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HF 2921

3rd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to the military; requiring leaves of absence for the immediate family
members of a seriously injured or killed member of the armed forces; providing
for and funding certain programs benefiting veterans; creating an individual
income tax subtraction for military pensions; requiring educational fairness;
appropriating money; amending Minnesota Statutes 2005 Supplement, sections
192.502, by adding a subdivision; 290.01, subdivision 19b; 290.091, subdivision
2; proposing coding for new law in Minnesota Statutes, chapters 181; 197.

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

Section 1.

new text begin [181.947] LEAVE FOR IMMEDIATE FAMILY MEMBERS OF
MILITARY PERSONNEL INJURED OR KILLED IN ACTIVE SERVICE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this
section.
new text end

new text begin (b) "Active service" has the meaning given in section 190.05, subdivision 5.
new text end

new text begin (c) "Employee" means a person, independent contractor, or person working for an
independent contractor who performs services for compensation, in whatever form, for
an employer.
new text end

new text begin (d) "Employer" means a person or entity located or doing business in this state
and having one or more employees, and includes the state and all political or other
governmental subdivisions of the state.
new text end

new text begin (e) "Immediate family member" means a person's parent, child, grandparents,
siblings, or spouse.
new text end

new text begin Subd. 2. new text end

new text begin Unpaid leave required. new text end

new text begin An employer must grant a leave of absence
without pay to an employee whose immediate family member, as a member of the United
States armed forces, has been injured or killed while engaged in active service. Leave must
be granted for a reasonable amount of time necessary to attend to an immediate family
member who has been injured and for a reasonable amount of time necessary to attend
services for and attend to the affairs of an immediate family member who has been killed.
new text end

new text begin Subd. 3. new text end

new text begin Notice. new text end

new text begin An employee must give as much notice to the employee's employer
as practicable of the employee's intent to exercise the leave guaranteed by this section.
new text end

new text begin Subd. 4. new text end

new text begin Relationship to other leave. new text end

new text begin The length of leave provided under this
section may be reduced by any period of paid leave provided by the employer. Nothing
in this section prevents an employer from providing leave benefits in addition to those
provided in this section or otherwise affects an employee's rights with respect to other
employment benefits.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 192.502, is amended by adding a
subdivision to read:


new text begin Subd. 3. new text end

new text begin Unpaid leave for families of injured or deceased military members.
new text end

new text begin Employees are entitled to unpaid leave, as required by section 181.947, when an
immediate family member, as a member of the United States armed forces, has been
injured or killed while engaged in active service.
new text end

Sec. 3.

new text begin [197.585] HIGHER EDUCATION VETERANS ASSISTANCE OFFICES.
new text end

new text begin If there is a need as determined by the commissioner of veterans affairs, each campus
of the University of Minnesota and each institution within the Minnesota State Colleges
and Universities system shall provide adequate space for a veterans assistance office to
be administered by the Department of Veterans Affairs, and each private college and
university in Minnesota is requested to provide adequate space for a veterans assistance
office to be administered by the Department of Veterans Affairs. The veterans assistance
office must provide information and assistance to veterans who are students or family
members of students at the school so that they know what state, federal, local, and private
resources are available to them.
new text end

Sec. 4.

new text begin [197.775] HIGHER EDUCATION FAIRNESS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) The definitions in this subdivision apply to this
section.
new text end

new text begin (b) "Commissioner" means the commissioner of veterans affairs.
new text end

new text begin (c) "State college or university" means a unit of the University of Minnesota or
Minnesota State Colleges and Universities.
new text end

new text begin Subd. 2. new text end

new text begin Recognition of courses. new text end

new text begin (a) Minnesota State Colleges and Universities
must recognize courses and award educational credits for courses that were part of a
veteran's military training or service if the courses meet the standards of the American
Council on Education or equivalent standards for awarding academic credits.
new text end

new text begin (b) The University of Minnesota and private colleges and universities in Minnesota
are encouraged to recognize courses and award educational credits for courses that were
part of a veteran's military training or service if the courses meet the standards of the
American Council on Education or equivalent standards for awarding academic credits.
new text end

new text begin Subd. 3. new text end

new text begin Tuition status. new text end

new text begin A state college or university must treat a veteran as a
Minnesota resident for purposes of determining the veteran's undergraduate tuition rate. A
state college or university must treat a veteran as a Minnesota resident for purposes of
determining the veteran's graduate school tuition rate if the veteran was a Minnesota
resident on entering military service and starts attending the state college or university
graduate program within two years of completing military service.
new text end

new text begin Subd. 4. new text end

new text begin Delayed payment of tuition. new text end

new text begin A state college or university may not assess
late fees or other late charges for veterans who are eligible to receive federal educational
assistance and who have applied for that assistance but not yet received it, nor may they
prevent these students from registering for a subsequent term because of outstanding
tuition charges that arise from delayed federal payments. The state college or university
may request without delay the amount of tuition above expected federal educational
assistance and may require payment of the full amount of tuition owed by the veteran
within 30 days of receipt of the expected federal educational assistance.
new text end

Sec. 5.

new text begin [197.783] TAX DEDUCTION FOR MILITARY RETIREMENT PAY;
PURPOSE.
new text end

new text begin The legislature and the governor of the state of Minnesota recognize that military
service entails many sacrifices, including significant personal and family financial
sacrifices. One common financial sacrifice for career service members involves foregoing
the opportunity for significant financial gain that typically accrues from long-term
homeownership. By comparison, homeownership is often the primary investment tool
for many Minnesotans employed in stable civilian occupations. Thus, in recognition of
the patriotic service and sacrifices of career military personnel and their families, it is
the policy of the state of Minnesota to compensate service members and their families
by exempting their military retirement pay from state taxation, as provided in sections
290.01, subdivision 19b, and 290.091, subdivision 2.
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, 2005.
new text end

Sec. 6.

Minnesota Statutes 2005 Supplement, 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 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) 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
services performed exclusively for purposes of basic combat training, advanced individual
training, annual training, and periodic inactive duty training; special training periodically
made available to reserve members; and service performed in accordance with section
190.08, subdivision 3;

(12) 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;

(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
nonresident who is a service member as defined in United States Code, title 10, section
101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
Law 108-189, section 101(2); deleted text begin and
deleted text end

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

new text begin (17) to the extent included in federal taxable income, a percentage of compensation,
up to a maximum amount received from a pension or other retirement pay from the
government for service in the armed forces of the United States, regardless of whether the
recipient served in the military. For taxable years beginning after December 31, 2005, and
before January 1, 2007, the percentage is 25 percent and the maximum amount is $7,500;
for taxable years beginning after December 31, 2006, and before January 1, 2008, the
percentage is 50 percent and the maximum amount is $15,000; for taxable years beginning
after December 31, 2007, and before January 1, 2009, the percentage is 75 percent and the
maximum amount is $22,500; and for taxable years beginning after December 31, 2008,
the percentage is 100 percent and there is no maximum amount.
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, 2005.
new text end

Sec. 7.

Minnesota Statutes 2005 Supplement, 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:

(A) for taxable years beginning before January 1, 2006, to the extent that the
deduction exceeds 1.0 percent of adjusted gross income;

(B) for taxable years beginning after December 31, 2005, to the full extent of the
deduction.

For purposes of this clause, "adjusted gross income" has the meaning given in
section 62 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), (8), and (9);

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 (9) to deleted text begin (16)deleted text end new text begin (17)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, 2005.
new text end

Sec. 8. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin State soldiers' assistance fund. new text end

new text begin $3,000,000 is appropriated in fiscal
year 2007 from the general fund to the commissioner of veterans affairs to be deposited
in the state soldiers' assistance fund established in Minnesota Statutes, section 197.03.
The appropriations in this subdivision are in addition to other appropriations made to
the commissioner of veterans affairs for that fund and are to be used to assist veterans
to provide financial security, family therapy, and other similar special needs while those
veterans are seeking needed benefits from the United States Department of Veterans
Affairs.
new text end

new text begin Subd. 2. new text end

new text begin Centralized Web site for veterans services. new text end

new text begin $200,000 is appropriated
in fiscal year 2007 from the general fund to the commissioner of veterans affairs to
fund a veterans service coordinator and a veterans assistance Web manager within
the Department of Veterans Affairs, whose mission is to create a centralized Web site
containing information on all state, federal, local, and private agencies and organizations
that provide goods or services to veterans or their families. Prior to encumbering funds
from the appropriation in this subdivision, the commissioner must adhere to the provisions
of Minnesota Statutes, section 16E.03.
new text end

new text begin Subd. 3. new text end

new text begin Incentive-based county veterans service officers service enhancement
grants.
new text end

new text begin $3,000,000 is appropriated in fiscal year 2007 from the general fund to the
commissioner of veterans affairs to provide incentive-based grants to counties for
enhancing the benefits, programs, and services they provide to veterans based on
benchmarks and standards established by the commissioner. A county may not reduce its
veterans service office budget by any amount received as a grant under this section. This
grant program is in addition to grants made under Minnesota Statutes, section 197.608.
new text end

new text begin Subd. 4. new text end

new text begin Higher education veterans assistance offices. new text end

new text begin (a) $2,600,000 is
appropriated in fiscal year 2007 from the general fund for the purposes of Minnesota
Statutes, section 197.585.
new text end

new text begin (b) Of the amount in paragraph (a), $2,500,000 is to the commissioner of veterans
affairs for the veterans assistance offices under Minnesota Statutes, section 197.585. The
commissioner must, in consultation with the Office of Higher Education, determine the
most appropriate method of allocating this appropriation to align with the needs of the
students at Minnesota State Colleges and Universities and the University of Minnesota
who are veterans. Methods may include, but are not limited to, providing grants for veteran
work study positions and providing central liaison and coordination staff from a veteran
pool as needed to enhance the ability of higher education institutions to be responsive to
students who are veterans. The commissioner shall designate a liaison who is a veteran
to the University of Minnesota and a liaison who is a veteran to the private colleges and
universities in Minnesota for the purposes of Minnesota Statutes, section 197.585.
new text end

new text begin (c) Of the amount in paragraph (a), $100,000 is to the Board of Trustees of the
Minnesota State Colleges and Universities to facilitate the provision of assistance to
veterans at Minnesota State Colleges and Universities campuses under Minnesota
Statutes, section 197.585.
new text end

new text begin Subd. 5. new text end

new text begin Report. new text end

new text begin By January 15, 2007, and each year thereafter, the commissioner
shall report to the chairs of the house and senate committees having purview over veterans
affairs policy and finance, regarding the implementation and effectiveness of the program
described in subdivision 4. The report must address all relevant issues raised in writing to
the commissioner by those chairs by August 1 of the preceding year.
new text end

new text begin Subd. 6. new text end

new text begin Sunset. new text end

new text begin The program established in subdivision 4 expires at the end of the
first fiscal year in which the number of veterans enrolled in Minnesota public institutions
of higher education is fewer than 4,000, but no later than June 30, 2012.
new text end

Sec. 9. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective the day following final enactment and apply to the
immediate family members of military personnel injured or killed on or after that date, as
well as to the immediate family members of military personnel who, on the effective date,
are recovering from injuries that occurred prior to that date.
new text end