1.1                          A bill for an act
  1.2             relating to agriculture; rural economic development; 
  1.3             providing a tax credit for investments in certain 
  1.4             agricultural cooperatives; proposing coding for new 
  1.5             law in Minnesota Statutes, chapter 290. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  [290.0681] [CREDIT; COOPERATIVE INVESTMENTS.] 
  1.8      Subdivision 1.  [CREDIT ALLOWED.] An individual, trust, or 
  1.9   estate is allowed a credit against the tax imposed under section 
  1.10  290.06, subdivision 2c, as provided by this section. 
  1.11     Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
  1.12  the following terms have the meanings given. 
  1.13     (b) "Agricultural product processing facility" has the 
  1.14  meaning given in section 41B.046, subdivision 1, but excludes an 
  1.15  ethanol production facility for which payments are made under 
  1.16  section 41A.09. 
  1.17     (c) "Commissioner" means the commissioner of the department 
  1.18  of trade and economic development. 
  1.19     (d) "Qualified cooperative" means a cooperative that: 
  1.20     (1) is incorporated in this state for the primary purpose 
  1.21  of processing and marketing agricultural commodities capable of 
  1.22  being raised in this state; 
  1.23     (2) is in compliance with the requirements for securities 
  1.24  filings with the commissioner of commerce under the laws of this 
  1.25  state; 
  2.1      (3) has its agricultural product processing facility or 
  2.2   facilities located in a county in this state, other than a 
  2.3   county containing a standard metropolitan statistical area, as 
  2.4   defined by the United States Census Bureau; 
  2.5      (4) employs at least five full-time employees at the 
  2.6   facility under clause (3); 
  2.7      (5) has all of its ownership interests owned by producers 
  2.8   of unprocessed agricultural products or an estate; and 
  2.9      (6) is certified by the commissioner under subdivision 3 as 
  2.10  meeting the requirements of this paragraph. 
  2.11     (e) "Taxpayer" means an individual, trust, or estate. 
  2.12     Subd. 3.  [CERTIFICATION OF COOPERATIVES.] The commissioner 
  2.13  shall certify qualified cooperatives upon application by the 
  2.14  cooperative.  The commissioner shall establish the necessary 
  2.15  forms and procedures for certifying qualifying cooperatives.  
  2.16  The commissioner may not certify more than ten cooperatives as 
  2.17  qualifying cooperatives and may not certify a cooperative after 
  2.18  December 31, 2001. 
  2.19     Subd. 4.  [CALCULATION OF CREDIT.] The credit under this 
  2.20  section equals 30 percent of the taxpayer's investment made 
  2.21  during the taxable year.  The total annual investment that 
  2.22  qualifies for the credit must be more than $5,000 and not more 
  2.23  than $50,000.  The restriction on amount does not limit 
  2.24  additional investments by the taxpayer. 
  2.25     Subd. 5.  [CARRYOVER.] (a) The credit allowed may not 
  2.26  exceed 50 percent of the taxpayer's tax under section 290.06, 
  2.27  subdivision 2c. 
  2.28     (b) The amount of the credit not allowed because of the 
  2.29  limitation under paragraph (a) may be carried forward for up to 
  2.30  five taxable years after the taxable year in which the 
  2.31  investment is made. 
  2.32     Subd. 6.  [PARTNERSHIP RULES.] A partnership that invests 
  2.33  in a qualified cooperative is considered to be the taxpayer for 
  2.34  purposes of the limitations in subdivision 4.  The amount of the 
  2.35  credit allowed with respect to a partnership's investment in a 
  2.36  qualified cooperative must be determined at the partnership 
  3.1   level.  The amount of the total credit determined at the 
  3.2   partnership level is allowed to the partners, limited to 
  3.3   individuals, trusts, and estates, in proportion to their 
  3.4   respective interests in the partnership. 
  3.5      Subd. 7.  [INVESTMENT AT RISK.] The investment in the 
  3.6   cooperative must be at risk.  A qualified investment must be in 
  3.7   the form of a purchase of stock or the right to receive payments 
  3.8   of dividends from the cooperative.  An investment must remain in 
  3.9   the cooperative for three years after the end of the taxable 
  3.10  year for which the credit is claimed. 
  3.11     Subd. 8.  [COOPERATIVE'S USE OF INVESTMENT.] The 
  3.12  cooperative must use investments qualifying for a credit under 
  3.13  this section for plant, equipment, research and development, 
  3.14  marketing and sales activity, or working capital for the 
  3.15  qualified cooperative. 
  3.16     Subd. 9.  [ADMINISTRATIVE AUTHORITY.] The commissioner of 
  3.17  revenue may disallow a credit otherwise allowed under this 
  3.18  section, (1) if any representation by a cooperative in the 
  3.19  application for certification as a qualified cooperative is 
  3.20  false or (2) if the taxpayer or qualified cooperative fails to 
  3.21  satisfy any conditions under this section or any conditions 
  3.22  consistent with this section otherwise determined by the 
  3.23  commissioner of revenue.  The amount of any credit disallowed 
  3.24  that reduced the taxpayer's income tax liability for any or all 
  3.25  applicable years, plus interest and penalties, must be paid by 
  3.26  the taxpayer. 
  3.27     Subd. 10.  [INVESTMENT REPORTING FORMS.] (a) By February 15 
  3.28  following each calendar year in which the cooperative receives 
  3.29  an investment, the cooperative must file with the commissioner 
  3.30  and the commissioner of revenue completed forms prescribed by 
  3.31  the commissioner of revenue which show for each investment in 
  3.32  the qualified cooperative during the previous calendar year: 
  3.33     (1) the name, address, and social security number of the 
  3.34  taxpayer who made the investment; 
  3.35     (2) the amount of the investment; 
  3.36     (3) the date on which full consideration was received by 
  4.1   the qualified cooperative for the investment. 
  4.2      (b) Within 30 days after an investment is made, the 
  4.3   cooperative must provide to each investor a statement meeting 
  4.4   the requirements of paragraph (a) for the investor's investment. 
  4.5      Sec. 2.  [EFFECTIVE DATE.] 
  4.6      Section 1 is effective for taxable years beginning after 
  4.7   December 31, 1996.