SF 728

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; income; providing for economic
growth in rural counties of the state by allowing a
credit against the income tax of an employer for the
creation and retention of certain jobs; appropriating
money; proposing coding for new law in Minnesota
Statutes, chapter 290.

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

Section 1.

new text begin [290.681] RURAL ECONOMIC GROWTH CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit name. new text end

new text begin The credit allowed by this
section shall be known as the "Rural Minnesota Catch-Up Credit."
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 county" means a county that experienced,
between 1991 and 2001, a net new job growth rate of less than
15.6 percent, or a county that has a population of less than
25,000 according to the 2000 census.
new text end

new text begin (c) "Qualifying job" means a job in an industry that
produces goods or services that bring outside wealth into an
eligible county. A qualifying job includes jobs in the
following industries: value-added manufacturing,
technologically innovative and information industries, forestry,
energy, mining, agriprocessing, and tourism attractions. At a
minimum, a qualifying job must provide full-time employment and
pay not less than $12 per hour, or $10 per hour plus health
insurance benefits, or its equivalent. A qualifying job does
not include any job for which a tax credit is received under
section 469.318 or for which a grant is made under section
469.309.
new text end

new text begin Subd. 3. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer that is awarded a
credit under subdivision 4 may take a credit against the tax
imposed by this chapter, equal to $4,000 per qualifying job
created by the taxpayer, per year for three years and $3,000 in
the fourth year.
new text end

new text begin Subd. 4. new text end

new text begin Qualification; application. new text end

new text begin (a) To qualify for
a credit under this section, a taxpayer must create a new
qualifying job within an eligible county. The taxpayer must
create the qualifying job within 12 months of being awarded the
credit. If a taxpayer does not create the qualifying job within
12 months, the credit is forfeited and, if claimed by the
taxpayer, subject to recapture, and the credit amount accrues
back to the eligible county for allocation under subdivision 5.
new text end

new text begin (b) A taxpayer seeking a credit under this section must
make an application to an eligible county at least 60 days
before the award date in paragraph (c). Applications for a
credit shall be made on a form and in a manner prescribed by the
commissioner.
new text end

new text begin (c) Eligible counties shall award credits under this
section twice each year, by March 15 and September 15. An
eligible county shall publish a notice advertising the award
date at least 90 days before the date. Selection of applicants
for awarding tax credits under this section must be made by the
county board of commissioners of an eligible county, or the duly
appointed representatives of the county board of commissioners,
using uniform criteria established by the commissioner. In
selecting among applicants for awarding credits under this
section, criteria must contemplate and place greater weight on
the following factors: whether the qualifying job provides
higher wages, better benefits, or on-the-job training; whether
the taxpayer's business is locally owned and owns, rather than
leases, its own facilities or buildings; whether the taxpayer's
business provides employee stock ownership plans or employee
profit sharing; and whether a higher percentage of the
business's employees are hired with tax credits under this
section. For purposes of this section, "duly appointed
representatives" include a county or regional economic
development agency or authority.
new text end

new text begin Subd. 5. new text end

new text begin Limitation; carryforward. new text end

new text begin (a) The total amount
of credits under this section may not exceed $150,000 per
eligible county over two years. If a county fails to award
$150,000 within a year, it may carry forward the amount that
remains unawarded to the following year. Unawarded amounts may
not be carried beyond the following year and are lost.
new text end

new text begin (b) A taxpayer may claim the credit under this section for
each year the new qualifying job remains in existence, up to a
maximum of four years or $15,000 per qualifying job created.
The taxpayer may claim the credit under this section for years
in which the qualifying job was in existence for the entire
year. A credit under this section is awarded to the taxpayer
for, and attaches to, a designated employee. If the designated
employee for whom a credit under this section was awarded leaves
the employment of the taxpayer for any reason, the remaining
credit the taxpayer would otherwise be eligible to receive is
forfeited and may not be claimed by the taxpayer. Credit
amounts forfeited under this paragraph accrue back to and may be
awarded by an eligible county as if the amount had been
unawarded, as provided in paragraph (a).
new text end

new text begin Subd. 6. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit that
the taxpayer is eligible to receive under this section exceeds
the liability for tax under this chapter, the commissioner shall
refund the excess to the claimant. An amount sufficient to pay
the refunds authorized by this subdivision is appropriated to
the commissioner from the general fund.
new text end

new text begin Subd. 7. new text end

new text begin Manner of claiming. new text end

new text begin The commissioner shall
prescribe the manner in which the credit may be issued and
claimed. This may include providing for the issuance of credit
certificates or allowing the credit only as a separately
processed claim for a refund.
new text end

new text begin Subd. 8. new text end

new text begin Report. new text end

new text begin The commissioner shall report to the
legislature by February 15, 2008, on credits claimed under this
section and shall evaluate the feasibility and benefit of
continuing the program. The commissioner may consult with the
commissioner of employment and economic development in preparing
this report.
new text end

new text begin Subd. 9. new text end

new text begin Expiration. new text end

new text begin This section expires for taxable
years beginning after December 31, 2010.
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