Minnesota Legislature
HF 2373
as introduced - 89th Legislature (2015 - 2016) Posted on 05/18/2015 10:55am
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A bill for an act
relating to telecommunications; border-to-border broadband; creating a
broadband tax credit; amending Minnesota Statutes 2014, sections 116J.395;
290.06, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 116J.395, is amended to read:
116J.395 BORDER-TO-BORDER BROADBAND DEVELOPMENT GRANT
new text begin AND TAX CREDIT new text end PROGRAM.
Subdivision 1.
Establishment.
A grant new text begin and tax credit new text end program is established under
the Department of Employment and Economic Development to award grants new text begin and tax
credits new text end to eligible applicants in order to promote the expansion of access to broadband
service in deleted text begin unserved ordeleted text end underserved areas of the state.
Subd. 2.
Eligible expenditures.
Grants new text begin and tax credits new text end may be awarded under this
section to fund the acquisition and installation of middle-mile and last-mile infrastructure
that support broadband service scalable to speeds of at least 100 megabits per second
download and 100 megabits per second upload.
Subd. 3.
Eligible applicants.
Eligible applicants for grantsnew text begin or tax creditsnew text end awarded
under this section include:
(1) an incorporated business or a partnership;
(2) a political subdivision;
(3) an Indian tribe;
(4) a Minnesota nonprofit organization organized under chapter 317A;
(5) a Minnesota cooperative association organized under chapter 308A or 308B; and
(6) a Minnesota limited liability corporation organized under chapter 322B for the
purpose of expanding broadband access.
Subd. 4.
Application process.
An eligible applicant must submit an application
to the commissioner on a form prescribed by the commissioner. The commissioner shall
develop administrative procedures governing the application and grantnew text begin and tax credit
new text end award process. The commissioner shall act as fiscal agent for the grant program and
shall be responsible for receiving and reviewing grant applications and awarding grants
under this section.
Subd. 5.
Application contents.
An applicant for a grant new text begin or tax credit new text end under this
section shall provide the following information on the application:
(1) the location of the project;
(2) the kind and amount of broadband infrastructure to be purchased for the project;
(3) evidence regarding the unserved or underserved nature of the community in
which the project is to be located;
(4) the number of households passed that will have access to broadband service as a
result of the project, or whose broadband service will be upgraded as a result of the project;
(5) significant community institutions that will benefit from the proposed project;
(6) evidence of community support for the project;
(7) the total cost of the project;
(8) sources of funding or in-kind contributions for the project that will supplement
any grant award; and
(9) any additional information requested by the commissioner.
Subd. 6.
Awarding grantsnew text begin and tax creditsnew text end .
(a) In evaluating applications and
awarding grantsnew text begin or tax creditsnew text end , the commissioner shall give priority to applications that deleted text begin are
constructed in areas identified by the director of the Office of Broadband Development as
unserved.
deleted text end
deleted text begin
(b) In evaluating applications and awarding grants, the commissioner may give
priority to applications that:
deleted text end
deleted text begin (1)deleted text end are constructed in areas identified by the director of the Office of Broadband
Development as underserveddeleted text begin ;deleted text end new text begin , and may give priority to projects that:
new text end
deleted text begin (2)deleted text end new text begin (1)new text end offer new or substantially upgraded broadband service to important
community institutions including, but not limited to, libraries, educational institutions,
public safety facilities, and healthcare facilities;
deleted text begin (3)deleted text end new text begin (2)new text end facilitate the use of telemedicine and electronic health records;
deleted text begin (4)deleted text end new text begin (3)new text end serve deleted text begin economically distressed areas of the state, as measured by indices of
unemployment, poverty, or population loss that are significantly greater than the statewide
average;deleted text end new text begin one or more businesses in a city that has provided a written statement to the city
indicating that the lack of broadband service at speeds scalable to at least 100 megabits
per second download and 100 megabits per second upload has impeded their business
growth or threatens their ability to remain in the city;
new text end
deleted text begin (5)deleted text end new text begin (4)new text end provide technical support and train residents, businesses, and institutions in
the community served by the project to utilize broadband service;
deleted text begin (6)deleted text end new text begin (5)new text end include a component to actively promote the adoption of the newly available
broadband services in the community;
deleted text begin (7)deleted text end new text begin (6)new text end provide evidence of strong support for the project from citizens, government,
businesses, and institutions in the community;
deleted text begin (8)deleted text end new text begin (7)new text end provide access to broadband service to a greater number of deleted text begin unserved or
deleted text end underserved households and businesses; or
deleted text begin (9)deleted text end new text begin (8)new text end leverage greater amounts of funding for the project from other private and
public sources.
deleted text begin (c)deleted text end new text begin (b)new text end The commissioner shall endeavor to award grants new text begin and tax credits new text end under this
section to qualified applicants in all regions of the state.
Subd. 7.
Limitation.
(a) No grant new text begin or tax credit new text end awarded under this section may fund
more than 50 percent of the total cost of a project.
(b) Grants new text begin and tax credits new text end awarded to a single project under this section must not
exceed $5,000,000.
new text begin
(c) The commissioner must not award more than $50,000,000 in tax credits under
this section for any taxable year.
new text end
new text begin Subd. 8. new text end
new text begin Tax credits. new text end
new text begin
(a) The commissioner may award tax credits to applicants for
projects, based on the criteria set out in subdivision 6, up to the maximum amount of the
limitations that apply under subdivision 7. Applications for a tax credit must include the
name and taxpayer identification number of the taxpayers that will invest in or install the
project, as well as all of the information required for a grant and any additional information
that the commissioner requires. Eligible applicants under subdivision 3, clauses (2) to (4),
may apply for a tax credit and designate the for-profit entity or individuals that will fund
all or part of the project and claim the tax credit.
new text end
new text begin
(b) The commissioner must award tax credits for a taxable year by November 1 of the
prior year. In awarding tax credits, the commissioner must certify the dollar amount of the
credit, the taxable year to which it applies, the taxpayers that will be allowed the credit, and
the qualifying project and specific investments that must be made to qualify for the credit.
new text end
new text begin
(c) The commissioner shall provide the certification and supporting information
necessary to administer the tax credit to the commissioner of revenue.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment
and applies to taxable years beginning after December 31, 2016.
new text end
Sec. 2.
Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision
to read:
new text begin Subd. 37. new text end
new text begin Broadband tax credit. new text end
new text begin
(a) A taxpayer is allowed a credit against the tax
under subdivision 1 or 2c equal to the amount certified by the commissioner of employment
and economic development under section 116J.395, to the taxpayer for the taxable year.
new text end
new text begin
(b) Credits allowed to a partnership, limited liability company taxed as a partnership,
corporation, or multiple owners of property are passed through to the partners, members,
shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or
owner based on that person's share of the entity's income for the taxable year.
new text end
new text begin
(c) The credit is limited to the liability for tax. "Liability for tax" for purposes of this
subdivision means the tax imposed under subdivision 1 or 2c, as applicable, and under
section 290.091 or 290.0921, as applicable, for the taxable year reduced by the sum of the
nonrefundable credits allowed under this chapter.
new text end
new text begin
(d) For a corporation that is a partner in a partnership, the credit allowed for the
taxable year is limited to the lesser of the amount determined under paragraph (c) for the
taxable year or an amount, separately computed with respect to the corporation's interest
in the trade, business, or entity, equal to the amount of tax attributable to that portion of
taxable income that is allocable or apportionable to the corporation's interest in the trade,
business, or entity.
new text end
new text begin
(e) If the amount of the credit determined under this subdivision for any taxable year
exceeds the limitation under paragraph (c), the excess is a credit carryover to each of the
ten succeeding taxable years. The entire amount of the excess unused credit for the taxable
year is carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit that may be added under this paragraph is limited to the taxpayer's liability
for tax, less the credit for the taxable year.
new text end
new text begin
(f) Notwithstanding the certification eligibility issued by the commissioner of
employment and economic development under section 116J.395, the commissioner may
utilize any audit and examination powers under chapter 270C or 289A to the extent
necessary to verify that the taxpayer is eligible for the credit and to assess for the amount
of any improperly claimed credit.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
The tax credits in this section are effective for taxable years
beginning after December 31, 2016.
new text end