1.1                          A bill for an act 
  1.2             relating to human services; ending poverty; minimum 
  1.3             wage; AFDC grant; undocumented persons eligible for GA 
  1.4             and GAMC; STRIDE; Minnesota working family credit; 
  1.5             sales tax on replacement capital equipment and special 
  1.6             tooling; sliding fee child care program; appropriating 
  1.7             money; amending Minnesota Statutes 1994, sections 
  1.8             177.24, subdivision 1; 256.01, by adding a 
  1.9             subdivision; 256.031, subdivision 3; 256.73, 
  1.10            subdivision 8, and by adding subdivisions; 256.736, 
  1.11            subdivisions 3, 3a, and 16; 256.737, subdivision 4; 
  1.12            256.74, subdivision 1, and by adding a subdivision; 
  1.13            256D.03, subdivision 3; 290.0671, subdivision 1; 
  1.14            297A.01, subdivision 16; 297A.02, subdivision 2; and 
  1.15            297A.15, subdivision 5; proposing coding for new law 
  1.16            in Minnesota Statutes, chapter 268; repealing 
  1.17            Minnesota Statutes 1994, sections 256D.05, subdivision 
  1.18            8; 297A.02, subdivision 5; and 297A.25, subdivision 53.
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20     Section 1.  [PURPOSE STATEMENT.] 
  1.21     The Legislature intends to end poverty in the state of 
  1.22  Minnesota and require the state to enter into a social contract 
  1.23  with its citizens that recognizes ending poverty as the primary 
  1.24  objective. 
  1.25     Instead of legislation that punishes the poor, legislation 
  1.26  shall address the elimination of poverty.  Toward that end, the 
  1.27  state shall recognize and begin to work on real solutions to 
  1.28  poverty which include: 
  1.29     (1) the creation of real jobs with livable family wages; 
  1.30     (2) affordable and accessible child care for all; 
  1.31     (3) free education for all; 
  1.32     (4) free and accessible health care for all; and 
  2.1      (5) increased and immediate access to affordable housing 
  2.2   for all. 
  2.3      In an effort to fund these antipoverty provisions, the 
  2.4   state must explore other sources of revenue, such as eliminating 
  2.5   large tax credits for companies and corporations and other forms 
  2.6   of corporate welfare. 
  2.7      Fulfilling these antipoverty measures eliminates the need 
  2.8   for any discussion or action around punitive "welfare reforms." 
  2.9      For the immediate future, some of the barriers to getting 
  2.10  out of poverty can be removed by enacting the provisions in 
  2.11  sections 2 to 25. 
  2.12     Sec. 2.  Minnesota Statutes 1994, section 177.24, 
  2.13  subdivision 1, is amended to read: 
  2.14     Subdivision 1.  [AMOUNT.] (a) For purposes of this 
  2.15  subdivision, the terms defined in this paragraph have the 
  2.16  meanings given them.  
  2.17     (1) "Large employer" means an enterprise whose annual gross 
  2.18  volume of sales made or business done is not less than $362,500 
  2.19  (exclusive of excise taxes at the retail level that are 
  2.20  separately stated) and covered by the Minnesota fair labor 
  2.21  standards act, sections 177.21 to 177.35. 
  2.22     (2) "Small employer" means an enterprise whose annual gross 
  2.23  volume of sales made or business done is less than $362,500 
  2.24  (exclusive of excise taxes at the retail level that are 
  2.25  separately stated) and covered by the Minnesota fair labor 
  2.26  standards act, sections 177.21 to 177.35.  
  2.27     (b) Except as otherwise provided in sections 177.21 to 
  2.28  177.35, every large employer must pay each employee wages at a 
  2.29  rate of at least $4.25 $9.27 an hour beginning January July 1, 
  2.30  1991 1995.  Every small employer must pay each employee at a 
  2.31  rate of at least $4 $9.27 an hour beginning January July 1, 
  2.32  1991 1995.  On July 1, 1995, and each succeeding July 1, the 
  2.33  minimum wage paid by large and small employers must be adjusted 
  2.34  by the same percentage as the change in the Consumer Price Index 
  2.35  for the immediate preceding calendar year. 
  2.36     For the purpose of this subdivision, "Consumer Price Index" 
  3.1   means the Consumer Price Index for all urban consumers, 
  3.2   Minneapolis-St. Paul (CPI-U), published by the United States 
  3.3   Department of Labor, Bureau of Labor Statistics. 
  3.4      (c) A large employer must pay each employee at a rate of at 
  3.5   least the minimum wage set by this section or federal law 
  3.6   without the reduction for training wage or full-time student 
  3.7   status allowed under federal law. 
  3.8      Sec. 3.  Minnesota Statutes 1994, section 256.01, is 
  3.9   amended by adding a subdivision to read: 
  3.10     Subd. 13.  [PILOT PROJECT; PROTOCOLS FOR PERSONS LACKING 
  3.11  PROFICIENCY IN ENGLISH.] The commissioner of human services 
  3.12  shall establish pilot projects in Hennepin and Ramsey counties 
  3.13  to provide language assistance to clients applying for or 
  3.14  receiving aid through the county social service agency.  The 
  3.15  projects shall be designed to provide all relevant information 
  3.16  in translation to individuals lacking proficiency in English, 
  3.17  who are applying for or receiving assistance under any program 
  3.18  supervised by the commissioner of human services.  The projects 
  3.19  shall also provide language assistance to individuals applying 
  3.20  for or receiving aid under programs which the department of 
  3.21  human services operates jointly with other executive branch 
  3.22  agencies, including all work and training programs operated 
  3.23  under chapters 256 and 256D.  The purpose of the pilot projects 
  3.24  is to ensure that all necessary information regarding a program 
  3.25  is presented in translation, both orally and in writing, to 
  3.26  applicants for and recipients of assistance who lack proficiency 
  3.27  in English.  In preparing the protocols to be used in the pilot 
  3.28  programs, the commissioner shall seek input from the following 
  3.29  groups:  advocacy organizations that represent non-English 
  3.30  speaking clients, county social service agencies, legal advocacy 
  3.31  groups, employment and training providers, and other affected 
  3.32  groups.  The commissioner shall develop the protocols by October 
  3.33  1, 1995, and shall implement them as soon as feasible in the 
  3.34  pilot counties.  The commissioner shall report to the 
  3.35  legislature by February 1, 1996, on the protocols developed and 
  3.36  report on the status of the implementation of the program in the 
  4.1   pilot counties.  The report must include recommendations for 
  4.2   statewide implementation. 
  4.3      Sec. 4.  Minnesota Statutes 1994, section 256.031, 
  4.4   subdivision 3, is amended to read: 
  4.5      Subd. 3.  [AUTHORIZATION FOR THE DEMONSTRATION.] (a) The 
  4.6   commissioner of human services, in consultation with the 
  4.7   commissioners of education, finance, economic security, health, 
  4.8   and planning, and the director of the higher education 
  4.9   coordinating board, is authorized to proceed with the planning 
  4.10  and designing of the Minnesota family investment plan and to 
  4.11  implement the plan to test policies, methods, and cost impact on 
  4.12  an experimental basis by using field trials.  The commissioner, 
  4.13  under the authority in section 256.01, subdivision 2, shall 
  4.14  implement the plan according to sections 256.031 to 256.0361 and 
  4.15  Public Law Numbers 101-202 and 101-239, section 8015, as 
  4.16  amended.  If major and unpredicted costs to the program occur, 
  4.17  the commissioner may take corrective action consistent with 
  4.18  Public Law Numbers 101-202 and 101-239, which may include 
  4.19  termination of the program.  Before taking such corrective 
  4.20  action, the commissioner shall consult with the chairs of the 
  4.21  senate family services committee, the house health and human 
  4.22  services committee, the health care and family services division 
  4.23  of the senate family services and health care committees and the 
  4.24  human services division of the house health and human services 
  4.25  committee, or, if the legislature is not in session, consult 
  4.26  with the legislative advisory commission. 
  4.27     (b) The field trials shall be conducted as permitted under 
  4.28  federal law, for as many years as necessary, and in different 
  4.29  geographical settings, to provide reliable instruction about the 
  4.30  desirability of expanding the program statewide. 
  4.31     (c) The commissioner shall select the counties which shall 
  4.32  serve as field trial or comparison sites based on criteria which 
  4.33  ensure reliable evaluation of the program.  
  4.34     (d) The commissioner is authorized to determine the number 
  4.35  of families and characteristics of subgroups to be included in 
  4.36  the evaluation.  
  5.1      (i) A family that applies for or is currently receiving 
  5.2   financial assistance from aid to families with dependent 
  5.3   children; family general assistance or work readiness; or food 
  5.4   stamps may be tested for eligibility for aid to families with 
  5.5   dependent children or family general assistance and may be 
  5.6   assigned by the commissioner to a test or a comparison group for 
  5.7   the purposes of evaluating the family investment plan.  A family 
  5.8   found not eligible for aid to families with dependent children 
  5.9   or family general assistance will be tested for eligibility for 
  5.10  the food stamp program.  If found eligible for the food stamp 
  5.11  program, the commissioner may randomly assign the family to a 
  5.12  test group, comparison group, or neither group.  Families 
  5.13  assigned to a test group receive benefits and services through 
  5.14  the family investment plan.  Families assigned to a comparison 
  5.15  group receive benefits and services through existing programs.  
  5.16  A family may not select the group to which it is assigned.  Once 
  5.17  assigned to a group, an eligible family must remain in that 
  5.18  group for the duration of the project. 
  5.19     (ii) To evaluate the effectiveness of the family investment 
  5.20  plan, the commissioner may designate a subgroup of families from 
  5.21  the test group who shall be exempt from section 256.035, 
  5.22  subdivision 1, and shall not receive case management services 
  5.23  under section 256.035, subdivision 6a.  Families are eligible 
  5.24  for services under section 256.736 to the same extent as 
  5.25  families receiving AFDC.  
  5.26     (e) After field trials have begun, the commissioner may 
  5.27  extend field trials to Ramsey county with county board consent.  
  5.28  The MFIP program extended into Ramsey county must be a voluntary 
  5.29  program, meaning recipients of AFDC may volunteer to participate 
  5.30  in the program.  Participation must not be by mandatory 
  5.31  assignment.  This extension of the field trials may be executed 
  5.32  only if permitted under federal law, and is subject to federal 
  5.33  approval.  Ramsey county shall consult with members of the 
  5.34  community when developing the service delivery plan under 
  5.35  section 256.0361, subdivision 1. 
  5.36     Sec. 5.  Minnesota Statutes 1994, section 256.73, is 
  6.1   amended by adding a subdivision to read: 
  6.2      Subd. 3b.  [ELIGIBILITY NOT BARRED BY WORKING OVER 99 
  6.3   HOURS; PAST EMPLOYMENT HISTORY; AND 30-DAY WAITING PERIOD.] An 
  6.4   individual receiving assistance may work over 99 hours per month 
  6.5   and remain eligible for assistance, provided all other 
  6.6   requirements of the aid to families with dependent 
  6.7   children-unemployed parent program are met.  The applicant is 
  6.8   not required to demonstrate past employment history or 30 days 
  6.9   of prior unemployment to be eligible for AFDC-unemployed parent 
  6.10  program.  This subdivision is effective upon federal approval 
  6.11  and implementation of the waiver under section 22, subdivision 5.
  6.12     Sec. 6.  Minnesota Statutes 1994, section 256.73, 
  6.13  subdivision 8, is amended to read: 
  6.14     Subd. 8.  [RECOVERY OF OVERPAYMENTS.] (a) Except as 
  6.15  provided in subdivision 8a, if an amount of aid to families with 
  6.16  dependent children assistance is paid to a recipient in excess 
  6.17  of the payment due, it shall be recoverable by the county 
  6.18  agency.  The agency shall give written notice to the recipient 
  6.19  of its intention to recover the overpayment. 
  6.20     (b) When an overpayment occurs, the county agency shall 
  6.21  recover the overpayment from a current recipient by reducing the 
  6.22  amount of aid payable to the assistance unit of which the 
  6.23  recipient is a member for one or more monthly assistance 
  6.24  payments until the overpayment is repaid.  All county agencies 
  6.25  in the state shall reduce the assistance payment by three 
  6.26  percent of the assistance unit's standard of need or the amount 
  6.27  of the monthly payment, whichever is less, for all overpayments 
  6.28  whether or not the overpayment is due solely to agency error.  
  6.29  If the overpayment is due solely to having wrongfully obtained 
  6.30  assistance, whether based on a court order, the finding of an 
  6.31  administrative fraud disqualification hearing or a waiver of 
  6.32  such a hearing, or a confession of judgment containing an 
  6.33  admission of an intentional program violation, the amount of 
  6.34  this reduction shall be ten percent.  In cases when there is 
  6.35  both an overpayment and underpayment, the county agency shall 
  6.36  offset one against the other in correcting the payment. 
  7.1      (c) Overpayments may also be voluntarily repaid, in part or 
  7.2   in full, by the individual, in addition to the above aid 
  7.3   reductions, until the total amount of the overpayment is repaid. 
  7.4      (d) The county agency shall make reasonable efforts to 
  7.5   recover overpayments to persons no longer on assistance in 
  7.6   accordance with standards adopted in rule by the commissioner of 
  7.7   human services.  The county agency need not attempt to recover 
  7.8   overpayments of less than $35 paid to an individual no longer on 
  7.9   assistance if the individual does not receive assistance again 
  7.10  within three years, unless the individual has been convicted of 
  7.11  fraud under section 256.98. 
  7.12     Sec. 7.  Minnesota Statutes 1994, section 256.73, is 
  7.13  amended by adding a subdivision to read: 
  7.14     Subd. 8a.  [START WORK OFFSET.] An overpayment resulting 
  7.15  from earned income received in the first month of employment is 
  7.16  not recoverable by the county agency.  A "start work offset" for 
  7.17  purposes of this subdivision is the amount of the overpayment 
  7.18  the assistance unit would otherwise be required to repay to the 
  7.19  county under subdivision 8.  This subdivision is effective upon 
  7.20  federal approval and implementation of the waiver under section 
  7.21  22, subdivision 4. 
  7.22     Sec. 8.  Minnesota Statutes 1994, section 256.736, 
  7.23  subdivision 3, is amended to read: 
  7.24     Subd. 3.  [REGISTRATION.] (a) To the extent permissible 
  7.25  under federal law, every caretaker or child is required to 
  7.26  register for employment and training services, as a condition of 
  7.27  receiving AFDC, unless the caretaker or child is: 
  7.28     (1) a child who is under age 16, a child age 16 or 17 who 
  7.29  is attending elementary or secondary school or a secondary level 
  7.30  vocational or technical school full time; 
  7.31     (2) ill, incapacitated, or age 60 or older; 
  7.32     (3) a person for whom participation in an employment and 
  7.33  training service would require a round trip commuting time by 
  7.34  available transportation of more than two hours; 
  7.35     (4) a person whose presence in the home is required because 
  7.36  of illness or incapacity of another member of the household; 
  8.1      (5) a caretaker or other caretaker relative of a child 
  8.2   under the age of three who personally provides full-time care 
  8.3   for the child.  In AFDC-UP cases, only one parent or other 
  8.4   relative may qualify for this exemption; 
  8.5      (6) a caretaker or other caretaker relative personally 
  8.6   providing care for a child under six years of age, except that 
  8.7   when child care is arranged for or provided, the caretaker or 
  8.8   caretaker relative may be required to register and participate 
  8.9   in employment and training services up to a maximum of 20 hours 
  8.10  per week.  In AFDC-UP cases, only one parent or other relative 
  8.11  may qualify for this exemption; 
  8.12     (7) a pregnant woman, if it has been medically verified 
  8.13  that the child is expected to be born within the next six 
  8.14  months; or 
  8.15     (8) employed at least 30 hours per week; 
  8.16     (9) a caretaker whose level of English proficiency is a 
  8.17  potential barrier to employment, provided that the caretaker is 
  8.18  involved in a program which is designed to address the English 
  8.19  language deficiencies.  Individuals who are incapable of gaining 
  8.20  proficiency in English, as determined by the county social 
  8.21  worker, because of advanced age or lack of ability, shall 
  8.22  continue to be exempt under this subdivision and are not subject 
  8.23  to the requirement to participate in the program; or 
  8.24     (10) a caretaker whose level of skill or knowledge is a 
  8.25  barrier to permanent, unsubsidized employment, and the caretaker 
  8.26  is enrolled or enrolls in a training or education program.  
  8.27     (b) To the extent permissible by federal law, applicants 
  8.28  for benefits under the AFDC program are registered for 
  8.29  employment and training services by signing the application 
  8.30  form.  Applicants must be informed that they are registering for 
  8.31  employment and training services by signing the form.  Persons 
  8.32  receiving benefits on or after July 1, 1987, shall register for 
  8.33  employment and training services to the extent permissible by 
  8.34  federal law.  The caretaker has a right to a fair hearing under 
  8.35  section 256.045 with respect to the appropriateness of the 
  8.36  registration. 
  9.1      Sec. 9.  Minnesota Statutes 1994, section 256.736, 
  9.2   subdivision 3a, is amended to read: 
  9.3      Subd. 3a.  [PARTICIPATION.] (a) Except as provided under 
  9.4   paragraphs (b) and (c), participation in employment and training 
  9.5   services under this section is limited to the following 
  9.6   recipients:  
  9.7      (1) caretakers who are required to participate in a job 
  9.8   search under subdivision 14; 
  9.9      (2) custodial parents who are subject to the school 
  9.10  attendance or case management participation requirements under 
  9.11  subdivision 3b; 
  9.12     (3) caretakers whose participation in employment and 
  9.13  training services began prior to May 1, 1990, if the caretaker's 
  9.14  AFDC eligibility has not been interrupted for 30 days or more 
  9.15  and the caretaker's employability development plan has not been 
  9.16  completed; 
  9.17     (4) recipients who are members of a family in which the 
  9.18  youngest child is within two years of being ineligible for AFDC 
  9.19  due to age; 
  9.20     (5) custodial parents under the age of 24 who:  (i) have 
  9.21  not completed a high school education and who, at the time of 
  9.22  application for AFDC, were not enrolled in high school or in a 
  9.23  high school equivalency program; or (ii) have had little or no 
  9.24  work experience in the preceding year; 
  9.25     (6) recipients who have received AFDC for 36 six or more 
  9.26  months out of the last 60 12 months; 
  9.27     (7) recipients who are participants in the self-employment 
  9.28  investment demonstration project under section 268.95; and 
  9.29     (8) recipients who participate in the new chance research 
  9.30  and demonstration project under contract with the department of 
  9.31  human services. 
  9.32     (b) If the commissioner determines that participation of 
  9.33  persons listed in paragraph (a) in employment and training 
  9.34  services is insufficient either to meet federal performance 
  9.35  targets or to fully utilize funds appropriated under this 
  9.36  section, the commissioner may, after notifying the chairs of the 
 10.1   senate family services committee, the house health and human 
 10.2   services committee, the family services division of the senate 
 10.3   family services and health care committees, and the human 
 10.4   services division of the house health and human services 
 10.5   committee, permit additional groups of recipients to participate 
 10.6   until the next meeting of the legislative advisory commission, 
 10.7   after which the additional groups may continue to enroll for 
 10.8   participation unless the legislative advisory commission 
 10.9   disapproves the continued enrollment.  The commissioner shall 
 10.10  allow participation of additional groups in the following order 
 10.11  only as needed to meet performance targets or fully utilize 
 10.12  funding for employment and training services under this section: 
 10.13     (1) recipients who have received 24 or more months of AFDC 
 10.14  out of the previous 48 months; and 
 10.15     (2) recipients who have not completed a high school 
 10.16  education or a high school equivalency program. 
 10.17     (c) To the extent of money appropriated specifically for 
 10.18  this paragraph, the commissioner may permit AFDC caretakers who 
 10.19  are not eligible for participation in employment and training 
 10.20  services under the provisions of paragraph (a) or (b) to 
 10.21  participate.  Money must be allocated to county agencies based 
 10.22  on the county's percentage of participants statewide in services 
 10.23  under this section in the prior calendar year.  Caretakers must 
 10.24  be selected on a first-come, first-served basis from a waiting 
 10.25  list of caretakers who volunteer to participate.  The 
 10.26  commissioner may, on a quarterly basis, reallocate unused 
 10.27  allocations to county agencies that have sufficient volunteers.  
 10.28  If funding under this paragraph is discontinued in future fiscal 
 10.29  years, caretakers who began participating under this paragraph 
 10.30  must be deemed eligible under paragraph (a), clause (3). 
 10.31     Sec. 10.  Minnesota Statutes 1994, section 256.736, 
 10.32  subdivision 16, is amended to read: 
 10.33     Subd. 16.  [ALLOCATION AND USE OF MONEY.] (a) State money 
 10.34  appropriated for employment and training services under this 
 10.35  section must be allocated to counties as specified in paragraphs 
 10.36  (b) to (j). 
 11.1      (b) For purposes of this subdivision, "targeted caretaker" 
 11.2   means a recipient who: 
 11.3      (1) is a custodial parent under the age of 24 who:  (i) has 
 11.4   not completed a high school education and at the time of 
 11.5   application for AFDC is not enrolled in high school or in a high 
 11.6   school equivalency program; or (ii) had little or no work 
 11.7   experience in the preceding year; 
 11.8      (2) is a member of a family in which the youngest child is 
 11.9   within two years of being ineligible for AFDC due to age; or 
 11.10     (3) has received 36 six months or more of AFDC over the 
 11.11  last 60 12 months. 
 11.12     (c) One hundred percent of the money appropriated for case 
 11.13  management services as described in subdivision 11 must be 
 11.14  allocated to counties based on the average number of cases in 
 11.15  each county described in clause (1).  Money appropriated for 
 11.16  employment and training services as described in subdivision 1a, 
 11.17  paragraph (d), other than case management services, must be 
 11.18  allocated to counties as follows: 
 11.19     (1) Forty percent of the state money must be allocated 
 11.20  based on the average number of cases receiving AFDC in the 
 11.21  county which either have been open for 36 or more consecutive 
 11.22  months or have a caretaker who is under age 24 and who has no 
 11.23  high school or general equivalency diploma.  The average number 
 11.24  of cases must be based on counts of these cases as of March 31, 
 11.25  June 30, September 30, and December 31 of the previous year. 
 11.26     (2) Twenty percent of the state money must be allocated 
 11.27  based on the average number of cases receiving AFDC in the 
 11.28  county which are not counted under clause (1).  The average 
 11.29  number of cases must be based on counts of cases as of March 31, 
 11.30  June 30, September 30, and December 31 of the previous year.  
 11.31     (3) Twenty-five percent of the state money must be 
 11.32  allocated based on the average monthly number of assistance 
 11.33  units in the county receiving AFDC-UP for the period ending 
 11.34  December 31 of the previous year. 
 11.35     (4) Fifteen percent of the state money must be allocated at 
 11.36  the discretion of the commissioner based on participation levels 
 12.1   for target group members in each county. 
 12.2      (d) No more than 15 percent of the money allocated under 
 12.3   paragraph (b) and no more than 15 percent of the money allocated 
 12.4   under paragraph (c) may be used for administrative activities. 
 12.5      (e) At least 55 percent of the money allocated to counties 
 12.6   under paragraph (c) must be used for employment and training 
 12.7   services for caretakers in the target groups, and up to 45 
 12.8   percent of the money may be used for employment and training 
 12.9   services for nontarget caretakers.  One hundred percent of the 
 12.10  money allocated to counties for case management services must be 
 12.11  used to provide those services to caretakers in the target 
 12.12  groups. 
 12.13     (f) Money appropriated to cover the nonfederal share of 
 12.14  costs for bilingual case management services to refugees for the 
 12.15  employment and training programs under this section are 
 12.16  allocated to counties based on each county's proportion of the 
 12.17  total statewide number of AFDC refugee cases.  However, counties 
 12.18  with less than one percent of the statewide number of AFDC 
 12.19  refugee cases do not receive an allocation.  
 12.20     (g) Counties, the department of economic security, and 
 12.21  entities under contract with either the department of economic 
 12.22  security or the department of human services for provision of 
 12.23  Project STRIDE related services shall bill the commissioner of 
 12.24  human services for any expenditures incurred by the county, the 
 12.25  county's employment and training service provider, or the 
 12.26  department of economic security that may be reimbursed by 
 12.27  federal money.  The commissioner of human services shall bill 
 12.28  the United States Department of Health and Human Services and 
 12.29  the United States Department of Agriculture for the 
 12.30  reimbursement and appropriate the reimbursed money to the 
 12.31  county, the department of economic security, or employment and 
 12.32  training service provider that submitted the original bill.  The 
 12.33  reimbursed money must be used to expand employment and training 
 12.34  services. 
 12.35     (h) The commissioner of human services shall review county 
 12.36  expenditures of case management and employment and training 
 13.1   block grant money at the end of the third quarter of the 
 13.2   biennium and each quarter after that, and may reallocate 
 13.3   unencumbered or unexpended money allocated under this section to 
 13.4   those counties that can demonstrate a need for additional 
 13.5   money.  Reallocation of funds must be based on the formula set 
 13.6   forth in paragraph (a), excluding the counties that have not 
 13.7   demonstrated a need for additional funds. 
 13.8      (i) The county agency may continue to provide case 
 13.9   management and supportive services to a participant for up to 90 
 13.10  days after the participant loses AFDC eligibility and may 
 13.11  continue providing a specific employment and training service 
 13.12  for the duration of that service to a participant if funds for 
 13.13  the service are obligated or expended prior to the participant 
 13.14  losing AFDC eligibility. 
 13.15     (j) One hundred percent of the money appropriated for an 
 13.16  unemployed parent work experience program under section 256.737 
 13.17  must be allocated to counties based on the average monthly 
 13.18  number of assistance units in the county receiving AFDC-UP for 
 13.19  the period ending December 31 of the previous year.  
 13.20     Sec. 11.  Minnesota Statutes 1994, section 256.737, 
 13.21  subdivision 4, is amended to read: 
 13.22     Subd. 4.  [GOOD CAUSE.] A caretaker shall have good cause 
 13.23  for failure to cooperate if:  
 13.24     (1) the worksite participation adversely affects the 
 13.25  caretaker's physical or mental health as verified by a 
 13.26  physician, licensed or certified psychologist, physical 
 13.27  therapist, vocational expert, or by other sound medical 
 13.28  evidence; or 
 13.29     (2) the caretaker does not possess the skill or knowledge 
 13.30  required for the work; 
 13.31     (3) the caretaker's level of English proficiency is a 
 13.32  potential barrier to employment, provided that the caretaker is 
 13.33  involved in a program which is designed to address the English 
 13.34  language deficiencies.  Individuals who are incapable of gaining 
 13.35  proficiency in English, as determined by the county social 
 13.36  worker, because of advanced age or lack of ability, shall 
 14.1   continue to be exempt under this subdivision and are not subject 
 14.2   to the requirement to participate in the program; or 
 14.3      (4) the caretaker's level of skill or knowledge is a 
 14.4   barrier to permanent, unsubsidized employment, and the caretaker 
 14.5   is enrolled or enrolls in a training or education program.  
 14.6      Sec. 12.  Minnesota Statutes 1994, section 256.74, 
 14.7   subdivision 1, is amended to read: 
 14.8      Subdivision 1.  [AMOUNT.] The amount of assistance which 
 14.9   shall be granted to or on behalf of any dependent child and 
 14.10  mother or other needy eligible relative caring for the dependent 
 14.11  child shall be determined by the county agency in accordance 
 14.12  with rules promulgated by the commissioner and shall be 
 14.13  sufficient, when added to all other income and support available 
 14.14  to the child, to provide the child with a reasonable subsistence 
 14.15  compatible with decency and health.  The amount shall be based 
 14.16  on the method of budgeting required in Public Law Number 97-35, 
 14.17  section 2315, United States Code, title 42, section 602, as 
 14.18  amended and federal regulations at Code of Federal Regulations, 
 14.19  title 45, section 233.  Nonrecurring lump sum income received by 
 14.20  an AFDC family must be budgeted in the normal retrospective 
 14.21  cycle.  When the family's income, after application of the 
 14.22  applicable disregards, exceeds the need standard for the family 
 14.23  because of receipt of earned or unearned lump sum income, the 
 14.24  family will be ineligible for the full number of months derived 
 14.25  by dividing the sum of the lump sum income and other income by 
 14.26  the monthly need standard for a family of that size.  Any income 
 14.27  remaining from this calculation is income in the first month 
 14.28  following the period of ineligibility.  The first month of 
 14.29  ineligibility is the payment month that corresponds with the 
 14.30  budget month in which the lump sum income was received.  For 
 14.31  purposes of applying the lump sum provision, family includes 
 14.32  those persons defined in the Code of Federal Regulations, title 
 14.33  45, section 233.20(a)(3)(ii)(F).  A period of ineligibility must 
 14.34  be shortened when the standard of need increases and the amount 
 14.35  the family would have received also changes, an amount is 
 14.36  documented as stolen, an amount is unavailable because a member 
 15.1   of the family left the household with that amount and has not 
 15.2   returned, an amount is paid by the family during the period of 
 15.3   ineligibility to cover a cost that would otherwise qualify for 
 15.4   emergency assistance, or the family incurs and pays for medical 
 15.5   expenses which would have been covered by medical assistance if 
 15.6   eligibility existed.  In making its determination the county 
 15.7   agency shall disregard the following from family income:  
 15.8      (1) all the earned income of each dependent child applying 
 15.9   for AFDC if the child is a full-time student and all of the 
 15.10  earned income of each dependent child receiving AFDC who is a 
 15.11  full-time student or is a part-time student who is not a 
 15.12  full-time employee.  A student is one who is attending a school, 
 15.13  college, or university, or a course of vocational or technical 
 15.14  training designed to fit students for gainful employment and 
 15.15  includes a participant in the Job Corps program under the Job 
 15.16  Training Partnership Act (JTPA).  The county agency shall also 
 15.17  disregard all income of each dependent child applying for or 
 15.18  receiving AFDC when the income is derived from a program carried 
 15.19  out under JTPA, except that disregard of earned income may not 
 15.20  exceed six months per calendar year; 
 15.21     (2) all educational grants and loans; 
 15.22     (3) the first $90 of each individual's earned income.  For 
 15.23  self-employed persons, the expenses directly related to 
 15.24  producing goods and services and without which the goods and 
 15.25  services could not be produced shall be disregarded pursuant to 
 15.26  rules promulgated by the commissioner; 
 15.27     (4) thirty dollars plus one-third of each individual's 
 15.28  earned income for individuals found otherwise eligible to 
 15.29  receive aid or who have received aid in one of the four months 
 15.30  before the month of application.  With respect to any month, the 
 15.31  county welfare agency shall not disregard under this clause any 
 15.32  earned income of any person who has:  (a) reduced earned income 
 15.33  without good cause within 30 days preceding any month in which 
 15.34  an assistance payment is made; (b) refused without good cause to 
 15.35  accept an offer of suitable employment; (c) left employment or 
 15.36  reduced earnings without good cause and applied for assistance 
 16.1   so as to be able later to return to employment with the 
 16.2   advantage of the income disregard; or (d) failed without good 
 16.3   cause to make a timely report of earned income in accordance 
 16.4   with rules promulgated by the commissioner of human services.  
 16.5   Persons who are already employed and who apply for assistance 
 16.6   shall have their needs computed with full account taken of their 
 16.7   earned and other income.  If earned and other income of the 
 16.8   family is less than need, as determined on the basis of public 
 16.9   assistance standards, the county agency shall determine the 
 16.10  amount of the grant by applying the disregard of income 
 16.11  provisions.  The county agency shall not disregard earned income 
 16.12  for persons in a family if the total monthly earned and other 
 16.13  income exceeds their needs, unless for any one of the four 
 16.14  preceding months their needs were met in whole or in part by a 
 16.15  grant payment.  The disregard of $30 and one-third of earned 
 16.16  income in this clause shall be applied to the individual's 
 16.17  income for a period not to exceed four consecutive months.  Any 
 16.18  month in which the individual loses this disregard because of 
 16.19  the provisions of subclauses (a) to (d) shall be considered as 
 16.20  one of the four months.  An additional $30 work incentive must 
 16.21  be available for an eight-month period beginning in the month 
 16.22  following the last month of the combined $30 and one-third work 
 16.23  incentive.  This period must be in effect whether or not the 
 16.24  person has earned income or is eligible for AFDC.  To again 
 16.25  qualify for the earned income disregards under this clause, the 
 16.26  individual must not be a recipient of aid for a period of 12 
 16.27  consecutive months.  When an assistance unit becomes ineligible 
 16.28  for aid due to the fact that these disregards are no longer 
 16.29  applied to income, the assistance unit shall be eligible for 
 16.30  medical assistance benefits for a 12-month period beginning with 
 16.31  the first month of AFDC ineligibility; 
 16.32     (5) an amount equal to the actual expenditures for the care 
 16.33  of each dependent child or incapacitated individual living in 
 16.34  the same home and receiving aid, not to exceed:  (a) $175 for 
 16.35  each individual age two and older, and $200 for each individual 
 16.36  under the age of two.  The dependent care disregard must be 
 17.1   applied after all other disregards under this subdivision have 
 17.2   been applied; 
 17.3      (6) the first $50 per entire amount of the assistance unit 
 17.4   of the unit's monthly support obligation collected by the 
 17.5   support and recovery (IV-D) unit.  The change in this clause 
 17.6   allowing the entire amount of child support to be forwarded to 
 17.7   the AFDC obligee is effective upon federal approval and 
 17.8   implementation of the waiver under section 22, subdivision 10. 
 17.9   The first $50 of periodic support payments collected by the 
 17.10  public authority responsible for child support enforcement from 
 17.11  a person with a legal obligation to pay support for a member of 
 17.12  the assistance unit must be paid to the assistance unit within 
 17.13  15 days after the end of the month in which the collection of 
 17.14  the periodic support payments occurred and must be disregarded 
 17.15  when determining the amount of assistance.  A review of a 
 17.16  payment decision under this clause must be requested within 30 
 17.17  days after receiving the notice of collection of assigned 
 17.18  support or within 90 days after receiving the notice if good 
 17.19  cause can be shown for not making the request within the 30-day 
 17.20  limit; 
 17.21     (7) that portion of an insurance settlement earmarked and 
 17.22  used to pay medical expenses, funeral and burial costs, or to 
 17.23  repair or replace insured property; and 
 17.24     (8) all earned income tax credit payments received by the 
 17.25  family as a refund of federal income taxes or made as advance 
 17.26  payments by an employer.  
 17.27     All payments made pursuant to a court order for the support 
 17.28  of children not living in the assistance unit's household shall 
 17.29  be disregarded from the income of the person with the legal 
 17.30  obligation to pay support, provided that, if there has been a 
 17.31  change in the financial circumstances of the person with the 
 17.32  legal obligation to pay support since the support order was 
 17.33  entered, the person with the legal obligation to pay support has 
 17.34  petitioned for a modification of the support order. 
 17.35     Sec. 13.  Minnesota Statutes 1994, section 256.74, is 
 17.36  amended by adding a subdivision to read: 
 18.1      Subd. 6.  [STUDY OF STATE SUPPLEMENTARY PAYMENTS.] The 
 18.2   commissioner of human services shall study and report back on a 
 18.3   plan for providing supplemental payments for recipients of AFDC 
 18.4   whose income is reduced or terminated as a result of a reduction 
 18.5   in the rate of pay, reduction in number of hours worked, or 
 18.6   reduction in court ordered or agreed upon support, but whose 
 18.7   assistance under the AFDC program is not adjusted accordingly 
 18.8   because of the operation of retrospective budgeting procedures.  
 18.9   The amount of assistance must be sufficient to ensure that the 
 18.10  assistance unit's income equals, but does not exceed, the 
 18.11  standard of assistance in the AFDC program for an assistance 
 18.12  unit of like size and composition.  The commissioner's report 
 18.13  shall provide information on the projected number of families 
 18.14  likely to be eligible for supplementary payments during the 
 18.15  1997-1999 biennium, and on the costs, including administrative 
 18.16  costs, of making those payments to eligible recipients.  The 
 18.17  report shall be presented to the legislature by February 15, 
 18.18  1996. 
 18.19     Sec. 14.  Minnesota Statutes 1994, section 256D.03, 
 18.20  subdivision 3, is amended to read: 
 18.21     Subd. 3.  [GENERAL ASSISTANCE MEDICAL CARE; ELIGIBILITY.] 
 18.22  (a) General assistance medical care may be paid for any person 
 18.23  who is not eligible for medical assistance under chapter 256B, 
 18.24  including eligibility for medical assistance based on a 
 18.25  spenddown of excess income according to section 256B.056, 
 18.26  subdivision 5, and: 
 18.27     (1) who is receiving assistance under section 256D.05 or 
 18.28  256D.051, or who is having a payment made on the person's behalf 
 18.29  under sections 256I.01 to 256I.06; or 
 18.30     (2)(i) who is a resident of Minnesota; and whose equity in 
 18.31  assets is not in excess of $1,000 per assistance unit.  No asset 
 18.32  test shall be applied to children and their parents living in 
 18.33  the same household.  Exempt assets, the reduction of excess 
 18.34  assets, and the waiver of excess assets must conform to the 
 18.35  medical assistance program in chapter 256B, with the following 
 18.36  exception:  the maximum amount of undistributed funds in a trust 
 19.1   that could be distributed to or on behalf of the beneficiary by 
 19.2   the trustee, assuming the full exercise of the trustee's 
 19.3   discretion under the terms of the trust, must be applied toward 
 19.4   the asset maximum; and 
 19.5      (ii) who has countable income not in excess of the 
 19.6   assistance standards established in section 256B.056, 
 19.7   subdivision 4, or whose excess income is spent down pursuant to 
 19.8   section 256B.056, subdivision 5, using a six-month budget 
 19.9   period, except that a one-month budget period must be used for 
 19.10  recipients residing in a long-term care facility.  The method 
 19.11  for calculating earned income disregards and deductions for a 
 19.12  person who resides with a dependent child under age 21 shall be 
 19.13  as specified in section 256.74, subdivision 1.  However, if a 
 19.14  disregard of $30 and one-third of the remainder described in 
 19.15  section 256.74, subdivision 1, clause (4), has been applied to 
 19.16  the wage earner's income, the disregard shall not be applied 
 19.17  again until the wage earner's income has not been considered in 
 19.18  an eligibility determination for general assistance, general 
 19.19  assistance medical care, medical assistance, or aid to families 
 19.20  with dependent children for 12 consecutive months.  The earned 
 19.21  income and work expense deductions for a person who does not 
 19.22  reside with a dependent child under age 21 shall be the same as 
 19.23  the method used to determine eligibility for a person under 
 19.24  section 256D.06, subdivision 1, except the disregard of the 
 19.25  first $50 of earned income is not allowed; or 
 19.26     (3) who would be eligible for medical assistance except 
 19.27  that the person resides in a facility that is determined by the 
 19.28  commissioner or the federal health care financing administration 
 19.29  to be an institution for mental diseases. 
 19.30     (b) Eligibility is available for the month of application, 
 19.31  and for three months prior to application if the person was 
 19.32  eligible in those prior months.  A redetermination of 
 19.33  eligibility must occur every 12 months. 
 19.34     (c) General assistance medical care is not available for a 
 19.35  person in a correctional facility unless the person is detained 
 19.36  by law for less than one year in a county correctional or 
 20.1   detention facility as a person accused or convicted of a crime, 
 20.2   or admitted as an inpatient to a hospital on a criminal hold 
 20.3   order, and the person is a recipient of general assistance 
 20.4   medical care at the time the person is detained by law or 
 20.5   admitted on a criminal hold order and as long as the person 
 20.6   continues to meet other eligibility requirements of this 
 20.7   subdivision.  
 20.8      (d) General assistance medical care is not available for 
 20.9   applicants or recipients who do not cooperate with the county 
 20.10  agency to meet the requirements of medical assistance. 
 20.11     (e) In determining the amount of assets of an individual, 
 20.12  there shall be included any asset or interest in an asset, 
 20.13  including an asset excluded under paragraph (a), that was given 
 20.14  away, sold, or disposed of for less than fair market value 
 20.15  within the 30 months preceding application for general 
 20.16  assistance medical care or during the period of eligibility.  
 20.17  Any transfer described in this paragraph shall be presumed to 
 20.18  have been for the purpose of establishing eligibility for 
 20.19  general assistance medical care, unless the individual furnishes 
 20.20  convincing evidence to establish that the transaction was 
 20.21  exclusively for another purpose.  For purposes of this 
 20.22  paragraph, the value of the asset or interest shall be the fair 
 20.23  market value at the time it was given away, sold, or disposed 
 20.24  of, less the amount of compensation received.  For any 
 20.25  uncompensated transfer, the number of months of ineligibility, 
 20.26  including partial months, shall be calculated by dividing the 
 20.27  uncompensated transfer amount by the average monthly per person 
 20.28  payment made by the medical assistance program to skilled 
 20.29  nursing facilities for the previous calendar year.  The 
 20.30  individual shall remain ineligible until this fixed period has 
 20.31  expired.  The period of ineligibility may exceed 30 months, and 
 20.32  a reapplication for benefits after 30 months from the date of 
 20.33  the transfer shall not result in eligibility unless and until 
 20.34  the period of ineligibility has expired.  The period of 
 20.35  ineligibility begins in the month the transfer was reported to 
 20.36  the county agency, or if the transfer was not reported, the 
 21.1   month in which the county agency discovered the transfer, 
 21.2   whichever comes first.  For applicants, the period of 
 21.3   ineligibility begins on the date of the first approved 
 21.4   application. 
 21.5      (f)(1) Beginning October 1, 1993, an undocumented alien or 
 21.6   a nonimmigrant is ineligible for general assistance medical care 
 21.7   other than emergency services.  For purposes of this 
 21.8   subdivision, a nonimmigrant is an individual in one or more of 
 21.9   the classes listed in United States Code, title 8, section 
 21.10  1101(a)(15), and an undocumented alien is an individual who 
 21.11  resides in the United States without the approval or 
 21.12  acquiescence of the Immigration and Naturalization Service. 
 21.13     (2) This subdivision does not apply to a child under age 
 21.14  18, to a Cuban or Haitian entrant as defined in Public Law 
 21.15  Number 96-422, section 501(e)(1) or (2)(a), or to an alien who 
 21.16  is aged, blind, or disabled as defined in United States Code, 
 21.17  title 42, section 1382c(a)(1). 
 21.18     (3) For purposes of paragraph (f), "emergency services" has 
 21.19  the meaning given in Code of Federal Regulations, title 42, 
 21.20  section 440.255(b)(1). 
 21.21     Sec. 15.  [268.905] [TARGETED JOBS DEVELOPMENT PLAN.] 
 21.22     (a) The commissioners of economic security and human 
 21.23  services shall jointly develop a plan for a pilot project 
 21.24  involving job creation and support services for families who are 
 21.25  currently receiving assistance under the program of AFDC, or who 
 21.26  are at risk of needing assistance under the program.  The plan 
 21.27  shall have as its goal creating, through job subsidies or other 
 21.28  state incentives, long-term or permanent jobs that pay wages 
 21.29  that would add up to an annual income of at least 150 percent of 
 21.30  the federal poverty level for a family of three, with no more 
 21.31  than 40 hours of work required each week.  The plan shall ensure 
 21.32  that: 
 21.33     (1) the jobs created must not replace existing jobs and 
 21.34  wages must be on a par with those of similar existing jobs 
 21.35  within the company or organization; 
 21.36     (2) employers receiving a subsidy or other state incentive 
 22.1   are required to retain the employee for at least 18 months 
 22.2   unless the employee is guilty of gross misconduct or it is clear 
 22.3   after three months that the employee is unable to perform the 
 22.4   work required.  If the employee is terminated by the employer 
 22.5   before the 18-month period, a proportional amount of the job 
 22.6   subsidy or other incentive shall be returned to the state; 
 22.7      (3) participating employers must provide health care 
 22.8   benefits to plan participants; 
 22.9      (4) plan participants shall be provided with child care 
 22.10  under section 256H.03; and 
 22.11     (5) newly created jobs will be available to:  (i) 
 22.12  unemployed single parents; (ii) current AFDC recipients; and 
 22.13  (iii) families with incomes less than 150 percent of the federal 
 22.14  poverty level where only one parent is able to work. 
 22.15     (b) In developing the jobs program, the commissioners shall 
 22.16  also address the need for jobs that match the skills and 
 22.17  education of the eligible population, the need for specific and 
 22.18  flexible hours for parents to care for their families, and the 
 22.19  need for transportation to work and child care providers. 
 22.20     Sec. 16.  Minnesota Statutes 1994, section 290.0671, 
 22.21  subdivision 1, is amended to read: 
 22.22     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
 22.23  a credit against the tax imposed by this chapter equal to 15 40 
 22.24  percent of the credit for which the individual is eligible under 
 22.25  section 32 of the Internal Revenue Code. 
 22.26     For a nonresident or part-year resident, the credit 
 22.27  determined under section 32 of the Internal Revenue Code must be 
 22.28  allocated based on the percentage calculated under section 
 22.29  290.06, subdivision 2c, paragraph (e). 
 22.30     For a person who was a resident for the entire tax year and 
 22.31  has earned income not subject to tax under this chapter, the 
 22.32  credit must be allocated based on the ratio of federal adjusted 
 22.33  gross income reduced by the earned income not subject to tax 
 22.34  under this chapter over federal adjusted gross income. 
 22.35     Sec. 17.  Minnesota Statutes 1994, section 297A.01, 
 22.36  subdivision 16, is amended to read: 
 23.1      Subd. 16.  [CAPITAL EQUIPMENT.] (a) Capital equipment means 
 23.2   machinery and equipment purchased or leased for use in this 
 23.3   state and used by the purchaser or lessee primarily for 
 23.4   manufacturing, fabricating, mining, or refining tangible 
 23.5   personal property to be sold ultimately at retail and for 
 23.6   electronically transmitting results retrieved by a customer of 
 23.7   an on-line computerized data retrieval system.  
 23.8      (b) Capital equipment includes all machinery and equipment 
 23.9   that is essential to the integrated production process.  Capital 
 23.10  equipment includes, but is not limited to: 
 23.11     (1) machinery and equipment used or required to operate, 
 23.12  control, or regulate the production equipment; 
 23.13     (2) machinery and equipment used for research and 
 23.14  development, design, quality control, and testing activities; 
 23.15     (3) environmental control devices that are used to maintain 
 23.16  conditions such as temperature, humidity, light, or air pressure 
 23.17  when those conditions are essential to and are part of the 
 23.18  production process; or 
 23.19     (4) materials and supplies necessary to construct and 
 23.20  install machinery or equipment. 
 23.21     (c) Capital equipment does not include the following: 
 23.22     (1) repair or replacement parts, including accessories, 
 23.23  whether purchased as spare parts, repair parts, or as upgrades 
 23.24  or modifications, and whether purchased before or after the 
 23.25  machinery or equipment is placed into service.  Parts or 
 23.26  accessories are treated as capital equipment only to the extent 
 23.27  that they are a part of and are essential to the operation of 
 23.28  the machinery or equipment as initially purchased; 
 23.29     (2) motor vehicles taxed under chapter 297B; 
 23.30     (3) machinery or equipment used to receive or store raw 
 23.31  materials; 
 23.32     (4) building materials; 
 23.33     (5) machinery or equipment used for nonproduction purposes, 
 23.34  including, but not limited to, the following:  machinery and 
 23.35  equipment used for plant security, fire prevention, first aid, 
 23.36  and hospital stations; machinery and equipment used in support 
 24.1   operations or for administrative purposes; machinery and 
 24.2   equipment used solely for pollution control, prevention, or 
 24.3   abatement; and machinery and equipment used in plant cleaning, 
 24.4   disposal of scrap and waste, plant communications, space 
 24.5   heating, lighting, or safety; 
 24.6      (6) "farm machinery" as defined by subdivision 15, 
 24.7   "aquaculture production equipment" as defined by subdivision 19, 
 24.8   and "replacement capital equipment" as defined by subdivision 
 24.9   20; or 
 24.10     (7) special tooling as defined by subdivision 17; or 
 24.11     (8) any other item that is not essential to the integrated 
 24.12  process of manufacturing, fabricating, mining, or refining. 
 24.13     (d) For purposes of this subdivision: 
 24.14     (1) "Equipment" means independent devices or tools separate 
 24.15  from machinery but essential to an integrated production 
 24.16  process, including computers and software, used in operating 
 24.17  machinery and equipment; and any subunit or assembly comprising 
 24.18  a component of any machinery or accessory or attachment parts of 
 24.19  machinery, such as tools, dies, jigs, patterns, and molds. 
 24.20     (2) "Fabricating" means to make, build, create, produce, or 
 24.21  assemble components or property to work in a new or different 
 24.22  manner. 
 24.23     (3) "Machinery" means mechanical, electronic, or electrical 
 24.24  devices, including computers and software, that are purchased or 
 24.25  constructed to be used for the activities set forth in paragraph 
 24.26  (a), beginning with the removal of raw materials from inventory 
 24.27  through the completion of the product, including packaging of 
 24.28  the product. 
 24.29     (4) "Manufacturing" means an operation or series of 
 24.30  operations where raw materials are changed in form, composition, 
 24.31  or condition by machinery and equipment and which results in the 
 24.32  production of a new article of tangible personal property.  For 
 24.33  purposes of this subdivision, "manufacturing" includes the 
 24.34  generation of electricity or steam to be sold at retail. 
 24.35     (5) "Mining" means the extraction of minerals, ores, stone, 
 24.36  and peat. 
 25.1      (6) "On-line data retrieval system" means a system whose 
 25.2   cumulation of information is equally available and accessible to 
 25.3   all its customers. 
 25.4      (7) "Pollution control equipment" means machinery and 
 25.5   equipment used to eliminate, prevent, or reduce pollution 
 25.6   resulting from an activity described in paragraph (a). 
 25.7      (8) "Primarily" means machinery and equipment used 50 
 25.8   percent or more of the time in an activity described in 
 25.9   paragraph (a). 
 25.10     (9) "Refining" means the process of converting a natural 
 25.11  resource to a product, including the treatment of water to be 
 25.12  sold at retail. 
 25.13     (e) For purposes of this subdivision the requirement that 
 25.14  the machinery or equipment "must be used by the purchaser or 
 25.15  lessee" means that the person who purchases or leases the 
 25.16  machinery or equipment must be the one who uses it for the 
 25.17  qualifying purpose.  When a contractor buys and installs 
 25.18  machinery or equipment as part of an improvement to real 
 25.19  property, only the contractor is considered the purchaser. 
 25.20     (f) Notwithstanding prior provisions of this subdivision, 
 25.21  machinery and equipment purchased or leased to replace machinery 
 25.22  and equipment used in the mining or production of taconite shall 
 25.23  qualify as capital equipment. 
 25.24     Sec. 18.  Minnesota Statutes 1994, section 297A.02, 
 25.25  subdivision 2, is amended to read: 
 25.26     Subd. 2.  [MACHINERY AND EQUIPMENT.] Notwithstanding the 
 25.27  provisions of subdivision 1, the rate of the excise tax imposed 
 25.28  upon sales of farm machinery and aquaculture production 
 25.29  equipment is 2.5 percent, and the rate of the excise tax imposed 
 25.30  upon sales of special tooling is four percent. 
 25.31     Sec. 19.  Minnesota Statutes 1994, section 297A.15, 
 25.32  subdivision 5, is amended to read: 
 25.33     Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
 25.34  provisions of sections 297A.02, subdivision 5, and section 
 25.35  297A.25, subdivisions 42 and 50, the tax on sales of capital 
 25.36  equipment, replacement capital equipment, and construction 
 26.1   materials and supplies under section 297A.25, subdivision 50, 
 26.2   shall be imposed and collected as if the rates under sections 
 26.3   297A.02, subdivision 1, and 297A.021, applied.  Upon application 
 26.4   by the purchaser, on forms prescribed by the commissioner, a 
 26.5   refund equal to the reduction in the tax due as a result of the 
 26.6   application of the exemption under section 297A.25, subdivision 
 26.7   42 or 50, and the rates under sections 297A.02, subdivision 5, 
 26.8   and 297A.021 shall be paid to the purchaser.  In the case of 
 26.9   building materials qualifying under section 297A.25, subdivision 
 26.10  50, where the tax was paid by a contractor, application must be 
 26.11  made by the owner for the sales tax paid by all the contractors, 
 26.12  subcontractors, and builders for the project.  The application 
 26.13  must include sufficient information to permit the commissioner 
 26.14  to verify the sales tax paid for the project.  The application 
 26.15  shall include information necessary for the commissioner 
 26.16  initially to verify that the purchases qualified as capital 
 26.17  equipment under section 297A.25, subdivision 42, replacement 
 26.18  capital equipment under section 297A.01, subdivision 20, or 
 26.19  capital equipment or construction materials and supplies under 
 26.20  section 297A.25, subdivision 50.  No more than two applications 
 26.21  for refunds may be filed under this subdivision in a calendar 
 26.22  year.  No owner may apply for a refund based on the exemption 
 26.23  under section 297A.25, subdivision 50, before July 1, 1993.  
 26.24  Unless otherwise specifically provided by this subdivision, the 
 26.25  provisions of section 289A.40 apply to the refunds payable under 
 26.26  this subdivision.  There is annually appropriated to the 
 26.27  commissioner of revenue the amount required to make the refunds. 
 26.28     The amount to be refunded shall bear interest at the rate 
 26.29  in section 270.76 from the date the refund claim is filed with 
 26.30  the commissioner. 
 26.31     Sec. 20.  [STATE STANDARD OF NEED STUDY.] 
 26.32     The commissioner of human services shall conduct a study 
 26.33  and make recommendations on the state standard of need and 
 26.34  payment levels in the AFDC program.  The study shall be 
 26.35  conducted in accordance with the requirements of federal law and 
 26.36  the requirements of this section.  In conducting the study, the 
 27.1   commissioner shall make detailed findings on the cost of the 
 27.2   shelter, food, clothing, fuel, transportation, and other basic 
 27.3   needs in Minnesota.  The commissioner shall also consider 
 27.4   regional differences within the state in determining the cost of 
 27.5   items included in the standard of need budget.  In all cost 
 27.6   estimates, the commissioner shall take into account the ages of 
 27.7   the AFDC recipients, most specifically the fact that most of the 
 27.8   recipients are children whose needs, particularly for food and 
 27.9   clothing items, may exceed that of adults.  The commissioner 
 27.10  shall also examine various options that enable working families 
 27.11  on AFDC to retain more of their earnings.  The commissioner 
 27.12  shall present the report with recommendations to the chairs of 
 27.13  the human services policy and funding committees of the 
 27.14  legislature by February 15, 1996. 
 27.15     Sec. 21.  [INCREASING AFDC CASH BENEFITS TO POVERTY LEVEL.] 
 27.16     The commissioner of human services shall increase the AFDC 
 27.17  cash benefit to be equal to the poverty level for a family of 
 27.18  like size and composition.  The commissioner shall repeal or 
 27.19  change related rules which are inconsistent with the increase in 
 27.20  cash benefits. 
 27.21     Sec. 22.  [FEDERAL WAIVER PACKAGE.] 
 27.22     Subdivision 1.  [REQUEST.] The commissioner of human 
 27.23  services shall make a single request for the waivers listed in 
 27.24  this section to the United States Department of Health and Human 
 27.25  Services.  The waivers in the package support and encourage AFDC 
 27.26  recipients to move from reliance on welfare to 
 27.27  self-sufficiency.  The commissioner shall explore alternatives 
 27.28  to the federally required waiver evaluation process in an effort 
 27.29  to reduce evaluation costs and develop a cost-effective 
 27.30  evaluation process for the waiver package in this section.  
 27.31  While also exploring other possible alternatives, the 
 27.32  commissioner shall investigate the feasibility of the 
 27.33  following:  (1) evaluation for the entire waiver package; (2) 
 27.34  consolidation of evaluation efforts for the same or similar 
 27.35  waiver with another state; and (3) completion of the evaluation 
 27.36  internally, possibly by the office of legislative auditor.  The 
 28.1   commissioner shall notify the revisor of statutes when each 
 28.2   waiver is approved by the federal government. 
 28.3      Subd. 2.  [WAIVER TO ELIMINATE MANDATORY WORK FOR 
 28.4   TWO-PARENT FAMILIES.] The commissioner shall seek a waiver of 
 28.5   the federal requirements in the program of AFDC to eliminate the 
 28.6   mandatory requirements of participation in the community work 
 28.7   experience program, on-the-job training program, grant diversion 
 28.8   program, and the mandatory state-designed work program for 
 28.9   two-parent AFDC families.  This waiver will give the state more 
 28.10  flexibility in determining what types of work and training 
 28.11  programs will result in self-sufficiency for AFDC families in 
 28.12  the state.  The commissioner shall also seek a waiver which 
 28.13  allows savings from the elimination of this requirement to be 
 28.14  used to provide more child care for persons on AFDC who are in 
 28.15  work and training programs. 
 28.16     Subd. 3.  [WAIVER TO DISALLOW PARENTAL INCOME OF A PREGNANT 
 28.17  OR PARENTING MINOR LIVING WITH PARENTS.] The commissioner shall 
 28.18  seek the following waivers:  (1) from the filing unit 
 28.19  requirement in Code of Federal Regulations, title 45, section 
 28.20  206.10(a)(1)(vii), for minor parents living with a parent on 
 28.21  AFDC with other dependent children, resulting in the minor 
 28.22  parent receiving the same separate need standard available if 
 28.23  the minor parent's parent was not on AFDC; (2) to disregard all 
 28.24  parental income if the parent is on AFDC with other children; 
 28.25  and (3) if the parent is not on AFDC with other children, to 
 28.26  disregard 150 percent of the federal poverty guideline and deem 
 28.27  the remainder of income under Code of Federal Regulations, title 
 28.28  45, section 233.20(a)(3)(xviii), provided the parental income 
 28.29  does not exceed 150 percent of poverty.  If the commissioner 
 28.30  experiences barriers or complications in preparing the waiver 
 28.31  under this subdivision, the commissioner shall report back to 
 28.32  the legislature for clarification without delaying the requests 
 28.33  for other waivers under this section.  The commissioner shall 
 28.34  also explore the impact of waivers under this subdivision on 
 28.35  other programs and report to the legislature potential waivers 
 28.36  necessary to provide consistency across programs.  The general 
 29.1   policy in requesting these waivers is to keep the family intact 
 29.2   and give the minor parent, the dependent child, and the 
 29.3   grandparent an incentive to continue living together as a family.
 29.4      Subd. 4.  [WAIVER TO ALLOW START WORK OFFSET.] The 
 29.5   commissioner shall seek a waiver of the federal regulation which 
 29.6   requires the state to recover AFDC overpayments from the 
 29.7   assistance unit if the overpayment occurred in the month the 
 29.8   assistance unit started working and the overpayment resulted 
 29.9   from the assistance unit's increased earnings. 
 29.10     Subd. 5.  [WAIVER OF THE 100-HOUR RULE; WORK HISTORY 
 29.11  REQUIREMENT; 30-DAY WAITING PERIOD REQUIREMENT.] The 
 29.12  commissioner shall seek a waiver to eliminate the 100-hour rule 
 29.13  under Code of Federal Regulations, title 45, section 
 29.14  233.100(a)(1)(i); the eligibility requirement for past 
 29.15  employment history under Code of Federal Regulations, title 45, 
 29.16  section 233.100(a)(3)(iii); and the requirement for a 30-day 
 29.17  waiting period under Code of Federal Regulations, title 45, 
 29.18  section 233.100(a)(3)(i).  
 29.19     Subd. 6.  [WAIVER OF MOTOR VEHICLE RESOURCE LIMIT.] The 
 29.20  commissioner shall seek a waiver to increase the maximum equity 
 29.21  value of a licensed motor vehicle, which can be excluded as a 
 29.22  resource under the federal regulations, from $1,500 to the level 
 29.23  permitted under the federal Food Stamp Program.  This waiver is 
 29.24  essential for AFDC recipients who need reliable transportation 
 29.25  to participate in education, work, and training to become 
 29.26  self-sufficient. 
 29.27     Subd. 7.  [WAIVER TO ALLOW STUDENTS TO EARN INCOME.] The 
 29.28  commissioner shall seek a waiver of the federal regulation which 
 29.29  includes the earned income of dependent children and minor 
 29.30  caretakers who are attending school at least half-time when 
 29.31  determining eligibility for AFDC.  The commissioner shall also 
 29.32  seek a waiver which allows savings set aside in a separate 
 29.33  account designated specifically for future education or 
 29.34  employment needs to be excluded from the AFDC resource limits. 
 29.35     Subd. 8.  [TRANSITIONAL MEDICAL ASSISTANCE AND CHILD CARE 
 29.36  BENEFITS EXTENDED.] The commissioner of human services shall 
 30.1   seek a waiver of federal requirements to enable: 
 30.2      (1) recipient families eligible for transitional medical 
 30.3   assistance under Minnesota Statutes, section 256B.062, to 
 30.4   receive an additional 12 months of medical assistance benefits 
 30.5   up to a total of 24 months; and 
 30.6      (2) recipient families eligible for AFDC child care 
 30.7   benefits under Minnesota Statutes, section 256H.05, subdivision 
 30.8   1b, clause (3), to receive child care benefits for an additional 
 30.9   12 months beyond their transition year, up to a total of 24 
 30.10  months. 
 30.11     Subd. 9.  [ADDITIONAL WAIVER REQUEST FOR EMPLOYED DISABLED 
 30.12  PERSONS.] The commissioner shall seek a federal waiver in order 
 30.13  to implement a work incentive for disabled persons eligible for 
 30.14  medical assistance who are not residents of long-term care 
 30.15  facilities.  The waiver shall request authorization to establish 
 30.16  a medical assistance earned income disregard for employed 
 30.17  disabled persons equivalent to the threshold amount applied to 
 30.18  persons who qualify under section 1619(b) of the Social Security 
 30.19  Act, except that when a disabled person's earned income reaches 
 30.20  the maximum income permitted at the threshold under section 
 30.21  1619(b), the person shall retain medical assistance eligibility 
 30.22  and must contribute to the costs of medical care on a sliding 
 30.23  fee basis. 
 30.24     Subd. 10.  [WAIVER TO ALLOW CHILD SUPPORT TO BE FORWARDED 
 30.25  TO AFDC OBLIGEE.] The commissioner shall seek a waiver of the 
 30.26  federal requirements to enable the entire amount paid for child 
 30.27  support by the obligor to be forwarded to the AFDC obligee, 
 30.28  instead of the $50 pass-through under Minnesota Statutes, 
 30.29  section 256.74, subdivision 1. 
 30.30     Subd. 11.  [IMPLEMENTATION.] The commissioner shall 
 30.31  implement the program changes authorized under this subdivision 
 30.32  promptly upon approval of the waiver, provided all conditions 
 30.33  are met under Minnesota Statutes, section 256.01, subdivision 2, 
 30.34  clause (12). 
 30.35     Subd. 12.  [EVALUATION.] If any of the federal waivers are 
 30.36  granted, the commissioner shall evaluate the program changes 
 31.1   according to federal waiver requirements and, if necessary, 
 31.2   submit reports to the legislature within a time frame consistent 
 31.3   with the evaluation criteria that are established. 
 31.4      Sec. 23.  [APPROPRIATION.] 
 31.5      $38,000,000 is appropriated from the general fund to the 
 31.6   commissioner of human services and is added to the appropriation 
 31.7   for the basic sliding fee program established under Minnesota 
 31.8   Statutes, section 256H.03, to be available for the biennium 
 31.9   ending June 30, 1997. 
 31.10     Sec. 24.  [REPEALER.] 
 31.11     Minnesota Statutes 1994, sections 256D.05, subdivision 8; 
 31.12  297A.02, subdivision 5; and 297A.25, subdivision 53, are 
 31.13  repealed. 
 31.14     Sec. 25.  [EFFECTIVE DATE.] 
 31.15     Sections 5 (256.73, subd. 3b), 6 (256.73, subd. 8), and 9 
 31.16  (256.736, subd. 3a) are effective when the applicable federal 
 31.17  waivers are granted and approved by the legislature.  Section 16 
 31.18  (290.0671, subd. 1) is effective for taxable years beginning 
 31.19  after December 31, 1994.  Sections 17 (297A.01, subd. 16), 18 
 31.20  (297A.02, subd. 2), 19 (297A.15, subd. 5), and 24 (repealer), 
 31.21  are effective for sales after June 30, 1995.