relating to state government; creating the family economic security act;
increasing minimum wage rates; modifying child care assistance; providing a
new child care tax credit; expanding the working family tax credit; appropriating
money;amending Minnesota Statutes 2012, sections 119B.02, subdivision
1; 119B.03, subdivision 9; 119B.035, subdivision 1; 119B.08, subdivision 3;
119B.09, subdivisions 1, 4a; 177.23, subdivision 7; 177.24, subdivision 1;
177.27, subdivisions 7, 8; 256.017, subdivision 9; 290.0671, subdivision 1;
proposing coding for new law in Minnesota Statutes, chapter 290; repealing
Minnesota Statutes 2012, sections 119B.03, subdivisions 1, 2, 4, 5, 6, 6a, 6b, 8;
119B.09, subdivision 3; 177.23, subdivision 11.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. CITATION.
1.14Sections 2 to 12 may be cited as the "Family Economic Security Act."
Sec. 2. Minnesota Statutes 2012, section 119B.02, subdivision 1, is amended to read:
Subdivision 1. Child care services.
The commissioner shall develop standards
for county and human services boards to provide child care services to enable eligible
families to participate in employment, training, or education programs.
Within the limits
1.19 of available appropriations,
The commissioner shall distribute money to counties to
reduce the costs of child care for eligible families. The commissioner shall adopt rules to
govern the program in accordance with this section. The rules must establish a sliding
schedule of fees for parents receiving child care services. The rules shall provide that
funds received as a lump-sum payment of child support arrearages shall not be counted
as income to a family in the month received but shall be prorated over the 12 months
following receipt and added to the family income during those months. The commissioner
shall maximize the use of federal money under title I and title IV of Public Law 104-193,
the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, and
other programs that provide federal or state reimbursement for child care services for
low-income families who are in education, training, job search, or other activities allowed
under those programs. Money appropriated under this section must be coordinated with
the programs that provide federal reimbursement for child care services to accomplish
this purpose. Federal reimbursement obtained must be allocated to the county that spent
money for child care that is federally reimbursable under programs that provide federal
reimbursement for child care services. The counties shall use the federal money to expand
child care services. The commissioner may adopt rules under chapter 14 to implement and
coordinate federal program requirements.
Sec. 3. Minnesota Statutes 2012, section 119B.03, subdivision 9, is amended to read:
Portability pool Family move; continued participation.
2.13 commissioner shall establish a pool of up to five percent of the annual appropriation for
2.14 the basic sliding fee program to provide continuous child care assistance for eligible
2.15 families who move between Minnesota counties. At the end of each allocation period, any
2.16 unspent funds in the portability pool must be used for assistance under the basic sliding fee
2.17 program. If expenditures from the portability pool exceed the amount of money available,
2.18 the reallocation pool must be reduced to cover these shortages.
2.19 (b) To be eligible for portable basic sliding fee assistance, a family that has moved
2.20 from a county in which it A family receiving child care assistance under the child care
2.21fund that has moved from a county in which the family
basic sliding fee
2.22 child care
assistance to a county
with a waiting list for the basic sliding fee program
2.23 be admitted into the receiving county's child care assistance program if the family
the income and eligibility guidelines for the
basic sliding fee child
the new county of residence within 60 days of moving and
information to the new county of residence to verify eligibility for the
2.28 sliding fee child care assistance
The receiving county must
accept administrative responsibility
for applicants for portable basic sliding fee
at the end of the two months of assistance under the Unitary Residency Act
2.32 (2) continue basic sliding fee assistance for the lesser of six months or until the
2.33 family is able to receive assistance under the county's regular basic sliding program; and
2.34 (3) notify the commissioner through the quarterly reporting process of any family
2.35 that meets the criteria of the portable basic sliding fee assistance pool.
Sec. 4. Minnesota Statutes 2012, section 119B.035, subdivision 1, is amended to read:
Subdivision 1. Establishment.
A family in which a parent provides care for the
family's infant child may receive a subsidy in lieu of assistance if the family is eligible for
or is receiving assistance under the basic sliding fee program. An eligible family must
meet the eligibility factors under section
, except as provided in subdivision 4,
and the requirements of this section. Subject to federal match and maintenance of effort
requirements for the child care and development fund,
and up to available appropriations,
the commissioner shall provide assistance under the at-home infant child care program
and for administrative costs associated with the program. At the end of a fiscal year, the
commissioner may carry forward any unspent funds under this section to the next fiscal
year within the same biennium for assistance under the basic sliding fee program.
Sec. 5. Minnesota Statutes 2012, section 119B.08, subdivision 3, is amended to read:
Subd. 3. Child care fund plan.
The county and designated administering agency
shall submit a biennial child care fund plan to the commissioner. The commissioner shall
establish the dates by which the county must submit the plans. The plan shall include:
(1) a description of strategies to coordinate and maximize public and private
community resources, including school districts, health care facilities, government
agencies, neighborhood organizations, and other resources knowledgeable in early
childhood development, in particular to coordinate child care assistance with existing
community-based programs and service providers including child care resource and
referral programs, early childhood family education, school readiness, Head Start, local
interagency early intervention committees, special education services, early childhood
screening, and other early childhood care and education services and programs to the extent
possible, to foster collaboration among agencies and other community-based programs that
provide flexible, family-focused services to families with young children and to facilitate
transition into kindergarten. The county must describe a method by which to share
information, responsibility, and accountability among service and program providers;
(2) a description of procedures and methods to be used to make copies of the
proposed state plan reasonably available to the public, including members of the public
particularly interested in child care policies such as parents, child care providers, culturally
specific service organizations, child care resource and referral programs, interagency
early intervention committees, potential collaborative partners and agencies involved in
the provision of care and education to young children, and allowing sufficient time for
public review and comment; and
(3) information as requested by the department to ensure compliance with the child
care fund statutes and rules promulgated by the commissioner.
The commissioner shall notify counties within 90 days of the date the plan is
submitted whether the plan is approved or the corrections or information needed to approve
the plan. The commissioner shall withhold
a county's allocation until it has an approved
4.6 plan. Plans not approved by the end of the second quarter after the plan is due may result
4.7 in a 25 percent reduction in allocation. Plans not approved by the end of the third quarter
4.8 after the plan is due may result in a 100 percent reduction in the allocation to the county
4.9 payments to a county until it has an approved plan
. Counties are to maintain services despite
reduction in their allocation withholding of payments
due to plans not being approved.
Sec. 6. Minnesota Statutes 2012, section 119B.09, subdivision 1, is amended to read:
Subdivision 1. General eligibility requirements for all applicants for child
(a) Child care services must be available to families who need child
care to find or keep employment or to obtain the training or education necessary to find
employment and who:
(1) have household income less than or equal to
percent of the state median
income, adjusted for family size, and meet the requirements of section
MFIP assistance; and are participating in employment and training services under chapter
(2) have household income less than or equal to 47 percent of the state median
income, adjusted for family size, at program entry and less than or equal to
of the state median income, adjusted for family size, at program exit.
(b) Child care services must be made available as in-kind services.
(c) All applicants for child care assistance and families currently receiving child care
assistance must be assisted and required to cooperate in establishment of paternity and
enforcement of child support obligations for all children in the family as a condition
of program eligibility. For purposes of this section, a family is considered to meet the
requirement for cooperation when the family complies with the requirements of section
Sec. 7. Minnesota Statutes 2012, section 119B.09, subdivision 4a, is amended to read:
Subd. 4a. Temporary ineligibility of military personnel.
Counties must reserve a
family's position under the child care assistance fund if a family has been receiving child
care assistance but is temporarily ineligible for assistance due to increased income from
active military service. Activated military personnel may be temporarily ineligible until
A county must reserve a military family's position on the basic sliding fee
5.2 waiting list under the child care assistance fund if a family is approved to receive child care
5.3 assistance and reaches the top of the waiting list but is temporarily ineligible for assistance.
Sec. 8. Minnesota Statutes 2012, section 177.23, subdivision 7, is amended to read:
Subd. 7. Employee.
"Employee" means any individual employed by an employer
but does not include:
(1) two or fewer specified individuals employed at any given time in agriculture on a
farming unit or operation who are paid a salary;
(2) any individual employed in agriculture on a farming unit or operation who is
paid a salary greater than the individual would be paid if the individual worked 48 hours at
the state minimum wage plus 17 hours at 1-1/2 times the state minimum wage per week;
(3) an individual under 18 who is employed in agriculture on a farm to perform
services other than corn detasseling or hand field work when one or both of that minor
hand field worker's parents or physical custodians are also hand field workers;
(4) for purposes of section
, an individual under 18 who is employed as a
(5) any staff member employed on a seasonal basis by an organization for work in an
organized resident or day camp operating under a permit issued under section
(6) any individual employed in a bona fide executive, administrative, or professional
capacity, or a salesperson who conducts no more than 20 percent of sales on the premises
of the employer;
(7) any individual who renders service gratuitously for a nonprofit organization;
(8) any individual who serves as an elected official for a political subdivision or who
serves on any governmental board, commission, committee or other similar body, or who
renders service gratuitously for a political subdivision;
(9) any individual employed by a political subdivision to provide police or fire
protection services or employed by an entity whose principal purpose is to provide police
or fire protection services to a political subdivision;
(10) any individual employed by a political subdivision who is ineligible for
membership in the Public Employees Retirement Association under section
, clause (1), (2), (4), or (9);
(11) any driver employed by an employer engaged in the business of operating
5.34 (12) (11)
any individual engaged in babysitting as a sole practitioner;
for the purpose of section
, any individual employed on a seasonal
basis in a carnival, circus, fair, or ski facility;
any individual under 18 working less than 20 hours per workweek for a
municipality as part of a recreational program;
any individual employed by the state as a natural resource manager 1, 2, or
3 (conservation officer);
any individual in a position for which the United States Department of
Transportation has power to establish qualifications and maximum hours of service under
United States Code, title 49, section 31502;
any individual employed as a seafarer. The term "seafarer" means a
master of a vessel or any person subject to the authority, direction, and control of the
master who is exempt from federal overtime standards under United States Code, title 29,
section 213(b)(6), including but not limited to pilots, sailors, engineers, radio operators,
firefighters, security guards, pursers, surgeons, cooks, and stewards;
any individual employed by a county in a single-family residence owned
by a county home school as authorized under section
if the residence is
an extension facility of that county home school, and if the individual as part of the
employment duties resides at the residence for the purpose of supervising children as
defined by section
260C.007, subdivision 4
nuns, monks, priests, lay brothers, lay sisters, ministers, deacons, and other
members of religious orders who serve pursuant to their religious obligations in schools,
hospitals, and other nonprofit institutions operated by the church or religious order.
Sec. 9. Minnesota Statutes 2012, section 177.24, subdivision 1, is amended to read:
Subdivision 1. Amount.
(a) For purposes of this subdivision, the terms defined in
this paragraph have the meanings given them.
(1) "Large employer" means an enterprise whose annual gross volume of sales made
or business done is not less than
(exclusive of excise taxes at the
retail level that are separately stated) and covered by the Minnesota Fair Labor Standards
(2) "Small employer" means an enterprise whose annual gross volume of sales
made or business done is less than
(exclusive of excise taxes at the
retail level that are separately stated) and covered by the Minnesota Fair Labor Standards
(b) Except as otherwise provided in sections
, every large employer
6.35 must pay each employee wages at a rate of at least $5.15 an hour beginning September
7.1 1, 1997, and at a rate of at least $6.15 an hour beginning August 1, 2005. Every small
7.2 employer must pay each employee at a rate of at least $4.90 an hour beginning January 1,
7.3 1998, and at a rate of at least $5.25 an hour beginning August 1, 2005:
7.4(1) every large employer must pay each employee wages at a rate of at least:
7.5(i) $8.25 per hour beginning September 1, 2013;
7.6(ii) $9.50 per hour beginning July 1, 2014;
7.7(iii) at the rate established under paragraph (d) beginning July 1, 2015; or
7.8(iv) the wage rate under United States Code, title 29, section 206(a)(1), whichever
7.9is greater; and
7.10(2) every small employer must pay each employee wages at a rate of at least:
7.11(i) $7.50 per hour beginning September 1, 2013;
7.12(ii) $8.25 per hour beginning July 1, 2014;
7.13(iii) at the rate established under paragraph (d) beginning July 1, 2015; or
7.14(iv) the wage rate under United States Code, title 29, section 206(a)(1), whichever
(c) Notwithstanding paragraph (b), during the first 90 consecutive days of
employment, an employer may pay an employee under the age of 20 years a wage of
7.18 an hour. No employer may take any action to displace any employee, including a partial
7.19 displacement through a reduction in hours, wages, or employment benefits, in order to
7.20 hire an employee at the wage authorized in this paragraph:
7.21(1) $6.50 per hour beginning September 1, 2013;
7.22(2) $7.50 per hour beginning July 1, 2014;
7.23(3) at the rate established under paragraph (d) beginning July 1, 2015; or
7.24(4) the wage rate under United States Code, title 29, section 206(a)(1), whichever
7.26No employer may take any action to displace any employee, including a partial
7.27displacement through a reduction in hours, wages, or employment benefits, in order to
7.28hire an employee at the wage authorized in this paragraph.
7.29(d) No later than April 1 each year, beginning in 2015, the commissioner shall
7.30determine the percentage increase in the rate of inflation, as measured by the Consumer
7.31Price Index for all urban consumers, United States city average, as determined by the
7.32United States Department of Labor, during the most recent 12-month period for which
7.33data is available. The minimum wage rates in paragraphs (b) and (c) are increased by the
7.34percentage calculated by the commissioner, rounded up to the nearest five cents. The new
7.35minimum wage rates determined under this paragraph take effect on the next July 1.
Sec. 10. Minnesota Statutes 2012, section 177.27, subdivision 7, is amended to read:
Subd. 7. Employer liability.
If an employer is found by the commissioner to have
violated a section identified in subdivision 4, or any rule adopted under section
the commissioner issues an order to comply, the commissioner shall order the employer to
cease and desist from engaging in the violative practice and to take such affirmative steps
that in the judgment of the commissioner will effectuate the purposes of the section or rule
violated. The commissioner shall order the employer to pay to the aggrieved parties back
pay, gratuities, and compensatory damages, less any amount actually paid to the employee
by the employer, and for an additional
amount equal to twice the compensation owed
as liquidated damages. Any employer who is found by the commissioner to have repeatedly
or willfully violated a section or sections identified in subdivision 4 shall be subject to a
civil penalty of up to $1,000 for each violation for each employee. In determining the
amount of a civil penalty under this subdivision, the appropriateness of such penalty to the
size of the employer's business and the gravity of the violation shall be considered. In
addition, the commissioner may order the employer to reimburse the department and the
attorney general for all appropriate litigation and hearing costs expended in preparation for
and in conducting the contested case proceeding, unless payment of costs would impose
extreme financial hardship on the employer. If the employer is able to establish extreme
financial hardship, then the commissioner may order the employer to pay a percentage
of the total costs that will not cause extreme financial hardship. Costs include but are
not limited to the costs of services rendered by the attorney general, private attorneys if
engaged by the department, administrative law judges, court reporters, and expert witnesses
as well as the cost of transcripts. Interest shall accrue on, and be added to, the unpaid
balance of a commissioner's order from the date the order is signed by the commissioner
until it is paid, at an annual rate provided in section
549.09, subdivision 1
, paragraph (c).
The commissioner may establish escrow accounts for purposes of distributing damages.
Sec. 11. Minnesota Statutes 2012, section 177.27, subdivision 8, is amended to read:
Subd. 8. Court actions; suits brought by private parties.
An employee may
bring a civil action seeking redress for a violation or violations of sections
directly to district court. An employer who pays an employee less than the wages
and overtime compensation to which the employee is entitled under sections
is liable to the employee for the full amount of the wages, gratuities, and overtime
compensation, less any amount the employer is able to establish was actually paid to the
employee and for an additional
amount equal to twice the compensation owed
as liquidated damages. In addition, in an action under this subdivision the employee
may seek damages and other appropriate relief provided by subdivision 7 and otherwise
provided by law. An agreement between the employee and the employer to work for less
than the applicable wage is not a defense to the action.
Sec. 12. Minnesota Statutes 2012, section 256.017, subdivision 9, is amended to read:
Subd. 9. Timing and disposition of penalty and case disallowance funds.
control case penalty and administrative penalty amounts shall be disallowed or withheld
from the next regular reimbursement made to the county agency for state and federal
benefit reimbursements and federal administrative reimbursements for all programs
covered in this section, according to procedures established in statute, but shall not be
imposed sooner than 30 calendar days from the date of written notice of such penalties.
Except for penalties withheld under the child care assistance program, all penalties
must be deposited in the county incentive fund provided in section
9.13 withheld under the child care assistance program shall be reallocated to counties using the
9.14 allocation formula under section
119B.03, subdivision 5 .
All penalties must be imposed
according to this provision until a decision is made regarding the status of a written
exception. Penalties must be returned to county agencies when a review of a written
exception results in a decision in their favor.
Sec. 13. Minnesota Statutes 2012, section 290.0671, subdivision 1, is amended to read:
Subdivision 1. Credit allowed.
(a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.
(b) For individuals with no qualifying children, the credit equals
of the first $4,620 of earned income. The credit is reduced by
earned income or adjusted gross income, whichever is greater, in excess of $5,770, but in
no case is the credit less than zero.
(c) For individuals with one qualifying child, the credit equals
percent of the
first $6,920 of earned income and
percent of earned income over $12,080 but less
than $13,450. The credit is reduced by
percent of earned income or adjusted gross
income, whichever is greater, in excess of $15,080, but in no case is the credit less than zero.
(d) For individuals with two or more qualifying children, the credit equals
percent of the first $9,720 of earned income and
percent of earned income over
$14,860 but less than $16,800. The credit is reduced by
percent of earned
income or adjusted gross income, whichever is greater, in excess of $17,890, but in no
case is the credit less than zero.
(e) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section
290.06, subdivision 2c
, paragraph (e).
(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section
, clause (9), the credit must be allocated based on the ratio of federal
adjusted gross income reduced by the earned income not subject to tax under this chapter
over federal adjusted gross income. For purposes of this paragraph, the subtractions
for military pay under section
290.01, subdivision 19b
, clauses (10) and (11), are not
considered "earned income not subject to tax under this chapter."
For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.
(h) For tax years beginning after December 31, 2010, and before January 1, 2012,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are each increased by $5,000 for
married taxpayers filing joint returns. For tax years beginning after December 31, 2010,
and before January 1, 2012, the commissioner shall annually adjust the $5,000 by the
percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
Code, except that in section 1(f)(3)(B), the word "2008" shall be substituted for the word
"1992." For 2011, the commissioner shall then determine the percent change from the 12
months ending on August 31, 2008, to the 12 months ending on August 31, 2010. The
earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.
(i) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.
11.7EFFECTIVE DATE.This section is effective for taxable years beginning after
11.8December 31, 2012.
Sec. 14. [290.0682] CHILD CREDIT.
11.10 Subdivision 1. Credit allowed. (a) An individual may claim a credit against the
11.11tax due under this chapter in an amount equal to $100 for each qualifying child. For
11.12individuals with adjusted gross income in excess of 300 percent of the federal poverty
11.13guideline, adjusted for family size, the credit is reduced by the ratio of (1) adjusted gross
11.14income in excess of 300 percent of the federal poverty guideline, adjusted for family
11.15size, to (2) the difference between 400 percent of the federal poverty guideline, adjusted
11.16for family size, and 300 percent of the federal poverty guideline, adjusted for family
11.17size; but in no case is the credit less than zero. The credit is not allowed for individuals
11.18with adjusted gross income equal to or greater than 400 percent of the federal poverty
11.19guideline, adjusted for family size.
11.20(b) For a nonresident or part-year resident, the credit must be allocated based on the
11.21percentage calculated under section 290.06, subdivision 2c, paragraph (e).
11.22 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
11.23the meanings given.
11.24(b) "Adjusted gross income" means federal adjusted gross income as defined in
11.25section 62 of the Internal Revenue Code.
11.26(c) "Family size" is the sum total of the taxpayer, spouse, and each individual eligible
11.27to be claimed as dependent under sections 151 and 152 of the Internal Revenue Code.
11.28(d) "Federal poverty guideline" means the federal poverty guideline for the calendar
11.29year as published in the federal register by the United States Department of Health and
11.31(e) "Qualifying child" has the meaning given in section 24 of the Internal Revenue
11.33 Subd. 3. Credit refundable. If the amount of credit which the individual is eligible
11.34to receive under this section exceeds the individual's liability for tax under this chapter,
11.35the commissioner shall refund the excess to the claimant.
12.1 Subd. 4. Appropriation. An amount sufficient to pay the refunds required by this
12.2section is appropriated to the commissioner from the general fund.
12.3EFFECTIVE DATE.This section is effective for taxable years beginning after
12.4December 31, 2012.
Sec. 15. DIRECTION TO COMMISSIONER OF MANAGEMENT AND
12.7The state obligation for the basic sliding fee child care assistance program under
12.8Minnesota Statutes, section 119B.03, must be included in the Department of Management
12.9and Budget February and November forecast of state revenues and expenditures under
12.10Minnesota Statutes, section 16A.103, beginning with the November 2013 forecast.
Sec. 16. REPEALER.
12.12Minnesota Statutes 2012, sections 119B.03, subdivisions 1, 2, 4, 5, 6, 6a, 6b, and 8;
12.13119B.09, subdivision 3; and 177.23, subdivision 11, are repealed.