1.1                          A bill for an act 
  1.2             relating to taxation; individual income; providing a 
  1.3             credit for expenses incurred in the process of 
  1.4             adopting a child; amending Minnesota Statutes 2000, 
  1.5             section 290.06, by adding a subdivision. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 290.06, is 
  1.8   amended by adding a subdivision to read: 
  1.9      Subd. 29.  [CREDIT FOR ADOPTION EXPENSES.] (a) A taxpayer 
  1.10  may take a credit against the tax due under this chapter equal 
  1.11  to the amount of qualified adoption expenses paid or incurred by 
  1.12  the taxpayer as provided in this subdivision. 
  1.13     (b) "Qualified adoption expenses" means the following 
  1.14  expenses to the extent they are directly related to the process 
  1.15  of adopting a child who is, at the time of the adoption, under 
  1.16  the age of 18 or is physically or mentally incapable of 
  1.17  self-care and who is not the stepchild of the adoptive parent: 
  1.18     (1) fees for required services of the department of human 
  1.19  services or through a licensed adoption agency or fees imposed 
  1.20  by any other governmental agency in connection with the 
  1.21  adoption; 
  1.22     (2) travel-related expenses for the adoptive family and 
  1.23  child; and 
  1.24     (3) medical fees and expenses that are not reimbursed by 
  1.25  insurance, including medical expenses of the child and birth 
  2.1   mother during the pregnancy and birth. 
  2.2      (c) The credit must be taken in the taxable year during 
  2.3   which the adoption becomes final. 
  2.4      (d) The maximum amount of the credit that may be taken for 
  2.5   all taxable years for the adoption of one child is $5,000 or, in 
  2.6   the case of the adoption of a special needs child, $8,000.  For 
  2.7   purposes of this subdivision, a "special needs child" is a child 
  2.8   who meets the requirements described in section 259.67, 
  2.9   subdivision 1 or 4. 
  2.10     (e) If the amount of the credit for which a taxpayer is 
  2.11  eligible under this subdivision exceeds the taxpayer's liability 
  2.12  for tax for the taxable year, the excess shall be carried over 
  2.13  to succeeding taxable years.  The entire amount of the excess 
  2.14  unused credit for the taxable year shall be carried first to the 
  2.15  earliest of the taxable years to which the credit may be carried 
  2.16  and then to each successive year to which the credit may be 
  2.17  carried.  The amount of the unused credit which may be added 
  2.18  under this clause shall not exceed the taxpayer's liability for 
  2.19  tax less the credit for the taxable year. 
  2.20     (f) No credit may be taken under this subdivision for any 
  2.21  expense for which a deduction or credit is allowed under any 
  2.22  other provision of this chapter or section 23 of the Internal 
  2.23  Revenue Code of 1986, as amended through December 31, 2000.  No 
  2.24  credit may be taken under this subdivision for any expense to 
  2.25  the extent that funds for the expense are received under any 
  2.26  federal, state, or local government program or an employer 
  2.27  reimbursement program. 
  2.28     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
  2.29  years beginning after December 31, 2000.