HF 2854

as introduced - 87th Legislature (2011 - 2012) Posted on 03/14/2012 11:37am

A bill for an act
relating to workforce development; establishing a new jobs training program;
providing a credit against withholding tax liability; establishing accounts;
authorizing administrative rulemaking; appropriating money; proposing coding
for new law in Minnesota Statutes, chapter 116L.

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

Section 1.

new text begin [116L.40] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin When used in sections 116L.40 to 116L.44, the following
terms have the meanings given them unless the context requires otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Agreement. new text end

new text begin "Agreement" means the agreement between an employer
and the commissioner concerning a project.
new text end

new text begin Subd. 3. new text end

new text begin Community. new text end

new text begin "Community" means any of the following:
new text end

new text begin (1) the city, whether organized as a statutory or home rule charter city, or the county
in which an eligible primary sector business is or will be located;
new text end

new text begin (2) an economic development authority, housing and redevelopment authority, port
authority, or an institution of higher education that provides workforce training; or
new text end

new text begin (3) any other group or entity, the interest of which is in the economic growth of
the area.
new text end

new text begin Subd. 4. new text end

new text begin Date of commencement of the project. new text end

new text begin "Date of commencement of the
project" means the date of the agreement.
new text end

new text begin Subd. 5. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Employment and
Economic Development.
new text end

new text begin Subd. 6. new text end

new text begin Employee. new text end

new text begin "Employee" means the individual employed in a new job.
new text end

new text begin Subd. 7. new text end

new text begin Employer. new text end

new text begin "Employer" means the individual, corporation, partnership,
limited liability company, or association providing new jobs and entering into an
agreement.
new text end

new text begin Subd. 8. new text end

new text begin Full-time job. new text end

new text begin "Full-time job" means a job providing 32 hours of work
per week for a minimum of nine months.
new text end

new text begin Subd. 9. new text end

new text begin New job. new text end

new text begin "New job" means a full-time job in a new or expanding primary
sector business. To qualify, a job must be permanent with no planned termination date.
The term does not include recalled workers returning to positions they previously held,
replacement workers, including workers newly hired as a result of a labor dispute, or other
jobs that an employee was formerly employed by the employer in the state.
new text end

new text begin Subd. 10. new text end

new text begin New jobs credit from withholding; credit. new text end

new text begin "New jobs credit from
withholding" or "credit" means the credit as provided in section 116L.42.
new text end

new text begin Subd. 11. new text end

new text begin New jobs training program; program. new text end

new text begin "New jobs training program"
or "program" means the project or projects established by the commissioner to provide
workers with education and training required for jobs in new or expanding primary sector
businesses in the state.
new text end

new text begin Subd. 12. new text end

new text begin Primary sector business. new text end

new text begin "Primary sector business" means an employer
engaged in locating to or in this state that previously had no presence in this state or an
employer expanding its operations within this state, if the employer meets the following
eligibility criteria:
new text end

new text begin (1) the employer enters an agreement with the commissioner and (i) increases its
base employment level by ten percent, or two employees, whichever is greater, or (ii) for
an employer without an established base employment level in this state, hires a minimum
of five employees within the time set in the agreement; and
new text end

new text begin (2) each of the employees qualifying under clause (1) is employed at a location
outside of the metropolitan area, as defined in section 473.121, subdivision 2.
new text end

new text begin Subd. 13. new text end

new text begin Program costs. new text end

new text begin "Program costs" means all necessary and incidental
costs of providing program services. The term does not include the cost of purchasing
equipment to be owned or used by the training or educational institution or service.
new text end

new text begin Subd. 14. new text end

new text begin Program services. new text end

new text begin "Program services" means training and education
specifically directed to new jobs, including the following:
new text end

new text begin (1) all direct training costs, such as:
new text end

new text begin (i) program promotion;
new text end

new text begin (ii) instructor wages, per diem, and travel;
new text end

new text begin (iii) curriculum development and training materials;
new text end

new text begin (iv) lease of training equipment and training space;
new text end

new text begin (v) miscellaneous direct training costs;
new text end

new text begin (vi) administrative costs; and
new text end

new text begin (vii) assessment and testing;
new text end

new text begin (2) in-house or on-the-job training; and
new text end

new text begin (3) subcontracted services with institutions governed by the state board of higher
education; private colleges or universities; federal, state, or local agencies; or other private
training or educational services.
new text end

new text begin Subd. 15. new text end

new text begin Project. new text end

new text begin "Project" means a training arrangement that is the subject of an
agreement entered into between the commissioner and an employer to provide program
services.
new text end

Sec. 2.

new text begin [116L.41] COMMISSIONER'S DUTIES AND POWERS; AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Service provision. new text end

new text begin Upon request, the commissioner shall provide or
coordinate the provision of program services to primary sector businesses that are eligible
for grants under sections 116L.40 to 116L.44.
new text end

new text begin Subd. 2. new text end

new text begin Agreements; required terms. new text end

new text begin (a) The commissioner may enter into an
agreement to establish a project with an employer that:
new text end

new text begin (1) sets a date for commencement of the project;
new text end

new text begin (2) identifies program costs, including deferred costs, to be paid from available
sources including the new jobs credit from withholding to be received or derived from
new jobs resulting from the project;
new text end

new text begin (3) provides for a guarantee by the employer of payment for program costs;
new text end

new text begin (4) provides that any deferral of program cost payments may not exceed ten years
from the date of commencement of the project;
new text end

new text begin (5) provides that on-the-job training costs for employees may not exceed 50 percent
of the annual gross wages and salaries of the new jobs in the first full year after the date
of commencement of the project;
new text end

new text begin (6) provides the maximum amount of new jobs credit from withholding or tuition
and fee payments allowed for a project;
new text end

new text begin (7) provides that every employee participating in the new jobs training program
must be paid wages of at least $10 per hour, plus benefits, by the end of the first year of
employment under the project and through the period the credit under section 116L.42
applies; and
new text end

new text begin (8) provides that the length of time each job category will be provided job
training, which must not exceed the length of allowable on-the-job training in a
vocational preparation guide of the dictionary of occupational titles, as designated by the
commissioner, for that job title or for similar jobs.
new text end

new text begin (b) Before entering a final agreement, the commissioner shall:
new text end

new text begin (1) determine that sufficient funding authority for the project is available under
section 116L.44; and
new text end

new text begin (2) investigate the applicability of other training programs and determine whether the
job skills partnership grant program is a more suitable source of funding for the training.
The investigation must be completed within 15 days or as soon as reasonably possible
after the employer has provided the commissioner with all the requested information.
new text end

new text begin Subd. 3. new text end

new text begin Agreement required; notification. new text end

new text begin (a) An agreement may not be executed
by the commissioner:
new text end

new text begin (1) unless the commissioner has awarded the project a grant under section 116L.43;
or
new text end

new text begin (2) until the commissioner has received notification from the community that the
employer has qualified for a grant.
new text end

new text begin (b) Upon execution of the agreement, the commissioner shall notify the
commissioner of revenue of the agreement and the identity of the employer.
new text end

new text begin Subd. 4. new text end

new text begin Allocation of limit. new text end

new text begin The commissioner shall allocate funding authority for
credits under section 116L.44 to project applications based on a first-come first-served
basis, determined on the basis of the commissioner's receipt of a complete application for
the project, including the provision of all of the required information.
new text end

new text begin Subd. 5. new text end

new text begin Application fee. new text end

new text begin The commissioner may charge each applicant an
application fee to cover part or all of the administrative and legal costs incurred. If the fee
does not exceed five percent of the amount of the credit allocated to the applicant, the fee
is deemed approved under section 16A.1283. The fee is deposited in the new jobs tax
credit account in the special revenue fund and amounts in the account are appropriated to
the commissioner for the department's costs of administering the program.
new text end

new text begin Subd. 6. new text end

new text begin Rulemaking authority. new text end

new text begin The commissioner may adopt administrative rules
under chapter 14 to implement the provisions of sections 116L.40 to 116L.44.
new text end

Sec. 3.

new text begin [116L.42] NEW JOBS CREDIT FROM WITHHOLDING TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Recovery of program costs; withholding credit. new text end

new text begin Grants made
under section 116L.43 for program costs must be repaid by receipt of a new jobs credit
from withholding as follows:
new text end

new text begin (1) new jobs credit from withholding is based on the wages paid to the new
employees;
new text end

new text begin (2) the income tax withholding on wages paid by the employer to each new
employee participating in a project must be credited from the withholding payments made
by the employer under section 290.92; and
new text end

new text begin (3) the commissioner of revenue shall transmit the equivalent credit payment amount
to the commissioner of management and budget to be allocated to the account established
under subdivision 2 for payment to the department, community, or both, as the case may
be, of reimbursement of the amount of grants made under section 116L.43.
new text end

new text begin Subd. 2. new text end

new text begin Credit accounts. new text end

new text begin The commissioner of management and budget shall
establish accounts and records as necessary to administer the new jobs credit. If the
grant was made by a community out of its funds, the commissioner of management and
budget shall pay the credit amount to the community. If the grant was made out of the
appropriation under section 116L.43, the credit amount is canceled to the general fund.
If the grant was made from other money available to the department, the credit must be
paid to the appropriate fund or account as provided under that funding source. All money
allocated by subdivision 1 is appropriated for purposes of this section. When the amount
of the grant has been repaid, the employer credits cease, but in no case later than ten years
after the date of the commencement of the project. Any money in the account for a project
after the grant for the project has been paid is canceled to the general fund.
new text end

new text begin Subd. 3. new text end

new text begin Effect on employee income tax liability. new text end

new text begin A new employee participating
in a project must receive full credit for the amount withheld under section 290.92 for
purposes of the employee's tax liability under chapter 290.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin (a) The commissioner of revenue and the commissioner
of management and budget shall administer this section. The provisions of section 290.92
pertaining to the administration of the income tax withholding, including provisions for
refund or credit, not in conflict with the provisions of sections 116L.40 to 116L.44, govern
the administration of the credit provided by this section.
new text end

new text begin (b) Each participating employer shall provide any information the commissioner
of revenue requires.
new text end

new text begin (c) The commissioner of revenue and the commissioner of management and budget
may adopt administrative rules under chapter 14 to aid in the administration of this section.
new text end

Sec. 4.

new text begin [116L.43] PROGRAM FUNDING; APPROPRIATION.
new text end

new text begin (a) Funding for programs must be through grants as provided under sections
116L.40 to 116L.44. For the purposes of making grants under the program, $10,000,000 is
appropriated to the commissioner from the general fund for each fiscal year beginning
after June 30, 2012, until the program expires under section 116L.44. The annual amount
available for grants under the appropriation is reduced by the amount of credits allocated
to projects qualifying for grants from a community for which the commissioner has been
notified under section 116L.41, subdivision 3, paragraph (a), clause (2), and by any grants
the department awards out of other funding sources.
new text end

new text begin (b) The department or a community may also make grants out of any of its available
money to fund the programs.
new text end

new text begin (c) A community may fund a program through a grant without use of the new jobs
credit under section 116L.42.
new text end

Sec. 5.

new text begin [116L.44] FUNDING LIMIT; REPORT; EXPIRATION.
new text end

new text begin Subdivision 1. new text end

new text begin Funding limit. new text end

new text begin The maximum amount of credits under section
116L.42 is limited to $10,000,000 per year. The commissioner must not enter into
agreements under section 116L.42 that authorize training to be reimbursed by credits
under section 116L.43 in excess of the limitation in this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin (a) By February 1, 2015, the commissioner shall prepare a
report to the governor and the legislature on the new jobs training program. The report
must include at least the following:
new text end

new text begin (1) the amount of loans and grants issued under the program;
new text end

new text begin (2) the number of individuals receiving training under the program;
new text end

new text begin (3) the number of new hires attributable to issuance of the credit;
new text end

new text begin (4) an analysis of the effectiveness of the credit in encouraging employment; and
new text end

new text begin (5) any other information the commissioner determines is appropriate to evaluating
the cost-effectiveness of the program and credit.
new text end

new text begin (b) The report to the legislature must be distributed as provided in section 3.195.
new text end

new text begin Subd. 3. new text end

new text begin Expiration. new text end

new text begin The authority of the commissioner to enter agreements
authorizing new training under section 116L.42 expires June 30, 2017.
new text end