HF 4689

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/04/2022 05:09pm

A bill for an act
relating to taxation; providing grants to local governments; providing income tax
subtractions for certain business assistance; requiring a report; appropriating money.

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

Section 1. new text begin INCOME TAX SUBTRACTION; COVID BUSINESS ASSISTANCE
PROGRAMS.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section:
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new text begin (1) for an individual, estate, or trust, "subtraction" has the meaning given in Minnesota
Statutes, section 290.0132, subdivision 1, and the rules in that subdivision apply for this
section;
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new text begin (2) for a corporation other than an S corporation, "subtraction" has the meaning given
in Minnesota Statutes, section 290.0134, subdivision 1, and the rules in that subdivision
apply for this section;
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new text begin (3) the definitions in Minnesota Statutes, section 290.01, apply for this section; and
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new text begin (4) "qualifying business assistance" means grants, forgivable loans, and other financial
assistance to businesses by the state, county, or local government that were included in
adjusted gross income, and that meet the criteria in subdivision 4.
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new text begin Subd. 2. new text end

new text begin Business assistance subtraction; individuals, estates, and trusts. new text end

new text begin For an
individual, estate, or trust, the amount of qualifying business assistance is a subtraction.
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new text begin Subd. 3. new text end

new text begin Business assistance subtraction; C corporations. new text end

new text begin For a corporation other
than an S corporation, the amount of qualifying business assistance is a subtraction.
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new text begin Subd. 4. new text end

new text begin Programs eligible for a subtraction. new text end

new text begin Only qualifying business assistance
provided under the following sections of state or federal law is considered qualifying business
assistance for the purposes of this section:
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new text begin (1) business assistance provided under section 2;
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new text begin (2) forgivable loans under Executive Order No. 20-15;
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new text begin (3) small business relief grants under Laws 2020, First Special Session chapter 1, section
4;
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new text begin (4) business relief payments under Laws 2020, Seventh Special Session chapter 2, article
1;
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new text begin (5) grants to movie theaters and convention centers under Laws 2020, Seventh Special
Session chapter 2, article 4;
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new text begin (6) county relief grants to local businesses under Laws 2020, Seventh Special Session
chapter 2, article 5;
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new text begin (7) grants through the Main Street Economic Revitalization Program in Laws 2021, First
Special Session chapter 10, article 2, section 5;
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new text begin (8) main street COVID-19 relief grants under Laws 2021, First Special Session chapter
10, article 2, section 22;
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new text begin (9) forgivable loans under Laws 2021, First Special Session chapter 10, article 2, section
24;
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new text begin (10) financial assistance to businesses provided by a county, city, or township using
funds from the Coronavirus Relief Fund under section 5001 of Public Law 116-136; or
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new text begin (11) financial assistance to businesses provided by a county, city, or township using
funds from the State and Local Fiscal Recovery Fund in section 9901 of Public Law 117-2.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2019.
new text end

Sec. 2. new text begin COUNTY PANDEMIC BUSINESS AND COMMUNITY RELIEF AID;
APPROPRIATION.
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new text begin Subdivision 1. new text end

new text begin Appropriation. new text end

new text begin (a) $....... in fiscal year 2023 is appropriated from the
general fund to the commissioner of revenue for payments to counties under this section.
This is a onetime appropriation.
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new text begin (b) Of the amount under paragraph (a), $....... must be used for payments to counties for
economic assistance and aid to businesses under subdivision 2.
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new text begin (c) Of the amount under paragraph (a), $....... must be used for payments to counties to
provide rental assistance under subdivision 6.
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new text begin (d) Any unexpended amount from the appropriation in paragraph (a) after June 30, 2023,
is canceled.
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new text begin Subd. 2. new text end

new text begin Economic assistance and aid to local businesses. new text end

new text begin (a) From the amount available
under subdivision 1, paragraph (b), each county shall be issued a payment of a per capita
amount determined by reference to the population of each county according to the most
recently available 2020 population estimate from the state demographer as of January 1,
2022.
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new text begin (b) A county must use funds received under paragraph (a) to provide economic assistance
to underserved communities under subdivision 3, aid to businesses under subdivision 4, or
aid to venues under subdivision 5. A county may use funds for one or more of the approved
uses in subdivisions 3, 4, and 5.
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new text begin (c) Each county may use the greater of $6,250 or 2.5 percent of the total amount received
under this subdivision for administrative costs incurred from making payments under this
subdivision. A county may contract with a third party to administer the program on behalf
of the county.
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new text begin (d) Payments under this subdivision must be awarded by March 15, 2023.
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new text begin Subd. 3. new text end

new text begin Economic assistance to underserved communities. new text end

new text begin (a) A county may use
funds received under subdivision 2 to provide economic assistance to businesses. Economic
assistance under this paragraph must be provided to businesses located in areas designated
by the county as underserved communities. Economic assistance includes but is not limited
to:
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new text begin (1) grants, loans, or other financial assistance to businesses that pay their employees a
living wage;
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new text begin (2) grants, loans, or other financial assistance to improve streetscapes or engage in
creative placemaking;
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new text begin (3) down payment assistance for businesses seeking to purchase commercial property;
or
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new text begin (4) payments to commercial property owners to reduce rent costs for businesses.
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new text begin (b) To provide economic assistance to businesses under paragraph (a), a county must
designate census tracts representing five percent or less of the population in the county as
"underserved communities." In making a designation under this subdivision, the county
must consider the following characteristics of a census tract, among other considerations
deemed relevant by the county:
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new text begin (1) the unemployment rate;
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new text begin (2) the poverty rate;
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new text begin (3) the median income of the tract relative to the rest of the county; and
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new text begin (4) the number of vacant commercial properties.
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new text begin Subd. 4. new text end

new text begin Aid to businesses without income in 2019. new text end

new text begin A county may use funds received
under subdivision 2 to provide economic assistance to businesses that were in operation in
calendar year 2020 or 2021, but not in calendar year 2019, and were ineligible to participate
in a state or federal business assistance program due to the lack of operations or revenue in
calendar year 2019. Economic assistance includes but is not limited to grants, loans, or any
other financial assistance deemed appropriate by the county.
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new text begin Subd. 5. new text end

new text begin Aid to venues. new text end

new text begin (a) A county may use funds received under subdivision 2 to
provide grants to Minnesota-registered businesses in good standing or Minnesota-registered
nonprofits in good standing that:
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new text begin (1) are directly engaged in the procurement, promotion, production, or presentation of
live entertainment events to an in-person audience; and
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new text begin (2) experienced a decrease in revenues due to the COVID-19 pandemic.
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new text begin (b) To qualify for a grant under this subdivision, a business or nonprofit must:
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new text begin (1) meet the following revenue requirements:
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new text begin (i) have derived at least 33 percent of its 2019 revenue from the sale of tickets for live
events; or
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new text begin (ii) be directly reliant on ticketed live entertainment events but not directly in receipt of
those ticket revenues because the event is free to the general public and the revenue is
derived from avenues other than ticket sales;
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new text begin (2) employ no more than 60 full-time equivalent employees, defined as an employee
who worked on average at least 30 hours per week or 130 hours per month;
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new text begin (3) have been restricted from operating above 25 percent capacity or 250 attendees,
whichever is less, pursuant to an executive order issued during a peacetime emergency
declared regarding the infectious disease known as COVID-19;
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new text begin (4) not have any current tax delinquency with the Department of Revenue at the time
of application; and
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new text begin (5) have its principal place of business in Minnesota.
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new text begin (c) The following entities are ineligible for grants under this subdivision:
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new text begin (1) bars, restaurants, and other facilities whose primary source of revenue is not
entertainment events;
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new text begin (2) multinational or publicly owned companies; and
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new text begin (3) adult entertainment operations.
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new text begin (d) Notwithstanding the requirements of paragraph (b), a county may authorize a grant
to a business under this subdivision if the county determines that the business has
substantially met the requirements of this subdivision, but was a new entertainment venue
that had planned on opening in 2020 but was unable to begin operations based solely on
the fact that COVID-19-related closures prevented the business from doing so. The business
shall submit, on a form required by the county, any documentation the county deems
necessary to determine whether the business applies for a discretionary grant under this
subdivision.
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new text begin Subd. 6. new text end

new text begin Rental assistance payments. new text end

new text begin (a) From the amount available under subdivision
1, paragraph (c), each county shall be issued a payment equal to the product of the amount
available under subdivision 1, paragraph (c), multiplied by the number of rent-burdened
households in the county, divided by the number of rent-burdened households in the state.
The number of rent-burdened households shall be determined using the 2020 experimental
estimates provided by the American Community Survey of the United States Census Bureau.
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new text begin (b) For the purposes of this subdivision, the following terms have the meanings given:
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new text begin (1) "eligible household" means a household in which household income is at or below
50 percent of area median income, as adjusted for household size;
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new text begin (2) "rent-burdened household" means a household in which gross rent is 30 percent or
more of household income; and
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new text begin (3) "rental assistance" means payments for:
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new text begin (i) rent;
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new text begin (ii) rental arrears;
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new text begin (iii) utilities and home energy costs;
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new text begin (iv) utilities and home energy costs arrears; and
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new text begin (v) other expenses related to housing incurred due, directly or indirectly, to the novel
coronavirus disease COVID-19 outbreak.
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new text begin (c) A county receiving a payment under this subdivision must spend at least 90 percent
of the payment received to provide rental assistance to eligible households.
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new text begin (d) A county receiving a payment under this subdivision may use up to ten percent of
the payment received for administrative costs attributable to providing rental assistance.
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new text begin (e) A county receiving aid under this subdivision may distribute the aid to a community
action agency or a nonprofit to provide rental assistance to eligible households.
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new text begin Subd. 7. new text end

new text begin Grants. new text end

new text begin Grants and the process of making grants under this section are exempt
from the following statutes and related policies: Minnesota Statutes, sections 16A.15,
subdivision 3; 16B.97; and 16B.98, subdivisions 5, 7, and 8. A county opting to use a third
party to administer grants is exempt from Minnesota Statutes, section 471.345, in the
selection of the third-party administrator. The exemptions under this paragraph expire on
March 15, 2023.
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new text begin Subd. 8. new text end

new text begin Report. new text end

new text begin By January 31, 2024, the commissioner of revenue shall report to the
legislative committees with jurisdiction over taxes on the grants provided under this section.
The report must comply with Minnesota Statutes, sections 3.195 and 3.197. By July 1, 2023,
each county must report to the commissioner of revenue how the county used the funds
provided under this section.
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