1.1 	A bill for an act
1.2 	relating to employment; modifying worker classification regulation, penalties, 
1.3 	and fees; authorizing rulemaking;amending Minnesota Statutes 2010, sections 
1.4 	181.723; 326B.04, subdivision 1; 326B.081, subdivision 3; 326B.805, 
1.5 	subdivision 6; repealing Minnesota Statutes 2010, section 181.723, subdivision 
1.6 	17; Minnesota Rules, parts 5202.0100; 5202.0110; 5202.0120; 5202.0130; 
1.7 	5202.0140; 5202.0150; 5202.0160.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2010, section 181.723, is amended to read:
1.10 	181.723 INDEPENDENTCONSTRUCTION CONTRACTORS.
1.11 		Subdivision 1.Definitions Scope. This section governs registration and other 
1.12 	responsibilities of persons performing construction services in Minnesota.
1.13 		Subd. 1a.Definitions. The definitions in this subdivision apply to this section.
1.14 	(a) "Person" means any individual, limited liability corporation company, limited 
1.15 	liability partnership, corporation, partnership, incorporated or unincorporated association, 
1.16 	sole proprietorship, joint stock company, or any other legal or commercial entity.
1.17 	(b) "Department" means the Department of Labor and Industry.
1.18 	(c) "Commissioner" means the commissioner of labor and industry or a duly 
1.19 	designated representative of the commissioner who is either an employee of the 
1.20 	Department of Labor and Industry or person working under contract with the Department 
1.21 	of Labor and Industry.
1.22 	(d) "Individual" means a human being.
1.23 	(e) "Day" means calendar day unless otherwise provided.
1.24 	(f) "Knowingly" means knew or could have known with the exercise of reasonable 
1.25 	diligence.
2.1 	(g) (f) "Document" or "documents" includes papers; books; records; memoranda; 
2.2 	data; contracts; drawings; graphs; charts; photographs; digital, video, and audio 
2.3 	recordings; records; accounts; files; statements; letters; e-mails; invoices; bills; notes; and 
2.4 	calendars maintained in any form or manner.
2.5 	(g) "Construction services" means field installation of building construction 
2.6 	materials into new or existing public or private sector commercial or residential buildings. 
2.7 	Construction services include demolition or deconstruction of building components. 
2.8 	Construction services include landscaping services and construction cleaning services 
2.9 	when they are performed as part of a contract for other building construction or 
2.10 	improvement services. Construction services do not include:
2.11 	(1) the manufacture, supply, or sale of products, materials, merchandise, or 
2.12 	construction equipment;
2.13 	(2) installation or delivery of a product by the manufacturer of the product;
2.14 	(3) rubbish or debris hauling; or
2.15 	(4) cleaning or maintenance of a building.
2.16 	(h) "Construction contractor" means a person that meets the requirements of 
2.17 	subdivision 4.
2.18 	(i) "Business entity" means a person other than an individual or a sole proprietor.
2.19 	(j) "In the course of a person's construction business" means in the course of a 
2.20 	person's construction trade, business, profession, or occupation.
2.21 		Subd. 2.Limited application. This section only applies to individuals performing 
2.22 	public or private sector commercial or residential building construction or improvement 
2.23 	services. Building construction and improvement services do not include (1) the 
2.24 	manufacture, supply, or sale of products, materials, or merchandise; (2) landscaping 
2.25 	services for the maintenance or removal of existing plants, shrubs, trees, and other 
2.26 	vegetation, whether or not the services are provided as part of a contract for the building 
2.27 	construction or improvement services; and (3) all other landscaping services, unless the 
2.28 	other landscaping services are provided as part of a contract for the building construction 
2.29 	or improvement services.
2.30 		Subd. 3.Employee-employer relationship. Except as provided in subdivision 4, 
2.31 	For purposes of chapters 176, 177, 181A, 182, and 268, as of January 1, 2009 2012, an 
2.32 	individual who performs construction services for a another person that are in the course 
2.33 	of the other person's trade, construction business, profession, or occupation is an employee 
2.34 	of that person and that person is an employer of the individual, except that if the individual 
2.35 	satisfies all of the conditions in subdivision 4, clause (2), the individual is an independent 
2.36 	contractor and not an employee for purposes of those chapters only.
3.1 		Subd. 4.Independent Construction contractor. An individual is an independent 
3.2 	contractor and not an employee of the person for whom the individual is performing 
3.3 	services in the course of the person's trade, business, profession, or occupation only if (1) 
3.4 	the individual holds a current independent contractor exemption certificate issued by 
3.5 	the commissioner; and (2) the individual is performing services for the person under 
3.6 	the independent contractor exemption certificate as provided in subdivision 6. The 
3.7 	requirements in clauses (1) and (2) must be met in order to qualify as an independent 
3.8 	contractor and not as an employee of the person for whom the individual is performing 
3.9 	services in the course of the person's trade, business, profession, or occupation.A person 
3.10 	is a construction contractor only if: 
3.11 	(1) the person has satisfied the registration requirements of subdivision 4a; and
3.12 	(2) the person meets all of the following conditions:
3.13 	(i) the person maintains a separate business with the person's own office, equipment, 
3.14 	and materials;
3.15 	(ii) the person holds a federal employer identification number or has filed business 
3.16 	or self-employment income tax returns with the federal Internal Revenue Service if the 
3.17 	person has performed services in the previous year;
3.18 	(iii) the person operates under written contracts to perform specific construction 
3.19 	services for specific amounts of money and under which the person controls the means of 
3.20 	performing the services;
3.21 	(iv) the person incurs the main expenses related to the construction services that the 
3.22 	person performs under contract;
3.23 	(v) the person is responsible for the satisfactory completion of construction services 
3.24 	that the person contracts to perform and is liable for a failure to complete the service;
3.25 	(vi) the person receives compensation for construction services performed under a 
3.26 	contract on a commission or per-job or competitive bid basis and not on any other basis;
3.27 	(vii) the person may realize a profit or suffer a loss under contracts to perform 
3.28 	construction services;
3.29 	(viii) the person has continuing or recurring business liabilities or obligations; and
3.30 	(ix) the success or failure of the person's business depends on the relationship of 
3.31 	business receipts to expenditures.
3.32 		Subd. 4a.Registration. (a) Except as provided in paragraph (b), any person who 
3.33 	performs construction services in the state on or after January 1, 2012, must register with 
3.34 	the commissioner as provided in subdivision 5a before performing construction services 
3.35 	for another person.
3.36 	(b) The registration requirements in this section do not apply to:
4.1 	(1) a person who, at the time the person is performing the construction services, 
4.2 	holds a current license, certificate, or registration under chapter 299M or 326B;
4.3 	(2) a person who holds a current independent contractor exemption certificate issued 
4.4 	under this section that expires on or after January 1, 2012;
4.5 	(3) a person who has given a bond to the state under section 326B.197 or 326B.46;
4.6 	(4) an employee of the person performing the construction services, if the person 
4.7 	was in compliance with laws related to employment of the individual at the time the 
4.8 	construction services were performed;
4.9 	(5) an architect or professional engineer engaging in professional practice as defined 
4.10 	in section 326.02, subdivisions 2 and 3;
4.11 	(6) a school district or technical college governed under chapter 136F;
4.12 	(7) a person providing construction services on a volunteer basis, such as Habitat 
4.13 	for Humanity and Builders Outreach Foundation, and their individual volunteers when 
4.14 	engaged in activities on their behalf; and
4.15 	(8) a person who provides construction services with gross annual receipts of less 
4.16 	than $600 during a calendar year.
4.17 	(c) The requirements for registration under this section are not a substitute for, and 
4.18 	do not relieve a person from complying with, any other law requiring that the person be 
4.19 	licensed, registered, or certified.
4.20 		Subd. 5.Application. To obtain an independent contractor exemption certificate, 
4.21 	the individual must submit, in the manner prescribed by the commissioner, a complete 
4.22 	application and the certificate fee required under subdivision 14.
4.23 	(a) A complete application must include all of the following information:
4.24 	(1) the individual's full name;
4.25 	(2) the individual's residence address and telephone number;
4.26 	(3) the individual's business name, address, and telephone number;
4.27 	(4) the services for which the individual is seeking an independent contractor 
4.28 	exemption certificate;
4.29 	(5) the individual's Social Security number;
4.30 	(6) the individual's or the individual's business federal employer identification 
4.31 	number, if a number has been issued to the individual or the individual's business;
4.32 	(7) any information or documentation that the commissioner requires by rule that 
4.33 	will assist the department in determining whether to grant or deny the individual's 
4.34 	application; and
4.35 	(8) the individual's sworn statement that the individual meets all of the following 
4.36 	conditions:
5.1 	(i) maintains a separate business with the individual's own office, equipment, 
5.2 	materials, and other facilities;
5.3 	(ii) holds or has applied for a federal employer identification number or has filed 
5.4 	business or self-employment income tax returns with the federal Internal Revenue Service 
5.5 	if the person has performed services in the previous year for which the individual is 
5.6 	seeking the independent contractor exemption certificate;
5.7 	(iii) operates under contracts to perform specific services for specific amounts of 
5.8 	money and under which the individual controls the means of performing the services;
5.9 	(iv) incurs the main expenses related to the service that the individual performs 
5.10 	under contract;
5.11 	(v) is responsible for the satisfactory completion of services that the individual 
5.12 	contracts to perform and is liable for a failure to complete the service;
5.13 	(vi) receives compensation for service performed under a contract on a commission 
5.14 	or per-job or competitive bid basis and not on any other basis;
5.15 	(vii) may realize a profit or suffer a loss under contracts to perform service;
5.16 	(viii) has continuing or recurring business liabilities or obligations; and
5.17 	(ix) the success or failure of the individual's business depends on the relationship of 
5.18 	business receipts to expenditures.
5.19 	(b) Individuals who are applying for or renewing a residential building contractor or 
5.20 	residential remodeler license under sections 326B.197, 326B.802, 326B.805, 326B.81, 
5.21 	326B.815, 326B.821 to 326B.86, 326B.87 to 326B.885, and 327B.041, and any rules 
5.22 	promulgated pursuant thereto, may simultaneously apply for or renew an independent 
5.23 	contractor exemption certificate. The commissioner shall create an application form 
5.24 	that allows for the simultaneous application for both a residential building contractor 
5.25 	or residential remodeler license and an independent contractor exemption certificate. 
5.26 	If individuals simultaneously apply for or renew a residential building contractor or 
5.27 	residential remodeler license and an independent contractor exemption certificate using 
5.28 	the form created by the commissioner, individuals shall only be required to provide, in 
5.29 	addition to the information required by section 326B.83 and rules promulgated pursuant 
5.30 	thereto, the sworn statement required by paragraph (a), clause (8), and any additional 
5.31 	information required by this subdivision that is not also required by section 326B.83
5.32 	and any rules promulgated thereto. When individuals submit a simultaneous application 
5.33 	on the form created by the commissioner for both a residential building contractor or 
5.34 	residential remodeler license and an independent contractor exemption certificate, the 
5.35 	application fee shall be $150. An independent contractor exemption certificate that is in 
6.1 	effect before March 1, 2009, shall remain in effect until March 1, 2013, unless revoked by 
6.2 	the commissioner or canceled by the individual.
6.3 	(c) Within 30 days of receiving a complete application and the certificate fee, the 
6.4 	commissioner must either grant or deny the application. The commissioner may deny 
6.5 	an application for an independent contractor exemption certificate if the individual has 
6.6 	not submitted a complete application and certificate fee or if the individual does not 
6.7 	meet all of the conditions for holding the independent contractor exemption certificate. 
6.8 	The commissioner may revoke an independent contractor exemption certificate if the 
6.9 	commissioner determines that the individual no longer meets all of the conditions for 
6.10 	holding the independent contractor exemption certificate, commits any of the actions 
6.11 	set out in subdivision 7, or fails to cooperate with a department investigation into the 
6.12 	continued validity of the individual's certificate. Once issued, an independent contractor 
6.13 	exemption certificate remains in effect for four years unless:
6.14 	(1) revoked by the commissioner; or
6.15 	(2) canceled by the individual.
6.16 	(d) If the department denies an individual's original or renewal application for 
6.17 	an independent contractor exemption certificate or revokes an independent contractor 
6.18 	exemption certificate, the commissioner shall issue to the individual an order denying or 
6.19 	revoking the certificate. The commissioner may issue an administrative penalty order to 
6.20 	an individual or person who commits any of the actions set out in subdivision 7.
6.21 	(e) An individual or person to whom the commissioner issues an order under 
6.22 	paragraph (d) shall have 30 days after service of the order to request a hearing. The 
6.23 	request for hearing must be in writing and must be served on or faxed to the commissioner 
6.24 	at the address or facsimile number specified in the order by the 30th day after service of 
6.25 	the order. If the individual does not request a hearing or if the individual's request for a 
6.26 	hearing is not served on or faxed to the commissioner by the 30th day after service of the 
6.27 	order, the order shall become a final order of the commissioner and will not be subject to 
6.28 	review by any court or agency. The date on which a request for hearing is served by mail 
6.29 	shall be the postmark date on the envelope in which the request for hearing is mailed. If 
6.30 	the individual serves or faxes a timely request for hearing, the hearing shall be a contested 
6.31 	case hearing and shall be held in accordance with chapter 14.
6.32 		Subd. 5a.Registration and renewal application. (a) A person required to 
6.33 	register with the commissioner under subdivision 4a must file a registration application 
6.34 	electronically in the manner prescribed by the commissioner. The application for initial or 
6.35 	renewal registration must include the following information:
7.1 	(1) the applicant's legal name; assumed name filed with the secretary of state, if any; 
7.2 	designated business address; physical address; phone number; and e-mail address;
7.3 	(2) the applicant's Minnesota tax identification number, if one is required or has 
7.4 	been issued;
7.5 	(3) the applicant's federal employee identification number, if one is required or 
7.6 	has been issued;
7.7 	(4) evidence of the active status of the applicant's business filings with the secretary 
7.8 	of state, if one is required or has been issued;
7.9 	(5) for each of the applicant's directors; officers; governors; owners; partners; 
7.10 	members, managers, and partners of a limited liability company or limited liability 
7.11 	partnership; and shareholders, except for shareholders with less than a ten percent interest 
7.12 	in a publicly traded corporation; the following information:
7.13 	(i) the individual's full name, business telephone number, Social Security number, 
7.14 	and title at applicant's business;
7.15 	(ii) the percentage of the applicant's business owned by each individual; and
7.16 	(iii) whether the individual personally performs construction services on behalf of 
7.17 	the applicant;
7.18 	(6) whether the applicant has any employees at the time the application is filed;
7.19 	(7) the name of the applicant's workers' compensation insurer, the policy number, 
7.20 	and the effective dates of coverage, or a description of the basis for exemption from 
7.21 	workers' compensation coverage laws;
7.22 	(8) the unemployment insurance account number, if any;
7.23 	(9) a certification that the person signing the application has reviewed it; that the 
7.24 	information provided is true and accurate; and that the person signing is authorized to sign 
7.25 	and file the application as an agent of the applicant. The name of the person signing, 
7.26 	entered on an electronic application, shall constitute a valid signature of the agent on 
7.27 	behalf of the applicant; and
7.28 	(10) a signed authorization for the Department of Labor and Industry to verify the 
7.29 	information provided on or with the application.
7.30 	(b) A person's registration shall expire at the end of the calendar year following 
7.31 	the year of initial registration and every two years thereafter. The registered person 
7.32 	must remain registered while providing construction services for another person. The 
7.33 	provisions of sections 326B.091 to 326B.097 apply to this section, except that the initial 
7.34 	registration and renewal fees under this section shall be $80 for each initial or renewal 
7.35 	application for registration.
8.1 	(c) A registered person must notify the commissioner within 15 days after there is a 
8.2 	change in any of the information on the application as approved. This notification must 
8.3 	be provided electronically in the manner prescribed by the commissioner. However, if 
8.4 	the business entity structure, legal form of the business entity, or business ownership has 
8.5 	changed, the person must submit a new registration application and registration fee for 
8.6 	the new business entity.
8.7 	(d) An application for registration is private data on individuals as defined in section 
8.8 	13.02, subdivision 12, and nonpublic data as defined under section 13.02, subdivision 9, 
8.9 	except for the information on the registration certificate described in subdivision 6a, 
8.10 	paragraph (b), which shall be public data as defined under section 13.02, subdivisions 
8.11 	14 and 15. However, the commissioner is authorized to share application data with the 
8.12 	Departments of Revenue and Employment and Economic Development for purposes 
8.13 	of enforcement of laws administered by those agencies. Information shared with the 
8.14 	Departments of Revenue and Employment and Economic Development shall remain 
8.15 	private and nonpublic data in the possession of the receiving agency unless otherwise 
8.16 	provided by law.
8.17 		Subd. 6.Performing services under exemption certificate. An individual is 
8.18 	performing services for a person under an independent contractor exemption certificate if:
8.19 	(a) the individual is performing services listed on the individual's independent 
8.20 	contractor exemption certificate; and
8.21 	(b) at the time the individual is performing services listed on the individual's 
8.22 	independent contractor exemption certificate, the individual meets all of the following 
8.23 	conditions:
8.24 	(1) maintains a separate business with the individual's own office, equipment, 
8.25 	materials, and other facilities;
8.26 	(2) holds or has applied for a federal employer identification number or has filed 
8.27 	business or self-employment income tax returns with the federal Internal Revenue Service 
8.28 	if the individual performed services in the previous year for which the individual has the 
8.29 	independent contractor exemption certificate;
8.30 	(3) is operating under contract to perform the specific services for the person 
8.31 	for specific amounts of money and under which the individual controls the means of 
8.32 	performing the services;
8.33 	(4) is incurring the main expenses related to the services that the individual is 
8.34 	performing for the person under the contract;
8.35 	(5) is responsible for the satisfactory completion of the services that the individual 
8.36 	has contracted to perform for the person and is liable for a failure to complete the services;
9.1 	(6) receives compensation from the person for the services performed under the 
9.2 	contract on a commission or per-job or competitive bid basis and not on any other basis;
9.3 	(7) may realize a profit or suffers a loss under the contract to perform services for 
9.4 	the person;
9.5 	(8) has continuing or recurring business liabilities or obligations; and
9.6 	(9) the success or failure of the individual's business depends on the relationship of 
9.7 	business receipts to expenditures.
9.8 		Subd. 6a.Web site. (a) The commissioner shall develop and maintain a Web site on 
9.9 	which applicants for registration can submit a registration application and payment. The 
9.10 	Web site shall be designed to receive and process registration applications and payments 
9.11 	and promptly issue registration certificates electronically to successful applicants.
9.12 	(b) The commissioner shall maintain the certificates of registration on the 
9.13 	department's official public Web site, which shall include the following information:
9.14 	(1) the registered person's legal business name, including any assumed name, as 
9.15 	filed with the secretary of state;
9.16 	(2) the person's business address designated on the application; and
9.17 	(3) the effective date of the registration and the expiration date.
9.18 		Subd. 7.Prohibited activities. (a) The prohibited activities in this section are in 
9.19 	addition to those in sections 326B.081 to 326B.085.
9.20 	(b) An individual shall not perform or offer to perform construction services on 
9.21 	behalf of a business entity of which the individual is a director; officer; governor; owner; 
9.22 	partner; member, manager, or partner of a limited liability company or limited liability 
9.23 	partnership; or shareholder, except for a shareholder holding less than ten percent interest 
9.24 	in a publicly traded company; unless:
9.25 	(1) perform work as an independent contractor who meets the qualifications under 
9.26 	subdivision 6 without first obtaining from the department an independent contractor 
9.27 	exemption certificate the business entity is a construction contractor under subdivision 4;
9.28 	(2) perform work as an independent contractor when the department has denied or 
9.29 	revoked the individual's independent contractor exemption certificate the business entity is 
9.30 	listed as active with the secretary of state, if required for the business entity;
9.31 	(3) transfer to another individual or allow another individual to use the individual's 
9.32 	independent contractor exemption certificate there is a signed and dated written contract 
9.33 	between the business entity and the person for whom the construction services are 
9.34 	performed that describes the services to be performed and the payment for the services;
10.1 	(4) alter or falsify an independent contractor exemption certificate invoices or 
10.2 	bills for the construction services performed are submitted in the name of the business 
10.3 	entity; and
10.4 	(5) misrepresent the individual's status as an independent contractor; or payment is 
10.5 	made to the business entity.
10.6 	(6) make a false material statement, representation, or certification; omit material 
10.7 	information; or alter, conceal, or fail to file a document required by this section or any rule 
10.8 	promulgated by the commissioner under rulemaking authority set out in this section.
10.9 	(b) (c) A person shall not:
10.10 	(1) require an individual through coercion, misrepresentation, or fraudulent means to 
10.11 	adopt independent contractor status form a business entity;
10.12 	(2) knowingly misrepresent that an individual who has not been issued an 
10.13 	independent contractor exemption certificate or is not performing services for the person 
10.14 	under an independent contractor exemption certificate is an independent contractor
10.15 	represent that the person is a construction contractor unless the person is a construction 
10.16 	contractor under subdivision 4; or
10.17 	(3) make a false material statement, representation, or certification; omit material 
10.18 	information; or alter, conceal, or fail to file a document required by this section or any 
10.19 	rule promulgated by the commissioner under rulemaking authority set out in this section.
10.20 	perform or provide construction services for another person if the person performing the 
10.21 	construction services is not registered as required by subdivision 4a; or
10.22 	(4) perform or provide construction services for another person in the course of the 
10.23 	other person's business if the person performing or providing the construction services is 
10.24 	not a construction contractor under subdivision 4.
10.25 	(c) (d) A person for whom an individual is performing services must obtain a 
10.26 	copy of the individual's independent contractor exemption certificate before services 
10.27 	may commence. A copy of the independent contractor exemption certificate must be 
10.28 	retained for five years from the date of receipt by the person for whom an individual is 
10.29 	performing services. who provides construction services in the course of that person's 
10.30 	business shall not:
10.31 	(1) pay a person that is not named in a contract for construction services, or pay a 
10.32 	person without receiving an invoice from the person; or
10.33 	(2) contract with or pay another person to perform construction services if the other 
10.34 	person is not registered under subdivision 4a.
11.1 	(e) This subdivision does not apply to an employee of a person performing the 
11.2 	construction services, if the person was in compliance with laws related to employment of 
11.3 	the individual at the time the construction services were performed.
11.4 		Subd. 8.Enforcement; remedies and penalties.  An individual or person who 
11.5 	violates any provision of subdivision 7 is subject to a penalty to be assessed by the 
11.6 	department of up to $5,000 for each violation. The department shall deposit penalties in 
11.7 	the assigned risk safety account. (a) The commissioner is authorized to use sections 
11.8 	326B.081 to 326B.085 to enforce this section. Notwithstanding the maximum penalty 
11.9 	amount in section 326B.082, subdivisions 7 and 12, the monetary penalties for violation 
11.10 	of this section shall be as provided in paragraphs (b), (c), and (d).
11.11 	(b) The commissioner may assess a monetary penalty against an unregistered person 
11.12 	who is required to be registered, in violation of subdivision 4a, as follows:
11.13 	(1) for the first violation, the commissioner may assess a monetary penalty of 
11.14 	$2,000. If the person registers within 30 days of the date of the order, $1,500 of the 
11.15 	penalty shall be forgiven; and
11.16 	(2) for the second and each subsequent violation, the commissioner may assess a 
11.17 	penalty of up to $2,000.
11.18 	(c) The commissioner may assess a monetary penalty against a person who, in the 
11.19 	course of that person's business, directly pays an unregistered person for construction 
11.20 	services performed by the unregistered person, in violation of subdivision 7, paragraph 
11.21 	(d), clause (2), as follows:
11.22 	(1) for the first violation, the commissioner shall issue a notice of violation under 
11.23 	section 326B.082, subdivision 6; and
11.24 	(2) for the second and each subsequent violation, the commissioner may assess a 
11.25 	penalty of up to $2,000.
11.26 	For purposes of this paragraph, all payments to an unregistered person for 
11.27 	construction services on a single project site shall be considered a single violation. It shall 
11.28 	not be a violation for a person to pay an unregistered person if the unregistered person was 
11.29 	registered at the time the contract for construction services was entered into.
11.30 	(d) For all other violations of this section, the monetary penalties shall be as provided 
11.31 	in section 326B.082, subdivisions 7 and 12.
11.32 	(e) Monetary penalties under this section shall be payable to the commissioner for 
11.33 	deposit in the construction code fund under section 326B.04.
11.34 		Subd. 9.Commissioner's powers. (a) In order to carry out the purposes of this 
11.35 	section, the commissioner may:
12.1 	(1) administer oaths and affirmations, certify official acts, interview, question, take 
12.2 	oral or written statements, and take depositions;
12.3 	(2) request, examine, take possession of, photograph, record, and copy any 
12.4 	documents, equipment, or materials;
12.5 	(3) at a time and place indicated by the commissioner, request persons to appear 
12.6 	before the commissioner to give testimony and produce documents, equipment, or 
12.7 	materials;
12.8 	(4) issue subpoenas to compel persons to appear before the commissioner to give 
12.9 	testimony and produce documents, equipment, or materials; and
12.10 	(5) subject to paragraph (c), with or without notice, enter without delay upon 
12.11 	any property, public or private, for the purpose of taking any action authorized under 
12.12 	this subdivision or the applicable law, including obtaining information or conducting 
12.13 	inspections or investigations.
12.14 	(b) Persons requested by the commissioner to give testimony or produce documents, 
12.15 	equipment, or materials shall respond within the time and in the manner specified by the 
12.16 	commissioner. If no time to respond is specified in the request, then a response shall be 
12.17 	submitted within 30 days of the commissioner's service of the request.
12.18 	(c) Upon the refusal or anticipated refusal of a property owner, lessee, property 
12.19 	owner's representative, or lessee's representative to permit the commissioner's entry onto 
12.20 	property as provided in paragraph (a), the commissioner may apply for an administrative 
12.21 	inspection order in the Ramsey County District Court or, at the commissioner's discretion, 
12.22 	in the district court in the county in which the property is located. The commissioner may 
12.23 	anticipate that a property owner or lessee will refuse entry if the property owner, lessee, 
12.24 	property owner's representative, or lessee's representative has refused to permit entry on a 
12.25 	prior occasion or has informed the commissioner that entry will be refused. Upon showing 
12.26 	of administrative probable cause by the commissioner, the district court shall issue an 
12.27 	administrative inspection order that compels the property owner or lessee to permit the 
12.28 	commissioner to enter the property for the purposes specified in paragraph (a).
12.29 	(d) Upon the application of the commissioner, a district court shall treat the failure of 
12.30 	any person to obey a subpoena lawfully issued by the commissioner under this subdivision 
12.31 	as a contempt of court.
12.32 		Subd. 10.Notice requirements. Unless otherwise specified, service of a document 
12.33 	on a person under this section may be by mail, by personal service, or in accordance with 
12.34 	any consent to service filed with the commissioner. Service by mail shall be accomplished 
12.35 	in the manner provided in Minnesota Rules, part 1400.5550, subpart 2. Personal service 
13.1 	shall be accomplished in the manner provided in Minnesota Rules, part 1400.5550, 
13.2 	subpart 3.
13.3 		Subd. 11.Facsimile; timely service. When this section permits a request for 
13.4 	hearing to be served by facsimile on the commissioner, the facsimile shall not exceed 15 
13.5 	pages in length. The request shall be considered timely served if the facsimile is received 
13.6 	by the commissioner, at the facsimile number identified by the commissioner in the order, 
13.7 	no later than 4:30 p.m. central time on the last day permitted for faxing the request. 
13.8 	Where the quality or authenticity of the faxed request is at issue, the commissioner 
13.9 	may require the original request to be filed. Where the commissioner has not identified 
13.10 	quality or authenticity of the faxed request as an issue and the request has been faxed in 
13.11 	accordance with this subdivision, the person faxing the request does not need to file the 
13.12 	original request with the commissioner.
13.13 		Subd. 12.Time period computation. In computing any period of time prescribed 
13.14 	or allowed by this section, the day of the act, event, or default from which the designated 
13.15 	period of time begins to run shall not be included. The last day of the period so computed 
13.16 	shall be included, unless it is a Saturday, Sunday, or legal holiday, in which event the 
13.17 	period runs until the next day which is not a Saturday, Sunday, or legal holiday.
13.18 		Subd. 13.Rulemaking. The commissioner may, in consultation with the 
13.19 	commissioner of revenue and the commissioner of employment and economic 
13.20 	development, adopt, amend, suspend, and repeal rules under the rulemaking provisions of 
13.21 	chapter 14 that relate to the commissioner's responsibilities under this section as amended 
13.22 	by this act. This subdivision is effective May 26, 2007.
13.23 		Subd. 14.Fee. The certificate fee for the original application and for the renewal of 
13.24 	an independent contractor exemption certificate shall be $150.
13.25 		Subd. 15.Notice to commissioner; review by commissioner of revenue. When 
13.26 	the commissioner has reason to believe that an individual who holds a certificate has failed 
13.27 	to maintain all the conditions required by subdivision 6 or is not performing services for a 
13.28 	person under the independent contractor exemption certificate, the commissioner must 
13.29 	notify the commissioner of revenue and the commissioner of employment and economic 
13.30 	development. Upon receipt of notification from the commissioner that an individual who 
13.31 	holds a certificate has failed to maintain all the conditions required by subdivision 6 
13.32 	or is not performing services for a person under the independent contractor exemption 
13.33 	certificate, the commissioner of revenue must review the information returns required 
13.34 	under section 6041A of the Internal Revenue Code. The commissioner of revenue shall 
13.35 	also review the submitted certification that is applicable to returns audited or investigated 
13.36 	under section 289A.35.
14.1 		Subd. 16.Data classified. Data in applications for an independent contractor 
14.2 	exemption certificate and any required documentation submitted to the commissioner are 
14.3 	private data on individuals as defined in section 13.02. Data in exemption certificates 
14.4 	issued by the commissioner are public data. Data that document a revocation or 
14.5 	cancellation of an exemption certificate are public data. Upon request of the Department 
14.6 	of Revenue or Department of Employment and Economic Development, the commissioner 
14.7 	may release to the requesting department data classified as private under this subdivision 
14.8 	or investigative data that are not public under section 13.39 that relate to the issuance or 
14.9 	denial of applications or revocations of certificates.
14.10 		Subd. 17.Advisory task force on employee misclassification. (a) The 
14.11 	commissioner of the Department of Labor and Industry shall appoint an advisory task 
14.12 	force on employee misclassification and "off-the-books" payment of workers in the 
14.13 	construction industry. The advisory task force shall consist of the following members:
14.14 	(1) the commissioner of the Department of Labor and Industry or designee;
14.15 	(2) the commissioner of the Department of Employment and Economic Development 
14.16 	or designee;
14.17 	(3) the commissioner of the Department of Revenue or designee;
14.18 	(4) the attorney general or designee;
14.19 	(5) a representative appointed by the Minnesota County Attorneys Association;
14.20 	(6) two members who are members of a labor organization that represents members 
14.21 	who perform public or private sector commercial or residential building construction 
14.22 	or improvement services;
14.23 	(7) one member who is a general contractor or a representative of general contractors 
14.24 	that performs public or private sector commercial building construction or improvement 
14.25 	services;
14.26 	(8) one member who is a general contractor or a representative of general contractors 
14.27 	that performs public or private sector residential building construction or improvement 
14.28 	services;
14.29 	(9) one member who is a subcontractor or a representative of subcontractors that 
14.30 	performs public or private sector commercial building construction or improvement 
14.31 	services;
14.32 	(10) one member who is a subcontractor or a representative of subcontractors 
14.33 	that performs public or private sector residential building construction or improvement 
14.34 	services; and
14.35 	(11) up to three additional members who perform public or private sector commercial 
14.36 	or residential building and construction or improvement services including one member 
15.1 	who is an independent contractor with a current independent contractor certificate; one 
15.2 	member who is a limited liability corporation; and one member who is an employee.
15.3 	The commissioner of the Department of Labor and Industry or designee shall serve 
15.4 	as the advisory task force chair. The advisory task force shall meet on a regular basis.
15.5 	(b) The advisory task force shall have the following duties:
15.6 	(1) advise the commissioner on the development, implementation, and coordination 
15.7 	of enforcement activities, including information sharing and joint investigation and 
15.8 	prosecution of persons who violate laws under the jurisdiction of the Department of 
15.9 	Labor and Industry, Department of Employment and Economic Development, and the 
15.10 	Department of Revenue; and
15.11 	(2) advise the commissioner on the development and adoption of necessary 
15.12 	legislation, regulations, policies, and procedures.
15.13 	(c) The advisory task force shall expire and the terms, compensation, and removal of 
15.14 	members shall be as provided in section 15.059, subdivision 6.
15.15 	(d) The advisory task force shall, prior to its expiration, report to the legislature a 
15.16 	summary of the advice it provided to the commissioner.

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

15.23 	Sec. 2. Minnesota Statutes 2010, section 326B.04, subdivision 1, is amended to read:
15.24 		Subdivision 1.Construction code fund. There is created in the state treasury 
15.25 	a construction code fund as a special revenue fund for the purpose of administering this 
15.26 	chapter, sections 327.31 to 327.36, and chapter 327B. All money collected under those 
15.27 	sections, except penalties, is credited to the construction code fund unless otherwise 
15.28 	specifically designated by law. Any interest or profit accruing from investment of these 
15.29 	sums is credited to the construction code fund. All money collected in the construction 
15.30 	code fund is appropriated to the commissioner of labor and industry to administer and 
15.31 	enforce the provisions of the laws identified in this section.
15.32 	Unless otherwise provided by law, all penalties assessed under this chapter, section 
15.33 	327.35, and chapter 327B are credited to the assigned risk safety account established by 
15.34 	section 79.253. Unless otherwise provided by law, all penalties assessed under this chapter 
15.35 	are credited to the construction code fund.

16.1 	Sec. 3. Minnesota Statutes 2010, section 326B.081, subdivision 3, is amended to read:
16.2 		Subd. 3.Applicable law. "Applicable law" means the provisions of sections 
16.3 	181.723, 327.31 to 327.36, and this chapter, and all rules, orders, stipulation agreements, 
16.4 	settlements, compliance agreements, licenses, registrations, certificates, and permits 
16.5 	adopted, issued, or enforced by the department under sections 181.723, 327.31 to 327.36,
16.6 	or this chapter.

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

16.12 	Sec. 4. Minnesota Statutes 2010, section 326B.805, subdivision 6, is amended to read:
16.13 		Subd. 6.Exemptions. The license requirement does not apply to:
16.14 	(1) an employee of a licensee performing work for the licensee;
16.15 	(2) a material person, manufacturer, or retailer furnishing finished products, 
16.16 	materials, or articles of merchandise who does not install or attach the items;
16.17 	(3) an owner of residential real estate who builds or improves any structure on 
16.18 	residential real estate, if the building or improving is performed by the owner's bona fide 
16.19 	employees or by individual owners personally. This exemption does not apply to an 
16.20 	owner who constructs or improves property for purposes of speculation if the building 
16.21 	or improving is performed by the owner's bona fide employees or by individual owners 
16.22 	personally. A residential building contractor or residential remodeler will be presumed 
16.23 	to be building or improving for purposes of speculation if the contractor or remodeler 
16.24 	constructs or improves more than one property within any 24-month period;
16.25 	(4) an architect or professional engineer engaging in professional practice as defined 
16.26 	by section 326.02, subdivisions 2 and 3;
16.27 	(5) a person whose total gross annual receipts for performing specialty skills for 
16.28 	which licensure would be required under this section do not exceed $15,000;
16.29 	(6)(5) a mechanical contractor;
16.30 	(7)(6) a plumber, electrician, or other person whose profession is otherwise subject 
16.31 	to statewide licensing, when engaged in the activity which is the subject of that licensure;
16.32 	(8)(7) specialty contractors who provide only one special skill as defined in section 
16.33 	326B.802;
16.34 	(9)(8) a school district, or a technical college governed under chapter 136F; and
17.1 	(10)(9) Habitat for Humanity and Builders Outreach Foundation, and their 
17.2 	individual volunteers when engaged in activities on their behalf.
17.3 	To qualify for the exemption in clause (5), a person must obtain a certificate of exemption 
17.4 	from licensure from the commissioner. A certificate of exemption will be issued upon 
17.5 	the applicant's filing with the commissioner, an affidavit stating that the applicant does 
17.6 	not expect to exceed $15,000 in gross annual receipts derived from performing services 
17.7 	which require licensure under this section during the calendar year in which the affidavit 
17.8 	is received. For the purposes of calculating fees under section 326B.092, a certificate of 
17.9 	exemption is an entry level license. To renew the exemption in clause (5), the applicant 
17.10 	must file an affidavit stating that the applicant did not exceed $15,000 in gross annual 
17.11 	receipts during the past calendar year. If a person, operating under the exemption in 
17.12 	clause (5), exceeds $15,000 in gross receipts during any calendar year, the person must 
17.13 	immediately surrender the certificate of exemption and apply for the appropriate license. 
17.14 	The person must remain licensed until such time as the person's gross annual receipts 
17.15 	during a calendar year fall below $15,000. The person may then apply for an exemption 
17.16 	for the next calendar year.

17.17 	Sec. 5.  REPEALER.
 17.18 	(a) Minnesota Statutes 2010, section 181.723, subdivision 17, is repealed on May 
17.19 	15, 2011.
17.20 	(b) Minnesota Rules, parts 5202.0100; 5202.0110; 5202.0120; 5202.0130; 
17.21 	5202.0140; 5202.0150; and 5202.0160, are repealed on January 1, 2012, except that 
17.22 	they shall remain in effect for the regulation of an independent contractor exemption 
17.23 	certificate issued before January 1, 2012, under Minnesota Statutes 2010, section 181.723, 
17.24 	subdivision 5, and shall remain in effect for a person holding that exemption certificate 
17.25 	until the exemption certificate expires, is revoked, or is canceled.