SF 3001

3rd Engrossment - 89th Legislature (2015 - 2016) Posted on 05/17/2016 09:19am

A bill for an act
relating to economic development; making various policy changes; modifying
agency programs; modifying the commissioner's promotional authority;
modifying workforce development outcomes; creating the Workforce
Development Board; amending Minnesota Statutes 2014, sections 116J.035,
subdivision 1a; 116J.8738, subdivision 2; 116J.8747, by adding a subdivision;
116J.8748, subdivision 4; Minnesota Statutes 2015 Supplement, sections
116J.8738, subdivision 3; 116L.98, subdivision 3; proposing coding for new
law in Minnesota Statutes, chapter 116L; repealing Minnesota Statutes 2014,
section 116L.665.

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

ARTICLE 1

ECONOMIC DEVELOPMENT PROGRAMS

Section 1.

Minnesota Statutes 2014, section 116J.8738, subdivision 2, is amended to
read:

Subd. 2.

Qualified business.

(a) A business is a qualified business if it satisfies the
requirement of this paragraph and is not disqualified under the provisions of paragraph
(b). To qualify, the business must:

deleted text begin (1) have operated its trade or business in a city or cities in greater Minnesota for at
least one year before applying under subdivision 3;
deleted text end

deleted text begin (2) deleted text end new text begin (1) new text end pay or agree to pay in the future each employee compensation, including
benefits not mandated by law, that on an annualized basis equal at least 120 percent of the
federal poverty level for a family of four;

deleted text begin (3) deleted text end new text begin (2) new text end plan and agree to expand its employment in deleted text begin one or more cities in deleted text end greater
Minnesota by the minimum number of employees required under subdivision 3, paragraph
(c); and

deleted text begin (4) deleted text end new text begin (3) new text end have received certification from the commissioner under subdivision 3 that
it is a qualified business.

(b) A business is not a qualified business if it is either:

(1) primarily engaged in making retail sales to purchasers who are physically present
at the business's location or locations in greater Minnesota;

(2) a public utility, as defined in section 336B.01; or

(3) primarily engaged in lobbying; gambling; entertainment; professional sports;
political consulting; leisure; hospitality; or professional services provided by attorneys,
accountants, business consultants, physicians, or health care consultants.

deleted text begin (c) The requirements in paragraph (a) that the business's operations and expansion
be located in a city do not apply to an agricultural processing facility.
deleted text end

Sec. 2.

Minnesota Statutes 2015 Supplement, section 116J.8738, subdivision 3, is
amended to read:

Subd. 3.

Certification of qualified business.

(a) A business may apply to
the commissioner for certification as a qualified business under this section. The
commissioner shall specify the form of the application, the manner and times for applying,
and the information required to be included in the application. The commissioner may
impose an application fee in an amount sufficient to defray the commissioner's cost of
processing certifications. Application fees are deposited in the greater Minnesota business
expansion administration account in the special revenue fund. A business must file a copy
of its application with the chief clerical officer of the city at the same time it applies to
the commissioner. For deleted text begin an agricultural processing facility deleted text end new text begin a business new text end located outside the
boundaries of a city, the business must file a copy of the application with the county auditor.

(b) The commissioner shall certify each business as a qualified business that:

(1) satisfies the requirements of subdivision 2;

(2) the commissioner determines would not expand its operations in greater
Minnesota without the tax incentives available under subdivision 4; and

(3) enters a business subsidy agreement with the commissioner that pledges to
satisfy the minimum expansion requirements of paragraph (c) within three years or less
following execution of the agreement.

The commissioner must act on an application within 90 days after its filing. Failure
by the commissioner to take action within the 90-day period is deemed approval of the
application.

(c) The business must increase the number of full-time equivalent employees
in greater Minnesota from the time the business subsidy agreement is executed by two
employees or ten percent, whichever is greater.

(d) The city, or a county for deleted text begin an agricultural processing facility deleted text end new text begin a business new text end located
outside the boundaries of a city, in which the business proposes to expand its operations
may file comments supporting or opposing the application with the commissioner. The
comments must be filed within 30 days after receipt by the city new text begin or county new text end of the application
and may include a notice of any contribution the city or county intends to make to
encourage or support the business expansion, such as the use of tax increment financing,
property tax abatement, additional city or county services, or other financial assistance.

(e) Certification of a qualified business is effective for the seven-year period
beginning on the first day of the calendar month immediately following the date that the
commissioner informs the business of the award of the benefit.

Sec. 3.

Minnesota Statutes 2014, section 116J.8748, subdivision 4, is amended to read:

Subd. 4.

Certification; benefits.

(a) The commissioner may certify a Minnesota job
creation fund business as eligible to receive a specific value of benefit under paragraphs
(b) and (c) when the business has achieved its job creation and capital investment goals
noted in its agreement under subdivision 3.

(b) A qualified Minnesota job creation fund business may be certified eligible for
the benefits in this paragraph for up to five years for projects located in the metropolitan
area as defined in section 200.02, subdivision 24, and seven years for projects located
outside the metropolitan area, as determined by the commissioner when considering the
best interests of the state and local area. new text begin Notwithstanding section 16B.98, subdivision 5,
paragraph (b), grant agreements for projects located outside the metropolitan area may
be for up to seven years in length. new text end The eligibility for the following benefits begins the
date the commissioner certifies the business as a qualified Minnesota job creation fund
business under this subdivision:

(1) up to five percent rebate for projects located in the metropolitan area as
defined in section 200.02, subdivision 24, and 7.5 percent for projects located outside
the metropolitan area, on capital investment on qualifying purchases as provided in
subdivision 5 with the total rebate for a project not to exceed $500,000;

(2) an award of up to $500,000 based on full-time job creation and wages paid as
provided in subdivision 6 with the total award not to exceed $500,000;

(3) up to $1,000,000 in capital investment rebates and $1,000,000 in job creation
awards are allowable for projects that have at least $25,000,000 in capital investment
and 200 new employees;

(4) up to $1,000,000 in capital investment rebates are allowable for projects that
have at least $25,000,000 in capital investment and 200 retained employees for projects
located in the metropolitan area as defined in section 200.02, subdivision 24, and 75
employees for projects located outside the metropolitan area; and

(5) for clauses (3) and (4) only, the capital investment expenditure requirements may
include the installation and purchases of machinery and equipment. These expenditures
are not eligible for the capital investment rebate provided under subdivision 5.

(c) The job creation award may be provided in multiple years as long as the qualified
Minnesota job creation fund business continues to meet the job creation goals provided
for in its agreement under subdivision 3 and the total award does not exceed $500,000
except as provided under paragraph (b), clauses (3) and (4).

(d) No rebates or award may be provided until the Minnesota job creation fund
business has at least $500,000 in capital investment in the project and at least ten full-time
jobs have been created and maintained for at least one year or the retained employees, as
provided in paragraph (b), clause (4), remain for at least one year. The agreement may
require additional performance outcomes that need to be achieved before rebates and
awards are provided. If fewer retained jobs are maintained, but still above the minimum
under this subdivision, the capital investment award shall be reduced on a proportionate
basis.

(e) The forms needed to be submitted to document performance by the Minnesota
job creation fund business must be in the form and be made under the procedures specified
by the commissioner. The forms shall include documentation and certification by the
business that it is in compliance with the business subsidy agreement, sections 116J.871
and 116L.66, and other provisions as specified by the commissioner.

(f) Minnesota job creation fund businesses must pay each new full-time employee
added pursuant to the agreement total compensation, including benefits not mandated by
law, that on an annualized basis is equal to at least 110 percent of the federal poverty
level for a family of four.

(g) A Minnesota job creation fund business must demonstrate reasonable progress on
its capital investment expenditures within six months following designation as a Minnesota
job creation fund business to ensure that the capital investment goal in the agreement
under subdivision 1 will be met. Businesses not making reasonable progress will not be
eligible for benefits under the submitted application and will need to work with the local
government unit to resubmit a new application and request to be a Minnesota job creation
fund business. Notwithstanding the goals noted in its agreement under subdivision 1, this
action shall not be considered a default of the business subsidy agreement.

ARTICLE 2

PROMOTIONAL AUTHORITY

Section 1.

Minnesota Statutes 2014, section 116J.035, subdivision 1a, is amended to
read:

Subd. 1a.

Promotional contracts.

In order to best carry out duties and
responsibilities and to serve the people of the state in the promotion of tourism, trade,
and economic development, the commissioner may engage in programs and projects new text begin ,
including solicitations and proposals for programs and projects, new text end jointly with a private
person, firm, corporation or association deleted text begin and deleted text end new text begin . The commissioner new text end may enter into contracts
under terms to be mutually agreed upon to carry out deleted text begin such deleted text end new text begin these new text end programs and projects not
including acquisition of land or buildings. Contracts may be negotiated and are not subject
to the provisions of chapter 16C relating to competitive bidding.

ARTICLE 3

WORKFORCE DEVELOPMENT PROGRAM OUTCOMES

Section 1.

Minnesota Statutes 2015 Supplement, section 116L.98, subdivision 3, is
amended to read:

Subd. 3.

Uniform outcome report card; reporting by commissioner.

(a) By
December 31 of each even-numbered year, the commissioner must report to the chairs
and ranking minority members of the committees of the house of representatives and the
senate having jurisdiction over economic development and workforce policy and finance
the following information separately for each of the previous two fiscal or calendar years,
for each program subject to the requirements of subdivision 1:

(1) the total number of participants enrolled;

(2) the median pre-enrollment wages based on participant wages for the second
through the fifth calendar quarters immediately preceding the quarter of enrollment
excluding those with zero income;

(3) the total number of participants with zero income in the second through fifth
calendar quarters immediately preceding the quarter of enrollment;

(4) the total number of participants enrolled in training;

(5) the total number of participants enrolled in training by occupational group;

(6) the total number of participants that exited the program and the average
enrollment duration of participants that have exited the program during the year;

(7) the total number of exited participants who completed training;

(8) the total number of exited participants who attained a credential;

(9) the total number of participants employed during three consecutive quarters
immediately following the quarter of exit, by industry;

(10) the median wages of participants employed during deleted text begin three deleted text end new text begin four new text end consecutive
quarters immediately following the quarter of exit;

(11) the total number of participants employed during eight consecutive quarters
immediately following the quarter of exit, by industry;

(12) the median wages of participants employed during eight consecutive quarters
immediately following the quarter of exit;

(13) the total cost of the program;

(14) the total cost of the program per participant;

(15) the cost per credential received by a participant; and

(16) the administrative cost of the program.

(b) The report to the legislature must contain participant information by education
level, race and ethnicity, gender, and geography, and a comparison of exited participants
who completed training and those who did not.

(c) The requirements of this section apply to programs administered directly by the
commissioner or administered by other organizations under a grant made by the department.

ARTICLE 4

PAY FOR PERFORMANCE GRANTS

Section 1.

Minnesota Statutes 2014, section 116J.8747, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Grant administration authority. new text end

new text begin The state agency administering grants
under this section may offer exemption from sections 16A.28, subdivision 6, and 16B.98,
subdivision 7.
new text end

ARTICLE 5

WORKFORCE INNOVATION AND OPPORTUNITY ACT UPDATES

Section 1.

new text begin [116L.6651] WORKFORCE DEVELOPMENT BOARD.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; duties. new text end

new text begin The governor's Workforce Development Board
serves as Minnesota's state workforce development board for the purposes of the federal
Workforce Innovation and Opportunity Act, United States Code, title 29, section 3111,
and must perform the duties under that act.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The board is composed of 49 voting members and
12 nonvoting members representing businesses, labor organizations, community-based
organizations, state agencies, and education. For the public members, membership terms,
compensation of members, and removal of members, are governed by section 15.059,
subdivisions 2, 3, and 4.
new text end

new text begin (b) No person shall serve as a member of more than one category described in
paragraph (a).
new text end

new text begin (c) Voting members shall consist of the following:
new text end

new text begin (1) the governor or the governor's designee;
new text end

new text begin (2) two members of the house of representatives, one appointed by the speaker of the
house and one appointed by the minority leader of the house of representatives;
new text end

new text begin (3) two members of the senate, one appointed by the majority leader of the senate
and one appointed by the minority leader of the senate;
new text end

new text begin (4) 25 representatives of businesses in the state appointed by the governor who:
new text end

new text begin (i) are owners of businesses, chief executives or operating officers of businesses, or
other business executives or employers with optimum policy-making or hiring authority,
and who, in addition, may be members of a local board under United States Code, title 29,
section 3122(b)(2)(A)(i);
new text end

new text begin (ii) represent businesses, including small businesses, or organizations representing
businesses that provide employment opportunities that, at a minimum, include
high-quality, work-relevant training and development in in-demand industry sectors or
occupations in the state;
new text end

new text begin (iii) are appointed from individuals nominated by state business organizations and
business trade associations; and
new text end

new text begin (iv) to the extent practicable, are balanced as to gender and ethnic diversity;
new text end

new text begin (5) commissioners of the state agencies with primary responsibility for core
programs identified within the state plan including:
new text end

new text begin (i) the Department of Employment and Economic Development;
new text end

new text begin (ii) the Department of Education; and
new text end

new text begin (iii) the Department of Human Services; and
new text end

new text begin (6) other voting members appointed by the governor, including:
new text end

new text begin (i) two chief elected officials, collectively representing cities and counties;
new text end

new text begin (ii) six representatives of labor organizations, including:
new text end

new text begin (A) representatives of labor organizations who have been nominated by state labor
federations; and
new text end

new text begin (B) a member of a labor organization or a training director from a joint labor
and management apprenticeship program, or if no joint program exists in the state, a
representative of an apprenticeship program in the state;
new text end

new text begin (iii) four minority representatives of community-based organizations that have
demonstrated experience and expertise in addressing the employment, training, or
education needs of individuals with barriers to employment, including organizations
that serve veterans or that provide or support competitive, integrated employment for
individuals with disabilities; and
new text end

new text begin (iv) four officials responsible for education programs in the state, including chief
executive officers of community colleges and other institutions of higher education,
including:
new text end

new text begin (A) chancellor, Minnesota State Colleges and Universities;
new text end

new text begin (B) president, University of Minnesota;
new text end

new text begin (C) president, private postsecondary; and
new text end

new text begin (D) representative of career and technical education.
new text end

new text begin (d) The 12 nonvoting members of the board shall be appointed by the governor and
consist of one of each of the following:
new text end

new text begin (1) a representative of Adult Basic Education;
new text end

new text begin (2) a representative of public libraries;
new text end

new text begin (3) a person with expertise in women's economic security;
new text end

new text begin (4) the chair of the Minnesota Workforce Council Association;
new text end

new text begin (5) the commissioner of the Department of Labor and Industry;
new text end

new text begin (6) the commissioner of the Office of Higher Education;
new text end

new text begin (7) the commissioner of the Department of Corrections;
new text end

new text begin (8) the commissioner of Management and Budget;
new text end

new text begin (9) two representatives of community-based organizations;
new text end

new text begin (10) a district superintendent of a public school district; and
new text end

new text begin (11) a representative of school-based service learning.
new text end

new text begin Subd. 3. new text end

new text begin Board meetings; chair. new text end

new text begin (a) The board shall hold regular in-person
meetings at least quarterly and as often as necessary to perform the duties outlined in the
statement of authority and the board's bylaws. Meetings shall be called by the chair.
Special meetings may be called as needed. Notices of all meetings shall be made at least
48 hours prior to the meeting date.
new text end

new text begin (b) The governor shall designate a chair from among the appointed voting members.
The chairperson shall approve an agenda for each meeting. Members shall submit a
written request for consideration of an agenda item no less than 24 hours in advance
of the meeting. Members of the public may submit a written request within 48 hours
of a meeting in order to be considered for inclusion on the agenda. Those members of
the public in attendance at any meeting of the board may address the board only with
the approval or at the request of the chair.
new text end

new text begin (c) All meeting notices must be posted on the board's Web site. All meetings of the
board and committees must be open to the public. The board must make available to
the public, on a regular basis through electronic means and open meetings, information
regarding the activities of the board, information regarding membership and, on request,
minutes of formal meetings of the board.
new text end

new text begin (d) For the purpose of conducting business before the board at a duly called meeting, a
simple majority of the voting members, excluding any vacancies, shall constitute a quorum.
new text end

new text begin Subd. 4. new text end

new text begin Bylaws. new text end

new text begin The board must adopt bylaws to govern the operation of the
board consistent with this section. The bylaws must provide for the establishment of an
executive committee comprised of voting members of the board.
new text end

new text begin Subd. 5. new text end

new text begin Executive committee duties. new text end

new text begin The executive committee must, in
cooperation with the operations committee and with advice and input of local workforce
boards and other stakeholders as appropriate, develop performance standards for the state
workforce centers. By February 1, 2017, and each odd-numbered year thereafter, the
executive committee shall submit a report to the chairs and ranking minority members of
the committees in the senate and house of representatives with jurisdiction over workforce
development programs regarding the performance and outcomes of the workforce centers.
The report must provide recommendations regarding workforce center funding levels and
sources, program changes, and administrative changes. The report must include draft
legislation to implement the executive committee recommendations.
new text end

new text begin Subd. 6. new text end

new text begin Staffing. new text end

new text begin The commissioner of employment and economic development
must provide staff to the board necessary to carry out the duties of the board. At the
request of the board, other state departments and agencies must provide the board with the
assistance it requires to fulfill its duties and responsibilities.
new text end

new text begin Subd. 7. new text end

new text begin Funding. new text end

new text begin The commissioner of employment and economic development
must provide at least $350,000 each fiscal year from existing agency resources to the
board for staffing and administrative expenses.
new text end

Sec. 2. new text begin INITIAL APPOINTMENTS AND FIRST MEETING OF THE
WORKFORCE DEVELOPMENT BOARD.
new text end

new text begin The appointing authorities must make initial appointments to the Workforce
Development Board under Minnesota Statutes, section 116L.6651, by August 1, 2016,
and the chair must convene the first meeting of the board by September 1, 2016. The
governor must specify those members that will serve terms coterminous with the
governor as follows: 13 of the public members appointed under Minnesota Statutes,
section 116L.6651, subdivision 2, paragraph (c), clause (4); seven of the public members
appointed under Minnesota Statutes, section 116L.6651, subdivision 2, paragraph (c),
clause (6); and seven of the nonvoting members appointed under Minnesota Statutes,
section 116L.6651, subdivision 2, paragraph (d). Notwithstanding Minnesota Statutes,
section 116L.6651, subdivision 2, paragraph (a), initial appointees who serve terms
coterminous with the governor will serve a first term that ends the first Monday in January
2023; the remaining initial public members appointed under subdivision 2, paragraph (c),
clauses (4) and (6), and subdivision 2, paragraph (d), serve a first term that ends the first
Monday in January 2024.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 116L.665, new text end new text begin is repealed.
new text end