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Minnesota Legislature

Office of the Revisor of Statutes

HF 3

as introduced - 89th Legislature (2015 - 2016) Posted on 01/12/2015 11:37am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to long-term care; modifying nursing facility employee scholarship
costs; providing for a long-term care savings plan; providing for an income tax
subtraction for contributions made to the long-term care savings plan; providing
a credit for the additional tax paid on early withdrawals from retirement accounts
if used for long-term care expenses; appropriating money;amending Minnesota
Statutes 2014, sections 144.1501, subdivision 2; 256B.431, subdivision 36;
290.01, subdivisions 19a, 19b; 290.091, subdivision 2; proposing coding for new
law in Minnesota Statutes, chapters 16A; 290.

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

ARTICLE 1

LONG-TERM CARE WORKFORCE DEVELOPMENT POLICY

Section 1.

Minnesota Statutes 2014, section 144.1501, subdivision 2, is amended to read:


Subd. 2.

Creation of account.

(a) A health professional education loan forgiveness
program account is established. The commissioner of health shall use money from the
account to establish a loan forgiveness program:

(1) for medical residents agreeing to practice in designated rural areas or underserved
urban communities or specializing in the area of pediatric psychiatry;

(2) for midlevel practitioners agreeing to practice in designated rural areas or to
teach at least 12 credit hours, or 720 hours per year in the nursing field in a postsecondary
program at the undergraduate level or the equivalent at the graduate level;

(3) for nurses who agree to practice in a Minnesota nursing home or intermediate
care facility for persons with developmental disability or to teach at least 12 credit hours,
or 720 hours per year in the nursing field in a postsecondary program at the undergraduate
level or the equivalent at the graduate level;

(4) for other health care technicians agreeing to teach at least 12 credit hours, or 720
hours per year in their designated field in a postsecondary program at the undergraduate
level or the equivalent at the graduate level. The commissioner, in consultation with
the Healthcare Education-Industry Partnership, shall determine the health care fields
where the need is the greatest, including, but not limited to, respiratory therapy, clinical
laboratory technology, radiologic technology, and surgical technology;

(5) for pharmacists who agree to practice in designated rural areas; deleted text beginand
deleted text end

(6) for dentists agreeing to deliver at least 25 percent of the dentist's yearly patient
encounters to state public program enrollees or patients receiving sliding fee schedule
discounts through a formal sliding fee schedule meeting the standards established by
the United States Department of Health and Human Services under Code of Federal
Regulations, title 42, section 51, chapter 303deleted text begin.deleted text endnew text begin; and
new text end

new text begin (7) for the following health care professionals agreeing to practice in a Minnesota
nursing home or intermediate care facility for persons with a developmental disability:
new text end

new text begin (i) dentists, medical residents, midlevel practitioners, or pharmacists; or
new text end

new text begin (ii) other health care technicians working in health care fields where the need
is the greatest, as determined by the commissioner in consultation with the Healthcare
Education-Industry Partnership, including, but not limited to, respiratory therapy, clinical
laboratory technology, radiologic technology, and surgical technology.
new text end

(b) Appropriations made to the account do not cancel and are available until
expended, except that at the end of each biennium, any remaining balance in the account
that is not committed by contract and not needed to fulfill existing commitments shall
cancel to the fund.

Sec. 2.

Minnesota Statutes 2014, section 256B.431, subdivision 36, is amended to read:


Subd. 36.

Employee scholarship costs and training in English as a second
language.

(a) For the period between deleted text beginJuly 1, 2001, and June 30, 2003deleted text endnew text begin October 1,
2015, and September 30, 2017
new text end, the commissioner shall provide to each nursing facility
reimbursed under this section, section 256B.434, or any other section, a scholarship per
diem of 25 cents to the total operating payment rate to be used:

(1) for employee scholarships that satisfy the following requirements:

(i) scholarships are available to all employees who work an average of at least deleted text begin20deleted text endnew text begin
ten
new text end hours per week at the facility except the administrator, deleted text begindepartment supervisors, and
registered nurses
deleted text endnew text begin and to reimburse student loan expenses for newly hired and recently
graduated registered nurses and licensed practical nurses
new text end; and

(ii) the course of study is expected to lead to career advancement with the facility or
in long-term care, including medical care interpreter services and social work; and

(2) to provide job-related training in English as a second language.

(b) A facility receiving a rate adjustment under this subdivision may submit to the
commissioner on a schedule determined by the commissioner and on a form supplied
by the commissioner a calculation of the scholarship per diem, including: the amount
received from this rate adjustment; the amount used for training in English as a second
language; the number of persons receiving the training; the name of the person or entity
providing the training; and for each scholarship recipient, the name of the recipient,
the amount awarded, the educational institution attended, the nature of the educational
program, the program completion date, and a determination of the per diem amount of
these costs based on actual resident days.

(c) On deleted text beginJuly 1, 2003deleted text endnew text begin October 1, 2017new text end, the commissioner shall remove the 25 cent
scholarship per diem from the total operating payment rate of each facility.

(d) deleted text beginFor rate years beginning after June 30, 2003, the commissioner shall provide
to each facility the scholarship per diem determined in paragraph (b).
deleted text end In calculating the
per diem under paragraph (b), the commissioner shall allow deleted text beginonlydeleted text end costs related to tuitiondeleted text begin
and
deleted text endnew text begin,new text end direct educational expensesnew text begin, and child care costs and transportation expenses related
to direct educational expenses
new text end.

new text begin (e) The rate increase under this subdivision is an optional rate add-on that the facility
must request from the commissioner in a manner prescribed by the commissioner. The
rate increase must be used for scholarships as specified in this subdivision.
new text end

new text begin (f) Nursing facilities that close beds during a rate year can request to have their
scholarship adjustment under paragraph (b) recalculated by the commissioner for the
remainder of the rate year to reflect the reduction in resident days compared to the cost
report year.
new text end

Sec. 3. new text beginDIRECTION TO COMMISSIONER; LONG-TERM CARE
WORKFORCE DEVELOPMENT.
new text end

new text begin The commissioner of employment and economic development shall review existing
workforce development programs in order to further the advancement of long-term care
careers in rural Minnesota. The commissioner shall report recommendations regarding
training, retaining, and connecting employees to long-term care facilities in rural
Minnesota to the chairs and ranking minority members of the legislative committees with
jurisdiction over long-term care and workforce development by February 1, 2016.
new text end

Sec. 4. new text beginAPPROPRIATIONS.
new text end

new text begin (a) $....... is appropriated in fiscal year 2016 and $....... is appropriated in fiscal
year 2017 from the general fund to the commissioner of health for the purposes of the
health professional education loan forgiveness program under Minnesota Statutes, section
144.1501.
new text end

new text begin (b) $....... is appropriated in fiscal year 2016 and $....... is appropriated in fiscal year
2017 from the general fund to the commissioner of human services for the purposes of
nursing facility employee scholarship costs under Minnesota Statutes, section 256B.431,
subdivision 36.
new text end

ARTICLE 2

LONG-TERM CARE TAX POLICY

Section 1.

new text begin [16A.728] LONG-TERM CARE SAVINGS PLAN.
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) "Long-term care expense" means the cost of long-term care in a long-term care
facility and the cost of care provided in a person's home when the person receiving the
care is unable to perform multiple basic life functions independently.
new text end

new text begin (c) "Long-term care insurance premiums" means premiums paid for a long-term care
insurance policy, as defined in section 290.0672.
new text end

new text begin (d) "Participant" means an individual who has entered into a participation agreement
or established an account with a financial institution with which the commissioner has an
agreement under subdivision 2, paragraph (a).
new text end

new text begin (e) "Qualified individual" means a person who:
new text end

new text begin (1) incurred long-term care expenses during the taxable year; or
new text end

new text begin (2) turned 50 years of age or older during the taxable year and who made payments
for long-term care insurance premiums during the taxable year.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner duties; participation agreement. new text end

new text begin (a) The Minnesota
long-term care savings plan is created. The commissioner shall select the administrator of
the plan. If the commissioner receives no acceptable responses to a request for proposals
for an administrator for the plan by November 1, 2015, the commissioner may enter into
agreements with state chartered or federally chartered banks, savings banks, savings
associations, trust companies, or credit unions, or a subsidiary of such an entity, to receive
contributions in the form of account deposits. The commissioner may adopt rules to
carry out the duties under this subdivision.
new text end

new text begin (b) If an administrator is selected, participants must enter into participation
agreements with the commissioner, and if an administrator is not selected, participants may
make contributions to an account with a financial institution with which the commissioner
has an agreement under paragraph (a). A lifetime maximum of $200,000 may be
contributed by a participant. The commissioner must adjust the dollar limitation annually
for inflation as provided in section 151 of the Internal Revenue Code of 1986, as amended.
new text end

new text begin (c) Each participation agreement must provide that the agreement may be canceled
or transferred to a spouse upon the terms and conditions set by the commissioner. If
the participation agreement is canceled or the Minnesota long-term care savings plan is
terminated, a participant may receive the principal amount of all contributions made
by the participant or on behalf of the participant plus the actual investment earnings on
the contributions, less any losses incurred on the contributions. A participant must not
receive more than the fair market value of the account under the participation agreement
on the applicable liquidation date.
new text end

new text begin (d) A participant retains ownership of all contributions up to the date of use.
new text end

new text begin (e) State income tax treatment of contributions and investment earnings is as
provided in section 290.01, subdivisions 19a and 19b.
new text end

new text begin Subd. 3. new text end

new text begin Long-term care savings plan trust. new text end

new text begin If an administrator for the Minnesota
long-term care savings plan is selected under subdivision 2, the Minnesota long-term care
savings plan trust is created. The commissioner is the trustee of the trust and is responsible
for the administration, operation, and maintenance of the plan and has all the powers
necessary to carry out and effectuate the purposes, objectives, and provisions of the
Minnesota long-term care savings plan for the administration, operation, and maintenance
of the trust, except that the investment officer has fiduciary responsibility to make all
decisions regarding the investment of the money in the trust, including the selection of all
investment options and the approval of all fees and other costs charged to trust assets, except
costs for administration, operation, and maintenance of the trust, under the directions,
guidelines, and policies established by the State Board of Investment. The commissioner
may adopt rules for the efficient administration, operation, and maintenance of the trust.
The commissioner must not adopt rules that in any way interfere with the fiduciary
responsibility of the state investment officer to make all decisions regarding the investment
of money in the trust. The State Board of Investment may adopt rules to provide for the
prudent investment of the assets of the trust. The State Board of Investment or its designee
may select and enter into agreements with individuals and entities to provide investment
advice and management of the assets held by the trust, establish investment guidelines,
objectives, and performance standards for the assets held by the trust, and approve any
fees, commissions, and expenses which directly or indirectly affect the return on assets.
new text end

new text begin Subd. 4. new text end

new text begin Authorized withdrawals. new text end

new text begin A qualified individual may make withdrawals as
a participant in the Minnesota long-term care savings plan to pay or reimburse long-term
care expenses. A qualified individual may make withdrawals to pay or reimburse
long-term care insurance premiums. Any participant who is not a qualified individual or
who makes a withdrawal for any reason other than: (1) a transfer of funds to a spouse;
(2) payment of long-term care expenses or long-term care insurance premiums; or (3)
payment of expenses related to the death of the participant, is subject to a ten percent
penalty on the amount withdrawn. The commissioner shall collect the penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2014, section 290.01, subdivision 19a, is amended to read:


Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and

(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
accrued within the taxable year under this chapter and the amount of taxes based on net
income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state or
to any province or territory of Canada, to the extent allowed as a deduction under section
63(d) of the Internal Revenue Code, but the addition may not be more than the amount
by which the state itemized deduction exceeds the amount of the standard deduction as
defined in section 63(c) of the Internal Revenue Code, minus any addition that would have
been required under clause (17) if the taxpayer had claimed the standard deduction. For
the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed under clause (15);

(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the amount of expenses disallowed under section 290.10, subdivision 2;

(11) for taxable years beginning before January 1, 2010, the amount deducted for
qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, the amount deducted for
certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
of the Internal Revenue Code, to the extent deducted from gross income;

(13) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) changes to federal taxable income attributable to a net operating loss that the
taxpayer elected to carry back for more than two years for federal purposes but for which
the losses can be carried back for only two years under section 290.095, subdivision
11
, paragraph (c);

(15) the amount of disallowed itemized deductions, but the amount of disallowed
itemized deductions plus the addition required under clause (2) may not be more than the
amount by which the itemized deductions as allowed under section 63(d) of the Internal
Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
the Internal Revenue Code, and reduced by any addition that would have been required
under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income
over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
married individual filing a separate return. Each dollar amount shall be increased by
an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue
Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal
adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal
exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied
by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the
Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal
Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or
fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. In the case of a married individual filing a separate
return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

(C) $100,000 in the case of an individual who is not married and who is not a
surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; deleted text beginand
deleted text end

(17) to the extent deducted in the computation of federal taxable income, for taxable
years beginning after December 31, 2010, and before January 1, 2014, the difference
between the standard deduction allowed under section 63(c) of the Internal Revenue Code
and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue
Code as amended through December 1, 2010deleted text begin.deleted text endnew text begin; and
new text end

new text begin (18) the amount withdrawn by a participant in the Minnesota long-term care savings
plan under section 16A.728, by a person who is not a qualified individual or for any
reason other than a transfer of funds to a spouse, payment of long-term care expenses or
long-term care insurance premiums, or the death of the participant, including withdrawals
made by reason of cancellation of the participation agreement or termination of the plan.
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, 2014.
new text end

Sec. 3.

Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:


Subd. 19b.

Subtractions from federal taxable income.

For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:

(1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;

(7) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;

(8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (12), in the case of a shareholder of an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. The resulting delayed depreciation cannot be less than zero;

(9) job opportunity building zone income as provided under section 469.316;

(10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service, including compensation for services performed
under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
5b
, and "active service" includes service performed in accordance with section 190.08,
subdivision 3
;

(11) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States
or United Nations for active duty performed under United States Code, title 10; or the
authority of the United Nations;

(12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;

(13) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;

(14) to the extent included in the federal taxable income of a nonresident of
Minnesota, compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);

(15) to the extent included in federal taxable income, the amount of national service
educational awards received from the National Service Trust under United States Code,
title 42, sections 12601 to 12604, for service in an approved Americorps National Service
program;

(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under subdivision 19a, clause (13);

(17) the amount of the net operating loss allowed under section 290.095, subdivision
11
, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the
Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of
the Internal Revenue Code; deleted text beginand
deleted text end

(21) to the extent included in federal taxable income, the amount of qualified
transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal
Revenue Code. The subtraction is limited to the lesser of the amount of qualified
transportation fringe benefits received in excess of the limitations under section
132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the
maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal
Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A)
of the Internal Revenue Codedeleted text begin.deleted text endnew text begin; and
new text end

new text begin (22) to the extent not deducted in determining federal taxable income, an amount
equal to contributions made to the Minnesota long-term care savings plan under section
16A.728, up to a maximum of $2,000 for married individuals filing joint returns and
$1,000 for any other return, and any investment earnings made as a participant in the
Minnesota long-term care savings plan.
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, 2014.
new text end

Sec. 4.

new text begin [290.0693] CREDIT FOR ADDITIONAL FEDERAL TAX ON
RETIREMENT PLAN WITHDRAWALS USED FOR LONG-TERM CARE
EXPENSES.
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) "Additional federal tax" means the tax imposed under section 72(t) of the Internal
Revenue Code on early withdrawals from qualified retirement plans.
new text end

new text begin (c) "Qualified long-term care expenses" means amounts paid for qualified long-term
care services, as defined in section 7702B(c) of the Internal Revenue Code, plus amounts
paid for a qualified long-term care insurance contract, as defined in section 7702B(b) of
the Internal Revenue Code.
new text end

new text begin (d) "Qualified retirement plans" has the meaning given in section 4974(c) of the
Internal Revenue Code.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual is allowed a credit against the tax due
under this chapter equal to the additional federal tax paid during the taxable year on
early withdrawals from qualified retirement plans, provided the withdrawals are used for
qualified long-term care expenses.
new text end

new text begin (b) For a nonresident or part-year resident, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable; appropriation. new text end

new text begin (a) If the credit allowed under this
section exceeds the individual's liability under this chapter, the commissioner shall refund
the excess to the taxpayer.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated
from the general fund to the commissioner.
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, 2014.
new text end

Sec. 5.

Minnesota Statutes 2014, section 290.091, subdivision 2, is amended to read:


Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given:

(a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue
Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), and (11) to (14);

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by section 290.01, subdivision
19b
, clause (2), to the extent included in federal alternative minimum taxable income;

(3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income;

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b
, clauses (6), (8) to (14), (16), deleted text beginanddeleted text end (21)new text begin, and (22)new text end; and

(5) the amount of the net operating loss allowed under section 290.095, subdivision
11
, paragraph (c).

In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end