HF 154

as introduced - 88th Legislature (2013 - 2014) Posted on 01/24/2013 01:27pm

A bill for an act
relating to economic development; creating the performance rewards on fast
investment today program; providing tax benefits; appropriating money;
proposing coding for new law in Minnesota Statutes, chapter 469.

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

Section 1.

new text begin [469.352] PERFORMANCE REWARDS ON FAST INVESTMENT
TODAY.
new text end

new text begin Subdivision 1. 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.
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new text begin (b) "New full-time employee" means an employee who:
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new text begin (1) begins work at a qualified PROFIT business during the taxable year;
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new text begin (2) was not previously on the payroll of the qualified PROFIT business; and
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new text begin (3) has annualized expected hours of work of at least 1,950 hours.
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new text begin (c) "Qualified performance rewards on fast investment today (PROFIT) business"
means a business that is certified by the commissioner under this section.
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new text begin (d) "Taxing authority" means a county, home rule charter or statutory city, or town.
new text end

new text begin (e) "Wages" is defined as provided in section 290.92, subdivision 1, clause (1).
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new text begin Subd. 2. new text end

new text begin Application and certification. new text end

new text begin (a) In order to qualify for the tax benefits
in subdivision 4, a business must submit an application to each taxing authority that
may be affected by the tax benefits under subdivision 5, 6, or 7, or to a joint powers
board established under section 471.59 acting on behalf of local government units with
jurisdiction to tax in the applicable geographic area. If the affected taxing authorities
determine that the increased business activities will benefit the local economy, the taxing
authorities may notify the commissioner that the business has received local approval to
be certified as a qualified PROFIT business. In making this determination, each taxing
authority must consider the conditions listed in paragraph (e) and subdivision 3, paragraph
(a), clauses (1) and (2).
new text end

new text begin (b) In lieu of paragraph (a), one or more taxing authorities or a joint powers board
may provide a general local approval to the commissioner that applies to any business
seeking approval to be certified as a qualified PROFIT business that conducts or plans
to conduct business operations within an area subject to the jurisdiction of the taxing
authority or authorities or joint powers board.
new text end

new text begin (c) Upon receiving notification of local approval under paragraph (a) or (b), the
commissioner shall review the determination by the local taxing authorities or joint
powers board and consider the conditions listed in paragraph (e) and subdivision 3,
paragraph (a), clauses (1) and (2), to determine whether to certify a business as a qualified
PROFIT business.
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new text begin (d) The applications required under paragraph (a) must be in the form and be made
under the procedures specified by the commissioner.
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new text begin (e) Prior to certification of a business under this section, the commissioner shall
consider the following:
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new text begin (1) the economic outlook of the industry in which the business engages;
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new text begin (2) the projected sales of the business that will be generated from outside the state
of Minnesota;
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new text begin (3) how the business will build on existing regional, national, and international
strengths to diversify the state's economy;
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new text begin (4) whether the business activity would occur without financial assistance;
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new text begin (5) the effect of financial assistance on industry competitors; and
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new text begin (6) any other criteria the commissioner deems necessary.
new text end

new text begin Subd. 3. new text end

new text begin Requirements. new text end

new text begin (a) To receive certification as a qualified PROFIT business,
a business must satisfy all of the following conditions:
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new text begin (1) the business is engaged in, within Minnesota, one of the following as its primary
business activity:
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new text begin (i) manufacturing;
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new text begin (ii) warehousing;
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new text begin (iii) distribution;
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new text begin (iv) information technology;
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new text begin (v) finance;
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new text begin (vi) insurance; or
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new text begin (vii) professional or technical services;
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new text begin (2) the business must not be primarily engaged in lobbying, political consulting,
leisure, hospitality, or professional services provided by attorneys, accountants, business
consultants, physicians, or health care consultants; and
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new text begin (3) the business must enter into a binding agreement with the appropriate local
government unit in which the qualified PROFIT business is located and the commissioner
to create at least ten new full-time employee positions, earning at least $35,000 in annual
wages for businesses located in the seven-county metropolitan area as defined in section
473.121, subdivision 2, or at least $27,000 in annual wages in all other areas and invest
at least $500,000 in a construction project that includes a new, expanding, or remodeled
facility within two years of being certified as a qualified PROFIT business. The agreement
may also include additional job creation goals as determined by the commissioner and the
business and that must be achieved in order for the business to continue to be eligible for
the tax benefits after the qualified PROFIT business initially meets the two-year goals.
new text end

new text begin (b) For purposes of this section, a business includes an individual, corporation,
partnership, limited liability company, association, or any other entity.
new text end

new text begin Subd. 4. new text end

new text begin Tax benefits. new text end

new text begin (a) A business that is certified as a qualified PROFIT
business is eligible for the following tax benefits for up to 12 years from the date the
commissioner certifies the business as a qualified PROFIT business under this section:
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new text begin (1) the property tax refund for certain improvements as provided in subdivision 5;
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new text begin (2) a refund for sales and use tax and any local sales and use taxes on qualifying
purchases made as provided in subdivision 6; and
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new text begin (3) a refund for the state sales tax on motor vehicles and any local sales tax on motor
vehicles as provided under subdivision 7.
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new text begin (b) A refund of property, sales, or motor vehicle taxes paid, as described under
paragraph (a), is provided to a qualified PROFIT business when two-year construction
and employment goals under subdivision 3, paragraph (a), clause (3), are achieved and
upon filing with the commissioner of revenue a claim for refund in the form and manner
prescribed by the commissioner of revenue. Following achievement of the two-year goals,
a qualified PROFIT business is eligible for a refund of property, sales, or motor vehicle
taxes paid, as described under paragraph (a), in the previous year if the business meets the
additional job creation goals. The amount of the refund is equal to the amount of property,
sales, or motor vehicle taxes paid, as described under paragraph (a), in the previous calendar
year if the business meets its additional job creation goals. If the business does not meet
its additional job creation goals, then the refund is equal to the amount of property, sales,
or motor vehicle taxes paid, as described under paragraph (a), in the previous calendar
year multiplied by the number of new full-time employee positions over the number of
full-time employee positions agreed to under subdivision 3, paragraph (a), clause (3).
new text end

new text begin Subd. 5. new text end

new text begin Property tax refund. new text end

new text begin (a) The value of improvements made to real property
and personal property, classified under section 273.13, subdivision 24, and owned and
operated by a qualified PROFIT business as defined under this section, may be refunded
as provided in this subdivision.
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new text begin (b) For property to qualify for the refund, the occupant must be certified by the
commissioner as a qualified PROFIT business under this section.
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new text begin (c) A qualified PROFIT business is eligible for the refund beginning the first
assessment year after the business is certified by the commissioner. To be eligible, the
property must be occupied by July 1 of the assessment year by a qualified PROFIT business.
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new text begin (d) A qualified PROFIT business must notify the commissioner of revenue in writing
of eligibility under this subdivision by July 1 in order to begin receiving the refund under
this subdivision in the following year.
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new text begin (e) The refund is distributed as provided in subdivision 4, paragraph (b), and
continues annually while the business is certified under this section as long as the business
continues to meet the job creation goals.
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new text begin Subd. 6. new text end

new text begin Sales and use tax refund. new text end

new text begin (a) A qualified PROFIT business is eligible
for a refund of taxes paid under chapter 297A on the purchase and use of construction
materials, services, and supplies used or consumed in, including equipment incorporated
into, real property owned by a qualified PROFIT business if used in the conduct of a
qualified PROFIT business.
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new text begin (b) The refund under this subdivision applies to a local sales and use tax regardless
of whether the local sales tax is imposed on the sales taxable as defined in chapter 297A.
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new text begin (c) The refund under this subdivision applies regardless of whether the purchases are
made by the qualified PROFIT business or a contractor.
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new text begin (d) The tax must be refunded in the manner provided under subdivision 4, paragraph
(b), subject to the job creation and construction agreement under subdivision 3, paragraph
(a), clause (3).
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new text begin Subd. 7. new text end

new text begin Motor vehicle tax refund. new text end

new text begin (a) A qualified PROFIT business is eligible
for a refund of taxes paid under chapter 297B on the purchase of a motor vehicle, if the
motor vehicle is primarily used as part of or in direct support of the business operations of
a qualified PROFIT business. The refund applies to sales if the purchase was made and
delivery received during the duration of a qualified PROFIT business certification. The
refund also applies to any local sales and use tax.
new text end

new text begin (b) The tax must be refunded in the manner provided under subdivision 4, paragraph
(b), subject to the job creation and construction agreement under subdivision 3, paragraph
(a), clause (3).
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new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds under subdivision
4 is annually appropriated to the commissioner of revenue from the general fund.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2014 and
thereafter and for sales and purchases made after July 31, 2013, and thereafter.
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