1.1                          A bill for an act 
  1.2             relating to taxation; creating the Minnesota workforce 
  1.3             development fund; providing income tax credits for 
  1.4             expenditures for certain job training programs and for 
  1.5             post-secondary education; appropriating money; 
  1.6             amending Minnesota Statutes 1998, section 268.022; 
  1.7             proposing coding for new law in Minnesota Statutes, 
  1.8             chapters 116L; and 290; repealing Minnesota Statutes 
  1.9             1998, sections 268.975; 268.976; 268.9771; 268.978; 
  1.10            268.9781; 268.9782; 268.9783; 268.979; and 268.98. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1
  1.13                MINNESOTA WORKFORCE DEVELOPMENT FUND
  1.14     Section 1.  [116L.07] [DEFINITIONS.] 
  1.15     Subdivision 1.  [SCOPE.] For the purpose of sections 
  1.16  116L.07 and 116L.08, the terms defined in this section have the 
  1.17  meanings given them.  
  1.18     Subd. 2.  [BOARD.] "Board" means the job skills partnership 
  1.19  board. 
  1.20     Subd. 3.  [FUND.] "Fund" means the Minnesota workforce 
  1.21  development fund created in section 116L.08. 
  1.22     Sec. 2.  [116L.08] [MINNESOTA WORKFORCE DEVELOPMENT FUND.] 
  1.23     Subdivision 1.  [CREATED.] The Minnesota workforce 
  1.24  development fund is created under the administration of the 
  1.25  board.  
  1.26     The board may make grants or loans from the fund using the 
  1.27  guidelines and subject to the limits prescribed by section 
  1.28  116L.04, subdivision 1, and the match requirement of section 
  2.1   116L.02.  The grants and loans may be made for training 
  2.2   individuals that include dislocated workers, farmers who 
  2.3   experience economic circumstances similar to dislocated workers, 
  2.4   health care workers, displaced homemakers, welfare-to-work 
  2.5   candidates, and the unemployed.  
  2.6      Subd. 2.  [FUND.] The Minnesota workforce development 
  2.7   account is created as a separate dedicated account in the 
  2.8   general fund in the treasury.  Earnings, including interest, 
  2.9   earned on funds in the account must be credited to the account.  
  2.10  The account consists of money transferred to or appropriated to 
  2.11  the account.  Funds in the account may only be used by the board 
  2.12  for the purposes of this section upon an appropriation from the 
  2.13  fund for that purpose.  
  2.14     Sec. 3.  Minnesota Statutes 1998, section 268.022, is 
  2.15  amended to read: 
  2.16     268.022 [WORKFORCE INVESTMENT FUND.] 
  2.17     Subdivision 1.  [DETERMINATION AND COLLECTION OF SPECIAL 
  2.18  ASSESSMENT.] (a) In addition to all other taxes, assessments, 
  2.19  and payment obligations under chapter 268, each employer, except 
  2.20  an employer making payments in lieu of taxes is liable for a 
  2.21  special assessment levied at the rate of one-tenth of one 
  2.22  percent per year on all taxable wages, as defined in section 
  2.23  268.04, subdivision 25b.  The assessment shall become due and be 
  2.24  paid by each employer to the department on the same schedule and 
  2.25  in the same manner as other taxes. 
  2.26     (b) The special assessment levied under this section shall 
  2.27  not affect the computation of any other taxes, assessments, or 
  2.28  payment obligations due under this chapter. 
  2.29     (c) Notwithstanding any provision to the contrary, if on 
  2.30  June 30 of any year the unobligated balance of the special 
  2.31  assessment fund under this section is greater than $30,000,000, 
  2.32  the special assessment for the following year only shall be 
  2.33  levied at a rate of 1/20th of one percent on all taxable wages. 
  2.34     Subd. 2.  [DISBURSEMENT OF SPECIAL ASSESSMENT FUNDS.] (a) 
  2.35  The money collected under this section shall be deposited in the 
  2.36  state treasury and credited to a dedicated fund to provide for 
  3.1   the employment and training programs established under sections 
  3.2   268.975 to 268.98; including vocational guidance, training, 
  3.3   placement, and job development the Minnesota workforce 
  3.4   development account created by section 116L.08. 
  3.5      (b) All money in the dedicated fund is appropriated to the 
  3.6   commissioner who must act as the fiscal agent for the money and 
  3.7   must disburse the money for the purposes of this section, not 
  3.8   allowing the money to be used for any other obligation of the 
  3.9   state.  All money in the dedicated fund shall be deposited, 
  3.10  administered, and disbursed in the same manner and under the 
  3.11  same conditions and requirements as are provided by law for the 
  3.12  other dedicated funds in the state treasury, except that all 
  3.13  interest or net income resulting from the investment or deposit 
  3.14  of money in the fund shall accrue to the fund for the purposes 
  3.15  of the fund. 
  3.16     (c) No more than five percent of the dedicated funds 
  3.17  collected in each fiscal year may be used by the department of 
  3.18  economic security for its administrative costs. 
  3.19     (d) (c) Reimbursement for costs related to collection of 
  3.20  the special assessment shall be in an amount negotiated between 
  3.21  the commissioner and the United States Department of Labor. 
  3.22     (e) The dedicated funds, less amounts under paragraphs (c) 
  3.23  and (d) shall be allocated as follows:  
  3.24     (1) 40 percent to be allocated annually to substate 
  3.25  grantees for provision of expeditious response activities under 
  3.26  section 268.9771 and worker adjustment services under section 
  3.27  268.9781; and 
  3.28     (2) 60 percent to be allocated to activities and programs 
  3.29  authorized under sections 268.975 to 268.98. 
  3.30     (f) Any funds not allocated, obligated, or expended in a 
  3.31  fiscal year shall be available for allocation, obligation, and 
  3.32  expenditure in the following fiscal year. 
  3.33     Sec. 4.  [WORKFORCE DEVELOPMENT ANALYSIS.] 
  3.34     The office of strategic and long-range planning must 
  3.35  identify workforce training programs administered by state 
  3.36  agencies and by January 15, 2000, present a plan to the governor 
  4.1   and to the legislature that consolidates those programs and 
  4.2   provides for an economic development focus to that consolidated 
  4.3   program. 
  4.4      Sec. 5.  [FUND TRANSFER.] 
  4.5      The unobligated balance in the workforce investment 
  4.6   dedicated fund administered under Minnesota Statutes, section 
  4.7   268.022, subdivision 2, as of July 1, 1999, is transferred to 
  4.8   the Minnesota workforce development account created by Minnesota 
  4.9   Statutes, section 116L.08. 
  4.10     Sec. 6.  [REPEALER.] 
  4.11     Minnesota Statutes 1998, sections 268.975; 268.976; 
  4.12  268.9771; 268.978; 268.9781; 268.9782; 268.9783; 268.979; and 
  4.13  268.98, are repealed. 
  4.14                             ARTICLE 2
  4.15                    JOB TRAINING PROGRAM CREDIT
  4.16     Section 1.  [290.0675] [JOB TRAINING PROGRAM CREDIT.] 
  4.17     Subdivision 1.  [CREDIT ALLOWED.] (a) A credit is allowed 
  4.18  against the taxes imposed by section 290.06, subdivisions 1 and 
  4.19  2c, equal to 25 percent of costs incurred by an employer for a 
  4.20  qualified job training program. 
  4.21     (b) A credit is allowed only up to the dollar amount of 
  4.22  certificates issued under subdivision 4.  A taxpayer's 
  4.23  certificates must not exceed $10,000 in the aggregate for 
  4.24  calendar years 1999 through 2001. 
  4.25     Subd. 2.  [QUALIFIED JOB TRAINING PROGRAM.] (a) To qualify 
  4.26  for a credit under this section, a job training program must 
  4.27  provide for the training or retraining of the taxpayer's 
  4.28  employees.  Eligible training or retraining does not include 
  4.29  costs an employer incurs for training or retraining that allows 
  4.30  an employee to perform the employee's current duties and 
  4.31  responsibilities using technologies identical or substantially 
  4.32  similar to those currently used by the employee.  It must either 
  4.33  train the employee for a new position with duties and 
  4.34  responsibilities significantly different from those the employee 
  4.35  currently performs or retrain the employee to use technologies 
  4.36  substantially different from those the employee currently uses 
  5.1   to perform the employee's duties and responsibilities. 
  5.2      (1) Eligible costs include: 
  5.3      (i) costs for employees or outside vendors to provide 
  5.4   training or retraining to employees; 
  5.5      (ii) costs for instructional materials or equipment used 
  5.6   for training or retraining of employees; 
  5.7      (iii) costs for instructional facilities temporarily leased 
  5.8   or contracted for the sole purposes of providing training or 
  5.9   retraining to employees; 
  5.10     (iv) meal, transportation, or lodging costs the employer 
  5.11  incurs for an employee to receive training or retraining at a 
  5.12  facility described in item (iii); and 
  5.13     (v) tuition costs the employer incurs for employee training 
  5.14  or retraining. 
  5.15     (2) Costs for testing or screening of job applicants are 
  5.16  not an eligible cost. 
  5.17     (b) The program must be certified by the job skills 
  5.18  partnership board as meeting the requirements of this 
  5.19  subdivision.  Employers must apply to the board on a form 
  5.20  designated by the board in order to receive the credit.  The 
  5.21  board may require the information the board considers 
  5.22  appropriate to determine whether the proposed training or 
  5.23  retraining meets the requirements of paragraph (a).  The form 
  5.24  must include the estimated costs of the employer for providing 
  5.25  employee training and retraining.  The costs eligible for the 
  5.26  credit may not exceed the estimated costs. 
  5.27     Subd. 3.  [ISSUANCE OF CREDIT CERTIFICATES.] (a) Upon 
  5.28  application, the board shall issue certificates for employer job 
  5.29  training programs, up to the dollar amount available for the 
  5.30  taxable year.  The certificates must be in a dollar amount that: 
  5.31     (1) is no greater than the dollar amount of the credit 
  5.32  applied for; and 
  5.33     (2) reflects the board's estimate of the job training 
  5.34  program's costs.  
  5.35     The board shall issue the certificates in the order in 
  5.36  which applications are received until the available authority 
  6.1   has been issued. 
  6.2      (b) The total amount of credits under this section is 
  6.3   limited to $60,000,000 for the period of taxable years beginning 
  6.4   after December 31, 1998, and before January 1, 2002.  The board 
  6.5   may issue no more than the specified amount of certificates for 
  6.6   taxable years beginning during each of the following calendar 
  6.7   years: 
  6.8        $20,000,000    .....     1999 
  6.9        $20,000,000    .....     2000 
  6.10       $20,000,000    .....     2001 
  6.11     Unused certificates for a taxable year carry over and may 
  6.12  be used for a later taxable year, regardless of when issued by 
  6.13  the board. 
  6.14     Subd. 4.  [CREDIT TO BE REFUNDABLE.] The taxpayer may claim 
  6.15  the credit in the taxable year in which the eligible training 
  6.16  and retraining costs for which certificates were issued are 
  6.17  actually incurred.  If the credit for the taxable year exceeds 
  6.18  the liability for tax under this chapter for the taxable year, 
  6.19  the commissioner shall refund the excess to the taxpayer.  An 
  6.20  amount sufficient to pay the refunds authorized by this 
  6.21  subdivision is appropriated to the commissioner of revenue from 
  6.22  the general fund. 
  6.23     Subd. 5.  [MANNER OF CLAIMING.] The commissioner of revenue 
  6.24  shall prescribe the manner in which the credit may be claimed, 
  6.25  which may include only allowing the credit as a separately 
  6.26  processed claim for a refund. 
  6.27     Sec. 2.  [290.0676] [MINNESOTA HOPE AND LIFETIME LEARNING 
  6.28  CREDIT.] 
  6.29     An individual is allowed a credit against the tax imposed 
  6.30  by this chapter in an amount equal to 25 percent of the lesser 
  6.31  of: 
  6.32     (1) the qualified tuition and related expense as defined 
  6.33  under section 25A(f) of the Internal Revenue Code as adjusted 
  6.34  under section 25A(g)(2) of the Internal Revenue Code for the 
  6.35  taxpayer, the taxpayer's spouse and the taxpayer's dependent, to 
  6.36  the extent the expenses exceed the tax credits which the 
  7.1   taxpayer claimed under section 25A of the Internal Revenue Code 
  7.2   on the taxpayer's federal tax return; or 
  7.3      (2) $4,000 for each student for which the taxpayer can 
  7.4   claim a credit under section 25A of the Internal Revenue Code on 
  7.5   the taxpayer's federal tax return. 
  7.6      The amount eligible for the credit shall be prorated as 
  7.7   provided under sections 25A(d) and 25A(h)(2) of the Internal 
  7.8   Revenue Code.  If the credit for the taxable year exceeds the 
  7.9   liability for tax under this chapter for the taxable year, the 
  7.10  commissioner shall refund the excess to the taxpayer. 
  7.11     Sec. 3.  [EFFECTIVE DATE.] 
  7.12     Section 1 is effective for taxable years beginning after 
  7.13  December 31, 1998, and before January 1, 2002.  Section 2 is 
  7.14  effective for taxable years beginning after December 31, 1998, 
  7.15  and before January 1, 2001.