HF 4569

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/14/2024 03:43pm

A bill for an act
relating to wage theft; preventing wage theft and requiring use of responsible
contractors when the Minnesota Housing Finance Agency provides financial
assistance for development of multiunit residential housing; amending Minnesota
Statutes 2023 Supplement, section 116J.871, subdivision 1; proposing coding for
new law in Minnesota Statutes, chapter 462A.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 116J.871, subdivision 1, is
amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have
the meanings given them.

(b) "Economic development" means financial assistance provided to a person directly
or to a local unit of government or nonprofit organization on behalf of a person who is
engaged in the manufacture or sale of goods and services. Economic development does not
include (1) financial assistance for rehabilitation of existing housing; (2) financial assistance
for new housing construction in which total financial assistance at a single project site is
less than $100,000; or (3) financial assistance for the new construction of fully detached
single-family affordable homeownership units for which the financial assistance covers no
more than ten fully detached single-family affordable homeownership units. For purposes
of this paragraph, "affordable homeownership" means housing targeted at households with
incomes, at initial occupancy, at or below 115 percent of the state or area median income,
whichever is greater, as determined by the United States Department of Housing and Urban
Development.

(c) "Financial assistance" means (1) a grant awarded by a state agency for economic
development related purposes if a single business receives $200,000 or more of the grant
proceeds; (2) a loan or the guaranty or purchase of a loan made by a state agency for
economic development related purposes if a single business receives $500,000 or more of
the loan proceeds; deleted text begin or deleted text end (3) a reduction, credit, or abatement of a tax assessed under chapter
297A where the tax reduction, credit, or abatement applies to a geographic area smaller
than the entire state and was granted for economic development related purposes new text begin ; or (4)
allocations of low-income housing credits by all suballocators as defined under section
462A.222, for which tax credits are used for multifamily housing projects consisting of
more than ten units new text end . Financial assistance does not include payments by the state of aids and
credits under chapter 273 or 477A to a political subdivision.

(d) "Project site" means the location where improvements are made that are financed in
whole or in part by the financial assistance; or the location of employees that receive financial
assistance in the form of employment and training services as defined in section 116L.19,
subdivision 4, or customized training from a technical college.

(e) "State agency" means any agency defined under section 16B.01, subdivision 2,
Enterprise Minnesota, Inc., and the Iron Range Resources and Rehabilitation Board.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for financial assistance provided after
August 1, 2024, except Minnesota Statutes, section 462A.051, subdivision 2, does not apply
for requests for proposals that were initiated prior to August 1, 2024.
new text end

Sec. 2.

new text begin [462A.051] WAGE THEFT PREVENTION AND USE OF RESPONSIBLE
CONTRACTORS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin This section applies to all forms of financial assistance
provided by the Minnesota Housing Finance Agency, including the allocation of federal
low-income housing credits, for the development, construction, rehabilitation, renovation,
or retrofitting of multiunit residential housing, including loans, grants, tax credits, loan
guarantees, loan insurance, and other financial assistance.
new text end

new text begin Subd. 2. new text end

new text begin Disclosures. new text end

new text begin An applicant for financial assistance under this chapter shall
disclose in the application any conviction, court judgment, agency determination, legal
settlement, ongoing criminal or civil investigation, or lawsuit involving alleged violations
of sections 177.24, 177.25, 177.32, 177.41 to 177.44, 181.03, 181.101, 181.13, 181.14,
181.722, 181.723, 181A.01 to 181A.12, or 609.52, subdivision 2, paragraph (a), clause (19),
or United States Code, title 29, sections 201 to 219, or title 40, sections 3141 to 3148, arising
or occurring within the preceding five years on a construction project owned or managed
by the developer or owner of the proposed project, the intended general contractor for the
proposed project, or any of their respective parent companies, subsidiaries, or other affiliated
companies. An applicant for financial assistance shall make the disclosures required by this
subdivision available within 14 calendar days to any member of the public who submits a
request by mail or electronic correspondence. The applicant shall designate a public
information officer who will serve as a point of contact for public inquiries.
new text end

new text begin Subd. 3. new text end

new text begin Responsible contractors required. new text end

new text begin As a condition of receiving financial
assistance, the applicant shall verify that every contractor or subcontractor of any tier
performing work on the proposed project meets the minimum criteria to be a responsible
contractor under section 16C.285, subdivision 3. This verification must meet the criteria
defined in section 16C.285, subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Certified contractor lists. new text end

new text begin As a condition of receiving financial assistance, the
applicant shall submit to the agency with its responsible contractor verification, a list of
every contractor and subcontractor of any tier that performs work or is expected to perform
work on the proposed project, as described in section 16C.285, subdivision 5, including the
following information for each contractor and subcontractor: business name, scope of work,
Department of Labor and Industry registration number, business name of the entity
contracting its services, business telephone number and email address, and actual or
anticipated number of workers on the project. The applicant shall establish the initial
contractor list 30 days before the start of construction and shall update the list each month
thereafter until construction is complete. The applicant shall post the contractor list in a
conspicuous location at the project site.
new text end

new text begin Subd. 5. new text end

new text begin Wage theft remedy. new text end

new text begin If any contractor or subcontractor of any tier is found to
have failed to pay statutorily required wages under section 609.52, subdivision 1, clause
(13), on a project receiving financial assistance from or through the agency, the recipient
is responsible for correcting the violation.
new text end

new text begin Subd. 6. new text end

new text begin Wage theft prevention plans; disqualification. new text end

new text begin (a) If any contractor or
subcontractor of any tier fails to pay statutorily required wages on a project receiving
financial assistance from or through the agency as determined by an enforcement entity,
the recipient must have a wage theft prevention plan to be eligible for further financial
assistance from the agency. The project developer's wage theft prevention plan must describe
detailed measures that the project developer and its general contractor have taken and are
committed to take to prevent wage theft on the project, including provisions in any
construction contracts and subcontracts on the project. The recipient must submit the plan
with any subsequent application for financial assistance from the agency. The agency must
consider the adequacy of a wage theft prevention plan in evaluating an application for
financial assistance and may require the applicant to amend the plan or adopt policies or
protocols to prevent wage theft, in consultation with the Department of Labor and Industry.
The wage theft prevention plan must be made available to members of the public upon
request and must be posted on the agency's website.
new text end

new text begin (b) A developer is disqualified from receiving financial assistance from or through the
agency for three years if any of the developer's contractors or subcontractors of any tier are
found by an enforcement agency to have, within three years after entering into a wage theft
prevention plan under paragraph (a), failed to pay statutorily required wages on a project
receiving financial assistance from or through the agency for a total underpayment of $25,000
or more.
new text end

new text begin Subd. 7. new text end

new text begin Enforcement. new text end

new text begin The agency may deny an application for financial assistance
that does not comply with this section or if the applicant refuses to enter into the agreements
required by this section. The agency may withhold financial assistance that has been
previously approved if the agency determines that the applicant has engaged in unacceptable
practices by failing to comply with this section until the violation is cured. The state, on
behalf of the agency, may pursue any available legal remedies in district court to enforce
the applicant's agreements pursuant to this section, including but not limited to injunctive
relief and compensatory damages, and shall be entitled to recover attorney fees and litigation
costs upon prevailing in such litigation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for financial assistance provided after
August 1, 2024, except Minnesota Statutes, section 462A.051, subdivision 2, does not apply
for requests for proposals that were initiated prior to August 1, 2024.
new text end