Bill Text: MN HF40 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Lifelong learning account program established, tax credits allowed to employers and employees for contributions to lifelong learning accounts, and money appropriated.
Sponsorship: Moderate Partisan Bill (Democrat 4-1)
Status: (Introduced - Dead) 2011-03-14 - Committee report, to pass and re-refer to Jobs and Economic Development Finance [HF40 Detail]
Download: Minnesota-2011-HF40-Introduced.html
1.2relating to workforce development; establishing a lifelong learning account
1.3program; allowing tax credits to employers and employees for contributions to
1.4lifelong learning accounts; appropriating money;proposing coding for new law
1.5in Minnesota Statutes, chapters 116L; 290.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [116L.85] LIFELONG LEARNING ACCOUNTS PROGRAM.
1.8 Subdivision 1. Program established. The lifelong learning accounts program is
1.9established in the Department of Employment and Economic Development.
1.10 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
1.11the meanings given.
1.12(b) "Commissioner" means the commissioner of employment and economic
1.13development.
1.14(c) "Education expenses" means "qualified higher education expenses" as defined in
1.15section 529(e) of the Internal Revenue Code.
1.16(d) "Lifelong learning account" means an individual asset account held by a trustee,
1.17custodian, or fiduciary approved by the commissioner on behalf of an employee in this
1.18state to pay education expenses of the employee. State-operated qualified tuition programs
1.19under section 529 of the Internal Revenue Code of 1986, as amended, qualify to be
1.20trustees, custodians, or fiduciaries for lifelong learning accounts under this section without
1.21application to or approval by the commissioner.
1.22 Subd. 3. Commissioner's duties. The commissioner shall use any funds
1.23appropriated for the lifelong learning accounts program to:
1.24(1) encourage both lower-income and lower-skilled health care, hospitality, and
1.25technology industry workers to participate in a lifelong learning account;
2.1(2) encourage the establishment of lifelong learning accounts in diverse geographic
2.2and economic areas and among differing sizes of firms, and include health care, hospitality,
2.3and technology industry workers in urban, suburban, and rural areas of the state;
2.4(3) make technical assistance available to companies, and make educational and
2.5career advising available to individual participants; and
2.6(4) document the process and outcomes in the establishment of lifelong learning
2.7accounts, and prepare a report on the program, to be submitted to the legislature by
2.8December 15 of each even-numbered year.
2.9 Subd. 4. Limits on use of money in accounts. The money in a lifelong learning
2.10account must be used only to pay education expenses incurred by or on behalf of the
2.11account owner.
2.12 Subd. 5. Contracting authority. The commissioner may contract with other
2.13government agencies, nonprofit organizations, or for-profit firms to carry out the purpose
2.14and required activities of the lifelong learning accounts program.
2.15 Subd. 6. Authority to adopt rules. The commissioner may adopt administrative
2.16rules under chapter 14 to implement this section.
2.17EFFECTIVE DATE.This section is effective July 1, 2011.
2.18 Sec. 2. [290.0693] LIFELONG LEARNING ACCOUNT CREDIT.
2.19 Subdivision 1. Refundable credit allowed; individuals. (a) A qualified individual
2.20is allowed a credit against the tax imposed under this chapter equal to 50 percent of the
2.21contributions made during the taxable year to a lifelong learning account. The maximum
2.22tax credit for the taxable year is $1,000 for a married couple filing a joint return and
2.23$500 for all other returns. Amounts funded with matching payments from employers that
2.24qualify for a credit under subdivision 2 do not qualify for a credit under this subdivision.
2.25(b) If the credit for which the claimant is eligible under this subdivision exceeds the
2.26claimant's tax liability under this chapter, the commissioner shall refund the excess.
2.27(c) An amount sufficient to pay the refunds required by this subdivision is
2.28appropriated to the commissioner from the general fund.
2.29 Subd. 2. Employer tax credit. (a) An employer, whether a corporation, an
2.30individual, or a partnership, subject to taxation under this chapter may claim a tax credit
2.31for payments made during the taxable year to make matching payments for contributions
2.32to lifelong learning accounts for its employees. The maximum tax credit is limited to $500
2.33during the taxable year for each employee on whose behalf qualified lifelong learning
2.34account matching payments are made.
3.1(b) For a partnership or S corporation, the credit must be allocated to the partners or
3.2shareholders in proportion to their respective shares of the income of the entity.
3.3(c) The credit allowed under this subdivision is limited to the liability for tax
3.4imposed under this chapter for the taxable year reduced by the sum of the nonrefundable
3.5credits allowed under this chapter. If the amount of the credit determined under this
3.6section for any taxable year exceeds the liability for tax, the excess is a carryover to each
3.7of the 15 succeeding taxable years. The entire amount of the excess unused credit for the
3.8taxable year must be carried first to the earliest of the taxable years to which the credit
3.9may be carried and then to each successive year to which the credit may be carried. The
3.10amount of the unused credit that may be added under this paragraph must not exceed the
3.11taxpayer's liability for tax less the credit for the taxable year.
3.12 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
3.13the meanings given.
3.14(b) "Lifelong learning account" means an individual asset account held by a trustee,
3.15custodian, or fiduciary qualifying under section 116L.85, on behalf of an employee
3.16in Minnesota.
3.17(c) "Qualified individual" means an individual who is not claimed as a dependent or
3.18as a qualifying child, as those terms are defined in section 152 of the Internal Revenue
3.19Code, by another taxpayer for federal tax purposes.
3.20 Subd. 4. Special tax on nonqualified withdrawals. (a) An individual making a
3.21nonqualified withdrawal from a lifelong learning account is subject to a tax equal to
3.22the greater of:
3.23(1) 25 percent of the withdrawal; or
3.24(2) the tax credit claimed on contributions under subdivision 1 or the amount
3.25withdrawn, whichever is less.
3.26(b) For purposes of this subdivision, a "nonqualified withdrawal" means a
3.27withdrawal that is not:
3.28(1) used to pay "qualified higher education expenses" as defined in section 529(e)
3.29of the Internal Revenue Code; or
3.30(2) contributed to another lifelong learning account within 60 days after the
3.31withdrawal from the original account.
3.32(c) The tax under this subdivision is due and payable at the same time as and with
3.33the return for the taxable year in which the withdrawal was made. The trustee for the
3.34lifelong learning account shall withhold and remit to the commissioner 25 percent of each
3.35withdrawal from an account, unless the account holder certifies that the amount will be
4.1used for qualifying higher education expenses. The amount withheld is a credit against the
4.2tax due under this subdivision.
4.3EFFECTIVE DATE.This section is effective for taxable years beginning after
4.4December 31, 2010.
1.3program; allowing tax credits to employers and employees for contributions to
1.4lifelong learning accounts; appropriating money;proposing coding for new law
1.5in Minnesota Statutes, chapters 116L; 290.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [116L.85] LIFELONG LEARNING ACCOUNTS PROGRAM.
1.8 Subdivision 1. Program established. The lifelong learning accounts program is
1.9established in the Department of Employment and Economic Development.
1.10 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
1.11the meanings given.
1.12(b) "Commissioner" means the commissioner of employment and economic
1.13development.
1.14(c) "Education expenses" means "qualified higher education expenses" as defined in
1.15section 529(e) of the Internal Revenue Code.
1.16(d) "Lifelong learning account" means an individual asset account held by a trustee,
1.17custodian, or fiduciary approved by the commissioner on behalf of an employee in this
1.18state to pay education expenses of the employee. State-operated qualified tuition programs
1.19under section 529 of the Internal Revenue Code of 1986, as amended, qualify to be
1.20trustees, custodians, or fiduciaries for lifelong learning accounts under this section without
1.21application to or approval by the commissioner.
1.22 Subd. 3. Commissioner's duties. The commissioner shall use any funds
1.23appropriated for the lifelong learning accounts program to:
1.24(1) encourage both lower-income and lower-skilled health care, hospitality, and
1.25technology industry workers to participate in a lifelong learning account;
2.1(2) encourage the establishment of lifelong learning accounts in diverse geographic
2.2and economic areas and among differing sizes of firms, and include health care, hospitality,
2.3and technology industry workers in urban, suburban, and rural areas of the state;
2.4(3) make technical assistance available to companies, and make educational and
2.5career advising available to individual participants; and
2.6(4) document the process and outcomes in the establishment of lifelong learning
2.7accounts, and prepare a report on the program, to be submitted to the legislature by
2.8December 15 of each even-numbered year.
2.9 Subd. 4. Limits on use of money in accounts. The money in a lifelong learning
2.10account must be used only to pay education expenses incurred by or on behalf of the
2.11account owner.
2.12 Subd. 5. Contracting authority. The commissioner may contract with other
2.13government agencies, nonprofit organizations, or for-profit firms to carry out the purpose
2.14and required activities of the lifelong learning accounts program.
2.15 Subd. 6. Authority to adopt rules. The commissioner may adopt administrative
2.16rules under chapter 14 to implement this section.
2.17EFFECTIVE DATE.This section is effective July 1, 2011.
2.18 Sec. 2. [290.0693] LIFELONG LEARNING ACCOUNT CREDIT.
2.19 Subdivision 1. Refundable credit allowed; individuals. (a) A qualified individual
2.20is allowed a credit against the tax imposed under this chapter equal to 50 percent of the
2.21contributions made during the taxable year to a lifelong learning account. The maximum
2.22tax credit for the taxable year is $1,000 for a married couple filing a joint return and
2.23$500 for all other returns. Amounts funded with matching payments from employers that
2.24qualify for a credit under subdivision 2 do not qualify for a credit under this subdivision.
2.25(b) If the credit for which the claimant is eligible under this subdivision exceeds the
2.26claimant's tax liability under this chapter, the commissioner shall refund the excess.
2.27(c) An amount sufficient to pay the refunds required by this subdivision is
2.28appropriated to the commissioner from the general fund.
2.29 Subd. 2. Employer tax credit. (a) An employer, whether a corporation, an
2.30individual, or a partnership, subject to taxation under this chapter may claim a tax credit
2.31for payments made during the taxable year to make matching payments for contributions
2.32to lifelong learning accounts for its employees. The maximum tax credit is limited to $500
2.33during the taxable year for each employee on whose behalf qualified lifelong learning
2.34account matching payments are made.
3.1(b) For a partnership or S corporation, the credit must be allocated to the partners or
3.2shareholders in proportion to their respective shares of the income of the entity.
3.3(c) The credit allowed under this subdivision is limited to the liability for tax
3.4imposed under this chapter for the taxable year reduced by the sum of the nonrefundable
3.5credits allowed under this chapter. If the amount of the credit determined under this
3.6section for any taxable year exceeds the liability for tax, the excess is a carryover to each
3.7of the 15 succeeding taxable years. The entire amount of the excess unused credit for the
3.8taxable year must be carried first to the earliest of the taxable years to which the credit
3.9may be carried and then to each successive year to which the credit may be carried. The
3.10amount of the unused credit that may be added under this paragraph must not exceed the
3.11taxpayer's liability for tax less the credit for the taxable year.
3.12 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
3.13the meanings given.
3.14(b) "Lifelong learning account" means an individual asset account held by a trustee,
3.15custodian, or fiduciary qualifying under section 116L.85, on behalf of an employee
3.16in Minnesota.
3.17(c) "Qualified individual" means an individual who is not claimed as a dependent or
3.18as a qualifying child, as those terms are defined in section 152 of the Internal Revenue
3.19Code, by another taxpayer for federal tax purposes.
3.20 Subd. 4. Special tax on nonqualified withdrawals. (a) An individual making a
3.21nonqualified withdrawal from a lifelong learning account is subject to a tax equal to
3.22the greater of:
3.23(1) 25 percent of the withdrawal; or
3.24(2) the tax credit claimed on contributions under subdivision 1 or the amount
3.25withdrawn, whichever is less.
3.26(b) For purposes of this subdivision, a "nonqualified withdrawal" means a
3.27withdrawal that is not:
3.28(1) used to pay "qualified higher education expenses" as defined in section 529(e)
3.29of the Internal Revenue Code; or
3.30(2) contributed to another lifelong learning account within 60 days after the
3.31withdrawal from the original account.
3.32(c) The tax under this subdivision is due and payable at the same time as and with
3.33the return for the taxable year in which the withdrawal was made. The trustee for the
3.34lifelong learning account shall withhold and remit to the commissioner 25 percent of each
3.35withdrawal from an account, unless the account holder certifies that the amount will be
4.1used for qualifying higher education expenses. The amount withheld is a credit against the
4.2tax due under this subdivision.
4.3EFFECTIVE DATE.This section is effective for taxable years beginning after
4.4December 31, 2010.
