HF 2329

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:03am

A bill for an act
relating to taxation; income; franchise; property; sales and use; providing
tax incentives for businesses in green job zones; providing for certification of
qualifying businesses; appropriating money; amending Minnesota Statutes 2008,
sections 268.19, subdivision 1; 270B.14, subdivision 3; 270B.15; 289A.12, by
adding a subdivision; 290.01, subdivisions 19b, 29; 290.06, subdivision 2c, by
adding a subdivision; 290.067, subdivision 1; 290.0671, subdivision 1; 290.091,
subdivision 2; 290.0921, subdivision 3; 290.0922, subdivisions 2, 3; 297A.68,
by adding a subdivision; proposing coding for new law in Minnesota Statutes,
chapter 469.

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

Section 1.

Minnesota Statutes 2008, section 268.19, subdivision 1, is amended to read:

Subdivision 1.

Use of data.

(a) Except as provided by this section, data gathered
from any person under the administration of the Minnesota Unemployment Insurance Law
are private data on individuals or nonpublic data not on individuals as defined in section
13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court
order or section 13.05. A subpoena is not considered a district court order. These data
may be disseminated to and used by the following agencies without the consent of the
subject of the data:

(1) state and federal agencies specifically authorized access to the data by state
or federal law;

(2) any agency of any other state or any federal agency charged with the
administration of an unemployment insurance program;

(3) any agency responsible for the maintenance of a system of public employment
offices for the purpose of assisting individuals in obtaining employment;

(4) the public authority responsible for child support in Minnesota or any other
state in accordance with section 256.978;

(5) human rights agencies within Minnesota that have enforcement powers;

(6) the Department of Revenue to the extent necessary for its duties under Minnesota
laws;

(7) public and private agencies responsible for administering publicly financed
assistance programs for the purpose of monitoring the eligibility of the program's
recipients;

(8) the Department of Labor and Industry and the Division of Insurance Fraud
Prevention in the Department of Commerce for uses consistent with the administration of
their duties under Minnesota law;

(9) local and state welfare agencies for monitoring the eligibility of the data subject
for assistance programs, or for any employment or training program administered by those
agencies, whether alone, in combination with another welfare agency, or in conjunction
with the department or to monitor and evaluate the statewide Minnesota family investment
program by providing data on recipients and former recipients of food stamps or food
support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;

(10) local and state welfare agencies for the purpose of identifying employment,
wages, and other information to assist in the collection of an overpayment debt in an
assistance program;

(11) local, state, and federal law enforcement agencies for the purpose of ascertaining
the last known address and employment location of an individual who is the subject of
a criminal investigation;

(12) the United States Citizenship and Immigration Services has access to data on
specific individuals and specific employers provided the specific individual or specific
employer is the subject of an investigation by that agency;

(13) the Department of Health for the purposes of epidemiologic investigations;

(14) the Department of Corrections for the purpose of preconfinement and
postconfinement employment tracking of committed offenders for the purpose of case
planning; deleted text begin and
deleted text end

(15) the state auditor to the extent necessary to conduct audits of job opportunity
building zones new text begin and green job zones new text end as required under deleted text begin section deleted text end new text begin sections new text end 469.3201 deleted text begin . deleted text end new text begin and
469.3701; and
new text end

new text begin (16) any agency responsible for monitoring compliance with job opportunity
building zones or green job zones business subsidy agreements.
new text end

(b) Data on individuals and employers that are collected, maintained, or used by
the department in an investigation under section 268.182 are confidential as to data
on individuals and protected nonpublic data not on individuals as defined in section
13.02, subdivisions 3 and 13, and must not be disclosed except under statute or district
court order or to a party named in a criminal proceeding, administrative or judicial, for
preparation of a defense.

(c) Data gathered by the department in the administration of the Minnesota
unemployment insurance program must not be made the subject or the basis for any
suit in any civil proceedings, administrative or judicial, unless the action is initiated by
the department.

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 2008, section 270B.14, subdivision 3, is amended to read:

Subd. 3.

Administration of enterprise, job opportunity, deleted text begin and deleted text end biotechnology and
health sciences industry zone new text begin , and green job zone new text end programs.

The commissioner may
disclose return information relating to the taxes imposed by chapters 290 and 297A to
the Department of Employment and Economic Development or a municipality receiving
an enterprise zone designation under section 469.169 but only as necessary to administer
the funding limitations under section 469.169, subdivision 7, or to the Department
of Employment and Economic Development and appropriate officials from the local
government units in which a qualified business is located but only as necessary to enforce
the job opportunity building zone benefits under section 469.315, deleted text begin or deleted text end biotechnology and
health sciences industry zone benefits under section 469.336 new text begin , or green job zone benefits
under section 469.365 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. 3.

Minnesota Statutes 2008, section 270B.15, is amended to read:

270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE
AUDITOR.

(a) Returns and return information must be disclosed to the legislative auditor to the
extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.

(b) The commissioner must disclose return information, including the report
required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
to conduct audits of job opportunity building zones as required under section 469.3201 new text begin ,
and audits of green job zones and business subsidy agreements under section 469.3701 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. 4.

Minnesota Statutes 2008, section 289A.12, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Report of green job zone benefits; penalty for failure to file report.
new text end

new text begin (a) By October 15 of each year, every qualified business, as defined under section
469.360, subdivision 10, must file with the commissioner, on a form prescribed by the
commissioner, a report listing the tax benefits under section 469.365 received by the
business for the previous year.
new text end

new text begin (b) The commissioner shall send notice to each business that fails to timely submit
the report required under paragraph (a). The notice shall demand that the business submit
the report within 60 days. Where good cause exists, the commissioner may extend
the period for submitting the report as long as a request for extension is filed by the
business before the expiration of the 60-day period. The commissioner shall notify the
commissioner of employment and economic development and the appropriate green job
zone local administrator whenever notice is sent to a business under this paragraph.
new text end

new text begin (c) A business that fails to submit the report as required under paragraph (b) is no
longer a qualified business under section 469.360, subdivision 10, and is subject to the
repayment provisions of section 469.369.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 5.

Minnesota Statutes 2008, 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. 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 and
under the provisions of Public Law 109-1;

(7) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;

(8) 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;

(9) 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 (15), 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 (15), 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;

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

(11) 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 performed in Minnesota, excluding 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); (ii) federally funded state active service as defined in section
190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05,
subdivision 5c, but "active service" excludes service performed in accordance with section
190.08, subdivision 3;

(12) 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 outside Minnesota under United States Code,
title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
the United Nations;

(13) 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;

(14) 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 (16), 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 (16), 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;

(15) to the extent included in federal taxable income, 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);

(16) international economic development zone income as provided under section
469.325; deleted text begin and
deleted text end

(17) 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 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (18) green job zone income as provided under section 469.366.
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, 2009.
new text end

Sec. 6.

Minnesota Statutes 2008, section 290.01, subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income" means:

(1) for individuals, estates, and trusts, the same as taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095;

(ii) the dividends received deduction under section 290.21, subdivision 4;

(iii) the exemption for operating in a job opportunity building zone under section
469.317;

(iv) the exemption for operating in a biotechnology and health sciences industry
zone under section 469.337; deleted text begin and
deleted text end

(v) the exemption for operating in an international economic development zone
under section 469.326 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (vi) the exemption for operating in a green job zone under section 469.367.
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, 2009.
new text end

Sec. 7.

Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:

(1) On the first $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05 percent;

(3) On all over $102,030, 7.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05 percent;

(3) On all over $57,710, 7.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05 percent;

(3) On all over $86,910, 7.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
and (13) and reduced by the Minnesota assignable portion of the subtraction for United
States government interest under section 290.01, subdivision 19b, clause (1), and the
subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), deleted text begin and deleted text end (16),
new text begin and (18), new text end after applying the allocation and assignability provisions of section 290.081,
clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), and (13) and
reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1), (9),
(10), (14), (15), deleted text begin and deleted text end (16) new text begin , and (18) 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, 2009.
new text end

Sec. 8.

Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Green job zone jobs credit. new text end

new text begin A taxpayer that is a qualified business, as
defined in section 469.360, subdivision 10, is allowed a credit as determined under section
469.368 against the tax imposed by this chapter.
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, 2009.
new text end

Sec. 9.

Minnesota Statutes 2008, section 290.067, subdivision 1, is amended to read:

Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the
tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of
section 21 of the Internal Revenue Code subject to the limitations provided in subdivision
2 except that in determining whether the child qualified as a dependent, income received
as a Minnesota family investment program grant or allowance to or on behalf of the child
must not be taken into account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of section 32(b)(1)(D) of
the Internal Revenue Code do not apply.

(b) If a child who has not attained the age of six years at the close of the taxable year
is cared for at a licensed family day care home operated by the child's parent, the taxpayer
is deemed to have paid employment-related expenses. If the child is 16 months old or
younger at the close of the taxable year, the amount of expenses deemed to have been paid
equals the maximum limit for one qualified individual under section 21(c) and (d) of the
Internal Revenue Code. If the child is older than 16 months of age but has not attained the
age of six years at the close of the taxable year, the amount of expenses deemed to have
been paid equals the amount the licensee would charge for the care of a child of the same
age for the same number of hours of care.

(c) If a married couple:

(1) has a child who has not attained the age of one year at the close of the taxable
year;

(2) files a joint tax return for the taxable year; and

(3) does not participate in a dependent care assistance program as defined in section
129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
one qualified individual under section 21(c) and (d) of the Internal Revenue Code will
be deemed to be the employment related expense paid for that child. The earned income
limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any employment-related
expenses have been paid.

(d) If the taxpayer is not required and does not file a federal individual income tax
return for the tax year, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included
on the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal
Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code,
the name and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due
diligence in attempting to provide the information required.

In the case of a nonresident, part-year resident, or a person who has earned income
not subject to tax under this chapter including earned income excluded pursuant to section
290.01, subdivision 19b, clause (10) deleted text begin or deleted text end new text begin , new text end (16), new text begin or (18), new text end the credit determined under section
21 of the Internal Revenue Code must be allocated based on the ratio by which the earned
income of the claimant and the claimant's spouse from Minnesota sources bears to the
total earned income of the claimant and the claimant's spouse.

For residents of Minnesota, the subtractions for military pay under section 290.01,
subdivision 19b, clauses (11) and (12), are not considered "earned income not subject to
tax under this chapter."

For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 10.

Minnesota Statutes 2008, section 290.0671, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual is allowed a credit against the tax
imposed by this chapter equal to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code.

(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
whichever is greater, in excess of $15,080, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals ten
percent of the first $9,720 of earned income and 20 percent of earned income over
$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
the credit less than zero.

(e) 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).

(f) For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, including income excluded under section 290.01,
subdivision 19b, clause (10) deleted text begin or deleted text end new text begin , new text end (16), new text begin or (18), new text end the credit must be allocated based on the
ratio of federal adjusted gross income reduced by the earned income not subject to tax
under this chapter over federal adjusted gross income. For purposes of this paragraph, the
subtractions for military pay under section 290.01, subdivision 19b, clauses (11) and (12),
are not considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, the exclusion of combat pay under section 112
of the Internal Revenue Code is not considered "earned income not subject to tax under
this chapter."

(g) For tax years beginning after December 31, 2001, and before December 31,
2004, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$1,000 for married taxpayers filing joint returns.

(h) For tax years beginning after December 31, 2004, and before December 31,
2007, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$2,000 for married taxpayers filing joint returns.

(i) For tax years beginning after December 31, 2007, and before December 31, 2010,
the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph
(d), after being adjusted for inflation under subdivision 7, are each increased by $3,000 for
married taxpayers filing joint returns. For tax years beginning after December 31, 2008,
the $3,000 is adjusted annually for inflation under subdivision 7.

(j) The commissioner shall construct tables showing the amount of the credit at
various income levels and make them available to taxpayers. The tables shall follow
the schedule contained in this subdivision, except that the commissioner may graduate
the transition between income brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 11.

Minnesota Statutes 2008, 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), (12), and (13);

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; and

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b, clauses (6) deleted text begin and deleted text end new text begin , new text end (9) to (16) new text begin , and (18) new text end .

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) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 12.

Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:

Subd. 3.

Alternative minimum taxable income.

"Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.

(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.

(2) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an
addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining
alternative minimum taxable income.

(3) The subtraction for depreciation allowed under section 290.01, subdivision 19d,
clause (18), is allowed as a depreciation deduction in determining alternative minimum
taxable income.

(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.

(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.

(6) The special rule for dividends from section 936 companies under section
56(g)(4)(C)(iii) does not apply.

(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
Code does not apply.

(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).

(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
Revenue Code does not apply.

(10) The tax preference for charitable contributions of appreciated property under
section 57(a)(6) of the Internal Revenue Code does not apply.

(11) For purposes of calculating the tax preference for accelerated depreciation or
amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.

(12) For purposes of calculating the adjustment for adjusted current earnings in
section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.

(13) For purposes of determining the amount of adjusted current earnings under
section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the
amount of refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other like
income subtracted as provided in section 290.01, subdivision 19d, clause (10).

(14) Alternative minimum taxable income excludes the income from operating in a
job opportunity building zone as provided under section 469.317.

(15) Alternative minimum taxable income excludes the income from operating in a
biotechnology and health sciences industry zone as provided under section 469.337.

(16) Alternative minimum taxable income excludes the income from operating in an
international economic development zone as provided under section 469.326.

new text begin (17) Alternative minimum taxable income excludes the income from operating in a
green job zone as provided under section 469.367.
new text end

Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 13.

Minnesota Statutes 2008, section 290.0922, subdivision 2, is amended to read:

Subd. 2.

Exemptions.

The following entities are exempt from the tax imposed
by this section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof; and

(4) entities having a valid election in effect under section 860D(b) of the Internal
Revenue Code;

(5) town and farmers' mutual insurance companies;

(6) cooperatives organized under chapter 308A or 308B that provide housing
exclusively to persons age 55 and over and are classified as homesteads under section
273.124, subdivision 3;

(7) an entity, if for the taxable year all of its property is located in a job opportunity
building zone designated under section 469.314 and all of its payroll is a job opportunity
building zone payroll under section 469.310; deleted text begin and
deleted text end

(8) an entity, if for the taxable year all of its property is located in an international
economic development zone designated under section 469.322, and all of its payroll is
international economic development zone payroll under section 469.321. The exemption
under this clause applies to taxable years beginning during the duration of the international
economic development zone deleted text begin . deleted text end new text begin ; and
new text end

new text begin (9) an entity, if for the taxable year all of its property is located in a green job zone
under section 469.360, subdivision 5, and all of its payroll is green job zone payroll under
section 469.360, subdivision 6.
new text end

Entities not specifically exempted by this subdivision are subject to tax under this
section, notwithstanding section 290.05.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 14.

Minnesota Statutes 2008, section 290.0922, subdivision 3, is amended to read:

Subd. 3.

Definitions.

(a) "Minnesota sales or receipts" means the total sales
apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
total sales or receipts apportioned or attributed to Minnesota pursuant to any other
apportionment formula applicable to the taxpayer.

(b) "Minnesota property" means total Minnesota tangible property as provided in
section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
but does not include: (1) property located in a job opportunity building zone designated
under section 469.314, (2) property of a qualified business located in a biotechnology
and health sciences industry zone designated under section 469.334, deleted text begin or deleted text end (3) for taxable
years beginning during the duration of the zone, property of a qualified business located
in the international economic development zone designated under section 469.322 new text begin , or
(4) property of a qualified business located in a green job zone as defined under section
469.360 new text end . Intangible property shall not be included in Minnesota property for purposes
of this section. Taxpayers who do not utilize tangible property to apportion income
shall nevertheless include Minnesota property for purposes of this section. On a return
for a short taxable year, the amount of Minnesota property owned, as determined under
section 290.191, shall be included in Minnesota property based on a fraction in which the
numerator is the number of days in the short taxable year and the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
290.191, subdivision 12, but does not include: (1) job opportunity building zone payrolls
under section 469.310, subdivision 8, (2) biotechnology and health sciences industry zone
payrolls under section 469.330, subdivision 8, deleted text begin or deleted text end (3) for taxable years beginning during
the duration of the zone, international economic development zone payrolls under section
469.321, subdivision 9 new text begin , or (4) green job zone payroll under section 469.360, subdivision
6 new text end . Taxpayers who do not utilize payrolls to apportion income shall nevertheless include
Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 15.

Minnesota Statutes 2008, section 297A.68, is amended by adding a
subdivision to read:

new text begin Subd. 42. new text end

new text begin Green job zones. new text end

new text begin (a) Purchases of tangible personal property or taxable
services by a qualified business, as defined in section 469.360, are exempt if the property or
services are primarily used or consumed in a green job zone as defined in section 469.360.
new text end

new text begin (b) Purchase and use of construction materials and supplies used or consumed in,
and equipment incorporated into, the construction of improvements to real property in a
green job zone are exempt if the improvements after completion of construction are to be
used in the conduct of a qualified business, as defined in section 469.360. This exemption
applies regardless of whether the purchases are made by the business or a contractor.
new text end

new text begin (c) The exemptions under this subdivision apply to a local sales and use tax
regardless of whether the local sales tax is imposed on the sales taxable as defined under
this chapter.
new text end

new text begin (d) This subdivision applies to sales if the purchase was made and delivery received
during the duration of the zone.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for purchases after June 30, 2009.
new text end

Sec. 16.

new text begin [469.360] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections new text end new text begin to new text end new text begin , the following
terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Applicant. new text end

new text begin "Applicant" means a local government unit or units applying
for designation of an area as a green job zone or a joint powers board established under
section new text end new text begin acting on behalf of two or more local government units.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of employment
and economic development.
new text end

new text begin Subd. 4. new text end

new text begin Expansion. new text end

new text begin "Expansion" means enlargement of a business facility within a
property or on contiguous property to an existing business facility.
new text end

new text begin Subd. 5. new text end

new text begin Green job zone or zone. new text end

new text begin "Green job zone" or "zone" means a zone
designated by the commissioner under section new text end new text begin .
new text end

new text begin Subd. 6. new text end

new text begin Green job zone payroll factor or green job zone payroll. new text end

new text begin "Green job
zone payroll factor" or "green job zone payroll" means that portion of the payroll factor
under section new text end new text begin that represents:
new text end

new text begin (1) wages or salaries paid to an individual for services performed in a green job
zone; or
new text end

new text begin (2) wages or salaries paid to individuals working from offices within a green job
zone if their employment requires them to work outside the zone and the work is incidental
to the work performed by the individual within the zone. However, in no case does zone
payroll include wages paid for work performed outside the zone of an employee who
performs more than ten percent of total services for the employer outside the zone.
new text end

new text begin Subd. 7. new text end

new text begin Green job zone percentage or zone percentage. new text end

new text begin "Green job zone
percentage" or "zone percentage" means the following fraction reduced to a percentage:
new text end

new text begin (1) the numerator of the fraction is:
new text end

new text begin (i) the ratio of the taxpayer's property factor under section 290.191 located in the
zone for the taxable year over the property factor numerator determined under section
290.191, plus
new text end

new text begin (ii) the ratio of the taxpayer's green job zone payroll factor under subdivision 6 over
the payroll factor numerator determined under section 290.191; and
new text end

new text begin (2) the denominator of the fraction is two.
new text end

new text begin When calculating the zone percentage for a business that is part of a unitary business
as defined under section 290.17, subdivision 4, the denominator of the payroll and
property factors is the Minnesota payroll and property of the unitary business as reported
on the combined report under section 290.17, subdivision 4, paragraph (j).
new text end

new text begin Subd. 8. new text end

new text begin Local government unit. new text end

new text begin "Local government unit" means a statutory or
home rule charter city, county, town, Iron Range resources and rehabilitation agency,
regional development commission, or federally designated economic development district.
new text end

new text begin Subd. 9. new text end

new text begin Person. new text end

new text begin "Person" includes an individual, corporation, partnership, limited
liability company, association, or any other entity.
new text end

new text begin Subd. 10. new text end

new text begin Qualified business. new text end

new text begin (a) A person carrying on a trade or business at a
place of business located within a green job zone is a qualified business for the purposes
of sections 469.360 to 469.3693 according to paragraphs (b) to (e).
new text end

new text begin (b) A person is a qualified business only on those parcels of land for which the
person has entered into a business subsidy agreement approved by the commissioner, as
required under section 469.363, with the appropriate local government unit in which the
parcels are located.
new text end

new text begin (c) A person is a qualified business only if the business meets all of the requirements
of paragraph (b), and:
new text end

new text begin (1) is predominantly engaged in the manufacture of products, used by the building,
transport, consumer products and industrial products sectors, that reduce environmental
impact and increase the efficiency of the use of resources such as energy, water, and
materials, or, in the case of a business at a site described in section 469.361, subdivision 2,
clause (3), in the manufacture of motor vehicles that have superior fuel economy to the
vehicles that were manufactured at that site prior to enactment of this act;
new text end

new text begin (2) is a new facility in Minnesota, not a relocation of an existing Minnesota facility,
provided that a facility at which the qualified business has increased the number of
full-time employees at the place of business in the zone by at least ten percent over the
level of full-time employees at a date one year prior to filing the application under section
469.362 is also considered a new facility; and
new text end

new text begin (3) enters a business subsidy agreement that:
new text end

new text begin (i) provides for repayment of all tax benefits enumerated under section 469.365
to the business under the procedures in section 469.369, if the requirements of this
subdivision are not met for the taxable year or for taxes payable during the year in which
the requirements were not met; and
new text end

new text begin (ii) contains any other terms the commissioner determines appropriate.
new text end

new text begin (d) A qualifying business must pay each employee compensation, including benefits
not mandated by law, that on an annualized basis is equal to at least 110 percent of the
federal poverty level for a family of four.
new text end

new text begin (e) A qualifying business must pay prevailing wage for construction installation,
remodeling, and repair as required by section 116J.871.
new text end

new text begin Subd. 11. new text end

new text begin Relocation. new text end

new text begin (a) "Relocation" means that the trade or business:
new text end

new text begin (1) ceases one or more operations or functions at another location in Minnesota
and begins performing substantially the same operations or functions at a location in a
green job zone; or
new text end

new text begin (2) reduces employment at another location in Minnesota during a period starting
one year before and ending one year after it begins operations in a green job zone and
its employees in the zone are engaged in the same line of business as the employees at
the location where it reduced employment.
new text end

new text begin (b) "Relocation" does not include establishing a new facility by a business that does
not replace or supplant an existing operation or employment, in whole or in part.
new text end

new text begin (c) "Trade or business" means any business entity that is substantially similar in
operation or ownership to the business entity seeking to be a qualified business under
this section.
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. 17.

new text begin [469.361] GREEN JOB ZONES; LIMITATIONS.
new text end

new text begin Subdivision. 1. new text end

new text begin Zones. new text end

new text begin The area of a green job zone must consist of defined property
boundaries specified in the business subsidy agreement.
new text end

new text begin Subd. 2. new text end

new text begin Location. new text end

new text begin A green job zone must be located in an area determined by the
commissioner of employment and economic development to be:
new text end

new text begin (1) a brownfield;
new text end

new text begin (2) a parcel that contains a vacant structure that had previously contained a
manufacturing facility that under the business subsidy agreement will be used for the
purpose of a qualified business; or
new text end

new text begin (3) the site of a motor vehicle manufacturing plant located in a city of the first class
that had at least 400 employees on the effective date of this act.
new text end

new text begin Subd. 3. new text end

new text begin Border city development zones. new text end

new text begin (a) The area of a green job zone must not
include the area of a border city development zone designated under section new text end new text begin .
The city must remove property from a border city development zone if the area is
designated as a green job zone. Before removing a parcel of property from a border
city development zone, the city must obtain the written consent to the removal from
each recipient that is located on the parcel and receives incentives under the border city
development zone. Consent of any other property owner or taxpayer in the border city
development zone is not required.
new text end

new text begin (b) A city must not provide tax incentives under section new text end new text begin to individuals or
businesses for operations or activity in a green job zone.
new text end

new text begin Subd. 4. new text end

new text begin Duration limit. new text end

new text begin (a) The maximum duration of a zone is 12 years. The
commissioner may specify a shorter duration, regardless of the requested duration, in
order to ensure that benefits to the state outweigh the costs.
new text end

new text begin (b) The commissioner may not approve any business subsidy agreements after
December 31, 2015.
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. 18.

new text begin [469.362] APPLICATION FOR DESIGNATION.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin One or more local government units, or a joint powers
board under section 471.59, acting on behalf of two or more units, may apply for
designation of an area as a green job zone. All or part of the area proposed for designation
as a zone must be located within the boundaries of each of the governmental units.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin In order to receive designation for a green job zone, a local
government unit must submit an application to the commissioner in the form and manner
designated by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin State review criteria. new text end

new text begin (a) The commissioner may approve an appropriation
only after considering:
new text end

new text begin (1) whether the business has local or Minnesota competitors that will be significantly
and adversely effected by the business subsidy agreement;
new text end

new text begin (2) whether the proposed job creation, job retention, and capital investment is
commensurate with the estimated tax benefits provided to the business by the green job
zone program;
new text end

new text begin (3) whether the zone is located in an area that has access to public transportation and
that has experienced a relatively high rate of unemployment; and
new text end

new text begin (4) whether other financial assistance is available.
new text end

new text begin (b) Additionally, the commissioner may only approve a business subsidy agreement
after considering if, without the estimated tax benefits, the business:
new text end

new text begin (1) would not have begun operations within Minnesota;
new text end

new text begin (2) would not have relocated from outside the state to Minnesota;
new text end

new text begin (3) would have moved to another state or expanded in another state rather than
remaining or expanding in Minnesota; or
new text end

new text begin (4) would not have opened a new facility in Minnesota.
new text end

new text begin (c) The local government unit and the qualified business must provide the
commissioner with the information that the commissioner needs to review a business
subsidy agreement under paragraphs (a) and (b). The information must be in the form
and manner required by the commissioner.
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. 19.

new text begin [469.363] BUSINESS SUBSIDY AGREEMENTS; REPORTS.
new text end

new text begin Subdivision 1. new text end

new text begin Generally. new text end

new text begin A business subsidy agreement required under section
469.360, subdivision 10, paragraph (c), clause (3), must comply with this section.
new text end

new text begin Subd. 2. new text end

new text begin Business subsidy agreement requirements. new text end

new text begin A business subsidy
agreement is not effective until the commissioner has approved the agreement in writing.
The commissioner may not approve an agreement that violates sections 116J.993 to
116J.995 or 469.310 to 469.3201. The commissioner may not approve an agreement
unless:
new text end

new text begin (1) the qualified business is required to create or retain a minimum number of jobs;
new text end

new text begin (2) the agreement defines "jobs" for purposes of determining compliance with wage
and job goals as all jobs that constitute "employment" for purposes of state unemployment
insurance;
new text end

new text begin (3) the qualified business is required to report all jobs created or retained because of
the green job program as a separate business location for purposes of section 268.044; and
new text end

new text begin (4) the qualified business agrees to provide the appropriate data practices release so
that the commissioner of revenue and the commissioner of employment and economic
development can monitor compliance with the terms of the agreement.
new text end

new text begin Subd. 3. new text end

new text begin Standard agreement. new text end

new text begin The commissioner must develop and require the
use of a standard business subsidy agreement that imposes definitive and enforceable
obligations on the qualified business.
new text end

new text begin Subd. 4. new text end

new text begin Business subsidy reports. new text end

new text begin (a) A local government unit must report to the
commissioner on the two-year anniversary date of the business subsidy agreement on the
progress of the qualified business in meeting the goals listed in the business subsidy
agreement.
new text end

new text begin (b) A local government unit must annually report to the commissioner on the
progress of the qualified business in meeting the goals listed in the business subsidy
agreement as required under section 116J.994, subdivisions 7 and 8.
new text end

new text begin (c) The commissioner must hold a qualified business out of compliance or remove
the business from the program if the qualified business fails to provide the information
requested by the local government unit for the report under paragraph (a) within 30 days
of written notice that the information is overdue.
new text end

new text begin Subd. 5. new text end

new text begin Public notice and hearing. new text end

new text begin A local government unit must provide public
notice and hearing as required under section 116J.994, subdivision 5, before approving a
business subsidy agreement. Public notice of a proposed business subsidy agreement must
be published in a local newspaper of general circulation. The public hearing must be held
in a location specified by the local government unit. Notwithstanding section 116J.994,
subdivision 5, the commissioner is not required to provide an additional public notice and
hearing when entering into a business subsidy agreement with a local government unit
and a qualified business.
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. 20.

new text begin [469.364] DESIGNATION OF GREEN JOB ZONES.
new text end

new text begin Subdivision 1. new text end

new text begin Designation schedule. new text end

new text begin Green job zones are designated continuously
upon approval of an application by the commissioner. The duration of the zone, as
defined in section 469.361, subdivision 4, starts from the date the commissioner approves
the business subsidy agreement.
new text end

new text begin Subd. 2. new text end

new text begin Geographic distribution. new text end

new text begin The commissioner shall have as a goal the
geographic distribution of zones around the state, subject to the location requirements
of sections 469.361 and 469.362.
new text end

new text begin Subd. 3. new text end

new text begin Rulemaking exemption. new text end

new text begin The commissioner's actions in establishing
procedures and requirements and making determinations to administer sections new text end new text begin to
469.3693 are not a rule for purposes of chapter 14, are not subject to the Administrative
Procedure Act contained in chapter 14, and are not subject to section new text end new text begin .
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. 21.

new text begin [469.365] TAX INCENTIVES AVAILABLE IN ZONES.
new text end

new text begin Qualified businesses that operate in a green job zone, individuals who invest in a
qualified business that operates in a green job zone, and property located in a green job
zone qualify for:
new text end

new text begin (1) exemption from individual income taxes as provided under section 469.366;
new text end

new text begin (2) exemption from corporate franchise taxes as provided under section 469.367;
new text end

new text begin (3) exemption from the state sales and use tax and any local sales and use taxes on
qualifying purchases as provided in section new text end new text begin 297A.68, subdivision 42 new text end new text begin ; and
new text end

new text begin (4) the jobs credit allowed under section 469.368.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 22.

new text begin [469.366] INDIVIDUAL INCOME TAX EXEMPTION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin An individual, estate, or trust operating a trade or
business in a green job zone and an individual, estate, or trust making a qualifying
investment in a qualified business operating in a green job zone qualifies for the
exemptions from taxes imposed under chapter 290 as provided in this section. The
exemptions provided under this section apply only to the extent that the income otherwise
would be taxable under chapter 290. Subtractions under this section from federal taxable
income, alternative minimum taxable income, or any other base subject to tax are limited
to the amount that otherwise would be included in the tax base absent the exemption under
this section. This section applies only to taxable years beginning during the duration of
the green job zone.
new text end

new text begin Subd. 2. new text end

new text begin Rents. new text end

new text begin An individual, estate, or trust is exempt from the taxes imposed
under chapter 290 on net rents derived from real or tangible personal property used
by a qualified business and located in a zone for a taxable year in which the zone was
designated a green job zone. If tangible personal property was used both inside and
outside of the zone by the qualified business, the exemption amount for the net rental
income must be multiplied by a fraction, the numerator of which is the number of days
the property was used in the zone and the denominator of which is the total days the
property is rented by the qualified business.
new text end

new text begin Subd. 3. new text end

new text begin Business income. new text end

new text begin An individual, estate, or trust is exempt from the taxes
imposed under chapter 290 on net income from the operation of a qualified business in a
green job zone. If the trade or business is carried on inside and outside of the zone and
the individual is not a resident of Minnesota, or the taxpayer is an estate or trust, the
exemption must be apportioned based on the zone percentage and the relocation payroll
percentage for the taxable year. If the trade or business is carried on inside and outside of
the zone and the individual is a resident of Minnesota, the exemption must be apportioned
based on the zone percentage and the relocation payroll percentage for the taxable year,
except the ratios under section new text end new text begin 469.360, new text end new text begin subdivision 7 new text end new text begin , clause (1), items (i) and (ii),
must use the denominators of the property and payroll factors determined under section
new text end new text begin . No subtraction is allowed under this section in excess of 20 percent of the sum
of the green job zone payroll and the adjusted basis of the property at the time that the
property is first used in the green job zone by the business.
new text end

new text begin Subd. 4. new text end

new text begin Capital gains. new text end

new text begin (a) An individual, estate, or trust is exempt from the taxes
imposed under chapter 290 on:
new text end

new text begin (1) net gain derived on a sale or exchange of real property located in the zone and
used by a qualified business. If the property was held by the individual, estate, or trust
during a period when the zone was not designated, the gain must be prorated based on
the percentage of time, measured in calendar days, that the real property was held by the
individual, estate, or trust during the period the zone designation was in effect to the total
period of time the real property was held by the individual;
new text end

new text begin (2) net gain derived on a sale or exchange of tangible personal property used by a
qualified business in the zone. If the property was held by the individual, estate, or trust
during a period when the zone was not designated, the gain must be prorated based on
the percentage of time, measured in calendar days, that the property was held by the
individual, estate, or trust during the period the zone designation was in effect to the total
period of time the property was held by the individual. If the tangible personal property
was used outside of the zone during the period of the zone's designation, the exemption
must be multiplied by a fraction, the numerator of which is the number of days the
property was used in the zone during the time of the designation and the denominator of
which is the total days the property was held during the time of the designation; and
new text end

new text begin (3) net gain derived on a sale of an ownership interest in a qualified business
operating in the green job zone, meeting the requirements of paragraph (b). The exemption
on the gain must be multiplied by the zone percentage of the business for the taxable
year prior to the sale.
new text end

new text begin (b) A qualified business meets the requirements of paragraph (a), clause (3), if it is
a corporation, an S corporation, or a partnership, and for the taxable year its green job
zone percentage exceeds 25 percent. For purposes of paragraph (a), clause (3), the zone
percentage must be calculated by modifying the ratios under section new text end new text begin 469.360, subdivision
new text end new text begin 7 new text end new text begin , clause (1), items (i) and (ii), to use the denominators of the property and payroll factors
determined under section new text end new text begin . Upon the request of an individual, estate, or trust
holding an ownership interest in the entity, the entity must certify to the owner, in writing,
the green job zone percentage needed to determine the exemption.
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, 2009.
new text end

Sec. 23.

new text begin [469.367] CORPORATE FRANCHISE TAX EXEMPTION.
new text end

new text begin (a) A qualified business is exempt from taxation under section new text end new text begin , the alternative
minimum tax under section new text end new text begin , and the minimum fee under section new text end new text begin ,
on the portion of its income attributable to operations within the zone. This exemption
is determined as follows:
new text end

new text begin (1) for purposes of the tax imposed under section new text end new text begin , by multiplying its taxable
net income by its zone percentage and by its relocation payroll percentage and subtracting
the result in determining taxable income;
new text end

new text begin (2) for purposes of the alternative minimum tax under section new text end new text begin , by
multiplying its alternative minimum taxable income by its zone percentage and by its
relocation payroll percentage and reducing alternative minimum taxable income by this
amount; and
new text end

new text begin (3) for purposes of the minimum fee under section new text end new text begin , by excluding property
and payroll in the zone from the computations of the fee or by exempting the entity under
section new text end new text begin 290.0922, subdivision 2 new text end new text begin , clause (9).
new text end

new text begin (b) No subtraction is allowed under this section in excess of 20 percent of the sum of
the corporation's green job zone payroll and the adjusted basis of the property at the time
that the property is first used in the green job zone by the corporation.
new text end

new text begin (c) This section applies only to taxable years beginning during the duration of the
green job zone.
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, 2009.
new text end

Sec. 24.

new text begin [469.368] GREEN JOBS CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin A qualified business is allowed a credit against the
taxes imposed under chapter 290. The credit equals seven percent of the:
new text end

new text begin (1) zone payroll for the taxable year, minus
new text end

new text begin (2) the current inflation adjusted green job zone wage threshold determined annually
by the Department of Revenue as defined in section 469.318, subdivision 1, clause (2),
and subdivision 3, multiplied by the number of full-time equivalent employees that the
qualified business employs in the green job zone for the taxable year.
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) "Full-time equivalent employees" means the equivalent of annualized expected
hours of work equal to 2,080 hours.
new text end

new text begin (c) "Zone payroll" means wages or salaries used to determine the zone payroll factor
for the qualified business, less the amount of compensation attributable to any employee
that exceeds the ceiling calculated in section 469.318, subdivision 2, paragraph (e), and
subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Refundable. new text end

new text begin If the amount of the credit exceeds the liability for tax under
chapter 290, the commissioner of revenue shall refund the excess to the qualified business.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds authorized by this
section is appropriated to the commissioner of revenue from the general fund.
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, 2009.
new text end

Sec. 25.

new text begin [469.369] REPAYMENT OF TAX BENEFITS BY BUSINESSES THAT
NO LONGER OPERATE IN ZONE.
new text end

new text begin Subdivision 1. new text end

new text begin Repayment obligation. new text end

new text begin A business must repay the total tax benefits
listed in section new text end new text begin received during the two years immediately before it (1) ceased to
perform a substantial level of activities described in the business subsidy agreement, or (2)
otherwise ceased to be a qualified business, other than those subject to section new text end new text begin .
new text end

new text begin Subd. 1a. new text end

new text begin Repayment obligation of businesses not operating in zone. new text end

new text begin Persons
that receive benefits without operating a business in a zone are subject to repayment
under this section if the business for which those benefits relate is subject to repayment
under this section. Such persons are deemed to have ceased performing in the zone on
the same day that the qualified business for which the benefits relate becomes subject to
repayment under subdivision 1.
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) "Business" means any person that received tax benefits enumerated in section
new text end new text begin .
new text end

new text begin (c) "Commissioner" means the commissioner of revenue.
new text end

new text begin (d) "Persons that receive benefits without operating a business in a zone" means
persons that claim benefits under section new text end new text begin 469.366, subdivision 2 new text end new text begin or 4, as well as persons
that own property leased by a qualified business and are eligible for benefits under section
new text end new text begin 297A.68, subdivision 42 new text end new text begin , paragraph (b).
new text end

new text begin Subd. 3. new text end

new text begin Disposition of repayment. new text end

new text begin The repayment must be paid to the state and
must be deposited in the general fund. Any repayment of local sales taxes must be repaid
to the commissioner for distribution to the city or county imposing the local sales tax.
new text end

new text begin Subd. 4. new text end

new text begin Repayment procedures. new text end

new text begin (a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section new text end new text begin , a business must
file an amended return with the commissioner of revenue and pay any taxes required
to be repaid within 30 days after becoming subject to repayment under this section.
The amount required to be repaid is determined by calculating the tax for the period or
periods for which repayment is required without regard to the exemptions and credits
allowed under section new text end new text begin .
new text end

new text begin (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of
revenue, within 30 days after becoming subject to repayment under this section.
new text end

new text begin (c) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraph (a). The commissioner may impose civil penalties as
provided in chapter 289A, and the additional tax and penalties are subject to interest at the
rate provided in section new text end new text begin , from 30 days after becoming subject to repayment under
this section until the date the tax is paid.
new text end

new text begin (d) For determining the tax required to be repaid, a reduction of a state or local
sales or use tax is deemed to have been received on the date that the good or service was
purchased or first put to a taxable use. In the case of an income tax or franchise tax,
including the credit payable under section new text end new text begin , a reduction of tax is deemed to have
been received for the two most recent tax years that have ended prior to the date that the
business became subject to repayment under this section.
new text end

new text begin (e) The commissioner may assess the repayment of taxes under paragraph (d) any
time within two years after the business becomes subject to repayment under subdivision
1, or within any period of limitations for the assessment of tax under section new text end new text begin ,
whichever period is later.
new text end

new text begin (f) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. new text end new text begin A business is not eligible for any
sales tax benefits beginning with goods or services purchased or first put to a taxable use
on the day that the business becomes subject to repayment under this section.
new text end

new text begin Subd. 5. new text end

new text begin Waiver authority. new text end

new text begin (a) The commissioner may waive all or part of
a repayment required under subdivision 1 if the commissioner, in consultation with
the commissioner of employment and economic development and appropriate officials
from the local government units in which the qualified business is located, determines
that requiring repayment of the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result of circumstances beyond
its control including, but not limited to:
new text end

new text begin (1) a natural disaster;
new text end

new text begin (2) unforeseen industry trends; or
new text end

new text begin (3) loss of a major supplier or customer.
new text end

new text begin (b)(1) The commissioner shall waive repayment required under subdivision 1a if
the commissioner has waived repayment by the operating business under subdivision 1,
unless the person that received benefits without having to operate a business in the zone
was a contributing factor in the qualified business becoming subject to repayment under
subdivision 1;
new text end

new text begin (2) the commissioner shall waive the repayment required under subdivision 1a, even
if the repayment has not been waived for the operating business if:
new text end

new text begin (i) the person that received benefits without having to operate a business in the zone
and the business that operated in the zone are not related parties as defined in section
267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
new text end

new text begin (ii) actions of the person were not a contributing factor in the qualified business
becoming subject to repayment under subdivision 1.
new text end

new text begin Subd. 6. new text end

new text begin Reconciliation. new text end

new text begin Where this section is inconsistent with section new text end new text begin 116J.994,
new text end new text begin subdivision 3 new text end new text begin , paragraph (e), or subdivision 6, or any other provisions of sections new text end new text begin
to new text end new text begin , this section prevails.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 26.

new text begin [469.3691] BREACH OF AGREEMENTS BY BUSINESSES THAT
CONTINUE TO OPERATE IN ZONE.
new text end

new text begin (a) A "business in violation of its business subsidy agreement but not subject to
section new text end new text begin " means a business that is operating in violation of the business subsidy
agreement but maintains a level of operations in the zone that does not subject it to the
repayment provisions of section new text end new text begin 469.369, subdivision 1 new text end new text begin .
new text end

new text begin (b) A business described in paragraph (a) that does not sign a new or amended
business subsidy agreement as authorized under paragraph (h) is subject to repayment
of benefits under section new text end new text begin from the day that it ceases to perform in the zone a
substantial level of activities described in the business subsidy agreement.
new text end

new text begin (c) A business described in paragraph (a) ceases being a qualified business after the
last day that it has to meet the goals stated in the agreement. The commissioner may
extend for up to one year the period for meeting any goals provided in an agreement.
new text end

new text begin (d) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business is no longer a qualified
business under paragraph (c) and thereafter. A business is not eligible for sales tax benefits
beginning with goods or services purchased or put to a taxable use on the day that it is no
longer a qualified business under paragraph (c).
new text end

new text begin (e) A business described in paragraph (a) that seeks to resume eligibility for benefits
under section new text end new text begin must request that the commissioner of employment and economic
development determine the length of time that the business is ineligible for benefits. The
commissioner shall determine the length of ineligibility by applying the proportionate
level of performance under the agreement to the total duration of the zone as measured
from the date that the business subsidy agreement was executed. The length of time
must not be less than one full year for each tax benefit listed in section new text end new text begin . The
commissioner of employment and economic development and the appropriate local
government officials shall consult with the commissioner of revenue to ensure that the
period of ineligibility includes at least one full year of benefits for each tax.
new text end

new text begin (f) The length of ineligibility determined under paragraph (e) must be applied by
reducing the zone duration for the property by the duration of the ineligibility.
new text end

new text begin (g) The zone duration of property that has been adjusted under paragraph (f) must
not be altered again to permit the business additional benefits under section new text end new text begin .
new text end

new text begin (h) A business described in paragraph (a) becomes eligible for benefits available
under new text end new text begin section new text end new text begin by entering into a new or amended business subsidy agreement with
the appropriate local government unit. The new or amended agreement must cover a period
beginning from the date of ineligibility under the original business subsidy agreement,
through the zone duration determined by the commissioner under paragraph (f).
new text end

new text begin (i) A business that violates the terms of an agreement authorized under paragraph
(h) is permanently barred from seeking benefits under section new text end new text begin and is subject to
the repayment provisions under section new text end new text begin effective from the day that the business
ceases to operate as a qualified business in the zone under the second agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 27.

new text begin [469.3692] PROHIBITION AGAINST AMENDMENTS TO BUSINESS
SUBSIDY AGREEMENT.
new text end

new text begin Except as authorized under section new text end new text begin , terms of any agreement required as a
condition for eligibility for benefits listed under section new text end new text begin must not be amended to
change job creation, job retention, or wage goals included in the agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 28.

new text begin [469.3693] CERTIFICATION OF CONTINUING ELIGIBILITY FOR
GREEN JOB ZONE BENEFITS.
new text end

new text begin (a) By October 15 of each year, every qualified business must certify to the
commissioner of revenue, on a form prescribed by the commissioner of revenue, whether
it is in compliance with any agreement required as a condition for eligibility for benefits
listed under section new text end new text begin . A business that fails to submit the certification, or any
business, including those still operating in the zone, that submits a certification that
the commissioner of revenue later determines materially misrepresents the business's
compliance with the agreement, is subject to the repayment provisions under section
new text end new text begin from January 1 of the year in which the report is due or the date that the business
became subject to section new text end new text begin , whichever is earlier. Any such business is permanently
barred from obtaining benefits under section new text end new text begin . For purposes of this section, the bar
applies to an entity and also applies to any individuals or entities that have an ownership
interest of at least 20 percent of the entity.
new text end

new text begin (b) Before the sanctions under paragraph (a) apply to a business that fails to
submit the certification, the commissioner of revenue shall send notice to the business,
demanding that the certification be submitted within 30 days and advising the business
of the consequences for failing to do so. The commissioner of revenue shall notify the
commissioner of employment and economic development and the appropriate green job
zone administrator whenever notice is sent to a business under this paragraph.
new text end

new text begin (c) The certification required under this section is public.
new text end

new text begin (d) The commissioner of revenue shall promptly notify the commissioner of
employment and economic development of all businesses that certify that they are not
in compliance with the terms of their business subsidy agreement and all businesses
that fail to file the certification.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 29.

new text begin [469.3701] STATE AUDITOR; AUDITS OF GREEN JOB ZONES AND
BUSINESS SUBSIDY AGREEMENTS.
new text end

new text begin The Office of the State Auditor may annually audit the creation and operation of
all green job zones and business subsidy agreements entered into under sections new text end new text begin
to new text end new text begin . To the extent necessary to perform this audit, the state auditor may request
from the commissioner of revenue tax return information of taxpayers who are eligible to
receive tax benefits authorized under section new text end new text begin . To the extent necessary to perform
this audit, the state auditor may request from the commissioner of employment and
economic development wage detail report information required under section new text end new text begin of
taxpayers eligible to receive tax benefits authorized under section new text end new text begin .
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