HF 72

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:33am

A bill for an act
relating to workforce development; establishing a lifelong learning account
program; allowing tax credits to employers and employees for contributions to
lifelong learning accounts; appropriating money; proposing coding for new law
in Minnesota Statutes, chapters 116L; 290.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116L.85] LIFELONG LEARNING ACCOUNTS PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Program established. new text end

new text begin The lifelong learning accounts program is
established in the Department of Employment and Economic Development.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of employment and economic
development.
new text end

new text begin (c) "Education expenses" means "qualified higher education expenses" as defined in
section 529(e) of the Internal Revenue Code.
new text end

new text begin (d) "Lifelong learning account" means an individual asset account held by a trustee,
custodian, or fiduciary approved by the commissioner on behalf of an employee in this
state to pay education expenses of the employee. State-operated qualified tuition programs
under section 529 of the Internal Revenue Code of 1986, as amended, qualify to be
trustees, custodians, or fiduciaries for lifelong learning accounts under this section without
application to or approval by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner's duties. new text end

new text begin The commissioner shall use any funds
appropriated for the lifelong learning accounts program to:
new text end

new text begin (1) encourage both lower-income and lower-skilled health care, hospitality, and
technology industry workers to participate in a lifelong learning account;
new text end

new text begin (2) encourage the establishment of lifelong learning accounts in diverse geographic
and economic areas and among differing sizes of firms, and include health care, hospitality,
and technology industry workers in urban, suburban, and rural areas of the state;
new text end

new text begin (3) make technical assistance available to companies, and make educational and
career advising available to individual participants; and
new text end

new text begin (4) document the process and outcomes in the establishment of lifelong learning
accounts, and prepare a report on the program, to be submitted to the legislature by
December 15 of each even-numbered year.
new text end

new text begin Subd. 4. new text end

new text begin Limits on use of money in accounts. new text end

new text begin The money in a lifelong learning
account must be used only to pay education expenses incurred by or on behalf of the
account owner.
new text end

new text begin Subd. 5. new text end

new text begin Contracting authority. new text end

new text begin The commissioner may contract with other
government agencies, nonprofit organizations, or for-profit firms to carry out the purpose
and required activities of the lifelong learning accounts program.
new text end

new text begin Subd. 6. new text end

new text begin Authority to adopt rules. new text end

new text begin The commissioner may adopt administrative
rules under chapter 14 to implement this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 2.

new text begin [290.0678] LIFELONG LEARNING ACCOUNT CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Refundable credit allowed; individuals. new text end

new text begin (a) A qualified individual
is allowed a credit against the tax imposed under this chapter equal to 50 percent of the
contributions made during the taxable year to a lifelong learning account. The maximum
tax credit for the taxable year is $1,000 for a married couple filing a joint return and
$500 for all other returns. Amounts funded with matching payments from employers that
qualify for a credit under subdivision 2 do not qualify for a credit under this subdivision.
new text end

new text begin (b) If the credit for which the claimant is eligible under this subdivision exceeds the
claimant's tax liability under this chapter, the commissioner shall refund the excess.
new text end

new text begin (c) An amount sufficient to pay the refunds required by this subdivision is
appropriated to the commissioner from the general fund.
new text end

new text begin Subd. 2. new text end

new text begin Employer tax credit. new text end

new text begin (a) An employer, whether a corporation, an
individual, or a partnership, subject to taxation under this chapter may claim a tax credit
for payments made during the taxable year to make matching payments for contributions
to lifelong learning accounts for its employees. The maximum tax credit is limited to $500
during the taxable year for each employee on whose behalf qualified lifelong learning
account matching payments are made.
new text end

new text begin (b) For a partnership or S corporation, the credit must be allocated to the partners or
shareholders in proportion to their respective shares of the income of the entity.
new text end

new text begin (c) The credit allowed under this subdivision is limited to the liability for tax
imposed under this chapter for the taxable year reduced by the sum of the nonrefundable
credits allowed under this chapter. If the amount of the credit determined under this
section for any taxable year exceeds the liability for tax, the excess is a carryover to each
of the 15 succeeding taxable years. The entire amount of the excess unused credit for the
taxable year must be 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 must not exceed the
taxpayer's liability for tax less the credit for the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Lifelong learning account" means an individual asset account held by a trustee,
custodian, or fiduciary qualifying under section 116L.85, on behalf of an employee
in Minnesota.
new text end

new text begin (c) "Qualified individual" means an individual who is not claimed as a dependent or
as a qualifying child, as those terms are defined in section 152 of the Internal Revenue
Code, by another taxpayer for federal tax purposes.
new text end

new text begin Subd. 4. new text end

new text begin Special tax on nonqualified withdrawals. new text end

new text begin (a) An individual making a
nonqualified withdrawal from a lifelong learning account is subject to a tax equal to
the greater of:
new text end

new text begin (1) 25 percent of the withdrawal; or
new text end

new text begin (2) the tax credit claimed on contributions under subdivision 1 or the amount
withdrawn, whichever is less.
new text end

new text begin (b) For purposes of this subdivision, a "nonqualified withdrawal" means a
withdrawal that is not:
new text end

new text begin (1) used to pay "qualified higher education expenses" as defined in section 529(e)
of the Internal Revenue Code; or
new text end

new text begin (2) contributed to another lifelong learning account within 60 days after the
withdrawal from the original account.
new text end

new text begin (c) The tax under this subdivision is due and payable at the same time as and with
the return for the taxable year in which the withdrawal was made. The trustee for the
lifelong learning account shall withhold and remit to the commissioner 25 percent of each
withdrawal from an account, unless the account holder certifies that the amount will be
used for qualifying higher education expenses. The amount withheld is a credit against the
tax due under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end