HF 331

as introduced - 88th Legislature (2013 - 2014) Posted on 02/04/2013 02:59pm

A bill for an act
relating to economic development; establishing an internship program; allowing
a tax credit; requiring reports; appropriating money; amending Minnesota
Statutes 2012, section 290.06, by adding a subdivision; proposing coding for new
law in Minnesota Statutes, chapter 136A.

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

Section 1.

new text begin [136A.129] GREATER MINNESOTA INTERNSHIP PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined in
this subdivision have the meanings given to them.
new text end

new text begin (b) "Eligible employer" means a taxpayer under section 290.01 with employees
located in greater Minnesota.
new text end

new text begin (c) "Eligible institution" means a Minnesota public postsecondary institution or a
Minnesota private, nonprofit, baccalaureate degree-granting college or university.
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new text begin (d) "Eligible student" means a student enrolled in an eligible institution who has
completed one-half of the credits necessary for the respective degree or certification.
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new text begin (e) "Greater Minnesota" means the area located outside of the metropolitan area, as
defined in section 473.121, subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Program established. new text end

new text begin The Office of Higher Education shall administer
a greater Minnesota internship program through eligible institutions to provide credit at
the eligible institution for internships and tax credits for eligible employers who hire
interns for employment in greater Minnesota. The purpose of the program is to encourage
Minnesota businesses to:
new text end

new text begin (1) employ and provide valuable experience to Minnesota students; and
new text end

new text begin (2) foster long-term relationships between the students and greater Minnesota
employers.
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new text begin Subd. 3. new text end

new text begin Program components. new text end

new text begin (a) An intern must be an eligible student who
has been admitted to a major program that is closely related to the intern experience
as determined by the eligible institution.
new text end

new text begin (b) To participate in the program, an eligible institution must:
new text end

new text begin (1) enter into written agreements with eligible employers to provide internships that
are at least 12 weeks long and located in greater Minnesota;
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new text begin (2) determine that the work experience of the internship is closely related to the
eligible student's course of study; and
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new text begin (3) provide academic credit for the successful completion of the internship or ensure
that it fulfills requirements necessary to complete a vocational technical education program.
new text end

new text begin (c) To participate in the program, an eligible employer must enter into a written
agreement with an eligible institution specifying that the intern:
new text end

new text begin (1) would not have been hired without the tax credit described in subdivision 4;
new text end

new text begin (2) did not work for the employer in the same or a similar job prior to entering
the agreement;
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new text begin (3) does not replace an existing employee;
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new text begin (4) has not previously participated in the program;
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new text begin (5) will be employed at a location in greater Minnesota;
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new text begin (6) will be paid at least minimum wage for a minimum of 16 hours per week for a
period of at least 12 weeks; and
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new text begin (7) will be supervised and evaluated by the employer.
new text end

new text begin (d) Participating eligible institutions and eligible employers must report annually to
the office. The report must include at least the following:
new text end

new text begin (1) the number of interns hired;
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new text begin (2) the number of hours and weeks worked by interns; and
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new text begin (3) the compensation paid to interns.
new text end

new text begin (e) An internship required to complete an academic program does not qualify for the
greater Minnesota internship program under this section.
new text end

new text begin Subd. 4. new text end

new text begin Tax credit allowed; maximum limits. new text end

new text begin (a) The tax credit for an eligible
employee equals 40 percent of the compensation paid to each qualifying intern, but not to
exceed $4,000. An employer is limited to one credit per qualifying intern for no more than
five interns in any taxable year.
new text end

new text begin (b) The total amount of credits authorized under this section is limited to
$5,500,000 per fiscal year. The office shall allocate these credits to eligible institutions
for participating employers and certify to the Department of Revenue the amount of the
credit under section 290.06, subdivision 36.
new text end

new text begin Subd. 5. new text end

new text begin Allocations to institutions. new text end

new text begin The office shall allocate tax credits authorized
in subdivision 4 to eligible institutions. The office shall determine relevant criteria to
allocate the tax credits including the geographic distribution of credits to work locations
outside the metropolitan area. Any credits allocated to an institution but not used may be
reallocated to eligible institutions. The office shall allocate a portion of the administrative
fee under section 290.06, subdivision 36, to participating eligible institutions for their
administrative costs.
new text end

new text begin Subd. 6. new text end

new text begin Reports to the legislature. new text end

new text begin (a) By February 1, 2014, the office and the
Department of Revenue shall report to the legislature on the greater Minnesota internship
program. The report must include at least the following:
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new text begin (1) the number and dollar amount of credits allowed;
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new text begin (2) the number of interns employed under the program; and
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new text begin (3) the cost of administering the program.
new text end

new text begin (b) By February 1, 2015, the office and the Department of Revenue shall report to the
legislature with an analysis of the effectiveness of the program in stimulating businesses
to hire interns and in assisting participating interns in finding permanent career positions.
This report must include the number of students who participated in the program who
were subsequently employed full-time by the employer.
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 2012, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Greater Minnesota internship credit. new text end

new text begin (a) A taxpayer may take a credit
against the tax due under this chapter equal to the lesser of:
new text end

new text begin (1) 40 percent of the compensation paid to an intern qualifying under the program
established under section 136A.129, but not to exceed $4,000 per intern; or
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new text begin (2) the amount certified by the Office of Higher Education under section 136A.129
to the taxpayer.
new text end

new text begin (b) Credits allowed to a partnership, a limited liability company taxed as a
partnership, an S corporation, or multiple owners of property are passed through to the
partners, members, shareholders, or owners, respectively, pro rata to each partner, member,
shareholder, or owner based on their share of the entity's income for the taxable year.
new text end

new text begin (c) If the amount of credit which the taxpayer is eligible to receive under this
subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
revenue shall refund the excess to the taxpayer.
new text end

new text begin (d) The amount necessary to:
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new text begin (1) pay claims for the refund provided in this subdivision; and
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new text begin (2) an amount equal to one percent of the total amount of the credits authorized
under this subdivision for an administrative fee for the Office of Higher Education and
participating eligible institutions
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new text begin is appropriated from the general fund to the commissioner of revenue.
new text end

new text begin The commissioner of revenue shall transfer the amount of the administrative fee to
the Office of Higher Education.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2012.
new text end