HF 1170

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 04/14/2011 03:09pm

A bill for an act
relating to employment; modifying worker classification regulation, penalties,
and fees; authorizing rulemaking; amending Minnesota Statutes 2010, sections
181.723; 326B.081, subdivision 3; repealing Minnesota Statutes 2010, section
181.723, subdivision 17; Minnesota Rules, parts 5202.0100; 5202.0110;
5202.0120; 5202.0130; 5202.0140; 5202.0150; 5202.0160.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 181.723, is amended to read:

181.723 deleted text begin INDEPENDENT deleted text end new text begin CONSTRUCTION new text end CONTRACTORS.

Subdivision 1.

deleted text begin Definitions deleted text end new text begin Scope new text end .

new text begin This section governs registration and other
responsibilities of persons performing construction services in Minnesota.
new text end

new text begin Subd. 1a. new text end

new text begin Definitions. new text end

The definitions in this subdivision apply to this section.

(a) "Person" means any individual, limited liability deleted text begin corporation deleted text end new text begin company new text end , new text begin limited
liability partnership, new text end corporation, partnership, incorporated or unincorporated association,
sole proprietorship, joint stock company, or any other legal or commercial entity.

(b) "Department" means the Department of Labor and Industry.

(c) "Commissioner" means the commissioner of labor and industry or a duly
designated representative of the commissioner who is either an employee of the
Department of Labor and Industry or person working under contract with the Department
of Labor and Industry.

(d) "Individual" means a human being.

(e) "Day" means calendar day unless otherwise provided.

deleted text begin (f) "Knowingly" means knew or could have known with the exercise of reasonable
diligence.
deleted text end

deleted text begin (g) deleted text end new text begin (f) new text end "Document" or "documents" includes papers; books; records; memoranda;
data; contracts; drawings; graphs; charts; photographs; digital, video, and audio
recordings; records; accounts; files; statements; letters; e-mails; invoices; bills; notes; and
calendars maintained in any form or manner.

new text begin (g) "Construction services" means field installation of building construction
materials into new or existing public or private sector commercial or residential buildings.
Construction services include demolition or deconstruction of building components.
Construction services include landscaping services and construction cleaning services
when they are performed as part of a contract for other building construction or
improvement services. Construction services do not include:
new text end

new text begin (1) the manufacture, supply, or sale of products, materials, merchandise, or
construction equipment;
new text end

new text begin (2) installation or delivery of a product by the manufacturer of the product;
new text end

new text begin (3) rubbish or debris hauling; or
new text end

new text begin (4) cleaning or maintenance of a building.
new text end

new text begin (h) "Construction contractor" means a person that meets the requirements of
subdivision 4.
new text end

new text begin (i) "Business entity" means a person other than an individual or a sole proprietor.
new text end

new text begin (j) "In the course of a person's construction business" means in the course of a
person's construction trade, business, profession, or occupation.
new text end

deleted text begin Subd. 2. deleted text end

deleted text begin Limited application. deleted text end

deleted text begin This section only applies to individuals performing
public or private sector commercial or residential building construction or improvement
services. Building construction and improvement services do not include (1) the
manufacture, supply, or sale of products, materials, or merchandise; (2) landscaping
services for the maintenance or removal of existing plants, shrubs, trees, and other
vegetation, whether or not the services are provided as part of a contract for the building
construction or improvement services; and (3) all other landscaping services, unless the
other landscaping services are provided as part of a contract for the building construction
or improvement services.
deleted text end

Subd. 3.

Employee-employer relationship.

deleted text begin Except as provided in subdivision 4,
deleted text end For purposes of chapters 176, 177, 181A, 182, and 268, as of January 1, deleted text begin 2009 deleted text end new text begin 2012 new text end , an
individual who performs new text begin construction new text end services for deleted text begin a deleted text end new text begin another new text end person that are in the course
of the new text begin other new text end person's deleted text begin trade, deleted text end new text begin construction new text end business deleted text begin , profession, or occupation deleted text end is an employee
of that person and that person is an employer of the individual new text begin , except that if the individual
satisfies all of the conditions in subdivision 4, clause (2), the individual is an independent
contractor and not an employee for purposes of those chapters only new text end .

Subd. 4.

deleted text begin Independent deleted text end new text begin Construction new text end contractor.

deleted text begin An individual is an independent
contractor and not an employee of the person for whom the individual is performing
services in the course of the person's trade, business, profession, or occupation only if (1)
the individual holds a current independent contractor exemption certificate issued by
the commissioner; and (2) the individual is performing services for the person under
the independent contractor exemption certificate as provided in subdivision 6. The
requirements in clauses (1) and (2) must be met in order to qualify as an independent
contractor and not as an employee of the person for whom the individual is performing
services in the course of the person's trade, business, profession, or occupation. deleted text end new text begin A person
is a construction contractor only if:
new text end

new text begin (1) the person has satisfied the registration requirements of subdivision 4a; and
new text end

new text begin (2) the person meets all of the following conditions:
new text end

new text begin (i) the person maintains a separate business with the person's own office, equipment,
and materials;
new text end

new text begin (ii) the person holds a federal employer identification number or has filed business
or self-employment income tax returns with the federal Internal Revenue Service if the
person has performed services in the previous year;
new text end

new text begin (iii) the person operates under written contracts to perform specific construction
services for specific amounts of money and under which the person controls the means of
performing the services;
new text end

new text begin (iv) the person incurs the main expenses related to the construction services that the
person performs under contract;
new text end

new text begin (v) the person is responsible for the satisfactory completion of construction services
that the person contracts to perform and is liable for a failure to complete the service;
new text end

new text begin (vi) the person receives compensation for construction services performed under a
contract on a commission or per-job or competitive bid basis and not on any other basis;
new text end

new text begin (vii) the person may realize a profit or suffer a loss under contracts to perform
construction services;
new text end

new text begin (viii) the person has continuing or recurring business liabilities or obligations; and
new text end

new text begin (ix) the success or failure of the person's business depends on the relationship of
business receipts to expenditures.
new text end

new text begin Subd. 4a. new text end

new text begin Registration. new text end

new text begin (a) Except as provided in paragraph (b), any person who
performs construction services in the state on or after January 1, 2012, must register with
the commissioner as provided in subdivision 5a before performing construction services
for another person.
new text end

new text begin (b) The registration requirements in this section do not apply to:
new text end

new text begin (1) a person who, at the time the person is performing the construction services,
holds a current license, certificate, or registration under chapter 299M or 326B;
new text end

new text begin (2) a person who holds a current independent contractor exemption certificate issued
under this section that expires on or after January 1, 2012;
new text end

new text begin (3) a person who has given a bond to the state under section 326B.197 or 326B.46;
new text end

new text begin (4) an employee of the person performing the construction services, if the person
was in compliance with laws related to employment of the individual at the time the
construction services were performed;
new text end

new text begin (5) an architect or professional engineer engaging in professional practice as defined
in section 326.02, subdivisions 2 and 3;
new text end

new text begin (6) a school district or technical college governed under chapter 136F;
new text end

new text begin (7) a person providing construction services on a volunteer basis, such as Habitat
for Humanity and Builders Outreach Foundation, and their individual volunteers when
engaged in activities on their behalf; and
new text end

new text begin (8) a person who provides construction services with gross annual receipts of less
than $2,000 during a calendar year.
new text end

new text begin (c) The requirements for registration under this section are not a substitute for, and
do not relieve a person from complying with, any other law requiring that the person be
licensed, registered, or certified.
new text end

deleted text begin Subd. 5. deleted text end

deleted text begin Application. deleted text end

deleted text begin To obtain an independent contractor exemption certificate,
the individual must submit, in the manner prescribed by the commissioner, a complete
application and the certificate fee required under subdivision 14.
deleted text end

deleted text begin (a) A complete application must include all of the following information:
deleted text end

deleted text begin (1) the individual's full name;
deleted text end

deleted text begin (2) the individual's residence address and telephone number;
deleted text end

deleted text begin (3) the individual's business name, address, and telephone number;
deleted text end

deleted text begin (4) the services for which the individual is seeking an independent contractor
exemption certificate;
deleted text end

deleted text begin (5) the individual's Social Security number;
deleted text end

deleted text begin (6) the individual's or the individual's business federal employer identification
number, if a number has been issued to the individual or the individual's business;
deleted text end

deleted text begin (7) any information or documentation that the commissioner requires by rule that
will assist the department in determining whether to grant or deny the individual's
application; and
deleted text end

deleted text begin (8) the individual's sworn statement that the individual meets all of the following
conditions:
deleted text end

deleted text begin (i) maintains a separate business with the individual's own office, equipment,
materials, and other facilities;
deleted text end

deleted text begin (ii) holds or has applied for a federal employer identification number or has filed
business or self-employment income tax returns with the federal Internal Revenue Service
if the person has performed services in the previous year for which the individual is
seeking the independent contractor exemption certificate;
deleted text end

deleted text begin (iii) operates under contracts to perform specific services for specific amounts of
money and under which the individual controls the means of performing the services;
deleted text end

deleted text begin (iv) incurs the main expenses related to the service that the individual performs
under contract;
deleted text end

deleted text begin (v) is responsible for the satisfactory completion of services that the individual
contracts to perform and is liable for a failure to complete the service;
deleted text end

deleted text begin (vi) receives compensation for service performed under a contract on a commission
or per-job or competitive bid basis and not on any other basis;
deleted text end

deleted text begin (vii) may realize a profit or suffer a loss under contracts to perform service;
deleted text end

deleted text begin (viii) has continuing or recurring business liabilities or obligations; and
deleted text end

deleted text begin (ix) the success or failure of the individual's business depends on the relationship of
business receipts to expenditures.
deleted text end

deleted text begin (b) Individuals who are applying for or renewing a residential building contractor or
residential remodeler license under sections 326B.197, 326B.802, 326B.805, 326B.81,
326B.815, 326B.821 to 326B.86, 326B.87 to 326B.885, and 327B.041, and any rules
promulgated pursuant thereto, may simultaneously apply for or renew an independent
contractor exemption certificate. The commissioner shall create an application form
that allows for the simultaneous application for both a residential building contractor
or residential remodeler license and an independent contractor exemption certificate.
If individuals simultaneously apply for or renew a residential building contractor or
residential remodeler license and an independent contractor exemption certificate using
the form created by the commissioner, individuals shall only be required to provide, in
addition to the information required by section 326B.83 and rules promulgated pursuant
thereto, the sworn statement required by paragraph (a), clause (8), and any additional
information required by this subdivision that is not also required by section 326B.83
and any rules promulgated thereto. When individuals submit a simultaneous application
on the form created by the commissioner for both a residential building contractor or
residential remodeler license and an independent contractor exemption certificate, the
application fee shall be $150. An independent contractor exemption certificate that is in
effect before March 1, 2009, shall remain in effect until March 1, 2013, unless revoked by
the commissioner or canceled by the individual.
deleted text end

deleted text begin (c) Within 30 days of receiving a complete application and the certificate fee, the
commissioner must either grant or deny the application. The commissioner may deny
an application for an independent contractor exemption certificate if the individual has
not submitted a complete application and certificate fee or if the individual does not
meet all of the conditions for holding the independent contractor exemption certificate.
The commissioner may revoke an independent contractor exemption certificate if the
commissioner determines that the individual no longer meets all of the conditions for
holding the independent contractor exemption certificate, commits any of the actions
set out in subdivision 7, or fails to cooperate with a department investigation into the
continued validity of the individual's certificate. Once issued, an independent contractor
exemption certificate remains in effect for four years unless:
deleted text end

deleted text begin (1) revoked by the commissioner; or
deleted text end

deleted text begin (2) canceled by the individual.
deleted text end

deleted text begin (d) If the department denies an individual's original or renewal application for
an independent contractor exemption certificate or revokes an independent contractor
exemption certificate, the commissioner shall issue to the individual an order denying or
revoking the certificate. The commissioner may issue an administrative penalty order to
an individual or person who commits any of the actions set out in subdivision 7.
deleted text end

deleted text begin (e) An individual or person to whom the commissioner issues an order under
paragraph (d) shall have 30 days after service of the order to request a hearing. The
request for hearing must be in writing and must be served on or faxed to the commissioner
at the address or facsimile number specified in the order by the 30th day after service of
the order. If the individual does not request a hearing or if the individual's request for a
hearing is not served on or faxed to the commissioner by the 30th day after service of the
order, the order shall become a final order of the commissioner and will not be subject to
review by any court or agency. The date on which a request for hearing is served by mail
shall be the postmark date on the envelope in which the request for hearing is mailed. If
the individual serves or faxes a timely request for hearing, the hearing shall be a contested
case hearing and shall be held in accordance with chapter 14.
deleted text end

new text begin Subd. 5a. new text end

new text begin Registration and renewal application. new text end

new text begin (a) A person required to
register with the commissioner under subdivision 4a must file a registration application
electronically in the manner prescribed by the commissioner. The application for initial or
renewal registration must include the following information:
new text end

new text begin (1) the applicant's legal name; assumed name filed with the secretary of state, if any;
designated business address; physical address; phone number; and e-mail address;
new text end

new text begin (2) the applicant's Minnesota tax identification number, if one is required or has
been issued;
new text end

new text begin (3) the applicant's federal employee identification number, if one is required or
has been issued;
new text end

new text begin (4) evidence of the active status of the applicant's business filings with the secretary
of state, if one is required or has been issued;
new text end

new text begin (5) for each of the applicant's directors; officers; governors; owners; partners;
members, managers, and partners of a limited liability company or limited liability
partnership; and shareholders, except for shareholders with less than a ten percent interest
in a publicly traded corporation; the following information:
new text end

new text begin (i) the individual's full name, business telephone number, Social Security number,
and title at applicant's business;
new text end

new text begin (ii) the percentage of the applicant's business owned by each individual; and
new text end

new text begin (iii) whether the individual personally performs construction services on behalf of
the applicant;
new text end

new text begin (6) whether the applicant has any employees at the time the application is filed;
new text end

new text begin (7) the name of the applicant's workers' compensation insurer, the policy number,
and the effective dates of coverage, or a description of the basis for exemption from
workers' compensation coverage laws;
new text end

new text begin (8) the unemployment insurance account number, if any;
new text end

new text begin (9) a certification that the person signing the application has reviewed it; that the
information provided is true and accurate; and that the person signing is authorized to sign
and file the application as an agent of the applicant. The name of the person signing,
entered on an electronic application, shall constitute a valid signature of the agent on
behalf of the applicant; and
new text end

new text begin (10) a signed authorization for the Department of Labor and Industry to verify the
information provided on or with the application.
new text end

new text begin (b) A person's registration shall expire at the end of the calendar year following
the year of initial registration and every two years thereafter. The registered person
must remain registered while providing construction services for another person. The
provisions of sections 326B.091 to 326B.097 apply to this section, except that the initial
registration and renewal fees under this section shall be $80 for each initial or renewal
application for registration.
new text end

new text begin (c) A registered person must notify the commissioner within 15 days after there is a
change in any of the information on the application as approved. This notification must
be provided electronically in the manner prescribed by the commissioner. However, if
the business entity structure, legal form of the business entity, or business ownership has
changed, the person must submit a new registration application and registration fee for
the new business entity.
new text end

new text begin (d) An application for registration is private data on individuals as defined in section
13.02, subdivision 12, and nonpublic data as defined under section 13.02, subdivision 9,
except for the information on the registration certificate described in subdivision 6a,
paragraph (b), which shall be public data as defined under section 13.02, subdivisions
14 and 15. However, the commissioner is authorized to share application data with the
Departments of Revenue and Employment and Economic Development for purposes
of enforcement of laws administered by those agencies. Information shared with the
Departments of Revenue and Employment and Economic Development shall remain
private and nonpublic data in the possession of the receiving agency unless otherwise
provided by law.
new text end

deleted text begin Subd. 6. deleted text end

deleted text begin Performing services under exemption certificate. deleted text end

deleted text begin An individual is
performing services for a person under an independent contractor exemption certificate if:
deleted text end

deleted text begin (a) the individual is performing services listed on the individual's independent
contractor exemption certificate; and
deleted text end

deleted text begin (b) at the time the individual is performing services listed on the individual's
independent contractor exemption certificate, the individual meets all of the following
conditions:
deleted text end

deleted text begin (1) maintains a separate business with the individual's own office, equipment,
materials, and other facilities;
deleted text end

deleted text begin (2) holds or has applied for a federal employer identification number or has filed
business or self-employment income tax returns with the federal Internal Revenue Service
if the individual performed services in the previous year for which the individual has the
independent contractor exemption certificate;
deleted text end

deleted text begin (3) is operating under contract to perform the specific services for the person
for specific amounts of money and under which the individual controls the means of
performing the services;
deleted text end

deleted text begin (4) is incurring the main expenses related to the services that the individual is
performing for the person under the contract;
deleted text end

deleted text begin (5) is responsible for the satisfactory completion of the services that the individual
has contracted to perform for the person and is liable for a failure to complete the services;
deleted text end

deleted text begin (6) receives compensation from the person for the services performed under the
contract on a commission or per-job or competitive bid basis and not on any other basis;
deleted text end

deleted text begin (7) may realize a profit or suffers a loss under the contract to perform services for
the person;
deleted text end

deleted text begin (8) has continuing or recurring business liabilities or obligations; and
deleted text end

deleted text begin (9) the success or failure of the individual's business depends on the relationship of
business receipts to expenditures.
deleted text end

new text begin Subd. 6a. new text end

new text begin Web site. new text end

new text begin (a) The commissioner shall develop and maintain a Web site on
which applicants for registration can submit a registration application and payment. The
Web site shall be designed to receive and process registration applications and payments
and promptly issue registration certificates electronically to successful applicants.
new text end

new text begin (b) The commissioner shall maintain the certificates of registration on the
department's official public Web site, which shall include the following information:
new text end

new text begin (1) the registered person's legal business name, including any assumed name, as
filed with the secretary of state;
new text end

new text begin (2) the person's business address designated on the application; and
new text end

new text begin (3) the effective date of the registration and the expiration date.
new text end

Subd. 7.

Prohibited activities.

(a) new text begin The prohibited activities in this section are in
addition to those in sections 326B.081 to 326B.085.
new text end

new text begin (b) new text end An individual shall not new text begin perform or offer to perform construction services on
behalf of a business entity of which the individual is a director; officer; governor; owner;
partner; member, manager, or partner of a limited liability company or limited liability
partnership; or shareholder, except for a shareholder holding less than ten percent interest
in a publicly traded company; unless new text end :

(1) deleted text begin perform work as an independent contractor who meets the qualifications under
subdivision 6 without first obtaining from the department an independent contractor
exemption certificate deleted text end new text begin the business entity is a construction contractor under subdivision 4 new text end ;

(2) deleted text begin perform work as an independent contractor when the department has denied or
revoked the individual's independent contractor exemption certificate deleted text end new text begin the business entity is
listed as active with the secretary of state, if required for the business entity new text end ;

(3) deleted text begin transfer to another individual or allow another individual to use the individual's
independent contractor exemption certificate deleted text end new text begin there is a signed and dated written contract
between the business entity and the person for whom the construction services are
performed that describes the services to be performed and the payment for the services new text end ;

(4) deleted text begin alter or falsify an independent contractor exemption certificate deleted text end new text begin invoices or
bills for the construction services performed are submitted in the name of the business
entity new text end ; new text begin and
new text end

(5) deleted text begin misrepresent the individual's status as an independent contractor; or deleted text end new text begin payment is
made to the business entity.
new text end

deleted text begin (6) make a false material statement, representation, or certification; omit material
information; or alter, conceal, or fail to file a document required by this section or any rule
promulgated by the commissioner under rulemaking authority set out in this section.
deleted text end

deleted text begin (b) deleted text end new text begin (c) new text end A person shall not:

(1) require an individual through coercion, misrepresentation, or fraudulent means to
deleted text begin adopt independent contractor status deleted text end new text begin form a business entity new text end ;

(2) deleted text begin knowingly misrepresent that an individual who has not been issued an
independent contractor exemption certificate or is not performing services for the person
under an independent contractor exemption certificate is an independent contractor deleted text end new text begin
represent that the person is a construction contractor unless the person is a construction
contractor under subdivision 4 new text end ; deleted text begin or
deleted text end

(3) deleted text begin make a false material statement, representation, or certification; omit material
information; or alter, conceal, or fail to file a document required by this section or any
rule promulgated by the commissioner under rulemaking authority set out in this section. deleted text end new text begin
perform or provide construction services for another person if the person performing the
construction services is not registered as required by subdivision 4a; or
new text end

new text begin (4) perform or provide construction services for another person in the course of the
other person's business if the person performing or providing the construction services is
not a construction contractor under subdivision 4.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end A person deleted text begin for whom an individual is performing services must obtain a
copy of the individual's independent contractor exemption certificate before services
may commence. A copy of the independent contractor exemption certificate must be
retained for five years from the date of receipt by the person for whom an individual is
performing services. deleted text end new text begin who provides construction services in the course of that person's
business shall not:
new text end

new text begin (1) pay a person that is not named in a contract for construction services, or pay a
person without receiving an invoice from the person; or
new text end

new text begin (2) contract with or pay another person to perform construction services if the other
person is not registered under subdivision 4a.
new text end

new text begin (e) This subdivision does not apply to an employee of a person performing the
construction services, if the person was in compliance with laws related to employment of
the individual at the time the construction services were performed.
new text end

Subd. 8.

new text begin Enforcement; new text end remedies new text begin and penalties new text end .

deleted text begin An individual or person who
violates any provision of subdivision 7 is subject to a penalty to be assessed by the
department of up to $5,000 for each violation. The department shall deposit penalties in
the assigned risk safety account. deleted text end new text begin (a) The commissioner is authorized to use sections
326B.081 to 326B.085 to enforce this section. Notwithstanding the maximum penalty
amount in section 326B.082, subdivisions 7 and 12, the monetary penalties for violation
of this section shall be as provided in paragraphs (b), (c), and (d).
new text end

new text begin (b) The commissioner may assess a monetary penalty against an unregistered person
who is required to be registered, in violation of subdivision 4a, as follows:
new text end

new text begin (1) for the first violation, the commissioner may assess a monetary penalty of
$2,000. If the person registers within 30 days of the date of the order, $1,500 of the
penalty shall be forgiven; and
new text end

new text begin (2) for the second and each subsequent violation, the commissioner may assess a
penalty of up to $2,000.
new text end

new text begin (c) The commissioner may assess a monetary penalty against a person who, in the
course of that person's business, directly pays an unregistered person for construction
services performed by the unregistered person, in violation of subdivision 7, paragraph
(d), clause (2), as follows:
new text end

new text begin (1) for the first violation, the commissioner shall issue a notice of violation under
section 326B.082, subdivision 6; and
new text end

new text begin (2) for the second and each subsequent violation, the commissioner may assess a
penalty of up to $2,000.
new text end

new text begin For purposes of this paragraph, all payments to an unregistered person for
construction services on a single project site shall be considered a single violation. It shall
not be a violation for a person to pay an unregistered person if the unregistered person was
registered at the time the contract for construction services was entered into.
new text end

new text begin (d) For all other violations of this section, the monetary penalties shall be as provided
in section 326B.082, subdivisions 7 and 12.
new text end

new text begin (e) Monetary penalties under this section shall be payable to the commissioner for
deposit in the assigned risk safety account under chapter 79.
new text end

deleted text begin Subd. 9. deleted text end

deleted text begin Commissioner's powers. deleted text end

deleted text begin (a) In order to carry out the purposes of this
section, the commissioner may:
deleted text end

deleted text begin (1) administer oaths and affirmations, certify official acts, interview, question, take
oral or written statements, and take depositions;
deleted text end

deleted text begin (2) request, examine, take possession of, photograph, record, and copy any
documents, equipment, or materials;
deleted text end

deleted text begin (3) at a time and place indicated by the commissioner, request persons to appear
before the commissioner to give testimony and produce documents, equipment, or
materials;
deleted text end

deleted text begin (4) issue subpoenas to compel persons to appear before the commissioner to give
testimony and produce documents, equipment, or materials; and
deleted text end

deleted text begin (5) subject to paragraph (c), with or without notice, enter without delay upon
any property, public or private, for the purpose of taking any action authorized under
this subdivision or the applicable law, including obtaining information or conducting
inspections or investigations.
deleted text end

deleted text begin (b) Persons requested by the commissioner to give testimony or produce documents,
equipment, or materials shall respond within the time and in the manner specified by the
commissioner. If no time to respond is specified in the request, then a response shall be
submitted within 30 days of the commissioner's service of the request.
deleted text end

deleted text begin (c) Upon the refusal or anticipated refusal of a property owner, lessee, property
owner's representative, or lessee's representative to permit the commissioner's entry onto
property as provided in paragraph (a), the commissioner may apply for an administrative
inspection order in the Ramsey County District Court or, at the commissioner's discretion,
in the district court in the county in which the property is located. The commissioner may
anticipate that a property owner or lessee will refuse entry if the property owner, lessee,
property owner's representative, or lessee's representative has refused to permit entry on a
prior occasion or has informed the commissioner that entry will be refused. Upon showing
of administrative probable cause by the commissioner, the district court shall issue an
administrative inspection order that compels the property owner or lessee to permit the
commissioner to enter the property for the purposes specified in paragraph (a).
deleted text end

deleted text begin (d) Upon the application of the commissioner, a district court shall treat the failure of
any person to obey a subpoena lawfully issued by the commissioner under this subdivision
as a contempt of court.
deleted text end

deleted text begin Subd. 10. deleted text end

deleted text begin Notice requirements. deleted text end

deleted text begin Unless otherwise specified, service of a document
on a person under this section may be by mail, by personal service, or in accordance with
any consent to service filed with the commissioner. Service by mail shall be accomplished
in the manner provided in Minnesota Rules, part 1400.5550, subpart 2. Personal service
shall be accomplished in the manner provided in Minnesota Rules, part 1400.5550,
subpart 3.
deleted text end

deleted text begin Subd. 11. deleted text end

deleted text begin Facsimile; timely service. deleted text end

deleted text begin When this section permits a request for
hearing to be served by facsimile on the commissioner, the facsimile shall not exceed 15
pages in length. The request shall be considered timely served if the facsimile is received
by the commissioner, at the facsimile number identified by the commissioner in the order,
no later than 4:30 p.m. central time on the last day permitted for faxing the request.
Where the quality or authenticity of the faxed request is at issue, the commissioner
may require the original request to be filed. Where the commissioner has not identified
quality or authenticity of the faxed request as an issue and the request has been faxed in
accordance with this subdivision, the person faxing the request does not need to file the
original request with the commissioner.
deleted text end

deleted text begin Subd. 12. deleted text end

deleted text begin Time period computation. deleted text end

deleted text begin In computing any period of time prescribed
or allowed by this section, the day of the act, event, or default from which the designated
period of time begins to run shall not be included. The last day of the period so computed
shall be included, unless it is a Saturday, Sunday, or legal holiday, in which event the
period runs until the next day which is not a Saturday, Sunday, or legal holiday.
deleted text end

Subd. 13.

Rulemaking.

The commissioner may, in consultation with the
commissioner of revenue and the commissioner of employment and economic
development, adopt, amend, suspend, and repeal rules under the rulemaking provisions of
chapter 14 that relate to the commissioner's responsibilities under this section new text begin as amended
by this act new text end . deleted text begin This subdivision is effective May 26, 2007.
deleted text end

deleted text begin Subd. 14. deleted text end

deleted text begin Fee. deleted text end

deleted text begin The certificate fee for the original application and for the renewal of
an independent contractor exemption certificate shall be $150.
deleted text end

deleted text begin Subd. 15. deleted text end

deleted text begin Notice to commissioner; review by commissioner of revenue. deleted text end

deleted text begin When
the commissioner has reason to believe that an individual who holds a certificate has failed
to maintain all the conditions required by subdivision 6 or is not performing services for a
person under the independent contractor exemption certificate, the commissioner must
notify the commissioner of revenue and the commissioner of employment and economic
development. Upon receipt of notification from the commissioner that an individual who
holds a certificate has failed to maintain all the conditions required by subdivision 6
or is not performing services for a person under the independent contractor exemption
certificate, the commissioner of revenue must review the information returns required
under section 6041A of the Internal Revenue Code. The commissioner of revenue shall
also review the submitted certification that is applicable to returns audited or investigated
under section 289A.35.
deleted text end

Subd. 16.

Data classified.

Data in applications for an independent contractor
exemption certificate and any required documentation submitted to the commissioner are
private data on individuals as defined in section 13.02. Data in exemption certificates
issued by the commissioner are public data. Data that document a revocation or
cancellation of an exemption certificate are public data. Upon request of the Department
of Revenue or Department of Employment and Economic Development, the commissioner
may release to the requesting department data classified as private under this subdivision
or investigative data that are not public under section 13.39 that relate to the issuance or
denial of applications or revocations of certificates.

Subd. 17.

Advisory task force on employee misclassification.

(a) The
commissioner of the Department of Labor and Industry shall appoint an advisory task
force on employee misclassification and "off-the-books" payment of workers in the
construction industry. The advisory task force shall consist of the following members:

(1) the commissioner of the Department of Labor and Industry or designee;

(2) the commissioner of the Department of Employment and Economic Development
or designee;

(3) the commissioner of the Department of Revenue or designee;

(4) the attorney general or designee;

(5) a representative appointed by the Minnesota County Attorneys Association;

(6) two members who are members of a labor organization that represents members
who perform public or private sector commercial or residential building construction
or improvement services;

(7) one member who is a general contractor or a representative of general contractors
that performs public or private sector commercial building construction or improvement
services;

(8) one member who is a general contractor or a representative of general contractors
that performs public or private sector residential building construction or improvement
services;

(9) one member who is a subcontractor or a representative of subcontractors that
performs public or private sector commercial building construction or improvement
services;

(10) one member who is a subcontractor or a representative of subcontractors
that performs public or private sector residential building construction or improvement
services; and

(11) up to three additional members who perform public or private sector commercial
or residential building and construction or improvement services including one member
who is an independent contractor with a current independent contractor certificate; one
member who is a limited liability corporation; and one member who is an employee.

The commissioner of the Department of Labor and Industry or designee shall serve
as the advisory task force chair. The advisory task force shall meet on a regular basis.

(b) The advisory task force shall have the following duties:

(1) advise the commissioner on the development, implementation, and coordination
of enforcement activities, including information sharing and joint investigation and
prosecution of persons who violate laws under the jurisdiction of the Department of
Labor and Industry, Department of Employment and Economic Development, and the
Department of Revenue; and

(2) advise the commissioner on the development and adoption of necessary
legislation, regulations, policies, and procedures.

(c) The advisory task force shall expire and the terms, compensation, and removal of
members shall be as provided in section 15.059, subdivision 6.

(d) The advisory task force shall, prior to its expiration, report to the legislature a
summary of the advice it provided to the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, except (1) the new
rulemaking authority in subdivision 13 is effective March 1, 2012, and (2) the amendments
in this section do not apply to the regulation of an independent contractor exemption
certificate issued before January 1, 2012, under Minnesota Statutes 2010, section 181.723,
subdivision 5, and shall not be effective for a person holding that exemption certificate
until the exemption certificate expires, is revoked, or is canceled.
new text end

Sec. 2.

Minnesota Statutes 2010, section 326B.081, subdivision 3, is amended to read:

Subd. 3.

Applicable law.

"Applicable law" means the provisions of sections
new text begin 181.723, new text end 327.31 to 327.36 new text begin , new text end and this chapter, and all rules, orders, stipulation agreements,
settlements, compliance agreements, licenses, registrations, certificates, and permits
adopted, issued, or enforced by the department under sections new text begin 181.723, new text end 327.31 to 327.36 new text begin , new text end
or this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, except the
amendments in this section do not apply to the regulation of an independent contractor
exemption certificate issued before January 1, 2012, under Minnesota Statutes 2010,
section 181.723, subdivision 5, and shall not be effective for a person holding that
exemption certificate until the exemption certificate expires, is revoked, or is canceled.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2010, section 181.723, subdivision 17, new text end new text begin is repealed on May
15, 2011.
new text end

new text begin (b) Minnesota Rules, parts 5202.0100; 5202.0110; 5202.0120; 5202.0130;
5202.0140; 5202.0150; and 5202.0160, new text end new text begin are repealed on January 1, 2012, except that
they shall remain in effect for the regulation of an independent contractor exemption
certificate issued before January 1, 2012, under Minnesota Statutes 2010, section 181.723,
subdivision 5, and shall remain in effect for a person holding that exemption certificate
until the exemption certificate expires, is revoked, or is canceled.
new text end