1.1                          A bill for an act 
  1.2             relating to employment; establishing the 1997 
  1.3             Minnesota employment and economic development program; 
  1.4             modifying the wage subsidy program and providing job 
  1.5             retention services; appropriating money; amending 
  1.6             Minnesota Statutes 1996, sections 268.672, subdivision 
  1.7             6, and by adding subdivisions; 268.673, subdivisions 
  1.8             3, 4a, and 5; 268.6751, subdivision 1; 268.677, 
  1.9             subdivision 1; and 268.681; proposing coding for new 
  1.10            law in Minnesota Statutes, chapter 268; repealing 
  1.11            Minnesota Statutes 1996, sections 268.672, subdivision 
  1.12            4; 268.673, subdivision 6; 268.676; 268.677, 
  1.13            subdivisions 2 and 3; 268.678; and 268.679, 
  1.14            subdivision 3. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  [268.6715] [1997 MINNESOTA EMPLOYMENT AND 
  1.17  ECONOMIC DEVELOPMENT PROGRAM.] 
  1.18     The 1997 Minnesota employment and economic development 
  1.19  program is established to assist businesses and communities to 
  1.20  create jobs that provide the wages, benefits, and on-the-job 
  1.21  training opportunities necessary to help low-wage workers and 
  1.22  people transitioning from public assistance to get and retain 
  1.23  jobs, and to help their families to move out of poverty. 
  1.24     Sec. 2.  Minnesota Statutes 1996, section 268.672, 
  1.25  subdivision 6, is amended to read: 
  1.26     Subd. 6.  [ELIGIBLE JOB APPLICANT.] "Eligible job 
  1.27  applicant" means a person who:  (1) has been a resident of this 
  1.28  state for at least one month, (2) is unemployed, (3) is not 
  1.29  receiving and is not qualified to receive reemployment insurance 
  1.30  or workers' compensation, and (4) is determined to be likely to 
  2.1   be available for employment by an eligible employer for the 
  2.2   duration of the job.  
  2.3      For the purposes of this subdivision, a farmer or any 
  2.4   member of a farm family household who can demonstrate severe 
  2.5   household financial need must be considered unemployed. 
  2.6      (1) has attempted to secure a nonsubsidized job by 
  2.7   completing comprehensive job readiness and is: 
  2.8      (i) a temporary assistance for needy families (TANF) 
  2.9   recipient who is making good faith efforts to comply with the 
  2.10  family support agreement as defined under section 256.032, 
  2.11  subdivision 7a, but has failed to find suitable employment; or 
  2.12     (ii) a family general assistance recipient; 
  2.13     (2) is a member of a household supported only by: 
  2.14     (i) a low-income worker; or 
  2.15     (ii) a person who is underemployed as that term is defined 
  2.16  in section 268.61, subdivision 5; or 
  2.17     (3) is a member of a family that is eligible for, but not 
  2.18  receiving public assistance. 
  2.19     Sec. 3.  Minnesota Statutes 1996, section 268.672, is 
  2.20  amended by adding a subdivision to read: 
  2.21     Subd. 13.  [COMPREHENSIVE JOB READINESS.] "Comprehensive 
  2.22  job readiness" means a job search program administered by a 
  2.23  county, its designee, or workforce service area that teaches 
  2.24  self-esteem, marketable work habits, job-seeking skills, and 
  2.25  life-management skills, and may include job retention services. 
  2.26     Sec. 4.  Minnesota Statutes 1996, section 268.672, is 
  2.27  amended by adding a subdivision. 
  2.28     Subd. 13a.  [ELIGIBLE PROGRAM PARTICIPANT.] "Eligible 
  2.29  program participant" means an eligible job applicant who is 
  2.30  participating in comprehensive job readiness, subsidized 
  2.31  employment, or job retention services.  An individual who has 
  2.32  been dismissed for cause or quit subsidized employment without 
  2.33  good cause is not eligible for subsidized employment under the 
  2.34  program. 
  2.35     Sec. 5.  Minnesota Statutes 1996, section 268.672, is 
  2.36  amended by adding a subdivision to read:  
  3.1      Subd. 14.  [EMPLOYER.] "Employer" means a private or public 
  3.2   employer that: 
  3.3      (1) agrees to create a job that is permanent and full time, 
  3.4   except a private nonprofit or public employer may provide a 
  3.5   temporary job; 
  3.6      (2) pays a wage of at least $2 per hour higher than the 
  3.7   minimum wage; and 
  3.8      (3) agrees to retain a participant at the same wage and 
  3.9   benefit level of the wage subsidy period after satisfactory 
  3.10  completion of the subsidy period. 
  3.11     Sec. 6.  Minnesota Statutes 1996, section 268.672, is 
  3.12  amended by adding a subdivision to read: 
  3.13     Subd. 15.  [FULL-TIME.] "Full-time" means 40 hours of work 
  3.14  per week or any other schedule considered full-time by the 
  3.15  employer.  In the case of a temporary assistance to needy 
  3.16  families recipient, "full-time" means 40 hours comprised of the 
  3.17  number of hours of work needed to meet the recipient's work 
  3.18  requirement plus the number of hours spent in a training or 
  3.19  education program. 
  3.20     Sec. 7.  Minnesota Statutes 1996, section 268.672, is 
  3.21  amended by adding a subdivision to read: 
  3.22     Subd. 16.  [JOB RETENTION SERVICES.] "Job retention 
  3.23  services" means assistance that would not otherwise be provided 
  3.24  to an eligible job applicant with child care, transportation, 
  3.25  job coaching, employer-employee mediation, and other forms of 
  3.26  support services to help an applicant to transition to 
  3.27  employment and retain a job. 
  3.28     Sec. 8.  Minnesota Statutes 1996, section 268.672, is 
  3.29  amended by adding a subdivision to read: 
  3.30     Subd. 17.  [LOW-INCOME WORKER.] "Low-income worker" means a 
  3.31  worker who earns no more than $1 per hour more than the minimum 
  3.32  wage. 
  3.33     Sec. 9.  Minnesota Statutes 1996, section 268.672, is 
  3.34  amended by adding a subdivision to read: 
  3.35     Subd. 18.  [MINIMUM WAGE.] "Minimum wage" means the greater 
  3.36  of (1) the federal minimum wage in effect on or after September 
  4.1   1, 1997, and (2) the state minimum wage under section 177.24. 
  4.2      Sec. 10.  Minnesota Statutes 1996, section 268.672, is 
  4.3   amended by adding a subdivision to read: 
  4.4      Subd. 19.  [PROGRAM.] "Program" means the 1997 Minnesota 
  4.5   employment and economic development program. 
  4.6      Sec. 11.  Minnesota Statutes 1996, section 268.672, is 
  4.7   amended by adding a subdivision to read: 
  4.8      Subd. 20.  [WORKFORCE SERVICE AREA.] "Workforce service 
  4.9   area" means a service delivery area designated by the governor 
  4.10  under the Job Training Partnership Act, United States Code, 
  4.11  title 29, section 1501, et seq. 
  4.12     Sec. 12.  Minnesota Statutes 1996, section 268.673, 
  4.13  subdivision 3, is amended to read: 
  4.14     Subd. 3.  [DEPARTMENT OF ECONOMIC SECURITY.] The 
  4.15  commissioner shall supervise wage subsidies, comprehensive job 
  4.16  readiness, and job retention services and shall provide 
  4.17  technical assistance to the local service units for the purpose 
  4.18  of delivering wage subsidies counties in their delivery.  
  4.19     Sec. 13.  Minnesota Statutes 1996, section 268.673, 
  4.20  subdivision 4a, is amended to read: 
  4.21     Subd. 4a.  [CONTRACTS WITH SERVICE PROVIDERS COUNTIES.] The 
  4.22  commissioner shall contract directly with a certified local 
  4.23  service provider counties, their designees, or workforce service 
  4.24  areas to deliver wage subsidies, comprehensive job readiness, 
  4.25  and job retention services if (1) each county served by 
  4.26  the provider designee or workforce service area agrees to the 
  4.27  contract and knows the amount of wage subsidy money, 
  4.28  comprehensive job readiness money, and job retention services 
  4.29  money allocated to the county under section 268.6751, and (2) 
  4.30  the provider designee or workforce service area agrees to meet 
  4.31  regularly with each county being served.  The contracts must 
  4.32  require that no more than ten percent of the contract amount be 
  4.33  expended for administration. 
  4.34     Counties and workforce service areas are encouraged to 
  4.35  designate community-based providers of comprehensive job 
  4.36  readiness and job retention services. 
  5.1      Sec. 14.  Minnesota Statutes 1996, section 268.673, 
  5.2   subdivision 5, is amended to read: 
  5.3      Subd. 5.  [REPORT.] Each entity county delivering wage 
  5.4   subsidies, comprehensive job readiness, and job retention 
  5.5   services shall report to the commissioner on a quarterly basis: 
  5.6      (1) the number of persons placed in private sector jobs, in 
  5.7   temporary public sector jobs, or in other services; 
  5.8      (2) the outcome for each participant placed in a private 
  5.9   sector job, in a temporary public sector job, or in another 
  5.10  service; 
  5.11     (3) the number and type of employers employing persons 
  5.12  under the program; 
  5.13     (4) the amount of money spent in each local service unit 
  5.14  county for wages, comprehensive job readiness, and job retention 
  5.15  services for each type of employment and each type of other 
  5.16  expense; 
  5.17     (5) the age, educational experience, family status, gender, 
  5.18  priority group status, race, and work experience of each person 
  5.19  in the program; 
  5.20     (6) the amount of wages received by persons while in the 
  5.21  program and 60 days after completing the program; and 
  5.22     (7) for each classification of persons described in clause 
  5.23  (5), the outcome of the wage subsidy placement, the 
  5.24  comprehensive job readiness, and the job retention services, 
  5.25  including length of time employed; nature of employment, whether 
  5.26  private sector, temporary public sector, or other service; and 
  5.27  the hourly wages; and 
  5.28     (8) any other information requested by the commissioner.  
  5.29  Each report must include cumulative information, as well as 
  5.30  information for each quarter. 
  5.31     Data collected on individuals under this subdivision are 
  5.32  private data on individuals as defined in section 13.02, 
  5.33  subdivision 12, except that summary data may be provided under 
  5.34  section 13.05, subdivision 7. 
  5.35     Sec. 15.  Minnesota Statutes 1996, section 268.6751, 
  5.36  subdivision 1, is amended to read: 
  6.1      Subdivision 1.  [WAGE SUBSIDIES ALLOCATION.] Wage subsidy 
  6.2   money, comprehensive job readiness money, and job retention 
  6.3   services money must be allocated to local service units in the 
  6.4   following manner: 
  6.5      (a) The commissioner shall allocate 87.5 percent of the 
  6.6   funds available for allocation to local service units for wage 
  6.7   subsidy programs as follows:  the proportion of the wage subsidy 
  6.8   money available to each local service unit must be based on the 
  6.9   number of unemployed persons in the local service unit for the 
  6.10  most recent six-month period and the number of work readiness 
  6.11  assistance cases and aid to families with dependent children 
  6.12  cases in the local service unit for the most recent six-month 
  6.13  period. 
  6.14     (b) Five percent of the money available for wage subsidy 
  6.15  programs must be allocated at the discretion of the commissioner.
  6.16     (c) Seven and one-half percent of the money available for 
  6.17  wage subsidy programs must be allocated at the discretion of the 
  6.18  commissioner to provide jobs for residents of federally 
  6.19  recognized Indian reservations.  
  6.20     (d) counties in proportion to the number of persons living 
  6.21  at or below the federal poverty threshold in each county.  By 
  6.22  December 31 of each fiscal year, providers and local service 
  6.23  units counties, designees, and workforce service areas receiving 
  6.24  wage subsidy money, comprehensive job readiness money, and job 
  6.25  retention services money shall report to the commissioner on the 
  6.26  use of allocated funds.  The commissioner shall reallocate 
  6.27  uncommitted funds for each fiscal year according to the formula 
  6.28  in paragraph (a) this subdivision. 
  6.29     Sec. 16.  Minnesota Statutes 1996, section 268.677, 
  6.30  subdivision 1, is amended to read: 
  6.31     Subdivision 1.  [WAGE SUBSIDY, COMPREHENSIVE JOB READINESS, 
  6.32  AND JOB RETENTION SERVICES MONEY.] To the extent allowable under 
  6.33  federal and state law, wage subsidy money, comprehensive job 
  6.34  readiness money, and job retention services money must be pooled 
  6.35  and used in combination with money from other employment and 
  6.36  training services or income maintenance and support 
  7.1   services.  At least 75 percent of the money appropriated for 
  7.2   wage subsidies must be used to pay wages for eligible job 
  7.3   applicants.  For each eligible job applicant employed, the 
  7.4   maximum state contribution from any combination of public 
  7.5   assistance grant diversion and employment and training services 
  7.6   governed under this chapter, including wage subsidies, is $4 per 
  7.7   hour for wages and $1 per hour for fringe benefits.  The use of 
  7.8   wage subsidies is limited as follows:  
  7.9      (a) The wage subsidy is $2.50 per hour for wages and up to 
  7.10  $1 per hour for reimbursement of employer paid benefits for 
  7.11  health care, child care, or transportation expenses for 
  7.12  employers paying an eligible program participant an hourly wage 
  7.13  that is $2 to $2.99 per hour higher than the minimum wage. 
  7.14     (b) The wage subsidy is $4 per hour for wages and up to $1 
  7.15  per hour for reimbursement of employer paid benefits for health 
  7.16  care, child care, or transportation expenses for employers 
  7.17  paying an eligible program participant an hourly wage that is $3 
  7.18  or more per hour higher than the minimum wage. 
  7.19     (c) The wage subsidy for each an eligible job applicant 
  7.20  placed in private or nonprofit employment, the state may 
  7.21  subsidize wages may be paid for a maximum of 1,040 hours over a 
  7.22  period of 26 weeks.  Employers are encouraged to use money from 
  7.23  other sources to provide increased wages to applicants they 
  7.24  employ.  Job retention services may be provided to an eligible 
  7.25  program participant over a period of 78 weeks.  
  7.26     (b) For each eligible job applicant participating in a job 
  7.27  training program and placed in private sector employment, the 
  7.28  state may subsidize wages for a maximum of 1,040 hours over a 
  7.29  period of 52 weeks.  
  7.30     (c) For each eligible job applicant placed in a community 
  7.31  investment program job, the state may provide wage subsidies for 
  7.32  a maximum of 780 hours over a maximum of 26 weeks.  For an 
  7.33  individual placed in a community investment program job, the 
  7.34  county share of the wage subsidy shall be 25 percent.  Counties 
  7.35  may use money from sources other than public assistance and wage 
  7.36  subsidies, including private grants, contributions from 
  8.1   nonprofit corporations and other units of government, and other 
  8.2   state money, to increase the wages or hours of persons employed 
  8.3   in community investment programs.  
  8.4      (d) Notwithstanding the limitations of paragraphs (a) and 
  8.5   (b), money may be used to provide a state contribution for wages 
  8.6   and fringe benefits in private sector jobs for eligible 
  8.7   applicants who had previously held temporary jobs with eligible 
  8.8   government and nonprofit agencies or who had previously held 
  8.9   community investment program jobs for which a state contribution 
  8.10  had been made, and who are among the priority groups established 
  8.11  in section 268.676, subdivision 1.  The use of money under this 
  8.12  paragraph shall be for a maximum of 1,040 hours over a maximum 
  8.13  period of 26 weeks per job applicant. An employer of more than 
  8.14  four full-time employees shall receive wage subsidies for no 
  8.15  more than 25 percent of the employer's full-time workforce. 
  8.16     Sec. 17.  Minnesota Statutes 1996, section 268.681, is 
  8.17  amended to read: 
  8.18     268.681 [BUSINESS EMPLOYMENT.] 
  8.19     Subdivision 1.  [ELIGIBLE BUSINESSES.] A business employer 
  8.20  is an eligible employer if it enters into a written contract, 
  8.21  signed and subscribed to under oath, with a local service 
  8.22  unit county or its contractor designee, containing assurances 
  8.23  that: 
  8.24     (a) funds received by a business shall be used only as 
  8.25  permitted under sections 268.672 to 268.682; 
  8.26     (b) the business has submitted information to the local 
  8.27  service unit county or, its contractor designee, or 
  8.28  workforce service area (1) describing the duties and proposed 
  8.29  compensation of each employee proposed to be hired under the 
  8.30  program; and (2) demonstrating that, with the funds provided 
  8.31  under sections 268.672 to 268.682, the business is likely to 
  8.32  succeed and continue to employ persons hired using wage 
  8.33  subsidies; 
  8.34     (c) the business will use funds exclusively for 
  8.35  compensation and fringe benefits of eligible job applicants and 
  8.36  will provide employees hired with these funds with fringe 
  9.1   benefits and other terms and conditions of employment comparable 
  9.2   to those provided to other employees of the business who do 
  9.3   comparable work; 
  9.4      (d) the funds are necessary to allow the business to begin, 
  9.5   or to employ additional people, but not to fill positions which 
  9.6   would be filled even in the absence of wage subsidies; 
  9.7      (e) the business will cooperate with the local service unit 
  9.8   county and the commissioner in collecting data to assess the 
  9.9   result of wage subsidies and the effectiveness of comprehensive 
  9.10  job readiness and job retention services; and 
  9.11     (f) the business is in compliance with all applicable 
  9.12  affirmative action, fair labor, health, safety, and 
  9.13  environmental standards.  
  9.14     Subd. 1a.  [INELIGIBLE BUSINESSES.] A business employer is 
  9.15  ineligible to participate in the program and is ineligible to 
  9.16  receive wage subsidy money if:  
  9.17     (1) the business is a temporary employment agency; or 
  9.18     (2) the business is a restaurant.  
  9.19     For purposes of this subdivision, "temporary employment 
  9.20  agency" means a business that hires people to work in temporary 
  9.21  positions for employers who are clients of that business.  
  9.22     For purposes of this subdivision, "restaurant" includes, 
  9.23  but is not limited to, fast food restaurants. 
  9.24     Subd. 1b.  [DISCHARGE OF PROGRAM PARTICIPANT.] A program 
  9.25  participant discharged from employment may challenge the 
  9.26  discharge as a violation of subdivision 1. 
  9.27     Subd. 2.  [PRIORITIES.] (a) In allocating funds among 
  9.28  eligible businesses, the local service unit county or its 
  9.29  contractor designee shall give priority to: 
  9.30     (1) businesses that will provide applicants with on-the-job 
  9.31  training and marketable job skills; 
  9.32     (2) businesses engaged in manufacturing; 
  9.33     (2) (3) nonretail businesses that are small businesses as 
  9.34  defined in section 645.445; and 
  9.35     (3) (4) businesses that export products outside the state. 
  9.36     (b) In addition to paragraph (a), a local service unit 
 10.1   county must give priority to businesses that: 
 10.2      (1) have a high potential for growth and long-term job 
 10.3   creation; 
 10.4      (2) are labor intensive; 
 10.5      (3) make high use of local and Minnesota resources; 
 10.6      (4) are under ownership of women and minorities; 
 10.7      (5) make high use of new technology; 
 10.8      (6) produce energy conserving materials or services or are 
 10.9   involved in development of renewable sources of energy; and 
 10.10     (7) have their primary place of business in Minnesota.  
 10.11     Subd. 3.  [PAYBACK.] (a) A business receiving wage 
 10.12  subsidies shall repay 70 percent of the amount initially 
 10.13  received for each eligible job applicant employed, if the 
 10.14  employee does not continue in the employment of the business 
 10.15  beyond the six-month subsidized period.  If the employee 
 10.16  continues in the employment of the business for one year or 
 10.17  longer after the six-month subsidized period, the business need 
 10.18  not repay any of the funds received for that employee's wages.  
 10.19  If the employee continues in the employment of the business for 
 10.20  a period of less than one year after the expiration of the 
 10.21  six-month subsidized period, the business shall receive a 
 10.22  proportional reduction in the amount it must repay. 
 10.23     (b) If an employer dismisses an employee for good cause and 
 10.24  works in good faith with the local service unit or its 
 10.25  contractor to employ and train another person referred by 
 10.26  the local service unit county or, its contractor 
 10.27  designee, or workforce service area, the payback formula shall 
 10.28  apply as if the original person had continued in employment.  
 10.29     (c) If a business receiving funds under the program reduces 
 10.30  the hourly wage after the six-month subsidy, the business must 
 10.31  repay a portion of the subsidy in direct proportion to the 
 10.32  amount that the hourly wage is reduced. 
 10.33     (d) A repayment schedule shall be negotiated and agreed to 
 10.34  by the local service unit county and the business prior to the 
 10.35  disbursement of the funds and is subject to renegotiation.  The 
 10.36  local service unit county shall forward 25 percent of the 
 11.1   payments received under this subdivision to the commissioner on 
 11.2   a monthly basis and shall retain the remaining 75 percent for 
 11.3   local program expenditures.  Notwithstanding section 268.677, 
 11.4   subdivision 2, the local service unit may use up to 20 percent 
 11.5   of its share of the funds returned retain payments received 
 11.6   under this subdivision for any administrative costs associated 
 11.7   with the collection of the funds under this subdivision and for 
 11.8   entering into new wage subsidy agreements.  At least 80 percent 
 11.9   of the local service unit's share of the funds returned under 
 11.10  this subdivision must be used as provided in section 268.677.  
 11.11  The commissioner shall deposit payments forwarded to the 
 11.12  commissioner under this subdivision in the general fund. 
 11.13     (e) If an employer is more than 60 days late in repaying a 
 11.14  subsidy as required in this subdivision, the county may engage a 
 11.15  licensed collection agency or refer the matter to the department 
 11.16  for collection under chapter 16D. 
 11.17     Subd. 5.  [SUCCESSORSHIP.] A contract entered into by an 
 11.18  owner, employer, or manager under the wage subsidy program is 
 11.19  legally binding on any successor owner, employer, or manager. 
 11.20     Sec. 18.  [REPEALER.] 
 11.21     Minnesota Statutes 1996, sections 268.672, subdivision 4; 
 11.22  268.673, subdivision 6; 268.676; 268.677, subdivisions 2 and 3; 
 11.23  268.678; and 268.679, subdivision 3, are repealed. 
 11.24     Sec. 19.  [APPROPRIATIONS.] 
 11.25     $....... is appropriated from the general fund to the 
 11.26  commissioner of economic security for the wage subsidy and job 
 11.27  retention services program.