SF 1155

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 03/19/2024 09:25am

A bill for an act
relating to taxation; individual income and corporate franchise; modifying transfer
and certification provisions; amending Minnesota Statutes 2023 Supplement,
section 290.0695, subdivisions 1, 3.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 290.0695, subdivision 1, is
amended to read:

Subdivision 1.

Definitions.

(a) For purpose of this section, the following terms have the
meanings given them.

(b) "Eligible taxpayer" means any railroad that is classified by the United States Surface
Transportation Board as a Class II or Class III railroad.

(c) "Eligible transferee" means any taxpayer subject to tax under this chapter or chapter
297I.

(d) "Qualified railroad reconstruction or replacement expenditures" means gross
expenditures in the taxable year for maintenance, reconstruction, or replacement of railroad
infrastructure, including track, roadbed, bridges, industrial leads and sidings, and track-related
structures owned or leased by a Class II or Class III railroad in Minnesota as of January 1,
2021. Qualified railroad reconstruction or replacement expenditures also includes new
construction of industrial leads, switches, spurs and sidings and extensions of existing sidings
in Minnesota by a Class II or Class III railroad.

new text begin (e) "Credit certificate" means the certificate issued by the commissioner of transportation
under subdivision 3, paragraph (a).
new text end

new text begin (f) "Transfer credit certificate" means the certificate issued to a transferee by the
commissioner under subdivision 3, paragraph (d).
new text end

Sec. 2.

Minnesota Statutes 2023 Supplement, section 290.0695, subdivision 3, is amended
to read:

Subd. 3.

deleted text begin Transferability deleted text end new text begin Credit certificates new text end ; written agreement required; deleted text begin credit
certificate deleted text end new text begin transferability new text end .

(a) new text begin To qualify for a credit under this section, an eligible taxpayer
must apply to the commissioner of transportation for a credit certificate. The application
for the credit certificate must be in the form and manner prescribed by the commissioner
of transportation, in consultation with the commissioner. If the application is approved, the
commissioner of transportation must issue the credit certificate to the eligible taxpayer
within 30 days of receipt of the application. The credit certificate must state, at minimum,
the number of miles of qualified railroad reconstruction or replacement expenditures in the
taxable year and the total amount of credit calculated under the provisions of subdivision
2, paragraph (a). The commissioner of transportation must provide a copy of the credit
certificate to the commissioner of revenue. The commissioner of transportation must not
issue more than one credit certificate to an eligible taxpayer in a taxable year.
new text end

new text begin (b) By written agreement, new text end an eligible taxpayer may transfer the credit allowed under
this section deleted text begin by written agreement deleted text end to an eligible transferee deleted text begin . The amount of the transferred
credit is limited to the unused, remaining portion of the credit deleted text end new text begin as follows:
new text end

new text begin (1) any amount of the credit allowed that is stated in the credit certificate before any
remainder of the credit is claimed; or
new text end

new text begin (2) the entire amount of the credit carryover in each of the five succeeding taxable years new text end .

deleted text begin (b) deleted text end new text begin (c) new text end The eligible taxpayer and the eligible transferee must jointly file a copy of the
written transfer agreement with the commissioner within 30 days of the transfer. The written
agreement must contain the name, address, and taxpayer identification number of the parties
to the transfer; the taxable year the eligible taxpayer incurred the qualified expenditures;
the amount of credit being transferred; and the taxable year or years for which the transferred
credit may be claimed.

deleted text begin (c) deleted text end new text begin (d) new text end The commissioner must issue a new text begin transfer new text end credit certificate to the transferee within
30 days of the joint filing of a copy of the written transfer agreement with the commissioner.

deleted text begin (d) In the case of an audit or assessment, the transferee is liable for repayment of credits
claimed in excess of the allowed amount.
deleted text end

new text begin (e) An eligible taxpayer must not transfer a credit to an eligible transferee more than
once in a taxable year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2022.
new text end