HF 2577

as introduced - 91st Legislature (2019 - 2020) Posted on 03/18/2019 02:41pm

A bill for an act
relating to taxation; income; providing a tax credit for certain employers; requiring
a report; proposing coding for new law in Minnesota Statutes, chapter 290.

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

Section 1.

new text begin [290.0683] GREATER MINNESOTA CATCH-UP CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit name. new text end

new text begin The credit allowed by this section shall be known as the
"Greater Minnesota Catch-Up Credit."
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) "Duly appointed representatives" means a county or regional economic development
agency or authority.
new text end

new text begin (c) "Eligible county" means a county, located outside the metropolitan area, as defined
in section 473.121, subdivision 2, that experienced, between 2008 and 2018, a net job growth
rate of less than 1.5 percent, or a county that has a population of less than 25,000 according
to the 2010 census.
new text end

new text begin (d) "Qualifying job" means full-time employment in an export-focused or high-growth,
high-demand industry that pays not less than $15 per hour, or $12 per hour plus health
insurance benefits, or its equivalent. Qualifying job includes employment in the following
industries: advanced manufacturing, information technology, forestry, mining, agriprocessing,
and tourism attractions. Qualifying job does not include any employment for which a tax
credit is received under section 469.318 or for which a grant is made under section 469.309.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin (a) A taxpayer who is awarded a credit under subdivision 4
may take a credit against the tax imposed by this chapter, equal to $4,000 per qualifying
job created by the taxpayer, per year for three years, and $3,000 in the fourth year.
new text end

new text begin (b) A taxpayer may first claim the credit under this section for the taxable year in which
the new qualifying job is in existence for the full year and thereafter for each of the three
immediately succeeding taxable years in which the new qualifying job is in existence for a
full year.
new text end

new text begin Subd. 4. new text end

new text begin Qualification; application. new text end

new text begin (a) To qualify for a credit under this section, a
taxpayer must create a new qualifying job within an eligible county.
new text end

new text begin (b) A taxpayer seeking a credit under this section must apply to an eligible county by
January 15 on a form and in a manner prescribed by the commissioner of employment and
economic development.
new text end

new text begin (c) Eligible counties shall award credits under this section once each year by March 15.
An eligible county shall publish a notice advertising the award date at least 90 days before
the date. The county board of commissioners of an eligible county, or the duly appointed
representatives of the county board of commissioners, shall award credits under this section
to applicants using uniform criteria established by the commissioner of employment and
economic development. The county board of commissioners must use criteria that
contemplate and place greater weight on the following factors: whether the qualifying job
provides higher wages, better benefits, or on-the-job training; whether the taxpayer's business
provides employee stock ownership plans or employee profit sharing; and whether a higher
percentage of the business's employees are hired with tax credits under this section.
new text end

new text begin Subd. 5. new text end

new text begin Limitation; carryforward of unawarded amounts; designated employees. new text end

new text begin (a)
The total amount of credits that may be awarded in each eligible county under this section
may not exceed the following amounts:
new text end

new text begin (1) $20,000 for credits taken in tax year 2020;
new text end

new text begin (2) $40,000 for credits taken in tax year 2021;
new text end

new text begin (3) $60,000 for credits taken in tax year 2022; and
new text end

new text begin (4) $75,000 for credits taken in tax year 2023 and thereafter.
new text end

new text begin (b) If a county does not award the maximum amount of credits for a tax year, the
maximum amount for the following year is increased by the amount not awarded in the
preceding year.
new text end

new text begin (c) A credit under this section is awarded to the taxpayer for a qualifying job held by a
designated employee. Except as provided by this paragraph, the taxpayer may only claim
the credit under this section for those years in which the designated employee held a
qualifying job for the entire year. If the designated employee for whom a credit under this
section was awarded leaves the employment of the taxpayer for any reason, the remaining
credit the taxpayer would otherwise be eligible to receive is forfeited and may not be claimed
by the taxpayer unless a replacement employee is hired to fill the qualifying job within three
months. Credit amounts forfeited under this paragraph accrue back to and may be awarded
by an eligible county as if the amount had been unawarded, as provided in paragraphs (a)
and (b).
new text end

new text begin Subd. 6. new text end

new text begin Credit refundable. new text end

new text begin If the amount of the credit that the taxpayer is eligible to
receive under this section exceeds the taxpayer's liability for tax under this chapter, the
commissioner shall refund the excess to the claimant. An amount sufficient to pay the
refunds authorized by this subdivision is appropriated to the commissioner from the general
fund.
new text end

new text begin Subd. 7. new text end

new text begin Proportional credits. new text end

new text begin Credits granted to a partnership, a limited liability
company taxed as a partnership, an S 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 their share of the entity's assets or as
specially allocated in their organizational documents or any other executed agreement, as
of the last day of the taxable year.
new text end

new text begin Subd. 8. new text end

new text begin Manner of claiming. new text end

new text begin The commissioner shall prescribe the manner in which
the credit may be issued and claimed. This may include providing for the issuance of credit
certificates or allowing the credit only as a separately processed claim for a refund.
new text end

new text begin Subd. 9. new text end

new text begin Report. new text end

new text begin The commissioner of employment and economic development shall
provide a written report to the chairs and ranking minority members of the senate and house
of representatives committees and divisions with jurisdiction over jobs and economic
development and taxes by February 15, 2027. The report must comply with sections 3.195
and 3.197, and provide information on credits claimed under this section and evaluate the
feasibility and benefit of continuing the program. The commissioner of employment and
economic development may consult with the commissioner of revenue in preparing this
report.
new text end

new text begin Subd. 10. new text end

new text begin Expiration. new text end

new text begin This section expires for taxable years beginning after December
31, 2035.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
credits taken for taxable years beginning after December 31, 2020.
new text end