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H.F. No. 2 - Omnibus Jobs, Economic Development, Commerce, and Energy (Minnesota Laws 2019, Chapter 7) (First Special Session - 2019)
 
Author: Senator Eric R. Pratt
 
Prepared By: Christopher B. Stang, Senate Counsel (651/296-0539)
Carlon D. Fontaine, Senate Counsel (651/296-4395)
 
Date: May 29, 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.  Workers’ Compensation Court of Appeals.  Provides appropriations for the Workers’ Compensation Court of Appeals.  See spreadsheet for details.

Section 5.  Bureau of Mediation Services.  Provides appropriations for the Bureau of Mediation Services.  See spreadsheet for details.

Section 6.  Department of Commerce. Provides appropriations to the Department of Commerce. See spreadsheet for details.

Section 7.  Public Utilities Commission.  Provides appropriations for the Public Utilities Commission. See spreadsheet for details.

Section 8Contractor 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.

Article 2 - Jobs Policy

Section 1. 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.

Section 2. Inventory of economic development programs. Requires DEED to provide an inventory of all economic development programs provided by or overseen by any state agency. Provides the elements that must be included in the report.

Section 3. Meetings by telephone or other electronic means.  Authorizes the Seaway Port Authority of Duluth to conduct meetings by telephone or other electronic means.

Section 4. Meetings by telephone or other electronic means.  Authorizes the Red Wing Port Authority to conduct meetings by telephone or other electronic means.

Section 5. Meetings by telephone or other electronic means.  Authorizes the Winona Port Authority to conduct meetings by telephone or other electronic means.

Section 6. 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.

Section 7. 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. 

Section 8.  Launch Minnesota.  Creates a new program called “Launch Minnesota” within the Department of Employment and Economic Development to provide grants and business assistance to entrepreneurs and emerging technology based companies.

Article 3 – Wage Theft

Section 1. Minimum criteria. Adds a conviction for criminal wage theft to the list of disqualifying violations from inclusion on the state’s “responsible contractor” list.

Section 2. Enforcement. Clarifies existing and expands Department of Labor and Industry (DLI) enforcement powers over chapters 177, 181, 181A, and 184. Allows the commissioner of labor and industry to obtain a court order to enter the place of business of an employer if an employer refuses to permit entry. Allows the commissioner to interview, in private, non-management employees regarding an investigation.

Section 3. Submission of records; penalty. Provides that the commissioner of labor and industry may require submission of employment records in a specific format. Creates a new maximum fine of $5,000 for repeat violations of Department of Labor and Industry record requests.

Section 4. Providing data to licensing agencies, contracting agencies, and employees. Requires DLI to share orders to comply and their resolutions with relevant public licensing and contracting entities as well as affected employees.

Section 5. Keeping records; penalties. Requires employers to keep additional employment records, including basis of pay (hourly, salary, piece rate, etc.), personnel policies given to employees, and the notice required to be provided to employees under section 11. The section also requires that all records be available for inspection and creates a new maximum fine of $5,000 for repeat violations of Department of Labor and Industry record keeping requirements.

Section 6. Misdemeanors. Adds hindering or delaying DLI in the performance of duties under sections 181.01 to 181.723 and 181.79 to existing misdemeanor crime.

Section 7. Attorney general enforcement. Expressly provides that the attorney general may enforce chapter 177 in addition to enforcement by DLI.

Section 8.  Enforcement.  Gives enforcement authority over section 181.03 to the commissioner of labor and industry.

Section 9.  Effect on other laws.  Provides that section 181.03 should not be construed to limit application of federal or other state laws. 

Section 10. Retaliation. Prohibits retaliation against employees for asserting rights under sections 177.21 to 177.44, 181.01 to 181.723, or 181.79. Provides a civil penalty of not less than $700 nor more than $3,000 per violation.

Section 11. Required statement of earnings by employer; notice to employee. Adds to information required on an employee earnings statement. The new information required includes the basis of pay (hourly, salary, piece rate, etc.), any allowances for meals or lodging, and the address and phone number of the employer. The section also requires an employer to give a written notice to an employee at the start of employment. That notice must include a variety of information about employee pay and the employer, and must be signed by the employee and kept by the employer. Finally, the section requires an employer to provide written notice to an employee whenever anything in the original written notice changes.

Section 12. Wages; how often paid. Clarifies that this section provides a substantive right to payment of all wages owed under law or contract and provides for separate treatment of commissions.

Section 13. Enforcement; remedies. Expressly provides that the attorney general may enforce chapter 181 in addition to enforcement by DLI.

Section 14. Definitions. Amends the definition of “value” for use in determining the severity of a wage theft offense by clarifying that value means the difference between wages legally required to be reported or paid and the amount actually reported or paid. Provides a definition of "wage theft" within the criminal code. Wage theft occurs when an employer with intent to defraud fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee's rate or rates of pay or at the rate or rates required by law. Provides definitions for “employer” and “employee.”

Section 15. Acts constituting theft. Adds authorizing or engaging in wage theft with intent to defraud to the list of acts that constitute theft in the criminal statutes.

Section 16. Sentence. Includes criminal wage theft in list of theft crimes eligible for enhanced penalties as well as aggregation of offenses.

Article 4 - Unemployment Insurance Advisory Council; Policy

Section 1. Covered employment. Makes several changes in the section of law addressing when employers pay Minnesota UI taxes related to employees who work both inside and outside of Minnesota. The bill replaces the term “primarily” with “50% or more” in the context of employees working both inside and outside Minnesota. The bill also eliminates the concept of employers having a “base of operations” and work being “directed or controlled” from a particular place, and instead focuses on whether an employee lived and worked in Minnesota for certain periods of time. Finally, the section makes minor clarifying changes to the section.

Section 2. Noncovered employment. Adds J-1 Visa holders to the types of employment that are considered “non-covered employment.” Adding J-1 visa holders to the definition of noncovered employment will not affect the eligibility of these employees for benefits as they are already ineligible for UI benefits under federal law for an unrelated reason.

Section 3. Unemployment insurance tax reduction. Provides a statutory mechanism to transfer value of a tax reduction, under the UI tax reduction law passed in 2016, when a business is purchased or otherwise reorganized. This section also clarifies the application of the tax reduction for business with the maximum experience rating.

Article 5 - Unemployment Insurance Advisory Council; Interest

Sections 1 and 2. Interest. Clarifies assessment of interest on applicant and employer applies to unpaid principal only.

Article 6 - Unemployment Insurance Advisory Council; Base Periods

Section 1. Base period. Clarifies that the base period for the first month of each quarter does not include the most recently completed calendar quarter.

Section 2. Application for unemployment benefits; determination of benefit account. Along with section 1, clarifies that the base period for the first month of each quarter does not include the most recently completed calendar quarter.

Article 7 - Unemployment Insurance Advisory Council; Housekeeping

 

Section 1. Employment. Requested by the federal Department of Labor, clarifies UI coverage for certain traveling salespeople.

Section 2. Failure to timely file report; late fees. Changes cross-reference to reflect current UI practices in reaching compromises in collection of employer fees.

Section 3. Exceptions for taxpaying employers. Benefits paid to a former employee are not used to calculate an employer’s experience rating under a number of conditions. There two most common reasons this occurs: (1) the employee quit the employment for a reason other than a good reason caused by the employer; or (2) the employee was discharged for misconduct. Current law is silent on the duration of this effect, implying the effect is indefinite. This change clarifies that the effect ends if the employee goes back to work with the same employer.

Section 4. Vacation and sick payments that delay unemployment benefits. Makes stylistic changes to clarify when payments that affect unemployment benefits take effect.

Section 5. Workers’ compensation and disability insurance offset. Makes stylistic changes.

Section 6. Separation, severance, or bonus payments that delay unemployment insurance benefits. Makes stylistic changes to clarify when payments that affect unemployment benefits take effect.

Section 7. Pension or retirement payment offset. Makes stylistic changes to clarify when payments that affect unemployment benefits take effect.

Section 8. Leave of absence. Makes stylistic changes.

Section 9. Employment misconduct defined. Removes one of the two standards for what constitutes employment misconduct for UI purposes. The intent is to clarify and simplify the section for the often pro se appellants of denied benefits.

Section 10. Aggravated employment misconduct defined. Codifies interpretation of the section under a court decision but does not change current law as applied.

Article 8 - Unemployment Insurance Advisory Council; Technical

Section 1. Missing or erroneous information. Makes stylistic changes.

Section 2. Tax accounts assigned. Updates cross-reference.

Section 3. Requirements. Corrects a reference related to “misrepresentation.”

Section 4. Representation; fees. Makes clarifying change.

Section 5. Notification. Clarifies priority of deductions to payments to benefit applicants.

Section 6. Remedies. Clarifies priority of deductions to payments to benefit applicants.

Section 7. Revisor’s instruction. Directs a number of stylistic changes.

Article 9 - Labor and Industry Policy

Section 1.  Retainage.  Adds specific requirements when using retainage in public building and construction contracts for public improvements. 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 as follows:   

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

Paragraph (c) 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.

Paragraph (d) 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.

Paragraph (e) specifies that after substantial completion of a project, a public contracting agency may withhold no more than: (1) 250 percent of the cost to correct or complete work at substantial completion; and (2) one percent of the value of the contract or $500, whichever is greater, 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 60 days after the completion of the work.

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

Paragraph (g) prohibits withholding retainage for warranty work.

Paragraph (h) provides that if a project is funded with federal or state aid, that portion of the contract does not need to be paid until the federal or state aid payments have been received by the public contracting agency.

Paragraph (i) clarifies that the section does not require payment for a portion of a contract that is not complete or for which an invoice has not been submitted.

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

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.

Section 4. Notices of violation. Allows for use of email, in addition to existing methods, for transmitting notice of a violation under the construction codes and licensing statutes.

Section 5. Hearings related to administrative orders. Allows for use of email, in addition to existing methods, for transmitting notice hearing on an administrative order under the construction codes and licensing statutes.

Section 6. Issuance of licensing orders; hearings related to licensing orders. Allows for use of email, in addition to existing methods, for issuing administrative orders under the construction codes and licensing statutes.

Section 7. Public buildings. Stylistic clarification of the definition of “public building” relating to building projects for school districts and charter schools.

Section 8. Accessibility. Clarifies statutory language without imposing any new requirements beyond those that already exist under state and federal law.

Section 9. License number to be displayed. Adds requirement for plumbers to display their name and license number on their vehicle. The same is currently required of electricians.

Section 10. Renewal; use period for license. Strikes outdated language related to “restricted” plumbers.

Section 11. Residential building contractor, remodeler, and roofer education. Requires residential building contractors, remodelers, and roofers to obtain one hour business management education applicable to the construction business during each continuing education reporting period.

Section 12. Grounds for sanctions. Clarifies that sanctions under the construction codes and licensing statutes can be applied to unlicensed individuals.

Section 13.  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 new requirements and prohibitions on construction contracts related to retainage include the following:

Paragraph (b) requires a contractor to reduce the amount of retainage for any subcontractors at the same rate if the owner reduced the amount of retainage.

Paragraph (c) requires the owner to release all 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, 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.

Paragraph (e) specifies that after substantial completion of a project, a public contracting agency may withhold no more than: (1) 250 percent of the cost to correct or complete work at substantial completion; and (2) one percent of the value of the contract or $500, whichever is greater, 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 60 days after the completion of the work.

Paragraph (f) prohibits withholding retainage for warranty work.

Paragraph (g) specifies that this section does not apply to a public agency.

Paragraph (i) clarifies that the section does not require payment for a portion of a contract that is not complete or for which an invoice has not been submitted.

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

Sections 14 to 16. Combative sports. Reduces certain fees for combative sports licenses and eliminates licensing requirements for combative sports managers and ring announcers.

Section 17. Repealer. Repeals section related to plumber advertising from consumer protection chapter. The result is plumbers are treated the same as other licensed individuals under the construction codes and licensing statutes.

Article 10 – Commerce

Sections 1 and 2 add fees from financial institutions, money transmitters, and mortgage loan originators to the financial institutions account.

Sections 3, 4, and 6 are technical updates related to real estate appraiser regulation.

Section 5 authorizes per diem compensation for members of the Real Estate Appraisal Advisory Board under section 15.059.

Section 7 provides that the requirements to obtain specified appraiser licenses are those of the Appraiser Qualifications Board of the Appraisal Foundation.

Section 8 denotes the scope of practice for a trainee real property appraiser.

Section 9 removes language related to a federally-related transaction for purposes of qualifying for a license for temporary practice.

Section 10 is a conforming change.

Section 11 removes an obligation to disclose whether the appraiser has previously been to the property.

Section 12 deletes references to performance of limited appraisal for classification of services.

Section 13 modifies reporting requirements for unclaimed property, requiring reporting on whether property is interest-bearing.

Section 14 entitles the owner of property turned over to the state to receive income or gain on the unclaimed property. This is a legislative response to the Hall Minnesota Supreme Court decision.

Section 15 repeals an unconstitutional unclaimed property provision and current real estate appraiser statutes that relate to subjects otherwise addressed in this article.

Article 11 - Energy Policy

Section 1Solar energy incentive program. Changes the type of current allowed when calculating the aggregate nameplate capacity from “direct” to “alternating” current.

Section 2. Energy storage system pilot projects. Allows a public utility to petition the Public Utilities Commission to recover costs associated with implementation of an energy storage system pilot project. 

Section 3Recognition of beneficial habitat. Requires an owner of a solar site implementing solar site management practices and making a beneficial habitat claim to report on its site management practices to the Board of Water and Soil Resources, by June 1, 2020, and every third June 1 after that. 

Section 4.  Definitions. Provides a definition for “energy storage system” within the resource planning statute.

Section 5.  Energy storage systems assessment. Requires investor-owned utilities to include an assessment of energy storage systems in any integrated resource plan or plan modification filed by an investor-owned utility. Provides considerations for the Public Utilities Commission in approving a plan with respect to an energy storage system assessment submitted by an investor-owned utility.

Section 6. Assessment for department regional and national duties. Revives and reenacts retroactively the department’s authority to assess utilities up to $500,000 annually to represent the state’s interests before regional and national energy policy and regulatory bodies.

Sections 7 and 8. PACE loan program definitions. Amends the definitions of “cost-effective energy improvements” and “qualifying commercial real property” applicable to the PACE loan program to include application to new construction.

Section 9. Financing terms. Requires financing under the commercial PACE program to have a principal amount not to exceed the lesser of the greater of 20 percent of the assessed value of the real property or 20 percent of the real property's appraised value.

Section 10. Improvements; real property or fixture. Provides that a cost-effective energy improvement financed under a commercial PACE loan program is deemed real property or a fixture attached to the real property.

Sections 11 and 12. C-LEAF. Corrects the misnaming of the renewable development account in two sections of session law enacted in 2017.

Section 13. Energy utility diversity stakeholder group; report. Requires the Public Utilities Commission to convene a stakeholder group to submit a report to the legislature by January 15, 2020, analyzing current utility employment and purchasing patterns and making recommendations for diversifying the workforce and supply chain.

Section 14. Cost-benefit analysis of energy storage systems. Requires the commissioner of commerce to contract with an independent consultant selected through a request for proposal process to produce a report analyzing the potential costs and benefits of energy storage systems. Requires the study to be submitted to the Legislature by December 31, 2019.

Article 12 - Workers’ Compensation Advisory Council

This article contains the recommendations of the Workers’ Compensation Advisory Council under the Department of Labor and Industry (DLI). The changes implement a modernized workers’ compensation technology system, which will replace a system in effect since 1992. The new system will be called the Claims Access and Management Platform User System (CAMPUS). It will be a web-based system that maintains records related to a specific workers’ compensation claim, processes electronic data filed by stakeholders, provides authorized stakeholders and agency staff access to documents related to a claim, and supports automated operations.

Sections 1 to 4. Definitions. Adds several definitions related to CAMPUS.

Section 5. Filing and review. Requires the commissioner of DLI be notified within 30 days of an employer’s entry or withdrawal from an approved Union Construction Workers’ Compensation Program (UCWCP) agreement, and modifies UCWCP reporting requirements.

Section 6. Report of death or injury to commissioner. Changes various provisions related to reports to DLI of workplace injuries and deaths, including privacy provisions and access to related electronic files.

Section 7. Insurer, employer, and third-party administrator; performance of acts. Provides for access of licensed, third-party administrators to CAMPUS.

Section 8. Applicability. Clarifies existing law related to coordination of the Office of Administrative Hearings (OAH) and DLI to reflect changes in sections 9 and 10.

Section 9. Form revision and access to documents and data. Changes terminology related to the replacement of the current system with CAMPUS, describes interagency read-only access to the OAH and DLI case management systems, and requires electronic transmission of documents and data between the OAH and DLI beginning 8/31/20.

Section 10. Data privacy. Makes changes related to data privacy to reflect CAMPUS. Clarifies that an employee’s name is identifying information and must not be included in posted notices.

Section 11. The workers’ compensation claims access and management platform user system (CAMPUS). Adds section laying out requirements for CAMPUS.

Section 12. Filing of papers; proof of service. Clarifies an agency’s authority to accept or reject a filing; requires filers to use the worker identification number (WID) instead of the SSN if a WID has been assigned; provides that a document inadvertently filed at the wrong agency is deemed filed with the correct agency only if it is filed by an unrepresented employee.

Section 13. Orders, decisions, and awards; filing; service. Requires immediate electronic transmission of data, documents, and dispute outcomes between the OAH case management system and CAMPUS.

Section 14. Service of papers and notices; electronic filing. Makes changes to provisions related to service, notice, and filing to accommodate CAMPUS.

Section 15. Affidavits of prejudice and petitions for reassignment. Extends the time from ten to 20 days for a party to petition for reassignment of a compensation judge.

CDF/CS/syl

 

 
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