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:
Minnesota Statutes 2023 Supplement, section 116J.871, subdivision 1, is
amended to read:
(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 ordeleted 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 purposesnew 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 unitsnew 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.
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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
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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.
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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.
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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.
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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.
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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.
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(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 a