HF 632

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; income; providing for economic growth in rural counties
of the state by allowing a credit against the income tax of an employer for the
creation and retention of certain jobs; appropriating money; proposing coding for
new law in Minnesota Statutes, chapter 290.

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

Section 1.

new text begin [290.0681] RURAL ECONOMIC GROWTH CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit name. new text end

new text begin The credit allowed by this section shall be known as
the "Rural Minnesota Catch-Up Credit."
new text end

new text begin Subd. 2. 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) "Eligible county" means a county, located outside the metropolitan area, as
defined in section 473.121, subdivision 2, that experienced, between 1994 and 2004, a net
new job growth rate of less than 15.6 percent, or a county that has a population of less
than 25,000 according to the 2000 census.
new text end

new text begin (c) "Qualifying job" means a job in an industry that produces goods or services
that bring outside wealth into an eligible county. A qualifying job includes jobs in
the following industries: value-added manufacturing, technologically innovative and
information industries, forestry, mining, agriprocessing, and tourism attractions. At a
minimum, a qualifying job must provide full-time employment and pay not less than $12
per hour, or $10 per hour plus health insurance benefits, or its equivalent. A qualifying job
does not include any job for which a tax credit is received under section 469.318 or for
which a grant is made under section 469.309.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer that is awarded a credit under subdivision 4
may take a credit against the tax imposed by this chapter, equal to $4,000 per qualifying
job created by the taxpayer, per year for three years, and $3,000 in the fourth year.
new text end

new text begin Subd. 4. new text end

new text begin Qualification; application. new text end

new text begin (a) To qualify for a credit under this section, a
taxpayer must create a new qualifying job within an eligible county. The taxpayer must
create the qualifying job within 12 months of being awarded the credit. If a taxpayer does
not create the qualifying job within 12 months, the credit is forfeited and, if claimed by
the taxpayer, subject to recapture, and the credit amount accrues back to the eligible
county for allocation under subdivision 5.
new text end

new text begin (b) A taxpayer seeking a credit under this section must apply to an eligible county at
least 60 days before the award date in paragraph (c) on a form and in a manner prescribed
by the commissioner.
new text end

new text begin (c) Eligible counties shall award credits under this section twice each year, by March
15 and September 15. An eligible county shall publish a notice advertising the award
date, at least 90 days before the date. The county board of commissioners of an eligible
county, or the duly appointed representatives of the county board of commissioners, shall
award credits under this section to applicants using uniform criteria established by the
commissioner. In selecting among applicants for awarding credits under this section,
criteria must contemplate and place greater weight on the following factors: whether the
qualifying job provides higher wages, better benefits, or on-the-job training; whether the
taxpayer's business is locally owned and owns, rather than leases, its own facilities or
buildings; whether the taxpayer's business provides employee stock ownership plans or
employee profit sharing; and whether a higher percentage of the business's employees are
hired with tax credits under this section. For purposes of this section, "duly appointed
representatives" include a county or regional economic development agency or authority.
new text end

new text begin Subd. 5. new text end

new text begin Limitation; carryforward. new text end

new text begin (a) The total amount of credits under this
section may not exceed $150,000 per eligible county over two years. If a county fails to
award $150,000 within a year, it may carry forward the amount that remains unawarded
to the following year. Unawarded amounts may not be carried beyond the following
year and are lost.
new text end

new text begin (b) A taxpayer may claim the credit under this section for the year following the
year in which the new qualifying job is created and for each year the new qualifying job
remains in existence, up to a maximum of four years or $15,000 per qualifying job created.
The taxpayer may claim the credit under this section for years in which the qualifying job
was in existence for the entire year. A credit under this section is awarded to the taxpayer
for, and attaches to, a designated employee. If the designated employee for whom a credit
under this section was awarded leaves the employment of the taxpayer for any reason,
the remaining credit the taxpayer would otherwise be eligible to receive is forfeited and
may not be claimed by the taxpayer unless a replacement employee is hired to fill the
qualifying job within a reasonable period, not to exceed three months. Credit amounts
forfeited under this paragraph accrue back to and may be awarded by an eligible county as
if the amount had been unawarded, as provided in paragraph (a).
new text end

new text begin Subd. 6. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that the taxpayer is eligible to
receive under this section exceeds the liability for tax under this chapter, the commissioner
shall refund the excess to the claimant. An amount sufficient to pay the refunds authorized
by this subdivision is appropriated to the commissioner from the general fund.
new text end

new text begin Subd. 7. new text end

new text begin Manner of claiming. new text end

new text begin The commissioner shall prescribe the manner in
which the credit may be issued and claimed. This may include providing for the issuance of
credit certificates or allowing the credit only as a separately processed claim for a refund.
new text end

new text begin Subd. 8. new text end

new text begin Report. new text end

new text begin The commissioner shall report to the legislature by February 15,
2009, on credits claimed under this section and shall evaluate the feasibility and benefit
of continuing the program. The commissioner may consult with the commissioner of
economic security and the commissioner of trade and economic development in preparing
this report.
new text end

new text begin Subd. 9. new text end

new text begin Expiration. new text end

new text begin This section expires for taxable years beginning after
December 31, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007.
new text end