<a id="pl.1.3"></a><var>1.3</var>contractors; providing pilot project for contractor registration; providing for <br/>
<a id="pl.1.4"></a><var>1.4</var>penalties;amending Minnesota Statutes 2010, sections 181.723, subdivisions <br/>
<a id="pl.1.5"></a><var>1.5</var>1, 3, 4, 7, 10, 15, 16, by adding subdivisions; 326B.081, subdivision 3; <br/>
<a id="pl.1.6"></a><var>1.6</var>Minnesota Statutes 2011 Supplement, section 181.723, subdivision 5; repealing <br/>
<a id="pl.1.7"></a><var>1.7</var>Minnesota Statutes 2010, section 181.723, subdivisions 6, 8, 9, 10, 11, 12, 14, <br/>
<a id="pl.1.8"></a><var>1.8</var>17; Minnesota Rules, parts 5202.0100; 5202.0110; 5202.0120; 5202.0130; <br/>
<a id="pl.1.9"></a><var>1.9</var>5202.0140; 5202.0150; 5202.0160.<br/>
<a id="pl.1.10"></a><var>1.10</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.11"></a><var>1.11</var>    Section 1. Minnesota Statutes 2010, section 181.723, subdivision 1, is amended to read:<br/>
<a id="pl.1.12"></a><var>1.12</var>    Subdivision 1. <b> Definitions.</b> The definitions in this subdivision apply to this section.<br/>
<a id="pl.1.13"></a><var>1.13</var>    (a) "Person" means any individual, limited liability corporation company, limited <br/>
<a id="pl.1.14"></a><var>1.14</var>liability partnership, corporation, partnership, incorporated or unincorporated association, <br/>
<a id="pl.1.15"></a><var>1.15</var>sole proprietorship, joint stock company, or any other legal or commercial entity.<br/>
<a id="pl.1.16"></a><var>1.16</var>    (b) "Department" means the Department of Labor and Industry.<br/>
<a id="pl.1.17"></a><var>1.17</var>    (c) "Commissioner" means the commissioner of labor and industry or a duly <br/>
<a id="pl.1.18"></a><var>1.18</var>designated representative of the commissioner who is either an employee of the <br/>
<a id="pl.1.19"></a><var>1.19</var>Department of Labor and Industry or person working under contract with the Department <br/>
<a id="pl.1.20"></a><var>1.20</var>of Labor and Industry.<br/>
<a id="pl.1.21"></a><var>1.21</var>    (d) "Individual" means a human being.<br/>
<a id="pl.1.22"></a><var>1.22</var>    (e) "Day" means calendar day unless otherwise provided.<br/>
<a id="pl.1.23"></a><var>1.23</var>    (f) "Knowingly" means knew or could have known with the exercise of reasonable <br/>
<a id="pl.1.24"></a><var>1.24</var>diligence.<br/>
<a id="pl.1.25"></a><var>1.25</var>    (g) "Document" or "documents" includes papers; books; records; memoranda; data; <br/>
<a id="pl.1.26"></a><var>1.26</var>contracts; drawings; graphs; charts; photographs; digital, video, and audio recordings; <br/>
<a id="pl.2.1"></a><var>2.1</var>records; accounts; files; statements; letters; e-mails; invoices; bills; notes; and calendars <br/>
<a id="pl.2.2"></a><var>2.2</var>maintained in any form or manner.<br/>
<a id="pl.2.3"></a><var>2.3</var>(h) "Business entity" means a person other than an individual or a sole proprietor.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.4"></a><var>2.4</var>    Sec. 2. Minnesota Statutes 2010, section 181.723, subdivision 3, is amended to read:<br/>
<a id="pl.2.5"></a><var>2.5</var>    Subd. 3. <b>Employee-employer relationship.</b> Except as provided in subdivision 4, <br/>
<a id="pl.2.6"></a><var>2.6</var>for purposes of chapters 176, 177, 181A, 182, and 268, as of January 1, 2009 2013, an <br/>
<a id="pl.2.7"></a><var>2.7</var>individual who performs services for a person that are in the course of the person's trade, <br/>
<a id="pl.2.8"></a><var>2.8</var>business, profession, or occupation is an employee of that person and that person is an <br/>
<a id="pl.2.9"></a><var>2.9</var>employer of the individual.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.2.10"></a><var>2.10</var>    Sec. 3. Minnesota Statutes 2010, section 181.723, subdivision 4, is amended to read:<br/>
<a id="pl.2.11"></a><var>2.11</var>    Subd. 4. <b>Independent contractor.</b> (a) An individual is an independent contractor <br/>
<a id="pl.2.12"></a><var>2.12</var>and not an employee of the person for whom the individual is performing services in the <br/>
<a id="pl.2.13"></a><var>2.13</var>course of the person's trade, business, profession, or occupation only if (1) the individual <br/>
<a id="pl.2.14"></a><var>2.14</var>holds a current independent contractor exemption certificate issued by the commissioner; <br/>
<a id="pl.2.15"></a><var>2.15</var>and (2) the individual is performing services for the person under the independent <br/>
<a id="pl.2.16"></a><var>2.16</var>contractor exemption certificate as provided in subdivision 6. The requirements in clauses <br/>
<a id="pl.2.17"></a><var>2.17</var>(1) and (2) must be met in order to qualify as an independent contractor and not as an <br/>
<a id="pl.2.18"></a><var>2.18</var>employee of the person for whom the individual is performing services in the course of <br/>
<a id="pl.2.19"></a><var>2.19</var>the person's trade, business, profession, or occupation. the individual is registered with the <br/>
<a id="pl.2.20"></a><var>2.20</var>Department of Labor and Industry, if required under subdivision 4a, and the individual:<br/>
<a id="pl.2.21"></a><var>2.21</var>(1) maintains a separate business with the worker's own office, equipment, materials, <br/>
<a id="pl.2.22"></a><var>2.22</var>and other facilities;<br/>
<a id="pl.2.23"></a><var>2.23</var>(2)(i) holds or has applied for a federal employer identification number or (ii) has <br/>
<a id="pl.2.24"></a><var>2.24</var>filed business or self-employment income tax returns with the federal Internal Revenue <br/>
<a id="pl.2.25"></a><var>2.25</var>Service if the worker has performed services in the previous year;<br/>
<a id="pl.2.26"></a><var>2.26</var>(3) is operating under contract to perform the specific services for the person for <br/>
<a id="pl.2.27"></a><var>2.27</var>specific amounts of money and under which the worker controls the means of performing <br/>
<a id="pl.2.28"></a><var>2.28</var>the services;<br/>
<a id="pl.2.29"></a><var>2.29</var>(4) is incurring the main expenses related to the services that the worker is <br/>
<a id="pl.2.30"></a><var>2.30</var>performing for the person under the contract;<br/>
<a id="pl.2.31"></a><var>2.31</var>(5) is responsible for the satisfactory completion of the services that the worker has <br/>
<a id="pl.2.32"></a><var>2.32</var>contracted to perform for the person and is liable for a failure to complete the services;<br/>
<a id="pl.2.33"></a><var>2.33</var>(6) receives compensation from the person for the services performed under the <br/>
<a id="pl.2.34"></a><var>2.34</var>contract on a commission or per-job or competitive bid basis and not on any other basis;<br/>
<a id="pl.3.1"></a><var>3.1</var>(7) may realize a profit or suffer a loss under the contract to perform services for <br/>
<a id="pl.3.2"></a><var>3.2</var>the person;<br/>
<a id="pl.3.3"></a><var>3.3</var>(8) has continuing or recurring business liabilities or obligations; and<br/>
<a id="pl.3.4"></a><var>3.4</var>(9) the success or failure of the worker's business depends on the relationship of <br/>
<a id="pl.3.5"></a><var>3.5</var>business receipts to expenditures.<br/>
<a id="pl.3.6"></a><var>3.6</var>(b) If a worker is an owner or partial owner of a business entity, the worker is an <br/>
<a id="pl.3.7"></a><var>3.7</var>employee of the person for whom the worker is performing services in the course of the <br/>
<a id="pl.3.8"></a><var>3.8</var>person's trade, business, profession, or occupation, and is not an employee of the business <br/>
<a id="pl.3.9"></a><var>3.9</var>entity in which the worker has an ownership interest, unless:<br/>
<a id="pl.3.10"></a><var>3.10</var>(1) the business entity meets the nine factors in paragraph (a);<br/>
<a id="pl.3.11"></a><var>3.11</var>(2) invoices are submitted in the name of the business entity;<br/>
<a id="pl.3.12"></a><var>3.12</var>(3) the business entity is registered with the secretary of state, if required; and<br/>
<a id="pl.3.13"></a><var>3.13</var>(4) the business entity is registered with the Department of Labor and Industry, <br/>
<a id="pl.3.14"></a><var>3.14</var>if required under subdivision 4a.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.3.15"></a><var>3.15</var>    Sec. 4. Minnesota Statutes 2010, section 181.723, is amended by adding a subdivision <br/>
<a id="pl.3.16"></a><var>3.16</var>to read:<br/>
<a id="pl.3.17"></a><var>3.17</var>    Subd. 4a. <b>Registration pilot project.</b> (a) The commissioner shall implement a pilot <br/>
<a id="pl.3.18"></a><var>3.18</var>project, effective July 1, 2012, for the registration of persons who perform public or <br/>
<a id="pl.3.19"></a><var>3.19</var>private sector commercial or residential building construction or improvement services <br/>
<a id="pl.3.20"></a><var>3.20</var>as described in subdivision 2. The purpose of the pilot project is to evaluate whether the <br/>
<a id="pl.3.21"></a><var>3.21</var>information obtained through registration assists the Department of Labor and Industry, <br/>
<a id="pl.3.22"></a><var>3.22</var>the Department of Employment and Economic Development, and the Department of <br/>
<a id="pl.3.23"></a><var>3.23</var>Revenue to enforce laws related to misclassification of employees. The commissioner <br/>
<a id="pl.3.24"></a><var>3.24</var>shall issue a report to the legislature no later than January 1, 2014, on recommendations <br/>
<a id="pl.3.25"></a><var>3.25</var>for amendments to the registration program, including reasonable registration fees to be <br/>
<a id="pl.3.26"></a><var>3.26</var>used to aid in enforcing misclassification laws. The commissioner must not charge a fee <br/>
<a id="pl.3.27"></a><var>3.27</var>for registration under the pilot project, but may take the enforcement action specified in <br/>
<a id="pl.3.28"></a><var>3.28</var>subdivision 8a. The pilot project shall expire on June 30, 2014, unless extended by the <br/>
<a id="pl.3.29"></a><var>3.29</var>legislature.<br/>
<a id="pl.3.30"></a><var>3.30</var>(b) Except as provided in paragraph (c), any person who performs construction <br/>
<a id="pl.3.31"></a><var>3.31</var>services in the state on or after September 15, 2012, must register with the commissioner <br/>
<a id="pl.3.32"></a><var>3.32</var>as provided in subdivision 5 before performing construction services for another person. <br/>
<a id="pl.3.33"></a><var>3.33</var>The requirements for registration under this subdivision are not a substitute for, and do <br/>
<a id="pl.3.34"></a><var>3.34</var>not relieve a person from complying with, any other law requiring that the person be <br/>
<a id="pl.3.35"></a><var>3.35</var>licensed, registered, or certified.<br/>
<a id="pl.4.1"></a><var>4.1</var>(c) The registration requirements in this subdivision do not apply to:<br/>
<a id="pl.4.2"></a><var>4.2</var>(1) a person who, at the time the person is performing the construction services, <br/>
<a id="pl.4.3"></a><var>4.3</var>holds a current license, certificate, or registration under chapter 299M or 326B;<br/>
<a id="pl.4.4"></a><var>4.4</var>(2) a person who holds a current independent contractor exemption certificate <br/>
<a id="pl.4.5"></a><var>4.5</var>issued under this section that is in effect on September 15, 2012, except that the person <br/>
<a id="pl.4.6"></a><var>4.6</var>must register under this section no later than the date the exemption certificate expires, is <br/>
<a id="pl.4.7"></a><var>4.7</var>revoked, or is canceled;<br/>
<a id="pl.4.8"></a><var>4.8</var>(3) a person who has given a bond to the state under section 326B.197 or 326B.46;<br/>
<a id="pl.4.9"></a><var>4.9</var>(4) an employee of the person performing the construction services, if the person <br/>
<a id="pl.4.10"></a><var>4.10</var>was in compliance with laws related to employment of the individual at the time the <br/>
<a id="pl.4.11"></a><var>4.11</var>construction services were performed;<br/>
<a id="pl.4.12"></a><var>4.12</var>(5) an architect or professional engineer engaging in professional practice as defined <br/>
<a id="pl.4.13"></a><var>4.13</var>in section 326.02, subdivisions 2 and 3;<br/>
<a id="pl.4.14"></a><var>4.14</var>(6) a school district or technical college governed under chapter 136F; <br/>
<a id="pl.4.15"></a><var>4.15</var>(7) a person providing construction services on a volunteer basis, including but not <br/>
<a id="pl.4.16"></a><var>4.16</var>limited to Habitat for Humanity and Builders Outreach Foundation, and their individual <br/>
<a id="pl.4.17"></a><var>4.17</var>volunteers when engaged in activities on their behalf; or<br/>
<a id="pl.4.18"></a><var>4.18</var>(8) a person exempt from licensing under section 326B.805, subdivision 6, clause (5).<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.4.19"></a><var>4.19</var>    Sec. 5. Minnesota Statutes 2011 Supplement, section 181.723, subdivision 5, is <br/>
<a id="pl.4.20"></a><var>4.20</var>amended to read:<br/>
<a id="pl.4.21"></a><var>4.21</var>    Subd. 5. <b>Registration </b><b>application.</b> To obtain an independent contractor exemption <br/>
<a id="pl.4.22"></a><var>4.22</var>certificate, the individual must submit (a) Persons required to register under subdivision 4a <br/>
<a id="pl.4.23"></a><var>4.23</var>must submit electronically, in the manner prescribed by the commissioner, a complete <br/>
<a id="pl.4.24"></a><var>4.24</var>application and the certificate fee required under subdivision 14 according to paragraphs <br/>
<a id="pl.4.25"></a><var>4.25</var>(b) to (d).<br/>
<a id="pl.4.26"></a><var>4.26</var>    (a) (b) A complete application must include all of the following information about <br/>
<a id="pl.4.27"></a><var>4.27</var>any individual who is registering as an individual or a sole proprietor, or who owns 25 <br/>
<a id="pl.4.28"></a><var>4.28</var>percent or more of a business entity being registered:<br/>
<a id="pl.4.29"></a><var>4.29</var>    (1) the individual's full legal name and title at applicant's business;<br/>
<a id="pl.4.30"></a><var>4.30</var>    (2) the individual's residence business address and telephone number;<br/>
<a id="pl.4.31"></a><var>4.31</var>    (3) the individual's business name, address, and telephone number; percentage of the <br/>
<a id="pl.4.32"></a><var>4.32</var>applicant's business owned by the individual; and<br/>
<a id="pl.4.33"></a><var>4.33</var>    (4) the services for which the individual is seeking an independent contractor <br/>
<a id="pl.4.34"></a><var>4.34</var>exemption certificate;<br/>
<a id="pl.4.35"></a><var>4.35</var>    (5) (4) the individual's Social Security number;.<br/>
<a id="pl.5.1"></a><var>5.1</var>    (6) the individual's or the individual's business federal employer identification <br/>
<a id="pl.5.2"></a><var>5.2</var>number, if a number has been issued to the individual or the individual's business;<br/>
<a id="pl.5.3"></a><var>5.3</var>    (7) any information or documentation that the commissioner requires by rule that <br/>
<a id="pl.5.4"></a><var>5.4</var>will assist the department in determining whether to grant or deny the individual's <br/>
<a id="pl.5.5"></a><var>5.5</var>application; and<br/>
<a id="pl.5.6"></a><var>5.6</var>    (8) the individual's sworn statement that the individual meets all of the following <br/>
<a id="pl.5.7"></a><var>5.7</var>conditions:<br/>
<a id="pl.5.8"></a><var>5.8</var>    (i) maintains a separate business with the individual's own office, equipment, <br/>
<a id="pl.5.9"></a><var>5.9</var>materials, and other facilities;<br/>
<a id="pl.5.10"></a><var>5.10</var>    (ii) holds or has applied for a federal employer identification number or has filed <br/>
<a id="pl.5.11"></a><var>5.11</var>business or self-employment income tax returns with the federal Internal Revenue Service <br/>
<a id="pl.5.12"></a><var>5.12</var>if the person has performed services in the previous year for which the individual is <br/>
<a id="pl.5.13"></a><var>5.13</var>seeking the independent contractor exemption certificate;<br/>
<a id="pl.5.14"></a><var>5.14</var>    (iii) operates under contracts to perform specific services for specific amounts of <br/>
<a id="pl.5.15"></a><var>5.15</var>money and under which the individual controls the means of performing the services;<br/>
<a id="pl.5.16"></a><var>5.16</var>    (iv) incurs the main expenses related to the service that the individual performs <br/>
<a id="pl.5.17"></a><var>5.17</var>under contract;<br/>
<a id="pl.5.18"></a><var>5.18</var>    (v) is responsible for the satisfactory completion of services that the individual <br/>
<a id="pl.5.19"></a><var>5.19</var>contracts to perform and is liable for a failure to complete the service;<br/>
<a id="pl.5.20"></a><var>5.20</var>    (vi) receives compensation for service performed under a contract on a commission <br/>
<a id="pl.5.21"></a><var>5.21</var>or per-job or competitive bid basis and not on any other basis;<br/>
<a id="pl.5.22"></a><var>5.22</var>    (vii) may realize a profit or suffer a loss under contracts to perform service;<br/>
<a id="pl.5.23"></a><var>5.23</var>    (viii) has continuing or recurring business liabilities or obligations; and<br/>
<a id="pl.5.24"></a><var>5.24</var>    (ix) the success or failure of the individual's business depends on the relationship of <br/>
<a id="pl.5.25"></a><var>5.25</var>business receipts to expenditures.<br/>
<a id="pl.5.26"></a><var>5.26</var>    (b) Individuals who are applying for or renewing a residential building contractor or <br/>
<a id="pl.5.27"></a><var>5.27</var>residential remodeler license under sections 
<statute_ref>326B.197, 326B.802, 326B.805, 326B.81, <br/>
<a id="pl.5.28"></a><var>5.28</var>326B.815, 326B.821
</statute_ref> to 
<statute_ref>326B.86, 326B.87</statute_ref> to 
<statute_ref>326B.885</statute_ref>, and 
<statute_ref>327B.041</statute_ref>, and any rules <br/>
<a id="pl.5.29"></a><var>5.29</var>promulgated pursuant thereto, may simultaneously apply for or renew an independent <br/>
<a id="pl.5.30"></a><var>5.30</var>contractor exemption certificate. The commissioner shall create an application form <br/>
<a id="pl.5.31"></a><var>5.31</var>that allows for the simultaneous application for both a residential building contractor <br/>
<a id="pl.5.32"></a><var>5.32</var>or residential remodeler license and an independent contractor exemption certificate. <br/>
<a id="pl.5.33"></a><var>5.33</var>If individuals simultaneously apply for or renew a residential building contractor or <br/>
<a id="pl.5.34"></a><var>5.34</var>residential remodeler license and an independent contractor exemption certificate using <br/>
<a id="pl.5.35"></a><var>5.35</var>the form created by the commissioner, individuals shall only be required to provide, in <br/>
<a id="pl.5.36"></a><var>5.36</var>addition to the information required by section 
<statute_ref>326B.83</statute_ref> and rules promulgated pursuant <br/>
<a id="pl.6.1"></a><var>6.1</var>thereto, the sworn statement required by paragraph (a), clause (8), and any additional <br/>
<a id="pl.6.2"></a><var>6.2</var>information required by this subdivision that is not also required by section 
<statute_ref>326B.83 </statute_ref>and <br/>
<a id="pl.6.3"></a><var>6.3</var>any rules promulgated thereto. An independent contractor exemption certificate that is in <br/>
<a id="pl.6.4"></a><var>6.4</var>effect before March 1, 2009, shall remain in effect until March 1, 2013, unless revoked by <br/>
<a id="pl.6.5"></a><var>6.5</var>the commissioner or canceled by the individual.<br/>
<a id="pl.6.6"></a><var>6.6</var>    (c) Within 30 days of receiving a complete application and the certificate fee, the <br/>
<a id="pl.6.7"></a><var>6.7</var>commissioner must either grant or deny the application. The commissioner may deny <br/>
<a id="pl.6.8"></a><var>6.8</var>an application for an independent contractor exemption certificate if the individual has <br/>
<a id="pl.6.9"></a><var>6.9</var>not submitted a complete application and certificate fee or if the individual does not <br/>
<a id="pl.6.10"></a><var>6.10</var>meet all of the conditions for holding the independent contractor exemption certificate. <br/>
<a id="pl.6.11"></a><var>6.11</var>The commissioner may revoke an independent contractor exemption certificate if the <br/>
<a id="pl.6.12"></a><var>6.12</var>commissioner determines that the individual no longer meets all of the conditions for <br/>
<a id="pl.6.13"></a><var>6.13</var>holding the independent contractor exemption certificate, commits any of the actions <br/>
<a id="pl.6.14"></a><var>6.14</var>set out in subdivision 7, or fails to cooperate with a department investigation into the <br/>
<a id="pl.6.15"></a><var>6.15</var>continued validity of the individual's certificate. Once issued, an independent contractor <br/>
<a id="pl.6.16"></a><var>6.16</var>exemption certificate remains in effect for four years unless:<br/>
<a id="pl.6.17"></a><var>6.17</var>    (1) revoked by the commissioner; or<br/>
<a id="pl.6.18"></a><var>6.18</var>    (2) canceled by the individual.<br/>
<a id="pl.6.19"></a><var>6.19</var>    (d) If the department denies an individual's original or renewal application for <br/>
<a id="pl.6.20"></a><var>6.20</var>an independent contractor exemption certificate or revokes an independent contractor <br/>
<a id="pl.6.21"></a><var>6.21</var>exemption certificate, the commissioner shall issue to the individual an order denying or <br/>
<a id="pl.6.22"></a><var>6.22</var>revoking the certificate. The commissioner may issue an administrative penalty order to <br/>
<a id="pl.6.23"></a><var>6.23</var>an individual or person who commits any of the actions set out in subdivision 7. The <br/>
<a id="pl.6.24"></a><var>6.24</var>commissioner may file and enforce the unpaid portion of a penalty as a judgment in <br/>
<a id="pl.6.25"></a><var>6.25</var>district court without further notice or additional proceedings.<br/>
<a id="pl.6.26"></a><var>6.26</var>    (e) An individual or person to whom the commissioner issues an order under <br/>
<a id="pl.6.27"></a><var>6.27</var>paragraph (d) shall have 30 days after service of the order to request a hearing. The <br/>
<a id="pl.6.28"></a><var>6.28</var>request for hearing must be in writing and must be served on or faxed to the commissioner <br/>
<a id="pl.6.29"></a><var>6.29</var>at the address or facsimile number specified in the order by the 30th day after service of <br/>
<a id="pl.6.30"></a><var>6.30</var>the order. If the individual does not request a hearing or if the individual's request for a <br/>
<a id="pl.6.31"></a><var>6.31</var>hearing is not served on or faxed to the commissioner by the 30th day after service of the <br/>
<a id="pl.6.32"></a><var>6.32</var>order, the order shall become a final order of the commissioner and will not be subject to <br/>
<a id="pl.6.33"></a><var>6.33</var>review by any court or agency. The date on which a request for hearing is served by mail <br/>
<a id="pl.6.34"></a><var>6.34</var>shall be the postmark date on the envelope in which the request for hearing is mailed. If <br/>
<a id="pl.6.35"></a><var>6.35</var>the individual serves or faxes a timely request for hearing, the hearing shall be a contested <br/>
<a id="pl.6.36"></a><var>6.36</var>case hearing and shall be held in accordance with chapter 14.<br/>
<a id="pl.7.1"></a><var>7.1</var>(c) A complete application must also include the following information:<br/>
<a id="pl.7.2"></a><var>7.2</var>(1) the applicant's legal name; assumed name filed with the secretary of state, if any; <br/>
<a id="pl.7.3"></a><var>7.3</var>designated business address; physical address; telephone number; and e-mail address;<br/>
<a id="pl.7.4"></a><var>7.4</var>(2) the applicant's Minnesota tax identification number, if one is required or has <br/>
<a id="pl.7.5"></a><var>7.5</var>been issued;<br/>
<a id="pl.7.6"></a><var>7.6</var>(3) the applicant's federal employer identification number, if one is required or <br/>
<a id="pl.7.7"></a><var>7.7</var>has been issued;<br/>
<a id="pl.7.8"></a><var>7.8</var>(4) evidence of the active status of the applicant's business filings with the secretary <br/>
<a id="pl.7.9"></a><var>7.9</var>of state, if one is required or has been issued;<br/>
<a id="pl.7.10"></a><var>7.10</var>(5) whether the applicant has any employees at the time the application is filed;<br/>
<a id="pl.7.11"></a><var>7.11</var>(6) the names of all other persons with an ownership interest in the business entity <br/>
<a id="pl.7.12"></a><var>7.12</var>who are not identified in paragraph (b), and the percentage of the interest owned by each <br/>
<a id="pl.7.13"></a><var>7.13</var>person, except that the names of shareholders with less than ten percent ownership in a <br/>
<a id="pl.7.14"></a><var>7.14</var>publicly traded corporation need not be provided;<br/>
<a id="pl.7.15"></a><var>7.15</var>(7) information documenting compliance with workers' compensation and <br/>
<a id="pl.7.16"></a><var>7.16</var>unemployment insurance laws;<br/>
<a id="pl.7.17"></a><var>7.17</var>(8) a certification that the person signing the application has: reviewed it; determined <br/>
<a id="pl.7.18"></a><var>7.18</var>that the information provided is true and accurate; and determined that the person signing <br/>
<a id="pl.7.19"></a><var>7.19</var>is authorized to sign and file the application as an agent of the applicant. The name of the <br/>
<a id="pl.7.20"></a><var>7.20</var>person signing, entered on an electronic application, shall constitute a valid signature of <br/>
<a id="pl.7.21"></a><var>7.21</var>the agent on behalf of the applicant; and<br/>
<a id="pl.7.22"></a><var>7.22</var>(9) a signed authorization for the Department of Labor and Industry to verify the <br/>
<a id="pl.7.23"></a><var>7.23</var>information provided on or with the application.<br/>
<a id="pl.7.24"></a><var>7.24</var>(d) A registered person must notify the commissioner within 15 days after there is a <br/>
<a id="pl.7.25"></a><var>7.25</var>change in any of the information on the application as approved. This notification must <br/>
<a id="pl.7.26"></a><var>7.26</var>be provided electronically in the manner prescribed by the commissioner. However, if <br/>
<a id="pl.7.27"></a><var>7.27</var>the business entity structure, legal form of the business entity, or business ownership has <br/>
<a id="pl.7.28"></a><var>7.28</var>changed, the person must submit a new registration application and registration fee, if <br/>
<a id="pl.7.29"></a><var>7.29</var>any, for the new business entity.<br/>
<a id="pl.7.30"></a><var>7.30</var>(e) The registered person must remain registered while providing construction <br/>
<a id="pl.7.31"></a><var>7.31</var>services for another person. The provisions of sections 326B.091 and 326B.094 to <br/>
<a id="pl.7.32"></a><var>7.32</var>326B.097 apply to this section.<br/>
<br/>
<a id="bill.0.6.0"></a><a id="pl.7.33"></a><var>7.33</var>    Sec. 6. Minnesota Statutes 2010, section 181.723, is amended by adding a subdivision <br/>
<a id="pl.7.34"></a><var>7.34</var>to read:<br/>
<a id="pl.8.1"></a><var>8.1</var>    Subd. 5a. <b>Web site.</b> (a) The commissioner shall develop and maintain a Web site <br/>
<a id="pl.8.2"></a><var>8.2</var>on which applicants for registration can submit a registration application. The Web site <br/>
<a id="pl.8.3"></a><var>8.3</var>shall be designed to receive and process registration applications and promptly issue <br/>
<a id="pl.8.4"></a><var>8.4</var>registration certificates electronically to successful applicants.<br/>
<a id="pl.8.5"></a><var>8.5</var>(b) The commissioner shall maintain the certificates of registration on the <br/>
<a id="pl.8.6"></a><var>8.6</var>department's official public Web site, which shall include the following information:<br/>
<a id="pl.8.7"></a><var>8.7</var>(1) the registered person's legal business name, including any assumed name, as <br/>
<a id="pl.8.8"></a><var>8.8</var>filed with the secretary of state;<br/>
<a id="pl.8.9"></a><var>8.9</var>(2) the person's business address designated on the application; and <br/>
<a id="pl.8.10"></a><var>8.10</var>(3) the effective date of the registration and the expiration date.<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.8.11"></a><var>8.11</var>    Sec. 7. Minnesota Statutes 2010, section 181.723, subdivision 7, is amended to read:<br/>
<a id="pl.8.12"></a><var>8.12</var>    Subd. 7. <b>Prohibited activities.</b> (a) The prohibited activities in this subdivision are <br/>
<a id="pl.8.13"></a><var>8.13</var>in addition to those prohibited in sections 326B.081 to 326B.085.<br/>
<a id="pl.8.14"></a><var>8.14</var>    (a) (b) An individual shall not:<br/>
<a id="pl.8.15"></a><var>8.15</var>    (1) perform work as an independent contractor who meets the qualifications under <br/>
<a id="pl.8.16"></a><var>8.16</var>subdivision 6 without first obtaining from the department an independent contractor <br/>
<a id="pl.8.17"></a><var>8.17</var>exemption certificate;<br/>
<a id="pl.8.18"></a><var>8.18</var>    (2) perform work as an independent contractor when the department has denied or <br/>
<a id="pl.8.19"></a><var>8.19</var>revoked the individual's independent contractor exemption certificate;<br/>
<a id="pl.8.20"></a><var>8.20</var>    (3) transfer to another individual or allow another individual to use the individual's <br/>
<a id="pl.8.21"></a><var>8.21</var>independent contractor exemption certificate;<br/>
<a id="pl.8.22"></a><var>8.22</var>    (4) alter or falsify an independent contractor exemption certificate;<br/>
<a id="pl.8.23"></a><var>8.23</var>    (5) misrepresent the individual's status as an independent contractor; or<br/>
<a id="pl.8.24"></a><var>8.24</var>    (6) make a false material statement, representation, or certification; omit material <br/>
<a id="pl.8.25"></a><var>8.25</var>information; or alter, conceal, or fail to file a document required by this section or any <br/>
<a id="pl.8.26"></a><var>8.26</var>rule promulgated by the commissioner under rulemaking authority set out in this section. <br/>
<a id="pl.8.27"></a><var>8.27</var>hold himself or herself out as an independent contractor unless the individual meets the <br/>
<a id="pl.8.28"></a><var>8.28</var>requirements of subdivision 4.<br/>
<a id="pl.8.29"></a><var>8.29</var>    (b) (c) A person who provides construction services in the course of the person's <br/>
<a id="pl.8.30"></a><var>8.30</var>trade, business, occupation, or profession shall not:<br/>
<a id="pl.8.31"></a><var>8.31</var>    (1) require an individual through coercion, misrepresentation, or fraudulent means to <br/>
<a id="pl.8.32"></a><var>8.32</var>adopt independent contractor status or form a business entity;<br/>
<a id="pl.8.33"></a><var>8.33</var>    (2) knowingly misrepresent that an individual who has not been issued or misclassify <br/>
<a id="pl.8.34"></a><var>8.34</var>a worker as an independent contractor exemption certificate or is not performing services <br/>
<a id="pl.9.1"></a><var>9.1</var>for the person under an independent contractor exemption certificate is an independent <br/>
<a id="pl.9.2"></a><var>9.2</var>contractor; or<br/>
<a id="pl.9.3"></a><var>9.3</var>    (3) contract with or perform construction services for another person without first <br/>
<a id="pl.9.4"></a><var>9.4</var>being registered if required by subdivision 4a; <br/>
<a id="pl.9.5"></a><var>9.5</var>(4) make a false material statement, representation, or certification; omit material <br/>
<a id="pl.9.6"></a><var>9.6</var>information; or alter, conceal, or fail to file a document required by this section or any <br/>
<a id="pl.9.7"></a><var>9.7</var>rule promulgated by the commissioner under rulemaking authority set out in this section. <br/>
<a id="pl.9.8"></a><var>9.8</var>contract with or pay another person to perform construction services if the other person <br/>
<a id="pl.9.9"></a><var>9.9</var>is not registered if required by subdivision 4a. All payments to an unregistered person <br/>
<a id="pl.9.10"></a><var>9.10</var>for construction services on a single project site shall be considered a single violation. It <br/>
<a id="pl.9.11"></a><var>9.11</var>is not a violation of this clause:<br/>
<a id="pl.9.12"></a><var>9.12</var>(i) for a person to contract with or pay an unregistered person if the unregistered <br/>
<a id="pl.9.13"></a><var>9.13</var>person was registered at the time the contract for construction services was entered into; or<br/>
<a id="pl.9.14"></a><var>9.14</var>(ii) for a homeowner or business to contract with or pay an unregistered person if <br/>
<a id="pl.9.15"></a><var>9.15</var>the homeowner or business is not in the trade, business, profession, or occupation of <br/>
<a id="pl.9.16"></a><var>9.16</var>performing building construction or improvement services; or<br/>
<a id="pl.9.17"></a><var>9.17</var>(5) be penalized for violations of this subdivision that are committed by another <br/>
<a id="pl.9.18"></a><var>9.18</var>person. This clause applies only to violations of this paragraph.<br/>
<a id="pl.9.19"></a><var>9.19</var>    (c) A person for whom an individual is performing services must obtain a copy of the <br/>
<a id="pl.9.20"></a><var>9.20</var>individual's independent contractor exemption certificate before services may commence. <br/>
<a id="pl.9.21"></a><var>9.21</var>A copy of the independent contractor exemption certificate must be retained for five years <br/>
<a id="pl.9.22"></a><var>9.22</var>from the date of receipt by the person for whom an individual is performing services.<br/>
<br/>
<a id="bill.0.8.0"></a><a id="pl.9.23"></a><var>9.23</var>    Sec. 8. Minnesota Statutes 2010, section 181.723, is amended by adding a subdivision <br/>
<a id="pl.9.24"></a><var>9.24</var>to read:<br/>
<a id="pl.9.25"></a><var>9.25</var>    Subd. 8a. <b>Enforcement; remedies; and penalties.</b> Notwithstanding the maximum <br/>
<a id="pl.9.26"></a><var>9.26</var>penalty amount in section 326B.082, subdivisions 7 and 12, the maximum penalty for <br/>
<a id="pl.9.27"></a><var>9.27</var>failure to register is $2,000, but the commissioner shall forgive the penalty if the person <br/>
<a id="pl.9.28"></a><var>9.28</var>registers within 30 days of the date of the penalty order.<br/>
<br/>
<a id="bill.0.9.0"></a><a id="pl.9.29"></a><var>9.29</var>    Sec. 9. Minnesota Statutes 2010, section 181.723, subdivision 10, is amended to read:<br/>
<a id="pl.9.30"></a><var>9.30</var>    Subd. 10. <b>Notice requirements.</b> Unless otherwise specified, service of a document <br/>
<a id="pl.9.31"></a><var>9.31</var>on a person under this section may be by mail, by personal service, or in accordance with <br/>
<a id="pl.9.32"></a><var>9.32</var>any consent to service filed with the commissioner. Service by mail shall be accomplished <br/>
<a id="pl.9.33"></a><var>9.33</var>in the manner provided in Minnesota Rules, part 1400.5550, subpart 2. Personal service <br/>
<a id="pl.9.34"></a><var>9.34</var>shall be accomplished in the manner provided in Minnesota Rules, part 1400.5550, subpart <br/>
<a id="pl.10.1"></a><var>10.1</var>3. Notice of a penalty order for failure to register must include a statement that the penalty <br/>
<a id="pl.10.2"></a><var>10.2</var>shall be forgiven if the person registers within 30 days of the date of the penalty order. <br/>
<br/>
<a id="bill.0.10.0"></a><a id="pl.10.3"></a><var>10.3</var>    Sec. 10. Minnesota Statutes 2010, section 181.723, subdivision 15, is amended to read:<br/>
<a id="pl.10.4"></a><var>10.4</var>    Subd. 15. <b>Notice to commissioner; review by commissioner of revenue.</b> When <br/>
<a id="pl.10.5"></a><var>10.5</var>the commissioner has reason to believe that an individual who holds a certificate has <br/>
<a id="pl.10.6"></a><var>10.6</var>failed to maintain all the conditions required by subdivision 6 or is not performing <br/>
<a id="pl.10.7"></a><var>10.7</var>services for a person under the independent contractor exemption certificate a person has <br/>
<a id="pl.10.8"></a><var>10.8</var>violated subdivision 7, paragraph (b); or (c), clause (1) or (2), the commissioner must <br/>
<a id="pl.10.9"></a><var>10.9</var>notify the commissioner of revenue and the commissioner of employment and economic <br/>
<a id="pl.10.10"></a><var>10.10</var>development. Upon receipt of notification from the commissioner that an individual who <br/>
<a id="pl.10.11"></a><var>10.11</var>holds a certificate has failed to maintain all the conditions required by subdivision 6 <br/>
<a id="pl.10.12"></a><var>10.12</var>or is not performing services for a person under the independent contractor exemption <br/>
<a id="pl.10.13"></a><var>10.13</var>certificate, the commissioner of revenue must review the information returns required <br/>
<a id="pl.10.14"></a><var>10.14</var>under section 6041A of the Internal Revenue Code. The commissioner of revenue shall <br/>
<a id="pl.10.15"></a><var>10.15</var>also review the submitted certification that is applicable to returns audited or investigated <br/>
<a id="pl.10.16"></a><var>10.16</var>under section 
         <statute_ref>289A.35</statute_ref>.<br/>
<br/>
<a id="bill.0.11.0"></a><a id="pl.10.17"></a><var>10.17</var>    Sec. 11. Minnesota Statutes 2010, section 181.723, subdivision 16, is amended to read:<br/>
<a id="pl.10.18"></a><var>10.18</var>    Subd. 16. <b>Data classified.</b> Data in applications for an independent contractor <br/>
<a id="pl.10.19"></a><var>10.19</var>exemption certificate and any required documentation submitted to the commissioner <br/>
<a id="pl.10.20"></a><var>10.20</var>under this section are private data on individuals or nonpublic data as defined in section <br/>
<statute_ref><a id="pl.10.21"></a><var>10.21</var>13.02
         </statute_ref>. Data in exemption registration certificates issued by the commissioner are public <br/>
<a id="pl.10.22"></a><var>10.22</var>data; except that registration information published on the department's Web site may be <br/>
<a id="pl.10.23"></a><var>10.23</var>accessed for registration verification purposes only. Data that document a revocation <br/>
<a id="pl.10.24"></a><var>10.24</var>or cancellation of an exemption a certificate are public data. Upon request of the <br/>
<a id="pl.10.25"></a><var>10.25</var>Department of Revenue or the Department of Employment and Economic Development, <br/>
<a id="pl.10.26"></a><var>10.26</var>the commissioner may release to the requesting department data classified as private or <br/>
<a id="pl.10.27"></a><var>10.27</var>nonpublic under this subdivision or investigative data that are not public under section <br/>
<statute_ref><a id="pl.10.28"></a><var>10.28</var>13.39
         </statute_ref> that relate to the issuance or denial of applications or revocations of certificates.<br/>
<br/>
<a id="bill.0.12.0"></a><a id="pl.10.29"></a><var>10.29</var>    Sec. 12. Minnesota Statutes 2010, section 326B.081, subdivision 3, is amended to read:<br/>
<a id="pl.10.30"></a><var>10.30</var>    Subd. 3. <b>Applicable law.</b> "Applicable law" means the provisions of sections <br/>
<a id="pl.10.31"></a><var>10.31</var>181.723, 
<statute_ref>327.31</statute_ref> to 
         <statute_ref>327.36</statute_ref>, and this chapter, and all rules, orders, stipulation agreements, <br/>
<a id="pl.10.32"></a><var>10.32</var>settlements, compliance agreements, licenses, registrations, certificates, and permits <br/>
<a id="pl.11.1"></a><var>11.1</var>adopted, issued, or enforced by the department under sections 
         <statute_ref>181.723, 327.31</statute_ref> to 
         <statute_ref>327.36</statute_ref>, <br/>
<a id="pl.11.2"></a><var>11.2</var>or this chapter.<br/>
<br/>
<a id="bill.0.13.0"></a><a id="pl.11.3"></a><var>11.3</var>    Sec. 13. <b> REPEALER.</b><br/>
<a id="pl.11.4"></a><var>11.4</var>(a) Minnesota Statutes 2010, section 181.723, subdivision 17, is repealed effective <br/>
<a id="pl.11.5"></a><var>11.5</var>May 15, 2011.<br/>
<a id="pl.11.6"></a><var>11.6</var>(b) Minnesota Statutes 2010, section 181.723, subdivisions 6, 8, 9, 10, 11, 12, and <br/>
<a id="pl.11.7"></a><var>11.7</var>14, and Minnesota Rules, parts 5202.0100; 5202.0110; 5202.0120; 5202.0130; 5202.0140; <br/>
<a id="pl.11.8"></a><var>11.8</var>5202.0150; and 5202.0160, are repealed July 1, 2012, except they shall remain in effect <br/>
<a id="pl.11.9"></a><var>11.9</var>for the regulation of an individual holding an independent contractor exemption certificate <br/>
<a id="pl.11.10"></a><var>11.10</var>issued before July 1, 2012, under Minnesota Statutes 2010, section 181.723, subdivision <br/>
<a id="pl.11.11"></a><var>11.11</var>5, until the exemption certificate expires, is revoked, or is canceled.<br/>
<br/>
<a id="bill.0.14.0"></a><a id="pl.11.12"></a><var>11.12</var>    Sec. 14. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.11.13"></a><var>11.13</var>Sections 1 to 12 are effective July 1, 2012, except that those sections do not apply to <br/>
<a id="pl.11.14"></a><var>11.14</var>the regulation of an individual who holds an independent contractor exemption certificate <br/>
<a id="pl.11.15"></a><var>11.15</var>issued before July 1, 2012, under Minnesota Statutes 2010, section 181.723, subdivision <br/>
<a id="pl.11.16"></a><var>11.16</var>5, until the exemption certificate expires, or is revoked or canceled.<br/>