more projects. This is from S.F. 2163 (Jasinski).

Section 3. Inventory of workforce development programs. Requires DEED to provide an inventory of all workforce development programs provided by or overseen by any state agency. Provides the elements that must be included in the report. Specifies that a program is ineligible to receive state funding in the following biennium if the organization does not submit the required information.

Section 4. Meetings by telephone or other electronic means.  Authorizes the Duluth Seaway Port Authority to conduct meetings by telephone or other electronic means.  This is from S.F. 2542 (Simonson).

Section 5. TERO extension. Provides an extension of an appropriation to the Bois Forte Tribal Employment Rights Office (TERO) for a pilot project until June 30, 2019. This is from S.F. 384 (Bakk).

Section 6. Onetime exception to restrictions on use of Minnesota investment fund local government loan repayment funds. Allows a onetime exception to the restrictions on use of Minnesota investment funds (MIF) for a home rule charter or statutory city, county, or town that has uncommitted money received from repayment of awarded MIF funds. Provides that if the local government transfers 20 percent of the balance of the money to the general fund before June 30, 2020, the local government may use the remaining funds for any lawful expenditure. A similar exception was allowed for MIF in 2017. Requires a report on the use of funds. This is from S.F. 1815 (Pratt).

Article 3 - Labor and Industry Policy

Section 1.  Retainage.  Current law permits a public contracting agency to reserve up to five percent from any progress payment to a contractor on a contract for a public improvement.  This withheld amount is "retainage."  Under current law, the agency may hold the retainage until work is complete.  Section 1 proposes new requirements and prohibitions on public construction contracts related to retainage, including the following:

Paragraph (b) requires, for construction contracts over $5,000,000, the public contracting agency to reduce retainage to no more than 2.5 percent if the work is 75 percent or more complete and contract requirements are being met.

Paragraph (c) requires a contracting agency to release any remaining retainage no later than 60 days after substantial completion.

Paragraph (d) requires a contractor to pay out any remaining retainage to its subcontractors no later than ten days after receiving retainage from the public contracting agency, unless there is a dispute about the subcontracted work. If there is a dispute, the contractor must pay out retainage to a subcontractor not involved in the dispute, and provide a written statement about the reason for the withholding to the affected subcontractor and the public agency.

Paragraph (e) prohibits a contractor from reserving retainage from a subcontractor in excess of the amount allowed to be reserved by the public contracting agency. Requires a public contracting agency, upon written request, to notify a subcontractor about a progress payment, retainage payment, or final payment made to the contractor. Requires a contractor to include public contracting agency contact information in any contract with a subcontractor.

Paragraph (f) specifies that after substantial completion of a project, a public contracting agency may withhold no more than: (1) 250 percent of the value of incomplete or defective work; and (2) one percent of the value of the contract or $500, whichever is greater, not to exceed $10,000, pending submission of all final paperwork by a contractor. Requires written notification of any basis for withholding to the contractor and any requesting subcontractor. Requires any amounts withheld for incomplete or defective to be paid within 45 days after the completion of the work.

Paragraph (g) provides a definition of “substantial completion.”

Paragraph (h) provides that the maximum retainage percentage allowed is the retainage percentage withheld by the public contracting agency from the contractor.

Paragraph (i) prohibits withholding retainage for warranties or warranty work.

Effective date. Provides that the section applies to agreements entered into on or after August 1, 2019.

Sections 1 and 5 are from S.F. 947 (Rarick).

Sections 2 and 3. Youth skills training. Modifies the youth skills training program. Specifies that grant awards may not exceed $100,000 per local partnership grant. This is from S.F. 1265 (Anderson, P.)

Section 4. Residential building contractor, remodeler, and roofer education. Requires residential building contractors, remodelers, and roofers to obtain one hour of business management education applicable to the construction business during each continuing education reporting period. This is from S.F. 2182 (Howe).

Section 5.  Progress payments and retainage.  Adds similar requirements as in section 1 pertaining to use of retainage in other building and construction contracts.  This existing section of law also caps the amount that can be held back at five percent. The amendment proposes new requirements and prohibitions on construction contracts related to retainage, including the following:

Paragraph (b) requires, for construction contracts over $5,000,000, the owner or agent to reduce retainage to no more than 2.5 percent if the work is 75 percent or more complete and contract requirements are being met.

Paragraph (c) requires the owner or agent to release any remaining retainage no later than 60 days after substantial completion. Provides a definition of “substantial completion.”

Paragraph (d) requires an owner or agent to reduce the retainage at the same rate reduced by the owner or agent and pay out any remaining retainage to its subcontractors no later than ten days after receiving retainage from the owner or agent, unless there is a dispute about the subcontracted work. If there is a dispute, the contractor must pay out retainage to a subcontractor not involved in the dispute.

Paragraph (e) specifies that after substantial completion of a project, an owner or agent may withhold no more than: (1) 250 percent of the value of incomplete or defective work; and (2) one percent of the value of the contract or $500, whichever is greater, not to exceed $10,000, pending submission of all final paperwork by a contractor. Requires written notification of any basis for withholding to the contractor and any requesting subcontractor. Requires any amounts withheld for incomplete or defective to be paid within 45 days after the completion of the work.

Paragraph (f) provides that the maximum retainage percentage allowed is the retainage percentage withheld by the public contracting agency from the contractor.

Paragraph (g) prohibits withholding retainage for warranties or warranty work.

Paragraph (h) prohibits retainage from being used as collateral.

Paragraph (i) clarifies that the provisions of this section do not apply to public contracts where a public agency has entered into a contract for improvements to public property.

Effective date. Provides that the section applies to agreements entered into on or after August 1, 2019.

Sections 6 to 8. Combative sports. Reduces certain fees for combative sports licenses and eliminates licensing requirements for combative sports managers and ring announcers.

Section 9. Contractor recovery fund; consumer awareness campaign. Allows the commissioner of labor and industry to spend up to an unspecified amount from the contractor recovery fund for a statewide consumer awareness campaign to highlight the importance of hiring licensed contractors instead of unlicensed contractors. This is from S.F. 2339 (Howe).

Article 4 - Employment Policy

Section 1.  Employee.  Amends the definition of “employee” for purposes of minimum wage and overtime requirements, to exclude individuals employed on a seasonal basis under contract to play minor league baseball. This change would make the law consistent with the federal Fair Labor Standards Act, which was amended in 2018 to provide for the exclusion, as well as St. Paul’s Minimum Wage Ordinance, which exempts employers in St. Paul from paying minimum wage to baseball players if the player is under contract and on the team roster. This is from S.F. 1526 (Goggin).

Section 2.  Examination of records.  In addition to requiring that there may be a potential violation of a Minnesota law, order, or rule, specifies that an employee making a wage claim or complaint provides a written demand for payment to the employer at least five days prior to the commissioner of labor and industry initiating an investigation.

Section 3. Misdemeanors. Provides that an employer who commits wage theft is guilty of a misdemeanor. Specifies that an employer who commits wage theft after previously being convicted of committing wage theft is guilty of a gross misdemeanor. Provides that prosecutions and punishment for conduct that constitutes other crimes are not precluded.  Applies to crimes committed on or after August 1, 2019.

Section 4.  Prohibited practices.  Provides a definition of wage theft. Specifies that there must be intent to commit wage theft. Includes failure to pay all wages to which an employee was entitled and retaliation against an employee for asserting rights under the section to the prohibited practices that constitute wage theft.

Section 5.  Enforcement.  Gives enforcement authority over section 181.03 to the commissioner of labor and industry.

Section 6.  Effect on other laws.  Provides that section 181.03 should not be construed to limit application of federal or other state laws. This is from S.F. 1816 (Pratt).

Section 7. Express preemption; uniformity of private employer mandates.   

Subdivision 1.  Definitions.  Provides definitions of “employer” and “local government.”

Subdivision 2. Express preemption. Prohibits local governments from adopting or enforcing four types of regulations: (1) a minimum wage higher than the state minimum wage; (2) a requirement that a private employer provide paid or unpaid leave; (3) a regulation relating private employee work hours or scheduling; and (4) a requirement that a private employer provide particular benefits or terms of employment.

Subdivision 3. Local governments as employers and contractors. Clarifies that the section does not prohibit local governments from regulating wages, hours, paid or unpaid leave, attendance policies, or other terms of employment for: (1) its own employees; (2) an employer providing goods or services to the local government and applicable for the work performed to the local government; or (3) an employer for which the local government provides financial assistance.

Effective date. Provides an effective date for the act of the day following final enactment and makes the prohibition applicable to local government policies enacted on or after January 1, 2017. This is from S.F. 2321 (Koran).

Article 5 - Workers’ Compensation Advisory Council Recommendations

Section 1. Filing and review. Provides that the department of labor and industry is not required to approve entry of a new employer into the Union Construction Workers’ Compensation Program (UCWCP), which is a program for a group of employers and unions who have bargained for certain obligations and procedures relating to workers’ compensation. Under the proposal, the employer need only notify the department within 30 days of joining or leaving the UCWCP. Requires the UCWCP to submit claim-specific dispute resolution data, rather than aggregate group data, to the department.

Section 2. Time limitation. Requires insurers and self-insured employers to report whether a claim is covered by the UWCWP at the same time that they submit a first report of injury to the department of labor and industry. Both sections 1 and 2 are from S.F. 2378 (Utke) and were approved by the Workers’ Compensation Advisory Council.

CDF/syl

 
Check on the status of this bill
 
Back to Senate Counsel and Research Bill Summaries page
 

 
This page is maintained by the Office of Senate Counsel, Research, and Fiscal Analysis for the Minnesota Senate.
 
Last review or update: 04/15/2019
 
If you see any errors on this page, please e-mail us at webmaster@senate.mn