Minnesota Legislature
HF 2998
as introduced - 87th Legislature (2011 - 2012) Posted on 04/05/2012 09:27am
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A bill for an act
relating to community foundations; establishing an endow Minnesota program;
authorizing matching grants and providing tax credits to encourage contributions;
authorizing rulemaking; amending Minnesota Statutes 2010, sections 290.06, by
adding a subdivision; 297I.20, by adding a subdivision; proposing coding for
new law in Minnesota Statutes, chapter 116J.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
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[116J.9821] ENDOW MINNESOTA PROGRAM ACT.
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new text begin Subdivision 1. new text end
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This section may be known and cited as the "Endow Minnesota
Program Act."
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new text begin Subd. 2. new text end
new text begin Purpose. new text end
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The purpose of this section is to:
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(1) enhance the quality of life for citizens of this state through increased
philanthropic activity by providing capital to new and existing citizen groups organized to
establish endowment funds that will address community needs in this state; and
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(2) encourage individuals, businesses, and organizations to invest in community
foundations.
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new text begin Subd. 3. new text end
new text begin Definitions. new text end
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(a) For purposes of this section, the following terms have
the meanings given.
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(b) "Board" means the governing body of the lead philanthropic entity selected
by the commissioner under subdivision 4.
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(c) "Business" means a business operating within this state or a consortium of
businesses operating within this state and includes an individual operating a sole
proprietorship or having rental, royalty, or farm income in this state.
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(d) "Commissioner" means the commissioner of employment and economic
development.
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(e) "Community affiliate organization" means a group of five or more community
leaders or advocates organized for the purpose of increasing philanthropic activity in an
identified community or geographic area in this state with the intention of establishing
a community affiliate endowment fund.
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(f) "Endow Minnesota qualified community foundation" means a community
foundation organized or operating in this state that substantially complies with the national
standards established by the National Council on Foundations, as determined by the
commissioner in collaboration with the Minnesota Council on Foundations.
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(g) "Endowment gift" means an irrevocable contribution to a permanent endowment
held by an endow Minnesota qualified community foundation.
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(h) "Lead philanthropic entity" means the entity selected by the commissioner under
subdivision 4.
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new text begin Subd. 4. new text end
new text begin Endow Minnesota grants. new text end
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(a) The commissioner shall select a lead
philanthropic entity for purposes of encouraging the development of qualified community
foundations in this state. A lead philanthropic entity must:
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(1) be a nonprofit entity that is exempt from federal income taxation under section
501(c)(3) of the Internal Revenue Code, as amended;
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(2) be a statewide organization with membership consisting of organizations, such as
community, corporate, and private foundations, whose principal function is the making of
grants in this state; and
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(3) have a minimum of 40 members that include qualified community foundations.
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(b) A lead philanthropic entity may receive a grant from the commissioner out of
any appropriation or other money available for that purpose. The board shall use the
grant money to award endow Minnesota grants to new and existing qualified community
foundations and to community affiliate organizations that do all of the following:
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(1) provide the board with all information it requires;
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(2) demonstrate a dollar-for-dollar funding match in a form approved by the board;
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(3) identify an endow Minnesota qualified community foundation to hold all funds.
This requirement does not apply to an endow Minnesota qualified community foundation;
and
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(4) provide a plan to the board demonstrating the method for distributing grant
money received from the board to organizations within the community or geographic area,
as defined by the endow Minnesota qualified community foundation or the community
affiliate organization.
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(c) Endow Minnesota grants awarded to new and existing endow Minnesota
qualified community foundations and to community affiliate organizations must not
exceed $25,000 per foundation or organization unless a foundation or organization
demonstrates a multiple county or regional approach. Grants may be awarded annually,
with no more than three grants to any one county in a fiscal year.
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(d) In ranking applications for grants, the board shall consider a variety of factors
including the following:
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(1) the demonstrated need for financial assistance;
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(2) the potential for future philanthropic activity in the area represented by or being
considered for assistance;
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(3) the proportion of the funding match being provided;
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(4) for community affiliate organizations, the demonstrated need for the creation of a
community affiliate endowment fund in the applicant's geographic area;
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(5) the identification of community needs and the manner in which additional
funding will address those needs; and
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(6) the geographic diversity of awards.
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(e) A lead philanthropic entity must not use more than five percent of money
received from the state for administrative purposes.
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new text begin Subd. 5. new text end
new text begin Endow Minnesota tax credit. new text end
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(a) For taxable years beginning on or after
December 31, 2011, a tax credit is allowed against the taxes imposed under chapters 290
and 297I equal to 25 percent of a taxpayer's endowment gift made during the taxable year
to an endow Minnesota qualified community foundation. A tax credit is allowed only for
an endowment gift made to an endow Minnesota qualified community foundation for a
permanent endowment fund established to benefit a charitable cause in this state. The
tax credit is limited to the amount certified by the commissioner to the taxpayer under
paragraph (d).
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(b) The aggregate amount of tax credits authorized under this subdivision is limited
to a total of $ ........ The maximum amount of tax credits granted to a taxpayer must not
exceed five percent of the aggregate amount of tax credits available to be authorized
for the taxable year. Ten percent of the aggregate amount of tax credits authorized in a
calendar year shall be reserved for endowment gifts in amounts of $30,000 or less. If by
September 1 of a calendar year the entire ten percent of the reserved tax credits is not
distributed, the remaining tax credits are available to any other eligible applicants.
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(c) A tax credit is not transferable to any other taxpayer.
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(d) To limit the amount of credits allowed to the amount provided under paragraph
(b), the commissioner shall develop a system for registration and authorization of tax
credits under this subdivision and shall control the distribution of all tax credits to
taxpayers providing an endowment gift subject to this subdivision. The commissioner
shall certify to each authorized taxpayer the tax credit amount by taxable year that the
taxpayer qualifies for.
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(e) The commissioner may adopt administrative rules under chapter 14 for the
qualification and administration of endowment gifts.
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Sec. 2.
Minnesota Statutes 2010, section 290.06, is amended by adding a subdivision
to read:
new text begin Subd. 36. new text end
new text begin Endow Minnesota tax credit. new text end
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(a) A taxpayer is allowed a credit against
the tax under subdivision 1 or 2c equal to the amount certified by the commissioner of
employment and economic development under section 116J.9821, subdivision 5, to the
taxpayer for the taxable year.
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(b) Credits allowed to a partnership, limited liability company taxed as a partnership,
S corporation, or multiple owners of property are passed through to the partners, members,
shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or
owner based on their share of the entity's income for the taxable year.
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(c)(1) The credit is limited to the liability for tax. "Liability for tax" for purposes of
this subdivision means the tax imposed under subdivision 1 or 2c, as applicable, for the
taxable year reduced by the sum of the nonrefundable credits allowed under this chapter.
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(2) For a corporation that is a partner in a partnership, the credit allowed for the
taxable year is limited to the lesser of the amount determined under clause (1) for the
taxable year or an amount, separately computed with respect to the corporation's interest
in the trade, business, or entity, equal to the amount of tax attributable to that portion of
taxable income which is allocable or apportionable to the corporation's interest in the
trade, business, or entity.
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(3) If the amount of the credit determined under this subdivision for any taxable year
exceeds the limitation under clause (1), the excess is a credit carryover to each of the 15
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 clause is limited to the taxpayer's liability
for tax, less the credit for the taxable year.
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new text begin EFFECTIVE DATE. new text end
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This section is effective for taxable years beginning after
December 31, 2011.
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Sec. 3.
Minnesota Statutes 2010, section 297I.20, is amended by adding a subdivision
to read:
new text begin Subd. 4. new text end
new text begin Endow Minnesota tax credit. new text end
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An insurance company may claim a credit
against the premiums tax imposed under this chapter equal to the amount of the credit
certificate issued to it under section 116J.9821. This credit does not affect the calculation
of police and fire aid under section 69.021.
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new text begin EFFECTIVE DATE. new text end
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This section is effective for taxable years beginning after
December 31, 2011.
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