SF 1421

as introduced - 87th Legislature (2011 - 2012) Posted on 03/02/2012 08:36am

A bill for an act
relating to economic development; creating performance rewards on fast
investment today program; providing tax benefits; appropriating money;
proposing coding for new law in Minnesota Statutes, chapter 469.

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

Section 1.

new text begin [469.352] PERFORMANCE REWARDS ON FAST INVESTMENT
TODAY.
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new text begin Subdivision 1. 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.
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new text begin (b) "Business" means an individual, corporation, partnership, limited liability
company, association, or other entity.
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new text begin (c) "Commissioner" means the commissioner of employment and economic
development.
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new text begin (d) "New full-time employee" means an employee who:
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new text begin (1) begins work at a PROFIT business during the taxable year; and
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new text begin (2) has annualized expected hours of work of at least 1,950 hours.
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new text begin (e) "Performance rewards on fast investment today (PROFIT) business" means a
business that is designated by the commissioner under subdivision 3.
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new text begin (f) "Qualified PROFIT business" means a PROFIT business that is certified by the
commissioner under subdivision 4.
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new text begin (g) "Taxing authority" means a county, home rule charter or statutory city, or town.
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new text begin (h) "Wages" has the meaning given in section 290.92, subdivision 1, clause (1).
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new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin (a) In order to qualify for designation as a PROFIT business
under subdivision 3, a business must submit an application to each taxing authority that
may be affected by the tax benefits under subdivision 5, 6, or 7, or to a joint powers
board established under section 471.59 acting on behalf of local government units with
jurisdiction to tax in the applicable geographic area. In making this determination, each
taxing authority must consider the conditions listed in subdivision 3, paragraph (a),
clauses (1) and (2), and paragraph (c). If the affected taxing authorities determine that
the increased business activities will benefit the local economy, the taxing authorities
may individually notify the commissioner that the business has received local approval
to be designated as a PROFIT business.
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new text begin (b) In lieu of paragraph (a), one or more taxing authorities acting together, or a joint
powers board may provide a general local approval to the commissioner that applies to
any business seeking approval to be designated as a PROFIT business that conducts or
plans to conduct business operations within an area subject to the jurisdiction of the taxing
authority or authorities or joint powers board.
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new text begin (c) The applications required under paragraph (a) must be in the form and be made
under the procedures specified by the commissioner.
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new text begin Subd. 3. new text end

new text begin PROFIT business designation; requirements. new text end

new text begin (a) To receive designation
as a PROFIT business, a business must satisfy all of the following conditions:
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new text begin (1) the business is engaged in, within Minnesota, one of the following as its primary
business activity:
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new text begin (i) manufacturing;
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new text begin (ii) warehousing;
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new text begin (iii) distribution;
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new text begin (iv) information technology;
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new text begin (v) finance;
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new text begin (vi) insurance; or
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new text begin (vii) professional or technical services;
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new text begin (2) the business must not be primarily engaged in lobbying, political consulting,
leisure, hospitality, or professional services provided by attorneys, accountants, business
consultants, physicians, or health care consultants; and
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new text begin (3) the business must enter into a binding job creation and construction agreement
with the appropriate local government unit in which the PROFIT business is located
and the commissioner to:
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new text begin (i) create at least ten new full-time employee positions within two years of being
designated as a PROFIT business. Each new position must earn:
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new text begin (A) at least $35,000 in annual wages for businesses located in the seven-county
metropolitan area as defined in section 473.121, subdivision 2; or
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new text begin (B) at least $27,000 in annual wages in all other areas; and
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new text begin (ii) invest at least $500,000 in a construction project that includes a new, expanded,
or remodeled facility within two years of being designated as a PROFIT business;
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new text begin (4) positions or employees moved or relocated from another location of the PROFIT
business in Minnesota must not be included in any calculation or determination of job
creation or new positions under this paragraph;
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new text begin (5) a PROFIT business may not terminate, layoff, or reduce the working hours of
an employee for the purpose of hiring an individual to satisfy job creation goals under
this subdivision; and
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new text begin (6) The agreement may also include additional job creation goals as determined by
the commissioner and the business and that must be achieved in order for the business
to continue to be eligible for the tax benefits after the PROFIT business initially meets
the two-year goals.
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new text begin (b) Upon receiving notification of local approval under subdivision 2, the
commissioner shall review the determination by the local taxing authorities or joint
powers board and consider the conditions listed in paragraphs (a) and (c), to determine
whether to designate a business as a PROFIT business.
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new text begin (c) Prior to designation of a business under this subdivision, the commissioner shall
consider the following:
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new text begin (1) the economic outlook of the industry in which the business engages;
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new text begin (2) the projected sales of the business that will be generated from outside the state
of Minnesota;
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new text begin (3) how the business will build on existing regional, national, and international
strengths to diversify the state's economy;
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new text begin (4) whether the business activity would occur without financial assistance;
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new text begin (5) the effect of financial assistance on industry competitors; and
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new text begin (6) any other criteria the commissioner deems necessary.
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new text begin Subd. 4. new text end

new text begin Certification; tax benefits. new text end

new text begin (a) The commissioner must certify as a
qualified PROFIT business, a PROFIT business that has achieved its two-year goals under
its job creation and construction agreements under subdivision 3.
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new text begin (b) In addition, upon application to the commissioner by the qualified PROFIT
business, the commissioner shall determine the extent to which the qualified PROFIT
business has met any additional job creation or construction goals.
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new text begin (c) A business that is certified as a qualified PROFIT business is eligible for the
following tax benefits for up to 12 years from the date the commissioner certifies the
business as a qualified PROFIT business under this subdivision:
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new text begin (1) the property tax refund for certain improvements as provided in subdivision 5;
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new text begin (2) a refund for sales and use tax and any local sales and use taxes on qualifying
purchases as provided in subdivision 6; and
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new text begin (3) a refund for the state sales tax on motor vehicles and any local sales tax on motor
vehicles as provided under subdivision 7.
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new text begin (d) A refund of property, sales, or motor vehicle taxes paid, as described under
paragraph (c), is provided to a qualified PROFIT business when the two-year construction
and employment goals under the agreement under subdivision 3 are achieved and upon
filing with the commissioner of revenue a claim for refund in the form and manner
prescribed by the commissioner of revenue. Following achievement of the two-year goals,
a qualified PROFIT business is eligible for a refund of property, sales, or motor vehicle
taxes paid, as described under paragraph (c), in the previous year if the business meets
the additional job creation and construction goals provided for in its agreement under
subdivision 3. The amount of the refund is equal to the amount of property, sales, or
motor vehicle taxes paid, as described under paragraph (c), in the previous calendar year
if the business meets its additional job creation and construction goals. If the business
does not meet its additional job creation and construction goals, then the refund is equal to
the amount of property, sales, or motor vehicle taxes paid, as described under paragraph
(c), in the previous calendar year multiplied by the number of new full-time employee
positions over the number of full-time employee positions agreed to under its agreement
under subdivision 3.
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new text begin Subd. 5. new text end

new text begin Property tax refund. new text end

new text begin (a) The property tax imposed on the increase in tax
capacity resulting from the value of improvements made to real property and personal
property, classified under section 273.13, subdivision 24, and owned and operated by a
qualified PROFIT business, may be refunded as provided in this subdivision.
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new text begin (b) For property to qualify for the refund, the occupant must be a qualified PROFIT
business.
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new text begin (c) A qualified PROFIT business is eligible for the refund beginning the first
assessment year after the business is certified by the commissioner. To be eligible, the
property must be occupied by July 1 of the assessment year by a qualified PROFIT
business.
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new text begin (d) A qualified PROFIT business must notify the commissioner of revenue in writing
of eligibility under this subdivision by July 1 in order to begin receiving the refund under
this subdivision in the following year.
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new text begin (e) The refund is distributed as provided in subdivision 4, paragraph (d), and
continues annually as long as the qualified PROFIT business continues to meet the job
creation goals provided for in its agreement under subdivision 3.
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new text begin Subd. 6. new text end

new text begin Sales and use tax refund. new text end

new text begin (a) A qualified PROFIT business is eligible
for a refund of taxes paid under chapter 297A on the purchase and use of construction
materials, services, and supplies used or consumed in, including equipment incorporated
into, real property owned by a qualified PROFIT business if used in the conduct of a
qualified PROFIT business.
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new text begin (b) The refund under this subdivision applies regardless of whether the purchases are
made by the qualified PROFIT business or a contractor hired to perform work or provide
services at the qualified PROFIT business location.
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new text begin (c) The tax must be refunded in the manner provided under subdivision 4, paragraph
(d), subject to the job creation and construction agreement under subdivision 3.
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new text begin Subd. 7. new text end

new text begin Motor vehicle tax refund. new text end

new text begin (a) A qualified PROFIT business is eligible
for a refund of taxes paid under chapter 297B on the purchase of a motor vehicle if the
motor vehicle is primarily used as part of or in direct support of the business operations of
a qualified PROFIT business. The refund applies to sales if the purchase was made and
delivery received during the duration of a qualified PROFIT business certification. The
refund also applies to any local sales and use tax.
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new text begin (b) The tax must be refunded in the manner provided under subdivision 4, paragraph
(d), subject to the job creation and construction agreement under subdivision 3.
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new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds under subdivision
4 is annually appropriated to the commissioner of revenue from the general fund.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter and for sales and purchases made after July 31, 2011, and thereafter.
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