as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; income; providing for economic 1.3 growth in rural counties of the state by allowing a 1.4 credit against the income tax of an employer for the 1.5 creation and retention of certain jobs; proposing 1.6 coding for new law in Minnesota Statutes, chapter 290. 1.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.8 Section 1. [290.681] [RURAL ECONOMIC GROWTH CREDIT.] 1.9 Subdivision 1. [CREDIT NAME.] The credit allowed by this 1.10 section shall be known as the "Rural Minnesota Catch-Up Credit." 1.11 Subd. 2. [DEFINITIONS.] (a) For purposes of this section, 1.12 the following terms have the meanings given. 1.13 (b) "Eligible county" means a county that experienced, 1.14 between 1991 and 2001, a net new job growth rate of less than 1.15 15.6 percent, or a county that has a population of less than 1.16 15,000 according to the 2000 census. 1.17 (c) "Qualifying job" means a job in an industry that 1.18 produces goods or services that bring outside wealth into an 1.19 eligible county. A qualifying job includes jobs in the 1.20 following industries: value-added manufacturing, 1.21 technologically innovative and information industries, forestry, 1.22 mining, agriprocessing, and tourism attractions. At a minimum, 1.23 a qualifying job must provide full-time employment and pay not 1.24 less than $12 per hour or $10 per hour, plus health insurance 1.25 benefits, or its equivalent. 1.26 Subd. 3. [CREDIT ALLOWED.] A taxpayer that is awarded a 2.1 credit under subdivision 4 may take a credit against the tax 2.2 imposed by this chapter, equal to $5,000 per qualifying job 2.3 created by the taxpayer, per year. 2.4 Subd. 4. [QUALIFICATION; APPLICATION.] (a) To qualify for 2.5 a credit under this section a taxpayer must create a new 2.6 qualifying job within an eligible county. The taxpayer must 2.7 create the qualifying job within 12 months of being awarded the 2.8 credit. If a taxpayer does not create the qualifying job within 2.9 12 months, the credit is forfeited and, if claimed by the 2.10 taxpayer, subject to recapture, and the credit amount accrues 2.11 back to the eligible county for allocation under subdivision 5. 2.12 (b) A taxpayer seeking a credit under this section must 2.13 make an application to an eligible county at least 60 days 2.14 before the award date in paragraph (c). Applications for a 2.15 credit shall be made on a form and in a manner prescribed by the 2.16 commissioner. 2.17 (c) Eligible counties shall award credits under this 2.18 section twice each year, by March 15 and September 15. An 2.19 eligible county shall publish a notice advertising the award 2.20 date, at least 90 days before the date. Selection of applicants 2.21 for awarding tax credits under this section shall be made by the 2.22 county board of commissioners of an eligible county, or the duly 2.23 appointed representatives of the county board of commissioners, 2.24 using uniform criteria established by the commissioner. In 2.25 selecting among applicants for awarding credits under this 2.26 section, criteria must contemplate and place greater weight on 2.27 the following factors: whether the qualifying job provides 2.28 higher wages, better benefits, or on-the-job training; whether 2.29 the taxpayer's business is locally owned and owns, rather than 2.30 leases, its own facilities or buildings; whether the taxpayer's 2.31 business provides employee stock ownership plans or employee 2.32 profit sharing; and whether a higher percentage of the 2.33 business's employees are hired with tax credits under this 2.34 section. For purposes of this section, "duly appointed 2.35 representatives" include a county or regional economic 2.36 development agency or authority. 3.1 Subd. 5. [LIMITATION; CARRYFORWARD.] (a) The total amount 3.2 of credits under this section may not exceed $300,000 per 3.3 eligible county. An eligible county may award up to $150,000 in 3.4 credits under this section in 2004 and $150,000 in 2005. An 3.5 eligible county may award up to $75,000 in credits by March 15 3.6 and the remainder by September 15. If a county fails to award 3.7 $150,000 within a year, it may carry forward the amount that 3.8 remains unawarded to the following year. Unawarded amounts may 3.9 not be carried beyond the following year and are lost. 3.10 (b) A taxpayer may claim the credit under this section for 3.11 each year the new qualifying job remains in existence, up to a 3.12 maximum of three years or $15,000 per qualifying job created. A 3.13 credit under this section is awarded to the taxpayer for, and 3.14 attaches to, a designated employee. If the designated employee 3.15 for whom a credit under this section was awarded leaves the 3.16 employment of the taxpayer for any reason, the remaining credit 3.17 the taxpayer would otherwise be eligible to receive is forfeited 3.18 and may not be claimed by the taxpayer. Credit amounts 3.19 forfeited under this paragraph accrue back to and may be awarded 3.20 by an eligible county as if the amount had been unawarded, as 3.21 provided in paragraph (a). 3.22 Subd. 6. [CREDIT REFUNDABLE.] If the amount of credit that 3.23 the taxpayer is eligible to receive under this section exceeds 3.24 the liability for tax under this chapter, the commissioner shall 3.25 refund the excess to the claimant. An amount sufficient to pay 3.26 the refunds authorized by this subdivision is appropriated to 3.27 the commissioner from the general fund. 3.28 Subd. 7. [MANNER OF CLAIMING.] The commissioner shall 3.29 prescribe the manner in which the credit may be issued and 3.30 claimed. This may include providing for the issuance of credit 3.31 certificates or allowing the credit only as a separately 3.32 processed claim for a refund. 3.33 Subd. 8. [REPORT.] The commissioner shall report to the 3.34 legislature by February 15, 2005, on credits claimed under this 3.35 section and shall evaluate the feasibility and benefit of 3.36 continuing the program. The commissioner may consult with the 4.1 commissioner of economic security and the commissioner of trade 4.2 and economic development in preparing this report. 4.3 Subd. 9. [EXPIRATION.] This section expires for taxable 4.4 years beginning after December 31, 2008. 4.5 [EFFECTIVE DATE.] This section is effective for taxable 4.6 years beginning after December 31, 2003.