1.1 	A bill for an act
1.2 	relating to taxation; individual income; repealing the greater Minnesota internship 
1.3 	program; repealing Minnesota Statutes 2016, sections 136A.129; 290.06, 
1.4 	subdivision 36.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1.  REPEALER.
 1.7 	Minnesota Statutes 2016, sections 136A.129; and 290.06, subdivision 36, are repealed.

1.8 	EFFECTIVE DATE. This section is effective for agreements entered into after June 
1.9 	30, 2017, and for taxable years beginning after December 31, 2017.

APPENDIX 

Repealed Minnesota Statutes: 17-3405 

136A.129 GREATER MINNESOTA INTERNSHIP PROGRAM.Subdivision 1.Definitions. 
(a) For the purposes of this section, the terms defined in this subdivision have the meanings given to them. 

(b) "Eligible employer" means a taxpayer under section 290.01 with employees located in greater Minnesota. 

(c) "Eligible institution" means a Minnesota public postsecondary institution or a Minnesota private, nonprofit, baccalaureate, or graduate degree-granting college or university. 

(d) "Eligible student" means a student enrolled in an eligible institution who has completed one-half of the credits necessary for the respective degree or certification, including a graduate degree. 

(e) "Greater Minnesota" means the area of the state outside of the counties of Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright. 

Subd. 2.Program established. 
The office shall administer a greater Minnesota internship program through eligible institutions to provide credit at the eligible institution for internships and tax credits for eligible employers who hire interns for employment in greater Minnesota. 

Subd. 3.Program components. 
(a) An intern must be an eligible student who has been admitted to a major program that is related to the intern experience as determined by the eligible institution. 

(b) To participate in the program, an eligible institution must: 

(1) enter into written agreements with eligible employers to provide internships that are at least eight weeks long and located in greater Minnesota; and 

(2) provide academic credit for the successful completion of the internship or ensure that it fulfills requirements necessary to complete a vocational technical education program. 

(c) To participate in the program, an eligible employer must enter into a written agreement with an eligible institution specifying that the intern: 

(1) would not have been hired without the tax credit described in subdivision 4; 

(2) did not work for the employer in the same or a similar job prior to entering the agreement; 

(3) does not replace an existing employee; 

(4) has not previously participated in the program; 

(5) will be employed at a location in greater Minnesota; 

(6) will be paid at least minimum wage for a minimum of 16 hours per week for a period of at least eight weeks; and 

(7) will be supervised and evaluated by the employer. 

(d) The written agreement between the eligible institution and the eligible employer must certify a credit amount to the employer, not to exceed $2,000 per intern. The total dollar amount of credits that an eligible institution certifies to eligible employers in a calendar year may not exceed the amount of its allocation under subdivision 4. 

(e) Participating eligible institutions and eligible employers must report annually to the office. The report must include at least the following: 

(1) the number of interns hired; 

(2) the number of hours and weeks worked by interns; and 

(3) the compensation paid to interns. 

(f) An internship required to complete an academic program does not qualify for the greater Minnesota internship program under this section. 

Subd. 4.Tax credit allowed. 
An employer is entitled to a tax credit as provided in section 290.06, subdivision 36. The total amount of credits allocated in a calendar year must not exceed $2,000,000. The office shall determine relevant criteria to allocate the tax credits including the geographic distribution of credits to work locations outside the metropolitan area, and shall allocate credits to eligible institutions that meet the criteria on a first-come, first-served basis. Any credits allocated to an institution but not used may be reallocated to eligible institutions. The office shall allocate a portion of the administrative fee under section 290.06, subdivision 36, to participating eligible institutions for their administrative costs. 

Subd. 5.Reports to the legislature. 
(a) By February 1, 2016, the office and the Department of Revenue shall report to the legislature on the greater Minnesota internship program. The report must include at least the following: 

(1) the number and dollar amount of credits allowed; 

(2) the number of interns employed under the program; and 

(3) the cost of administering the program. 

(b) By February 1, 2017, the office and the Department of Revenue shall report to the legislature with an analysis of the effectiveness of the program in stimulating businesses to hire interns and in assisting participating interns in finding permanent career positions. This report must include the number of students who participated in the program who were subsequently employed full-time by the employer. 

290.06 RATES OF TAX; CREDITS.Subd. 36.Greater Minnesota internship credit. 
(a) A taxpayer who is an eligible employer may take a credit against the tax due under this chapter equal to the lesser of: 

(1) 40 percent of the compensation paid to an intern qualifying under the program established under section 136A.129, but not to exceed $2,000 per intern; or 

(2) the amount certified to the taxpayer by an eligible institution out of the institution's allocation of credits for the calendar year, as provided in section 136A.129. 

(b) Credits allowed to a partnership, a limited liability company taxed as a partnership, an 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. 

(c) If the amount of credit which the taxpayer is eligible to receive under this subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the excess to the taxpayer. 

(d) An amount necessary to pay claims for refund provided in this subdivision is appropriated from the general fund to the commissioner of revenue. 

(e) An amount equal to one percent of the total amount of the credits authorized under section 136A.129, subdivision 4, for an administrative fee for the Office of Higher Education and participating eligible institutions is appropriated from the general fund to the commissioner of revenue, for a transfer to the Office of Higher Education. 

(f) For purposes of this subdivision, the terms "eligible employer" and "eligible institution" have the meanings given in section 136A.129.