Bill Text: MN SF331 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Child care scholarship finance system creation; early childhood workers training and retaining tax credit; parent aware quality rating system; parent aware plus regions scholarships; early childhood education tax credits; appropriation
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2011-03-17 - Author added Daley [SF331 Detail]
Download: Minnesota-2011-SF331-Engrossed.html
1.2relating to child care; creating a child care scholarship finance system; providing
1.3tax credits for training and retaining early education workers; improving quality
1.4early childhood education programming; appropriating money;amending
1.5Minnesota Statutes 2010, sections 119B.09, subdivision 5; 119B.13, subdivision
1.63a; 290.01, subdivisions 19a, 19c; proposing coding for new law in Minnesota
1.7Statutes, chapter 290; proposing coding for new law as Minnesota Statutes,
1.8chapter 119C.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.12 Section 1. Minnesota Statutes 2010, section 119B.09, subdivision 5, is amended to read:
1.13 Subd. 5. Provider choice. Parents who reside in a Parent Aware Plus region as
1.14defined in section 119C.03, subdivision 5, must choose a rated provider under section
1.15119C.01, subdivision 7, for their three- and four-year-old children, unless a waiver is
1.16granted by the commissioner. Parents who do not reside in a Parent Aware Plus region
1.17may choose child care providers as defined under section119B.011, subdivision 19 , that
1.18best meet the needs of their family. Counties shall make resources available to parents
1.19in choosing quality child care services. Counties may require a parent to sign a release
1.20stating their knowledge and responsibilities in choosing a legal provider described under
1.21section119B.011, subdivision 19 . When a county knows that a particular provider is
1.22unsafe, or that the circumstances of the child care arrangement chosen by the parent are
1.23unsafe, the county may deny a child care subsidy. A county may not restrict access to a
1.24general 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 licensed center-based
2.25child care program under chapter 245A, or licensed family child care program under
2.26chapter 245A.
2.27 Subd. 4. Parent Aware. "Parent Aware" means the voluntary evidence-based quality
2.28rating and improvement system for early childhood education under section 119C.02.
2.29 Subd. 5. Parent Aware Plus regions. "Parent Aware Plus regions" means Parent
2.30Aware regions as designated by the commissioner under section 119C.03, subdivision 5.
2.31 Subd. 6. Parent Aware region. "Parent Aware region" means a geographic area
2.32approved by the commissioner under section 119C.03.
2.33 Subd. 7. Rated program. "Rated program" means an eligible program in a Parent
2.34Aware region that receives one, two, three, or four stars.
2.35EFFECTIVE DATE.This section is effective the day following final enactment.
3.1 Sec. 4. [119C.02] PARENT AWARE.
3.2 Subdivision 1. Department of Human Services; request for proposal. The
3.3Department of Human Services must develop a request for proposal for an organization
3.4to: (1) develop the methods used to verify, assess, and monitor program compliance
3.5with the standards, including review of and action on applications; (2) conduct on-site
3.6assessments, if applicable; (3) develop and maintain a data quality management system for
3.7compiling all data used to calculate program ratings and related procedures for ensuring
3.8data quality and integrity; and (4) coordinate a system for sharing ratings and related
3.9quality information with the public. The commissioner must consult with the Minnesota
3.10Early Learning Foundation to design the request for proposal. Eligible responders include
3.11units of state and local governments, nonprofit organizations, research organizations, and
3.12educational institutions. The commissioner shall issue a request for proposal by July 30,
3.132011. The commissioner shall issue a contract by October 31, 2011. The contract is valid
3.14for three years. By July 30, 2014, and every three years thereafter, the commissioner
3.15must consult with the Minnesota Early Learning Foundation or its designated successor
3.16organization to review and update the request for proposal. The contract must be issued by
3.17October 31 of that year and every three years thereafter. The Minnesota Early Learning
3.18Foundation and its designated successor organization are consultants to the commissioner
3.19on the request for proposal and are not eligible responders.
3.20 Subd. 2. Criteria; measure. (a) Parent Aware must use quality ratings shown to
3.21be linked to improving children's school readiness outcomes and must evaluate, at a
3.22minimum, how programs perform in the following areas:
3.23(1) family partnerships;
3.24(2) tracking learning;
3.25(3) teacher training and education; and
3.26(4) teaching materials and strategies.
3.27(b) The commissioner, in coordination with the commissioner of education, must
3.28establish and regularly update the standards and indicators that determine program quality
3.29for the quality rating system. In fiscal year 2012 and later, the commissioner must use
3.30the Minnesota quality rating system tool in use in fiscal year 2011, the results of the
3.31evaluations of that quality rating system, and the recommendations in the report required
3.32under section 124D.142.
3.33(c) Ratings must be indicated using stars. Four stars is the best possible rating. No
3.34stars means the program has not been rated.
3.35 Subd. 3. Rated programs. At least twice each year, beginning June 30, 2012, the
3.36contract entity awarded the contract in subdivision 1 must submit a list of rated programs
4.1to the commissioner. The list of rated programs serves as the commissioner's rating. The
4.2commissioner's decision is final.
4.3 Subd. 4. Evaluation. The commissioner shall contract with an independent private
4.4organization to use private funds to evaluate the Parent Aware quality rating system if
4.5sufficient private funding is available. The evaluation must incorporate rating levels and
4.6outcome-based data reflecting child progress toward school readiness. The evaluation
4.7must also include recommendations on continued monitoring and improvement of the
4.8correlation between rating levels and outcome-based child progress toward school
4.9readiness. The commissioner shall make available to the independent private organization
4.10any data requested by the organization consistent with chapter 13 and at no cost to the
4.11organization.
4.12 Sec. 5. [119C.03] SELECTION PROCESS FOR PARENT AWARE REGIONS.
4.13 Subdivision 1. Designation of Parent Aware regions. For the purposes of this
4.14section, Parent Aware regions are the economic development regions as designated by the
4.15governor under section 462.385.
4.16 Subd. 2. Application process. The commissioner shall develop an application
4.17process to select new Parent Aware regions using the following criteria:
4.18(1) the percentage of preschool-aged children who are from families with income
4.19equal to or less than 47 percent of the state median income;
4.20(2) the region's demonstrated efforts to use existing public and private resources to
4.21improve program quality in alignment with Parent Aware quality standards;
4.22(3) the level of community support, especially support of the counties and local
4.23representatives of child care centers and licensed family child care homes; and
4.24(4) the demonstration of quality improvement support from local nonprofits and
4.25foundations.
4.26 Subd. 3. Application preparation. A resource and referral organization under
4.27section 119B.19 must prepare and submit the application for their region for approval
4.28under subdivision 4 to become a Parent Aware region in coordination with local partners.
4.29 Subd. 4. Region approval. The commissioner shall develop an application process
4.30by December 1, 2011. A region may apply beginning February 1, 2012, to become a
4.31Parent Aware region. Economic development regions 9, 10, and 11 are automatically
4.32approved as Parent Aware regions beginning in fiscal year 2012. The commissioner shall
4.33approve the first Parent Aware region by June 30, 2012, and shall approve all regions as
4.34Parent Aware regions by June 30, 2015.
5.1 Subd. 5. Parent Aware Plus regions; commissioner approval. The commissioner
5.2must designate a Parent Aware region as a Parent Aware Plus region when there is a
5.3sufficient number of programs rated for each program type. The commissioner must
5.4also consider, at a minimum, the following criteria when designating Parent Aware Plus
5.5regions: (1) the distribution of rated programs by eligible program type within a region;
5.6(2) the amount of funding available for scholarships in the region; and (3) the distribution
5.7of the population of low-income preschool-aged children in the region. The commissioner
5.8must also designate Hennepin County, the city of St. Paul, Blue Earth County, and
5.9Nicollet County as Parent Aware Plus regions beginning in fiscal year 2012 and allow
5.10those regions to continue using the existing model of the Parent Aware quality rating
5.11system in fiscal year 2012. For the purposes of provider choice under section 119B.09,
5.12subdivision 5, Parent Aware Plus regions would not be implemented prior to January 1 of
5.13the year in which the region is approved as a Parent Aware Plus region.
5.14 Sec. 6. [119C.04] EARLY CHILDHOOD EDUCATION SCHOLARSHIPS.
5.15 Subdivision 1. Early childhood education scholarship locations. In fiscal year
5.162012 and later, the commissioner shall make scholarships available in the Parent Aware
5.17Plus regions. In fiscal year 2013 and later, the commissioner shall establish additional
5.18locations where early childhood education scholarships may be used to pay for services
5.19provided by rated programs. The additional early childhood education scholarship
5.20locations must be located in Parent Aware Plus regions. The commissioner may assign
5.21duties as described in subdivisions 5 and 7 to approved Parent Aware Plus regions,
5.22as appropriate.
5.23 Subd. 2. Scholarship eligibility. (a) All children whose parents or legal guardians
5.24meet the eligibility requirements of paragraph (b) are eligible to receive early childhood
5.25education scholarships under this section.
5.26(b) A parent or legal guardian is eligible for an early childhood education scholarship
5.27if the parent or legal guardian has a child three or four years of age on September 1,
5.28beginning in calendar year 2011; lives in one of the early childhood education scholarship
5.29locations according to subdivision 1; and has income equal to or less than 47 percent of
5.30the state median income in the current calendar year.
5.31 Subd. 3. Eligibility determination. (a) The commissioner of human services shall
5.32develop a simple application process that families may use to apply for early childhood
5.33education scholarships based on the criteria in subdivision 2.
6.1(b) For the purpose of establishing eligibility for the early childhood education
6.2scholarship, the commissioners of education and human services shall accept a
6.3self-declaration from parents or legal guardians.
6.4(c) The commissioner shall also accept children identified in other public funding
6.5eligibility processes, including the Free and Reduced-Price Lunch Program, National
6.6School Lunch Act, United States Code, title 42, section 1751, part 210; Head Start under
6.7federal Improving Head Start for School Readiness Act of 2007; Minnesota family
6.8investment program under chapter 256J; and child care assistance programs under chapter
6.9119B.
6.10 Subd. 4. Scholarship value. For fiscal year 2012 and later, the early childhood
6.11education scholarship is equal to $4,000 each year for each eligible child according to
6.12subdivision 2.
6.13 Subd. 5. Scholarship use. (a) The early childhood education scholarship must be
6.14used during the 13 months after July 1, 2011, and each year thereafter by the parent or
6.15legal guardian on behalf of their child for services designed to promote school readiness at
6.16a rated program in a Parent Aware Plus region. A parent or legal guardian may use the
6.17early childhood education scholarship to pay fees or charges associated with their eligible
6.18child's education at a rated program, according to subdivision 6.
6.19(b) To maintain an eligible child's early childhood education scholarship, a parent or
6.20legal guardian must begin to use the scholarship within six months following the receipt
6.21of the scholarship or October 1.
6.22(c) For the purpose of dividing the early childhood education scholarship between
6.23two or more rated programs, a parent or legal guardian may reduce the early childhood
6.24education scholarship value paid to an individual rated program. The commissioner must
6.25determine a method to allow a parent or legal guardian to reduce or divide an early
6.26childhood education scholarship.
6.27 Subd. 6. Quality standard; transition. (a) A rated program is eligible to receive
6.28early childhood education scholarships if the program has received a three- or four-star
6.29rating under Parent Aware under section 119C.02 and is located in a Parent Aware Plus
6.30region. An eligible program must agree to accept early childhood education scholarships
6.31to pay for services.
6.32(b) Notwithstanding paragraph (a), for the first two fiscal years after a Parent
6.33Aware region has become a Parent Aware Plus region, a rated program located in the
6.34Parent Aware Plus region is eligible to receive early childhood education scholarships
6.35to pay for its services if the program has received a one-star or better rating under the
6.36Parent Aware rating system. An eligible program must agree to accept early childhood
7.1education scholarships to pay for services. This paragraph does not apply to the Parent
7.2Aware Plus regions located in the city of Saint Paul, Hennepin County, Nicollet County,
7.3and Blue Earth County.
7.4 Subd. 7. Redeeming a scholarship. (a) A rated program that has received an early
7.5childhood education scholarship on behalf of an eligible child to pay for services must
7.6remit the scholarship in a manner determined by the commissioner.
7.7(b) The commissioner must pay rated programs the value of the early childhood
7.8education scholarship within 30 days of receiving the scholarship from a program.
7.9(c) The commissioner must determine a method for paying rated programs if a parent
7.10or legal guardian has divided or reduced a scholarship under subdivision 5, paragraph (c).
7.11 Subd. 8. Earned income calculation. Scholarships paid to providers on behalf
7.12of eligible parents must not be counted as earned income for the purposes of medical
7.13assistance, MinnesotaCare, MFIP, diversionary work program, child care assistance, or
7.14Head Start programs. Scholarships paid to providers on behalf of eligible parents must
7.15not be considered child care funds for the purposes of the child care assistance program
7.16under chapter 119B.
7.17EFFECTIVE DATE.This section is effective the day following final enactment.
7.18 Sec. 7. PROGRAMMATIC STREAMLINING.
7.19By January 15, 2013, the commissioner of human services shall report to the
7.20legislative committees having jurisdiction over early childhood education and child care
7.21on a framework for incorporating the existing state programs that provide access to early
7.22learning and care programming into a single scholarship program that funds access to
7.23high-quality early learning and care programs for low-income children in Minnesota.
7.24The report must also identify barriers and impediments to applying federal child care
7.25assistance and Head Start program funds in the form of a scholarship, under Minnesota
7.26Statutes, section 119C.04. As part of the framework, the commissioner must also take
7.27into consideration efforts for simplifying the application and management procedures
7.28for participating families and providers.
7.29 Sec. 8. CHILD CARE DEVELOPMENT FUNDS; PARENT AWARE.
7.30The commissioner of human services shall direct $....... in federal child care
7.31development funds in fiscal years 2012 and 2013 for the purpose of implementing Parent
7.32Aware under Minnesota Statutes, sections 119C.01 to 119C.03. Of this amount, in fiscal
7.33year 2012, $......., and in fiscal year 2013, $......., are appropriated to help eligible programs
8.1prepare for and participate in Parent Aware. The commissioner shall ensure that funds are
8.2expended according to federal child care development fund regulations.
8.3 Sec. 9. WAIVER PROCESS RELATED TO CHILD CARE PROVIDER
8.4CHOICE.
8.5The commissioner of human services shall develop a simple waiver process related
8.6to Minnesota Statutes, section 119B.09, subdivision 5, that requires the parent or guardian
8.7to submit notice of a preferred alternative child arrangement.
8.8 Sec. 10. APPROPRIATIONS.
8.9 Subdivision 1. Department of Human Services. The sums indicated in this section
8.10are appropriated from the general fund to the Department of Human Services for the
8.11fiscal years designated.
8.12 Subd. 2. Early childhood education scholarships. For grants to early childhood
8.13education scholarships under Minnesota Statutes, section 119C.04:
8.16In fiscal year 2012, this appropriation is for early childhood scholarships in Parent
8.17Aware Plus regions. In fiscal year 2013 and later, the appropriation is for scholarship
8.18grants to fund eligible early childhood care and education programs located in Parent
8.19Aware Plus regions that have received early childhood education scholarships from
8.20eligible parents or legal guardians under Minnesota Statutes, section 119C.04, subdivision
8.212. The appropriation is available until expended. This appropriation is part of the base
8.22budget for subsequent fiscal years.
8.23Each year, if this appropriation is insufficient to provide early childhood education
8.24scholarships to all eligible children, the Department of Human Services shall make
8.25scholarships available on a first-come, first-served basis.
8.28 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
8.29read:
8.30 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
8.31trusts, there shall be added to federal taxable income:
9.1 (1)(i) interest income on obligations of any state other than Minnesota or a political
9.2or governmental subdivision, municipality, or governmental agency or instrumentality
9.3of any state other than Minnesota exempt from federal income taxes under the Internal
9.4Revenue Code or any other federal statute; and
9.5 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
9.6Code, except:
9.7(A) the portion of the exempt-interest dividends exempt from state taxation under
9.8the laws of the United States; and
9.9(B) the portion of the exempt-interest dividends derived from interest income
9.10on obligations of the state of Minnesota or its political or governmental subdivisions,
9.11municipalities, governmental agencies or instrumentalities, but only if the portion of the
9.12exempt-interest dividends from such Minnesota sources paid to all shareholders represents
9.1395 percent or more of the exempt-interest dividends, including any dividends exempt
9.14under subitem (A), that are paid by the regulated investment company as defined in section
9.15851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
9.16defined in section 851(g) of the Internal Revenue Code, making the payment; and
9.17 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
9.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
9.19interest income on obligations of the state in which the tribe is located;
9.20 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
9.21or accrued within the taxable year under this chapter and the amount of taxes based on
9.22net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
9.23state or to any province or territory of Canada, to the extent allowed as a deduction
9.24under section 63(d) of the Internal Revenue Code, but the addition may not be more
9.25than the amount by which the itemized deductions as allowed under section 63(d) of
9.26the Internal Revenue Code exceeds the amount of the standard deduction as defined in
9.27section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
9.28sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
9.29this paragraph, the disallowance of itemized deductions under section 68 of the Internal
9.30Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
9.31the last itemized deductions disallowed;
9.32 (3) the capital gain amount of a lump-sum distribution to which the special tax under
9.33section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
9.34 (4) the amount of income taxes paid or accrued within the taxable year under this
9.35chapter and taxes based on net income paid to any other state or any province or territory
9.36of Canada, to the extent allowed as a deduction in determining federal adjusted gross
10.1income. For the purpose of this paragraph, income taxes do not include the taxes imposed
10.2by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
10.3 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
10.4other than expenses or interest used in computing net interest income for the subtraction
10.5allowed under subdivision 19b, clause (1);
10.6 (6) the amount of a partner's pro rata share of net income which does not flow
10.7through to the partner because the partnership elected to pay the tax on the income under
10.8section 6242(a)(2) of the Internal Revenue Code;
10.9 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
10.10Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
10.11in the taxable year generates a deduction for depreciation under section 168(k) and the
10.12activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
10.13the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
10.14limited to excess of the depreciation claimed by the activity under section 168(k) over the
10.15amount of the loss from the activity that is not allowed in the taxable year. In succeeding
10.16taxable years when the losses not allowed in the taxable year are allowed, the depreciation
10.17under section 168(k) is allowed;
10.18 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
10.19Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
10.20Revenue Code of 1986, as amended through December 31, 2003;
10.21 (9) to the extent deducted in computing federal taxable income, the amount of the
10.22deduction allowable under section 199 of the Internal Revenue Code;
10.23 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
10.24federal subsidies for prescription drug plans;
10.25(11) the amount of expenses disallowed under section 290.10, subdivision 2;
10.26 (12) the amount deducted for qualified tuition and related expenses under section
10.27222 of the Internal Revenue Code, to the extent deducted from gross income;
10.28 (13) the amount deducted for certain expenses of elementary and secondary school
10.29teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
10.30from gross income;
10.31(14) the additional standard deduction for property taxes payable that is allowable
10.32under section 63(c)(1)(C) of the Internal Revenue Code;
10.33(15) the additional standard deduction for qualified motor vehicle sales taxes
10.34allowable under section 63(c)(1)(E) of the Internal Revenue Code;
10.35(16) discharge of indebtedness income resulting from reacquisition of business
10.36indebtedness and deferred under section 108(i) of the Internal Revenue Code;and
11.1(17) the amount of unemployment compensation exempt from tax under section
11.285(c) of the Internal Revenue Code;
11.3(18) the amount of the deduction under section 170 of the Internal Revenue Code
11.4that represents contributions that qualify for an early childhood education access to quality
11.5tax credit under section 290.0694; and
11.6(19) the amount of the deduction under section 170 of the Internal Revenue
11.7Code that represents contributions that qualify for an early childhood education quality
11.8improvement credit under section 290.0695.
11.9EFFECTIVE DATE.This section is effective for taxable years beginning after
11.10December 31, 2010.
11.11 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
11.12 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
11.13there shall be added to federal taxable income:
11.14 (1) the amount of any deduction taken for federal income tax purposes for income,
11.15excise, or franchise taxes based on net income or related minimum taxes, including but not
11.16limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
11.17another state, a political subdivision of another state, the District of Columbia, or any
11.18foreign country or possession of the United States;
11.19 (2) interest not subject to federal tax upon obligations of: the United States, its
11.20possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
11.21state, any of its political or governmental subdivisions, any of its municipalities, or any
11.22of its governmental agencies or instrumentalities; the District of Columbia; or Indian
11.23tribal governments;
11.24 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
11.25Revenue Code;
11.26 (4) the amount of any net operating loss deduction taken for federal income tax
11.27purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
11.28deduction under section 810 of the Internal Revenue Code;
11.29 (5) the amount of any special deductions taken for federal income tax purposes
11.30under sections 241 to 247 and 965 of the Internal Revenue Code;
11.31 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
11.32clause (a), that are not subject to Minnesota income tax;
11.33 (7) the amount of any capital losses deducted for federal income tax purposes under
11.34sections 1211 and 1212 of the Internal Revenue Code;
12.1 (8) the exempt foreign trade income of a foreign sales corporation under sections
12.2921(a) and 291 of the Internal Revenue Code;
12.3 (9) the amount of percentage depletion deducted under sections 611 through 614 and
12.4291 of the Internal Revenue Code;
12.5 (10) for certified pollution control facilities placed in service in a taxable year
12.6beginning before December 31, 1986, and for which amortization deductions were elected
12.7under section 169 of the Internal Revenue Code of 1954, as amended through December
12.831, 1985, the amount of the amortization deduction allowed in computing federal taxable
12.9income for those facilities;
12.10 (11) the amount of any deemed dividend from a foreign operating corporation
12.11determined pursuant to section290.17, subdivision 4 , paragraph (g). The deemed dividend
12.12shall be reduced by the amount of the addition to income required by clauses (20), (21),
12.13(22), and (23);
12.14 (12) the amount of a partner's pro rata share of net income which does not flow
12.15through to the partner because the partnership elected to pay the tax on the income under
12.16section 6242(a)(2) of the Internal Revenue Code;
12.17 (13) the amount of net income excluded under section 114 of the Internal Revenue
12.18Code;
12.19 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
12.20Revenue Code, for the taxable year when subpart F income is calculated without regard to
12.21the provisions of Division C, title III, section 303(b) of Public Law 110-343;
12.22 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
12.23and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
12.24has an activity that in the taxable year generates a deduction for depreciation under
12.25section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
12.26that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
12.27under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
12.28depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
12.29amount of the loss from the activity that is not allowed in the taxable year. In succeeding
12.30taxable years when the losses not allowed in the taxable year are allowed, the depreciation
12.31under section 168(k)(1)(A) and (k)(4)(A) is allowed;
12.32 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
12.33Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
12.34Revenue Code of 1986, as amended through December 31, 2003;
12.35 (17) to the extent deducted in computing federal taxable income, the amount of the
12.36deduction allowable under section 199 of the Internal Revenue Code;
13.1 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
13.2federal subsidies for prescription drug plans;
13.3 (19) the amount of expenses disallowed under section290.10, subdivision 2 ;
13.4 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
13.5accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
13.6of a corporation that is a member of the taxpayer's unitary business group that qualifies
13.7as a foreign operating corporation. For purposes of this clause, intangible expenses and
13.8costs include:
13.9 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
13.10use, maintenance or management, ownership, sale, exchange, or any other disposition of
13.11intangible property;
13.12 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
13.13transactions;
13.14 (iii) royalty, patent, technical, and copyright fees;
13.15 (iv) licensing fees; and
13.16 (v) other similar expenses and costs.
13.17For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
13.18applications, trade names, trademarks, service marks, copyrights, mask works, trade
13.19secrets, and similar types of intangible assets.
13.20This clause does not apply to any item of interest or intangible expenses or costs paid,
13.21accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
13.22to such item of income to the extent that the income to the foreign operating corporation
13.23is income from sources without the United States as defined in subtitle A, chapter 1,
13.24subchapter N, part 1, of the Internal Revenue Code;
13.25 (21) except as already included in the taxpayer's taxable income pursuant to clause
13.26(20), any interest income and income generated from intangible property received or
13.27accrued by a foreign operating corporation that is a member of the taxpayer's unitary
13.28group. For purposes of this clause, income generated from intangible property includes:
13.29 (i) income related to the direct or indirect acquisition, use, maintenance or
13.30management, ownership, sale, exchange, or any other disposition of intangible property;
13.31 (ii) income from factoring transactions or discounting transactions;
13.32 (iii) royalty, patent, technical, and copyright fees;
13.33 (iv) licensing fees; and
13.34 (v) other similar income.
14.1For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
14.2applications, trade names, trademarks, service marks, copyrights, mask works, trade
14.3secrets, and similar types of intangible assets.
14.4This clause does not apply to any item of interest or intangible income received or accrued
14.5by a foreign operating corporation with respect to such item of income to the extent that
14.6the income is income from sources without the United States as defined in subtitle A,
14.7chapter 1, subchapter N, part 1, of the Internal Revenue Code;
14.8 (22) the dividends attributable to the income of a foreign operating corporation that
14.9is a member of the taxpayer's unitary group in an amount that is equal to the dividends
14.10paid deduction of a real estate investment trust under section 561(a) of the Internal
14.11Revenue Code for amounts paid or accrued by the real estate investment trust to the
14.12foreign operating corporation;
14.13 (23) the income of a foreign operating corporation that is a member of the taxpayer's
14.14unitary group in an amount that is equal to gains derived from the sale of real or personal
14.15property located in the United States;
14.16 (24) the additional amount allowed as a deduction for donation of computer
14.17technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
14.18extent deducted from taxable income;and
14.19(25) discharge of indebtedness income resulting from reacquisition of business
14.20indebtedness and deferred under section 108(i) of the Internal Revenue Code;
14.21(26) the amount of the deduction under section 170 of the Internal Revenue Code
14.22that represents contributions that qualify for an early childhood education access to quality
14.23tax credit under section 290.0694; and
14.24(27) the amount of the deduction under section 170 of the Internal Revenue
14.25Code that represents contributions that qualify for an early childhood education quality
14.26improvement credit under section 290.0695.
14.27EFFECTIVE DATE.This section is effective for taxable years beginning after
14.28December 31, 2010.
14.29 Sec. 3. [290.0693] EARLY CHILDHOOD TRAIN AND RETAIN CREDIT.
14.30 Subdivision 1. Statement of intent. The purpose of the early childhood train
14.31and retain credit is to encourage and reward early childhood education professionals
14.32for furthering their education and providing continuity of instruction to Minnesota's
14.33children. The success of the credit must be measured by comparing the number of early
14.34childhood education professionals claiming the credit at the various point levels in the
15.1first year the credit is allowed with the number claiming the credit at the various point
15.2levels in following years.
15.3 Subd. 2. Credit allowed. (a) An individual who is an eligible early childhood
15.4education professional is allowed a credit against the tax imposed by this chapter as
15.5follows:
15.12(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
15.13per taxable year. For taxable years beginning after December 31, 2011, the maximum
15.14aggregate credits must not exceed $1,000,000 per taxable year.
15.15(c) For a nonresident or part-year resident, the credit must be allocated based on the
15.16percentage calculated under section 290.06, subdivision 2c, paragraph (e).
15.17 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
15.18the meanings given.
15.19(b) "Early education experience points" means the eligible early childhood education
15.20professional's points registered with the Minnesota Center for Professional Development
15.21Registry.
15.22(c) "Eligible early childhood education professional" means an individual who:
15.23(1) is registered with the Minnesota Center for Professional Development Registry;
15.24(2) is employed at a quality program;
15.25(3) works directly with children who have not yet enrolled in kindergarten or first
15.26grade; and
15.27(4) has been employed at the same program for at least 20 hours per week for at least
15.2812 months during the tax year.
15.29(d) "Quality program" means a program rated using the quality rating and
15.30improvement system tool established by the guidelines under chapter 119C.
15.31 Subd. 4. Application for credit certificates. For taxable years beginning after
15.32December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
15.33train and retain tax credit certificate. The credit certificates under this section must be
15.34made available on a first-come, first-served basis until the maximum statewide credit
15.35amount has been reached. The commissioner must not issue a tax credit certificate for an
15.36amount greater than the limits under subdivision 2.
16.1 Subd. 5. Credit refundable. If the amount of credit an individual is eligible to
16.2receive under this section exceeds the claimant's tax liability under this chapter, the
16.3commissioner shall refund the excess to the claimant.
16.4 Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this
16.5section is appropriated to the commissioner from the general fund.
16.6EFFECTIVE DATE.This section is effective for taxable years beginning after
16.7December 31, 2010.
16.8 Sec. 4. [290.0694] EARLY CHILDHOOD EDUCATION ACCESS TO QUALITY
16.9TAX CREDIT.
16.10 Subdivision 1. Statement of intent. The purpose of the early childhood education
16.11access to quality tax credit is to increase the amount of private contributions available to
16.12provide low-income children in Minnesota with access to high-quality early childhood
16.13education programs. The success of the credit must be measured by determining the
16.14total amount of private contributions that are made to provide early childhood education
16.15scholarships and are eligible for the credit under this section.
16.16 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
16.17the meanings given.
16.18(b) "Early childhood education access to quality donation" means a donation to a
16.19qualified early childhood education program.
16.20(c) "Qualified early childhood education program" means a program operated
16.21in Minnesota that:
16.22(1) has been rated using the quality rating and improvement system tool established
16.23by the guidelines under chapter 119C; and
16.24(2) accepts early childhood education access to quality donations under this section
16.25as payment of tuition for a qualified student who is enrolled in the program.
16.26(d) "Qualified student" means a student who:
16.27(1) has not attained the age of seven years and become subject to the requirements of
16.28section 120A.22, subdivision 5;
16.29(2) has reached age three or four by September 1;
16.30(3) is a Minnesota resident; and
16.31(4) is a member of a household whose total annual income during the year, without
16.32consideration of the benefits under this program, is equal to or less than 47 percent of the
16.33state median income in the current calendar year.
16.34 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
16.35credit against the tax due under this chapter equal to 75 percent of the amount donated to
17.1a qualified early childhood education program during the taxable year. For taxable year
17.22011, the maximum aggregate credits must not exceed $500,000 per taxable year. For
17.3taxable years beginning after December 31, 2011, the maximum aggregate credits must
17.4not exceed $1,000,000 per taxable year.
17.5(b) A taxpayer must provide a copy of the receipt provided by the qualified early
17.6childhood education program when claiming the credit for the donation.
17.7 Subd. 4. Application for credit certificates. For taxable years beginning after
17.8December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
17.9education access to quality tax credit certificate. The credit certificates under this section
17.10must be made available on a first-come, first-served basis until the maximum statewide
17.11credit amount has been reached. The commissioner must not issue a tax credit certificate
17.12for an amount greater than the limits under subdivision 3.
17.13 Subd. 5. Responsibilities of qualified early childhood education programs. (a)
17.14Each qualified early childhood education program that receives donations directly from
17.15taxpayers under this section must:
17.16(1) notify the commissioner of its intent to participate in this program;
17.17(2) demonstrate that it meets the definition of a qualified early childhood education
17.18program in subdivision 2, paragraph (c);
17.19(3) provide a receipt or verification on a form approved by the commissioner to
17.20taxpayers for donations;
17.21(4) conduct criminal background checks on all of its employees and board members
17.22and exclude from employment or governance any individuals that might reasonably pose a
17.23risk to the appropriate use of contributed funds;
17.24(5) demonstrate its financial accountability by submitting a financial information
17.25report for the organization that complies with uniform financial accounting standards
17.26established by the commissioner;
17.27(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
17.28more during the school year, by filing financial information with the commissioner prior
17.29to September 1 of each year that demonstrates the financial viability of the qualified
17.30early childhood education program; and
17.31(7) use amounts received as donations to provide scholarships to qualified students
17.32within one year of the date of receiving the donation.
17.33(b) A qualified early childhood education program that receives donations directly
17.34from taxpayers under this program must report to the commissioner by June 1 of each year
17.35the following information regarding donations received and scholarships awarded in the
17.36previous calendar year:
18.1(1) the total number and total dollar amount of donations from taxpayers received
18.2during the previous calendar year; and
18.3(2) the total number and total dollar amount of scholarships awarded to qualified
18.4students during the previous calendar year.
18.5(c) If the commissioner decides to bar a qualified early childhood education program
18.6from the program for failure to comply with the requirements in paragraph (a), the
18.7qualified early childhood education program must notify taxpayers who have donated to
18.8the qualified early childhood education program in writing within 30 days.
18.9 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
18.10standardized format for a receipt to be issued by a qualified early childhood education
18.11program to a taxpayer to indicate the value of a donation received.
18.12(b) The commissioner must prescribe a standardized format for qualified early
18.13childhood education programs to report the information required under subdivision 5.
18.14(c) The commissioner must post on the department's Web site the names and
18.15addresses of qualified early childhood education programs and regularly update the names
18.16and addresses of any qualified early childhood education programs that have been barred
18.17from participating in the program.
18.18(d) The commissioner must conduct either a financial review or audit of a qualified
18.19early childhood education program upon finding evidence of fraud or intentional
18.20misreporting.
18.21(e) The commissioner must bar a qualified early childhood education program from
18.22participating in the program if the commissioner establishes that the qualified early
18.23childhood education program has intentionally and substantially failed to comply with
18.24the requirements in subdivision 5. If the commissioner determines that a qualified early
18.25childhood education program should be barred from the program, the commissioner
18.26must notify the qualified early childhood education program within 60 days of that
18.27determination.
18.28EFFECTIVE DATE.This section is effective for taxable years beginning after
18.29December 31, 2010.
18.30 Sec. 5. [290.0695] EARLY CHILDHOOD EDUCATION QUALITY
18.31IMPROVEMENT CREDIT.
18.32 Subdivision 1. Statement of intent. The purpose of the early childhood education
18.33quality improvement credit is to encourage contributions that result in improvements to
18.34the quality of programming provided by eligible early childhood education providers.
18.35The success of the credit must be measured by determining amounts spent as a result of
19.1contributions qualifying for the credit to improve the quality of programming provided by
19.2eligible early childhood education providers.
19.3 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
19.4the meanings given.
19.5(b) "Eligible early childhood education provider" means a provider who operates a
19.6program in an area in Minnesota in which the quality rating and improvement system tool
19.7established by the guidelines under chapter 119C is in use for the taxable year.
19.8(c) "Resource and referral agency" means an agency that is designated by the
19.9Department of Human Services to provide child care resource and referral services.
19.10 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
19.11credit against the tax due under this chapter equal to 75 percent of the amount donated to
19.12an eligible early childhood education provider or a resource and referral agency during
19.13the taxable year. For a taxpayer to be eligible for the credit, donations to eligible early
19.14childhood education providers must be used to improve program quality in ways that
19.15are consistent with the standards set by the quality rating and improvement system, and
19.16donations to resource and referral agencies must be used to provide early childhood
19.17education providers with direct quality improvement services that are consistent with the
19.18standards set by the quality rating and improvement system.
19.19(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
19.20per taxable year. For taxable years beginning after December 31, 2011, the maximum
19.21aggregate credits must not exceed $1,000,000 per taxable year.
19.22(c) A taxpayer must provide a copy of the receipt provided by the eligible early
19.23childhood education provider or resource and referral agency when claiming the credit for
19.24the donation.
19.25 Subd. 4. Application for credit certificates. For taxable years beginning
19.26after December 31, 2010, and before January 1, 2013, a taxpayer must apply to the
19.27commissioner for an early childhood education quality improvement tax credit certificate.
19.28The credit certificates under this section must be made available on a first-come,
19.29first-served basis until the maximum statewide credit amount has been reached. The
19.30commissioner must not issue a tax credit certificate for an amount greater than the limits
19.31under subdivision 3.
19.32 Subd. 5. Responsibilities of eligible early childhood education providers and
19.33resource and referral agencies. (a) Each eligible early childhood education provider
19.34and resource and referral agency that receives contributions directly from taxpayers
19.35under this section must:
19.36(1) notify the commissioner of its intent to participate in this program;
20.1(2) demonstrate to the commissioner that it meets the requirements of this section;
20.2(3) provide a receipt or verification on a form approved by the commissioner to
20.3taxpayers for contributions made to the eligible early childhood education provider
20.4or resource and referral agency;
20.5(4) conduct criminal background checks on all of its employees and board members
20.6and exclude from employment or governance any individuals that might reasonably pose a
20.7risk to the appropriate use of contributed funds;
20.8(5) demonstrate its financial accountability by submitting a financial information
20.9report for the organization that complies with uniform financial accounting standards
20.10established by the commissioner;
20.11(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
20.12more during the school year, by filing financial information with the commissioner prior
20.13to September 1 of each year that demonstrates the financial viability of the qualified
20.14foundation; and
20.15(7) use amounts received as donations to improve program quality, in the case of
20.16eligible early childhood education providers, or to provide quality improvement services,
20.17in the case of resource and referral agencies, within one year of the date of receiving
20.18the donation.
20.19(b) If the commissioner decides to bar an eligible early childhood education
20.20provider or a resource and referral agency from the program for failure to comply with
20.21the requirements in paragraph (a), the provider or agency must notify taxpayers who
20.22have donated to the eligible early childhood provider or resource and referral agency in
20.23writing within 30 days.
20.24 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
20.25standardized format for a receipt to be issued by an eligible early childhood education
20.26provider or a resource and referral agency to a taxpayer to indicate the value of a
20.27contribution received.
20.28(b) The commissioner must prescribe a standardized format for eligible early
20.29childhood education providers or resource and referral agencies to report the information
20.30required under subdivision 5.
20.31(c) The commissioner must post on the department's Web site the names and
20.32addresses of eligible early childhood education providers and resource and referral
20.33agencies and regularly update the names and addresses of any eligible early childhood
20.34education providers or resource and referral agencies that have been barred from
20.35participating in the program.
21.1(d) The commissioner must conduct either a financial review or audit of an eligible
21.2early childhood education provider or a resource and referral agency upon finding
21.3evidence of fraud or intentional misreporting.
21.4(e) The commissioner must bar an eligible early childhood education provider or
21.5a resource and referral agency from participating in the program if the commissioner
21.6establishes that the provider or agency has intentionally and substantially failed to comply
21.7with the requirements in subdivision 5. If the commissioner determines that a provider or
21.8agency should be barred from the program, the commissioner must notify the provider or
21.9agency within 60 days of that determination.
21.10EFFECTIVE DATE.This section is effective for taxable years beginning after
21.11December 31, 2010.
1.3tax credits for training and retaining early education workers; improving quality
1.4early childhood education programming; appropriating money;amending
1.5Minnesota Statutes 2010, sections 119B.09, subdivision 5; 119B.13, subdivision
1.63a; 290.01, subdivisions 19a, 19c; proposing coding for new law in Minnesota
1.7Statutes, chapter 290; proposing coding for new law as Minnesota Statutes,
1.8chapter 119C.
1.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.12 Section 1. Minnesota Statutes 2010, section 119B.09, subdivision 5, is amended to read:
1.13 Subd. 5. Provider choice. Parents who reside in a Parent Aware Plus region as
1.14defined in section 119C.03, subdivision 5, must choose a rated provider under section
1.15119C.01, subdivision 7, for their three- and four-year-old children, unless a waiver is
1.16granted by the commissioner. Parents who do not reside in a Parent Aware Plus region
1.17may choose child care providers as defined under section
1.18best meet the needs of their family. Counties shall make resources available to parents
1.19in choosing quality child care services. Counties may require a parent to sign a release
1.20stating their knowledge and responsibilities in choosing a legal provider described under
1.21section
1.22unsafe, or that the circumstances of the child care arrangement chosen by the parent are
1.23unsafe, the county may deny a child care subsidy. A county may not restrict access to a
1.24general 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 licensed center-based
2.25child care program under chapter 245A, or licensed family child care program under
2.26chapter 245A.
2.27 Subd. 4. Parent Aware. "Parent Aware" means the voluntary evidence-based quality
2.28rating and improvement system for early childhood education under section 119C.02.
2.29 Subd. 5. Parent Aware Plus regions. "Parent Aware Plus regions" means Parent
2.30Aware regions as designated by the commissioner under section 119C.03, subdivision 5.
2.31 Subd. 6. Parent Aware region. "Parent Aware region" means a geographic area
2.32approved by the commissioner under section 119C.03.
2.33 Subd. 7. Rated program. "Rated program" means an eligible program in a Parent
2.34Aware region that receives one, two, three, or four stars.
2.35EFFECTIVE DATE.This section is effective the day following final enactment.
3.1 Sec. 4. [119C.02] PARENT AWARE.
3.2 Subdivision 1. Department of Human Services; request for proposal. The
3.3Department of Human Services must develop a request for proposal for an organization
3.4to: (1) develop the methods used to verify, assess, and monitor program compliance
3.5with the standards, including review of and action on applications; (2) conduct on-site
3.6assessments, if applicable; (3) develop and maintain a data quality management system for
3.7compiling all data used to calculate program ratings and related procedures for ensuring
3.8data quality and integrity; and (4) coordinate a system for sharing ratings and related
3.9quality information with the public. The commissioner must consult with the Minnesota
3.10Early Learning Foundation to design the request for proposal. Eligible responders include
3.11units of state and local governments, nonprofit organizations, research organizations, and
3.12educational institutions. The commissioner shall issue a request for proposal by July 30,
3.132011. The commissioner shall issue a contract by October 31, 2011. The contract is valid
3.14for three years. By July 30, 2014, and every three years thereafter, the commissioner
3.15must consult with the Minnesota Early Learning Foundation or its designated successor
3.16organization to review and update the request for proposal. The contract must be issued by
3.17October 31 of that year and every three years thereafter. The Minnesota Early Learning
3.18Foundation and its designated successor organization are consultants to the commissioner
3.19on the request for proposal and are not eligible responders.
3.20 Subd. 2. Criteria; measure. (a) Parent Aware must use quality ratings shown to
3.21be linked to improving children's school readiness outcomes and must evaluate, at a
3.22minimum, how programs perform in the following areas:
3.23(1) family partnerships;
3.24(2) tracking learning;
3.25(3) teacher training and education; and
3.26(4) teaching materials and strategies.
3.27(b) The commissioner, in coordination with the commissioner of education, must
3.28establish and regularly update the standards and indicators that determine program quality
3.29for the quality rating system. In fiscal year 2012 and later, the commissioner must use
3.30the Minnesota quality rating system tool in use in fiscal year 2011, the results of the
3.31evaluations of that quality rating system, and the recommendations in the report required
3.32under section 124D.142.
3.33(c) Ratings must be indicated using stars. Four stars is the best possible rating. No
3.34stars means the program has not been rated.
3.35 Subd. 3. Rated programs. At least twice each year, beginning June 30, 2012, the
3.36contract entity awarded the contract in subdivision 1 must submit a list of rated programs
4.1to the commissioner. The list of rated programs serves as the commissioner's rating. The
4.2commissioner's decision is final.
4.3 Subd. 4. Evaluation. The commissioner shall contract with an independent private
4.4organization to use private funds to evaluate the Parent Aware quality rating system if
4.5sufficient private funding is available. The evaluation must incorporate rating levels and
4.6outcome-based data reflecting child progress toward school readiness. The evaluation
4.7must also include recommendations on continued monitoring and improvement of the
4.8correlation between rating levels and outcome-based child progress toward school
4.9readiness. The commissioner shall make available to the independent private organization
4.10any data requested by the organization consistent with chapter 13 and at no cost to the
4.11organization.
4.12 Sec. 5. [119C.03] SELECTION PROCESS FOR PARENT AWARE REGIONS.
4.13 Subdivision 1. Designation of Parent Aware regions. For the purposes of this
4.14section, Parent Aware regions are the economic development regions as designated by the
4.15governor under section 462.385.
4.16 Subd. 2. Application process. The commissioner shall develop an application
4.17process to select new Parent Aware regions using the following criteria:
4.18(1) the percentage of preschool-aged children who are from families with income
4.19equal to or less than 47 percent of the state median income;
4.20(2) the region's demonstrated efforts to use existing public and private resources to
4.21improve program quality in alignment with Parent Aware quality standards;
4.22(3) the level of community support, especially support of the counties and local
4.23representatives of child care centers and licensed family child care homes; and
4.24(4) the demonstration of quality improvement support from local nonprofits and
4.25foundations.
4.26 Subd. 3. Application preparation. A resource and referral organization under
4.27section 119B.19 must prepare and submit the application for their region for approval
4.28under subdivision 4 to become a Parent Aware region in coordination with local partners.
4.29 Subd. 4. Region approval. The commissioner shall develop an application process
4.30by December 1, 2011. A region may apply beginning February 1, 2012, to become a
4.31Parent Aware region. Economic development regions 9, 10, and 11 are automatically
4.32approved as Parent Aware regions beginning in fiscal year 2012. The commissioner shall
4.33approve the first Parent Aware region by June 30, 2012, and shall approve all regions as
4.34Parent Aware regions by June 30, 2015.
5.1 Subd. 5. Parent Aware Plus regions; commissioner approval. The commissioner
5.2must designate a Parent Aware region as a Parent Aware Plus region when there is a
5.3sufficient number of programs rated for each program type. The commissioner must
5.4also consider, at a minimum, the following criteria when designating Parent Aware Plus
5.5regions: (1) the distribution of rated programs by eligible program type within a region;
5.6(2) the amount of funding available for scholarships in the region; and (3) the distribution
5.7of the population of low-income preschool-aged children in the region. The commissioner
5.8must also designate Hennepin County, the city of St. Paul, Blue Earth County, and
5.9Nicollet County as Parent Aware Plus regions beginning in fiscal year 2012 and allow
5.10those regions to continue using the existing model of the Parent Aware quality rating
5.11system in fiscal year 2012. For the purposes of provider choice under section 119B.09,
5.12subdivision 5, Parent Aware Plus regions would not be implemented prior to January 1 of
5.13the year in which the region is approved as a Parent Aware Plus region.
5.14 Sec. 6. [119C.04] EARLY CHILDHOOD EDUCATION SCHOLARSHIPS.
5.15 Subdivision 1. Early childhood education scholarship locations. In fiscal year
5.162012 and later, the commissioner shall make scholarships available in the Parent Aware
5.17Plus regions. In fiscal year 2013 and later, the commissioner shall establish additional
5.18locations where early childhood education scholarships may be used to pay for services
5.19provided by rated programs. The additional early childhood education scholarship
5.20locations must be located in Parent Aware Plus regions. The commissioner may assign
5.21duties as described in subdivisions 5 and 7 to approved Parent Aware Plus regions,
5.22as appropriate.
5.23 Subd. 2. Scholarship eligibility. (a) All children whose parents or legal guardians
5.24meet the eligibility requirements of paragraph (b) are eligible to receive early childhood
5.25education scholarships under this section.
5.26(b) A parent or legal guardian is eligible for an early childhood education scholarship
5.27if the parent or legal guardian has a child three or four years of age on September 1,
5.28beginning in calendar year 2011; lives in one of the early childhood education scholarship
5.29locations according to subdivision 1; and has income equal to or less than 47 percent of
5.30the state median income in the current calendar year.
5.31 Subd. 3. Eligibility determination. (a) The commissioner of human services shall
5.32develop a simple application process that families may use to apply for early childhood
5.33education scholarships based on the criteria in subdivision 2.
6.1(b) For the purpose of establishing eligibility for the early childhood education
6.2scholarship, the commissioners of education and human services shall accept a
6.3self-declaration from parents or legal guardians.
6.4(c) The commissioner shall also accept children identified in other public funding
6.5eligibility processes, including the Free and Reduced-Price Lunch Program, National
6.6School Lunch Act, United States Code, title 42, section 1751, part 210; Head Start under
6.7federal Improving Head Start for School Readiness Act of 2007; Minnesota family
6.8investment program under chapter 256J; and child care assistance programs under chapter
6.9119B.
6.10 Subd. 4. Scholarship value. For fiscal year 2012 and later, the early childhood
6.11education scholarship is equal to $4,000 each year for each eligible child according to
6.12subdivision 2.
6.13 Subd. 5. Scholarship use. (a) The early childhood education scholarship must be
6.14used during the 13 months after July 1, 2011, and each year thereafter by the parent or
6.15legal guardian on behalf of their child for services designed to promote school readiness at
6.16a rated program in a Parent Aware Plus region. A parent or legal guardian may use the
6.17early childhood education scholarship to pay fees or charges associated with their eligible
6.18child's education at a rated program, according to subdivision 6.
6.19(b) To maintain an eligible child's early childhood education scholarship, a parent or
6.20legal guardian must begin to use the scholarship within six months following the receipt
6.21of the scholarship or October 1.
6.22(c) For the purpose of dividing the early childhood education scholarship between
6.23two or more rated programs, a parent or legal guardian may reduce the early childhood
6.24education scholarship value paid to an individual rated program. The commissioner must
6.25determine a method to allow a parent or legal guardian to reduce or divide an early
6.26childhood education scholarship.
6.27 Subd. 6. Quality standard; transition. (a) A rated program is eligible to receive
6.28early childhood education scholarships if the program has received a three- or four-star
6.29rating under Parent Aware under section 119C.02 and is located in a Parent Aware Plus
6.30region. An eligible program must agree to accept early childhood education scholarships
6.31to pay for services.
6.32(b) Notwithstanding paragraph (a), for the first two fiscal years after a Parent
6.33Aware region has become a Parent Aware Plus region, a rated program located in the
6.34Parent Aware Plus region is eligible to receive early childhood education scholarships
6.35to pay for its services if the program has received a one-star or better rating under the
6.36Parent Aware rating system. An eligible program must agree to accept early childhood
7.1education scholarships to pay for services. This paragraph does not apply to the Parent
7.2Aware Plus regions located in the city of Saint Paul, Hennepin County, Nicollet County,
7.3and Blue Earth County.
7.4 Subd. 7. Redeeming a scholarship. (a) A rated program that has received an early
7.5childhood education scholarship on behalf of an eligible child to pay for services must
7.6remit the scholarship in a manner determined by the commissioner.
7.7(b) The commissioner must pay rated programs the value of the early childhood
7.8education scholarship within 30 days of receiving the scholarship from a program.
7.9(c) The commissioner must determine a method for paying rated programs if a parent
7.10or legal guardian has divided or reduced a scholarship under subdivision 5, paragraph (c).
7.11 Subd. 8. Earned income calculation. Scholarships paid to providers on behalf
7.12of eligible parents must not be counted as earned income for the purposes of medical
7.13assistance, MinnesotaCare, MFIP, diversionary work program, child care assistance, or
7.14Head Start programs. Scholarships paid to providers on behalf of eligible parents must
7.15not be considered child care funds for the purposes of the child care assistance program
7.16under chapter 119B.
7.17EFFECTIVE DATE.This section is effective the day following final enactment.
7.18 Sec. 7. PROGRAMMATIC STREAMLINING.
7.19By January 15, 2013, the commissioner of human services shall report to the
7.20legislative committees having jurisdiction over early childhood education and child care
7.21on a framework for incorporating the existing state programs that provide access to early
7.22learning and care programming into a single scholarship program that funds access to
7.23high-quality early learning and care programs for low-income children in Minnesota.
7.24The report must also identify barriers and impediments to applying federal child care
7.25assistance and Head Start program funds in the form of a scholarship, under Minnesota
7.26Statutes, section 119C.04. As part of the framework, the commissioner must also take
7.27into consideration efforts for simplifying the application and management procedures
7.28for participating families and providers.
7.29 Sec. 8. CHILD CARE DEVELOPMENT FUNDS; PARENT AWARE.
7.30The commissioner of human services shall direct $....... in federal child care
7.31development funds in fiscal years 2012 and 2013 for the purpose of implementing Parent
7.32Aware under Minnesota Statutes, sections 119C.01 to 119C.03. Of this amount, in fiscal
7.33year 2012, $......., and in fiscal year 2013, $......., are appropriated to help eligible programs
8.1prepare for and participate in Parent Aware. The commissioner shall ensure that funds are
8.2expended according to federal child care development fund regulations.
8.3 Sec. 9. WAIVER PROCESS RELATED TO CHILD CARE PROVIDER
8.4CHOICE.
8.5The commissioner of human services shall develop a simple waiver process related
8.6to Minnesota Statutes, section 119B.09, subdivision 5, that requires the parent or guardian
8.7to submit notice of a preferred alternative child arrangement.
8.8 Sec. 10. APPROPRIATIONS.
8.9 Subdivision 1. Department of Human Services. The sums indicated in this section
8.10are appropriated from the general fund to the Department of Human Services for the
8.11fiscal years designated.
8.12 Subd. 2. Early childhood education scholarships. For grants to early childhood
8.13education scholarships under Minnesota Statutes, section 119C.04:
| 8.14 |
$ |
8,000,000 |
..... |
2012 |
|
| 8.15 |
$ |
9,000,000 |
..... |
2013 |
8.17Aware Plus regions. In fiscal year 2013 and later, the appropriation is for scholarship
8.18grants to fund eligible early childhood care and education programs located in Parent
8.19Aware Plus regions that have received early childhood education scholarships from
8.20eligible parents or legal guardians under Minnesota Statutes, section 119C.04, subdivision
8.212. The appropriation is available until expended. This appropriation is part of the base
8.22budget for subsequent fiscal years.
8.23Each year, if this appropriation is insufficient to provide early childhood education
8.24scholarships to all eligible children, the Department of Human Services shall make
8.25scholarships available on a first-come, first-served basis.
8.28 Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to
8.29read:
8.30 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
8.31trusts, there shall be added to federal taxable income:
9.1 (1)(i) interest income on obligations of any state other than Minnesota or a political
9.2or governmental subdivision, municipality, or governmental agency or instrumentality
9.3of any state other than Minnesota exempt from federal income taxes under the Internal
9.4Revenue Code or any other federal statute; and
9.5 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
9.6Code, except:
9.7(A) the portion of the exempt-interest dividends exempt from state taxation under
9.8the laws of the United States; and
9.9(B) the portion of the exempt-interest dividends derived from interest income
9.10on obligations of the state of Minnesota or its political or governmental subdivisions,
9.11municipalities, governmental agencies or instrumentalities, but only if the portion of the
9.12exempt-interest dividends from such Minnesota sources paid to all shareholders represents
9.1395 percent or more of the exempt-interest dividends, including any dividends exempt
9.14under subitem (A), that are paid by the regulated investment company as defined in section
9.15851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
9.16defined in section 851(g) of the Internal Revenue Code, making the payment; and
9.17 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
9.18government described in section 7871(c) of the Internal Revenue Code shall be treated as
9.19interest income on obligations of the state in which the tribe is located;
9.20 (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
9.21or accrued within the taxable year under this chapter and the amount of taxes based on
9.22net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
9.23state or to any province or territory of Canada, to the extent allowed as a deduction
9.24under section 63(d) of the Internal Revenue Code, but the addition may not be more
9.25than the amount by which the itemized deductions as allowed under section 63(d) of
9.26the Internal Revenue Code exceeds the amount of the standard deduction as defined in
9.27section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
9.28sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
9.29this paragraph, the disallowance of itemized deductions under section 68 of the Internal
9.30Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
9.31the last itemized deductions disallowed;
9.32 (3) the capital gain amount of a lump-sum distribution to which the special tax under
9.33section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
9.34 (4) the amount of income taxes paid or accrued within the taxable year under this
9.35chapter and taxes based on net income paid to any other state or any province or territory
9.36of Canada, to the extent allowed as a deduction in determining federal adjusted gross
10.1income. For the purpose of this paragraph, income taxes do not include the taxes imposed
10.2by sections
10.3 (5) the amount of expense, interest, or taxes disallowed pursuant to section
10.5allowed under subdivision 19b, clause (1);
10.6 (6) the amount of a partner's pro rata share of net income which does not flow
10.7through to the partner because the partnership elected to pay the tax on the income under
10.8section 6242(a)(2) of the Internal Revenue Code;
10.9 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
10.10Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
10.11in the taxable year generates a deduction for depreciation under section 168(k) and the
10.12activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
10.13the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
10.14limited to excess of the depreciation claimed by the activity under section 168(k) over the
10.15amount of the loss from the activity that is not allowed in the taxable year. In succeeding
10.16taxable years when the losses not allowed in the taxable year are allowed, the depreciation
10.17under section 168(k) is allowed;
10.18 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
10.19Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
10.20Revenue Code of 1986, as amended through December 31, 2003;
10.21 (9) to the extent deducted in computing federal taxable income, the amount of the
10.22deduction allowable under section 199 of the Internal Revenue Code;
10.23 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
10.24federal subsidies for prescription drug plans;
10.25(11) the amount of expenses disallowed under section 290.10, subdivision 2;
10.26 (12) the amount deducted for qualified tuition and related expenses under section
10.27222 of the Internal Revenue Code, to the extent deducted from gross income;
10.28 (13) the amount deducted for certain expenses of elementary and secondary school
10.29teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
10.30from gross income;
10.31(14) the additional standard deduction for property taxes payable that is allowable
10.32under section 63(c)(1)(C) of the Internal Revenue Code;
10.33(15) the additional standard deduction for qualified motor vehicle sales taxes
10.34allowable under section 63(c)(1)(E) of the Internal Revenue Code;
10.35(16) discharge of indebtedness income resulting from reacquisition of business
10.36indebtedness and deferred under section 108(i) of the Internal Revenue Code;
11.1(17) the amount of unemployment compensation exempt from tax under section
11.285(c) of the Internal Revenue Code;
11.3(18) the amount of the deduction under section 170 of the Internal Revenue Code
11.4that represents contributions that qualify for an early childhood education access to quality
11.5tax credit under section 290.0694; and
11.6(19) the amount of the deduction under section 170 of the Internal Revenue
11.7Code that represents contributions that qualify for an early childhood education quality
11.8improvement credit under section 290.0695.
11.9EFFECTIVE DATE.This section is effective for taxable years beginning after
11.10December 31, 2010.
11.11 Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19c, is amended to read:
11.12 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
11.13there shall be added to federal taxable income:
11.14 (1) the amount of any deduction taken for federal income tax purposes for income,
11.15excise, or franchise taxes based on net income or related minimum taxes, including but not
11.16limited to the tax imposed under section
11.17another state, a political subdivision of another state, the District of Columbia, or any
11.18foreign country or possession of the United States;
11.19 (2) interest not subject to federal tax upon obligations of: the United States, its
11.20possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
11.21state, any of its political or governmental subdivisions, any of its municipalities, or any
11.22of its governmental agencies or instrumentalities; the District of Columbia; or Indian
11.23tribal governments;
11.24 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
11.25Revenue Code;
11.26 (4) the amount of any net operating loss deduction taken for federal income tax
11.27purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
11.28deduction under section 810 of the Internal Revenue Code;
11.29 (5) the amount of any special deductions taken for federal income tax purposes
11.30under sections 241 to 247 and 965 of the Internal Revenue Code;
11.31 (6) losses from the business of mining, as defined in section
11.32clause (a), that are not subject to Minnesota income tax;
11.33 (7) the amount of any capital losses deducted for federal income tax purposes under
11.34sections 1211 and 1212 of the Internal Revenue Code;
12.1 (8) the exempt foreign trade income of a foreign sales corporation under sections
12.2921(a) and 291 of the Internal Revenue Code;
12.3 (9) the amount of percentage depletion deducted under sections 611 through 614 and
12.4291 of the Internal Revenue Code;
12.5 (10) for certified pollution control facilities placed in service in a taxable year
12.6beginning before December 31, 1986, and for which amortization deductions were elected
12.7under section 169 of the Internal Revenue Code of 1954, as amended through December
12.831, 1985, the amount of the amortization deduction allowed in computing federal taxable
12.9income for those facilities;
12.10 (11) the amount of any deemed dividend from a foreign operating corporation
12.11determined pursuant to section
12.12shall be reduced by the amount of the addition to income required by clauses (20), (21),
12.13(22), and (23);
12.14 (12) the amount of a partner's pro rata share of net income which does not flow
12.15through to the partner because the partnership elected to pay the tax on the income under
12.16section 6242(a)(2) of the Internal Revenue Code;
12.17 (13) the amount of net income excluded under section 114 of the Internal Revenue
12.18Code;
12.19 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
12.20Revenue Code, for the taxable year when subpart F income is calculated without regard to
12.21the provisions of Division C, title III, section 303(b) of Public Law 110-343;
12.22 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
12.23and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
12.24has an activity that in the taxable year generates a deduction for depreciation under
12.25section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
12.26that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
12.27under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
12.28depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
12.29amount of the loss from the activity that is not allowed in the taxable year. In succeeding
12.30taxable years when the losses not allowed in the taxable year are allowed, the depreciation
12.31under section 168(k)(1)(A) and (k)(4)(A) is allowed;
12.32 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
12.33Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
12.34Revenue Code of 1986, as amended through December 31, 2003;
12.35 (17) to the extent deducted in computing federal taxable income, the amount of the
12.36deduction allowable under section 199 of the Internal Revenue Code;
13.1 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
13.2federal subsidies for prescription drug plans;
13.3 (19) the amount of expenses disallowed under section
13.4 (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
13.5accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
13.6of a corporation that is a member of the taxpayer's unitary business group that qualifies
13.7as a foreign operating corporation. For purposes of this clause, intangible expenses and
13.8costs include:
13.9 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
13.10use, maintenance or management, ownership, sale, exchange, or any other disposition of
13.11intangible property;
13.12 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
13.13transactions;
13.14 (iii) royalty, patent, technical, and copyright fees;
13.15 (iv) licensing fees; and
13.16 (v) other similar expenses and costs.
13.17For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
13.18applications, trade names, trademarks, service marks, copyrights, mask works, trade
13.19secrets, and similar types of intangible assets.
13.20This clause does not apply to any item of interest or intangible expenses or costs paid,
13.21accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
13.22to such item of income to the extent that the income to the foreign operating corporation
13.23is income from sources without the United States as defined in subtitle A, chapter 1,
13.24subchapter N, part 1, of the Internal Revenue Code;
13.25 (21) except as already included in the taxpayer's taxable income pursuant to clause
13.26(20), any interest income and income generated from intangible property received or
13.27accrued by a foreign operating corporation that is a member of the taxpayer's unitary
13.28group. For purposes of this clause, income generated from intangible property includes:
13.29 (i) income related to the direct or indirect acquisition, use, maintenance or
13.30management, ownership, sale, exchange, or any other disposition of intangible property;
13.31 (ii) income from factoring transactions or discounting transactions;
13.32 (iii) royalty, patent, technical, and copyright fees;
13.33 (iv) licensing fees; and
13.34 (v) other similar income.
14.1For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
14.2applications, trade names, trademarks, service marks, copyrights, mask works, trade
14.3secrets, and similar types of intangible assets.
14.4This clause does not apply to any item of interest or intangible income received or accrued
14.5by a foreign operating corporation with respect to such item of income to the extent that
14.6the income is income from sources without the United States as defined in subtitle A,
14.7chapter 1, subchapter N, part 1, of the Internal Revenue Code;
14.8 (22) the dividends attributable to the income of a foreign operating corporation that
14.9is a member of the taxpayer's unitary group in an amount that is equal to the dividends
14.10paid deduction of a real estate investment trust under section 561(a) of the Internal
14.11Revenue Code for amounts paid or accrued by the real estate investment trust to the
14.12foreign operating corporation;
14.13 (23) the income of a foreign operating corporation that is a member of the taxpayer's
14.14unitary group in an amount that is equal to gains derived from the sale of real or personal
14.15property located in the United States;
14.16 (24) the additional amount allowed as a deduction for donation of computer
14.17technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
14.18extent deducted from taxable income;
14.19(25) discharge of indebtedness income resulting from reacquisition of business
14.20indebtedness and deferred under section 108(i) of the Internal Revenue Code;
14.21(26) the amount of the deduction under section 170 of the Internal Revenue Code
14.22that represents contributions that qualify for an early childhood education access to quality
14.23tax credit under section 290.0694; and
14.24(27) the amount of the deduction under section 170 of the Internal Revenue
14.25Code that represents contributions that qualify for an early childhood education quality
14.26improvement credit under section 290.0695.
14.27EFFECTIVE DATE.This section is effective for taxable years beginning after
14.28December 31, 2010.
14.29 Sec. 3. [290.0693] EARLY CHILDHOOD TRAIN AND RETAIN CREDIT.
14.30 Subdivision 1. Statement of intent. The purpose of the early childhood train
14.31and retain credit is to encourage and reward early childhood education professionals
14.32for furthering their education and providing continuity of instruction to Minnesota's
14.33children. The success of the credit must be measured by comparing the number of early
14.34childhood education professionals claiming the credit at the various point levels in the
15.1first year the credit is allowed with the number claiming the credit at the various point
15.2levels in following years.
15.3 Subd. 2. Credit allowed. (a) An individual who is an eligible early childhood
15.4education professional is allowed a credit against the tax imposed by this chapter as
15.5follows:
| 15.6 |
Early education experience points |
Credit amount |
| 15.7 |
1 to 2 |
$500 |
| 15.8 |
3 to 5 |
$1,000 |
| 15.9 |
6 to 7 |
$1,500 |
| 15.10 |
8 to 10 |
$2,500 |
| 15.11 |
11 to 12 |
$3,000 |
15.13per taxable year. For taxable years beginning after December 31, 2011, the maximum
15.14aggregate credits must not exceed $1,000,000 per taxable year.
15.15(c) For a nonresident or part-year resident, the credit must be allocated based on the
15.16percentage calculated under section 290.06, subdivision 2c, paragraph (e).
15.17 Subd. 3. Definitions. (a) For purposes of this section, the following terms have
15.18the meanings given.
15.19(b) "Early education experience points" means the eligible early childhood education
15.20professional's points registered with the Minnesota Center for Professional Development
15.21Registry.
15.22(c) "Eligible early childhood education professional" means an individual who:
15.23(1) is registered with the Minnesota Center for Professional Development Registry;
15.24(2) is employed at a quality program;
15.25(3) works directly with children who have not yet enrolled in kindergarten or first
15.26grade; and
15.27(4) has been employed at the same program for at least 20 hours per week for at least
15.2812 months during the tax year.
15.29(d) "Quality program" means a program rated using the quality rating and
15.30improvement system tool established by the guidelines under chapter 119C.
15.31 Subd. 4. Application for credit certificates. For taxable years beginning after
15.32December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
15.33train and retain tax credit certificate. The credit certificates under this section must be
15.34made available on a first-come, first-served basis until the maximum statewide credit
15.35amount has been reached. The commissioner must not issue a tax credit certificate for an
15.36amount greater than the limits under subdivision 2.
16.1 Subd. 5. Credit refundable. If the amount of credit an individual is eligible to
16.2receive under this section exceeds the claimant's tax liability under this chapter, the
16.3commissioner shall refund the excess to the claimant.
16.4 Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this
16.5section is appropriated to the commissioner from the general fund.
16.6EFFECTIVE DATE.This section is effective for taxable years beginning after
16.7December 31, 2010.
16.8 Sec. 4. [290.0694] EARLY CHILDHOOD EDUCATION ACCESS TO QUALITY
16.9TAX CREDIT.
16.10 Subdivision 1. Statement of intent. The purpose of the early childhood education
16.11access to quality tax credit is to increase the amount of private contributions available to
16.12provide low-income children in Minnesota with access to high-quality early childhood
16.13education programs. The success of the credit must be measured by determining the
16.14total amount of private contributions that are made to provide early childhood education
16.15scholarships and are eligible for the credit under this section.
16.16 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
16.17the meanings given.
16.18(b) "Early childhood education access to quality donation" means a donation to a
16.19qualified early childhood education program.
16.20(c) "Qualified early childhood education program" means a program operated
16.21in Minnesota that:
16.22(1) has been rated using the quality rating and improvement system tool established
16.23by the guidelines under chapter 119C; and
16.24(2) accepts early childhood education access to quality donations under this section
16.25as payment of tuition for a qualified student who is enrolled in the program.
16.26(d) "Qualified student" means a student who:
16.27(1) has not attained the age of seven years and become subject to the requirements of
16.28section 120A.22, subdivision 5;
16.29(2) has reached age three or four by September 1;
16.30(3) is a Minnesota resident; and
16.31(4) is a member of a household whose total annual income during the year, without
16.32consideration of the benefits under this program, is equal to or less than 47 percent of the
16.33state median income in the current calendar year.
16.34 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
16.35credit against the tax due under this chapter equal to 75 percent of the amount donated to
17.1a qualified early childhood education program during the taxable year. For taxable year
17.22011, the maximum aggregate credits must not exceed $500,000 per taxable year. For
17.3taxable years beginning after December 31, 2011, the maximum aggregate credits must
17.4not exceed $1,000,000 per taxable year.
17.5(b) A taxpayer must provide a copy of the receipt provided by the qualified early
17.6childhood education program when claiming the credit for the donation.
17.7 Subd. 4. Application for credit certificates. For taxable years beginning after
17.8December 31, 2010, a taxpayer must apply to the commissioner for an early childhood
17.9education access to quality tax credit certificate. The credit certificates under this section
17.10must be made available on a first-come, first-served basis until the maximum statewide
17.11credit amount has been reached. The commissioner must not issue a tax credit certificate
17.12for an amount greater than the limits under subdivision 3.
17.13 Subd. 5. Responsibilities of qualified early childhood education programs. (a)
17.14Each qualified early childhood education program that receives donations directly from
17.15taxpayers under this section must:
17.16(1) notify the commissioner of its intent to participate in this program;
17.17(2) demonstrate that it meets the definition of a qualified early childhood education
17.18program in subdivision 2, paragraph (c);
17.19(3) provide a receipt or verification on a form approved by the commissioner to
17.20taxpayers for donations;
17.21(4) conduct criminal background checks on all of its employees and board members
17.22and exclude from employment or governance any individuals that might reasonably pose a
17.23risk to the appropriate use of contributed funds;
17.24(5) demonstrate its financial accountability by submitting a financial information
17.25report for the organization that complies with uniform financial accounting standards
17.26established by the commissioner;
17.27(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
17.28more during the school year, by filing financial information with the commissioner prior
17.29to September 1 of each year that demonstrates the financial viability of the qualified
17.30early childhood education program; and
17.31(7) use amounts received as donations to provide scholarships to qualified students
17.32within one year of the date of receiving the donation.
17.33(b) A qualified early childhood education program that receives donations directly
17.34from taxpayers under this program must report to the commissioner by June 1 of each year
17.35the following information regarding donations received and scholarships awarded in the
17.36previous calendar year:
18.1(1) the total number and total dollar amount of donations from taxpayers received
18.2during the previous calendar year; and
18.3(2) the total number and total dollar amount of scholarships awarded to qualified
18.4students during the previous calendar year.
18.5(c) If the commissioner decides to bar a qualified early childhood education program
18.6from the program for failure to comply with the requirements in paragraph (a), the
18.7qualified early childhood education program must notify taxpayers who have donated to
18.8the qualified early childhood education program in writing within 30 days.
18.9 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
18.10standardized format for a receipt to be issued by a qualified early childhood education
18.11program to a taxpayer to indicate the value of a donation received.
18.12(b) The commissioner must prescribe a standardized format for qualified early
18.13childhood education programs to report the information required under subdivision 5.
18.14(c) The commissioner must post on the department's Web site the names and
18.15addresses of qualified early childhood education programs and regularly update the names
18.16and addresses of any qualified early childhood education programs that have been barred
18.17from participating in the program.
18.18(d) The commissioner must conduct either a financial review or audit of a qualified
18.19early childhood education program upon finding evidence of fraud or intentional
18.20misreporting.
18.21(e) The commissioner must bar a qualified early childhood education program from
18.22participating in the program if the commissioner establishes that the qualified early
18.23childhood education program has intentionally and substantially failed to comply with
18.24the requirements in subdivision 5. If the commissioner determines that a qualified early
18.25childhood education program should be barred from the program, the commissioner
18.26must notify the qualified early childhood education program within 60 days of that
18.27determination.
18.28EFFECTIVE DATE.This section is effective for taxable years beginning after
18.29December 31, 2010.
18.30 Sec. 5. [290.0695] EARLY CHILDHOOD EDUCATION QUALITY
18.31IMPROVEMENT CREDIT.
18.32 Subdivision 1. Statement of intent. The purpose of the early childhood education
18.33quality improvement credit is to encourage contributions that result in improvements to
18.34the quality of programming provided by eligible early childhood education providers.
18.35The success of the credit must be measured by determining amounts spent as a result of
19.1contributions qualifying for the credit to improve the quality of programming provided by
19.2eligible early childhood education providers.
19.3 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
19.4the meanings given.
19.5(b) "Eligible early childhood education provider" means a provider who operates a
19.6program in an area in Minnesota in which the quality rating and improvement system tool
19.7established by the guidelines under chapter 119C is in use for the taxable year.
19.8(c) "Resource and referral agency" means an agency that is designated by the
19.9Department of Human Services to provide child care resource and referral services.
19.10 Subd. 3. Credit allowed. (a) An individual or corporate taxpayer is allowed a
19.11credit against the tax due under this chapter equal to 75 percent of the amount donated to
19.12an eligible early childhood education provider or a resource and referral agency during
19.13the taxable year. For a taxpayer to be eligible for the credit, donations to eligible early
19.14childhood education providers must be used to improve program quality in ways that
19.15are consistent with the standards set by the quality rating and improvement system, and
19.16donations to resource and referral agencies must be used to provide early childhood
19.17education providers with direct quality improvement services that are consistent with the
19.18standards set by the quality rating and improvement system.
19.19(b) For taxable year 2011, the maximum aggregate credits must not exceed $500,000
19.20per taxable year. For taxable years beginning after December 31, 2011, the maximum
19.21aggregate credits must not exceed $1,000,000 per taxable year.
19.22(c) A taxpayer must provide a copy of the receipt provided by the eligible early
19.23childhood education provider or resource and referral agency when claiming the credit for
19.24the donation.
19.25 Subd. 4. Application for credit certificates. For taxable years beginning
19.26after December 31, 2010, and before January 1, 2013, a taxpayer must apply to the
19.27commissioner for an early childhood education quality improvement tax credit certificate.
19.28The credit certificates under this section must be made available on a first-come,
19.29first-served basis until the maximum statewide credit amount has been reached. The
19.30commissioner must not issue a tax credit certificate for an amount greater than the limits
19.31under subdivision 3.
19.32 Subd. 5. Responsibilities of eligible early childhood education providers and
19.33resource and referral agencies. (a) Each eligible early childhood education provider
19.34and resource and referral agency that receives contributions directly from taxpayers
19.35under this section must:
19.36(1) notify the commissioner of its intent to participate in this program;
20.1(2) demonstrate to the commissioner that it meets the requirements of this section;
20.2(3) provide a receipt or verification on a form approved by the commissioner to
20.3taxpayers for contributions made to the eligible early childhood education provider
20.4or resource and referral agency;
20.5(4) conduct criminal background checks on all of its employees and board members
20.6and exclude from employment or governance any individuals that might reasonably pose a
20.7risk to the appropriate use of contributed funds;
20.8(5) demonstrate its financial accountability by submitting a financial information
20.9report for the organization that complies with uniform financial accounting standards
20.10established by the commissioner;
20.11(6) demonstrate its financial viability, if it is to receive donations of $150,000 or
20.12more during the school year, by filing financial information with the commissioner prior
20.13to September 1 of each year that demonstrates the financial viability of the qualified
20.14foundation; and
20.15(7) use amounts received as donations to improve program quality, in the case of
20.16eligible early childhood education providers, or to provide quality improvement services,
20.17in the case of resource and referral agencies, within one year of the date of receiving
20.18the donation.
20.19(b) If the commissioner decides to bar an eligible early childhood education
20.20provider or a resource and referral agency from the program for failure to comply with
20.21the requirements in paragraph (a), the provider or agency must notify taxpayers who
20.22have donated to the eligible early childhood provider or resource and referral agency in
20.23writing within 30 days.
20.24 Subd. 6. Responsibilities of commissioner. (a) The commissioner must prescribe a
20.25standardized format for a receipt to be issued by an eligible early childhood education
20.26provider or a resource and referral agency to a taxpayer to indicate the value of a
20.27contribution received.
20.28(b) The commissioner must prescribe a standardized format for eligible early
20.29childhood education providers or resource and referral agencies to report the information
20.30required under subdivision 5.
20.31(c) The commissioner must post on the department's Web site the names and
20.32addresses of eligible early childhood education providers and resource and referral
20.33agencies and regularly update the names and addresses of any eligible early childhood
20.34education providers or resource and referral agencies that have been barred from
20.35participating in the program.
21.1(d) The commissioner must conduct either a financial review or audit of an eligible
21.2early childhood education provider or a resource and referral agency upon finding
21.3evidence of fraud or intentional misreporting.
21.4(e) The commissioner must bar an eligible early childhood education provider or
21.5a resource and referral agency from participating in the program if the commissioner
21.6establishes that the provider or agency has intentionally and substantially failed to comply
21.7with the requirements in subdivision 5. If the commissioner determines that a provider or
21.8agency should be barred from the program, the commissioner must notify the provider or
21.9agency within 60 days of that determination.
21.10EFFECTIVE DATE.This section is effective for taxable years beginning after
21.11December 31, 2010.
