<a id="pl.1.3"></a><var>1.3</var>of principal and interest on student loans; appropriating money;proposing coding <br/>
<a id="pl.1.4"></a><var>1.4</var>for new law in Minnesota Statutes, chapter 290.<br/>
<a id="pl.1.5"></a><var>1.5</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.6"></a><var>1.6</var>    Section 1. <b>[290.0678] EDUCATION OPPORTUNITY CREDIT.</b><br/>
<a id="pl.1.7"></a><var>1.7</var>    Subdivision 1. <b>Definitions.</b> (a) For purposes of this section, the following terms <br/>
<a id="pl.1.8"></a><var>1.8</var>have the meanings given.<br/>
<a id="pl.1.9"></a><var>1.9</var>(b) "Eligible individual" means an individual who:<br/>
<a id="pl.1.10"></a><var>1.10</var>(1) is a Minnesota resident who graduated from a postsecondary educational <br/>
<a id="pl.1.11"></a><var>1.11</var>institution located in Minnesota or from a public postsecondary educational institution <br/>
<a id="pl.1.12"></a><var>1.12</var>located in a state with which a tuition reciprocity agreement under section 136A.08 was in <br/>
<a id="pl.1.13"></a><var>1.13</var>effect when the individual graduated; and<br/>
<a id="pl.1.14"></a><var>1.14</var>(2) has a household income under $75,000. For purposes of this section, "household <br/>
<a id="pl.1.15"></a><var>1.15</var>income" means income as described in section 290.067, subdivision 2a.<br/>
<a id="pl.1.16"></a><var>1.16</var>(c) "Eligible employer" means an employer of an eligible individual who undertakes <br/>
<a id="pl.1.17"></a><var>1.17</var>partial or full payment of the eligible individual's qualified education loan. <br/>
<a id="pl.1.18"></a><var>1.18</var>(d) "Qualified education loan" has the meaning given in section 221 of the Internal <br/>
<a id="pl.1.19"></a><var>1.19</var>Revenue Code, but is limited to indebtedness incurred on behalf of the taxpayer or <br/>
<a id="pl.1.20"></a><var>1.20</var>taxpayer's spouse.<br/>
<a id="pl.1.21"></a><var>1.21</var>(e) "Postsecondary educational institution" means a two- or four-year postsecondary <br/>
<a id="pl.1.22"></a><var>1.22</var>educational institution that meets the definition of "eligible educational institution" <br/>
<a id="pl.1.23"></a><var>1.23</var>provided in section 221(d)(2)(B) of the Internal Revenue Code.<br/>
<a id="pl.2.1"></a><var>2.1</var>(f) "Maximum qualifying amount" is the allowance for tuition and fees most recently <br/>
<a id="pl.2.2"></a><var>2.2</var>set in law as required under section 136A.121, subdivision 6. For an eligible individual <br/>
<a id="pl.2.3"></a><var>2.3</var>who graduated from a two-year postsecondary educational institution, the maximum <br/>
<a id="pl.2.4"></a><var>2.4</var>qualifying amount equals the allowance for tuition and fees specified for a two-year <br/>
<a id="pl.2.5"></a><var>2.5</var>institution, and for an eligible individual who graduated from a four-year postsecondary <br/>
<a id="pl.2.6"></a><var>2.6</var>educational institution, the maximum qualifying amount equals the allowance for tuition <br/>
<a id="pl.2.7"></a><var>2.7</var>and fees specified for a four-year institution.<br/>
<a id="pl.2.8"></a><var>2.8</var>    Subd. 2. <b>Credit allowed.</b> (a) An eligible individual or an eligible employer is <br/>
<a id="pl.2.9"></a><var>2.9</var>allowed a credit against the tax due under this chapter.<br/>
<a id="pl.2.10"></a><var>2.10</var>(b) The credit amount for an eligible individual equals the lesser of:<br/>
<a id="pl.2.11"></a><var>2.11</var>(1) the amount the individual paid during the taxable year to pay principal and <br/>
<a id="pl.2.12"></a><var>2.12</var>interest on qualified education loans; or<br/>
<a id="pl.2.13"></a><var>2.13</var>(2) the maximum qualifying amount.<br/>
<a id="pl.2.14"></a><var>2.14</var>(c) An eligible employer may only claim the credit based on qualified education <br/>
<a id="pl.2.15"></a><var>2.15</var>loan payments made on behalf of the eligible individual in months in which the eligible <br/>
<a id="pl.2.16"></a><var>2.16</var>individual did not make payments. The credit amount for an eligible employer equals <br/>
<a id="pl.2.17"></a><var>2.17</var>the least of:<br/>
<a id="pl.2.18"></a><var>2.18</var>(1) the amount the eligible employer paid during the taxable year to pay principal <br/>
<a id="pl.2.19"></a><var>2.19</var>and interest on qualified education loans of an eligible individual;<br/>
<a id="pl.2.20"></a><var>2.20</var>(2) the maximum qualifying amount; or<br/>
<a id="pl.2.21"></a><var>2.21</var>(3) the amount the eligible individual would have been able to claim had the eligible <br/>
<a id="pl.2.22"></a><var>2.22</var>individual made the payments in place of the employer.<br/>
<a id="pl.2.23"></a><var>2.23</var>    Subd. 3. <b>Credit refundable.</b> If the amount of credit which a taxpayer is eligible <br/>
<a id="pl.2.24"></a><var>2.24</var>to receive under this section exceeds the taxpayer's tax liability under this chapter, the <br/>
<a id="pl.2.25"></a><var>2.25</var>commissioner shall refund the excess to the taxpayer.<br/>
<a id="pl.2.26"></a><var>2.26</var>    Subd. 4. <b>Appropriation.</b> An amount sufficient to pay the refunds required by this <br/>
<a id="pl.2.27"></a><var>2.27</var>section is appropriated to the commissioner from the general fund.<br/>
<a id="pl.2.28"></a><var>2.28</var><b>EFFECTIVE DATE.</b>This section is effective for taxable years beginning after <br/>
<a id="pl.2.29"></a><var>2.29</var>December 31, 2008.<br/>