Minnesota Legislature
SF 2781
as introduced - 88th Legislature (2013 - 2014) Posted on 03/28/2014 08:56am
Current Version - as introduced
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A bill for an act
relating to economic development; modifying the greater Minnesota business
expansion sales tax exemption; amending Minnesota Statutes 2013 Supplement,
sections 116J.8738, subdivisions 2, 3, 4; 297A.68, subdivision 44.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 2,
is amended to read:
Subd. 2.
Qualified business.
(a) A business is a qualified business if it satisfies the
requirement of this paragraph and is not disqualified under the provisions of paragraph
(b). To qualify, the business must:
(1) have operated its trade or business in a city or cities in greater Minnesota for at
least one year before applying under subdivision 3;
(2) pay or agree to pay in the future each employee compensation, including benefits
not mandated by law, that on an annualized basis equal at least 120 percent of the federal
poverty level for a family of four;
(3) plan and agree to expand its employment in one or more cities in greater Minnesota
by the minimum number of employees required under subdivision 3, paragraph (c); and
(4) have received certification from the commissioner under subdivision 3 that
it is a qualified business.
(b) A business is not a qualified business if it is either:
(1) primarily engaged in making retail sales to purchasers who are physically present
at the business's location or locations in greater Minnesota; deleted text begin or
deleted text end
(2) a public utility, as defined in section 336B.01new text begin ; or
new text end
new text begin (3) primarily engaged in lobbying; gambling; entertainment; professional sports;
political consulting; leisure; hospitality; or professional services provided by attorneys,
accountants, business consultants, physicians, or health care consultantsnew text end .
(c) The requirements in paragraph (a) that the business's operations and expansion
be located in a city do not apply to an agricultural processing facility.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 2.
Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 3, is
amended to read:
Subd. 3.
Certification of qualified business.
(a) A business may apply to the
commissioner for certification as a qualified business under this section. The commissioner
shall specify the form of the application, the manner and times for applying, and the
information required to be included in the application. The commissioner may impose an
application fee in an amount sufficient to defray the commissioner's cost of processing
certifications. A business must file a copy of its application with the chief clerical officer
of the city at the same time it applies to the commissioner. For an agricultural processing
facility located outside the boundaries of a city, the business must file a copy of the
application with the county auditor.
(b) The commissioner shall certify each business as a qualified business that:
(1) satisfies the requirements of subdivision 2;
(2) the commissioner determines would not expand its operations in greater
Minnesota without the tax incentives available under subdivision 4; and
(3) enters a business subsidy agreement with the commissioner that pledges to
satisfy the minimum expansion requirements of paragraph (c) within three years or less
following execution of the agreement.
The commissioner must act on an application within deleted text begin 60deleted text end new text begin 90 new text end days after its filing.
Failure by the commissioner to take action within the deleted text begin 60-daydeleted text end new text begin 90-daynew text end period is deemed
approval of the application.
deleted text begin
(c) The following minimum expansion requirements apply, based on the number of
employees of the business at locations in greater Minnesota:
deleted text end
deleted text begin
(1) a business that employs 50 or fewer full-time equivalent employees in greater
Minnesota when the agreement is executed must increase its employment by five or more
full-time equivalent employees;
deleted text end
deleted text begin
(2) a business that employs more than 50 but fewer than 200 full-time equivalent
employees in greater Minnesota when the agreement is executed must increase the number
of its full-time equivalent employees in greater Minnesota by at least ten percent; or
deleted text end
deleted text begin (3) a business that employs 200 or more full-time equivalent employees in greater
Minnesota when the agreement is executed must increase its employment by at least 21
full-time equivalent employeesdeleted text end new text begin (c) The business must increase the number of full-time
equivalent employees in greater Minnesota from the time the business subsidy agreement
is executed by two employees or ten percent, whichever is greaternew text end .
(d) The city, or a county for an agricultural processing facility located outside the
boundaries of a city, in which the business proposes to expand its operations may file
comments supporting or opposing the application with the commissioner. The comments
must be filed within 30 days after receipt by the city of the application and may include a
notice of any contribution the city or county intends to make to encourage or support the
business expansion, such as the use of tax increment financing, property tax abatement,
additional city or county services, or other financial assistance.
(e) Certification of a qualified business is effective for the deleted text begin 12-yeardeleted text end new text begin seven-yearnew text end period
beginning on the first day of the calendar month immediately following deleted text begin execution of
the business subsidy agreementdeleted text end new text begin the date that the commissioner informs the business of
the award of the benefitnew text end .
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 3.
Minnesota Statutes 2013 Supplement, section 116J.8738, subdivision 4, is
amended to read:
Subd. 4.
Available tax incentives.
A qualified business is entitled to a sales tax
exemption, new text begin up to $2,000,000 annually and $10,000,000 during the total period of the
agreement, new text end as provided in section 297A.68, subdivision 44, for purchases made during
the period the business was certified as a qualified business under this section.new text begin The
commissioner has discretion to set the maximum amounts of the annual and total sales tax
exemption allowed for each qualifying business as part of the business subsidy agreement.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 4.
Minnesota Statutes 2013 Supplement, section 297A.68, subdivision 44, is
amended to read:
Subd. 44.
Greater Minnesota business expansions.
(a) Purchases and use of
tangible personal property or taxable services by a qualified business, as defined in section
116J.8738, are exempt if:
(1) the business subsidy agreement provides that the exemption under this
subdivision applies;
(2) the property or services are primarily used or consumed new text begin at the facility new text end in greater
Minnesotanew text begin identified in the business subsidy agreementnew text end ; and
(3) the purchase was made and delivery received during the duration of the
certification of the business as a qualified business under section 116J.8738.
(b) Purchase and use of construction materials and supplies used or consumed in,
and equipment incorporated into, the construction of improvements to real property in
greater Minnesota are exempt if the improvements after completion of construction are
to be used in the conduct of the trade or business of the qualified business, as defined in
section 116J.8738. This exemption applies regardless of whether the purchases are made
by the business or a contractor.
(c) The exemptions under this subdivision apply to a local sales and use tax.
(d) The tax on purchases imposed under this subdivision must be imposed and
collected as if the rate under section 297A.62 applied, and then refunded in the manner
provided in section 297A.75. new text begin The total amount refunded for a facility over the certification
period is limited to the amount listed in the business subsidy agreement. new text end No more than
$7,000,000 may be refunded in a fiscal year for all purchases under this subdivision.
Refunds must be allocated on a first-come, first-served basis. If more than $7,000,000 of
eligible claims are made in a fiscal year, claims by qualified businesses carry over to the
next fiscal year, and the commissioner must first allocate refunds to qualified businesses
eligible for a refund in the preceding fiscal year. Any portion of the balance of funds
allocated for refunds under this paragraph does not cancel and shall be carried forward to
and available for refunds in subsequent fiscal years.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end