SF 4988

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/15/2024 09:50am

A bill for an act
relating to economic development; establishing the Minnesota Strategic Industrial
Development Enhancement tax credits; authorizing rulemaking; proposing coding
for new law in Minnesota Statutes, chapter 116J.

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

Section 1.

new text begin [116J.8739] MINNESOTA STRATEGIC INDUSTRIAL DEVELOPMENT
ENHANCEMENT ACT.
new text end

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 terms in this subdivision
have the meanings given.
new text end

new text begin (b) "Eligible entity" means an entity incorporated and located in the state with a qualifying
project in a qualifying project location.
new text end

new text begin (c) "Project sponsor" means a local economic development organization or authority;
port authority; qualified industrial park; or terminal, switching, or Class II or III railroad.
new text end

new text begin (d) "Project tax credit amount" means the amount of tax credits allocated by the
Department of Employment and Economic Development to a qualifying project for qualified
economic development and initial infrastructure expenditures.
new text end

new text begin (e) "Qualified economic development expenditure" means an expenditure for land
improvements, building construction, building improvements and expansion, port terminal
improvements, and the purchase of certain machinery and equipment.
new text end

new text begin (f) "Qualified initial infrastructure expenditure" means an expenditure for new rail
infrastructure and improvements, which includes: the acquisition of right-of-way;
engineering; construction of new track such as industrial leads, switches, spurs, and sidings;
loading dock improvements; and transloading structures involved with providing rail service
to a qualifying project.
new text end

new text begin (g) "Qualifying project" means the new construction or expansion of an eligible entity
or the development of qualified initial infrastructure to serve an eligible entity in a qualifying
project location.
new text end

new text begin (h) "Qualifying project location" means a project located in an industrial park, economic
development zone, opportunity zone, or port located within a county in this state with a
population of less than 250,000 or a project located adjacent to a terminal, switching, or
Class II or III railroad as defined by the federal Surface Transportation Board.
new text end

new text begin Subd. 2. new text end

new text begin Credits allowed; limitation; carryover. new text end

new text begin (a) An eligible entity is allowed a
credit against the tax imposed under chapter 290 equal to 10 percent of qualified economic
development expenditures, not to exceed $8,000,000 per qualifying project.
new text end

new text begin (b) An eligible entity is allowed a credit against the tax imposed pursuant to chapter 290
equal to 50 percent of qualified initial infrastructure expenditures, not to exceed $4,000,000
per qualifying project.
new text end

new text begin (c) A project sponsor must submit a project application for an allocation of tax credits
under this section. The application must include a description of the qualifying project,
project location, detailed project costs, and a summary of expected economic benefits and
job creation.
new text end

new text begin (d) Projects are eligible to combine qualified economic development and qualified initial
infrastructure expenditures, but the total project tax credit amount must not exceed
$10,000,000 per qualifying project in aggregate.
new text end

new text begin (e) The commissioner shall not allocate credits exceeding $50,000,000 in a tax year.
Qualifying projects that have applied and are not allocated all or part of credit for qualified
economic development expenditures or qualified initial infrastructure expenditures are
eligible for credit in subsequent tax years.
new text end

new text begin (f) The tax credit under this section may not exceed an eligible entity's liability for tax.
If the amount of the credit for any taxable year exceeds this limitation, the excess is a credit
carryover to each of the five succeeding taxable years. The entire amount of the excess
unused credit for the taxable year is carried first to the earliest of the taxable years to which
the credit may be carried and then to each successive year to which the credit may be carried.
The amount of the unused credit which may be added under this paragraph must not exceed
the taxpayer's liability for tax, less the credit for the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Program implementation. new text end

new text begin (a) The Department of Employment and Economic
Development shall adopt rules to permit verification of the eligibility of a qualifying project
for the purpose of claiming the credits.
new text end

new text begin (b) The rules shall provide for the approval of qualified economic development
expenditures and qualified initial infrastructure expenditures prior to commencement of a
project and provide a certificate of verification upon completion of a project that uses
qualified economic development expenditures. The certificate of verification shall satisfy
all requirements of the Department of Revenue pertaining to the eligibility of the eligible
taxpayer claiming the credit.
new text end

new text begin Subd. 4. new text end

new text begin Transferability; written agreement required; credit certificate. new text end

new text begin (a) The
credits allowed under this section may be assigned to any taxpayer subject to income tax
in the state of Minnesota pursuant to chapter 290 by written agreement at any time during
the taxable year in which the credit is earned by the eligible entity or in the subsequent years
as allowed by subdivision 2, paragraph (f).
new text end

new text begin (b) The eligible taxpayer and the assignee must jointly file a copy of the written
assignment agreement with the Department of Revenue within 30 days of the assignment.
The written agreement must contain the name, address, and taxpayer identification number
of the parties to the assignment, the tax year the eligible taxpayer incurred the qualified
expenditures, the amount of credit being assigned, and the tax year or years for which the
credit may be claimed.
new text end

new text begin (c) The Department of Revenue may adopt rules, forms, and regulations as are necessary
to implement and administer this section and certify the tax credit amount generated by
each qualifying project annually.
new text end

new text begin Subd. 5. new text end

new text begin Sunset. new text end

new text begin This section expires January 1, 2034, for taxable years beginning after
December 31, 2033.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end