HF 3043

as introduced - 87th Legislature (2011 - 2012) Posted on 05/01/2012 01:53pm

A bill for an act
relating to human services; creating the Family Economic Security Act;
increasing minimum wage rates; modifying child care assistance; providing a
new child care tax credit; expanding the working family tax credit; appropriating
money; amending Minnesota Statutes 2010, sections 119B.02, subdivisions 1,
2; 119B.03, subdivision 9; 119B.035, subdivision 1; 119B.05, subdivision 1;
119B.08, subdivision 3; 119B.09, subdivisions 1, 4a; 119B.231, subdivision
5; 177.24, subdivision 1; 256.017, subdivision 9; Minnesota Statutes 2011
Supplement, section 290.0671, subdivision 1; proposing coding for new law in
Minnesota Statutes, chapter 290; repealing Minnesota Statutes 2010, sections
119B.011, subdivision 20a; 119B.03, subdivisions 1, 2, 4, 5, 6, 6a, 6b, 8;
119B.09, subdivision 3.

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

ARTICLE 1

FAMILY ECONOMIC SECURITY ACT

Section 1. new text begin CITATION.
new text end

new text begin Sections 2 to 12 may be cited as the "Family Economic Security Act."
new text end

Sec. 2.

Minnesota Statutes 2010, section 119B.02, subdivision 1, is amended to read:

Subdivision 1.

Child care services.

The commissioner shall develop standards
for county and human services boards to provide child care services to enable eligible
families to participate in employment, training, or education programs. deleted text begin Within the limits
of available appropriations, deleted text end The commissioner shall distribute money to counties to
reduce the costs of child care for eligible families. The commissioner shall adopt rules to
govern the program in accordance with this section. The rules must establish a sliding
schedule of fees for parents receiving child care services. The rules shall provide that
funds received as a lump-sum payment of child support arrearages shall not be counted
as income to a family in the month received but shall be prorated over the 12 months
following receipt and added to the family income during those months. The commissioner
shall maximize the use of federal money under title I and title IV of Public Law 104-193,
the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, and
other programs that provide federal or state reimbursement for child care services for
low-income families who are in education, training, job search, or other activities allowed
under those programs. Money appropriated under this section must be coordinated with
the programs that provide federal reimbursement for child care services to accomplish
this purpose. Federal reimbursement obtained must be allocated to the county that spent
money for child care that is federally reimbursable under programs that provide federal
reimbursement for child care services. The counties shall use the federal money to expand
child care services. The commissioner may adopt rules under chapter 14 to implement and
coordinate federal program requirements.

Sec. 3.

Minnesota Statutes 2010, section 119B.03, subdivision 9, is amended to read:

Subd. 9.

deleted text begin Portability pool deleted text end new text begin Family move; continued participation new text end .

(a) deleted text begin The
commissioner shall establish a pool of up to five percent of the annual appropriation for
the basic sliding fee program to provide continuous child care assistance for eligible
families who move between Minnesota counties. At the end of each allocation period, any
unspent funds in the portability pool must be used for assistance under the basic sliding fee
program. If expenditures from the portability pool exceed the amount of money available,
the reallocation pool must be reduced to cover these shortages.
deleted text end

deleted text begin (b) To be eligible for portable basic sliding fee assistance, a family that has moved
from a county in which it deleted text end new text begin A family receiving child care assistance under the child care
fund that has moved from a county in which the family new text end was receiving deleted text begin basic sliding fee deleted text end new text begin
child care new text end assistance to a county deleted text begin with a waiting list for the basic sliding fee program deleted text end must new text begin
be admitted into the receiving county's child care assistance program if the family new text end :

(1) deleted text begin meet deleted text end new text begin meets new text end the income and eligibility guidelines for the deleted text begin basic sliding fee deleted text end new text begin child
care assistance new text end program; and

(2) deleted text begin notify deleted text end new text begin notifies new text end the new county of residence within 60 days of moving and deleted text begin submit deleted text end new text begin
submits new text end information to the new county of residence to verify eligibility for the deleted text begin basic
sliding fee deleted text end new text begin child care assistance new text end program.

deleted text begin (c) deleted text end new text begin (b) new text end The receiving county must deleted text begin :
deleted text end

deleted text begin (1) deleted text end accept administrative responsibility deleted text begin for applicants for portable basic sliding fee
assistance deleted text end at the end of the two months of assistance under the Unitary Residency Act deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (2) continue basic sliding fee assistance for the lesser of six months or until the
family is able to receive assistance under the county's regular basic sliding program; and
deleted text end

deleted text begin (3) notify the commissioner through the quarterly reporting process of any family
that meets the criteria of the portable basic sliding fee assistance pool.
deleted text end

Sec. 4.

Minnesota Statutes 2010, section 119B.035, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

A family in which a parent provides care for the
family's infant child may receive a subsidy in lieu of assistance if the family is eligible for
or is receiving assistance under the basic sliding fee program. An eligible family must
meet the eligibility factors under section 119B.09, except as provided in subdivision 4,
and the requirements of this section. Subject to federal match and maintenance of effort
requirements for the child care and development fund, deleted text begin and up to available appropriations, deleted text end
the commissioner shall provide assistance under the at-home infant child care program
and for administrative costs associated with the program. At the end of a fiscal year, the
commissioner may carry forward any unspent funds under this section to the next fiscal
year within the same biennium for assistance under the basic sliding fee program.

Sec. 5.

Minnesota Statutes 2010, section 119B.08, subdivision 3, is amended to read:

Subd. 3.

Child care fund plan.

The county and designated administering agency
shall submit a biennial child care fund plan to the commissioner. The commissioner shall
establish the dates by which the county must submit the plans. The plan shall include:

(1) a description of strategies to coordinate and maximize public and private
community resources, including school districts, health care facilities, government
agencies, neighborhood organizations, and other resources knowledgeable in early
childhood development, in particular to coordinate child care assistance with existing
community-based programs and service providers including child care resource and
referral programs, early childhood family education, school readiness, Head Start, local
interagency early intervention committees, special education services, early childhood
screening, and other early childhood care and education services and programs to the
extent possible, to foster collaboration among agencies and other community-based
programs that provide flexible, family-focused services to families with young children
and to facilitate transition into kindergarten. The county must describe a method by which
to share information, responsibility, and accountability among service and program
providers;

(2) a description of procedures and methods to be used to make copies of the
proposed state plan reasonably available to the public, including members of the public
particularly interested in child care policies such as parents, child care providers, culturally
specific service organizations, child care resource and referral programs, interagency
early intervention committees, potential collaborative partners and agencies involved in
the provision of care and education to young children, and allowing sufficient time for
public review and comment; and

(3) information as requested by the department to ensure compliance with the child
care fund statutes and rules promulgated by the commissioner.

The commissioner shall notify counties within 90 days of the date the plan is
submitted whether the plan is approved or the corrections or information needed to
approve the plan. The commissioner shall withhold deleted text begin a county's allocation until it has an
approved plan. Plans not approved by the end of the second quarter after the plan is due
may result in a 25 percent reduction in allocation. Plans not approved by the end of the
third quarter after the plan is due may result in a 100 percent reduction in the allocation to
the county deleted text end new text begin payments to a county until it has an approved plan new text end . Counties are to maintain
services despite any deleted text begin reduction in their allocation deleted text end new text begin withholding of payments new text end due to plans
not being approved.

Sec. 6.

Minnesota Statutes 2010, section 119B.09, subdivision 1, is amended to read:

Subdivision 1.

General eligibility requirements for all applicants for child
care assistance.

(a) Child care services must be available to families who need child
care to find or keep employment or to obtain the training or education necessary to find
employment and who:

(1) have household income less than or equal to deleted text begin 67 deleted text end new text begin 76 new text end percent of the state median
income, adjusted for family size, and meet the requirements of section 119B.05; receive
MFIP assistance; and are participating in employment and training services under chapter
256J; or

(2) have household income less than or equal to 47 percent of the state median
income, adjusted for family size, at program entry and less than or equal to deleted text begin 67 deleted text end new text begin 76 new text end percent
of the state median income, adjusted for family size, at program exit.

(b) Child care services must be made available as in-kind services.

(c) All applicants for child care assistance and families currently receiving child care
assistance must be assisted and required to cooperate in establishment of paternity and
enforcement of child support obligations for all children in the family as a condition
of program eligibility. For purposes of this section, a family is considered to meet the
requirement for cooperation when the family complies with the requirements of section
256.741.

Sec. 7.

Minnesota Statutes 2010, section 119B.09, subdivision 4a, is amended to read:

Subd. 4a.

Temporary ineligibility of military personnel.

Counties must reserve a
family's position under the child care assistance fund if a family has been receiving child
care assistance but is temporarily ineligible for assistance due to increased income from
active military service. Activated military personnel may be temporarily ineligible until
deactivation. deleted text begin A county must reserve a military family's position on the basic sliding fee
waiting list under the child care assistance fund if a family is approved to receive child care
assistance and reaches the top of the waiting list but is temporarily ineligible for assistance.
deleted text end

Sec. 8.

Minnesota Statutes 2010, section 177.24, subdivision 1, is amended to read:

Subdivision 1.

Amount.

(a) For purposes of this subdivision, the terms defined in
this paragraph have the meanings given them.

(1) "Large employer" means an enterprise whose annual gross volume of sales
made or business done is not less than $625,000 (exclusive of excise taxes at the retail
level that are separately stated) and covered by the Minnesota Fair Labor Standards Act,
sections 177.21 to 177.35.

(2) "Small employer" means an enterprise whose annual gross volume of sales made
or business done is less than $625,000 (exclusive of excise taxes at the retail level that
are separately stated) and covered by the Minnesota Fair Labor Standards Act, sections
177.21 to 177.35.

(b) Except as otherwise provided in sections 177.21 to 177.35, every large employer
must pay each employee wages at a rate of at least deleted text begin $5.15 an hour beginning September
1, 1997, and at a rate of at least $6.15 an hour beginning August 1, 2005 deleted text end new text begin $9.50 an hour
beginning September 1, 2012 new text end . Every small employer must pay each employee at a rate of
at least deleted text begin $4.90 an hour beginning January 1, 1998, and at a rate of at least $5.25 an hour
beginning August 1, 2005 deleted text end new text begin $8.25 an hour beginning September 1, 2012 new text end .

(c) Notwithstanding paragraph (b), during the first 90 consecutive days of
employment, an employer may pay an employee under the age of 20 years a wage of
deleted text begin $4.90 deleted text end new text begin at least $7.50 new text end an hour new text begin beginning September 1, 2012 new text end . No employer may take any
action to displace any employee, including a partial displacement through a reduction in
hours, wages, or employment benefits, in order to hire an employee at the wage authorized
in this paragraph.

Sec. 9.

Minnesota Statutes 2011 Supplement, section 290.0671, subdivision 1, is
amended to read:

Subdivision 1.

Credit allowed.

(a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.

(b) For individuals with no qualifying children, the credit equals deleted text begin 1.9125 deleted text end new text begin 2.16 new text end percent
of the first $4,620 of earned income. The credit is reduced by deleted text begin 1.9125 deleted text end new text begin 2.16 new text end percent of
earned income or adjusted gross income, whichever is greater, in excess of $5,770, but in
no case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals deleted text begin 8.5 deleted text end new text begin 9.6 new text end percent of
the first $6,920 of earned income and deleted text begin 8.5 deleted text end new text begin 9.6 new text end percent of earned income over $12,080
but less than $13,450. The credit is reduced by deleted text begin 5.73 deleted text end new text begin 6.47 new text end percent of earned income or
adjusted gross income, whichever is greater, in excess of $15,080, but in no case is the
credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals deleted text begin ten deleted text end new text begin 11.3 new text end
percent of the first $9,720 of earned income and deleted text begin 20 deleted text end new text begin 22.6 new text end percent of earned income over
$14,860 but less than $16,800. The credit is reduced by deleted text begin 10.3 deleted text end new text begin 11.6 new text end percent of earned
income or adjusted gross income, whichever is greater, in excess of $17,890, but in no
case is the credit less than zero.

(e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).

(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b, clause (9) or (15), the credit must be allocated based on the ratio of
federal adjusted gross income reduced by the earned income not subject to tax under
this chapter over federal adjusted gross income. For purposes of this paragraph, the
subtractions for military pay under section 290.01, subdivision 19b, clauses (10) and (11),
are not considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.

(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000
for married taxpayers filing joint returns. For tax years beginning after December 31,
2010, and before January 1, 2012, the commissioner shall annually adjust the $5,000
by the percentage determined pursuant to the provisions of section 1(f) of the Internal
Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for
the word "1992." For 2011, the commissioner shall then determine the percent change
from the 12 months ending on August 31, 2008, to the 12 months ending on August
31, 2010. The earned income thresholds as adjusted for inflation must be rounded to
the nearest $10. If the amount ends in $5, the amount is rounded up to the nearest $10.
The determination of the commissioner under this subdivision is not a rule under the
Administrative Procedure Act.

(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2011.
new text end

Sec. 10.

new text begin [290.0682] CHILD CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual may claim a credit against the tax
due under this chapter in an amount equal to 50 percent of the child credit for the taxable
year for which the individual is eligible under section 24 of the Internal Revenue Code.
new text end

new text begin (b) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 2. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit which the individual is eligible
to receive under this section exceeds the individual's liability for tax under this chapter,
the commissioner shall refund the excess to the claimant.
new text end

new text begin Subd. 3. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2011.
new text end

Sec. 11. new text begin DIRECTION TO COMMISSIONER OF MANAGEMENT AND
BUDGET.
new text end

new text begin The state obligation for the basic sliding fee child care assistance program under
Minnesota Statutes, section 119B.03, must be included in the Department of Management
and Budget February and November forecast of state revenues and expenditures under
Minnesota Statutes, section 16A.103, beginning with the November 2012 forecast.
new text end

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, sections 119B.03, subdivisions 1, 2, 4, 5, 6, 6a, 6b, and 8;
and 119B.09, subdivision 3, new text end new text begin are repealed.
new text end

ARTICLE 2

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2010, section 119B.02, subdivision 2, is amended to read:

Subd. 2.

Contractual agreements with tribes.

The commissioner may enter into
contractual agreements with a federally recognized Indian tribe with a reservation in
Minnesota to carry out the responsibilities of county human service agencies to the extent
necessary for the tribe to operate child care assistance programs under sections 119B.03
and 119B.05. An agreement may allow for the tribe to be reimbursed for child care
assistance services provided under section 119B.05. The commissioner shall consult with
the affected county or counties in the contractual agreement negotiations, if the county or
counties wish to be included, in order to avoid the duplication of county and tribal child
care services. Funding to support services under section 119B.03 may be transferred to
the federally recognized Indian tribe with a reservation in Minnesota from allocations
available to counties in which reservation boundaries lie. deleted text begin When funding is transferred
under section 119B.03, the amount shall be commensurate to estimates of the proportion
of reservation residents with characteristics identified in section 119B.03, subdivision 6, to
the total population of county residents with those same characteristics.
deleted text end

Sec. 2.

Minnesota Statutes 2010, section 119B.05, subdivision 1, is amended to read:

Subdivision 1.

Eligible participants.

Families eligible for child care assistance
under the MFIP child care program are:

(1) MFIP participants who are employed or in job search and meet the requirements
of section 119B.10;

(2) persons who are members of transition year families under section 119B.011,
subdivision 20, and meet the requirements of section 119B.10;

(3) families who are participating in employment orientation or job search, or
other employment or training activities that are included in an approved employability
development plan under section 256J.95;

(4) MFIP families who are participating in work job search, job support,
employment, or training activities as required in their employment plan, or in appeals,
hearings, assessments, or orientations according to chapter 256J;

(5) MFIP families who are participating in social services activities under chapter
256J as required in their employment plan approved according to chapter 256J;

(6) families who are participating in services or activities that are included in an
approved family stabilization plan under section 256J.575; new text begin and
new text end

(7) families who are participating in programs as required in tribal contracts under
section 119B.02, subdivision 2, or 256.01, subdivision 2 deleted text begin ; and deleted text end new text begin .
new text end

deleted text begin (8) families who are participating in the transition year extension under section
119B.011, subdivision 20a.
deleted text end

Sec. 3.

Minnesota Statutes 2010, section 119B.231, subdivision 5, is amended to read:

Subd. 5.

Relationship to current law.

(a) The following provisions in chapter 119B
must be waived or modified for families receiving services under this section.

(b) Notwithstanding section 119B.13, subdivisions 1 and 1a, maximum weekly rates
under this section are 125 percent of the existing maximum weekly rate for like-care.
Providers eligible for a differential rate under section 119B.13, subdivision 3a, remain
eligible for the differential above the rate identified in this section. Only care for children
who have not yet entered kindergarten may be paid at the maximum rate under this
section. The provider's charge for service provided through an SRSA may not exceed the
rate that the provider charges a private-pay family for like-care arrangements.

(c) A family or child care provider may not be assessed an overpayment for care
provided through an SRSA unless:

(1) there was an error in the amount of care authorized for the family; or

(2) the family or provider did not timely report a change as required under the law.

(d) Care provided through an SRSA is authorized on a weekly basis.

(e) deleted text begin Funds appropriated under this section to serve families eligible under section
119B.03 are not allocated through the basic sliding fee formula under section 119B.03. deleted text end
Funds appropriated under this section are used to offset increased costs when payments
are made under SRSA's.

(f) Notwithstanding section 119B.09, subdivision 6, the maximum amount of child
care assistance that may be authorized for a child receiving care through an SRSA in a
two-week period is 160 hours per child.

(g) Effective May 23, 2008, absent day payment limits under section 119B.13,
subdivision 7, do not apply to children for care paid through SRSA's provided the family
remains eligible under subdivision 3.

Sec. 4.

Minnesota Statutes 2010, section 256.017, subdivision 9, is amended to read:

Subd. 9.

Timing and disposition of penalty and case disallowance funds.

Quality
control case penalty and administrative penalty amounts shall be disallowed or withheld
from the next regular reimbursement made to the county agency for state and federal
benefit reimbursements and federal administrative reimbursements for all programs
covered in this section, according to procedures established in statute, but shall not be
imposed sooner than 30 calendar days from the date of written notice of such penalties.
Except for penalties withheld under the child care assistance program, all penalties
must be deposited in the county incentive fund provided in section 256.018. Penalties
withheld under the child care assistance program shall be reallocated to counties deleted text begin using the
allocation formula under section 119B.03, subdivision 5 deleted text end . All penalties must be imposed
according to this provision until a decision is made regarding the status of a written
exception. Penalties must be returned to county agencies when a review of a written
exception results in a decision in their favor.

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 119B.011, subdivision 20a, new text end new text begin is repealed.
new text end