SF 2685

as introduced - 88th Legislature (2013 - 2014) Posted on 03/18/2014 09:13am

A bill for an act
relating to taxation; gross revenues taxes; modifying credits to include treatment
of eating disorders; amending Minnesota Statutes 2012, section 295.53,
subdivision 4a.

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

Section 1.

Minnesota Statutes 2012, section 295.53, subdivision 4a, is amended to read:

Subd. 4a.

Credit for research.

(a) In addition to the exemptions allowed under
subdivision 1, a hospital or health care provider may claim an annual credit against the
total amount of tax, if any, the hospital or health care provider owes for that calendar year
under sections 295.50 to 295.57. The credit shall equal 2.5 percent of revenues for patient
services used to fund expenditures for qualifying research conducted by an allowable
research program. The amount of the credit shall not exceed the tax liability of the hospital
or health care provider under sections 295.50 to 295.57.

(b) For purposes of this subdivision, the following requirements apply:

(1) expenditures must be for program costs of qualifying research conducted by
an allowable research program;

(2) an allowable research program must be a formal program of medical and health
care research conducted by an entity which is exempt under section 501(c)(3) of the
Internal Revenue Code as defined in section 289A.02, subdivision 7, or is owned and
operated under authority of a governmental unit new text begin , or conducted in coordination with a
public or private higher education institution for the purposes of treating eating disorders new text end ;

(3) qualifying research must:

(A) be approved in writing by the governing body of the hospital or health care
provider which is taking the deduction under this subdivision;

(B) have as its purpose the development of new knowledge in basic or applied
science relating to the diagnosis and treatment of conditions affecting the human body;

(C) be subject to review by individuals with expertise in the subject matter of the
proposed study but who have no financial interest in the proposed study and are not
involved in the conduct of the proposed study; and

(D) be subject to review and supervision by an institutional review board operating
in conformity with federal regulations if the research involves human subjects or
an institutional animal care and use committee operating in conformity with federal
regulations if the research involves animal subjects. Research expenses are not exempt if
the study is a routine evaluation of health care methods or products used in a particular
setting conducted for the purpose of making a management decision. Costs of clinical
research activities paid directly for the benefit of an individual patient are excluded from
this exemption. Basic research in fields including biochemistry, molecular biology, and
physiology are also included if such programs are subject to a peer review process.

(c) No credit shall be allowed under this subdivision for any revenue received by the
hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
government or nongovernment source, on which the tax liability under section 295.52 is
not imposed.

(d) The taxpayer shall apply for the credit under this section on the annual return
under section 295.55, subdivision 5.

(e) Beginning September 1, 2001, if the actual or estimated amount paid under this
section for the calendar year exceeds $2,500,000, the commissioner of management and
budget shall determine the rate of the research credit for the following calendar year to the
nearest one-half percent so that refunds paid under this section will most closely equal
$2,500,000. The commissioner of management and budget shall publish in the State
Register by October 1 of each year the rate of the credit for the following calendar year. A
determination under this section is not subject to the rulemaking provisions of chapter 14.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross revenues received after
December 31, 2012.
new text end