HF 1860

as introduced - 88th Legislature (2013 - 2014) Posted on 03/24/2014 03:23pm

A bill for an act
relating to taxation; providing tax credits to encourage charitable contributions;
establishing an Endow Minnesota program; authorizing rulemaking;
appropriating money; amending Minnesota Statutes 2012, sections 290.06, by
adding a subdivision; 297I.20, by adding a subdivision; proposing coding for
new law in Minnesota Statutes, chapter 116J.

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

Section 1.

new text begin [116J.9821] ENDOW MINNESOTA PROGRAM.
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.
new text end

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

new text begin (c) "Endow Minnesota qualified community foundation" means a community
foundation or public charity operating and organized in this state that, as verified by
the commissioner based on a certification by the Minnesota Council on Foundations,
makes grants to one or more nonprofit organizations that are unaffiliated with the qualified
community foundation, and:
new text end

new text begin (1) complies with the Minnesota Council on Foundations guidelines for membership
by a community foundation or public charity and subscribes to the principles of
grantmaking established by the Minnesota Council on Foundations; or
new text end

new text begin (2) is certified by the national Council on Foundations to comply with national
standards.
new text end

new text begin (d) "Endowment gift" means an irrevocable contribution to a permanent endowment
held by an Endow Minnesota qualified community foundation.
new text end

new text begin Subd. 2. new text end

new text begin Endow Minnesota tax credit. new text end

new text begin (a) A tax credit of up to a maximum of 25
percent of the contribution amount is allowed to an individual, estate, trust, or corporation
for a contribution made to an Endow Minnesota qualified community foundation for a
permanent endowment fund established to substantially benefit a charitable cause in this
state, against the taxes imposed under chapters 290 and 297I. The amount of the tax credit
claimed may not exceed $25,000. The tax credit is limited to the amount certified by the
commissioner to the taxpayer under paragraph (f).
new text end

new text begin (b) The commissioner shall prescribe the manner in which credits may be claimed
and issued, but must allocate credits in the order that the claim application is filed. All tax
credit claims filed with the department on the same day must be treated as having been
filed contemporaneously. If two or more tax credit claims are filed on the same day, and
the aggregate amount of credit allocation claims exceeds the aggregate limit of credits
allowed under paragraph (c) or the lesser amount of credits that remain unallocated on that
day, then the credits must be allocated among the taxpayers who filed on that day on a
pro rata basis with respect to the amounts claimed. The pro rata allocation for any one
taxpayer is the product obtained by multiplying a fraction, the numerator of which is the
amount of the credit allocation claim filed on behalf of a taxpayer and the denominator of
which is the total of all credit allocation claims filed on behalf of all applicants on that day,
by the amount of credits that remain unallocated on that day for the taxable year.
new text end

new text begin (c) The aggregate amount of tax credits authorized under this subdivision may not
exceed $2,000,000 for a taxable calendar year.
new text end

new text begin (d) At least ten percent of the aggregate amount of tax credits authorized in a
calendar year shall be reserved for endowment gifts in amounts of $30,000 or less. If, by
September 1 of a calendar year, ten percent of the reserved tax credits is not distributed,
the remaining tax credits are available to any other eligible applicants.
new text end

new text begin (e) A tax credit is not transferable to any other taxpayer.
new text end

new text begin (f) The commissioner shall develop a system for registration and authorization of
tax credits under this subdivision and shall control the distribution of all tax credits to
taxpayers providing an endowment gift subject to this subdivision. The commissioner
shall certify to each authorized taxpayer the tax credit amount, by taxable year, for which
the taxpayer qualifies.
new text end

new text begin (g) The commissioner may adopt administrative rules under chapter 14 for the
qualification and administration of endowment gifts.
new text end

new text begin (h) The commissioner shall monitor and report on the impact of the Endow
Minnesota program on promoting development of jobs, community development,
increasing community foundation endowments, and capturing generational transfer of
wealth for benefit in Minnesota communities. The commissioner may collaborate with
the Minnesota Council on Foundations in providing the report. The commissioner shall
report biennially to the legislature beginning November 1, 2014, and shall continue to
report until one year after the expiration of the Endow Minnesota program. Each Endow
Minnesota qualified community foundation certified to receive a tax credit must agree to
provide information as required by the commissioner for monitoring and reporting.
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, 2013, through the taxable year ending December 31, 2028.
new text end

Sec. 2.

Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Endow Minnesota tax credit. new text end

new text begin (a) A taxpayer is allowed a credit against
the tax under subdivision 1 or 2c equal to the amount certified by the commissioner
of employment and economic development under section 116J.9821, subdivision 2,
paragraph (f), to the taxpayer for the taxable year.
new text end

new text begin (b) Credits allowed to a partnership, limited liability company taxed as a partnership,
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 income for the taxable year.
new text end

new text begin (c) The credit is limited to the liability for tax. "Liability for tax" for purposes of
this subdivision means the tax imposed under subdivision 1 or 2c, as applicable, for the
taxable year reduced by the sum of the nonrefundable credits allowed under this chapter.
new text end

new text begin (d) For a corporation that is a partner in a partnership, the credit allowed for the
taxable year is limited to the lesser of the amount determined under paragraph (c) for the
taxable year or an amount, separately computed with respect to the corporation's interest
in the trade, business, or entity, equal to the amount of tax attributable to that portion of
taxable income that is allocable or apportionable to the corporation's interest in the trade,
business, or entity.
new text end

new text begin (e) If the amount of the credit determined under this subdivision for any taxable year
exceeds the limitation under paragraph (c), the excess is a credit carryover to each of
the 15 succeeding taxable years or through the expiration date of the Endow Minnesota
program. The entire amount of the excess unused credit for the taxable year is 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 is limited to the taxpayer's liability or tax, less the
credit for the taxable year.
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, 2013, through the taxable year ending December 31, 2028.
new text end

Sec. 3.

Minnesota Statutes 2012, section 297I.20, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Endow Minnesota tax credit. new text end

new text begin An insurance company may claim a credit
against the premiums tax imposed under this chapter equal to the amount of the credit
certificate issued to it under section 116J.9821. This credit does not affect the calculation
of police and fire aid under section 69.021.
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, 2013, through the taxable year ending December 31, 2028.
new text end

Sec. 4. new text begin APPROPRIATION.
new text end

new text begin $50,000 each year is appropriated to the commissioner of employment and economic
development for the Endow Minnesota program. The commissioner may solicit and
accept contributions from government or private entities to administer or evaluate the
Endow Minnesota program.
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, 2013, through the taxable year ending December 31, 2028.
new text end