1.1                          A bill for an act
  1.2             relating to economic development; requiring some 
  1.3             businesses with state or local financial assistance to 
  1.4             pay at least a poverty level wage; requiring the 
  1.5             commissioner of revenue to set goals for jobs and 
  1.6             wages for new tax expenditures; amending Minnesota 
  1.7             Statutes 1994, section 270.067, by adding a 
  1.8             subdivision; proposing coding for new law in Minnesota 
  1.9             Statutes, chapter 177; repealing Minnesota Statutes 
  1.10            1995 Supplement, section 116J.542. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  [177.255] [STATE ASSISTANCE; EMPLOYMENT; 
  1.13  POVERTY LEVEL WAGE.] 
  1.14     Subdivision 1.  [APPLICATION.] (a) This section only 
  1.15  applies to the following types of employers: 
  1.16     (1) a for profit corporation; 
  1.17     (2) a nonprofit corporation provided that the ratio of 
  1.18  total compensation of the corporation's chief executive officer 
  1.19  to the full-time equivalent of its lowest paid employee exceeds 
  1.20  25 to 1; 
  1.21     (3) a partnership; 
  1.22     (4) a limited liability company; or 
  1.23     (5) a sole proprietorship. 
  1.24     This section excludes those employers that satisfy the 
  1.25  definition of a small business in section 645.445.  
  1.26  Notwithstanding the requirement that a small business must be a 
  1.27  for profit business, any nonprofit corporation that otherwise 
  1.28  satisfies the definition in section 645.445, is excluded from 
  2.1   satisfying the provisions of this section. 
  2.2      (b) Of the employers listed in paragraph (a), this section 
  2.3   only applies to employers that receive state or local assistance 
  2.4   in the form of a grant or loan, if: 
  2.5      (1) the sum of all types of assistance exceeds $25,000 in a 
  2.6   fiscal year; and 
  2.7      (2) the purpose of the assistance is economic development 
  2.8   or job growth. 
  2.9      (c) Employers that meet the criteria stated in paragraphs 
  2.10  (a) and (b) must pay every employee hired as a result of the 
  2.11  assistance at least a poverty level wage.  For purposes of this 
  2.12  section, "poverty level wage" means the hourly wage, including 
  2.13  the employer's share of any health or dental coverage, necessary 
  2.14  for an employee working 40 hours a week, 52 weeks a year, to 
  2.15  earn an annual wage equal to 100 percent of the federal poverty 
  2.16  level for a family of four. 
  2.17     If the employer fails to pay a poverty level wage the 
  2.18  employer shall pay the county board in which the project is 
  2.19  located for community social services an amount equal to two 
  2.20  times the difference between the poverty level wage and the wage 
  2.21  actually paid. 
  2.22     Subd. 2.  [ON-THE-JOB TRAINING EXEMPTION.] (a) The 
  2.23  requirement to pay at least a poverty level wage under 
  2.24  subdivision 1 does not apply to an employee engaged in 
  2.25  on-the-job training.  For purposes of this section, "on-the-job 
  2.26  training" means: 
  2.27     (1) an apprenticeship program for an apprentice defined by 
  2.28  section 178.06; 
  2.29     (2) a preapprenticeship program that assists learners to 
  2.30  explore occupational areas and assess their skills and interests 
  2.31  in those areas, and acquire knowledge and skills necessary to 
  2.32  succeed in youth apprenticeship programs; or 
  2.33     (3) a training program, not to exceed six months, that is 
  2.34  offered to an individual while employed in productive work that 
  2.35  provides training, technical and other related skills, and 
  2.36  personal skills that are essential to the full and adequate 
  3.1   performance of the employment. 
  3.2      (b) An employer must pay at least a poverty level wage to 
  3.3   an employee who would otherwise be exempt under paragraph (a), 
  3.4   if: 
  3.5      (1) any other individual has been laid off by the employer 
  3.6   from the position to be filled by the eligible employee or from 
  3.7   any substantially equivalent position; or 
  3.8      (2) the employer has terminated the employment of any 
  3.9   regular employee or otherwise reduced the number of employees 
  3.10  with the intention of replacing the employee by hiring an 
  3.11  employee who is not required to receive at least a poverty level 
  3.12  wage. 
  3.13     Subd. 3.  [APPLICATION FOR ON-THE-JOB TRAINING 
  3.14  EXEMPTION.] An employer seeking exemption under subdivision 2 
  3.15  must: 
  3.16     (1) notify the commissioner of labor and industry.  The 
  3.17  commissioner must certify that the on-the-job training program 
  3.18  meets the criteria stated in subdivision 2; and 
  3.19     (2) describe the program in writing, retain a copy of the 
  3.20  program, and provide a copy of the program to the commissioner 
  3.21  of labor and industry and to the employee. 
  3.22     Subd. 4.  [BONA FIDE FOREIGN STATE OFFER; EXEMPTION.] This 
  3.23  section does not apply if the chief executive officer of the 
  3.24  assistance recipient certifies to the entity providing the 
  3.25  assistance that but for the assistance the recipient would have 
  3.26  relocated in another state due to an offer of assistance of the 
  3.27  other state.  The chief executive officer must provide details 
  3.28  of the offer with the certification. 
  3.29     Subd. 5.  [ASSISTANCE EXEMPTION.] This section does not 
  3.30  apply to the following types of assistance: 
  3.31     (1) grant and loan assistance for the removal or 
  3.32  remediation of a hazardous substance, hazardous waste, 
  3.33  pollutant, or contaminant, including human waste, as defined by 
  3.34  section 115B.02; 
  3.35     (2) loan or loan guarantee assistance from the tourism loan 
  3.36  program under section 116J.617; 
  4.1      (3) grant assistance from contamination cleanup grants 
  4.2   under section 116J.552; 
  4.3      (4) disparity reduction credits under section 273.1398, 
  4.4   subdivision 4; and 
  4.5      (5) grant and loan assistance from the Minnesota investment 
  4.6   fund provided that: 
  4.7      (i) the sum of all grant and loan assistance from the 
  4.8   Minnesota investment fund in a fiscal year exempted under this 
  4.9   subdivision does not exceed $650,000; 
  4.10     (ii) the project is outside the metropolitan area, as 
  4.11  defined in section 473.121, subdivision 2; and 
  4.12     (iii) the project expands the economic diversity of the 
  4.13  area. 
  4.14     Subd. 6.  [EMPLOYEE EXEMPTION.] This section does not apply 
  4.15  to an employee who is a blind or disabled eligible individual as 
  4.16  that term is defined in United States Code, title 42, section 
  4.17  1382, paragraph (a). 
  4.18     Subd. 7.  [LOCAL GOVERNMENT EXEMPTION.] This section does 
  4.19  not apply to 15 percent of the total assistance, otherwise 
  4.20  subject to this section, annually given to all employers by a 
  4.21  local government unit.  For the purpose of this subdivision, 
  4.22  "total assistance" does not include assistance funded by the 
  4.23  issuance of bonds for economic development.  The local 
  4.24  government unit may select the 15 percent of total assistance 
  4.25  that is not subject to this subdivision.  This subdivision only 
  4.26  exempts assistance that responds to a distinct emergency or 
  4.27  crisis and is for a business that: 
  4.28     (1) would expand the economic diversity of the area; and 
  4.29     (2) does not compete with an existing business in the area. 
  4.30     Subd. 8.  [MINNESOTA EXPORT FINANCE AUTHORITY.] This 
  4.31  section does not apply to assistance provided by the Minnesota 
  4.32  export finance authority created under section 116J.9673. 
  4.33     Sec. 2.  Minnesota Statutes 1994, section 177.27, 
  4.34  subdivision 1, is amended to read: 
  4.35     Subdivision 1.  [EXAMINATION OF RECORDS.] The commissioner 
  4.36  may enter during reasonable office hours or upon request and 
  5.1   inspect the place of business or employment of any employer of 
  5.2   employees working in the state, to examine and inspect books, 
  5.3   registers, payrolls, and other records of any employer that in 
  5.4   any way relate to wages, hours, and other conditions of 
  5.5   employment of any employees.  The commissioner may transcribe 
  5.6   any or all of the books, registers, payrolls, and other records 
  5.7   as the commissioner deems necessary or appropriate and may 
  5.8   question the employees to ascertain compliance with sections 
  5.9   177.21 to 177.35.  The commissioner may investigate wage claims 
  5.10  or complaints by an employee or other person against an employer 
  5.11  if the failure to pay a wage may violate Minnesota law or an 
  5.12  order or rule of the department. 
  5.13     Sec. 3.  Minnesota Statutes 1994, section 270.067, is 
  5.14  amended by adding a subdivision to read: 
  5.15     Subd. 5a.  [GOALS FOR NEW TAX EXPENDITURES.] Each newly 
  5.16  enacted business related state tax expenditure, including tax 
  5.17  waivers and tax incentives, must include measurable goals for 
  5.18  jobs and wages and require a biennial review conducted by the 
  5.19  commissioner of revenue to analyze the effect of each business 
  5.20  related tax expenditure and for continuation based upon meeting 
  5.21  those goals.  The commissioner of revenue shall report as part 
  5.22  of the tax expenditure budget report the results of the review 
  5.23  to the legislature. 
  5.24     Sec. 4.  [LEGISLATIVE AUDITOR; POVERTY AND CHOICES FOR 
  5.25  ECONOMIC DEVELOPMENT.] 
  5.26     The legislative audit commission is requested to direct the 
  5.27  legislative auditor to examine the cost of low paying jobs in 
  5.28  Minnesota.  The study shall consist of two parts.  The first 
  5.29  part is to compare the cost of government transfer payments for 
  5.30  families with income below the federal poverty threshold with 
  5.31  the benefits resulting from those jobs.  To the extent possible, 
  5.32  the study shall separate transfer payments by program, family 
  5.33  type, and region.  The second part shall examine the role of 
  5.34  state government in increasing wages to a livable level. 
  5.35     Sec. 5.  [REPEALER.] 
  5.36     Minnesota Statutes 1995 Supplement, section 116J.542, is 
  6.1   repealed. 
  6.2      Sec. 6.  [EFFECTIVE DATE; APPLICABILITY.] 
  6.3      Section 1 applies to grants and loans authorized on or 
  6.4   after August 1, 1996.