Purpose

The purpose of this Minnesota legislative bill is to establish the "Minnesota Strategic Industrial Development Enhancement Act," which aims to stimulate economic development by providing specific tax credits for qualifying industrial projects in the state.

Main Provisions

• Establishment of Tax Credits: The bill sets up a tax credit program to support eligible industrial developments. These tax credits are applicable to both economic development costs and infrastructure improvements.

• Eligible Participants: Entities eligible for the tax credits must be incorporated and located in Minnesota, and their projects must be situated in qualifying locations such as industrial parks, economic development zones, or ports within counties with populations under 250,000, or near specific types of railroads.

• Application Process: Project sponsors must apply for the tax credits, submitting project details including costs and expected economic benefits.

• Limitations on Credits:

  • A credit of up to 10% is allowed for economic development expenditures with a cap of $8 million per project.
  • A credit of up to 50% is allowed for infrastructure expenditures with a cap of $4 million per project.
  • The total credit for combined expenditures cannot exceed $10 million per project.
  • The total credits granted in a tax year cannot exceed $50 million.

• Carryover and Transferability: Unused credits can be carried over to the next five tax years. Credits can also be transferred to other taxpayers through a formal agreement.

• Rulemaking: The commissioner of employment and economic development is authorized to create rules for verifying project eligibility and expenditures.

Significant Changes to Existing Law

• New Tax Incentives: This bill introduces a new tax incentive program specifically targeting industrial development and infrastructure improvements, which was not previously available under existing Minnesota tax laws.

• Transferability of Credits: The provision allowing tax credit transfers to other taxpayers is an addition, providing flexibility for eligible entities.

• Sunset Provision: The program is set to expire on January 1, 2035, unless further legislative action is taken.

Relevant Terms

• Economic development
• Tax credits
• Infrastructure improvements
• Industrial park
• Economic development zone
• Opportunity zone
• Railroad infrastructure
• Commissioner of employment and economic development
• Tax liability and carryover