HF 1043

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; increasing the credit for 
  1.3             research in the health care provider tax; amending 
  1.4             Minnesota Statutes 2000, section 295.53, subdivision 
  1.5             4a. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 295.53, 
  1.8   subdivision 4a, is amended to read: 
  1.9      Subd. 4a.  [CREDIT FOR RESEARCH.] (a) In addition to the 
  1.10  exemptions allowed under subdivision 1, a hospital or health 
  1.11  care provider may claim an annual credit against the total 
  1.12  amount of tax, if any, the hospital or health care provider owes 
  1.13  for that calendar year under sections 295.50 to 295.57.  The 
  1.14  credit shall equal 2.5 percent of revenues for patient services 
  1.15  used to fund a percentage of expenditures for qualifying 
  1.16  research conducted by an allowable research program as 
  1.17  determined under paragraph (e).  The amount of the credit shall 
  1.18  not exceed the tax liability of the hospital or health care 
  1.19  provider under sections 295.50 to 295.57. 
  1.20     (b) For purposes of this subdivision, the following 
  1.21  requirements apply: 
  1.22     (1) expenditures must be for program costs of qualifying 
  1.23  research conducted by an allowable research program; 
  1.24     (2) an allowable research program must be a formal program 
  1.25  of medical and health care research conducted by an entity which 
  2.1   is exempt under section 501(c)(3) of the Internal Revenue Code 
  2.2   of 1986 or is owned and operated under authority of a 
  2.3   governmental unit; 
  2.4      (3) qualifying research must:  
  2.5      (A) be approved in writing by the governing body of the 
  2.6   hospital or health care provider which is taking the deduction 
  2.7   credit under this subdivision; 
  2.8      (B) have as its purpose the development of new knowledge in 
  2.9   basic or applied science relating to the diagnosis and treatment 
  2.10  of conditions affecting the human body; 
  2.11     (C) be subject to review by individuals with expertise in 
  2.12  the subject matter of the proposed study but who have no 
  2.13  financial interest in the proposed study and are not involved in 
  2.14  the conduct of the proposed study; and 
  2.15     (D) be subject to review and supervision by an 
  2.16  institutional review board operating in conformity with federal 
  2.17  regulations if the research involves human subjects or an 
  2.18  institutional animal care and use committee operating in 
  2.19  conformity with federal regulations if the research involves 
  2.20  animal subjects.  Research expenses are not exempt do not 
  2.21  qualify for the credit if the study is a routine evaluation of 
  2.22  health care methods or products used in a particular setting 
  2.23  conducted for the purpose of making a management decision.  
  2.24  Costs of clinical research activities paid directly for the 
  2.25  benefit of an individual patient are excluded from 
  2.26  this exemption credit.  Basic research in fields including 
  2.27  biochemistry, molecular biology, and physiology are also 
  2.28  included if such programs are subject to a peer review process. 
  2.29     (c) No credit shall be allowed under this subdivision for 
  2.30  any revenue received by the hospital or health care provider in 
  2.31  the form of a grant, gift, or otherwise, whether from a 
  2.32  government or nongovernment source, on which the tax liability 
  2.33  under section 295.52 is not imposed to conduct research. 
  2.34     (d) The taxpayer shall apply for the credit under this 
  2.35  section on the annual return under section 295.55, subdivision 5.
  2.36     (e) For research expenses paid in 2001, the credit is equal 
  3.1   to 7.5 percent of the taxpayer's total expenditures for 
  3.2   qualifying research.  Beginning September 1, 2001, if the actual 
  3.3   or estimated amount paid under this section for the calendar 
  3.4   year exceeds $2,500,000 $10,000,000, the commissioner of finance 
  3.5   shall determine the rate of the research credit for the 
  3.6   following calendar year to the nearest one-half percent so that 
  3.7   refunds paid under this section will most closely equal 
  3.8   $2,500,000 $10,000,000.  The commissioner of finance shall 
  3.9   publish in the State Register by October 1 of each year the rate 
  3.10  of the credit for the following calendar year.  A determination 
  3.11  under this section is not subject to the rulemaking provisions 
  3.12  of chapter 14. 
  3.13     [EFFECTIVE DATE.] This section is effective for research 
  3.14  expenses paid in 2001 and thereafter.