Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

                            CHAPTER 380-S.F.No. 3431 
                  An act relating to economic development; regulating 
                  eligibility for unemployment compensation benefits; 
                  providing for a special assessment for interest on 
                  federal loans; providing for extended unemployment 
                  compensation benefits; providing for unemployment 
                  insurance taxes; providing extra benefits for airline 
                  industry, Fingerhut Companies, Inc., and Farmland 
                  Foods Company; appropriating certain federal funds for 
                  unemployment administration; providing for workforce 
                  development fund transfers; making housekeeping 
                  changes related to the department of trade and 
                  economic development; repealing certain authority 
                  given to city of Chisago relating to annexation 
                  arguments; prohibiting employers from charging certain 
                  expenses to employees; regulating redevelopment 
                  grants; allowing foster parents to take certain 
                  leaves; providing certain youth employment to 
                  construct early childhood program facilities; 
                  reinstating a repealed law; providing unemployment 
                  benefits to certain employees doing food service 
                  contract work for school districts; requiring a study 
                  on unemployment trust fund solvency by the 
                  unemployment insurance advisory council; amending 
                  Minnesota Statutes 2000, sections 48.24, subdivision 
                  5; 116J.565, subdivision 1; 116J.58, subdivision 1; 
                  116J.9665, subdivisions 1, 4, 6; 116M.14, subdivision 
                  4; 116M.18, subdivisions 2, 3, 4, 4a, 5, 8, by adding 
                  a subdivision; 119A.45; 181.9412, by adding a 
                  subdivision; 268.051, subdivision 8; 270B.14, 
                  subdivision 8; 298.22, subdivision 7, by adding a 
                  subdivision; 446A.07, subdivision 4; 446A.12, 
                  subdivision 1; Minnesota Statutes 2001 Supplement, 
                  section 116L.17, subdivision 5; Laws 2001, First 
                  Special Session chapter 4, article 1, section 2, 
                  subdivision 5; proposing coding for new law in 
                  Minnesota Statutes, chapter 181; repealing Minnesota 
                  Statutes 2000, sections 116J.9672; 116J.9673; Laws 
                  2001, First Special Session chapter 5, article 3, 
                  section 88. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                             UNEMPLOYMENT INSURANCE 
           Section 1.  Minnesota Statutes 2000, section 268.051, 
        subdivision 8, is amended to read: 
           Subd. 8.  [SOLVENCY SPECIAL ASSESSMENT FOR INTEREST ON 
        FEDERAL LOAN.] (a) If the fund balance is less than $150,000,000 
        on June 30 October 31 of any year, the commissioner, in 
        consultation with the commissioner of finance, determines that 
        an interest payment will be due during the following calendar 
        year on any loan from the federal unemployment trust fund under 
        section 268.194, subdivision 6, a solvency special assessment on 
        taxpaying employers will be in effect for the following calendar 
        year.  The taxpaying employer shall pay quarterly a solvency The 
        legislature authorizes the commissioner, in consultation with 
        the commissioner of finance, to determine the appropriate level 
        of the assessment, of ten from two percent to eight percent of 
        the quarterly unemployment taxes due, that will be necessary to 
        pay the interest due on the loan. 
           (b) The solvency special assessment shall be placed into a 
        special account from which the commissioner shall pay any 
        interest accruing that has accrued on any loan from the federal 
        unemployment trust fund provided for under section 268.194, 
        subdivision 6.  If, at the end of each calendar quarter, the 
        commissioner, in consultation with the commissioner of finance, 
        determines that the balance in this special account, including 
        interest earned on the special account, is more than is 
        necessary to pay the interest which has accrued on any loan as 
        of that date, or will accrue over the following calendar 
        quarter, the commissioner shall immediately pay to the fund the 
        amount in excess of that necessary to pay the interest on any 
        loan. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2000, section 270B.14, 
        subdivision 8, is amended to read: 
           Subd. 8.  [EXCHANGE BETWEEN DEPARTMENTS OF LABOR AND 
        INDUSTRY AND REVENUE.] The departments of labor and industry and 
        revenue may exchange information as follows:  
           (1) data used in determining whether a business is an 
        employer or a contracting agent; 
           (2) taxpayer identity information relating to employers and 
        employees for purposes of supporting tax administration and 
        chapter chapters 176, 177, and 181; and 
           (3) data to the extent provided in and for the purpose set 
        out in section 176.181, subdivision 8. 
           Sec. 3.  [UNEMPLOYMENT INSURANCE; FOOD SERVICES.] 
           Notwithstanding the provisions of Minnesota Statutes, 
        section 268.085, subdivision 8, wage credits from an employer 
        are not subject to the provisions of Minnesota Statutes, section 
        268.085, subdivision 7, if those wage credits were earned by an 
        employee of a private employer performing work pursuant to a 
        contract between the employer and an elementary or secondary 
        school and the employment was related to food services provided 
        to the school by the employer.  This section expires December 
        31, 2004. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  [2003 UNEMPLOYMENT INSURANCE BASE TAX RATE.] 
           Notwithstanding Minnesota Statutes, section 268.051, 
        subdivision 2, and Laws 2001, First Special Session chapter 2, 
        article 2, section 32, subdivision 2, the unemployment insurance 
        base tax rate for employers is 0.38 percent for calendar year 
        2003. 
           Sec. 5.  [EXTRA UNEMPLOYMENT BENEFITS.] 
           Subdivision 1.  [AVAILABILITY.] Extra unemployment benefits 
        are available to an applicant who was permanently laid off due 
        to lack of work if: 
           (1) the applicant was laid off from the Farmland Foods 
        Company in Freeborn county on or after July 8, 2001; 
           (2) the applicant was laid off by Fingerhut Companies, 
        Incorporated on or after January 1, 2002, and worked at one of 
        that employer's facilities in the St. Cloud, Eveleth, or Mora 
        areas; or 
           (3) the applicant was laid off by Northwest Airlines, Sun 
        Country Airlines, Mesaba Airlines, United Airlines, LSG Sky 
        Chefs, Air Wisconsin, American Airlines, American TransAir, 
        Champion Air, Chautauqua Airlines, Continental Airlines, Emery 
        Worldwide Air, Great Lakes Airlines, PanAm International, Skyway 
        Airlines, or U.S. Airways on or after September 11, 2001, and 
        before June 1, 2002.  
           Subd. 2.  [PAYMENT FROM FUND; EFFECT ON EMPLOYER.] Extra 
        benefits under this section are payable from the fund. 
           Subd. 3.  [ELIGIBILITY CONDITIONS.] An applicant described 
        in subdivision 1 is eligible to collect benefits for any week 
        through December 31, 2003, if: 
           (1) a majority of the applicant's wage credits were with 
        the employer responsible for the layoff described in subdivision 
        1; 
           (2) the applicant meets the eligibility requirements of 
        Minnesota Statutes, section 268.085; 
           (3) the applicant is not subject to a disqualification 
        under Minnesota Statutes, section 268.095; 
           (4) the applicant is not entitled to any regular, 
        additional, or extended unemployment benefits for that week and 
        the applicant is not entitled to receive unemployment benefits 
        under any other state or federal law or the law of Canada for 
        that week; and 
           (5) the applicant is enrolled in, or has within the last 
        two weeks successfully completed, a program that qualifies as 
        reemployment assistance training under the state dislocated 
        worker program, except that an applicant whose training is 
        scheduled to begin in more than 30 days may be considered to be 
        in training if:  
           (i) the applicant's chosen training program does not offer 
        an available start date within 30 days; 
           (ii) the applicant is scheduled to begin training on the 
        earliest available start date for the chosen training program; 
        and 
           (iii) the applicant is scheduled to begin training in no 
        more than 60 days. 
           If an applicant qualifies for a new regular benefit account 
        at any time after exhausting regular unemployment benefits as a 
        result of the layoff under subdivision 1, the applicant must 
        apply for and exhaust entitlement to those new regular or any 
        other type of unemployment benefits under any state or federal 
        law. 
           Subd. 4.  [WEEKLY AMOUNT OF EXTRA BENEFITS.] The weekly 
        unemployment extra benefits amount available to an applicant 
        under this section is the same as the applicant's regular weekly 
        benefit amount on the benefit account established as a result of 
        the layoff under subdivision 1. 
           Subd. 5.  [MAXIMUM AMOUNT OF EXTRA UNEMPLOYMENT 
        BENEFITS.] The maximum amount of extra unemployment benefits 
        available is 13 times the applicant's weekly extra unemployment 
        benefit amount. 
           Subd. 6.  [PROGRAM EXPIRATION.] This extra unemployment 
        benefit program expires December 31, 2003.  No extra 
        unemployment benefits shall be paid under this section after the 
        expiration of this program. 
           Subd. 7.  [EFFECTIVE DATE.] This section is effective the 
        day following final enactment and is effective retroactive to 
        June 1, 2001. 
           Sec. 6.  [FINDINGS.] 
           The legislature finds that the extra benefits provided to 
        workers in this act are appropriate because the affected 
        employees or their employers meet one of the following criteria: 
           (a) Benefit extensions may be appropriate where: 
           (1) taking into consideration the effect of the layoff 
        affecting the applicant, the unemployment rate in the 
        applicant's county of employment is higher than the statewide 
        average rate of unemployment; 
           (2) the employer involved in the layoff has permanently 
        ceased operations at the location where the employee worked; 
           (3) the community or communities in which the employees 
        worked is disproportionately affected by the layoff; and 
           (4) the community or communities in which the affected 
        employees live is in a remote location where opportunities for 
        reemployment are limited. 
           (b) Benefit extensions may be appropriate in some cases 
        where the affected employees were part of layoffs that resulted 
        from an act of war or terrorism. 
           Sec. 7.  [PAYMENT OF SPECIAL STATE TEMPORARY EXTENDED 
        UNEMPLOYMENT BENEFITS.] 
           Subdivision 1.  [ELIGIBILITY.] Special state temporary 
        extended unemployment benefits shall be paid to an applicant who 
        does not qualify for unemployment benefits under the federal 
        Temporary Extended Unemployment Compensation Act of 2002 because 
        the applicant does not meet the requirement under section 
        202(d)(2)(A) of that act.  Special state extended unemployment 
        benefits shall be paid to individuals who have established a 
        benefit account effective on or after March 19, 2000, under the 
        same terms and conditions as apply to federal temporary extended 
        unemployment compensation.  An applicant may not receive more 
        than a combined total of 13 times the applicant's weekly benefit 
        amount available under the federal Temporary Extended 
        Unemployment Compensation Act and this section. 
           Subd. 2.  [PAYMENT FROM THE FUND; EFFECT ON 
        EMPLOYER.] Special state temporary extended unemployment 
        benefits shall be paid from the Minnesota unemployment insurance 
        program trust fund.  Special state temporary extended 
        unemployment benefits paid shall not be used in computing the 
        future unemployment tax rate of a taxpaying employer nor charged 
        to the reimbursing account of a government or nonprofit employer.
           Subd. 3.  [EXPIRATION.] This program expires December 28, 
        2002.  No payments under this section shall be paid for any week 
        after the expiration date. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and is retroactive to March 10, 2002. 
           Sec. 8.  [ADVISORY COUNCIL REPORT TRUST FUND SOLVENCY.] 
           The unemployment insurance advisory council shall present 
        to the legislature, by January 15, 2003, a report, including 
        proposals for any legislation, on the long-term solvency of the 
        Minnesota unemployment insurance program trust fund. 
           Sec. 9.  [REED ACT FEDERAL FUNDS APPROPRIATION.] 
           $12,000,000 of the approximately $163,000,000 of federal 
        "Reed Act" money transferred to the state of Minnesota on March 
        13, 2002, pursuant to section 209 of the Temporary Extended 
        Unemployment Compensation Act of 2002, is appropriated from the 
        unemployment insurance program trust fund to the commissioner of 
        economic security for unemployment insurance program 
        administration.  The amount appropriated must be transferred to 
        the appropriate account used to pay unemployment insurance 
        program administration costs.  
           [EFFECTIVE DATE.] This section is effective July 1, 2002.  
           Sec. 10.  [WORKFORCE DEVELOPMENT FUND TRANSFERS.] 
           Notwithstanding Laws 2001, First Special Session chapter 4, 
        article 2, sections 31 and 32, the amount actually collected in 
        calendar years 2002 and 2003, to a maximum of $12,000,000, net 
        of collection costs, and otherwise required to be deposited in 
        the unemployment insurance technology initiative account by 
        those sections shall be deposited into the workforce development 
        fund created under Minnesota Statutes, section 268.022.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment and retroactive to January 1, 2002. 
           Sec. 11.  [TRANSFERS.] 
           (a) On or before July 15, 2002, the commissioner of finance 
        shall transfer $89,000 from the general fund to the workforce 
        development fund. 
           (b) After July 16, 2002, but on or before July 15, 2003, 
        the commissioner of finance shall transfer $1,069,000 from the 
        general fund to the workforce development fund. 
           (c) After July 16, 2003, but on or before July 15, 2004, 
        the commissioner of finance shall transfer $1,069,000 from the 
        general fund to the workforce development fund. 

                                   ARTICLE 2 
                         TRADE AND ECONOMIC DEVELOPMENT 
           Section 1.  Minnesota Statutes 2000, section 48.24, 
        subdivision 5, is amended to read: 
           Subd. 5.  Loans or obligations shall not be subject under 
        this section to any limitation based upon such capital and 
        surplus to the extent that they are secured or covered by 
        guarantees, or by commitments or agreements to take over or to 
        purchase the same, made by: 
           (1) the commissioner of agriculture on the purchase of 
        agricultural land; 
           (2) any Federal Reserve bank; 
           (3) the United States or any department, bureau, board, 
        commission, or establishment of the United States, including any 
        corporation wholly owned directly or indirectly by the United 
        States; 
           (4) the Minnesota energy and economic development 
        authority; or 
           (5) the Minnesota export finance authority; or 
           (6) a municipality or political subdivision within 
        Minnesota to the extent that the guarantee or collateral is a 
        valid and enforceable general obligation of that political body. 
           Sec. 2.  Minnesota Statutes 2000, section 116J.58, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ENUMERATION.] The commissioner shall: 
           (1) investigate, study, and undertake ways and means of 
        promoting and encouraging the prosperous development and 
        protection of the legitimate interest and welfare of Minnesota 
        business, industry, and commerce, within and outside the state; 
           (2) locate markets for manufacturers and processors and aid 
        merchants in locating and contacting markets; 
           (3) investigate and study conditions affecting Minnesota 
        business, industry, and commerce and collect and disseminate 
        information, and engage in technical studies, scientific 
        investigations, and statistical research and educational 
        activities necessary or useful for the proper execution of the 
        powers and duties of the commissioner in promoting and 
        developing Minnesota business, industry, and commerce, both 
        within and outside the state; 
           (4) plan and develop an effective business information 
        service both for the direct assistance of business and industry 
        of the state and for the encouragement of business and industry 
        outside the state to use economic facilities within the state; 
           (5) compile, collect, and develop periodically, or 
        otherwise make available, information relating to current 
        business conditions; 
           (6) conduct or encourage research designed to further new 
        and more extensive uses of the natural and other resources of 
        the state and designed to develop new products and industrial 
        processes; 
           (7) study trends and developments in the industries of the 
        state and analyze the reasons underlying the trends; study costs 
        and other factors affecting successful operation of businesses 
        within the state; and make recommendations regarding 
        circumstances promoting or hampering business and industrial 
        development; 
           (8) serve as a clearing house for business and industrial 
        problems of the state; and advise small business enterprises 
        regarding improved methods of accounting and bookkeeping; 
           (9) cooperate with interstate commissions engaged in 
        formulating and promoting the adoption of interstate compacts 
        and agreements helpful to business, industry, and commerce; 
           (10) cooperate with other state departments, and with 
        boards, commissions, and other state agencies, in the 
        preparation and coordination of plans and policies for the 
        development of the state and for the use and conservation of its 
        resources insofar as the use, conservation, and development may 
        be appropriately directed or influenced by a state agency; 
           (11) assemble and coordinate information relative to the 
        status, scope, cost, and employment possibilities and the 
        availability of materials, equipment, and labor in connection 
        with public works projects, state, county, and municipal; 
        recommend limitations on the public works; gather current 
        progress information with reference to public and private works 
        projects of the state and its political subdivisions with 
        reference to conditions of employment; inquire into and report 
        to the governor, when requested by the governor, with respect to 
        any program of public state improvements and the financing 
        thereof; and request and obtain information from other state 
        departments or agencies as may be needed properly to report 
        thereon; 
           (12) study changes in population and current trends and 
        prepare plans and suggest policies for the development and 
        conservation of the resources of the state; 
           (13) confer and cooperate with the executive, legislative, 
        or planning authorities of the United States and neighboring 
        states and provinces and of the counties and municipalities of 
        such neighboring states, for the purpose of bringing about a 
        coordination between the development of such neighboring 
        provinces, states, counties, and municipalities and the 
        development of this state; 
           (14) generally, gather, compile, and make available 
        statistical information relating to business, trade, commerce, 
        industry, transportation, communication, natural resources, and 
        other like subjects in this state, with authority to call upon 
        other departments of the state for statistical data and results 
        obtained by them and to arrange and compile that statistical 
        information in a manner that seems wise; 
           (15) prepare an annual report to the legislature estimating 
        and, to the extent possible, describing the number of Minnesota 
        companies which have left the state or moved to surrounding 
        states or other countries.  The report should include an 
        estimate of the number of jobs lost by these moves, an estimate 
        of the total employment payroll, average hourly wage of those 
        jobs lost and those created in the new location, and to the 
        extent possible, the reasons for each company moving out of 
        state, if known; 
           (16) publish documents and annually convene regional 
        meetings to inform businesses, local government units, 
        assistance providers, and other interested persons of changes in 
        state and federal law related to economic development; 
           (17) (16) annually convene conferences of providers of 
        economic development related financial and technical assistance 
        for the purposes of exchanging information on economic 
        development assistance, coordinating economic development 
        activities, and formulating economic development strategies; 
           (18) (17) provide business with information on the economic 
        benefits of energy conservation and on the availability of 
        energy conservation assistance; and 
           (19) (18) prepare, as part of biennial budget process, 
        performance measures for each business loan or grant program 
        within the jurisdiction of the commissioner.  Measures would 
        include source of funds for each program, numbers of jobs 
        proposed or promised at the time of application and the number 
        of jobs created, estimated number of jobs retained, the average 
        salary and benefits for the jobs resulting from the program, and 
        the number of projects approved. 
           Sec. 3.  Minnesota Statutes 2000, section 116J.9665, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this 
        section, the following terms have the meanings given them: 
           (1) "Conference and service center" means the approximately 
        20,000 square feet of space on the third and fourth floors of 
        the Minnesota world trade center that the state of Minnesota has 
        the right to possess, occupy, and use subject to the terms and 
        conditions of the development agreement. 
           (2) "Development agreement" means the agreement entered 
        into by and between the world trade center board, as agent of 
        the state of Minnesota, and Oxford Development Minnesota, Inc. 
        dated July 27, 1984, and the amendments to that agreement, for 
        development and construction of a world trade center at a 
        designated site in Minnesota. 
           (3) (2) "Minnesota world trade center" means the facility 
        constructed in accordance with the development agreement or 
        other facilities meeting the membership requirements of the 
        World Trade Centers Association. 
           Sec. 4.  Minnesota Statutes 2000, section 116J.9665, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DUTIES.] The commissioner shall: 
           (1) promote and market the Minnesota world trade center and 
        membership in the World Trade Centers Association; 
           (2) sponsor conferences or other promotional events in the 
        conference and service center; 
           (3) sponsor, develop, and conduct educational programs 
        related to international trade; 
           (4) (3) establish and maintain an office in the Minnesota 
        world trade center; and 
           (5) (4) not duplicate programs or services provided by the 
        commissioner of agriculture. 
           Sec. 5.  Minnesota Statutes 2000, section 116J.9665, 
        subdivision 6, is amended to read: 
           Subd. 6.  [WORLD TRADE CENTER ACCOUNT.] The world trade 
        center account is in the special revenue fund.  All money 
        received from the use of the conference and service center or 
        appropriated under this section must be deposited in the 
        account.  Money in the account including interest earned is 
        appropriated to the commissioner and must be used exclusively 
        for the purposes of this section. 
           Sec. 6.  Minnesota Statutes 2001 Supplement, section 
        116L.17, subdivision 5, is amended to read: 
           Subd. 5.  [COST LIMITATIONS.] (a) Funds allocated to a 
        grantee are subject to the following cost limitations: 
           (1) no more than ten percent may be allocated for 
        administration; 
           (2) at least 50 percent must be allocated for training 
        assistance as provided in subdivision 4, clause (2); and 
           (3) no more than 15 percent may be allocated for support 
        services as provided in subdivision 4, clause (3). 
           (b) A waiver of the training assistance minimum in clause 
        (2) may be sought, but no waiver shall allow less than 30 
        percent of the grant to be spent on training assistance.  A 
        waiver of the support services maximum in clause (3) may be 
        sought, but no waiver shall allow more than 20 percent of the 
        grant to be spent on support services.  A waiver may be granted 
        below the minimum and above the maximum otherwise allowed by 
        this paragraph if funds other than state funds appropriated for 
        the dislocated worker program are used to fund training 
        assistance. 
           Sec. 7.  Minnesota Statutes 2000, section 116M.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [LOW-INCOME AREA.] "Low-income area" means 
        Minneapolis, St. Paul, and inner ring suburbs as defined by the 
        metropolitan council that had a median household income below 
        $31,000 as reported in the 1990 census those cities in the 
        metropolitan area as defined in section 473.121, subdivision 2, 
        that have an average income that is below 60 percent of the 
        median income for a four-person family as of the latest report 
        by the United States Census Bureau. 
           Sec. 8.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CHALLENGE GRANT ELIGIBILITY; NONPROFIT 
        CORPORATION.] The board may enter into agreements with nonprofit 
        corporations to fund and guarantee loans the nonprofit 
        corporation makes in low-income areas under subdivision 4.  A 
        corporation must demonstrate that:  
           (1) its board of directors includes citizens experienced in 
        development, minority business enterprises, and creating jobs in 
        low-income areas; 
           (2) it has the technical skills to analyze projects; 
           (3) it is familiar with other available public and private 
        funding sources and economic development programs; 
           (4) it can initiate and implement economic development 
        projects; 
           (5) it can establish and administer a revolving loan 
        account; and 
           (6) it can work with job referral networks which assist 
        minority and other persons in low-income areas. 
           Sec. 9.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 3, is amended to read: 
           Subd. 3.  [REVOLVING LOAN FUND.] (a) The board shall 
        establish a revolving loan fund to make grants to nonprofit 
        corporations for the purpose of making loans and loan guarantees 
        to new and expanding businesses in a low-income area to promote 
        minority business enterprises and job creation for minority and 
        other persons in low-income areas.  
           (b) Eligible business enterprises include, but are not 
        limited to, technologically innovative industries, value-added 
        manufacturing, and information industries.  Loan applications 
        given preliminary approval by the nonprofit corporation must be 
        forwarded to the board for approval.  The commissioner must give 
        final approval for each loan or loan guarantee made by the 
        nonprofit corporation.  The amount of a grant the state funds 
        contributed to any loan or loan guarantee may not exceed 50 
        percent of each loan.  The amount of nonstate money must equal 
        at least 50 percent for each loan. 
           Sec. 10.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BUSINESS LOAN CRITERIA.] (a) The criteria in 
        this subdivision apply to loans made or guaranteed by nonprofit 
        corporations under the urban challenge grant program.  
           (b) Loans or guarantees must be made to businesses that are 
        not likely to undertake a project for which loans are sought 
        without assistance from the urban challenge grant program.  
           (c) A loan or guarantee must be used for a project designed 
        to benefit persons in low-income areas through the creation of 
        job or business opportunities for them.  Priority must be given 
        for loans to the lowest income areas.  
           (d) The minimum state contribution to a loan or guarantee 
        is $5,000 and the maximum is $150,000. 
           (e) A loan The state contribution must be matched by at 
        least an equal amount of new private investment.  
           (f) A loan may not be used for a retail development project.
           (g) The business must agree to work with job referral 
        networks that focus on minority applicants from low-income areas.
           Sec. 11.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 4a, is amended to read: 
           Subd. 4a.  [MICROENTERPRISE LOAN.] Urban challenge grants 
        may be used to make microenterprise loans to small, beginning 
        businesses, including a sole proprietorship.  Microenterprise 
        loans are subject to this section except that: 
           (1) they may also be made to qualified retail businesses; 
           (2) they may be made for a minimum of $1,000 and a maximum 
        of $10,000 $25,000; and 
           (3) they do not require a match. 
           Sec. 12.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 5, is amended to read: 
           Subd. 5.  [REVOLVING FUND ADMINISTRATION; RULES.] (a) The 
        board shall establish a minimum interest rate for loans or 
        guarantees to ensure that necessary loan administration costs 
        are covered.  
           (b) Loan repayment amounts equal to one-half of the 
        principal and interest must be deposited in a revolving fund 
        created by the board for challenge grants.  The remaining amount 
        of the loan repayment may be deposited in a revolving loan fund 
        created by the nonprofit corporation originating the loan being 
        repaid for further distribution, consistent with the loan 
        criteria specified in subdivision 4.  
           (c) Administrative expenses of the board and nonprofit 
        corporations with whom the board enters into agreements under 
        subdivision 2, including expenses incurred by a nonprofit 
        corporation in providing financial, technical, managerial, and 
        marketing assistance to a business enterprise receiving a loan 
        under subdivision 4, may be paid out of the interest earned on 
        loans and out of interest earned on money invested by the state 
        board of investment under section 116M.16, subdivision 2, as may 
        be provided by the board.  
           Sec. 13.  Minnesota Statutes 2000, section 116M.18, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [NONPROFIT CORPORATION LOANS.] The board may 
        make loans to a nonprofit corporation with which it has entered 
        into an agreement under subdivision 1.  These loans must be used 
        to support a new or expanding business.  This support may 
        include such forms of financing as the sale of goods to the 
        business on installment or deferred payments, lease purchase 
        agreements, or royalty investments in the business.  The 
        nonprofit corporation must provide at least an equal match to 
        the loan received by the board.  The maximum loan available to 
        the nonprofit corporation under this subdivision is $50,000.  
        Loans made to the nonprofit corporation under this subdivision 
        may be made without interest.  Repayments made by the nonprofit 
        corporation must be deposited in the revolving fund created for 
        urban initiative grants. 
           Sec. 14.  Minnesota Statutes 2000, section 116M.18, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REPORTING REQUIREMENTS.] A nonprofit corporation 
        that receives a challenge grant shall:  
           (1) submit an annual report to the board by September 30 of 
        each year that includes a description of projects supported by 
        the urban challenge grant program, an account of loans made 
        during the calendar year, the program's impact on minority 
        business enterprises and job creation for minority persons and 
        persons in low-income areas, the source and amount of money 
        collected and distributed by the urban challenge grant program, 
        the program's assets and liabilities, and an explanation of 
        administrative expenses; and 
           (2) provide for an independent annual audit to be performed 
        in accordance with generally accepted accounting practices and 
        auditing standards and submit a copy of each annual audit report 
        to the board. 
           Sec. 15.  Minnesota Statutes 2000, section 298.22, 
        subdivision 7, is amended to read: 
           Subd. 7.  [GIANTS RIDGE RECREATION AREA PROJECT AREA 
        DEVELOPMENT AUTHORITY.] (a) In addition to the other powers 
        granted in this section and other law and notwithstanding any 
        limitations contained in subdivision 5, the commissioner, for 
        purposes of fostering economic development and tourism within 
        the Giants Ridge recreation area or the Ironworld Discovery 
        Center area, may spend any money made available to the agency 
        under section 298.28 to acquire real or personal property or 
        interests therein by gift, purchase, or lease and may convey by 
        lease, sale, or other means of conveyance or commitment any or 
        all of those property interests acquired owned or administered 
        by the commissioner within such areas.  
           (b) In furtherance of development of the Giants Ridge 
        recreation area or the Ironworld Discovery Center area, the 
        commissioner may establish and participate in charitable 
        foundations and nonprofit corporations, including a corporation 
        within the meaning of section 317A.011, subdivision 6. 
           (c) The term "Giants Ridge recreation area" refers to an 
        economic development project area established by the 
        commissioner in furtherance of the powers delegated in this 
        section within St. Louis county in the western portions of the 
        town of White and in the eastern portion of the westerly, 
        adjacent, unorganized township. 
           (d) The term "Ironworld Discovery Center area" refers to an 
        economic development and tourism promotion project area 
        established by the commissioner in furtherance of the powers 
        delegated in this section within St. Louis county in the south 
        portion of the town of Balkan. 
           Sec. 16.  Minnesota Statutes 2000, section 298.22, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [ECONOMIC DEVELOPMENT AND TRADE PROMOTION.] In 
        the promotion of tourism, trade, and economic development, the 
        commissioner may expend money made available to the agency under 
        section 298.28 in the same manner as private persons, firms, 
        corporations, and associations make expenditures for these 
        purposes.  An expenditure for food, lodging, or travel is not 
        governed by the travel rules of the commissioner of employee 
        relations. 
           Sec. 17.  Minnesota Statutes 2000, section 446A.07, 
        subdivision 4, is amended to read: 
           Subd. 4.  [INTENDED USE PLAN.] (a) The pollution control 
        agency public facilities authority shall annually prepare and 
        submit to the United States Environmental Protection Agency an 
        intended use plan.  The plan must identify the intended uses of 
        the amounts available to the water pollution control revolving 
        fund, including a list of wastewater treatment and storm water 
        projects and all other eligible activities to be funded during 
        the fiscal year.  Information regarding eligible activities must 
        be submitted to the pollution control agency by the appropriate 
        state agency or department within 30 days of written 
        notification by the pollution control agency.  
           (b) To be eligible for placement on the intended use plan: 
           (1) a project must be listed on the pollution control 
        agency's project priority list; 
           (2) the applicant must submit a written request to the 
        public facilities authority, including a brief description of 
        the project, a project cost estimate and the requested loan 
        amount, and a proposed project schedule; and 
           (3) for a construction loan, the project must have a 
        facility plan approved by the pollution control agency. 
           (c) The pollution control agency shall annually provide to 
        the public facilities authority its project priority list of 
        wastewater and storm water projects to be considered for funding.
        The pollution control agency public facilities authority may not 
        submit the plan until it has received the review and comment of 
        the authority pollution control agency or until 30 days have 
        elapsed since the plan was submitted to the authority pollution 
        control agency, whichever occurs first.  In addition, the public 
        facilities authority shall offer municipalities seeking 
        placement on the intended use plan an opportunity to review and 
        comment on the plan before it is adopted.  The plan may be 
        amended to add additional projects for consideration for funding 
        as it determines funds are available and additional projects are 
        able to proceed. 
           Sec. 18.  Minnesota Statutes 2000, section 446A.12, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [BONDING AUTHORITY.] The authority may 
        issue negotiable bonds in a principal amount that the authority 
        determines necessary to provide sufficient funds for achieving 
        its purposes, including the making of loans and purchase of 
        securities, the payment of interest on bonds of the authority, 
        the establishment of reserves to secure its bonds, the payment 
        of fees to a third party providing credit enhancement, and the 
        payment of all other expenditures of the authority incident to 
        and necessary or convenient to carry out its corporate purposes 
        and powers, but not including the making of grants.  Bonds of 
        the authority may be issued as bonds or notes or in any other 
        form authorized by law.  The principal amount of bonds issued 
        and outstanding under this section at any time may not exceed 
        $850,000,000 $1,000,000,000, excluding bonds for which refunding 
        bonds or crossover refunding bonds have been issued. 
           Sec. 19.  Laws 2001, First Special Session chapter 4, 
        article 1, section 2, subdivision 5, is amended to read: 
        Subd. 5.  Office of Tourism 
           10,219,000      10,111,000 
        To develop maximum private sector 
        involvement in tourism, $3,500,000 the 
        first year and $3,500,000 the second 
        year of the amounts appropriated for 
        marketing activities are contingent on 
        receipt of an equal contribution from 
        nonstate sources that have been 
        certified by the commissioner.  Up to 
        one-half of the match may be given in 
        in-kind contributions. 
        In order to maximize marketing grant 
        benefits, the commissioner must give 
        priority for joint venture marketing 
        grants to organizations with year-round 
        sustained tourism activities.  For 
        programs and projects submitted, the 
        commissioner must give priority to 
        those that encompass two or more areas 
        or that attract nonresident travelers 
        to the state. 
        If an appropriation for either year for 
        grants is not sufficient, the 
        appropriation for the other year is 
        available for it. 
        The commissioner may use grant dollars 
        or the value of in-kind services to 
        provide the state contribution for the 
        partnership program. 
        Any unexpended money from general fund 
        appropriations made under this 
        subdivision does not cancel but must be 
        placed in a special advertising account 
        for use by the office of tourism to 
        purchase additional media. 
        Of this amount, $50,000 the first year 
        is for a one-time grant to the 
        Mississippi River parkway commission to 
        support the increased promotion of 
        tourism along the Great River Road. 
        $829,000 the first year and $829,000 
        the second year are for the Minnesota 
        film board.  $329,000 of this 
        appropriation in each year is available 
        only upon receipt by the board of $1 in 
        matching contributions of money or 
        in-kind from nonstate sources for every 
        $3 provided by this appropriation.  Of 
        this amount, $500,000 the first year 
        and $500,000 the second year are for 
        grants to the Minnesota film board for 
        a film production jobs fund to 
        stimulate film production in 
        Minnesota.  This appropriation is to 
        reimburse film and television producers 
        for up to ten percent of the documented 
        wages and cost of services that they 
        paid to Minnesotans for film and 
        television production after January 1, 
        2001. 
        $150,000 the first year is for 
        partnerships with local tourism 
        interests to operate travel information 
        centers.  This is a one-time 
        appropriation.  This appropriation is 
        available until spent. 
           Sec. 20.  [REINSTATEMENT OF LAW.] 
           Notwithstanding its repeal by Laws 2001, First Special 
        Session chapter 4, article 2, section 41, Minnesota Statutes 
        2000, section 268.976, as amended by Laws 2001, chapter 175, 
        section 50, is revived. 
           Sec. 21.  [REPEALER.] 
           (a) Minnesota Statutes 2000, sections 116J.9672; and 
        116J.9673, are repealed. 
           (b) Laws 2001, First Special Session chapter 5, article 3, 
        section 88, is repealed. 
           [EFFECTIVE DATE.] Paragraph (b) is effective July 1, 2002. 

                                   ARTICLE 3 
                               BACKGROUND CHECKS 
           Section 1.  [181.645] [EXPENSES FOR BACKGROUND CHECKS, 
        TESTING, AND ORIENTATION.] 
           Except as provided by section 123B.03 or as otherwise 
        specifically provided by law, an employer, as defined in section 
        181.931, or a prospective employer may not require an employee 
        or prospective employee to pay for expenses incurred in criminal 
        or background checks, credit checks, or orientation.  An 
        employer or prospective employer may not require an employee or 
        prospective employee to pay for the expenses of training or 
        testing that is required by federal or state law or is required 
        by the employer for the employee to maintain the employee's 
        current position, unless the training or testing is required to 
        obtain or maintain a license, registration, or certification for 
        the employee or prospective employee.  

                                   ARTICLE 4 
                              REDEVELOPMENT GRANTS 
           Section 1.  Minnesota Statutes 2000, section 116J.565, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CHARACTERISTICS.] (a) If applications for 
        grants exceed the available appropriations, grants shall be made 
        for sites that, in the commissioner's judgment, provide the 
        highest return in public benefits for the public costs 
        incurred.  In making this judgment, the commissioner shall give 
        priority to redevelopment projects with one or more of the 
        following characteristics: 
           (1) the need for redevelopment in conjunction with 
        contamination remediation needs; 
           (2) the redevelopment project meets current tax increment 
        financing requirements for a redevelopment district and tax 
        increments will contribute to the project; 
           (3) the redevelopment potential within the municipality; 
           (4) proximity to public transit if located in the 
        metropolitan area; and 
           (5) multijurisdictional projects that take into account the 
        need for affordable housing, transportation, and environmental 
        impact. 
           (b) The factors in paragraph (a), clauses (1) to (5), are 
        not listed in a rank order of priority; rather the commissioner 
        may weigh each factor, depending upon the facts and 
        circumstances, as the commissioner considers appropriate.  The 
        commissioner may consider other factors that affect the net 
        return of public benefits for completion of the redevelopment 
        plan.  The commissioner, notwithstanding the listing of 
        priorities and the goal of maximizing the return of public 
        benefits, shall make grants that distribute available money to 
        sites both within and outside of the metropolitan area.  The 
        commissioner shall provide a written statement of the supporting 
        reasons for each grant.  Unless sufficient applications are not 
        received within the first nine months of a fiscal year for 
        qualifying sites outside of the metropolitan area, at least 25 
        50 percent of the money provided as grants in a fiscal year must 
        be made for sites located outside of the metropolitan area.  The 
        commissioner shall consult with the metropolitan council about 
        metropolitan area grants. 
           Sec. 2.  [BROWNFIELD SITE; ACQUISITION.] 
           Funds in the redevelopment accounts created in Minnesota 
        Statutes, section 116J.561, and allocated for sites within the 
        metropolitan area may be used for the purchase of a brownfield 
        site for a facility to house the department of military affairs' 
        training and community center. 

                                   ARTICLE 5
                      SCHOOL CONFERENCE AND ACTIVITY LEAVE
           Section 1.  Minnesota Statutes 2000, section 181.9412, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [FOSTER CHILD.] For the purpose of this section, 
        "child" includes a foster child. 

                                   ARTICLE 6  
                                YOUTH EMPLOYMENT 
           Section 1.  Minnesota Statutes 2000, section 119A.45, is 
        amended to read: 
           119A.45 [EARLY CHILDHOOD LEARNING AND CHILD PROTECTION 
        FACILITIES.] 
           The commissioner may make grants to state agencies and 
        political subdivisions to construct or rehabilitate facilities 
        for early childhood programs, with priority to centers in 
        counties or municipalities with the highest percentage of 
        children living in poverty.  The commissioner may also make 
        grants to state agencies and political subdivisions to construct 
        or rehabilitate facilities for crisis nurseries or parenting 
        time centers.  The facilities must be owned by the state or a 
        political subdivision, but may be leased under section 16A.695 
        to organizations that operate the programs.  The commissioner 
        must prescribe the terms and conditions of the leases.  A grant 
        for an individual facility must not exceed $200,000 for each 
        program that is housed in the facility, up to a maximum of 
        $500,000 for a facility that houses three programs or more.  
        Programs include Head Start, early childhood and family 
        education programs, and other early childhood intervention 
        programs.  The commissioner must give priority to grants that 
        involve collaboration among sponsors of programs under this 
        section and may give priority to projects that collaborate with 
        child care providers, including all-day and school-age child 
        care programs, special needs care, sick child care, 
        nontraditional hour care, and programs that include services to 
        refugee and immigrant families.  The commissioner may give 
        priority to grants for programs that will increase their child 
        care workers' wages as a result of the grant.  At least 25 
        percent of the amounts appropriated for these grants up to 
        $50,000 must If there is work that is appropriate for 
        youthbuild, as mutually agreed upon by the grantee and the local 
        youthbuild program, considering safety and skills needed, and if 
        it is demonstrated by youthbuild that using youthbuild will not 
        increase the overall cost of the project, then priority must be 
        given to grants for programs that utilize youthbuild under 
        sections 268.361 to 268.366 or other youth employment and 
        training programs for at least 25 percent of each grant awarded 
        or $50,000, whichever is less, of the labor portion of the 
        construction.  Eligible programs must consult with appropriate 
        labor organizations to deliver education and training.  State 
        appropriations must be matched on a 50 percent basis with 
        nonstate funds.  The matching requirement must apply programwide 
        and not to individual grants. 

                                   ARTICLE 7 
                       COMPETITIVE BIDDING FOR UTILITIES 
           Section 1.  [IDENTIFICATION AND EVALUATION; COMPETITIVE 
        BIDDING CRITERIA.] 
           The commissioner of commerce shall identify and evaluate 
        various criteria that could be used by a utility in evaluating 
        and selecting bids submitted in a competitive bidding process 
        established under Minnesota Statutes, section 216B.2422, 
        subdivision 5. 
           To assist in the evaluation, the commissioner shall convene 
        a series of forums at which input from citizens and stakeholders 
        can be solicited.  The commissioner shall present this 
        evaluation in a report to the house and senate policy and 
        finance committees with jurisdiction over energy regulatory 
        issues and agencies by January 15, 2003. 
           Presented to the governor May 17, 2002 
           Signed by the governor May 21, 2002, 3:05 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes