SF 240

1st Engrossment - 88th Legislature (2013 - 2014) Posted on 04/03/2013 08:25am

A bill for an act
relating to workforce development; establishing a new jobs training program;
providing a credit against withholding tax liability; establishing accounts;
appropriating money; proposing coding for new law in Minnesota Statutes,
chapter 116L.

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

Section 1.

new text begin [116L.40] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin When used in sections 116L.40 to 116L.44, the following
terms have the meanings given them unless the context requires otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Agreement. new text end

new text begin "Agreement" means the agreement between an employer and
the commissioner for a project.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of employment
and economic development.
new text end

new text begin Subd. 4. new text end

new text begin Employee. new text end

new text begin "Employee" means the individual employed in a new job.
new text end

new text begin Subd. 5. new text end

new text begin Employer. new text end

new text begin "Employer" means the individual, corporation, partnership,
limited liability company, or association providing new jobs and entering into an agreement.
new text end

new text begin Subd. 6. new text end

new text begin New job. new text end

new text begin "New job" means a job:
new text end

new text begin (1) that is provided by a new or expanding business at a location outside of the
metropolitan area, as defined in section 473.121, subdivision 2;
new text end

new text begin (2) that provides at least 32 hours of work per week for a minimum of nine months
of the year and is permanent with no planned termination date;
new text end

new text begin (3) that is certified by the commissioner as qualifying under the program before the
first employee is hired to fill the job; and
new text end

new text begin (4) for which an employee hired was not (i) formerly employed by the employer
in the state or (ii) a replacement worker, including a worker newly hired as a result of a
labor dispute.
new text end

new text begin Subd. 7. new text end

new text begin Jobs credit. new text end

new text begin "Jobs credit" or "credit" means the credit under section
116L.42.
new text end

new text begin Subd. 8. new text end

new text begin Program. new text end

new text begin "Program" means the project or projects established under
sections 116L.40 to 116L.44.
new text end

new text begin Subd. 9. new text end

new text begin Program costs. new text end

new text begin "Program costs" means all necessary and incidental
costs of providing program services. The term does not include the cost of purchasing
equipment to be owned or used by the training or educational institution or service.
new text end

new text begin Subd. 10. new text end

new text begin Program services. new text end

new text begin "Program services" means training and education
specifically directed to new jobs, determined to be appropriate by the commissioner,
including in-house training; services provided by institutions of higher education; federal,
state, or local agencies; or private training or educational services. Administrative services
and assessment and testing costs are included.
new text end

new text begin Subd. 11. new text end

new text begin Project. new text end

new text begin "Project" means a training arrangement that is the subject of an
agreement entered into between the commissioner and an employer to provide program
services.
new text end

Sec. 2.

new text begin [116L.41] COMMISSIONER'S DUTIES AND POWERS; AGREEMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Service provision. new text end

new text begin Upon request, the commissioner shall provide
or coordinate the provision of program services to employers eligible for grants under
sections 116L.40 to 116L.44.
new text end

new text begin Subd. 2. new text end

new text begin Agreements; required terms. new text end

new text begin (a) The commissioner may enter into an
agreement to establish a project with an employer that:
new text end

new text begin (1) identifies program costs to be paid from sources under the program;
new text end

new text begin (2) provides for a guarantee by the employer of payment for program costs;
new text end

new text begin (3) provides that any deferral of program cost payments may not exceed ten years
after execution of the agreement;
new text end

new text begin (4) provides that on-the-job training costs for employees may not exceed 50 percent
of the annual gross wages and salaries of the new jobs in the first full year after execution
of the agreement;
new text end

new text begin (5) provides that each employee must be paid wages of at least $13 per hour, plus
benefits, by the end of the first year of employment under the project and through the
period in which funding under the program applies; and
new text end

new text begin (6) provides that job training will be provided for each job category and the length
of time of training.
new text end

new text begin (b) The agreement may provide, at the election of the employer, that program costs
will be directly reimbursed by a grant from the commissioner, rather than as a tax credit
under section 116L.42. The maximum amount of such a grant is limited to 90 percent of
the amount of the tax credit that otherwise would apply.
new text end

new text begin (c) Before entering a final agreement, the commissioner shall:
new text end

new text begin (1) determine that sufficient funding authority for the project is available under
section 116L.44; and
new text end

new text begin (2) investigate the applicability of other training programs and determine whether the
job skills partnership grant program is a more suitable source of funding for the training
and the training can be completed in a timely manner that meets the needs of the employer.
new text end

new text begin The investigation must be completed within 15 days or as soon as reasonably possible
after the employer has provided the commissioner with all the requested information.
new text end

new text begin Subd. 3. new text end

new text begin Agreement required; notification. new text end

new text begin An agreement may not be executed
by the commissioner unless funding is available and the commissioner has awarded
the project a grant under section 116L.43. Upon execution of the agreement, the
commissioner shall notify the commissioner of revenue of the agreement and the identity
of the employer, if the agreement provides for a jobs tax credit.
new text end

new text begin Subd. 4. new text end

new text begin Allocation of limit. new text end

new text begin The commissioner shall allocate funding authority
for credits under section 116L.44 or for direct grants elected by employers under
subdivision 2, paragraph (b), to project applications based on a first-come first-served
basis, determined on the basis of the commissioner's receipt of a complete application for
the project, including the provision of all of the required information.
new text end

new text begin Subd. 5. new text end

new text begin Application fee. new text end

new text begin The commissioner may charge each applicant an
application fee to cover part or all of the administrative and legal costs incurred, not to
exceed $500 per applicant. The fee is deemed approved under section 16A.1283. The fee
shall be deposited in the jobs tax credit account in the special revenue fund and amounts
in the account are appropriated to the commissioner for the costs of administering the
program. The commissioner shall refund the fee to the applicant if the application is denied
because program funding is unavailable for the year under the limit in section 116L.43.
new text end

Sec. 3.

new text begin [116L.42] JOBS TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Recovery of program costs; withholding credit. new text end

new text begin Unless the
employer has elected to receive reimbursement through a direct grant under section
116L.41, subdivision 2, paragraph (b), grants made under section 116L.43 for program
costs are repaid by receipt of a jobs credit as follows:
new text end

new text begin (1) the jobs credit is based on the wages paid to the new employees;
new text end

new text begin (2) the income tax withholding on wages paid by the employer to each new
employee under a project must be credited from the employer's withholding payments
under section 290.92; and
new text end

new text begin (3) the commissioner of revenue shall transmit the equivalent credit payment
amount to the commissioner of management and budget to be allocated to the account
established under subdivision 2 for payment to the commissioner for reimbursement of
grants made under section 116L.43.
new text end

new text begin Subd. 2. new text end

new text begin Credit accounts. new text end

new text begin The commissioner of management and budget shall
establish accounts and records as necessary to administer the jobs credit. If the grant was
made out of the appropriation under section 116L.43, the credit amount is canceled to the
general fund. If the grant was made from other money available to the department, the
credit must be paid to the appropriate fund or account as provided under that funding source.
All money allocated by subdivision 1 is appropriated for purposes of this section. The
employer credits cease when the amount of the grant has been repaid, but in no case later
than ten years after execution of the agreement for the project. Any money in the account
for a project after the grant for the project has been paid is canceled to the general fund.
new text end

new text begin Subd. 3. new text end

new text begin Effect on employee income tax liability. new text end

new text begin A new employee participating
in a project must receive full credit for the amount withheld under section 290.92 for
purposes of the employee's tax liability under chapter 290.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin (a) The commissioner of revenue and the commissioner
of management and budget shall administer this section. The provisions of section 290.92
pertaining to the administration of income tax withholding, including provisions for
refund or credit, not in conflict with the provisions of sections 116L.40 to 116L.44, govern
the administration of the credit provided by this section.
new text end

new text begin (b) Each participating employer shall provide any information the commissioner
of revenue requires.
new text end

Sec. 4.

new text begin [116L.43] PROGRAM FUNDING; APPROPRIATION.
new text end

new text begin (a) Funding for programs must be through grants as provided under sections
116L.40 to 116L.44. For the purposes of making grants under the program, $10,000,000
is appropriated to the commissioner of management and budget from the accounts
established under section 116L.42, subdivision 2, in the general fund for each fiscal year
beginning after June 30, 2013, until the program expires under section 116L.44.
new text end

new text begin (b) The department may also make grants out of any of its available money.
new text end

Sec. 5.

new text begin [116L.44] FUNDING LIMIT; REPORT; EXPIRATION.
new text end

new text begin Subdivision 1. new text end

new text begin Funding limit. new text end

new text begin The commissioner must not enter into agreements
under section 116L.42 that authorize training to be reimbursed by the program in excess of
the amount available under section 116L.43.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin (a) By February 1, 2016, the commissioner shall report to the
governor and the legislature on the program. The report must include at least:
new text end

new text begin (1) the amount of grants issued under the program;
new text end

new text begin (2) the number of individuals receiving training under the program;
new text end

new text begin (3) the number of new hires attributable to the program;
new text end

new text begin (4) an analysis of the effectiveness of the credit and grant in encouraging
employment; and
new text end

new text begin (5) any other information the commissioner determines appropriate.
new text end

new text begin (b) The report to the legislature must be distributed as provided in section 3.195.
new text end

new text begin Subd. 3. new text end

new text begin Expiration. new text end

new text begin The authority of the commissioner to enter into agreements
authorizing new training under section 116L.42 expires June 30, 2018.
new text end