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HF 669

as introduced - 87th Legislature (2011 - 2012) Posted on 02/24/2011 10:12am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to early childhood education; creating an early childhood education
scholarship finance system; providing tax credits for training and retaining early
education workers; improving quality early childhood education programming;
appropriating money; amending Minnesota Statutes 2010, sections 119B.09,
subdivision 5; 119B.13, subdivision 3a; 124D.15, subdivisions 3, 3a; 270B.14,
subdivision 1, by adding a subdivision; 290.01, subdivisions 19a, 19c; 290.0674,
subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290;
proposing coding for new law as Minnesota Statutes, chapter 119C; repealing
Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, 7.

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

ARTICLE 1

EARLY CHILDHOOD EDUCATION ACCOUNTABILITY AND SCHOLARSHIPS

Section 1.

Minnesota Statutes 2010, section 119B.09, subdivision 5, is amended to read:


Subd. 5.

Provider choice.

Parents new text beginwho reside in a Parent Aware Plus region as
defined in section 119C.03, subdivision 5, must choose a rated provider under section
119C.01, subdivision 6, for their three- and four-year-old children, unless a waiver is
granted by the commissioner. Parents who do not reside in a Parent Aware Plus region
new text endmay choose child care providers as defined under section 119B.011, subdivision 19, that
best meet the needs of their family. Counties shall make resources available to parents
in choosing quality child care services. Counties may require a parent to sign a release
stating their knowledge and responsibilities in choosing a legal provider described under
section 119B.011, subdivision 19. When a county knows that a particular provider is
unsafe, or that the circumstances of the child care arrangement chosen by the parent are
unsafe, the county may deny a child care subsidy. A county may not restrict access to a
general category of provider allowed under section 119B.011, subdivision 19.

Sec. 2.

Minnesota Statutes 2010, section 119B.13, subdivision 3a, is amended to read:


Subd. 3a.

Provider rate differential for accreditation.

new text begin(a) new text endA family child care
provider or child care center shall be paid a 15 percent differential above the maximum
rate established in subdivision 1, up to the actual provider rate, ifnew text begin: (1)new text end the provider or
center holds a current early childhood development credential or is accreditednew text begin; or (2) the
provider is a Parent Aware rated four-star program under chapter 119C
new text end.

new text begin (b) new text endFor a family child care provider, early childhood development credential and
accreditation includes an individual who has earned a child development associate
degree, a child development associate credential, a diploma in child development from a
Minnesota state technical college, or a bachelor's or post baccalaureate degree in early
childhood education from an accredited college or university, or who is accredited by
the National Association for Family Child Care or the Competency Based Training
and Assessment Program. For a child care center, accreditation includes accreditation
by the National Association for the Education of Young Children, the Council on
Accreditation, the National Early Childhood Program Accreditation, the National
School-Age Care Association, or the National Head Start Association Program of
Excellence. For Montessori programs, accreditation includes the American Montessori
Society, Association of Montessori International-USA, or the National Center for
Montessori Education.

Sec. 3.

new text begin [119C.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin The terms defined in this section apply to this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of human
services.
new text end

new text begin Subd. 3. new text end

new text begin Eligible program. new text end

new text begin "Eligible program" means a Head Start program under
section 119A.50, school readiness program under section 124D.15, licensed center-based
child care program under section 119B.011, or licensed family child care program under
section 119B.011.
new text end

new text begin Subd. 4. new text end

new text begin Minimum threshold. new text end

new text begin "Minimum threshold" means the rated program
capacity is 25 percent or more of the total eligible program capacity in a Parent Aware
region.
new text end

new text begin Subd. 5. new text end

new text begin Parent Aware. new text end

new text begin "Parent Aware" means the voluntary evidence-based quality
rating and improvement system for early childhood education under section 119C.02.
new text end

new text begin Subd. 6. new text end

new text begin Parent Aware Plus regions. new text end

new text begin "Parent Aware Plus regions" means Parent
Aware regions that meet the minimum threshold and are designated by the commissioner
under section 119C.03 for its rated programs to receive early childhood education
scholarships under section 119C.04.
new text end

new text begin Subd. 7. new text end

new text begin Parent Aware region. new text end

new text begin "Parent Aware region" means a geographic area
approved by the commissioner under section 119C.03.
new text end

new text begin Subd. 8. new text end

new text begin Rated program. new text end

new text begin "Rated program" means an eligible program in a Parent
Aware region that receives one, two, three, or four stars.
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.

new text begin [119C.02] PARENT AWARE.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Administration; request for proposal. new text end

new text begin The
Department of Administration must develop a request for proposal for an organization
to: (1) develop the standards and indicators that determine program quality for the Parent
Aware quality rating system; (2) develop the methods used to verify, assess, and monitor
program compliance with the standards, including review of and action on applications;
(3) conduct on-site assessments, if applicable; (4) develop and maintain a data quality
management system for compiling all data used to calculate program ratings and related
procedures for ensuring data quality and integrity; and (5) develop a system for sharing
ratings and related quality information with the public. The standards, indicators, and
processes used in the rating system must be developed based on the Minnesota quality
rating system tool in use in fiscal year 2011, the results of the evaluations of that quality
rating system, and the recommendations in the report required under section 124D.142.
The commissioner of administration must consult with the Minnesota Early Learning
Foundation to design the request for proposal. The Department of Human Services and the
Department of Education may submit their proposal to develop, administer, and oversee
the Parent Aware quality rating system. The commissioner of administration must begin
accepting applications beginning July 30, 2011. The commissioner of administration must
issue a contract by September 30, 2011. The contract is valid for three years. By July 30,
2014, and every three years thereafter, the commissioner of administration must consult
with the Minnesota Early Learning Foundation or its designated successor organization
to redesign the request for proposal. The contract must be issued by September 30 of
that year and every three years thereafter.
new text end

new text begin Subd. 2. new text end

new text begin Criteria; measure. new text end

new text begin (a) Parent Aware must use quality ratings shown to
be linked to improving children's school readiness outcomes and must evaluate, at a
minimum, how programs perform in the following areas:
new text end

new text begin (1) family partnerships;
new text end

new text begin (2) tracking learning;
new text end

new text begin (3) teacher training and education; and
new text end

new text begin (4) teaching materials and strategies.
new text end

new text begin (b) Ratings must be indicated using stars. Four stars is the best possible rating. No
stars means the program has not been rated.
new text end

new text begin Subd. 3. new text end

new text begin Rated programs. new text end

new text begin Each year, beginning June 30, 2012, the contract
entity awarded the contract in subdivision 1 must submit a list of rated programs to the
commissioner of administration. The list of rated programs serves as the commissioner's
rating. The commissioner's decision is final.
new text end

new text begin Subd. 4. new text end

new text begin Evaluation. new text end

new text begin The commissioner shall contract with an independent private
organization to use private funds to evaluate the Parent Aware quality rating system. The
evaluation must incorporate rating levels and outcome-based data reflecting child progress
toward school readiness. The evaluation must also include recommendations on continued
monitoring and improvement of the correlation between rating levels and outcome-based
child progress toward school readiness. The commissioner shall make available to the
independent private organization any data requested by the organization consistent with
chapter 13 and at no cost to the organization.
new text end

Sec. 5.

new text begin [119C.03] SELECTION PROCESS FOR PARENT AWARE REGIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin In order to qualify as a Parent Aware region, a minimum
of two-thirds of the school districts, two-thirds of the counties, and two-thirds of the Head
Start programs in an economic development region as designated by the governor under
section 462.385 must jointly agree to apply as a Parent Aware region.
new text end

new text begin Subd. 2. new text end

new text begin Approval criteria. new text end

new text begin Regions must be selected based on:
new text end

new text begin (1) the percentage of preschool-aged children who are from families with income
equal to or less than 47 percent of the state median income;
new text end

new text begin (2) the region's demonstrated efforts to use existing public and private resources to
improve program quality in alignment with Parent Aware quality standards;
new text end

new text begin (3) the level of community support, especially support of the school districts and
local representatives of child care centers and licensed family child care centers; and
new text end

new text begin (4) the demonstration of quality improvement support from local nonprofits and
foundations.
new text end

new text begin Subd. 3. new text end

new text begin Preparation; quality. new text end

new text begin A resource and referral organization under section
119B.19 must work with the commissioner and eligible programs in their region for
approval under subdivision 4 to become a Parent Aware region.
new text end

new text begin Subd. 4. new text end

new text begin Region approval. new text end

new text begin The commissioner shall develop an application process
by December 1, 2011. A region may apply beginning February 1, 2012, to become a
Parent Aware region. The commissioner shall use the criteria in subdivision 2 to make a
determination. Economic development regions 9, 10, and 11 are automatically approved
as Parent Aware regions. The commissioner shall approve the first Parent Aware region by
June 30, 2012, and shall approve all Parent Aware regions by June 30, 2015.
new text end

new text begin Subd. 5. new text end

new text begin Parent Aware Plus regions; commissioner approval. new text end

new text begin The commissioner
must designate a Parent Aware region as a Parent Aware Plus region when the capacity
in the Parent Aware region meets the minimum threshold. The commissioner must also
designate the prekindergarten exploratory projects under Laws 2007, chapter 147, article
2, section 62, as Parent Aware Plus regions for the purposes of issuing and receiving early
childhood education scholarships under section 119C.04.
new text end

Sec. 6.

new text begin [119C.04] EARLY CHILDHOOD EDUCATION SCHOLARSHIPS.
new text end

new text begin Subdivision 1. new text end

new text begin Early childhood education scholarship locations. new text end

new text begin In fiscal year
2012 and later, the commissioner shall reinstate the three prekindergarten exploratory
projects located in the city of St. Paul, Hennepin County, Nicollet County, and Blue
Earth County that have been conducted in partnership with the Minnesota Early Learning
Foundation to promote children's school readiness. The prekindergarten exploratory
projects may continue to use the existing model of the Parent Aware quality rating
system in fiscal year 2012. In fiscal year 2013 and later, the commissioner shall establish
additional locations where early childhood education scholarships may be used to pay
for services provided by rated programs. The additional early childhood education
scholarship locations must be located in Parent Aware Plus regions. The commissioner
may assign duties as described in subdivisions 5 and 7 to approved Parent Aware Plus
regions, as appropriate.
new text end

new text begin Subd. 2. new text end

new text begin Scholarship eligibility. new text end

new text begin (a) All children whose parents or legal guardians
meet the eligibility requirements of paragraph (b) are eligible to receive early childhood
education scholarships under this section. No other eligibility criteria may be considered
for the purposes of establishing eligibility under this section.
new text end

new text begin (b) A parent or legal guardian is eligible for an early childhood education scholarship
if the parent or legal guardian has a child three or four years of age on September 1,
beginning in calendar year 2011; lives in one of the early childhood education scholarship
locations according to subdivision 1; and has income equal to or less than 47 percent of
the state median income in the current calendar year.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility determination. new text end

new text begin (a) Based on information from individual
income tax returns for the taxable year that has been processed by the commissioner of
revenue with a filing due date in the current calendar year, the commissioner of revenue
shall identify taxpayers who are eligible to receive a scholarship according to subdivision
2. For the purpose of determining whether taxpayers are eligible under subdivision 2, the
commissioner of revenue shall use the parent's or legal guardian's federal adjusted income,
as defined in section 62 of the Internal Revenue Code.
new text end

new text begin (b) The commissioner of revenue shall provide the commissioner a list of names
and addresses of taxpayers who meet the eligibility criteria to receive an early childhood
education scholarship. The commissioner shall notify eligible taxpayers by mail no
later than March 20 of each year. In the notification, the commissioner shall provide
information on how parents and legal guardians can locate a rated provider meeting the
quality standard under subdivision 6.
new text end

new text begin (c) The commissioner of revenue shall provide a list of names and addresses of
eligible taxpayers to the departments that are coordinating the early childhood education
scholarships under subdivision 9. The departments that receive this list may only use the
list to approve the payment of early childhood education scholarships.
new text end

new text begin (d) For the purpose of establishing eligibility for the early childhood education
scholarship, the commissioners of education and human services shall accept a self
declaration from parents or legal guardians who did not receive a notification under
paragraph (b). Under this paragraph, a parent or legal guardian whose income meets the
eligibility requirements under subdivision 2 shall be notified of their eligibility to receive
an early childhood education scholarship.
new text end

new text begin (e) The commissioner shall also accept children identified in other public funding
eligibility processes, including the Free and Reduced Lunch Program, National School
Lunch Act, United States Code, title 42, section 1751, part 210; Head Start under federal
Improving Head Start for School Readiness Act of 2007; Minnesota family investment
program under chapter 256J; and child care assistance programs under chapter 119B.
new text end

new text begin Subd. 4. new text end

new text begin Scholarship value. new text end

new text begin For fiscal year 2012 and later, the early childhood
education scholarship is equal to $4,000 each year for each eligible child according to
subdivision 2.
new text end

new text begin Subd. 5. new text end

new text begin Scholarship use. new text end

new text begin (a) The early childhood education scholarship must be
used during the 13 months after July 1, 2011, and each year thereafter by the parent or
legal guardian on behalf of their child for services designed to promote school readiness at
a rated program in a Parent Aware Plus region. A parent or legal guardian may use the
early childhood education scholarship to pay fees or charges associated with their eligible
child's education at a rated program, according to subdivision 6.
new text end

new text begin (b) To maintain an eligible child's early childhood education scholarship, a parent or
legal guardian must begin to use the scholarship within six months following the receipt
of the scholarship or October 1.
new text end

new text begin (c) For the purpose of dividing the early childhood education scholarship between
two or more rated programs, a parent or legal guardian may reduce the early childhood
education scholarship value paid to an individual rated program. The commissioner must
determine a method to allow a parent or legal guardian to reduce or divide an early
childhood education scholarship.
new text end

new text begin Subd. 6. new text end

new text begin Quality standard; transition. new text end

new text begin (a) A rated program is eligible to receive
early childhood education scholarships if the program has received a three- or four-star
rating under Parent Aware under section 119C.02 and is located in a Parent Aware Plus
region. An eligible program must agree to accept early childhood education scholarships
to pay for services.
new text end

new text begin (b) Notwithstanding paragraph (a), for the first two fiscal years after a Parent Aware
region has become a Parent Aware Plus region, a rated program located in the Parent
Aware Plus region is eligible to receive early childhood education scholarships to pay
for its services if the program has received a one-star or better rating under the Parent
Aware rating system. An eligible program must agree to accept early childhood education
scholarships to pay for services. This paragraph does not apply to the prekindergarten
exploratory projects located in the city of Saint Paul, Hennepin County, Nicollet County,
and Blue Earth County.
new text end

new text begin Subd. 7. new text end

new text begin Redeeming a scholarship. new text end

new text begin (a) A rated program that has received an early
childhood education scholarship on behalf of an eligible child to pay for services must
remit the scholarship in a manner determined by the commissioner.
new text end

new text begin (b) The commissioner must pay rated programs the value of the early childhood
education scholarship within 30 days of receiving the scholarship from a program.
new text end

new text begin (c) The commissioner must determine a method for paying rated programs if a parent
or legal guardian has divided or reduced a scholarship under subdivision 5, paragraph (b).
new text end

new text begin Subd. 8. new text end

new text begin Earned income calculation. new text end

new text begin Scholarships paid to families must not be
counted as earned income for the purposes of medical assistance, MinnesotaCare, MFIP,
diversionary work program, child care assistance, or Head Start programs. Scholarships
paid to families must not be considered child care funds for the purposes of the child care
assistance program under chapter 119B.
new text end

new text begin Subd. 9. new text end

new text begin Agency coordination. new text end

new text begin The Department of Education, Department of
Human Services, and the Department of Revenue must coordinate to maximize the
efficiency of the early childhood education scholarships and maximize the number of
children who can receive early childhood education scholarships.
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. 7.

Minnesota Statutes 2010, section 124D.15, subdivision 3, is amended to read:


Subd. 3.

Program requirements.

A school readiness program provider must:

(1) assess each child's cognitive skills with a comprehensive child assessment
instrument when the child enters and again before the child leaves the program to inform
program planning and parents and promote kindergarten readiness;

(2) provide comprehensive program content and intentional instructional practice
aligned with the state early childhood learning guidelines and kindergarten standards and
based on early childhood research and professional practice that is focused on children's
cognitive, social, emotional, and physical skills and development and prepares children
for the transition to kindergarten, including early literacy skills;

(3) coordinate appropriate kindergarten transition with parents and kindergarten
teachers;

new text begin (4) arrange for early childhood screening and appropriate referral;
new text end

deleted text begin (4)deleted text end new text begin(5) new text endinvolve parents in program planning and decision making;

deleted text begin (5)deleted text end new text begin(6) new text endcoordinate with relevant community-based services;

deleted text begin (6)deleted text end new text begin(7) new text endcooperate with adult basic education programs and other adult literacy
programs;

deleted text begin (7)deleted text end new text begin(8) new text endensure staff-child ratios of one-to-ten and maximum group size of 20 children
with the first staff required to be a teacher; deleted text beginand
deleted text end

new text begin (9) serve children a minimum of 12 hours per week; and
new text end

deleted text begin (8)deleted text end new text begin(10) new text endhave teachers knowledgeable in early childhood curriculum content,
assessment, and instruction.

Sec. 8.

Minnesota Statutes 2010, section 124D.15, subdivision 3a, is amended to read:


Subd. 3a.

Application and reporting requirements.

deleted text begin(a)deleted text end A school readiness
program provider must submit a biennial plan for approval by the commissioner deleted text beginbefore
receiving aid under section 124D.16
deleted text end. The plan must describe how the program meets the
program requirements under subdivision 3. A school district by April 1 must submit
the plan for approval by the commissioner in the form and manner prescribed by the
commissioner. deleted text beginOne-half the districts must first submit the plan by April 1, 2006, and
one-half the districts must first submit the plan by April 1, 2007, as determined by the
commissioner.
deleted text end

deleted text begin (b) Programs receiving school readiness funds annually must submit a report to
the department.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue in fiscal year 2012 and
later.
new text end

Sec. 9.

Minnesota Statutes 2010, section 270B.14, subdivision 1, is amended to read:


Subdivision 1.

Disclosure to commissioner of human services.

(a) On the request
of the commissioner of human services, the commissioner shall disclose return information
regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to
the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).

(b) Data that may be disclosed are limited to data relating to the identity,
whereabouts, employment, income, and property of a person owing or alleged to be owing
an obligation of child support.

(c) The commissioner of human services may request data only for the purposes of
carrying out the child support enforcement program and to assist in the location of parents
who have, or appear to have, deserted their children. Data received may be used only
as set forth in section 256.978.

(d) The commissioner shall provide the records and information necessary to
administer the supplemental housing allowance to the commissioner of human services.

(e) At the request of the commissioner of human services, the commissioner of
revenue shall electronically match the Social Security numbers and names of participants
in the telephone assistance plan operated under sections 237.69 to 237.711, with those of
property tax refund filers, and determine whether each participant's household income is
within the eligibility standards for the telephone assistance plan.

(f) The commissioner may provide records and information collected under sections
295.50 to 295.59 to the commissioner of human services for purposes of the Medicaid
Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law
102-234. Upon the written agreement by the United States Department of Health and
Human Services to maintain the confidentiality of the data, the commissioner may provide
records and information collected under sections 295.50 to 295.59 to the Centers for
Medicare and Medicaid Services section of the United States Department of Health and
Human Services for purposes of meeting federal reporting requirements.

(g) The commissioner may provide records and information to the commissioner of
human services as necessary to administer the early refund of refundable tax credits.

(h) The commissioner may disclose information to the commissioner of human
services necessary to verify income for eligibility and premium payment under the
MinnesotaCare program, under section 256L.05, subdivision 2.

(i) The commissioner may disclose information to the commissioner of human
services necessary to verify whether applicants or recipients for the Minnesota family
investment program, general assistance, food support, Minnesota supplemental aid
program, and child care assistance have claimed refundable tax credits under chapter 290
and the property tax refund under chapter 290A, and the amounts of the credits.

(j) The commissioner may disclose information to the commissioner of human
services necessary to verify income for purposes of calculating parental contribution
amounts under section 252.27, subdivision 2a.

new text begin (k) The commissioner shall provide information to the commissioner of human
services necessary for approving payments of early childhood education scholarships
under section 119C.04. This information is limited to what is provided by the
commissioner according to section 119C.04, subdivision 3.
new text end

Sec. 10.

Minnesota Statutes 2010, section 270B.14, is amended by adding a
subdivision to read:


new text begin Subd. 20. new text end

new text begin Disclosure to Department of Education. new text end

new text begin The commissioner shall
provide information to the commissioner of education necessary for approving payments of
early childhood education scholarships under section 119C.04. This information is limited
to what is provided by the commissioner according to section 119C.04, subdivision 3.
new text end

Sec. 11. new text beginSCHOLARSHIP NOTIFICATION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 119C.04, subdivision 3, paragraph
(a), for scholarships in fiscal year 2012, the commissioner of revenue shall use best
efforts to identify taxpayers who meet the eligibility criteria to receive an early childhood
education scholarship under Minnesota Statutes, section 119C.04, subdivision 2, as early
as is feasible. The commissioner of revenue must use federal adjusted gross income data
from 2010 income tax returns processed by the commissioner of revenue to determine
eligibility for fiscal year 2012 scholarship notifications. The commissioner of revenue
shall provide to the commissioner a list of names and addresses of taxpayers who meet
the eligibility criteria to receive an early childhood education scholarship as early as is
feasible, but not later than August 15, 2011.
new text end

Sec. 12. new text beginPROGRAMMATIC STREAMLINING.
new text end

new text begin By January 15, 2012, the commissioner of human services, in coordination with the
commissioner of education, shall report to the legislative committees having jurisdiction
over early childhood education and child care on a framework for incorporating the
existing state programs that provide access to early learning and care programming into
a single scholarship program that funds access to high-quality early learning and care
programs for low-income children in Minnesota. The report must also identify barriers
and impediments to applying federal child care assistance program funds in the form of a
scholarship, under Minnesota Statutes, section 119C.04. As part of the framework, the
commissioner must also take into consideration efforts for simplifying the application and
management procedures for participating families and providers.
new text end

Sec. 13. new text beginCHILD CARE DEVELOPMENT FUNDS; PARENT AWARE.
new text end

new text begin The commissioner of human services shall direct $7,000,000 in federal child care
development funds used for grants under Minnesota Statutes, section 119B.21, in fiscal
years 2012 and 2013 for the purpose of implementing Parent Aware under Minnesota
Statutes, sections 119C.01 to 119C.03. Of this amount, $1,200,000 is appropriated to the
commissioner of administration to administer the Parent Aware contract under Minnesota
Statutes, section 119C.02, subdivision 1.
new text end

Sec. 14. new text beginWAIVER PROCESS RELATED TO CHILD CARE PROVIDER
CHOICE.
new text end

new text begin The commissioner of human services shall develop a simple waiver process related
to Minnesota Statutes, section 119B.09, subdivision 5, that requires the parent or guardian
to submit notice of a preferred alternative child arrangement.
new text end

Sec. 15. new text beginAPPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Human Services. new text end

new text begin The sums indicated in this section
are appropriated from the general fund to the Department of Human Services for the
fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Early childhood education scholarships. new text end

new text begin For grants to early childhood
education scholarships under Minnesota Statutes, section 119C.04:
new text end

new text begin $
new text end
new text begin 8,000,000
new text end
new text begin .....
new text end
new text begin 2012
new text end
new text begin $
new text end
new text begin 9,000,000
new text end
new text begin .....
new text end
new text begin 2013
new text end

new text begin In fiscal year 2012, this appropriation is for grants to three prekindergarten
exploratory projects located in the city of St. Paul, Hennepin County, Nicollet County,
and Blue Earth County. In fiscal year 2013 and later, the appropriation is for scholarship
grants to fund eligible early childhood care and education programs located in Parent
Aware Plus regions that have received early childhood education scholarships from
eligible parents or legal guardians under Minnesota Statutes, section 119C.04, subdivision
2. The appropriation is available until expended. This appropriation is part of the base
budget for subsequent fiscal years.
new text end

new text begin For fiscal year 2012 only, if this appropriation is insufficient to provide early
childhood education scholarships to all eligible children, the Department of Human
Services shall make scholarships available on a first-come, first-served basis.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, and 7, new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue in fiscal year 2012 and
later.
new text end

ARTICLE 2

TAX CREDITS

Section 1.

Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
read:


Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and

(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on
net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a deduction
under section 63(d) of the Internal Revenue Code, but the addition may not be more
than the amount by which the itemized deductions as allowed under section 63(d) of
the Internal Revenue Code exceeds the amount of the standard deduction as defined in
section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
this paragraph, the disallowance of itemized deductions under section 68 of the Internal
Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed;

(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(11) the amount of expenses disallowed under section 290.10, subdivision 2;

(12) the amount deducted for qualified tuition and related expenses under section
222 of the Internal Revenue Code, to the extent deducted from gross income;

(13) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;

(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;

(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;

(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code; deleted text beginand
deleted text end

(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Codedeleted text begin.deleted text endnew text begin;
new text end

new text begin (18) the amount of the deduction under section 170 of the Internal Revenue Code
that represents contributions that qualify for an early childhood education access to quality
tax credit under section 290.0694; and
new text end

new text begin (19) the amount of the deduction under section 170 of the Internal Revenue
Code that represents contributions that qualify for an early childhood education quality
improvement credit under section 290.0695.
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, 2010.
new text end

Sec. 2.

Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:


Subd. 19c.

Corporations; additions to federal taxable income.

For corporations,
there shall be added to federal taxable income:

(1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;

(2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;

(4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;

(6) losses from the business of mining, as defined in section 290.05, subdivision 1,
clause (a), that are not subject to Minnesota income tax;

(7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;

(8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;

(9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;

(10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;

(11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (20), (21),
(22), and (23);

(12) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(13) the amount of net income excluded under section 114 of the Internal Revenue
Code;

(14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;

(16) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(17) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(18) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(19) the amount of expenses disallowed under section 290.10, subdivision 2;

(20) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:

(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;

(ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar expenses and costs.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;

(21) except as already included in the taxpayer's taxable income pursuant to clause
(20), any interest income and income generated from intangible property received or
accrued by a foreign operating corporation that is a member of the taxpayer's unitary
group. For purposes of this clause, income generated from intangible property includes:

(i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;

(ii) income from factoring transactions or discounting transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar income.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;

(22) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;

(23) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States;

(24) the additional amount allowed as a deduction for donation of computer
technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
extent deducted from taxable income; deleted text beginand
deleted text end

(25) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Codedeleted text begin.deleted text endnew text begin;
new text end

new text begin (26) the amount of the deduction under section 170 of the Internal Revenue Code
that represents contributions that qualify for an early childhood education access to quality
tax credit under section 290.0694; and
new text end

new text begin (27) the amount of the deduction under section 170 of the Internal Revenue
Code that represents contributions that qualify for an early childhood education quality
improvement credit under section 290.0695.
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, 2010.
new text end

Sec. 3.

Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed.

An individual is allowed a credit against the tax
imposed by this chapter in an amount equal to deleted text begin75deleted text end new text begin66 new text endpercent new text beginin taxable year 2011 and
58 percent in taxable years beginning after December 31, 2011,
new text endof the amount paid for
education-related expenses for a qualifying child in kindergarten through grade 12. For
purposes of this section, "education-related expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
10
, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
Association, and who is not a lineal ancestor or sibling of the dependent for instruction
outside the regular school day or school year, including tutoring, driver's education
offered as part of school curriculum, regardless of whether it is taken from a public or
private entity or summer camps, in grade or age appropriate curricula that supplement
curricula and instruction available during the regular school year, that assists a dependent
to improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), and that do not include the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship;

(2) expenses for textbooks, including 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. "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
extracurricular activities including sporting events, musical or dramatic events, speech
activities, driver's education, or similar programs;

(3) a maximum expense of $200 per family for personal computer hardware,
excluding single purpose processors, and educational software that assists a dependent to
improve knowledge of core curriculum areas or to expand knowledge and skills under
the required academic standards under section 120B.021, subdivision 1, and the elective
standard under section 120B.022, subdivision 1, clause (2), purchased for use in the
taxpayer's home and not used in a trade or business regardless of whether the computer is
required by the dependent's school; and

(4) the amount paid to others for transportation of a qualifying child 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 purposes of this section, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2010.
new text end

Sec. 4.

new text begin [290.0693] EARLY CHILDHOOD TRAIN AND RETAIN CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Statement of intent. new text end

new text begin The purpose of the early childhood train
and retain credit is to encourage and reward early childhood education professionals
for furthering their education and providing continuity of instruction to Minnesota's
children. The success of the credit must be measured by comparing the number of early
childhood education professionals claiming the credit at the various point levels in the
first year the credit is allowed with the number claiming the credit at the various point
levels in following years.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual who is an eligible early childhood
education professional is allowed a credit against the tax imposed by this chapter as
follows:
new text end

new text begin Early education experience points
new text end
new text begin Credit amount
new text end
new text begin 1 to 2
new text end
new text begin $500
new text end
new text begin 3 to 5
new text end
new text begin $1,000
new text end
new text begin 6 to 7
new text end
new text begin $1,500
new text end
new text begin 8 to 10
new text end
new text begin $2,500
new text end
new text begin 11 to 12
new text end
new text begin $3,000
new text end

new text begin (b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
per taxable year. For taxable years beginning after December 31, 2011, the maximum
aggregate credits must not exceed $1,000,000 per taxable year.
new text end

new text begin (c) 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).
new text end

new text begin Subd. 3. 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) "Early education experience points" means the eligible early childhood education
professional's points registered with the Minnesota Center for Professional Development
Registry.
new text end

new text begin (c) "Eligible early childhood education professional" means an individual who
new text end

new text begin (1) is registered with the Minnesota Center for Professional Development Registry;
new text end

new text begin (2) is employed at a quality program;
new text end

new text begin (3) works directly with children who have not yet enrolled in kindergarten or first
grade; and
new text end

new text begin (4) has been employed at the same program for at least 20 hours per week for at least
12 months during the tax year.
new text end

new text begin (d) "Quality program" means a program rated using the quality rating and
improvement system tool established by the guidelines under chapter 119C.
new text end

new text begin Subd. 4. new text end

new text begin Application for credit certificates. new text end

new text begin For taxable years beginning after
December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
train and retain tax credit certificate. The credit certificates under this section must be
made available on a first-come, first-served basis until the maximum statewide credit
amount has been reached. The commissioner must not issue a tax credit certificate for an
amount greater than the limits under subdivision 2.
new text end

new text begin Subd. 5. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit an individual is eligible to
receive under this section exceeds the claimant's tax liability under this chapter, the
commissioner shall refund the excess to the claimant.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner 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, 2010.
new text end

Sec. 5.

new text begin [290.0694] EARLY CHILDHOOD EDUCATION ACCESS TO QUALITY
TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Statement of intent. new text end

new text begin The purpose of the early childhood education
access to quality tax credit is to increase the amount of private contributions available to
provide low-income children in Minnesota with access to high quality early childhood
education programs. The success of the credit must be measured by determining the
total amount of private contributions that are made to provide early childhood education
scholarships and are eligible for the credit under this section.
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) "Early childhood education access to quality donation" means a donation to a
qualified early childhood education program.
new text end

new text begin (c) "Qualified early childhood education program" means a program operated
in Minnesota that:
new text end

new text begin (1) has been rated using the quality rating and improvement system tool established
by the guidelines under chapter 119C; and
new text end

new text begin (2) accepts early childhood education access to quality donations under this section
as payment of tuition for a qualified student who is enrolled in the program.
new text end

new text begin (d) "Qualified student" means a student who:
new text end

new text begin (1) has not attained the age of seven years and become subject to the requirements of
section 120A.22, subdivision 5;
new text end

new text begin (2) has reached age three or four by September 1;
new text end

new text begin (3) is a Minnesota resident; and
new text end

new text begin (4) is a member of a household whose total annual income during the year, without
consideration of the benefits under this program, is equal to or less than 47 percent of the
state median income in the current calendar year.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual or corporate taxpayer is allowed a
credit against the tax due under this chapter equal to 75 percent of the amount donated to
a qualified early childhood education program during the taxable year. For taxable year
2011, the maximum aggregate credits must not exceed $500,000 per taxable year. For
taxable years beginning after December 31, 2011, the maximum aggregate credits must
not exceed $1,000,000 per taxable year.
new text end

new text begin (b) A taxpayer must provide a copy of the receipt provided by the qualified early
childhood education program when claiming the credit for the donation.
new text end

new text begin Subd. 4. new text end

new text begin Application for credit certificates. new text end

new text begin For taxable years beginning after
December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
education access to quality tax credit certificate. The credit certificates under this section
must be made available on a first-come, first-served basis until the maximum statewide
credit amount has been reached. The commissioner must not issue a tax credit certificate
for an amount greater than the limits under subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Responsibilities of qualified early childhood education programs. new text end

new text begin (a)
Each qualified early childhood education program that receives donations directly from
taxpayers under this section must:
new text end

new text begin (1) notify the commissioner of its intent to participate in this program;
new text end

new text begin (2) demonstrate that it meets the definition of a qualified early childhood education
program in subdivision 2, paragraph (c);
new text end

new text begin (3) provide a receipt or verification on a form approved by the commissioner to
taxpayers for donations;
new text end

new text begin (4) conduct criminal background checks on all of its employees and board members
and exclude from employment or governance any individuals that might reasonably pose a
risk to the appropriate use of contributed funds;
new text end

new text begin (5) demonstrate its financial accountability by submitting a financial information
report for the organization that complies with uniform financial accounting standards
established by the commissioner;
new text end

new text begin (6) demonstrate its financial viability, if it is to receive donations of $150,000 or
more during the school year, by filing financial information with the commissioner prior
to September 1 of each year that demonstrates the financial viability of the qualified
early childhood education program; and
new text end

new text begin (7) use amounts received as donations to provide scholarships to qualified students
within one year of the date of receiving the donation.
new text end

new text begin (b) A qualified early childhood education program that receives donations directly
from taxpayers under this program must report to the commissioner by June 1 of each year
the following information regarding donations received and scholarships awarded in the
previous calendar year:
new text end

new text begin (1) the total number and total dollar amount of donations from taxpayers received
during the previous calendar year; and
new text end

new text begin (2) the total number and total dollar amount of scholarships awarded to qualified
students during the previous calendar year.
new text end

new text begin (c) If the commissioner decides to bar a qualified early childhood education program
from the program for failure to comply with the requirements in paragraph (a), the
qualified early childhood education program must notify taxpayers who have donated to
the qualified early childhood education program in writing within 30 days.
new text end

new text begin Subd. 6. new text end

new text begin Responsibilities of commissioner. new text end

new text begin (a) The commissioner must prescribe a
standardized format for a receipt to be issued by a qualified early childhood education
program to a taxpayer to indicate the value of a donation received.
new text end

new text begin (b) The commissioner must prescribe a standardized format for qualified early
childhood education programs to report the information required under subdivision 5.
new text end

new text begin (c) The commissioner must post on the department's Web site the names and
addresses of qualified early childhood education programs and regularly update the names
and addresses of any qualified early childhood education programs that have been barred
from participating in the program.
new text end

new text begin (d) The commissioner must conduct either a financial review or audit of a qualified
early childhood education program upon finding evidence of fraud or intentional
misreporting.
new text end

new text begin (e) The commissioner must bar a qualified early childhood education program from
participating in the program if the commissioner establishes that the qualified early
childhood education program has intentionally and substantially failed to comply with
the requirements in subdivision 5. If the commissioner determines that a qualified early
childhood education program should be barred from the program, the commissioner
must notify the qualified early childhood education program within 60 days of that
determination.
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, 2010.
new text end

Sec. 6.

new text begin [290.0695] EARLY CHILDHOOD EDUCATION QUALITY
IMPROVEMENT CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Statement of intent. new text end

new text begin The purpose of the early childhood education
quality improvement credit is to encourage contributions that result in improvements to
the quality of programming provided by eligible early childhood education providers.
The success of the credit must be measured by determining amounts spent as a result of
contributions qualifying for the credit to improve the quality of programming provided by
eligible early childhood education providers.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Eligible early childhood education provider" means a provider who operates a
program in an area in Minnesota in which the quality rating and improvement system tool
established by the guidelines under chapter 119C is in use for the taxable year.
new text end

new text begin (c) "Resource and referral agency" means an agency that is designated by the
Department of Human Services to provide child care resource and referral services.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual or corporate taxpayer is allowed a
credit against the tax due under this chapter equal to 75 percent of the amount donated to
an eligible early childhood education provider or a resource and referral agency during
the taxable year. For a taxpayer to be eligible for the credit, donations to eligible early
childhood education providers must be used to improve program quality in ways that
are consistent with the standards set by the quality rating and improvement system, and
donations to resource and referral agencies must be used to provide early childhood
education providers with direct quality improvement services that are consistent with the
standards set by the quality rating and improvement system.
new text end

new text begin (b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
per taxable year. For taxable years beginning after December 31, 2011, the maximum
aggregate credits must not exceed $1,000,000 per taxable year.
new text end

new text begin (c) A taxpayer must provide a copy of the receipt provided by the eligible early
childhood education provider or resource and referral agency when claiming the credit for
the donation.
new text end

new text begin Subd. 4. new text end

new text begin Application for credit certificates. new text end

new text begin For taxable years beginning
after December 31, 2010, and before January 1, 2013, a taxpayer must apply to the
commissioner for an early childhood education quality improvement tax credit certificate.
The credit certificates under this section must be made available on a first-come,
first-served basis until the maximum statewide credit amount has been reached. The
commissioner must not issue a tax credit certificate for an amount greater than the limits
under subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Responsibilities of eligible early childhood education providers and
resource and referral agencies.
new text end

new text begin (a) Each eligible early childhood education provider
and resource and referral agency that receives contributions directly from taxpayers
under this section must:
new text end

new text begin (1) notify the commissioner of its intent to participate in this program;
new text end

new text begin (2) demonstrate to the commissioner that it meets the requirements of this section;
new text end

new text begin (3) provide a receipt or verification on a form approved by the commissioner to
taxpayers for contributions made to the eligible early childhood education provider
or resource and referral agency;
new text end

new text begin (4) conduct criminal background checks on all of its employees and board members
and exclude from employment or governance any individuals that might reasonably pose a
risk to the appropriate use of contributed funds;
new text end

new text begin (5) demonstrate its financial accountability by submitting a financial information
report for the organization that complies with uniform financial accounting standards
established by the commissioner;
new text end

new text begin (6) demonstrate its financial viability, if it is to receive donations of $150,000 or
more during the school year, by filing financial information with the commissioner prior
to September 1 of each year that demonstrates the financial viability of the qualified
foundation; and
new text end

new text begin (7) use amounts received as donations to improve program quality, in the case of
eligible early childhood education providers, or to provide quality improvement services,
in the case of resource and referral agencies, within one year of the date of receiving
the donation.
new text end

new text begin (b) If the commissioner decides to bar an eligible early childhood education
provider or a resource and referral agency from the program for failure to comply with
the requirements in paragraph (a), the provider or agency must notify taxpayers who
have donated to the eligible early childhood provider or resource and referral agency in
writing within 30 days.
new text end

new text begin Subd. 6. new text end

new text begin Responsibilities of commissioner. new text end

new text begin (a) The commissioner must prescribe a
standardized format for a receipt to be issued by an eligible early childhood education
provider or a resource and referral agency to a taxpayer to indicate the value of a
contribution received.
new text end

new text begin (b) The commissioner must prescribe a standardized format for eligible early
childhood education providers or resource and referral agencies to report the information
required under subdivision 5.
new text end

new text begin (c) The commissioner must post on the department's Web site the names and
addresses of eligible early childhood education providers and resource and referral
agencies and regularly update the names and addresses of any eligible early childhood
education providers or resource and referral agencies that have been barred from
participating in the program.
new text end

new text begin (d) The commissioner must conduct either a financial review or audit of an eligible
early childhood education provider or a resource and referral agency upon finding
evidence of fraud or intentional misreporting.
new text end

new text begin (e) The commissioner must bar an eligible early childhood education provider or
a resource and referral agency from participating in the program if the commissioner
establishes that the provider or agency has intentionally and substantially failed to comply
with the requirements in subdivision 5. If the commissioner determines that a provider or
agency should be barred from the program, the commissioner must notify the provider or
agency within 60 days of that determination.
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, 2010.
new text end