HF 2106

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to child care; changing eligibility for basic 
  1.3             sliding fee assistance; expanding the dependent care 
  1.4             tax credit; amending Minnesota Statutes 1998, sections 
  1.5             119B.09, subdivisions 1 and 2; 119B.12, subdivision 2; 
  1.6             and 290.067, subdivisions 1 and 2. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1998, section 119B.09, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [GENERAL ELIGIBILITY REQUIREMENTS FOR ALL 
  1.11  APPLICANTS FOR CHILD CARE ASSISTANCE.] (a) Child care services 
  1.12  must be available to families who need child care to find or 
  1.13  keep employment or to obtain the training or education necessary 
  1.14  to find employment and who: 
  1.15     (1) meet the requirements of section 119B.05; receive aid 
  1.16  to families with dependent children, MFIP-S, or work first, 
  1.17  whichever is in effect; and are receiving employment and 
  1.18  training services under section 256.736 or chapter 256J or 256K; 
  1.19     (2) have household income below the eligibility levels for 
  1.20  aid to families with dependent children; or 
  1.21     (3) beginning November 1, 1999, have household income 
  1.22  within a range established by the commissioner at or below 200 
  1.23  percent of the federal poverty guidelines. 
  1.24     (b) Child care services for the families receiving aid to 
  1.25  families with dependent children must be made available as 
  1.26  in-kind services, to cover any difference between the actual 
  2.1   cost and the amount disregarded under the aid to families with 
  2.2   dependent children program.  Child care services to families 
  2.3   whose incomes are below the threshold of eligibility for aid to 
  2.4   families with dependent children, but are not AFDC caretakers, 
  2.5   must be made available with the same copayment required of AFDC 
  2.6   caretakers or MFIP-S caregivers. 
  2.7      (c) All applicants for child care assistance and families 
  2.8   currently receiving child care assistance must be assisted and 
  2.9   required to cooperate in establishment of paternity and 
  2.10  enforcement of child support obligations as a condition of 
  2.11  program eligibility.  For purposes of this section, a family is 
  2.12  considered to meet the requirement for cooperation when the 
  2.13  family complies with the requirements of section 256.741, if 
  2.14  enacted. 
  2.15     Sec. 2.  Minnesota Statutes 1998, section 119B.09, 
  2.16  subdivision 2, is amended to read: 
  2.17     Subd. 2.  [SLIDING FEE.] Child care services to families 
  2.18  with incomes in the commissioner's established range must be 
  2.19  made available on a sliding fee basis.  Beginning October 1, 
  2.20  1999, the upper limit of the range must be neither less than 70 
  2.21  percent nor more than 90 percent of the state median income 200 
  2.22  percent of the federal poverty guidelines for a family of four, 
  2.23  adjusted for family size.  
  2.24     Sec. 3.  Minnesota Statutes 1998, section 119B.12, 
  2.25  subdivision 2, is amended to read: 
  2.26     Subd. 2.  [PARENT FEE.] A family's monthly parent fee must 
  2.27  be a fixed percentage of its annual gross income.  Parent fees 
  2.28  must apply to families eligible for child care assistance under 
  2.29  sections 119B.03 and 119B.05.  Income must be as defined in 
  2.30  section 119B.01, subdivision 12.  The fixed percent is based on 
  2.31  the relationship of the family's annual gross income to 100 
  2.32  percent of state median income.  Beginning January 1, 1998, 
  2.33  Parent fees must begin at 75 percent of the poverty level.  The 
  2.34  minimum parent fees for families between 75 percent and 100 
  2.35  percent of poverty level must be $5 $10 per month.  Parent fees 
  2.36  for families with incomes at or above the poverty level must not 
  3.1   decrease due to the addition of family members after the 
  3.2   family's initial eligibility determination.  Parent fees must be 
  3.3   established in rule and must provide for graduated movement to 
  3.4   full payment. 
  3.5      Sec. 4.  Minnesota Statutes 1998, section 290.067, 
  3.6   subdivision 1, is amended to read: 
  3.7      Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
  3.8   as a credit against the tax due from the taxpayer and a spouse, 
  3.9   if any, under this chapter an amount equal to the dependent care 
  3.10  credit for which the taxpayer is eligible pursuant to the 
  3.11  provisions of section 21 of the Internal Revenue Code subject to 
  3.12  the limitations provided in subdivision 2 except that in 
  3.13  determining whether the child qualified as a dependent, income 
  3.14  received as an aid to families with dependent children grant or 
  3.15  allowance to or on behalf of the child, or as a grant or 
  3.16  allowance to or on behalf of the child under the successor 
  3.17  program pursuant to Public Law 104-193, must not be taken into 
  3.18  account in determining whether the child received more than half 
  3.19  of the child's support from the taxpayer, and the provisions of 
  3.20  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
  3.21     (b) If a child who has not attained the age of six years at 
  3.22  the close of the taxable year is cared for at a licensed family 
  3.23  day care home operated by the child's parent, the taxpayer is 
  3.24  deemed to have paid employment-related expenses.  If the child 
  3.25  is 16 months old or younger at the close of the taxable year, 
  3.26  the amount of expenses deemed to have been paid equals the 
  3.27  maximum limit for one qualified individual under section 21(c) 
  3.28  and (d) of the Internal Revenue Code.  If the child is older 
  3.29  than 16 months of age but has not attained the age of six years 
  3.30  at the close of the taxable year, the amount of expenses deemed 
  3.31  to have been paid equals the amount the licensee would charge 
  3.32  for the care of a child of the same age for the same number of 
  3.33  hours of care.  
  3.34     (c) If a married couple: 
  3.35     (1) has a child who has not attained the age of one year 
  3.36  three years at the close of the taxable year; 
  4.1      (2) files a joint tax return for the taxable year; and 
  4.2      (3) does not participate in a dependent care assistance 
  4.3   program as defined in section 129 of the Internal Revenue Code, 
  4.4   in lieu of the actual employment related expenses paid for that 
  4.5   child under paragraph (a) or the deemed amount under paragraph 
  4.6   (b), the lesser of (i) the combined earned income of the couple 
  4.7   or (ii) $2,400 will be deemed to be the employment related 
  4.8   expense paid for that child.  The earned income limitation of 
  4.9   section 21(d) of the Internal Revenue Code shall not apply to 
  4.10  this deemed amount.  These deemed amounts apply regardless of 
  4.11  whether any employment-related expenses have been paid.  
  4.12     (d) If the taxpayer is not required and does not file a 
  4.13  federal individual income tax return for the tax year, no credit 
  4.14  is allowed for any amount paid to any person unless: 
  4.15     (1) the name, address, and taxpayer identification number 
  4.16  of the person are included on the return claiming the credit; or 
  4.17     (2) if the person is an organization described in section 
  4.18  501(c)(3) of the Internal Revenue Code and exempt from tax under 
  4.19  section 501(a) of the Internal Revenue Code, the name and 
  4.20  address of the person are included on the return claiming the 
  4.21  credit.  
  4.22  In the case of a failure to provide the information required 
  4.23  under the preceding sentence, the preceding sentence does not 
  4.24  apply if it is shown that the taxpayer exercised due diligence 
  4.25  in attempting to provide the information required. 
  4.26     In the case of a nonresident, part-year resident, or a 
  4.27  person who has earned income not subject to tax under this 
  4.28  chapter, the credit determined under section 21 of the Internal 
  4.29  Revenue Code must be allocated based on the ratio by which the 
  4.30  earned income of the claimant and the claimant's spouse from 
  4.31  Minnesota sources bears to the total earned income of the 
  4.32  claimant and the claimant's spouse. 
  4.33     Sec. 5.  Minnesota Statutes 1998, section 290.067, 
  4.34  subdivision 2, is amended to read: 
  4.35     Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
  4.36  for the care of each dependent shall not exceed $720 in any 
  5.1   taxable year, and the total credit for all dependents of a 
  5.2   claimant shall not exceed $1,440 in a taxable year.  The maximum 
  5.3   total credit shall be reduced according to the amount of the 
  5.4   income of the claimant and a spouse, if any, as follows:  
  5.5      (1) income up to $13,350 $25,520, $720 maximum for one 
  5.6   dependent, $1,440 for all dependents; or 
  5.7      (2) income over $13,350 $25,250, the maximum credit for one 
  5.8   dependent shall be reduced by $18 $12 for every $350 of 
  5.9   additional income, $36 $24 for all dependents. 
  5.10     The commissioner shall construct and make available to 
  5.11  taxpayers tables showing the amount of the credit at various 
  5.12  levels of income and expenses.  The tables shall follow the 
  5.13  schedule contained in this subdivision, except that the 
  5.14  commissioner may graduate the transitions between expenses and 
  5.15  income brackets.  
  5.16     Sec. 6.  [TRANSITION PERIOD BASIC SLIDING FEE.] 
  5.17     Beginning September 1, 1999, a county must not accept 
  5.18  applications for the basic sliding fee program under Minnesota 
  5.19  Statutes, section 119B.03, from a family with income that 
  5.20  exceeds 200 percent of the federal poverty guidelines adjusted 
  5.21  for family size.  By August 1, 1999, the commissioner of 
  5.22  children, families, and learning must develop and provide to all 
  5.23  counties that administer the basic sliding fee program under 
  5.24  Minnesota Statutes, section 119B.03, a notice that must be 
  5.25  mailed to all participating families.  The notice must state 
  5.26  that income eligibility for the basic sliding fee program has 
  5.27  been changed and that a family with an income greater than 200 
  5.28  percent of federal poverty guidelines will be ineligible for the 
  5.29  basic sliding fee program beginning October 1, 1999.  The notice 
  5.30  must also include information on the dependent care tax credit 
  5.31  under Minnesota Statutes, section 290.067, and information of 
  5.32  pretax accounts for child care.  Each county that administers 
  5.33  the basic sliding fee program must mail the notice to all 
  5.34  participating families by September 1, 1999. 
  5.35     Sec. 7.  [EFFECTIVE DATE.] 
  5.36     Sections 4 and 5 are effective for tax years beginning 
  6.1   after December 31, 1998.