Bill Text: MN HF669 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Early childhood education scholarship finance system created, early education worker training and retainment tax credits provided, early childhood education programming quality improved, and money appropriated.
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2012-04-02 - Author stricken Slocum [HF669 Detail]
Download: Minnesota-2011-HF669-Introduced.html
1.2relating to early childhood education; creating an early childhood education
1.3scholarship finance system; providing tax credits for training and retaining early
1.4education workers; improving quality early childhood education programming;
1.5appropriating money;amending Minnesota Statutes 2010, sections 119B.09,
1.6subdivision 5; 119B.13, subdivision 3a; 124D.15, subdivisions 3, 3a; 270B.14,
1.7subdivision 1, by adding a subdivision; 290.01, subdivisions 19a, 19c; 290.0674,
1.8subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290;
1.9proposing coding for new law as Minnesota Statutes, chapter 119C; repealing
1.10Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, 7.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. Minnesota Statutes 2010, section 119B.09, subdivision 5, is amended to read:
1.15 Subd. 5. Provider choice. Parents who reside in a Parent Aware Plus region as
1.16defined in section 119C.03, subdivision 5, must choose a rated provider under section
1.17119C.01, subdivision 6, for their three- and four-year-old children, unless a waiver is
1.18granted by the commissioner. Parents who do not reside in a Parent Aware Plus region
1.19may choose child care providers as defined under section119B.011, subdivision 19 , that
1.20best meet the needs of their family. Counties shall make resources available to parents
1.21in choosing quality child care services. Counties may require a parent to sign a release
1.22stating their knowledge and responsibilities in choosing a legal provider described under
1.23section119B.011, subdivision 19 . When a county knows that a particular provider is
1.24unsafe, or that the circumstances of the child care arrangement chosen by the parent are
1.25unsafe, the county may deny a child care subsidy. A county may not restrict access to a
1.26general category of provider allowed under section119B.011, subdivision 19 .
2.1 Sec. 2. Minnesota Statutes 2010, section 119B.13, subdivision 3a, is amended to read:
2.2 Subd. 3a. Provider rate differential for accreditation. (a) A family child care
2.3provider or child care center shall be paid a 15 percent differential above the maximum
2.4rate established in subdivision 1, up to the actual provider rate, if: (1) the provider or
2.5center holds a current early childhood development credential or is accredited; or (2) the
2.6provider is a Parent Aware rated four-star program under chapter 119C.
2.7(b) For a family child care provider, early childhood development credential and
2.8accreditation includes an individual who has earned a child development associate
2.9degree, a child development associate credential, a diploma in child development from a
2.10Minnesota state technical college, or a bachelor's or post baccalaureate degree in early
2.11childhood education from an accredited college or university, or who is accredited by
2.12the National Association for Family Child Care or the Competency Based Training
2.13and Assessment Program. For a child care center, accreditation includes accreditation
2.14by the National Association for the Education of Young Children, the Council on
2.15Accreditation, the National Early Childhood Program Accreditation, the National
2.16School-Age Care Association, or the National Head Start Association Program of
2.17Excellence. For Montessori programs, accreditation includes the American Montessori
2.18Society, Association of Montessori International-USA, or the National Center for
2.19Montessori Education.
2.20 Sec. 3. [119C.01] DEFINITIONS.
2.21 Subdivision 1. Definitions. The terms defined in this section apply to this chapter.
2.22 Subd. 2. Commissioner. "Commissioner" means the commissioner of human
2.23services.
2.24 Subd. 3. Eligible program. "Eligible program" means a Head Start program under
2.25section 119A.50, school readiness program under section 124D.15, licensed center-based
2.26child care program under section 119B.011, or licensed family child care program under
2.27section 119B.011.
2.28 Subd. 4. Minimum threshold. "Minimum threshold" means the rated program
2.29capacity is 25 percent or more of the total eligible program capacity in a Parent Aware
2.30region.
2.31 Subd. 5. Parent Aware. "Parent Aware" means the voluntary evidence-based quality
2.32rating and improvement system for early childhood education under section 119C.02.
2.33 Subd. 6. Parent Aware Plus regions. "Parent Aware Plus regions" means Parent
2.34Aware regions that meet the minimum threshold and are designated by the commissioner
3.1under section 119C.03 for its rated programs to receive early childhood education
3.2scholarships under section 119C.04.
3.3 Subd. 7. Parent Aware region. "Parent Aware region" means a geographic area
3.4approved by the commissioner under section 119C.03.
3.5 Subd. 8. Rated program. "Rated program" means an eligible program in a Parent
3.6Aware region that receives one, two, three, or four stars.
3.7EFFECTIVE DATE.This section is effective the day following final enactment.
3.8 Sec. 4. [119C.02] PARENT AWARE.
3.9 Subdivision 1. Department of Administration; request for proposal. The
3.10Department of Administration must develop a request for proposal for an organization
3.11to: (1) develop the standards and indicators that determine program quality for the Parent
3.12Aware quality rating system; (2) develop the methods used to verify, assess, and monitor
3.13program compliance with the standards, including review of and action on applications;
3.14(3) conduct on-site assessments, if applicable; (4) develop and maintain a data quality
3.15management system for compiling all data used to calculate program ratings and related
3.16procedures for ensuring data quality and integrity; and (5) develop a system for sharing
3.17ratings and related quality information with the public. The standards, indicators, and
3.18processes used in the rating system must be developed based on the Minnesota quality
3.19rating system tool in use in fiscal year 2011, the results of the evaluations of that quality
3.20rating system, and the recommendations in the report required under section 124D.142.
3.21The commissioner of administration must consult with the Minnesota Early Learning
3.22Foundation to design the request for proposal. The Department of Human Services and the
3.23Department of Education may submit their proposal to develop, administer, and oversee
3.24the Parent Aware quality rating system. The commissioner of administration must begin
3.25accepting applications beginning July 30, 2011. The commissioner of administration must
3.26issue a contract by September 30, 2011. The contract is valid for three years. By July 30,
3.272014, and every three years thereafter, the commissioner of administration must consult
3.28with the Minnesota Early Learning Foundation or its designated successor organization
3.29to redesign the request for proposal. The contract must be issued by September 30 of
3.30that year and every three years thereafter.
3.31 Subd. 2. Criteria; measure. (a) Parent Aware must use quality ratings shown to
3.32be linked to improving children's school readiness outcomes and must evaluate, at a
3.33minimum, how programs perform in the following areas:
3.34(1) family partnerships;
3.35(2) tracking learning;
4.1(3) teacher training and education; and
4.2(4) teaching materials and strategies.
4.3(b) Ratings must be indicated using stars. Four stars is the best possible rating. No
4.4stars means the program has not been rated.
4.5 Subd. 3. Rated programs. Each year, beginning June 30, 2012, the contract
4.6entity awarded the contract in subdivision 1 must submit a list of rated programs to the
4.7commissioner of administration. The list of rated programs serves as the commissioner's
4.8rating. The commissioner's decision is final.
4.9 Subd. 4. Evaluation. The commissioner shall contract with an independent private
4.10organization to use private funds to evaluate the Parent Aware quality rating system. The
4.11evaluation must incorporate rating levels and outcome-based data reflecting child progress
4.12toward school readiness. The evaluation must also include recommendations on continued
4.13monitoring and improvement of the correlation between rating levels and outcome-based
4.14child progress toward school readiness. The commissioner shall make available to the
4.15independent private organization any data requested by the organization consistent with
4.16chapter 13 and at no cost to the organization.
4.17 Sec. 5. [119C.03] SELECTION PROCESS FOR PARENT AWARE REGIONS.
4.18 Subdivision 1. Eligibility. In order to qualify as a Parent Aware region, a minimum
4.19of two-thirds of the school districts, two-thirds of the counties, and two-thirds of the Head
4.20Start programs in an economic development region as designated by the governor under
4.21section 462.385 must jointly agree to apply as a Parent Aware region.
4.22 Subd. 2. Approval criteria. Regions must be selected based on:
4.23(1) the percentage of preschool-aged children who are from families with income
4.24equal to or less than 47 percent of the state median income;
4.25(2) the region's demonstrated efforts to use existing public and private resources to
4.26improve program quality in alignment with Parent Aware quality standards;
4.27(3) the level of community support, especially support of the school districts and
4.28local representatives of child care centers and licensed family child care centers; and
4.29(4) the demonstration of quality improvement support from local nonprofits and
4.30foundations.
4.31 Subd. 3. Preparation; quality. A resource and referral organization under section
4.32119B.19 must work with the commissioner and eligible programs in their region for
4.33approval under subdivision 4 to become a Parent Aware region.
4.34 Subd. 4. Region approval. The commissioner shall develop an application process
4.35by December 1, 2011. A region may apply beginning February 1, 2012, to become a
5.1Parent Aware region. The commissioner shall use the criteria in subdivision 2 to make a
5.2determination. Economic development regions 9, 10, and 11 are automatically approved
5.3as Parent Aware regions. The commissioner shall approve the first Parent Aware region by
5.4June 30, 2012, and shall approve all Parent Aware regions by June 30, 2015.
5.5 Subd. 5. Parent Aware Plus regions; commissioner approval. The commissioner
5.6must designate a Parent Aware region as a Parent Aware Plus region when the capacity
5.7in the Parent Aware region meets the minimum threshold. The commissioner must also
5.8designate the prekindergarten exploratory projects under Laws 2007, chapter 147, article
5.92, section 62, as Parent Aware Plus regions for the purposes of issuing and receiving early
5.10childhood education scholarships under section 119C.04.
5.11 Sec. 6. [119C.04] EARLY CHILDHOOD EDUCATION SCHOLARSHIPS.
5.12 Subdivision 1. Early childhood education scholarship locations. In fiscal year
5.132012 and later, the commissioner shall reinstate the three prekindergarten exploratory
5.14projects located in the city of St. Paul, Hennepin County, Nicollet County, and Blue
5.15Earth County that have been conducted in partnership with the Minnesota Early Learning
5.16Foundation to promote children's school readiness. The prekindergarten exploratory
5.17projects may continue to use the existing model of the Parent Aware quality rating
5.18system in fiscal year 2012. In fiscal year 2013 and later, the commissioner shall establish
5.19additional locations where early childhood education scholarships may be used to pay
5.20for services provided by rated programs. The additional early childhood education
5.21scholarship locations must be located in Parent Aware Plus regions. The commissioner
5.22may assign duties as described in subdivisions 5 and 7 to approved Parent Aware Plus
5.23regions, as appropriate.
5.24 Subd. 2. Scholarship eligibility. (a) All children whose parents or legal guardians
5.25meet the eligibility requirements of paragraph (b) are eligible to receive early childhood
5.26education scholarships under this section. No other eligibility criteria may be considered
5.27for the purposes of establishing eligibility under this section.
5.28(b) A parent or legal guardian is eligible for an early childhood education scholarship
5.29if the parent or legal guardian has a child three or four years of age on September 1,
5.30beginning in calendar year 2011; lives in one of the early childhood education scholarship
5.31locations according to subdivision 1; and has income equal to or less than 47 percent of
5.32the state median income in the current calendar year.
5.33 Subd. 3. Eligibility determination. (a) Based on information from individual
5.34income tax returns for the taxable year that has been processed by the commissioner of
5.35revenue with a filing due date in the current calendar year, the commissioner of revenue
6.1shall identify taxpayers who are eligible to receive a scholarship according to subdivision
6.22. For the purpose of determining whether taxpayers are eligible under subdivision 2, the
6.3commissioner of revenue shall use the parent's or legal guardian's federal adjusted income,
6.4as defined in section 62 of the Internal Revenue Code.
6.5(b) The commissioner of revenue shall provide the commissioner a list of names
6.6and addresses of taxpayers who meet the eligibility criteria to receive an early childhood
6.7education scholarship. The commissioner shall notify eligible taxpayers by mail no
6.8later than March 20 of each year. In the notification, the commissioner shall provide
6.9information on how parents and legal guardians can locate a rated provider meeting the
6.10quality standard under subdivision 6.
6.11(c) The commissioner of revenue shall provide a list of names and addresses of
6.12eligible taxpayers to the departments that are coordinating the early childhood education
6.13scholarships under subdivision 9. The departments that receive this list may only use the
6.14list to approve the payment of early childhood education scholarships.
6.15(d) For the purpose of establishing eligibility for the early childhood education
6.16scholarship, the commissioners of education and human services shall accept a self
6.17declaration from parents or legal guardians who did not receive a notification under
6.18paragraph (b). Under this paragraph, a parent or legal guardian whose income meets the
6.19eligibility requirements under subdivision 2 shall be notified of their eligibility to receive
6.20an early childhood education scholarship.
6.21(e) The commissioner shall also accept children identified in other public funding
6.22eligibility processes, including the Free and Reduced Lunch Program, National School
6.23Lunch Act, United States Code, title 42, section 1751, part 210; Head Start under federal
6.24Improving Head Start for School Readiness Act of 2007; Minnesota family investment
6.25program under chapter 256J; and child care assistance programs under chapter 119B.
6.26 Subd. 4. Scholarship value. For fiscal year 2012 and later, the early childhood
6.27education scholarship is equal to $4,000 each year for each eligible child according to
6.28subdivision 2.
6.29 Subd. 5. Scholarship use. (a) The early childhood education scholarship must be
6.30used during the 13 months after July 1, 2011, and each year thereafter by the parent or
6.31legal guardian on behalf of their child for services designed to promote school readiness at
6.32a rated program in a Parent Aware Plus region. A parent or legal guardian may use the
6.33early childhood education scholarship to pay fees or charges associated with their eligible
6.34child's education at a rated program, according to subdivision 6.
7.1(b) To maintain an eligible child's early childhood education scholarship, a parent or
7.2legal guardian must begin to use the scholarship within six months following the receipt
7.3of the scholarship or October 1.
7.4(c) For the purpose of dividing the early childhood education scholarship between
7.5two or more rated programs, a parent or legal guardian may reduce the early childhood
7.6education scholarship value paid to an individual rated program. The commissioner must
7.7determine a method to allow a parent or legal guardian to reduce or divide an early
7.8childhood education scholarship.
7.9 Subd. 6. Quality standard; transition. (a) A rated program is eligible to receive
7.10early childhood education scholarships if the program has received a three- or four-star
7.11rating under Parent Aware under section 119C.02 and is located in a Parent Aware Plus
7.12region. An eligible program must agree to accept early childhood education scholarships
7.13to pay for services.
7.14(b) Notwithstanding paragraph (a), for the first two fiscal years after a Parent Aware
7.15region has become a Parent Aware Plus region, a rated program located in the Parent
7.16Aware Plus region is eligible to receive early childhood education scholarships to pay
7.17for its services if the program has received a one-star or better rating under the Parent
7.18Aware rating system. An eligible program must agree to accept early childhood education
7.19scholarships to pay for services. This paragraph does not apply to the prekindergarten
7.20exploratory projects located in the city of Saint Paul, Hennepin County, Nicollet County,
7.21and Blue Earth County.
7.22 Subd. 7. Redeeming a scholarship. (a) A rated program that has received an early
7.23childhood education scholarship on behalf of an eligible child to pay for services must
7.24remit the scholarship in a manner determined by the commissioner.
7.25(b) The commissioner must pay rated programs the value of the early childhood
7.26education scholarship within 30 days of receiving the scholarship from a program.
7.27(c) The commissioner must determine a method for paying rated programs if a parent
7.28or legal guardian has divided or reduced a scholarship under subdivision 5, paragraph (b).
7.29 Subd. 8. Earned income calculation. Scholarships paid to families must not be
7.30counted as earned income for the purposes of medical assistance, MinnesotaCare, MFIP,
7.31diversionary work program, child care assistance, or Head Start programs. Scholarships
7.32paid to families must not be considered child care funds for the purposes of the child care
7.33assistance program under chapter 119B.
7.34 Subd. 9. Agency coordination. The Department of Education, Department of
7.35Human Services, and the Department of Revenue must coordinate to maximize the
8.1efficiency of the early childhood education scholarships and maximize the number of
8.2children who can receive early childhood education scholarships.
8.3EFFECTIVE DATE.This section is effective the day following final enactment.
8.4 Sec. 7. Minnesota Statutes 2010, section 124D.15, subdivision 3, is amended to read:
8.5 Subd. 3. Program requirements. A school readiness program provider must:
8.6 (1) assess each child's cognitive skills with a comprehensive child assessment
8.7instrument when the child enters and again before the child leaves the program to inform
8.8program planning and parents and promote kindergarten readiness;
8.9 (2) provide comprehensive program content and intentional instructional practice
8.10aligned with the state early childhood learning guidelines and kindergarten standards and
8.11based on early childhood research and professional practice that is focused on children's
8.12cognitive, social, emotional, and physical skills and development and prepares children
8.13for the transition to kindergarten, including early literacy skills;
8.14(3) coordinate appropriate kindergarten transition with parents and kindergarten
8.15teachers;
8.16(4) arrange for early childhood screening and appropriate referral;
8.17(4) (5) involve parents in program planning and decision making;
8.18(5) (6) coordinate with relevant community-based services;
8.19(6) (7) cooperate with adult basic education programs and other adult literacy
8.20programs;
8.21(7) (8) ensure staff-child ratios of one-to-ten and maximum group size of 20 children
8.22with the first staff required to be a teacher;and
8.23(9) serve children a minimum of 12 hours per week; and
8.24(8) (10) have teachers knowledgeable in early childhood curriculum content,
8.25assessment, and instruction.
8.26 Sec. 8. Minnesota Statutes 2010, section 124D.15, subdivision 3a, is amended to read:
8.27 Subd. 3a. Application and reporting requirements.(a) A school readiness
8.28program provider must submit a biennial plan for approval by the commissionerbefore
8.29receiving aid under section
124D.16
8.30program requirements under subdivision 3. A school district by April 1 must submit
8.31the plan for approval by the commissioner in the form and manner prescribed by the
8.32commissioner.One-half the districts must first submit the plan by April 1, 2006, and
8.33one-half the districts must first submit the plan by April 1, 2007, as determined by the
8.34commissioner.
9.1(b) Programs receiving school readiness funds annually must submit a report to
9.2the department.
9.3EFFECTIVE DATE.This section is effective for revenue in fiscal year 2012 and
9.4later.
9.5 Sec. 9. Minnesota Statutes 2010, section 270B.14, subdivision 1, is amended to read:
9.6 Subdivision 1. Disclosure to commissioner of human services. (a) On the request
9.7of the commissioner of human services, the commissioner shall disclose return information
9.8regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to
9.9the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).
9.10 (b) Data that may be disclosed are limited to data relating to the identity,
9.11whereabouts, employment, income, and property of a person owing or alleged to be owing
9.12an obligation of child support.
9.13 (c) The commissioner of human services may request data only for the purposes of
9.14carrying out the child support enforcement program and to assist in the location of parents
9.15who have, or appear to have, deserted their children. Data received may be used only
9.16as set forth in section256.978 .
9.17 (d) The commissioner shall provide the records and information necessary to
9.18administer the supplemental housing allowance to the commissioner of human services.
9.19 (e) At the request of the commissioner of human services, the commissioner of
9.20revenue shall electronically match the Social Security numbers and names of participants
9.21in the telephone assistance plan operated under sections237.69 to
237.711 , with those of
9.22property tax refund filers, and determine whether each participant's household income is
9.23within the eligibility standards for the telephone assistance plan.
9.24 (f) The commissioner may provide records and information collected under sections
9.25295.50
to
295.59 to the commissioner of human services for purposes of the Medicaid
9.26Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law
9.27102-234. Upon the written agreement by the United States Department of Health and
9.28Human Services to maintain the confidentiality of the data, the commissioner may provide
9.29records and information collected under sections295.50 to
295.59 to the Centers for
9.30Medicare and Medicaid Services section of the United States Department of Health and
9.31Human Services for purposes of meeting federal reporting requirements.
9.32 (g) The commissioner may provide records and information to the commissioner of
9.33human services as necessary to administer the early refund of refundable tax credits.
10.1 (h) The commissioner may disclose information to the commissioner of human
10.2services necessary to verify income for eligibility and premium payment under the
10.3MinnesotaCare program, under section256L.05, subdivision 2 .
10.4 (i) The commissioner may disclose information to the commissioner of human
10.5services necessary to verify whether applicants or recipients for the Minnesota family
10.6investment program, general assistance, food support, Minnesota supplemental aid
10.7program, and child care assistance have claimed refundable tax credits under chapter 290
10.8and the property tax refund under chapter 290A, and the amounts of the credits.
10.9 (j) The commissioner may disclose information to the commissioner of human
10.10services necessary to verify income for purposes of calculating parental contribution
10.11amounts under section252.27, subdivision 2a .
10.12(k) The commissioner shall provide information to the commissioner of human
10.13services necessary for approving payments of early childhood education scholarships
10.14under section 119C.04. This information is limited to what is provided by the
10.15commissioner according to section 119C.04, subdivision 3.
10.16 Sec. 10. Minnesota Statutes 2010, section 270B.14, is amended by adding a
10.17subdivision to read:
10.18 Subd. 20. Disclosure to Department of Education. The commissioner shall
10.19provide information to the commissioner of education necessary for approving payments of
10.20early childhood education scholarships under section 119C.04. This information is limited
10.21to what is provided by the commissioner according to section 119C.04, subdivision 3.
10.22 Sec. 11. SCHOLARSHIP NOTIFICATION.
10.23Notwithstanding Minnesota Statutes, section 119C.04, subdivision 3, paragraph
10.24(a), for scholarships in fiscal year 2012, the commissioner of revenue shall use best
10.25efforts to identify taxpayers who meet the eligibility criteria to receive an early childhood
10.26education scholarship under Minnesota Statutes, section 119C.04, subdivision 2, as early
10.27as is feasible. The commissioner of revenue must use federal adjusted gross income data
10.28from 2010 income tax returns processed by the commissioner of revenue to determine
10.29eligibility for fiscal year 2012 scholarship notifications. The commissioner of revenue
10.30shall provide to the commissioner a list of names and addresses of taxpayers who meet
10.31the eligibility criteria to receive an early childhood education scholarship as early as is
10.32feasible, but not later than August 15, 2011.
10.33 Sec. 12. PROGRAMMATIC STREAMLINING.
11.1By January 15, 2012, the commissioner of human services, in coordination with the
11.2commissioner of education, shall report to the legislative committees having jurisdiction
11.3over early childhood education and child care on a framework for incorporating the
11.4existing state programs that provide access to early learning and care programming into
11.5a single scholarship program that funds access to high-quality early learning and care
11.6programs for low-income children in Minnesota. The report must also identify barriers
11.7and impediments to applying federal child care assistance program funds in the form of a
11.8scholarship, under Minnesota Statutes, section 119C.04. As part of the framework, the
11.9commissioner must also take into consideration efforts for simplifying the application and
11.10management procedures for participating families and providers.
11.11 Sec. 13. CHILD CARE DEVELOPMENT FUNDS; PARENT AWARE.
11.12The commissioner of human services shall direct $7,000,000 in federal child care
11.13development funds used for grants under Minnesota Statutes, section 119B.21, in fiscal
11.14years 2012 and 2013 for the purpose of implementing Parent Aware under Minnesota
11.15Statutes, sections 119C.01 to 119C.03. Of this amount, $1,200,000 is appropriated to the
11.16commissioner of administration to administer the Parent Aware contract under Minnesota
11.17Statutes, section 119C.02, subdivision 1.
11.18 Sec. 14. WAIVER PROCESS RELATED TO CHILD CARE PROVIDER
11.19CHOICE.
11.20The commissioner of human services shall develop a simple waiver process related
11.21to Minnesota Statutes, section 119B.09, subdivision 5, that requires the parent or guardian
11.22to submit notice of a preferred alternative child arrangement.
11.23 Sec. 15. APPROPRIATIONS.
11.24 Subdivision 1. Department of Human Services. The sums indicated in this section
11.25are appropriated from the general fund to the Department of Human Services for the
11.26fiscal years designated.
11.27 Subd. 2. Early childhood education scholarships. For grants to early childhood
11.28education scholarships under Minnesota Statutes, section 119C.04:
11.31In fiscal year 2012, this appropriation is for grants to three prekindergarten
11.32exploratory projects located in the city of St. Paul, Hennepin County, Nicollet County,
12.1and Blue Earth County. In fiscal year 2013 and later, the appropriation is for scholarship
12.2grants to fund eligible early childhood care and education programs located in Parent
12.3Aware Plus regions that have received early childhood education scholarships from
12.4eligible parents or legal guardians under Minnesota Statutes, section 119C.04, subdivision
12.52. The appropriation is available until expended. This appropriation is part of the base
12.6budget for subsequent fiscal years.
12.7For fiscal year 2012 only, if this appropriation is insufficient to provide early
12.8childhood education scholarships to all eligible children, the Department of Human
12.9Services shall make scholarships available on a first-come, first-served basis.
12.10 Sec. 16. REPEALER.
12.11Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, and 7, are
12.12repealed.
12.13EFFECTIVE DATE.This section is effective for revenue in fiscal year 2012 and
12.14later.
12.17 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
12.18read:
12.19 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
12.20trusts, there shall be added to federal taxable income:
12.21 (1)(i) interest income on obligations of any state other than Minnesota or a political
12.22or governmental subdivision, municipality, or governmental agency or instrumentality
12.23of any state other than Minnesota exempt from federal income taxes under the Internal
12.24Revenue Code or any other federal statute; and
12.25 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
12.26Code, except:
12.27(A) the portion of the exempt-interest dividends exempt from state taxation under
12.28the laws of the United States; and
12.29(B) the portion of the exempt-interest dividends derived from interest income
12.30on obligations of the state of Minnesota or its political or governmental subdivisions,
12.31municipalities, governmental agencies or instrumentalities, but only if the portion of the
12.32exempt-interest dividends from such Minnesota sources paid to all shareholders represents
12.3395 percent or more of the exempt-interest dividends, including any dividends exempt
13.1under subitem (A), that are paid by the regulated investment company as defined in section
13.2851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
13.3defined in section 851(g) of the Internal Revenue Code, making the payment; and
13.4 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
13.5government described in section 7871(c) of the Internal Revenue Code shall be treated as
13.6interest income on obligations of the state in which the tribe is located;
13.7 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
13.8or accrued within the taxable year under this chapter and the amount of taxes based on
13.9net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
13.10state or to any province or territory of Canada, to the extent allowed as a deduction
13.11under section 63(d) of the Internal Revenue Code, but the addition may not be more
13.12than the amount by which the itemized deductions as allowed under section 63(d) of
13.13the Internal Revenue Code exceeds the amount of the standard deduction as defined in
13.14section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
13.15sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
13.16this paragraph, the disallowance of itemized deductions under section 68 of the Internal
13.17Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
13.18the last itemized deductions disallowed;
13.19 (3) the capital gain amount of a lump-sum distribution to which the special tax under
13.20section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
13.21 (4) the amount of income taxes paid or accrued within the taxable year under this
13.22chapter and taxes based on net income paid to any other state or any province or territory
13.23of Canada, to the extent allowed as a deduction in determining federal adjusted gross
13.24income. For the purpose of this paragraph, income taxes do not include the taxes imposed
13.25by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
13.26 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
13.27other than expenses or interest used in computing net interest income for the subtraction
13.28allowed under subdivision 19b, clause (1);
13.29 (6) the amount of a partner's pro rata share of net income which does not flow
13.30through to the partner because the partnership elected to pay the tax on the income under
13.31section 6242(a)(2) of the Internal Revenue Code;
13.32 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
13.33Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
13.34in the taxable year generates a deduction for depreciation under section 168(k) and the
13.35activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
13.36the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
14.1limited to excess of the depreciation claimed by the activity under section 168(k) over the
14.2amount of the loss from the activity that is not allowed in the taxable year. In succeeding
14.3taxable years when the losses not allowed in the taxable year are allowed, the depreciation
14.4under section 168(k) is allowed;
14.5 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
14.6Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
14.7Revenue Code of 1986, as amended through December 31, 2003;
14.8 (9) to the extent deducted in computing federal taxable income, the amount of the
14.9deduction allowable under section 199 of the Internal Revenue Code;
14.10 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
14.11federal subsidies for prescription drug plans;
14.12(11) the amount of expenses disallowed under section 290.10, subdivision 2;
14.13 (12) the amount deducted for qualified tuition and related expenses under section
14.14222 of the Internal Revenue Code, to the extent deducted from gross income;
14.15 (13) the amount deducted for certain expenses of elementary and secondary school
14.16teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
14.17from gross income;
14.18(14) the additional standard deduction for property taxes payable that is allowable
14.19under section 63(c)(1)(C) of the Internal Revenue Code;
14.20(15) the additional standard deduction for qualified motor vehicle sales taxes
14.21allowable under section 63(c)(1)(E) of the Internal Revenue Code;
14.22(16) discharge of indebtedness income resulting from reacquisition of business
14.23indebtedness and deferred under section 108(i) of the Internal Revenue Code;and
14.24(17) the amount of unemployment compensation exempt from tax under section
14.2585(c) of the Internal Revenue Code.;
14.26(18) the amount of the deduction under section 170 of the Internal Revenue Code
14.27that represents contributions that qualify for an early childhood education access to quality
14.28tax credit under section 290.0694; and
14.29(19) the amount of the deduction under section 170 of the Internal Revenue
14.30Code that represents contributions that qualify for an early childhood education quality
14.31improvement credit under section 290.0695.
14.32EFFECTIVE DATE.This section is effective for taxable years beginning after
14.33December 31, 2010.
14.34 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
15.1 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
15.2there shall be added to federal taxable income:
15.3 (1) the amount of any deduction taken for federal income tax purposes for income,
15.4excise, or franchise taxes based on net income or related minimum taxes, including but not
15.5limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
15.6another state, a political subdivision of another state, the District of Columbia, or any
15.7foreign country or possession of the United States;
15.8 (2) interest not subject to federal tax upon obligations of: the United States, its
15.9possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
15.10state, any of its political or governmental subdivisions, any of its municipalities, or any
15.11of its governmental agencies or instrumentalities; the District of Columbia; or Indian
15.12tribal governments;
15.13 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
15.14Revenue Code;
15.15 (4) the amount of any net operating loss deduction taken for federal income tax
15.16purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
15.17deduction under section 810 of the Internal Revenue Code;
15.18 (5) the amount of any special deductions taken for federal income tax purposes
15.19under sections 241 to 247 and 965 of the Internal Revenue Code;
15.20 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
15.21clause (a), that are not subject to Minnesota income tax;
15.22 (7) the amount of any capital losses deducted for federal income tax purposes under
15.23sections 1211 and 1212 of the Internal Revenue Code;
15.24 (8) the exempt foreign trade income of a foreign sales corporation under sections
15.25921(a) and 291 of the Internal Revenue Code;
15.26 (9) the amount of percentage depletion deducted under sections 611 through 614 and
15.27291 of the Internal Revenue Code;
15.28 (10) for certified pollution control facilities placed in service in a taxable year
15.29beginning before December 31, 1986, and for which amortization deductions were elected
15.30under section 169 of the Internal Revenue Code of 1954, as amended through December
15.3131, 1985, the amount of the amortization deduction allowed in computing federal taxable
15.32income for those facilities;
15.33 (11) the amount of any deemed dividend from a foreign operating corporation
15.34determined pursuant to section290.17, subdivision 4 , paragraph (g). The deemed dividend
15.35shall be reduced by the amount of the addition to income required by clauses (20), (21),
15.36(22), and (23);
16.1 (12) the amount of a partner's pro rata share of net income which does not flow
16.2through to the partner because the partnership elected to pay the tax on the income under
16.3section 6242(a)(2) of the Internal Revenue Code;
16.4 (13) the amount of net income excluded under section 114 of the Internal Revenue
16.5Code;
16.6 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
16.7Revenue Code, for the taxable year when subpart F income is calculated without regard to
16.8the provisions of Division C, title III, section 303(b) of Public Law 110-343;
16.9 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
16.10and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
16.11has an activity that in the taxable year generates a deduction for depreciation under
16.12section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
16.13that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
16.14under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
16.15depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
16.16amount of the loss from the activity that is not allowed in the taxable year. In succeeding
16.17taxable years when the losses not allowed in the taxable year are allowed, the depreciation
16.18under section 168(k)(1)(A) and (k)(4)(A) is allowed;
16.19 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
16.20Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
16.21Revenue Code of 1986, as amended through December 31, 2003;
16.22 (17) to the extent deducted in computing federal taxable income, the amount of the
16.23deduction allowable under section 199 of the Internal Revenue Code;
16.24 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
16.25federal subsidies for prescription drug plans;
16.26 (19) the amount of expenses disallowed under section290.10, subdivision 2 ;
16.27 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
16.28accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
16.29of a corporation that is a member of the taxpayer's unitary business group that qualifies
16.30as a foreign operating corporation. For purposes of this clause, intangible expenses and
16.31costs include:
16.32 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
16.33use, maintenance or management, ownership, sale, exchange, or any other disposition of
16.34intangible property;
16.35 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
16.36transactions;
17.1 (iii) royalty, patent, technical, and copyright fees;
17.2 (iv) licensing fees; and
17.3 (v) other similar expenses and costs.
17.4For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
17.5applications, trade names, trademarks, service marks, copyrights, mask works, trade
17.6secrets, and similar types of intangible assets.
17.7This clause does not apply to any item of interest or intangible expenses or costs paid,
17.8accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
17.9to such item of income to the extent that the income to the foreign operating corporation
17.10is income from sources without the United States as defined in subtitle A, chapter 1,
17.11subchapter N, part 1, of the Internal Revenue Code;
17.12 (21) except as already included in the taxpayer's taxable income pursuant to clause
17.13(20), any interest income and income generated from intangible property received or
17.14accrued by a foreign operating corporation that is a member of the taxpayer's unitary
17.15group. For purposes of this clause, income generated from intangible property includes:
17.16 (i) income related to the direct or indirect acquisition, use, maintenance or
17.17management, ownership, sale, exchange, or any other disposition of intangible property;
17.18 (ii) income from factoring transactions or discounting transactions;
17.19 (iii) royalty, patent, technical, and copyright fees;
17.20 (iv) licensing fees; and
17.21 (v) other similar income.
17.22For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
17.23applications, trade names, trademarks, service marks, copyrights, mask works, trade
17.24secrets, and similar types of intangible assets.
17.25This clause does not apply to any item of interest or intangible income received or accrued
17.26by a foreign operating corporation with respect to such item of income to the extent that
17.27the income is income from sources without the United States as defined in subtitle A,
17.28chapter 1, subchapter N, part 1, of the Internal Revenue Code;
17.29 (22) the dividends attributable to the income of a foreign operating corporation that
17.30is a member of the taxpayer's unitary group in an amount that is equal to the dividends
17.31paid deduction of a real estate investment trust under section 561(a) of the Internal
17.32Revenue Code for amounts paid or accrued by the real estate investment trust to the
17.33foreign operating corporation;
18.1 (23) the income of a foreign operating corporation that is a member of the taxpayer's
18.2unitary group in an amount that is equal to gains derived from the sale of real or personal
18.3property located in the United States;
18.4 (24) the additional amount allowed as a deduction for donation of computer
18.5technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
18.6extent deducted from taxable income;and
18.7(25) discharge of indebtedness income resulting from reacquisition of business
18.8indebtedness and deferred under section 108(i) of the Internal Revenue Code.;
18.9(26) the amount of the deduction under section 170 of the Internal Revenue Code
18.10that represents contributions that qualify for an early childhood education access to quality
18.11tax credit under section 290.0694; and
18.12(27) the amount of the deduction under section 170 of the Internal Revenue
18.13Code that represents contributions that qualify for an early childhood education quality
18.14improvement credit under section 290.0695.
18.15EFFECTIVE DATE.This section is effective for taxable years beginning after
18.16December 31, 2010.
18.17 Sec. 3. Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read:
18.18 Subdivision 1. Credit allowed. An individual is allowed a credit against the tax
18.19imposed by this chapter in an amount equal to75 66 percent in taxable year 2011 and
18.2058 percent in taxable years beginning after December 31, 2011, of the amount paid for
18.21education-related expenses for a qualifying child in kindergarten through grade 12. For
18.22purposes of this section, "education-related expenses" means:
18.23(1) fees or tuition for instruction by an instructor under section120A.22, subdivision
18.2410 , clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
18.25Association, and who is not a lineal ancestor or sibling of the dependent for instruction
18.26outside the regular school day or school year, including tutoring, driver's education
18.27offered as part of school curriculum, regardless of whether it is taken from a public or
18.28private entity or summer camps, in grade or age appropriate curricula that supplement
18.29curricula and instruction available during the regular school year, that assists a dependent
18.30to improve knowledge of core curriculum areas or to expand knowledge and skills under
18.31the required academic standards under section120B.021, subdivision 1 , and the elective
18.32standard under section120B.022, subdivision 1 , clause (2), and that do not include the
18.33teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
18.34tenets, doctrines, or worship;
19.1(2) expenses for textbooks, including books and other instructional materials and
19.2equipment purchased or leased for use in elementary and secondary schools in teaching
19.3only those subjects legally and commonly taught in public elementary and secondary
19.4schools in this state. "Textbooks" does not include instructional books and materials
19.5used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
19.6to instill such tenets, doctrines, or worship, nor does it include books or materials for
19.7extracurricular activities including sporting events, musical or dramatic events, speech
19.8activities, driver's education, or similar programs;
19.9(3) a maximum expense of $200 per family for personal computer hardware,
19.10excluding single purpose processors, and educational software that assists a dependent to
19.11improve knowledge of core curriculum areas or to expand knowledge and skills under
19.12the required academic standards under section120B.021, subdivision 1 , and the elective
19.13standard under section120B.022, subdivision 1 , clause (2), purchased for use in the
19.14taxpayer's home and not used in a trade or business regardless of whether the computer is
19.15required by the dependent's school; and
19.16(4) the amount paid to others for transportation of a qualifying child attending an
19.17elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
19.18or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
19.19attendance laws, which is not operated for profit, and which adheres to the provisions of
19.20the Civil Rights Act of 1964 and chapter 363A.
19.21For purposes of this section, "qualifying child" has the meaning given in section
19.2232(c)(3) of the Internal Revenue Code.
19.23EFFECTIVE DATE.This section is effective for taxable years beginning after
19.24December 31, 2010.
19.25 Sec. 4. [290.0693] EARLY CHILDHOOD TRAIN AND RETAIN CREDIT.
19.26 Subdivision 1. Statement of intent. The purpose of the early childhood train
19.27and retain credit is to encourage and reward early childhood education professionals
19.28for furthering their education and providing continuity of instruction to Minnesota's
19.29children. The success of the credit must be measured by comparing the number of early
19.30childhood education professionals claiming the credit at the various point levels in the
19.31first year the credit is allowed with the number claiming the credit at the various point
19.32levels in following years.
19.33 Subd. 2. Credit allowed. (a) An individual who is an eligible early childhood
19.34education professional is allowed a credit against the tax imposed by this chapter as
19.35follows:
20.7(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
20.8per taxable year. For taxable years beginning after December 31, 2011, the maximum
20.9aggregate credits must not exceed $1,000,000 per taxable year.
20.10(c) For a nonresident or part-year resident, the credit must be allocated based on the
20.11percentage calculated under section 290.06, subdivision 2c, paragraph (e).
20.12 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
20.13the meanings given.
20.14(b) "Early education experience points" means the eligible early childhood education
20.15professional's points registered with the Minnesota Center for Professional Development
20.16Registry.
20.17(c) "Eligible early childhood education professional" means an individual who
20.18(1) is registered with the Minnesota Center for Professional Development Registry;
20.19(2) is employed at a quality program;
20.20(3) works directly with children who have not yet enrolled in kindergarten or first
20.21grade; and
20.22(4) has been employed at the same program for at least 20 hours per week for at least
20.2312 months during the tax year.
20.24(d) "Quality program" means a program rated using the quality rating and
20.25improvement system tool established by the guidelines under chapter 119C.
20.26 Subd. 4. Application for credit certificates. For taxable years beginning after
20.27December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
20.28train and retain tax credit certificate. The credit certificates under this section must be
20.29made available on a first-come, first-served basis until the maximum statewide credit
20.30amount has been reached. The commissioner must not issue a tax credit certificate for an
20.31amount greater than the limits under subdivision 2.
20.32 Subd. 5. Credit refundable. If the amount of credit an individual is eligible to
20.33receive under this section exceeds the claimant's tax liability under this chapter, the
20.34commissioner shall refund the excess to the claimant.
20.35 Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this
20.36section is appropriated to the commissioner from the general fund.
21.1EFFECTIVE DATE.This section is effective for taxable years beginning after
21.2December 31, 2010.
21.3 Sec. 5. [290.0694] EARLY CHILDHOOD EDUCATION ACCESS TO QUALITY
21.4TAX CREDIT.
21.5 Subdivision 1. Statement of intent. The purpose of the early childhood education
21.6access to quality tax credit is to increase the amount of private contributions available to
21.7provide low-income children in Minnesota with access to high quality early childhood
21.8education programs. The success of the credit must be measured by determining the
21.9total amount of private contributions that are made to provide early childhood education
21.10scholarships and are eligible for the credit under this section.
21.11 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
21.12the meanings given.
21.13(b) "Early childhood education access to quality donation" means a donation to a
21.14qualified early childhood education program.
21.15(c) "Qualified early childhood education program" means a program operated
21.16in Minnesota that:
21.17(1) has been rated using the quality rating and improvement system tool established
21.18by the guidelines under chapter 119C; and
21.19(2) accepts early childhood education access to quality donations under this section
21.20as payment of tuition for a qualified student who is enrolled in the program.
21.21(d) "Qualified student" means a student who:
21.22(1) has not attained the age of seven years and become subject to the requirements of
21.23section 120A.22, subdivision 5;
21.24(2) has reached age three or four by September 1;
21.25(3) is a Minnesota resident; and
21.26(4) is a member of a household whose total annual income during the year, without
21.27consideration of the benefits under this program, is equal to or less than 47 percent of the
21.28state median income in the current calendar year.
21.29 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
21.30credit against the tax due under this chapter equal to 75 percent of the amount donated to
21.31a qualified early childhood education program during the taxable year. For taxable year
21.322011, the maximum aggregate credits must not exceed $500,000 per taxable year. For
21.33taxable years beginning after December 31, 2011, the maximum aggregate credits must
21.34not exceed $1,000,000 per taxable year.
22.1(b) A taxpayer must provide a copy of the receipt provided by the qualified early
22.2childhood education program when claiming the credit for the donation.
22.3 Subd. 4. Application for credit certificates. For taxable years beginning after
22.4December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
22.5education access to quality tax credit certificate. The credit certificates under this section
22.6must be made available on a first-come, first-served basis until the maximum statewide
22.7credit amount has been reached. The commissioner must not issue a tax credit certificate
22.8for an amount greater than the limits under subdivision 3.
22.9 Subd. 5. Responsibilities of qualified early childhood education programs. (a)
22.10Each qualified early childhood education program that receives donations directly from
22.11taxpayers under this section must:
22.12(1) notify the commissioner of its intent to participate in this program;
22.13(2) demonstrate that it meets the definition of a qualified early childhood education
22.14program in subdivision 2, paragraph (c);
22.15(3) provide a receipt or verification on a form approved by the commissioner to
22.16taxpayers for donations;
22.17(4) conduct criminal background checks on all of its employees and board members
22.18and exclude from employment or governance any individuals that might reasonably pose a
22.19risk to the appropriate use of contributed funds;
22.20(5) demonstrate its financial accountability by submitting a financial information
22.21report for the organization that complies with uniform financial accounting standards
22.22established by the commissioner;
22.23(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
22.24more during the school year, by filing financial information with the commissioner prior
22.25to September 1 of each year that demonstrates the financial viability of the qualified
22.26early childhood education program; and
22.27(7) use amounts received as donations to provide scholarships to qualified students
22.28within one year of the date of receiving the donation.
22.29(b) A qualified early childhood education program that receives donations directly
22.30from taxpayers under this program must report to the commissioner by June 1 of each year
22.31the following information regarding donations received and scholarships awarded in the
22.32previous calendar year:
22.33(1) the total number and total dollar amount of donations from taxpayers received
22.34during the previous calendar year; and
22.35(2) the total number and total dollar amount of scholarships awarded to qualified
22.36students during the previous calendar year.
23.1(c) If the commissioner decides to bar a qualified early childhood education program
23.2from the program for failure to comply with the requirements in paragraph (a), the
23.3qualified early childhood education program must notify taxpayers who have donated to
23.4the qualified early childhood education program in writing within 30 days.
23.5 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
23.6standardized format for a receipt to be issued by a qualified early childhood education
23.7program to a taxpayer to indicate the value of a donation received.
23.8(b) The commissioner must prescribe a standardized format for qualified early
23.9childhood education programs to report the information required under subdivision 5.
23.10(c) The commissioner must post on the department's Web site the names and
23.11addresses of qualified early childhood education programs and regularly update the names
23.12and addresses of any qualified early childhood education programs that have been barred
23.13from participating in the program.
23.14(d) The commissioner must conduct either a financial review or audit of a qualified
23.15early childhood education program upon finding evidence of fraud or intentional
23.16misreporting.
23.17(e) The commissioner must bar a qualified early childhood education program from
23.18participating in the program if the commissioner establishes that the qualified early
23.19childhood education program has intentionally and substantially failed to comply with
23.20the requirements in subdivision 5. If the commissioner determines that a qualified early
23.21childhood education program should be barred from the program, the commissioner
23.22must notify the qualified early childhood education program within 60 days of that
23.23determination.
23.24EFFECTIVE DATE.This section is effective for taxable years beginning after
23.25December 31, 2010.
23.26 Sec. 6. [290.0695] EARLY CHILDHOOD EDUCATION QUALITY
23.27IMPROVEMENT CREDIT.
23.28 Subdivision 1. Statement of intent. The purpose of the early childhood education
23.29quality improvement credit is to encourage contributions that result in improvements to
23.30the quality of programming provided by eligible early childhood education providers.
23.31The success of the credit must be measured by determining amounts spent as a result of
23.32contributions qualifying for the credit to improve the quality of programming provided by
23.33eligible early childhood education providers.
23.34 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
23.35the meanings given.
24.1(b) "Eligible early childhood education provider" means a provider who operates a
24.2program in an area in Minnesota in which the quality rating and improvement system tool
24.3established by the guidelines under chapter 119C is in use for the taxable year.
24.4(c) "Resource and referral agency" means an agency that is designated by the
24.5Department of Human Services to provide child care resource and referral services.
24.6 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
24.7credit against the tax due under this chapter equal to 75 percent of the amount donated to
24.8an eligible early childhood education provider or a resource and referral agency during
24.9the taxable year. For a taxpayer to be eligible for the credit, donations to eligible early
24.10childhood education providers must be used to improve program quality in ways that
24.11are consistent with the standards set by the quality rating and improvement system, and
24.12donations to resource and referral agencies must be used to provide early childhood
24.13education providers with direct quality improvement services that are consistent with the
24.14standards set by the quality rating and improvement system.
24.15(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
24.16per taxable year. For taxable years beginning after December 31, 2011, the maximum
24.17aggregate credits must not exceed $1,000,000 per taxable year.
24.18(c) A taxpayer must provide a copy of the receipt provided by the eligible early
24.19childhood education provider or resource and referral agency when claiming the credit for
24.20the donation.
24.21 Subd. 4. Application for credit certificates. For taxable years beginning
24.22after December 31, 2010, and before January 1, 2013, a taxpayer must apply to the
24.23commissioner for an early childhood education quality improvement tax credit certificate.
24.24The credit certificates under this section must be made available on a first-come,
24.25first-served basis until the maximum statewide credit amount has been reached. The
24.26commissioner must not issue a tax credit certificate for an amount greater than the limits
24.27under subdivision 3.
24.28 Subd. 5. Responsibilities of eligible early childhood education providers and
24.29resource and referral agencies. (a) Each eligible early childhood education provider
24.30and resource and referral agency that receives contributions directly from taxpayers
24.31under this section must:
24.32(1) notify the commissioner of its intent to participate in this program;
24.33(2) demonstrate to the commissioner that it meets the requirements of this section;
24.34(3) provide a receipt or verification on a form approved by the commissioner to
24.35taxpayers for contributions made to the eligible early childhood education provider
24.36or resource and referral agency;
25.1(4) conduct criminal background checks on all of its employees and board members
25.2and exclude from employment or governance any individuals that might reasonably pose a
25.3risk to the appropriate use of contributed funds;
25.4(5) demonstrate its financial accountability by submitting a financial information
25.5report for the organization that complies with uniform financial accounting standards
25.6established by the commissioner;
25.7(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
25.8more during the school year, by filing financial information with the commissioner prior
25.9to September 1 of each year that demonstrates the financial viability of the qualified
25.10foundation; and
25.11(7) use amounts received as donations to improve program quality, in the case of
25.12eligible early childhood education providers, or to provide quality improvement services,
25.13in the case of resource and referral agencies, within one year of the date of receiving
25.14the donation.
25.15(b) If the commissioner decides to bar an eligible early childhood education
25.16provider or a resource and referral agency from the program for failure to comply with
25.17the requirements in paragraph (a), the provider or agency must notify taxpayers who
25.18have donated to the eligible early childhood provider or resource and referral agency in
25.19writing within 30 days.
25.20 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
25.21standardized format for a receipt to be issued by an eligible early childhood education
25.22provider or a resource and referral agency to a taxpayer to indicate the value of a
25.23contribution received.
25.24(b) The commissioner must prescribe a standardized format for eligible early
25.25childhood education providers or resource and referral agencies to report the information
25.26required under subdivision 5.
25.27(c) The commissioner must post on the department's Web site the names and
25.28addresses of eligible early childhood education providers and resource and referral
25.29agencies and regularly update the names and addresses of any eligible early childhood
25.30education providers or resource and referral agencies that have been barred from
25.31participating in the program.
25.32(d) The commissioner must conduct either a financial review or audit of an eligible
25.33early childhood education provider or a resource and referral agency upon finding
25.34evidence of fraud or intentional misreporting.
25.35(e) The commissioner must bar an eligible early childhood education provider or
25.36a resource and referral agency from participating in the program if the commissioner
26.1establishes that the provider or agency has intentionally and substantially failed to comply
26.2with the requirements in subdivision 5. If the commissioner determines that a provider or
26.3agency should be barred from the program, the commissioner must notify the provider or
26.4agency within 60 days of that determination.
26.5EFFECTIVE DATE.This section is effective for taxable years beginning after
26.6December 31, 2010.
1.3scholarship finance system; providing tax credits for training and retaining early
1.4education workers; improving quality early childhood education programming;
1.5appropriating money;amending Minnesota Statutes 2010, sections 119B.09,
1.6subdivision 5; 119B.13, subdivision 3a; 124D.15, subdivisions 3, 3a; 270B.14,
1.7subdivision 1, by adding a subdivision; 290.01, subdivisions 19a, 19c; 290.0674,
1.8subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290;
1.9proposing coding for new law as Minnesota Statutes, chapter 119C; repealing
1.10Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, 7.
1.11BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.14 Section 1. Minnesota Statutes 2010, section 119B.09, subdivision 5, is amended to read:
1.15 Subd. 5. Provider choice. Parents who reside in a Parent Aware Plus region as
1.16defined in section 119C.03, subdivision 5, must choose a rated provider under section
1.17119C.01, subdivision 6, for their three- and four-year-old children, unless a waiver is
1.18granted by the commissioner. Parents who do not reside in a Parent Aware Plus region
1.19may choose child care providers as defined under section
1.20best meet the needs of their family. Counties shall make resources available to parents
1.21in choosing quality child care services. Counties may require a parent to sign a release
1.22stating their knowledge and responsibilities in choosing a legal provider described under
1.23section
1.24unsafe, or that the circumstances of the child care arrangement chosen by the parent are
1.25unsafe, the county may deny a child care subsidy. A county may not restrict access to a
1.26general category of provider allowed under section
2.1 Sec. 2. Minnesota Statutes 2010, section 119B.13, subdivision 3a, is amended to read:
2.2 Subd. 3a. Provider rate differential for accreditation. (a) A family child care
2.3provider or child care center shall be paid a 15 percent differential above the maximum
2.4rate established in subdivision 1, up to the actual provider rate, if: (1) the provider or
2.5center holds a current early childhood development credential or is accredited; or (2) the
2.6provider is a Parent Aware rated four-star program under chapter 119C.
2.7(b) For a family child care provider, early childhood development credential and
2.8accreditation includes an individual who has earned a child development associate
2.9degree, a child development associate credential, a diploma in child development from a
2.10Minnesota state technical college, or a bachelor's or post baccalaureate degree in early
2.11childhood education from an accredited college or university, or who is accredited by
2.12the National Association for Family Child Care or the Competency Based Training
2.13and Assessment Program. For a child care center, accreditation includes accreditation
2.14by the National Association for the Education of Young Children, the Council on
2.15Accreditation, the National Early Childhood Program Accreditation, the National
2.16School-Age Care Association, or the National Head Start Association Program of
2.17Excellence. For Montessori programs, accreditation includes the American Montessori
2.18Society, Association of Montessori International-USA, or the National Center for
2.19Montessori Education.
2.20 Sec. 3. [119C.01] DEFINITIONS.
2.21 Subdivision 1. Definitions. The terms defined in this section apply to this chapter.
2.22 Subd. 2. Commissioner. "Commissioner" means the commissioner of human
2.23services.
2.24 Subd. 3. Eligible program. "Eligible program" means a Head Start program under
2.25section 119A.50, school readiness program under section 124D.15, licensed center-based
2.26child care program under section 119B.011, or licensed family child care program under
2.27section 119B.011.
2.28 Subd. 4. Minimum threshold. "Minimum threshold" means the rated program
2.29capacity is 25 percent or more of the total eligible program capacity in a Parent Aware
2.30region.
2.31 Subd. 5. Parent Aware. "Parent Aware" means the voluntary evidence-based quality
2.32rating and improvement system for early childhood education under section 119C.02.
2.33 Subd. 6. Parent Aware Plus regions. "Parent Aware Plus regions" means Parent
2.34Aware regions that meet the minimum threshold and are designated by the commissioner
3.1under section 119C.03 for its rated programs to receive early childhood education
3.2scholarships under section 119C.04.
3.3 Subd. 7. Parent Aware region. "Parent Aware region" means a geographic area
3.4approved by the commissioner under section 119C.03.
3.5 Subd. 8. Rated program. "Rated program" means an eligible program in a Parent
3.6Aware region that receives one, two, three, or four stars.
3.7EFFECTIVE DATE.This section is effective the day following final enactment.
3.8 Sec. 4. [119C.02] PARENT AWARE.
3.9 Subdivision 1. Department of Administration; request for proposal. The
3.10Department of Administration must develop a request for proposal for an organization
3.11to: (1) develop the standards and indicators that determine program quality for the Parent
3.12Aware quality rating system; (2) develop the methods used to verify, assess, and monitor
3.13program compliance with the standards, including review of and action on applications;
3.14(3) conduct on-site assessments, if applicable; (4) develop and maintain a data quality
3.15management system for compiling all data used to calculate program ratings and related
3.16procedures for ensuring data quality and integrity; and (5) develop a system for sharing
3.17ratings and related quality information with the public. The standards, indicators, and
3.18processes used in the rating system must be developed based on the Minnesota quality
3.19rating system tool in use in fiscal year 2011, the results of the evaluations of that quality
3.20rating system, and the recommendations in the report required under section 124D.142.
3.21The commissioner of administration must consult with the Minnesota Early Learning
3.22Foundation to design the request for proposal. The Department of Human Services and the
3.23Department of Education may submit their proposal to develop, administer, and oversee
3.24the Parent Aware quality rating system. The commissioner of administration must begin
3.25accepting applications beginning July 30, 2011. The commissioner of administration must
3.26issue a contract by September 30, 2011. The contract is valid for three years. By July 30,
3.272014, and every three years thereafter, the commissioner of administration must consult
3.28with the Minnesota Early Learning Foundation or its designated successor organization
3.29to redesign the request for proposal. The contract must be issued by September 30 of
3.30that year and every three years thereafter.
3.31 Subd. 2. Criteria; measure. (a) Parent Aware must use quality ratings shown to
3.32be linked to improving children's school readiness outcomes and must evaluate, at a
3.33minimum, how programs perform in the following areas:
3.34(1) family partnerships;
3.35(2) tracking learning;
4.1(3) teacher training and education; and
4.2(4) teaching materials and strategies.
4.3(b) Ratings must be indicated using stars. Four stars is the best possible rating. No
4.4stars means the program has not been rated.
4.5 Subd. 3. Rated programs. Each year, beginning June 30, 2012, the contract
4.6entity awarded the contract in subdivision 1 must submit a list of rated programs to the
4.7commissioner of administration. The list of rated programs serves as the commissioner's
4.8rating. The commissioner's decision is final.
4.9 Subd. 4. Evaluation. The commissioner shall contract with an independent private
4.10organization to use private funds to evaluate the Parent Aware quality rating system. The
4.11evaluation must incorporate rating levels and outcome-based data reflecting child progress
4.12toward school readiness. The evaluation must also include recommendations on continued
4.13monitoring and improvement of the correlation between rating levels and outcome-based
4.14child progress toward school readiness. The commissioner shall make available to the
4.15independent private organization any data requested by the organization consistent with
4.16chapter 13 and at no cost to the organization.
4.17 Sec. 5. [119C.03] SELECTION PROCESS FOR PARENT AWARE REGIONS.
4.18 Subdivision 1. Eligibility. In order to qualify as a Parent Aware region, a minimum
4.19of two-thirds of the school districts, two-thirds of the counties, and two-thirds of the Head
4.20Start programs in an economic development region as designated by the governor under
4.21section 462.385 must jointly agree to apply as a Parent Aware region.
4.22 Subd. 2. Approval criteria. Regions must be selected based on:
4.23(1) the percentage of preschool-aged children who are from families with income
4.24equal to or less than 47 percent of the state median income;
4.25(2) the region's demonstrated efforts to use existing public and private resources to
4.26improve program quality in alignment with Parent Aware quality standards;
4.27(3) the level of community support, especially support of the school districts and
4.28local representatives of child care centers and licensed family child care centers; and
4.29(4) the demonstration of quality improvement support from local nonprofits and
4.30foundations.
4.31 Subd. 3. Preparation; quality. A resource and referral organization under section
4.32119B.19 must work with the commissioner and eligible programs in their region for
4.33approval under subdivision 4 to become a Parent Aware region.
4.34 Subd. 4. Region approval. The commissioner shall develop an application process
4.35by December 1, 2011. A region may apply beginning February 1, 2012, to become a
5.1Parent Aware region. The commissioner shall use the criteria in subdivision 2 to make a
5.2determination. Economic development regions 9, 10, and 11 are automatically approved
5.3as Parent Aware regions. The commissioner shall approve the first Parent Aware region by
5.4June 30, 2012, and shall approve all Parent Aware regions by June 30, 2015.
5.5 Subd. 5. Parent Aware Plus regions; commissioner approval. The commissioner
5.6must designate a Parent Aware region as a Parent Aware Plus region when the capacity
5.7in the Parent Aware region meets the minimum threshold. The commissioner must also
5.8designate the prekindergarten exploratory projects under Laws 2007, chapter 147, article
5.92, section 62, as Parent Aware Plus regions for the purposes of issuing and receiving early
5.10childhood education scholarships under section 119C.04.
5.11 Sec. 6. [119C.04] EARLY CHILDHOOD EDUCATION SCHOLARSHIPS.
5.12 Subdivision 1. Early childhood education scholarship locations. In fiscal year
5.132012 and later, the commissioner shall reinstate the three prekindergarten exploratory
5.14projects located in the city of St. Paul, Hennepin County, Nicollet County, and Blue
5.15Earth County that have been conducted in partnership with the Minnesota Early Learning
5.16Foundation to promote children's school readiness. The prekindergarten exploratory
5.17projects may continue to use the existing model of the Parent Aware quality rating
5.18system in fiscal year 2012. In fiscal year 2013 and later, the commissioner shall establish
5.19additional locations where early childhood education scholarships may be used to pay
5.20for services provided by rated programs. The additional early childhood education
5.21scholarship locations must be located in Parent Aware Plus regions. The commissioner
5.22may assign duties as described in subdivisions 5 and 7 to approved Parent Aware Plus
5.23regions, as appropriate.
5.24 Subd. 2. Scholarship eligibility. (a) All children whose parents or legal guardians
5.25meet the eligibility requirements of paragraph (b) are eligible to receive early childhood
5.26education scholarships under this section. No other eligibility criteria may be considered
5.27for the purposes of establishing eligibility under this section.
5.28(b) A parent or legal guardian is eligible for an early childhood education scholarship
5.29if the parent or legal guardian has a child three or four years of age on September 1,
5.30beginning in calendar year 2011; lives in one of the early childhood education scholarship
5.31locations according to subdivision 1; and has income equal to or less than 47 percent of
5.32the state median income in the current calendar year.
5.33 Subd. 3. Eligibility determination. (a) Based on information from individual
5.34income tax returns for the taxable year that has been processed by the commissioner of
5.35revenue with a filing due date in the current calendar year, the commissioner of revenue
6.1shall identify taxpayers who are eligible to receive a scholarship according to subdivision
6.22. For the purpose of determining whether taxpayers are eligible under subdivision 2, the
6.3commissioner of revenue shall use the parent's or legal guardian's federal adjusted income,
6.4as defined in section 62 of the Internal Revenue Code.
6.5(b) The commissioner of revenue shall provide the commissioner a list of names
6.6and addresses of taxpayers who meet the eligibility criteria to receive an early childhood
6.7education scholarship. The commissioner shall notify eligible taxpayers by mail no
6.8later than March 20 of each year. In the notification, the commissioner shall provide
6.9information on how parents and legal guardians can locate a rated provider meeting the
6.10quality standard under subdivision 6.
6.11(c) The commissioner of revenue shall provide a list of names and addresses of
6.12eligible taxpayers to the departments that are coordinating the early childhood education
6.13scholarships under subdivision 9. The departments that receive this list may only use the
6.14list to approve the payment of early childhood education scholarships.
6.15(d) For the purpose of establishing eligibility for the early childhood education
6.16scholarship, the commissioners of education and human services shall accept a self
6.17declaration from parents or legal guardians who did not receive a notification under
6.18paragraph (b). Under this paragraph, a parent or legal guardian whose income meets the
6.19eligibility requirements under subdivision 2 shall be notified of their eligibility to receive
6.20an early childhood education scholarship.
6.21(e) The commissioner shall also accept children identified in other public funding
6.22eligibility processes, including the Free and Reduced Lunch Program, National School
6.23Lunch Act, United States Code, title 42, section 1751, part 210; Head Start under federal
6.24Improving Head Start for School Readiness Act of 2007; Minnesota family investment
6.25program under chapter 256J; and child care assistance programs under chapter 119B.
6.26 Subd. 4. Scholarship value. For fiscal year 2012 and later, the early childhood
6.27education scholarship is equal to $4,000 each year for each eligible child according to
6.28subdivision 2.
6.29 Subd. 5. Scholarship use. (a) The early childhood education scholarship must be
6.30used during the 13 months after July 1, 2011, and each year thereafter by the parent or
6.31legal guardian on behalf of their child for services designed to promote school readiness at
6.32a rated program in a Parent Aware Plus region. A parent or legal guardian may use the
6.33early childhood education scholarship to pay fees or charges associated with their eligible
6.34child's education at a rated program, according to subdivision 6.
7.1(b) To maintain an eligible child's early childhood education scholarship, a parent or
7.2legal guardian must begin to use the scholarship within six months following the receipt
7.3of the scholarship or October 1.
7.4(c) For the purpose of dividing the early childhood education scholarship between
7.5two or more rated programs, a parent or legal guardian may reduce the early childhood
7.6education scholarship value paid to an individual rated program. The commissioner must
7.7determine a method to allow a parent or legal guardian to reduce or divide an early
7.8childhood education scholarship.
7.9 Subd. 6. Quality standard; transition. (a) A rated program is eligible to receive
7.10early childhood education scholarships if the program has received a three- or four-star
7.11rating under Parent Aware under section 119C.02 and is located in a Parent Aware Plus
7.12region. An eligible program must agree to accept early childhood education scholarships
7.13to pay for services.
7.14(b) Notwithstanding paragraph (a), for the first two fiscal years after a Parent Aware
7.15region has become a Parent Aware Plus region, a rated program located in the Parent
7.16Aware Plus region is eligible to receive early childhood education scholarships to pay
7.17for its services if the program has received a one-star or better rating under the Parent
7.18Aware rating system. An eligible program must agree to accept early childhood education
7.19scholarships to pay for services. This paragraph does not apply to the prekindergarten
7.20exploratory projects located in the city of Saint Paul, Hennepin County, Nicollet County,
7.21and Blue Earth County.
7.22 Subd. 7. Redeeming a scholarship. (a) A rated program that has received an early
7.23childhood education scholarship on behalf of an eligible child to pay for services must
7.24remit the scholarship in a manner determined by the commissioner.
7.25(b) The commissioner must pay rated programs the value of the early childhood
7.26education scholarship within 30 days of receiving the scholarship from a program.
7.27(c) The commissioner must determine a method for paying rated programs if a parent
7.28or legal guardian has divided or reduced a scholarship under subdivision 5, paragraph (b).
7.29 Subd. 8. Earned income calculation. Scholarships paid to families must not be
7.30counted as earned income for the purposes of medical assistance, MinnesotaCare, MFIP,
7.31diversionary work program, child care assistance, or Head Start programs. Scholarships
7.32paid to families must not be considered child care funds for the purposes of the child care
7.33assistance program under chapter 119B.
7.34 Subd. 9. Agency coordination. The Department of Education, Department of
7.35Human Services, and the Department of Revenue must coordinate to maximize the
8.1efficiency of the early childhood education scholarships and maximize the number of
8.2children who can receive early childhood education scholarships.
8.3EFFECTIVE DATE.This section is effective the day following final enactment.
8.4 Sec. 7. Minnesota Statutes 2010, section 124D.15, subdivision 3, is amended to read:
8.5 Subd. 3. Program requirements. A school readiness program provider must:
8.6 (1) assess each child's cognitive skills with a comprehensive child assessment
8.7instrument when the child enters and again before the child leaves the program to inform
8.8program planning and parents and promote kindergarten readiness;
8.9 (2) provide comprehensive program content and intentional instructional practice
8.10aligned with the state early childhood learning guidelines and kindergarten standards and
8.11based on early childhood research and professional practice that is focused on children's
8.12cognitive, social, emotional, and physical skills and development and prepares children
8.13for the transition to kindergarten, including early literacy skills;
8.14(3) coordinate appropriate kindergarten transition with parents and kindergarten
8.15teachers;
8.16(4) arrange for early childhood screening and appropriate referral;
8.17
8.18
8.19
8.20programs;
8.21
8.22with the first staff required to be a teacher;
8.23(9) serve children a minimum of 12 hours per week; and
8.24
8.25assessment, and instruction.
8.26 Sec. 8. Minnesota Statutes 2010, section 124D.15, subdivision 3a, is amended to read:
8.27 Subd. 3a. Application and reporting requirements.
8.28program provider must submit a biennial plan for approval by the commissioner
8.29
8.30program requirements under subdivision 3. A school district by April 1 must submit
8.31the plan for approval by the commissioner in the form and manner prescribed by the
8.32commissioner.
8.33
8.34
9.1
9.2
9.3EFFECTIVE DATE.This section is effective for revenue in fiscal year 2012 and
9.4later.
9.5 Sec. 9. Minnesota Statutes 2010, section 270B.14, subdivision 1, is amended to read:
9.6 Subdivision 1. Disclosure to commissioner of human services. (a) On the request
9.7of the commissioner of human services, the commissioner shall disclose return information
9.8regarding taxes imposed by chapter 290, and claims for refunds under chapter 290A, to
9.9the extent provided in paragraph (b) and for the purposes set forth in paragraph (c).
9.10 (b) Data that may be disclosed are limited to data relating to the identity,
9.11whereabouts, employment, income, and property of a person owing or alleged to be owing
9.12an obligation of child support.
9.13 (c) The commissioner of human services may request data only for the purposes of
9.14carrying out the child support enforcement program and to assist in the location of parents
9.15who have, or appear to have, deserted their children. Data received may be used only
9.16as set forth in section
9.17 (d) The commissioner shall provide the records and information necessary to
9.18administer the supplemental housing allowance to the commissioner of human services.
9.19 (e) At the request of the commissioner of human services, the commissioner of
9.20revenue shall electronically match the Social Security numbers and names of participants
9.21in the telephone assistance plan operated under sections
9.22property tax refund filers, and determine whether each participant's household income is
9.23within the eligibility standards for the telephone assistance plan.
9.24 (f) The commissioner may provide records and information collected under sections
9.26Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law
9.27102-234. Upon the written agreement by the United States Department of Health and
9.28Human Services to maintain the confidentiality of the data, the commissioner may provide
9.29records and information collected under sections
9.30Medicare and Medicaid Services section of the United States Department of Health and
9.31Human Services for purposes of meeting federal reporting requirements.
9.32 (g) The commissioner may provide records and information to the commissioner of
9.33human services as necessary to administer the early refund of refundable tax credits.
10.1 (h) The commissioner may disclose information to the commissioner of human
10.2services necessary to verify income for eligibility and premium payment under the
10.3MinnesotaCare program, under section
10.4 (i) The commissioner may disclose information to the commissioner of human
10.5services necessary to verify whether applicants or recipients for the Minnesota family
10.6investment program, general assistance, food support, Minnesota supplemental aid
10.7program, and child care assistance have claimed refundable tax credits under chapter 290
10.8and the property tax refund under chapter 290A, and the amounts of the credits.
10.9 (j) The commissioner may disclose information to the commissioner of human
10.10services necessary to verify income for purposes of calculating parental contribution
10.11amounts under section
10.12(k) The commissioner shall provide information to the commissioner of human
10.13services necessary for approving payments of early childhood education scholarships
10.14under section 119C.04. This information is limited to what is provided by the
10.15commissioner according to section 119C.04, subdivision 3.
10.16 Sec. 10. Minnesota Statutes 2010, section 270B.14, is amended by adding a
10.17subdivision to read:
10.18 Subd. 20. Disclosure to Department of Education. The commissioner shall
10.19provide information to the commissioner of education necessary for approving payments of
10.20early childhood education scholarships under section 119C.04. This information is limited
10.21to what is provided by the commissioner according to section 119C.04, subdivision 3.
10.22 Sec. 11. SCHOLARSHIP NOTIFICATION.
10.23Notwithstanding Minnesota Statutes, section 119C.04, subdivision 3, paragraph
10.24(a), for scholarships in fiscal year 2012, the commissioner of revenue shall use best
10.25efforts to identify taxpayers who meet the eligibility criteria to receive an early childhood
10.26education scholarship under Minnesota Statutes, section 119C.04, subdivision 2, as early
10.27as is feasible. The commissioner of revenue must use federal adjusted gross income data
10.28from 2010 income tax returns processed by the commissioner of revenue to determine
10.29eligibility for fiscal year 2012 scholarship notifications. The commissioner of revenue
10.30shall provide to the commissioner a list of names and addresses of taxpayers who meet
10.31the eligibility criteria to receive an early childhood education scholarship as early as is
10.32feasible, but not later than August 15, 2011.
10.33 Sec. 12. PROGRAMMATIC STREAMLINING.
11.1By January 15, 2012, the commissioner of human services, in coordination with the
11.2commissioner of education, shall report to the legislative committees having jurisdiction
11.3over early childhood education and child care on a framework for incorporating the
11.4existing state programs that provide access to early learning and care programming into
11.5a single scholarship program that funds access to high-quality early learning and care
11.6programs for low-income children in Minnesota. The report must also identify barriers
11.7and impediments to applying federal child care assistance program funds in the form of a
11.8scholarship, under Minnesota Statutes, section 119C.04. As part of the framework, the
11.9commissioner must also take into consideration efforts for simplifying the application and
11.10management procedures for participating families and providers.
11.11 Sec. 13. CHILD CARE DEVELOPMENT FUNDS; PARENT AWARE.
11.12The commissioner of human services shall direct $7,000,000 in federal child care
11.13development funds used for grants under Minnesota Statutes, section 119B.21, in fiscal
11.14years 2012 and 2013 for the purpose of implementing Parent Aware under Minnesota
11.15Statutes, sections 119C.01 to 119C.03. Of this amount, $1,200,000 is appropriated to the
11.16commissioner of administration to administer the Parent Aware contract under Minnesota
11.17Statutes, section 119C.02, subdivision 1.
11.18 Sec. 14. WAIVER PROCESS RELATED TO CHILD CARE PROVIDER
11.19CHOICE.
11.20The commissioner of human services shall develop a simple waiver process related
11.21to Minnesota Statutes, section 119B.09, subdivision 5, that requires the parent or guardian
11.22to submit notice of a preferred alternative child arrangement.
11.23 Sec. 15. APPROPRIATIONS.
11.24 Subdivision 1. Department of Human Services. The sums indicated in this section
11.25are appropriated from the general fund to the Department of Human Services for the
11.26fiscal years designated.
11.27 Subd. 2. Early childhood education scholarships. For grants to early childhood
11.28education scholarships under Minnesota Statutes, section 119C.04:
| 11.29 |
$ |
8,000,000 |
..... |
2012 |
|
| 11.30 |
$ |
9,000,000 |
..... |
2013 |
11.32exploratory projects located in the city of St. Paul, Hennepin County, Nicollet County,
12.1and Blue Earth County. In fiscal year 2013 and later, the appropriation is for scholarship
12.2grants to fund eligible early childhood care and education programs located in Parent
12.3Aware Plus regions that have received early childhood education scholarships from
12.4eligible parents or legal guardians under Minnesota Statutes, section 119C.04, subdivision
12.52. The appropriation is available until expended. This appropriation is part of the base
12.6budget for subsequent fiscal years.
12.7For fiscal year 2012 only, if this appropriation is insufficient to provide early
12.8childhood education scholarships to all eligible children, the Department of Human
12.9Services shall make scholarships available on a first-come, first-served basis.
12.10 Sec. 16. REPEALER.
12.11Minnesota Statutes 2010, section 124D.16, subdivisions 2, 3, 5, 6, and 7, are
12.12repealed.
12.13EFFECTIVE DATE.This section is effective for revenue in fiscal year 2012 and
12.14later.
12.17 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
12.18read:
12.19 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
12.20trusts, there shall be added to federal taxable income:
12.21 (1)(i) interest income on obligations of any state other than Minnesota or a political
12.22or governmental subdivision, municipality, or governmental agency or instrumentality
12.23of any state other than Minnesota exempt from federal income taxes under the Internal
12.24Revenue Code or any other federal statute; and
12.25 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
12.26Code, except:
12.27(A) the portion of the exempt-interest dividends exempt from state taxation under
12.28the laws of the United States; and
12.29(B) the portion of the exempt-interest dividends derived from interest income
12.30on obligations of the state of Minnesota or its political or governmental subdivisions,
12.31municipalities, governmental agencies or instrumentalities, but only if the portion of the
12.32exempt-interest dividends from such Minnesota sources paid to all shareholders represents
12.3395 percent or more of the exempt-interest dividends, including any dividends exempt
13.1under subitem (A), that are paid by the regulated investment company as defined in section
13.2851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
13.3defined in section 851(g) of the Internal Revenue Code, making the payment; and
13.4 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
13.5government described in section 7871(c) of the Internal Revenue Code shall be treated as
13.6interest income on obligations of the state in which the tribe is located;
13.7 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
13.8or accrued within the taxable year under this chapter and the amount of taxes based on
13.9net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
13.10state or to any province or territory of Canada, to the extent allowed as a deduction
13.11under section 63(d) of the Internal Revenue Code, but the addition may not be more
13.12than the amount by which the itemized deductions as allowed under section 63(d) of
13.13the Internal Revenue Code exceeds the amount of the standard deduction as defined in
13.14section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
13.15sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
13.16this paragraph, the disallowance of itemized deductions under section 68 of the Internal
13.17Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
13.18the last itemized deductions disallowed;
13.19 (3) the capital gain amount of a lump-sum distribution to which the special tax under
13.20section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
13.21 (4) the amount of income taxes paid or accrued within the taxable year under this
13.22chapter and taxes based on net income paid to any other state or any province or territory
13.23of Canada, to the extent allowed as a deduction in determining federal adjusted gross
13.24income. For the purpose of this paragraph, income taxes do not include the taxes imposed
13.25by sections
13.26 (5) the amount of expense, interest, or taxes disallowed pursuant to section
13.28allowed under subdivision 19b, clause (1);
13.29 (6) the amount of a partner's pro rata share of net income which does not flow
13.30through to the partner because the partnership elected to pay the tax on the income under
13.31section 6242(a)(2) of the Internal Revenue Code;
13.32 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
13.33Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
13.34in the taxable year generates a deduction for depreciation under section 168(k) and the
13.35activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
13.36the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
14.1limited to excess of the depreciation claimed by the activity under section 168(k) over the
14.2amount of the loss from the activity that is not allowed in the taxable year. In succeeding
14.3taxable years when the losses not allowed in the taxable year are allowed, the depreciation
14.4under section 168(k) is allowed;
14.5 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
14.6Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
14.7Revenue Code of 1986, as amended through December 31, 2003;
14.8 (9) to the extent deducted in computing federal taxable income, the amount of the
14.9deduction allowable under section 199 of the Internal Revenue Code;
14.10 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
14.11federal subsidies for prescription drug plans;
14.12(11) the amount of expenses disallowed under section 290.10, subdivision 2;
14.13 (12) the amount deducted for qualified tuition and related expenses under section
14.14222 of the Internal Revenue Code, to the extent deducted from gross income;
14.15 (13) the amount deducted for certain expenses of elementary and secondary school
14.16teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
14.17from gross income;
14.18(14) the additional standard deduction for property taxes payable that is allowable
14.19under section 63(c)(1)(C) of the Internal Revenue Code;
14.20(15) the additional standard deduction for qualified motor vehicle sales taxes
14.21allowable under section 63(c)(1)(E) of the Internal Revenue Code;
14.22(16) discharge of indebtedness income resulting from reacquisition of business
14.23indebtedness and deferred under section 108(i) of the Internal Revenue Code;
14.24(17) the amount of unemployment compensation exempt from tax under section
14.2585(c) of the Internal Revenue Code
14.26(18) the amount of the deduction under section 170 of the Internal Revenue Code
14.27that represents contributions that qualify for an early childhood education access to quality
14.28tax credit under section 290.0694; and
14.29(19) the amount of the deduction under section 170 of the Internal Revenue
14.30Code that represents contributions that qualify for an early childhood education quality
14.31improvement credit under section 290.0695.
14.32EFFECTIVE DATE.This section is effective for taxable years beginning after
14.33December 31, 2010.
14.34 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
15.1 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
15.2there shall be added to federal taxable income:
15.3 (1) the amount of any deduction taken for federal income tax purposes for income,
15.4excise, or franchise taxes based on net income or related minimum taxes, including but not
15.5limited to the tax imposed under section
15.6another state, a political subdivision of another state, the District of Columbia, or any
15.7foreign country or possession of the United States;
15.8 (2) interest not subject to federal tax upon obligations of: the United States, its
15.9possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
15.10state, any of its political or governmental subdivisions, any of its municipalities, or any
15.11of its governmental agencies or instrumentalities; the District of Columbia; or Indian
15.12tribal governments;
15.13 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
15.14Revenue Code;
15.15 (4) the amount of any net operating loss deduction taken for federal income tax
15.16purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
15.17deduction under section 810 of the Internal Revenue Code;
15.18 (5) the amount of any special deductions taken for federal income tax purposes
15.19under sections 241 to 247 and 965 of the Internal Revenue Code;
15.20 (6) losses from the business of mining, as defined in section
15.21clause (a), that are not subject to Minnesota income tax;
15.22 (7) the amount of any capital losses deducted for federal income tax purposes under
15.23sections 1211 and 1212 of the Internal Revenue Code;
15.24 (8) the exempt foreign trade income of a foreign sales corporation under sections
15.25921(a) and 291 of the Internal Revenue Code;
15.26 (9) the amount of percentage depletion deducted under sections 611 through 614 and
15.27291 of the Internal Revenue Code;
15.28 (10) for certified pollution control facilities placed in service in a taxable year
15.29beginning before December 31, 1986, and for which amortization deductions were elected
15.30under section 169 of the Internal Revenue Code of 1954, as amended through December
15.3131, 1985, the amount of the amortization deduction allowed in computing federal taxable
15.32income for those facilities;
15.33 (11) the amount of any deemed dividend from a foreign operating corporation
15.34determined pursuant to section
15.35shall be reduced by the amount of the addition to income required by clauses (20), (21),
15.36(22), and (23);
16.1 (12) the amount of a partner's pro rata share of net income which does not flow
16.2through to the partner because the partnership elected to pay the tax on the income under
16.3section 6242(a)(2) of the Internal Revenue Code;
16.4 (13) the amount of net income excluded under section 114 of the Internal Revenue
16.5Code;
16.6 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
16.7Revenue Code, for the taxable year when subpart F income is calculated without regard to
16.8the provisions of Division C, title III, section 303(b) of Public Law 110-343;
16.9 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
16.10and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
16.11has an activity that in the taxable year generates a deduction for depreciation under
16.12section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
16.13that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
16.14under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
16.15depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
16.16amount of the loss from the activity that is not allowed in the taxable year. In succeeding
16.17taxable years when the losses not allowed in the taxable year are allowed, the depreciation
16.18under section 168(k)(1)(A) and (k)(4)(A) is allowed;
16.19 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
16.20Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
16.21Revenue Code of 1986, as amended through December 31, 2003;
16.22 (17) to the extent deducted in computing federal taxable income, the amount of the
16.23deduction allowable under section 199 of the Internal Revenue Code;
16.24 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
16.25federal subsidies for prescription drug plans;
16.26 (19) the amount of expenses disallowed under section
16.27 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
16.28accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
16.29of a corporation that is a member of the taxpayer's unitary business group that qualifies
16.30as a foreign operating corporation. For purposes of this clause, intangible expenses and
16.31costs include:
16.32 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
16.33use, maintenance or management, ownership, sale, exchange, or any other disposition of
16.34intangible property;
16.35 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
16.36transactions;
17.1 (iii) royalty, patent, technical, and copyright fees;
17.2 (iv) licensing fees; and
17.3 (v) other similar expenses and costs.
17.4For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
17.5applications, trade names, trademarks, service marks, copyrights, mask works, trade
17.6secrets, and similar types of intangible assets.
17.7This clause does not apply to any item of interest or intangible expenses or costs paid,
17.8accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
17.9to such item of income to the extent that the income to the foreign operating corporation
17.10is income from sources without the United States as defined in subtitle A, chapter 1,
17.11subchapter N, part 1, of the Internal Revenue Code;
17.12 (21) except as already included in the taxpayer's taxable income pursuant to clause
17.13(20), any interest income and income generated from intangible property received or
17.14accrued by a foreign operating corporation that is a member of the taxpayer's unitary
17.15group. For purposes of this clause, income generated from intangible property includes:
17.16 (i) income related to the direct or indirect acquisition, use, maintenance or
17.17management, ownership, sale, exchange, or any other disposition of intangible property;
17.18 (ii) income from factoring transactions or discounting transactions;
17.19 (iii) royalty, patent, technical, and copyright fees;
17.20 (iv) licensing fees; and
17.21 (v) other similar income.
17.22For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
17.23applications, trade names, trademarks, service marks, copyrights, mask works, trade
17.24secrets, and similar types of intangible assets.
17.25This clause does not apply to any item of interest or intangible income received or accrued
17.26by a foreign operating corporation with respect to such item of income to the extent that
17.27the income is income from sources without the United States as defined in subtitle A,
17.28chapter 1, subchapter N, part 1, of the Internal Revenue Code;
17.29 (22) the dividends attributable to the income of a foreign operating corporation that
17.30is a member of the taxpayer's unitary group in an amount that is equal to the dividends
17.31paid deduction of a real estate investment trust under section 561(a) of the Internal
17.32Revenue Code for amounts paid or accrued by the real estate investment trust to the
17.33foreign operating corporation;
18.1 (23) the income of a foreign operating corporation that is a member of the taxpayer's
18.2unitary group in an amount that is equal to gains derived from the sale of real or personal
18.3property located in the United States;
18.4 (24) the additional amount allowed as a deduction for donation of computer
18.5technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
18.6extent deducted from taxable income;
18.7(25) discharge of indebtedness income resulting from reacquisition of business
18.8indebtedness and deferred under section 108(i) of the Internal Revenue Code
18.9(26) the amount of the deduction under section 170 of the Internal Revenue Code
18.10that represents contributions that qualify for an early childhood education access to quality
18.11tax credit under section 290.0694; and
18.12(27) the amount of the deduction under section 170 of the Internal Revenue
18.13Code that represents contributions that qualify for an early childhood education quality
18.14improvement credit under section 290.0695.
18.15EFFECTIVE DATE.This section is effective for taxable years beginning after
18.16December 31, 2010.
18.17 Sec. 3. Minnesota Statutes 2010, section 290.0674, subdivision 1, is amended to read:
18.18 Subdivision 1. Credit allowed. An individual is allowed a credit against the tax
18.19imposed by this chapter in an amount equal to
18.2058 percent in taxable years beginning after December 31, 2011, of the amount paid for
18.21education-related expenses for a qualifying child in kindergarten through grade 12. For
18.22purposes of this section, "education-related expenses" means:
18.23(1) fees or tuition for instruction by an instructor under section
18.2410
18.25Association, and who is not a lineal ancestor or sibling of the dependent for instruction
18.26outside the regular school day or school year, including tutoring, driver's education
18.27offered as part of school curriculum, regardless of whether it is taken from a public or
18.28private entity or summer camps, in grade or age appropriate curricula that supplement
18.29curricula and instruction available during the regular school year, that assists a dependent
18.30to improve knowledge of core curriculum areas or to expand knowledge and skills under
18.31the required academic standards under section
18.32standard under section
18.33teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
18.34tenets, doctrines, or worship;
19.1(2) expenses for textbooks, including books and other instructional materials and
19.2equipment purchased or leased for use in elementary and secondary schools in teaching
19.3only those subjects legally and commonly taught in public elementary and secondary
19.4schools in this state. "Textbooks" does not include instructional books and materials
19.5used in the teaching of religious tenets, doctrines, or worship, the purpose of which is
19.6to instill such tenets, doctrines, or worship, nor does it include books or materials for
19.7extracurricular activities including sporting events, musical or dramatic events, speech
19.8activities, driver's education, or similar programs;
19.9(3) a maximum expense of $200 per family for personal computer hardware,
19.10excluding single purpose processors, and educational software that assists a dependent to
19.11improve knowledge of core curriculum areas or to expand knowledge and skills under
19.12the required academic standards under section
19.13standard under section
19.14taxpayer's home and not used in a trade or business regardless of whether the computer is
19.15required by the dependent's school; and
19.16(4) the amount paid to others for transportation of a qualifying child attending an
19.17elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
19.18or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
19.19attendance laws, which is not operated for profit, and which adheres to the provisions of
19.20the Civil Rights Act of 1964 and chapter 363A.
19.21For purposes of this section, "qualifying child" has the meaning given in section
19.2232(c)(3) of the Internal Revenue Code.
19.23EFFECTIVE DATE.This section is effective for taxable years beginning after
19.24December 31, 2010.
19.25 Sec. 4. [290.0693] EARLY CHILDHOOD TRAIN AND RETAIN CREDIT.
19.26 Subdivision 1. Statement of intent. The purpose of the early childhood train
19.27and retain credit is to encourage and reward early childhood education professionals
19.28for furthering their education and providing continuity of instruction to Minnesota's
19.29children. The success of the credit must be measured by comparing the number of early
19.30childhood education professionals claiming the credit at the various point levels in the
19.31first year the credit is allowed with the number claiming the credit at the various point
19.32levels in following years.
19.33 Subd. 2. Credit allowed. (a) An individual who is an eligible early childhood
19.34education professional is allowed a credit against the tax imposed by this chapter as
19.35follows:
| 20.1 |
Early education experience points |
Credit amount |
| 20.2 |
1 to 2 |
$500 |
| 20.3 |
3 to 5 |
$1,000 |
| 20.4 |
6 to 7 |
$1,500 |
| 20.5 |
8 to 10 |
$2,500 |
| 20.6 |
11 to 12 |
$3,000 |
20.8per taxable year. For taxable years beginning after December 31, 2011, the maximum
20.9aggregate credits must not exceed $1,000,000 per taxable year.
20.10(c) For a nonresident or part-year resident, the credit must be allocated based on the
20.11percentage calculated under section 290.06, subdivision 2c, paragraph (e).
20.12 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
20.13the meanings given.
20.14(b) "Early education experience points" means the eligible early childhood education
20.15professional's points registered with the Minnesota Center for Professional Development
20.16Registry.
20.17(c) "Eligible early childhood education professional" means an individual who
20.18(1) is registered with the Minnesota Center for Professional Development Registry;
20.19(2) is employed at a quality program;
20.20(3) works directly with children who have not yet enrolled in kindergarten or first
20.21grade; and
20.22(4) has been employed at the same program for at least 20 hours per week for at least
20.2312 months during the tax year.
20.24(d) "Quality program" means a program rated using the quality rating and
20.25improvement system tool established by the guidelines under chapter 119C.
20.26 Subd. 4. Application for credit certificates. For taxable years beginning after
20.27December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
20.28train and retain tax credit certificate. The credit certificates under this section must be
20.29made available on a first-come, first-served basis until the maximum statewide credit
20.30amount has been reached. The commissioner must not issue a tax credit certificate for an
20.31amount greater than the limits under subdivision 2.
20.32 Subd. 5. Credit refundable. If the amount of credit an individual is eligible to
20.33receive under this section exceeds the claimant's tax liability under this chapter, the
20.34commissioner shall refund the excess to the claimant.
20.35 Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this
20.36section is appropriated to the commissioner from the general fund.
21.1EFFECTIVE DATE.This section is effective for taxable years beginning after
21.2December 31, 2010.
21.3 Sec. 5. [290.0694] EARLY CHILDHOOD EDUCATION ACCESS TO QUALITY
21.4TAX CREDIT.
21.5 Subdivision 1. Statement of intent. The purpose of the early childhood education
21.6access to quality tax credit is to increase the amount of private contributions available to
21.7provide low-income children in Minnesota with access to high quality early childhood
21.8education programs. The success of the credit must be measured by determining the
21.9total amount of private contributions that are made to provide early childhood education
21.10scholarships and are eligible for the credit under this section.
21.11 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
21.12the meanings given.
21.13(b) "Early childhood education access to quality donation" means a donation to a
21.14qualified early childhood education program.
21.15(c) "Qualified early childhood education program" means a program operated
21.16in Minnesota that:
21.17(1) has been rated using the quality rating and improvement system tool established
21.18by the guidelines under chapter 119C; and
21.19(2) accepts early childhood education access to quality donations under this section
21.20as payment of tuition for a qualified student who is enrolled in the program.
21.21(d) "Qualified student" means a student who:
21.22(1) has not attained the age of seven years and become subject to the requirements of
21.23section 120A.22, subdivision 5;
21.24(2) has reached age three or four by September 1;
21.25(3) is a Minnesota resident; and
21.26(4) is a member of a household whose total annual income during the year, without
21.27consideration of the benefits under this program, is equal to or less than 47 percent of the
21.28state median income in the current calendar year.
21.29 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
21.30credit against the tax due under this chapter equal to 75 percent of the amount donated to
21.31a qualified early childhood education program during the taxable year. For taxable year
21.322011, the maximum aggregate credits must not exceed $500,000 per taxable year. For
21.33taxable years beginning after December 31, 2011, the maximum aggregate credits must
21.34not exceed $1,000,000 per taxable year.
22.1(b) A taxpayer must provide a copy of the receipt provided by the qualified early
22.2childhood education program when claiming the credit for the donation.
22.3 Subd. 4. Application for credit certificates. For taxable years beginning after
22.4December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
22.5education access to quality tax credit certificate. The credit certificates under this section
22.6must be made available on a first-come, first-served basis until the maximum statewide
22.7credit amount has been reached. The commissioner must not issue a tax credit certificate
22.8for an amount greater than the limits under subdivision 3.
22.9 Subd. 5. Responsibilities of qualified early childhood education programs. (a)
22.10Each qualified early childhood education program that receives donations directly from
22.11taxpayers under this section must:
22.12(1) notify the commissioner of its intent to participate in this program;
22.13(2) demonstrate that it meets the definition of a qualified early childhood education
22.14program in subdivision 2, paragraph (c);
22.15(3) provide a receipt or verification on a form approved by the commissioner to
22.16taxpayers for donations;
22.17(4) conduct criminal background checks on all of its employees and board members
22.18and exclude from employment or governance any individuals that might reasonably pose a
22.19risk to the appropriate use of contributed funds;
22.20(5) demonstrate its financial accountability by submitting a financial information
22.21report for the organization that complies with uniform financial accounting standards
22.22established by the commissioner;
22.23(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
22.24more during the school year, by filing financial information with the commissioner prior
22.25to September 1 of each year that demonstrates the financial viability of the qualified
22.26early childhood education program; and
22.27(7) use amounts received as donations to provide scholarships to qualified students
22.28within one year of the date of receiving the donation.
22.29(b) A qualified early childhood education program that receives donations directly
22.30from taxpayers under this program must report to the commissioner by June 1 of each year
22.31the following information regarding donations received and scholarships awarded in the
22.32previous calendar year:
22.33(1) the total number and total dollar amount of donations from taxpayers received
22.34during the previous calendar year; and
22.35(2) the total number and total dollar amount of scholarships awarded to qualified
22.36students during the previous calendar year.
23.1(c) If the commissioner decides to bar a qualified early childhood education program
23.2from the program for failure to comply with the requirements in paragraph (a), the
23.3qualified early childhood education program must notify taxpayers who have donated to
23.4the qualified early childhood education program in writing within 30 days.
23.5 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
23.6standardized format for a receipt to be issued by a qualified early childhood education
23.7program to a taxpayer to indicate the value of a donation received.
23.8(b) The commissioner must prescribe a standardized format for qualified early
23.9childhood education programs to report the information required under subdivision 5.
23.10(c) The commissioner must post on the department's Web site the names and
23.11addresses of qualified early childhood education programs and regularly update the names
23.12and addresses of any qualified early childhood education programs that have been barred
23.13from participating in the program.
23.14(d) The commissioner must conduct either a financial review or audit of a qualified
23.15early childhood education program upon finding evidence of fraud or intentional
23.16misreporting.
23.17(e) The commissioner must bar a qualified early childhood education program from
23.18participating in the program if the commissioner establishes that the qualified early
23.19childhood education program has intentionally and substantially failed to comply with
23.20the requirements in subdivision 5. If the commissioner determines that a qualified early
23.21childhood education program should be barred from the program, the commissioner
23.22must notify the qualified early childhood education program within 60 days of that
23.23determination.
23.24EFFECTIVE DATE.This section is effective for taxable years beginning after
23.25December 31, 2010.
23.26 Sec. 6. [290.0695] EARLY CHILDHOOD EDUCATION QUALITY
23.27IMPROVEMENT CREDIT.
23.28 Subdivision 1. Statement of intent. The purpose of the early childhood education
23.29quality improvement credit is to encourage contributions that result in improvements to
23.30the quality of programming provided by eligible early childhood education providers.
23.31The success of the credit must be measured by determining amounts spent as a result of
23.32contributions qualifying for the credit to improve the quality of programming provided by
23.33eligible early childhood education providers.
23.34 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
23.35the meanings given.
24.1(b) "Eligible early childhood education provider" means a provider who operates a
24.2program in an area in Minnesota in which the quality rating and improvement system tool
24.3established by the guidelines under chapter 119C is in use for the taxable year.
24.4(c) "Resource and referral agency" means an agency that is designated by the
24.5Department of Human Services to provide child care resource and referral services.
24.6 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
24.7credit against the tax due under this chapter equal to 75 percent of the amount donated to
24.8an eligible early childhood education provider or a resource and referral agency during
24.9the taxable year. For a taxpayer to be eligible for the credit, donations to eligible early
24.10childhood education providers must be used to improve program quality in ways that
24.11are consistent with the standards set by the quality rating and improvement system, and
24.12donations to resource and referral agencies must be used to provide early childhood
24.13education providers with direct quality improvement services that are consistent with the
24.14standards set by the quality rating and improvement system.
24.15(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
24.16per taxable year. For taxable years beginning after December 31, 2011, the maximum
24.17aggregate credits must not exceed $1,000,000 per taxable year.
24.18(c) A taxpayer must provide a copy of the receipt provided by the eligible early
24.19childhood education provider or resource and referral agency when claiming the credit for
24.20the donation.
24.21 Subd. 4. Application for credit certificates. For taxable years beginning
24.22after December 31, 2010, and before January 1, 2013, a taxpayer must apply to the
24.23commissioner for an early childhood education quality improvement tax credit certificate.
24.24The credit certificates under this section must be made available on a first-come,
24.25first-served basis until the maximum statewide credit amount has been reached. The
24.26commissioner must not issue a tax credit certificate for an amount greater than the limits
24.27under subdivision 3.
24.28 Subd. 5. Responsibilities of eligible early childhood education providers and
24.29resource and referral agencies. (a) Each eligible early childhood education provider
24.30and resource and referral agency that receives contributions directly from taxpayers
24.31under this section must:
24.32(1) notify the commissioner of its intent to participate in this program;
24.33(2) demonstrate to the commissioner that it meets the requirements of this section;
24.34(3) provide a receipt or verification on a form approved by the commissioner to
24.35taxpayers for contributions made to the eligible early childhood education provider
24.36or resource and referral agency;
25.1(4) conduct criminal background checks on all of its employees and board members
25.2and exclude from employment or governance any individuals that might reasonably pose a
25.3risk to the appropriate use of contributed funds;
25.4(5) demonstrate its financial accountability by submitting a financial information
25.5report for the organization that complies with uniform financial accounting standards
25.6established by the commissioner;
25.7(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
25.8more during the school year, by filing financial information with the commissioner prior
25.9to September 1 of each year that demonstrates the financial viability of the qualified
25.10foundation; and
25.11(7) use amounts received as donations to improve program quality, in the case of
25.12eligible early childhood education providers, or to provide quality improvement services,
25.13in the case of resource and referral agencies, within one year of the date of receiving
25.14the donation.
25.15(b) If the commissioner decides to bar an eligible early childhood education
25.16provider or a resource and referral agency from the program for failure to comply with
25.17the requirements in paragraph (a), the provider or agency must notify taxpayers who
25.18have donated to the eligible early childhood provider or resource and referral agency in
25.19writing within 30 days.
25.20 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
25.21standardized format for a receipt to be issued by an eligible early childhood education
25.22provider or a resource and referral agency to a taxpayer to indicate the value of a
25.23contribution received.
25.24(b) The commissioner must prescribe a standardized format for eligible early
25.25childhood education providers or resource and referral agencies to report the information
25.26required under subdivision 5.
25.27(c) The commissioner must post on the department's Web site the names and
25.28addresses of eligible early childhood education providers and resource and referral
25.29agencies and regularly update the names and addresses of any eligible early childhood
25.30education providers or resource and referral agencies that have been barred from
25.31participating in the program.
25.32(d) The commissioner must conduct either a financial review or audit of an eligible
25.33early childhood education provider or a resource and referral agency upon finding
25.34evidence of fraud or intentional misreporting.
25.35(e) The commissioner must bar an eligible early childhood education provider or
25.36a resource and referral agency from participating in the program if the commissioner
26.1establishes that the provider or agency has intentionally and substantially failed to comply
26.2with the requirements in subdivision 5. If the commissioner determines that a provider or
26.3agency should be barred from the program, the commissioner must notify the provider or
26.4agency within 60 days of that determination.
26.5EFFECTIVE DATE.This section is effective for taxable years beginning after
26.6December 31, 2010.
