EDUCATION AND SCHOOLS
EMPLOYEE RIGHTS AND PRIVILEGES
GOVERNMENT EMPLOYEES
HEALTH CARE
INSURANCE
MILITARY PERSONNEL
OTHER IMPORTANT CHANGES
OTHER OCCUPATIONS AND PROFESSIONS
PENSIONS AND RETIREMENT
POLICE AND FIREFIGHTERS
TAX REFORM
UNEMPLOYMENT
WORKERS’ COMPENSATION

Education and Schools

Teaching Employment for Early Childhood Education Programs
S.F. No. 2796 amended Minn. Stat. § 124D.13, subd. 11, giving the Board of Teaching the authority to grant variances to the requirement that a school board must employ licensed teachers for its early childhood family education programs. This change was effective May 5, 2008.

New Requirements for Type III School Bus Drivers
Under S.F. No. 2988, drivers of type III school buses (passenger cars, vans, station wagons, small buses that seat 10 or fewer people) who are employees of the entity that owns, leases, or contracts for the school bus and who do not have a school bus endorsement must undergo annual training and certification in safe operation of the vehicle, understanding student behavior including student disabilities, encouraging orderly conduct, handling emergency situations, proper use of seat belts and child safety restraints, safe loading and unloading, and performance of pretrip vehicle inspections. Such drivers are also subject to background checks, drug and alcohol testing, annual driver’s license verification, and physical examination. They are disqualified for certain convictions, including some moving violations. Documentation meeting the requirements above must be maintained under separate file at the business location for each type III school bus operator and the bus itself must bear a current certificate of inspection. These requirements are effective September 1, 2008. Effective August 1, 2008, type III school bus drivers are also banned from using cell phones (whether hand-held or hands free) for personal reasons while driving.

Background Checks for Coaches and Teachers
Minn. Stat. § 123B.03, subd. 1, which already required background checks for those offered employment in a public school, was amended to make it clear that this includes coaches regardless of the terms of their compensation or service. At the beginning of each school year or when a student enrolls, a school hiring authority must notify parents/guardians about the criminal history background check policy and identify the positions subject to it. Notification can be accomplished through the student handbook, a school policy guide, or other similar communication, and is required beginning September 1, 2008.

Background checks are further modified by S.F. No. 2597, adding subd. 1a, which pertains to investigation of disciplinary actions taken against prospective teachers. School districts are now required to expand their background check of a prospective teacher to include contacting the Board of Teaching to determine whether the board has taken disciplinary action against the teacher due to sexual misconduct between the teacher and a student, even if the misconduct was not illegal. These changes are effective May 1, 2009.

School Board Conflicts of Interest
As of April 5, 2008, S.F. No. 2653 amended Minn. Stat. § 471.88, adding subd. 21, to establish a conflict of interest exception for certain contracts requiring school board approval. That is, a local school board can contract with a class of school district employees where the spouse of a school board member is a part of the class only if the spouse receives no special benefit as compared to the class, a majority of disinterested school board members vote to approve the contract, the spouse abstains, and the essential facts of the contract are shared with the public.

Minnesota School Employee Insurance Pool Veto
Governor Pawlenty vetoed H.F. No. 1875, which would have created the Minnesota School Employee Insurance Pool.


Employee Rights and Privileges

Payroll Card Accounts
S.F. No. 2830 removed the sunset provision of Minn. Stat. § 177.255. This section, originally passed in 2005, allows an employee to voluntarily receive wages by electronic fund transfer to a payroll card. This program has now become permanent.

Minnesota Human Rights Act
S.F. No. 2915 amends the Minnesota Human Rights Act to increase the punitive damage cap from $8,500 to $25,000 effective August 1, 2008. One sentence is added to make it clear that “Nothing in this section limits the power of the state to punish any person for conduct which constitutes a crime under any other statute.”

Paid Leave for Blood Donation
H.F. No. 3494 adds Minn. Stat. § 43A.187 providing that a state employee must be granted up to three hours of paid leave from work (in a 12-month period) to donate blood at a location away from his place of work. State employees seeking leave under this section must provide 14 days’ notice to the appointing authority. Minn. Stat. § 181.9458 is also added authorizing employers to grant paid leave from work to an employee to allow the employee to donate blood. This requirement applies beginning August 1, 2008.

Collective Bargaining Agreements
H.F. No. 3722 added Minn. Stat. § 181.985, which asserts that Minn. Stat. § 179A shall not prohibit a collective bargaining agreement from including provisions related to “workplace communications.” Such communications mean any printed or electronic document, letter, brochure, flyer, advertisement, e-mail, text message, or similar means pertaining to union business or labor organizing as provided under state law. This was effective as of May 13, 2008.

Minimum Wage Increase Veto
Governor Pawlenty vetoed S.F. No. 875, which would have amended Minn. Stat. § 177.24 to increase the minimum wage for larger employers (those with gross annual sales volume or business done not less than $625,000) to $6.75 per hour effective July 24, 2008, and $7.75 per hour effective July 24, 2009. The minimum wage for small employers (those with gross annual sales volume or business done less than $625,000) would have increased to $5.75 per hour effective July 24, 2008, and $6.75 per hour effective July 24, 2009.

Expansion of Sick Leave Benefits Veto
Governor Pawlenty vetoed S.F. No. 1128, which would have amended Minn. Stat. § 181.9413 to extend required personal sick leave benefits for all employees, including city employees, to include care for any employee’s adult child, spouse, sibling, parent, grandparent, or stepparent for reasonable period of time.


Government Employees

State Government Emergency Management Training
H.F. No. 3099 amends Minn. Stat. § 12.09, adding subd. 10, to require that emergency management training be completed by at least one employee for each state agency assigned as a disaster or emergency response organization and available to all state employees whose essential job duties involve emergency management. If not in compliance, the agency must file a plan detailing how and when it will comply. The commissioner of public safety is responsible for reporting on agencies’ compliance status beginning September 1, 2008 and on January 15 of each subsequent year.

Compensation Plan for Employees of the Legislative Auditor
Effective January 1, 2009, H.F. No. 3138 amends Minn. Stat. § 3.855, subd. 3, to require the Legislative Coordinating Commission to “review and approve, reject, or modify the plan for compensation, terms, and conditions of employment of classified employees in the office of the legislative auditor…”

Ratification of State Labor Contracts
H.F. No. 3138 ratified labor agreements approved by the Legislative Coordinating Commission Subcommittee on Employee Relations between the state of Minnesota and: (1) the American Federation of State, County, and Municipal Employees Council 5, Council 5/Unit 8, and Council 5/Unit 225; (2) the Minnesota Association of Professional Employees; (3) the State Residential Schools Education Association; (4) the Minnesota Government Engineers Council; (5) the Middle Management Association; (6) the Minnesota Law Enforcement Association; (7) the Inter Faculty Organization; and (8) the Minnesota State College Faculty. It also ratified a salary administration plan with the Minnesota State Board of Investment, the commissioner of employee relations’ plan for unrepresented employees, the managerial plan, a personnel plan for Minnesota State College and University administrators, and a compensation plan for unrepresented employees of the Office of Higher Education.

Transfer of Employee Relations Duties
S.F. No. 3202 transfers the duties of the Commissioner and Department of Employee Relations to the Commissioner and Department of Finance and the Commissioner of Administration effective August 1, 2008.

Community-based Program Employees
Effective August 1, 2008, S.F. No. 3571 amends Minn. Stat. § 252.50, subd. 1, to allow nonstate employees to work for community-based programs for persons with developmental disabilities if they are also clients benefitting from the programs.

Conflict of Interest Rules for Local Economic Development Authorities
S.F. No. 2806 amends Minn. Stat. § 469.098 such that, prior to taking action that might affect personal financial interests, an employee of a local economic development authority must submit a written disclosure statement within one week after a conflict arises. No disclosure is necessary if the affect on the employee is no different than on any other member of the business, profession, or occupation impacted. Employees with potential conflicts must be reassigned and conflicted commissioners must not attempt to influence or take part in the decision making. Breach of these provisions became punishable as a criminal misdemeanor as of June 1, 2008.

Expansion of Group Benefits for Local Government Employees Veto
Governor Pawlenty vetoed S.F. No. 960, which would have amended Minn. Stat. § 471.61, subd. 1a, to modify the definition of “dependent” for purposes of group benefits for local government officers and employees to include not just minor unmarried children but any unmarried children under 25 years of age and others as defined by governmental units at their discretion.

State Employee Whistleblower Protection
S.F. No. 3363 amends Minn. Stat. § 181.932, subd. 1, to provide greater whistleblower protection to state employees.


Health Care

Hospital Record Transfers
S.F. No. 3263 amended Minn. Stat. § 145.30. Hospital records may now be transferred to electronic image or other state-of-the-art electronic preservation technology and be used as evidence effective April 25, 2008. Minn. Stat. § 145.32, subd. 1, was amended to allow the chief administrative officer of any public or private hospital, with approval from the hospital’s governing body and first having transferred and recorded the records as authorized under § 145.30, to divest and destroy individual case records.

Personal Care Assistants
S.F. No. 3227 amends Minn. Stat. § 144.6503 to change the staff and supervisor training requirements in dementia care beginning August 1, 2008. They will no longer apply to all facilities that market or otherwise promote services for Alzheimer’s disease or related disorders but only to those that actually serve such patients. S.F. No. 3227 also amends Minn. Stat. § 144A.46, subd. 1, to require the commissioners of health and human services to recommend provider standards for personal care assistant services by February 15, 2009. A person or organization that offers, provides, or arranges for personal care assistant services under medical assistance need not obtain a home care provider license until such standards are implemented.

Unlicensed Complimentary and Alternative Health Care Practitioners
H.F. No. 3708 amends Minn. Stat. § 146A.08, subd. 1. Engaging in sexual contact with a former client or continuing a professional relationship with a client in which one’s objectivity would be impaired is no longer prohibited behavior for unlicensed complementary and alternative health care practitioners. H.F. No. 3708 also amends Minn. Stat. § 146A.11, subd. 1, to exempt practitioners employed by or volunteering in an inpatient hospital or under an appropriate hospice plan of care from disseminating the complementary and alternative health care client bill of rights. Clients served in such settings should be informed of their right to file a complaint by the hospital or hospice provider. These changes are effective on August 1, 2008.

H.F. No. 3708 also amended Minn. Stat. §§ 147.03 (endorsement and reciprocity) and 147.037 (general requirements). After April 11, 2008, applicants not meeting the examination requirements under § 147.02 due to failure to pass each of steps one, two, and three of the USMLE within the required three attempts are allowed to instead pass the three steps within no more than four attempts for each, hold current licensure in another state, and be certified by a specialty board.

H.F. No. 3708 amends various other health provisions relating to permanent and temporary licensure of speech-language pathologists and audiologists, surcharge and penalty fees for speech-language pathology and audiology, and physical agent modalities used by occupational therapists, among other things.

Health Occupations and Physical Therapists
S.F. No. 1018 amends Minn. Stat. § 148.65 to define “licensed health care professional” or “licensed health care provider” as a provider in good standing in Minnesota to practice medicine, osteopathy, chiropractic, podiatry, dentistry, or advanced practice nursing. It also amends the provisions relating to disciplinary action that can be taken against physical therapists. It extends from 30 to 90 days the initial period of patient admittance after which a therapist can no longer treat human ailments by physical therapy without the order or referral of other professionals. This 90-day limitation does not apply to prevention, wellness, education, or exercise. Finally, the bill repeals certain health related definitions and physical therapy reporting requirements under Minn. R. 5601.0100 and 5601.1200.

Ambulance Chasing
S.F. No. 2765 amends Minn. Stat. § 65B.54 to add subd. 6 regarding unethical practices. Effective August 1, 2008, licensed health care providers are prohibited from initiating direct contact with automobile accident victims for the purpose of influencing them to receive treatment or purchase goods from the licensee or his associates. Direct contact includes in person, telephone, or electronic means as well as any contact initiated by an employee, independent contractor, agent, or third party. The provisions specifically condone direct mail so long as the word “ADVERTISEMENT,” the licensee’s name, and the fact that he is a licensed health care provider are all clearly displayed in designated areas and no direct follow-up contact is initiated. The provisions do not apply to various forms of public media or general marketing nor to social contact with friends or relatives. They also do not apply to licensees having a prior professional relationship with the injured party, the patient’s primary care provider, or any current treating provider or member of the emergency services team. Violation of this subdivision is grounds for disciplinary action against the licensee up to and including revocation.

Ambulance Staffing
Effective August 1, 2008, S.F. No. 2377 amends Minn. Stat. § 144E.101, subd. 6, to require a minimum of two EMTs to staff a basic life support ambulance; one must accompany the patient. Upon showing of undue hardship, one EMT and one first responder driver are allowed to staff emergency calls and interfacility transfers. Further hardship exceptions apply to ambulance services with primary service areas outside of the metropolitan counties of Duluth, Mankato, Moorhead, Rochester, and St. Cloud, and in communities with less than 1,000 people. Similar provisions are outlined for advanced life support ambulance services.

Optometrists
S.F. No. 2837 alters the definition of practicing optometry under Minn. Stat. § 148.56. Those who merely display a sign such as an eye, a pair of eyes, or a pair of glasses or spectacles no longer practice optometry. Those who prescribe or administer legend drugs to aid in the diagnosis, cure, mitigation, prevention, treatment, or management of disease, deficiency, deformity, or abnormality of the human eye and adnexa included in the curricula of accredited schools or colleges of optometry do practice optometry. Practicing optometrists are prohibited from administering legend drugs intravenously, intramuscularly, or by injection (except to treat anaphylaxis), administering schedule II and III oral legend drugs or oral steroids, performing invasive surgery, or prescribing oral antivirals or oral carbonic anhydrase inhibitors for more than 10 or 7 days, respectively.

With respect to educational requirements, S.F. No. 2837 replaces reciprocity with endorsement. An applicant for licensure via endorsement must provide evidence of: (1) a clinical doctorate degree from a board-approved school or college of optometry; (2) successful completion of both written and practical licensure examinations in the applicant’s original state of licensure that thoroughly tested fitness to practice; (3) successful completion of an examination of Minnesota state optometry laws; (4) compliance with the requirements for board certification in § 148.575; (5) compliance with all continuing education required for license renewal in every state in which the applicant currently holds an active license to practice; and (6) good standing with every state board from which a license has been issued. The license fee is set at $87.

S.F. No. 2837 also amends Minn. Stat. § 148.573, subd. 1, removing CPR certification and an emergency plan for the management of adverse reactions from the requirements necessary to obtain a topical ocular drug certificate. Finally, the chapter repeals Minn. R. 6500.2100 relating to reciprocity. All of the above changes are effective August 1, 2008.

Oral Health Practitioners
S.F. No. 2942 adds Minn. Stat. § 150A.061 establishing the classification of “oral health practitioner.” Such a person must be licensed by the Board of Dentistry, working under the supervision of a Minnesota-licensed dentist pursuant to a written collaborative management agreement, and practicing in compliance with applicable law and other rules adopted by the board. Each practitioner must also graduate from an oral health practitioner education program that is nationally accredited, pass a comprehensive, competency-based, independently-administered clinical examination, and agree to practice in settings serving low-income, uninsured, and underserved patients or in dental health professional shortage areas as determined by the commissioner of health. This bill is effective July 1, 2009 but no oral health practitioner shall be authorized to practice prior to January 1, 2011.

Further recommendations for the education and regulation of oral health practitioners are to be developed by the “oral health practitioner work group” assembled by August 1, 2008. The group will advise on clinical training, program accreditation, scope of practice, supervision requirements, prescribing and other regulations relating to medication, extractions, practice settings, and an assessment of the economic impact of oral health practitioners on the provision of dental services.

Naturopathic Doctors
H.F. No. 1724 adds Minn. Stat. § 147E.01, which defines the practice of naturopathic medicine as well as what constitutes an approved naturopathic medical education program.

New § 147E.05 further defines the scope of practice of naturopathic medicine to include: (1) ordering, administering, prescribing, or dispensing for preventive and therapeutic purposes any food, extracts of food, nutraceuticals, vitamins, minerals, amino acids, enzymes, botanicals and their extracts, botanical medicines, herbal remedies, homeopathic medicines, dietary supplements, etc.; (2) performing or ordering physical examinations and physiological function tests; (3) ordering clinical laboratory tests; (4) referring a patient for various kinds of diagnostic imaging; (5) prescribing nonprescription medications and therapeutic devices or ordering noninvasive diagnostic procedures; (6) prescribing or performing naturopathic physical medicine which includes, but is not limited to, the use of physical agents such as water, heat, sound, electromagnetic nonionizing radiation, etc. and physical modalities such as electrotherapy, ultraviolet light, massage, colon hydrotherapy, etc.; and (7) admitting patients to a hospital if one meets the hospital’s credentialing and privileging requirements. The practice of naturopathic medicine does not include: (1) administering therapeutic ionizing radiation or radioactive substances; (2) administering general or spinal anesthesia; (3) prescribing, dispensing, or administering legend drugs or controlled substances; and (4) performing or inducing abortions. A naturopathic doctor shall not perform laser surgery or surgery beyond superficial tissue and shall not practice or claim to practice as an M.D., D.O., D.D.S., or any other health care professional unless also holding the appropriate license.

New § 147E.06 requires naturopaths to garner detailed informed consent prior to initiating patient treatment and to maintain patient records for at least seven years. New §§ 147E.15, 147E.25, 147E.30, 147E.35, and 147E.40, respectively, address registration requirements, continuing education, discipline and reporting, the Naturopathic Doctor Advisory Council, and applicable fees. All of the above provisions are effective July 1, 2009. Finally, a naturopathy work group is established to develop recommendations and propose legislation, as necessary, to regulate naturopathic practitioners; it will be convened by September 1, 2008.


Insurance

Definitions and Liability for Denial of Insurance Benefits
S.F. No. 2822 adds Minn. Stat. § 604.18, which defines “insurance policy” as a written agreement between an insured and an insurer that obligates an insurer to pay proceeds directly to an insured. It does not include those provisions of a written agreement that obligate an insurer to provide for any type of defense obligation or indemnify judgments or settlements. It does not include coverage for workers’ compensation insurance, a written agreement of a health carrier, or a contract issued by a nonprofit health service plan corporation that provides only dental coverage. The section also defines “insured” (does not include third-party beneficiaries) and “insurer” (does not include a self-insured political subdivision). Finally, various terms of liability are set forth in the event an insurer knowingly or recklessly denies benefits without a reasonable basis. A licensed insurance producer is not liable for the errors, acts, or omissions of an appointed insurer which the producer has not caused or to which the producer has not contributed. These changes are effective August 1, 2008, and apply to causes of action for conduct occurring on or after that date.

Small Employer Insurance
Effective August 1, 2008, S.F. No. 3446 requires health insurers selling small employer group coverage to provide information to small employers about the availability of no-mandate or “flexible benefit” plans.


Military Personnel

Programs Related to Veterans and Members of the Military
Under S.F. No. 3683, effective August 1, 2008 and applying to employment action after that date, employers may not punish an employee who takes time off to attend: (1) departure or return ceremonies for deploying military personnel; (2) family training or readiness events sponsored or conducted by the military; or (3) events held as part of official military reintegration programs. Employees must provide the employer reasonable notice when requesting time off. This law also provided for protection of reservist-owned businesses during active service effective July 1, 2008.

Military Reservist Economic Injury Loans
Effective May 13, 2008, H.F. No. 3722 added Minn. Stat. § 116J.966 providing for military reservist economic injury loans. This provision allows the commissioner of employment and economic development to make one time, interest-free loans of up to $20,000 per borrower to eligible businesses that have sustained or are likely to sustain substantial economic injury as a result of the call to active service for 180 days or more of an essential employee.


Other Important Changes

Use of Wireless Communications Device
Under H.F. 3800, effective August 1, 2008, any person is prohibited from operating a motor vehicle while using a wireless communications device to compose, read, or send an electronic message while a vehicle is in motion or part of traffic. An electronic message includes, but is not limited to, e-mail, a text message, an instant message, or a command to access a webpage. This provision does not apply if a wireless communications device is used solely in a voice-activated or hands-free mode; for making a cellular telephone call; for obtaining emergency assistance; in the reasonable belief that a person’s life or safety is in immediate danger; or in an authorized emergency vehicle while in the performance of official duties.

Note: Effective January 1, 2006, persons with provisional driver’s licenses, which are valid until the licensee turns 18, and persons under 18 who have learner’s permits may not use cell phones while driving if the vehicle is in motion. There is an exception for calls made to obtain emergency assistance to prevent a crime, or with the reasonable belief that a person’s life or safety is in danger.

Fund Management Regulation
Effective August 1, 2008, H.F. No. 1499 revamps regulations on management and investment standards for entities holding funds for charitable purposes. In particular, it changes provisions pertaining to supervision and investments in institutional funds, appropriation of endowment funds, compliance review, and electronic signatures.

Electronic Document Return to Secretary of State
S.F. No. 3397 allows documents to be returned to the Office of the Secretary of State by electronic methods and through facsimile transmission. The law also changes requirements for foreign corporations, including that they will no longer need to file documents relating to name changes, dissolutions, or mergers with the secretary of state and can simply certify that they possess such documents.

Business Law Technical Changes
Effective August 1, 2008, H.F. No. 3500 amends the Business Corporations Act, Limited Liability Company Act, and the Uniform Limited Partnership Act of 2001. It also adds a section, effective January 1, 2009, allowing the formation of nonprofit limited liability companies.

Energy
S.F. No. 2996 expands the state’s definition of renewable energy sources that may be used to generate electricity to allow the use of algal biofuels from publicly owned water treatment works. S.F. No. 2706 asserts new building performance standards to cut energy use and reduce costs. These new energy-efficient building codes are designed to reduce per-square-foot carbon emissions by 60 percent in 2010, 70 percent in 2015, 80 percent in 2020, and 90 percent in 2025. S.F. 3096 further passed provisions promoting a greener economy including creating a microenergy loan program.

Omnibus Transportation Bill
H.F. No. 2800, the omnibus transportation finance law, increased certain gas, sales, and other taxes to fund MnDOT and various efforts to remedy the state’s neglect of transportation. Governor Pawlenty initially vetoed this $284.4 million law, but the veto was overridden by the legislature. The law was effective as of February 26, 2008.

Stem Cell Research Veto
Governor Pawlenty vetoed S.F. No. 100, which would have allowed the University of Minnesota to spend state-appropriated funds on stem cell research.

Borrower Relief Act Veto
Governor Pawlenty vetoed S.F. No. 3396, the Minnesota Subprime Borrower Relief Act of 2008, which, among other changes, would have provided a one-year deferment before a foreclosed property would be put up for sale.


Other Occupations and Professions

Auctioneers
H.F. No. 3289 amended Minn. Stat. § 309.515, subd. 1, to deem licensed and bonded auctioneers conducting a live auction with no access to the proceeds exempt from the registration statement and annual reporting requirements applicable to professional fund-raisers under §§ 309.52 and 309.53. The change was made effective April 11, 2008 and asserts that such auctioneers are generally not considered professional fund-raisers.

Accountants
S.F. No. 2402 modified certain provisions governing the Board of Accountancy under Minn. Stat. § 13.411. Specifically, it added subd. 9, which says that data relating to disciplinary proceedings involving board licensees are classified under § 326A.08, subd. 2. All hearings are closed to the public and any records, findings, conclusions, reports, or orders of the administrative law judge are private until a final decision is made. S.F. No. 2402 also amended certain definitions relating to accountancy including adding “any engagement performed in accordance with auditing and related standards of the Public Company Accounting Oversight Board” to the definition of “attest” (Minn. Stat. § 326A.01, subd. 2), making minimal changes to the definition of “peer review” (Minn. Stat. § 326A.01, subd. 12), and defining “principal place of business” as that designated by the licensee for purposes of substantial equivalency or reciprocity. It also added provisions relating to the Board’s use of expedited rulemaking, appointment of an executive director, and the option to permit early examination.

S.F. No. 2402 further amended Minn. Stat. § 326A.01, subd. 17, to say that for purposes of ascertaining substantial equivalency the order in which one’s experience, education, and examination were attained is not relevant. It amended Minn. Stat. § 326A.03, subd. 1, to alter the licensing qualifications with respect to “good moral character” to include “the propensity to provide professional services in a fair, honest, and trustworthy manner” in addition to lacking a history of dishonest or felonious acts. It also amended Minn. Stat. § 326A.04, subd. 2, to extend the length of initial certification and renewal from one to three years and to allow provisional renewal for up to 90 days if the board does not timely grant or deny a filed application. S.F. No. 2402 adjusted various other professional accounting provisions relating to reciprocity, substantial equivalency, automatic revocation, entities requiring a permit to practice as a CPA firm, provisional renewal, scope of practice and privilege limitations, among other things. All of the changes made by S.F. No. 2402 became effective on April 18, 2008.

Residential Mortgage Originators
S.F. No. 3154 amends Minn. Stat. § 58.13, subd. 1, adding guidelines for a mortgage originator’s analysis of a borrower’s reasonable ability to repay. The analysis may include, but is not limited to, considering the following items so long as verified: (1) the borrower’s current and expected income and cash flow; (2) net worth and other financial resources other than equity in the mortgaged dwelling as well as current financial obligations; (3) property taxes, insurance, and assessments on the property; (4) employment status and credit history as well as debt-to-income ratio and credit scores; and (5) tax returns and pension statements along with employment payment records. The originator may not disregard facts or circumstances suggesting that any of the above information, as submitted, is inaccurate or incomplete. Mere statements by the borrower asserting the reasonable ability to pay or reliance on any single item from the list is not sufficient to fulfill the verification requirement. These changes are effective August 1, 2008.

S.F. No. 2881 also amended the same subdivision adding to the analysis of a borrower’s reasonable ability to repay criteria established by the United States Department of Veterans Affairs or the United States Department of Housing and Urban Development for interest rate reduction refinancing loans or streamline loans, or criteria authorized or promulgated by the Federal National Mortgage Association of Federal Home Loan Mortgage Corporation. This section became effective on May 9, 2008.

Journeyman and Master Plumbers
S.F. No. 2786 amended the licensing provisions for journeyman and master plumbers. Journeymen plumbers must have at least two years of practical experience, while master plumbers must have four years of practical experience in the plumbing trade or two years of experience as a plumbing contractor. The Commissioner of Labor and Industry was also granted authority to waive penalties for licensure applicants who failed to post a bond after June 20, 1999 upon a showing of undue hardship. The bill became effective on May 9, 2008.

Boiler Operators
S.F. No. 3140 decreased the age of those who can be licensed under § 183.411, subd. 3, to operate steam farm traction engines, portable stationary show engines, and portable stationary show boilers from 18 to 16 years. The bill also added to the licensing requirements that a grade A or higher class engineer must verify that an applicant can perform a certain list of tasks associated with operating the device. The applicant must further have at least 50 hours (rather than 25) of operating experience on the devices, 8 hours of which must be operating under load and up to 16 hours that can be satisfied by attending a school of instruction in operating the device.

S.F. No. 3140 also amended Minn. Stat. § 183.501 to allow provisional licensing of an employee of a high pressure boiler plant to operate boilers greater than 500 horsepower at only that plant if it has a designated chief engineer, the employee holds a valid second-class engineer’s license, the chief engineer submits an application signed by himself and an authorized representative of the owner of the boiler plant, there is a training program with examination in place, and the total number of provisional licenses for employees at the plant does not exceed the total number of properly licensed first-class engineers and chief engineers responsible for safe operation of the boilers. Provisional licensing can only happen when the operators are under labor contract if it does not violate the contract. Each provisional license expires 36 months after the date of issuance unless revoked earlier and none may be renewed. The commissioner may issue no more than two provisional licenses to any individual within a four-year period and the fee is set at $50. Finally, S.F. No. 3140 amended Minn. Stat. § 183.51 adding certain continuing education options and making other minimal changes to the engineer classifications. All of the above changes were effective as of May 16, 2008.

Construction Workers
H.F. No. 3034 amended Minn. Stat. § 326.242, adding subd. 3e, to define the classification of licensed elevator constructor as an individual who may install, maintain, and repair electrical wiring, apparatus, and equipment for elevators and escalators while in the employ of an elevator contractor or Class A electrical contractor. An applicant for this classification must have at least 36 months’ experience one year of which may be credited for the completion of a two-year post-high school electrical course approved by the commissioner. It also added subd. 3f, which defines the classification of a licensed lineman as an individual who may install, maintain, and repair transmission and distribution systems that are or will be owned or leased by an electric utility. An applicant for this classification must have at least 48 months’ experience. It likewise added subds. 3g and 3h which define the classifications of licensed maintenance electrician and licensed master elevator constructor.

H.F. No. 3034 amended certain other requirements pertaining to manufactured home installers, general liability and property damage insurance required for construction licensees, and the new position of “plumber’s apprentice.” Finally, it repealed Minn. Stat. § 16B.69 (making violation of the Construction Code a misdemeanor), § 326.2411 (establishing the Board of Electricity), § 326.372 (establishing the Board of Plumbing), and § 326.471 (establishing the Board of High Pressure Piping Systems).


Pensions and Retirement

Omnibus Pensions and Retirement Bill
H.F. No. 3082 makes changes to the postretirement fund by requiring it to be combined with active funds of each of the statewide retirement systems if it falls below a certain funding level. The law provides that if the postretirement fund is combined with the active funds, retirees will receive a flat 2.5 percent increase in their benefits each year, with no investment-based increase. It also says that while the postretirement fund remains in place the investment-based component of the fund would only be paid if inflation is more than 2.5 percent. If the postretirement fund is more than 90 percent funded, and the increase in the Consumer Price Index is less than 2.5 percent, any excess investment earnings can be used to pay an increase based on lost purchasing power from prior years. Finally, the postretirement fund will be eliminated if it falls below 80 percent funded in one year or below 85 percent for two consecutive years.

Effective January 1, 2009, most public pension plan annuities will be payable with a 50 percent benefit to a surviving spouse unless the spouse waives this benefit when the employee retires. H.F. No. 3082 also charges the Legislative Commission on Pensions and Retirement to review issues related to Minnesota teacher benefit adequacy and compare the level of teacher pension benefits with that in other states mandating a report by January 15, 2009. A teacher who is at least 62 years old, enters into a written agreement with the employer to return to work, retires, and begins to draw an annuity from the Teachers Retirement Association, is authorized to begin receiving a retirement annuity from the association and enter into an agreement to return to work.

Effective May 28, 2008, a person receiving a retirement annuity from the public employees police and fire plan and who is a sworn peace officer by the Metropolitan Airports Commission is exempt from limitations on reemployed annuitant exempt earnings for the period of January 1, 2008 through December 31, 2009.


Police and Firefighters

Police Officer Representation
S.F. No. 3362 removes an ambiguity in Minn. Stat. § 626.89, subd. 9, so that it is clear that a police officer under investigation has a right to speak with an attorney, his union representative, or both prior to making a formal statement and does not have to choose one or the other form of representation.

Firefighter or Peace Officer Disability
S.F. No. 2403 modified the eligibility for continued health insurance coverage for peace officers or firefighters suffering disabling injuries on duty by making the Public Employees Retirement Association determination of such a disability conclusive and binding. It amended Minn. Stat. § 299A.465, subd. 1, as a corrective measure because the Public Safety Officer’s Benefit Panel was to sunset on July 1, 2008, and it was the body that determined who qualifies for disability pay. This change also corrected an unintended quirk that denied health benefits to the same injured workers if they were between the ages of 50 and 55. This section was effective July 1, 2008.

Arbitration Reform for Firefighters
Effective May 6, 2008, S.F. No. 2948 repealed Minn. Stat. § 179A.16, subd. 7a, securing final offer total package arbitration for professional firefighters. It removed firefighters from the arbitration system that was adopted in 2005 that required the arbitrator to choose either one proposal or the other from the parties with no combining of proposals or compromise.


Tax Reform

Omnibus Tax Bill
H.F. No. 3201 amends Minn. Stat. § 289A.12, subd. 4, making returns by persons, corporations, cooperatives, governmental entities, and school districts mandatory after December 31, 2009, if payment is made for wages, salaries, or other compensation for services provided to a Minnesota resident, a recipient with a Minnesota address, or for activity occurring within Minnesota.

H.F. No. 3201 also amends Minn. Stat. § 290.01, subd. 19a (for individuals, estates, and trusts) and subd. 19c (for corporations). The definition of federal taxable income now includes amounts disallowed under § 290.10, subd. 2, which prohibits deducting as a trade or business expense charges incurred in relation to an actual or potential violation of the law except for those constituting restitution or paid to come into compliance. The change is effective for taxable years beginning after December 31, 2007, for disallowed expenses assessed after March 7, 2008.

H.F. No. 3201 makes other technical changes to the tax code relating to the extent of deductions for compensation paid to military personnel, income not derived from conduct of a trade or business, payments to persons who are not employees, filings with incorrect tax identification numbers, and inflation adjustments, among other things.


Unemployment

Unemployment Compensation Veto
S.F. No. 2688 would have amended Minn. Stat. § 268.035, subd. 25b, to exempt parcel delivery drivers who deliver shipments less than 250 pounds per parcel from provisions defining particular owner-operators in the trucking industry as independent contractors rather than employees for purposes of determining unemployment compensation. This bill was vetoed by Governor Pawlenty on April 3, 2008.

Unemployment Benefits
Effective August 1, 2008, H.F. No. 3722 amends Minn. Stat. § 268.047, subd. 1, to say that “additional” unemployment benefits paid to an applicant will no longer be used in computing the future tax rate of a taxpaying base period employer or charged to the reimbursable account of a base period nonprofit or government employer that has elected to be liable for reimbursements. H.F. No. 3722 also adjusted various other unemployment benefit provisions relating to the effect of benefits on tax rates, acceptable forms of payment including vacation funds and wage credits, what constitutes seeking suitable employment, and the availability of additional unemployment benefits in counties with disproportionately high unemployment rates, among other things. Most of the changes in this bill were effective as of May 14, 2008.


Workers’ Compensation

Workers’ Health Studies
On April 29, 2008, H.F. No. 3569 allocated $4.9 million to the University of Minnesota Board of Regents (from the workers’ compensation assigned risk plan by way of the general fund) to conduct a comprehensive study of workers’ lung health in partnership with the Department of Health, Department of Natural Resources, and the Pollution Control Agency as well as business and industry, local health providers, and other agencies and affected groups. The study is to include industry-specific worker mortality and morbidity studies, clinical disease studies, exposure assessments, case-control screening of current and former workers, and environmental studies. The studies are to be completed no later than December 31, 2013.

Workers’ Compensation
S.F. No. 3218 amends Minn. Stat. § 176.011, subd. 9, adding to the definition of “employee” any Minnesota Responds Medical Reserve Corps volunteer responding at the request of or engaged in training conducted by the commissioner of health. The bill also sets the daily wage of such volunteers for purposes of calculating workers’ compensation. Finally, qualification for benefits under any other clause is preempted.

S.F. No. 3218 also amends Minn. Stat. § 176.101, subd. 1, raising the maximum weekly compensation for injury producing temporary total disability from $750 to $850 beginning on October 1, 2008. It also extends from 104 to 130 the number of weeks prior to which recommencement of temporary total disability compensation can take place following cessation. In general, temporary total disability compensation is limited to 130 weeks of payment. Once an employee has been paid 52 weeks of temporary total compensation, the employer or insurer must notify the employee in writing of the 130-week limitation. This section is effective for injuries occurring on or after October 1, 2008.

Effective May 1, 2008, the maximum hourly rate for rehabilitation services provided by qualified rehabilitation consultants was increased to $91 and the maximum hourly rate for such services provided by qualified rehabilitation consultant interns was increased to $81. S.F. No. 3218 also adjusted various other workers’ compensation provisions relating to retraining request timelines, lack of coverage for services provided by complementary and alternative health care providers, updates to the relative value fee schedule and related conversion factors, payment limitation to providers outside Minnesota, certificates of default triggering payment from the Insurance Guaranty Association, and certain changes to filing requirements, among other things.


Larkin Hoffman acknowledges the work of its 2008 Summer Clerks in compiling this report:
Britta Orr, 2L, University of Minnesota Law School (Editor-in-Chief of the 2008 Legislative Roundup)
Ashlee Bekish, 2L, Hamline University School of Law
Steve Cerny, 2L, William Mitchell College of Law
Jay Reding, 2L, University of St. Thomas School of Law