1.1                          A bill for an act 
  1.2             relating to taxation; providing an income tax credit 
  1.3             for contributions to neighborhood assistance programs; 
  1.4             proposing coding for new law in Minnesota Statutes, 
  1.5             chapter 290. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [290.0681] [CREDIT FOR CONTRIBUTIONS TO 
  1.8   NEIGHBORHOOD ASSISTANCE PROGRAMS.] 
  1.9      Subdivision 1.  [CREDIT ALLOWED.] A taxpayer is allowed a 
  1.10  credit against the tax imposed by this chapter in an amount 
  1.11  equal to 50 percent of the amount contributed by the taxpayer 
  1.12  during the taxable year to a neighborhood organization for a 
  1.13  neighborhood assistance program that qualifies under this 
  1.14  section. 
  1.15     Subd. 2.  [DEFINITIONS.] (a) "Community services" means 
  1.16  counseling and advice, emergency assistance, medical care, 
  1.17  recreational facilities, housing facilities, employment 
  1.18  placement, job training, or economic development assistance 
  1.19  provided to persons and families of low or moderate income as 
  1.20  defined in section 469.002, subdivisions 17 and 18, residing in 
  1.21  an economically disadvantaged area or to groups comprised of or 
  1.22  acting on behalf of such persons and families. 
  1.23     (b) "Economically disadvantaged area" means an enterprise 
  1.24  zone, or any other area in the state that is certified as an 
  1.25  economically disadvantaged area by the department of trade and 
  2.1   economic development after consultation with the department of 
  2.2   human services.  The certification must be made on the basis of 
  2.3   current indices of social and economic conditions, which shall 
  2.4   include but not be limited to the median per capita income of 
  2.5   the area in relation to the median per capita income of the 
  2.6   state or standard metropolitan statistical area in which the 
  2.7   area is located. 
  2.8      (c) "Employment placement" means providing services 
  2.9   relating to the recruitment, screening, counseling, supporting, 
  2.10  and retention in employment of individuals who reside in 
  2.11  economically disadvantaged areas, including the provision of 
  2.12  transportation to job sites. 
  2.13     (d) "Job training" means instruction to an individual who 
  2.14  resides in an economically disadvantaged area that enables the 
  2.15  individual to acquire vocational skills in order to become 
  2.16  employable or be able to seek a higher grade of employment. 
  2.17     (e) "Neighborhood assistance" means: 
  2.18     (1) furnishing financial assistance, labor, material, and 
  2.19  technical advice by means of community services that aid in the 
  2.20  physical or economic improvement of any part or all of an 
  2.21  economically disadvantaged area; or 
  2.22     (2) furnishing technical advice to promote higher 
  2.23  employment in any neighborhood in the state. 
  2.24     (f) "Neighborhood organization" means any organization that:
  2.25     (1) performs community services in an economically 
  2.26  disadvantaged area; and 
  2.27     (2) is exempt from taxation under section 501(c)(3) of the 
  2.28  Internal Revenue Code. 
  2.29     Subd. 3.  [PROGRAM QUALIFICATION.] The commissioner of 
  2.30  trade and economic development shall adopt rules defining the 
  2.31  qualification of neighborhood organizations consistent with the 
  2.32  definition in subdivision 2.  A neighborhood organization that 
  2.33  intends to qualify its programs for the tax credit must apply to 
  2.34  the department of trade and economic development for a 
  2.35  certificate to operate a neighborhood assistance program.  The 
  2.36  commissioner of trade and economic development shall notify the 
  3.1   commissioner of revenue regarding the identity of each 
  3.2   neighborhood organization that has been certified to accept 
  3.3   contributions that are eligible for the tax credit for the 
  3.4   current calendar year, by September 1 of each year. 
  3.5      Subd. 4.  [LIMITATIONS; CARRYOVER.] (a) The credit under 
  3.6   this section shall not exceed $250,000 for any taxable year. 
  3.7      (b) The credit for the taxable year shall not exceed the 
  3.8   tax imposed on the taxpayer for the taxable year, reduced by the 
  3.9   sum of the nonrefundable credits allowed under this chapter. 
  3.10     (c) If the amount of the credit determined under this 
  3.11  section for any taxable year exceeds the limitation under 
  3.12  paragraph (b), the excess shall be a credit carryover to each of 
  3.13  the five succeeding taxable years.  The entire amount of the 
  3.14  excess unused credit for the taxable year shall be carried first 
  3.15  to the earliest of the taxable years to which the credit may be 
  3.16  carried and then to each successive year to which the credit may 
  3.17  be carried.  The amount of the unused credit which may be added 
  3.18  under this paragraph shall not exceed the taxpayer's liability 
  3.19  for tax less any additional credit under this section for the 
  3.20  current taxable year.  
  3.21     Sec. 2.  [EFFECTIVE DATE.] 
  3.22     Section 1 is effective for taxable years beginning after 
  3.23  December 31, 1996.