HF 1076

as introduced - 87th Legislature (2011 - 2012) Posted on 03/14/2011 10:27am

A bill for an act
relating to labor and industry; modifying certain administrative, rulemaking,
enforcement, and safety and health provisions; amending Minnesota Statutes
2010, sections 181.723, subdivision 5; 182.6553, subdivision 6; 326B.13,
subdivision 8; 326B.89, subdivisions 6, 8.

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

Section 1.

Minnesota Statutes 2010, section 181.723, subdivision 5, is amended to read:

Subd. 5.

Application.

To obtain an independent contractor exemption certificate,
the individual must submit, in the manner prescribed by the commissioner, a complete
application and the certificate fee required under subdivision 14.

(a) A complete application must include all of the following information:

(1) the individual's full name;

(2) the individual's residence address and telephone number;

(3) the individual's business name, address, and telephone number;

(4) the services for which the individual is seeking an independent contractor
exemption certificate;

(5) the individual's Social Security number;

(6) the individual's or the individual's business federal employer identification
number, if a number has been issued to the individual or the individual's business;

(7) any information or documentation that the commissioner requires by rule that
will assist the department in determining whether to grant or deny the individual's
application; and

(8) the individual's sworn statement that the individual meets all of the following
conditions:

(i) maintains a separate business with the individual's own office, equipment,
materials, and other facilities;

(ii) holds or has applied for a federal employer identification number or has filed
business or self-employment income tax returns with the federal Internal Revenue Service
if the person has performed services in the previous year for which the individual is
seeking the independent contractor exemption certificate;

(iii) operates under contracts to perform specific services for specific amounts of
money and under which the individual controls the means of performing the services;

(iv) incurs the main expenses related to the service that the individual performs
under contract;

(v) is responsible for the satisfactory completion of services that the individual
contracts to perform and is liable for a failure to complete the service;

(vi) receives compensation for service performed under a contract on a commission
or per-job or competitive bid basis and not on any other basis;

(vii) may realize a profit or suffer a loss under contracts to perform service;

(viii) has continuing or recurring business liabilities or obligations; and

(ix) the success or failure of the individual's business depends on the relationship of
business receipts to expenditures.

(b) Individuals who are applying for or renewing a residential building contractor or
residential remodeler license under sections 326B.197, 326B.802, 326B.805, 326B.81,
326B.815, 326B.821 to 326B.86, 326B.87 to 326B.885, and 327B.041, and any rules
promulgated pursuant thereto, may simultaneously apply for or renew an independent
contractor exemption certificate. The commissioner shall create an application form
that allows for the simultaneous application for both a residential building contractor
or residential remodeler license and an independent contractor exemption certificate.
If individuals simultaneously apply for or renew a residential building contractor or
residential remodeler license and an independent contractor exemption certificate using
the form created by the commissioner, individuals shall only be required to provide, in
addition to the information required by section 326B.83 and rules promulgated pursuant
thereto, the sworn statement required by paragraph (a), clause (8), and any additional
information required by this subdivision that is not also required by section 326B.83
and any rules promulgated thereto. deleted text begin When individuals submit a simultaneous application
on the form created by the commissioner for both a residential building contractor or
residential remodeler license and an independent contractor exemption certificate, the
application fee shall be $150. deleted text end An independent contractor exemption certificate that is in
effect before March 1, 2009, shall remain in effect until March 1, 2013, unless revoked by
the commissioner or canceled by the individual.

(c) Within 30 days of receiving a complete application and the certificate fee, the
commissioner must either grant or deny the application. The commissioner may deny
an application for an independent contractor exemption certificate if the individual has
not submitted a complete application and certificate fee or if the individual does not
meet all of the conditions for holding the independent contractor exemption certificate.
The commissioner may revoke an independent contractor exemption certificate if the
commissioner determines that the individual no longer meets all of the conditions for
holding the independent contractor exemption certificate, commits any of the actions
set out in subdivision 7, or fails to cooperate with a department investigation into the
continued validity of the individual's certificate. Once issued, an independent contractor
exemption certificate remains in effect for four years unless:

(1) revoked by the commissioner; or

(2) canceled by the individual.

(d) If the department denies an individual's original or renewal application for
an independent contractor exemption certificate or revokes an independent contractor
exemption certificate, the commissioner shall issue to the individual an order denying or
revoking the certificate. The commissioner may issue an administrative penalty order to
an individual or person who commits any of the actions set out in subdivision 7. new text begin The
commissioner may file and enforce the unpaid portion of a penalty as a judgment in
district court without further notice or additional proceedings.
new text end

(e) An individual or person to whom the commissioner issues an order under
paragraph (d) shall have 30 days after service of the order to request a hearing. The
request for hearing must be in writing and must be served on or faxed to the commissioner
at the address or facsimile number specified in the order by the 30th day after service of
the order. If the individual does not request a hearing or if the individual's request for a
hearing is not served on or faxed to the commissioner by the 30th day after service of the
order, the order shall become a final order of the commissioner and will not be subject to
review by any court or agency. The date on which a request for hearing is served by mail
shall be the postmark date on the envelope in which the request for hearing is mailed. If
the individual serves or faxes a timely request for hearing, the hearing shall be a contested
case hearing and shall be held in accordance with chapter 14.

Sec. 2.

Minnesota Statutes 2010, section 182.6553, subdivision 6, is amended to read:

Subd. 6.

Enforcement.

This section shall be enforced by the commissioner under
deleted text begin section deleted text end new text begin sections 182.66 and new text end 182.661. A violation of this section is subject to the penalties
provided under section 182.666.

Sec. 3.

Minnesota Statutes 2010, section 326B.13, subdivision 8, is amended to read:

Subd. 8.

Effective date of rules.

A rule to adopt or amend the State Building Code
is effective 180 days after deleted text begin the filing of the rule with the secretary of state under section
14.16 or 14.26 deleted text end new text begin publication of the rule's notice of adoption in the State Register new text end . The rule
may provide for a later effective date. The rule may provide for an earlier effective date
if the commissioner or board proposing the rule finds that an earlier effective date is
necessary to protect public health and safety after considering, among other things, the
need for time for training of individuals to comply with and enforce the rule.

Sec. 4.

Minnesota Statutes 2010, section 326B.89, subdivision 6, is amended to read:

Subd. 6.

Verified application.

To be eligible for compensation from the fund, an
owner or lessee shall serve on the commissioner a verified application for compensation
on a form approved by the commissioner. The application shall verify the following
information:

(1) the specific grounds upon which the owner or lessee seeks to recover from
the fund:

(2) that the owner or the lessee has obtained a final judgment in a court of competent
jurisdiction against a licensee licensed under section 326B.83;

(3) that the final judgment was obtained against the licensee on the grounds
of fraudulent, deceptive, or dishonest practices, conversion of funds, or failure of
performance that arose directly out of a contract directly between the licensee and the
homeowner or lessee that was entered into prior to the cause of action and that occurred
when the licensee was licensed and performing any of the special skills enumerated under
section 326B.802, subdivision 15;

(4) the amount of the owner's or the lessee's actual and direct out-of-pocket loss on
the owner's residential real estate, on residential real estate leased by the lessee, or on new
residential real estate that has never been occupied or that was occupied by the licensee
for less than one year prior to purchase by the owner;

(5) that the residential real estate is located in Minnesota;

(6) that the owner or the lessee is not the spouse of the licensee or the personal
representative of the licensee;

(7) the amount of the final judgment, any amount paid in satisfaction of the final
judgment, and the amount owing on the final judgment as of the date of the verified
application;

(8) that the owner or lessee has diligently pursued remedies against all the judgment
debtors and all other persons liable to the judgment debtor in the contract for which the
owner or lessee seeks recovery from the fund; and

(9) that the verified application is being served within two years after the judgment
became final.

The verified application must include documents evidencing the amount of the
owner's or the lessee's actual and direct out-of-pocket loss. The owner's and the lessee's
actual and direct out-of-pocket loss shall not include new text begin any new text end attorney fees, litigation costs
or fees, interest on the loss, and interest on the final judgment obtained as a result of the
loss new text begin or any costs not directly related to the value difference between what was contracted
for and what was provided new text end . Any amount paid in satisfaction of the final judgment shall
be applied to the owner's or lessee's actual and direct out-of-pocket loss. An owner or
lessee may serve a verified application regardless of whether the final judgment has been
discharged by a bankruptcy court. A judgment issued by a court is final if all proceedings
on the judgment have either been pursued and concluded or been forgone, including all
reviews and appeals. For purposes of this section, owners who are joint tenants or tenants
in common are deemed to be a single owner. For purposes of this section, owners and
lessees eligible for payment of compensation from the fund shall not include government
agencies, political subdivisions, financial institutions, and any other entity that purchases,
guarantees, or insures a loan secured by real estate.

Sec. 5.

Minnesota Statutes 2010, section 326B.89, subdivision 8, is amended to read:

Subd. 8.

Administrative hearing.

If an owner or a lessee timely serves a request
for hearing under subdivision 7, the commissioner shall request that an administrative law
judge be assigned and that a hearing be conducted under the contested case provisions of
chapter 14 within 45 days after the commissioner received the request for hearing, unless
the parties agree to a later date. The commissioner must notify the owner or lessee of the
time and place of the hearing at least 15 days before the hearing. Upon petition of the
commissioner, the administrative law judge shall continue the hearing up to 60 days and
upon a showing of good cause may continue the hearing for such additional period as the
administrative law judge deems appropriate.

At the hearing the owner or the lessee shall have the burden of proving by substantial
evidence under subdivision 6, clauses (1) to (8). Whenever an applicant's judgment
is by default, stipulation, or consent, or whenever the action against the licensee was
defended by a trustee in bankruptcy, the applicant shall have the burden of proving the
cause of action for fraudulent, deceptive, or dishonest practices, conversion of funds, or
failure of performance. Otherwise, the judgment shall create a rebuttable presumption
of the fraudulent, deceptive, or dishonest practices, conversion of funds, or failure of
performance. This presumption affects the burden of producing evidence.

The administrative law judge shall issue findings of fact, conclusions of law, and
order. If the administrative law judge finds that compensation should be paid to the owner
or the lessee, the administrative law judge shall order the commissioner to make payment
from the fund of the amount it finds to be payable pursuant to the provisions of and in
accordance with the limitations contained in this section. The order of the administrative
law judge shall constitute the final decision of the agency in the contested case. new text begin The
commissioner or the owner or lessee may seek new text end judicial review of the administrative law
judge's findings of fact, conclusions of law, and order deleted text begin shall be deleted text end in accordance with sections
14.63 to 14.69.