1.1    .................... moves to amend H.F. No. 943 as follows:
1.2Page 1, after line 5, insert:

1.3    "Section 1. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to
1.4read:
1.5    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
1.6corporations, there shall be subtracted from federal taxable income after the increases
1.7provided in subdivision 19c:
1.8    (1) the amount of foreign dividend gross-up added to gross income for federal
1.9income tax purposes under section 78 of the Internal Revenue Code;
1.10    (2) the amount of salary expense not allowed for federal income tax purposes due to
1.11claiming the federal jobs credit under section 51 of the Internal Revenue Code;
1.12    (3) any dividend (not including any distribution in liquidation) paid within the
1.13taxable year by a national or state bank to the United States, or to any instrumentality of
1.14the United States exempt from federal income taxes, on the preferred stock of the bank
1.15owned by the United States or the instrumentality;
1.16    (4) amounts disallowed for intangible drilling costs due to differences between
1.17this chapter and the Internal Revenue Code in taxable years beginning before January
1.181, 1987, as follows:
1.19    (i) to the extent the disallowed costs are represented by physical property, an amount
1.20equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
1.21subdivision 7 , subject to the modifications contained in subdivision 19e; and
1.22    (ii) to the extent the disallowed costs are not represented by physical property, an
1.23amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
1.24290.09, subdivision 8 ;
1.25    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
1.26Internal Revenue Code, except that:
2.1    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
2.2capital loss carrybacks shall not be allowed;
2.3    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
2.4a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
2.5allowed;
2.6    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
2.7capital loss carryback to each of the three taxable years preceding the loss year, subject to
2.8the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
2.9    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
2.10a capital loss carryover to each of the five taxable years succeeding the loss year to the
2.11extent such loss was not used in a prior taxable year and subject to the provisions of
2.12Minnesota Statutes 1986, section 290.16, shall be allowed;
2.13    (6) an amount for interest and expenses relating to income not taxable for federal
2.14income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
2.15expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
2.16291 of the Internal Revenue Code in computing federal taxable income;
2.17    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
2.18which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a
2.19reasonable allowance for depletion based on actual cost. In the case of leases the deduction
2.20must be apportioned between the lessor and lessee in accordance with rules prescribed
2.21by the commissioner. In the case of property held in trust, the allowable deduction must
2.22be apportioned between the income beneficiaries and the trustee in accordance with the
2.23pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
2.24of the trust's income allocable to each;
2.25    (8) for certified pollution control facilities placed in service in a taxable year
2.26beginning before December 31, 1986, and for which amortization deductions were elected
2.27under section 169 of the Internal Revenue Code of 1954, as amended through December
2.2831, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
2.291986, section 290.09, subdivision 7;
2.30    (9) amounts included in federal taxable income that are due to refunds of income,
2.31excise, or franchise taxes based on net income or related minimum taxes paid by the
2.32corporation to Minnesota, another state, a political subdivision of another state, the
2.33District of Columbia, or a foreign country or possession of the United States to the extent
2.34that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
2.35clause (1), in a prior taxable year;
3.1    (10) 80 20 percent of royalties, fees, or other like income accrued or received from a
3.2foreign operating corporation or a foreign corporation which is part of the same unitary
3.3business as the receiving corporation;
3.4    (11) income or gains from the business of mining as defined in section 290.05,
3.5subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
3.6    (12) the amount of disability access expenditures in the taxable year which are not
3.7allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
3.8    (13) the amount of qualified research expenses not allowed for federal income tax
3.9purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
3.10the amount exceeds the amount of the credit allowed under section 290.068;
3.11    (14) the amount of salary expenses not allowed for federal income tax purposes due
3.12to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
3.13Code;
3.14    (15) the amount of any refund of environmental taxes paid under section 59A of the
3.15Internal Revenue Code;
3.16    (16) for taxable years beginning before January 1, 2008, the amount of the federal
3.17small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
3.18which is included in gross income under section 87 of the Internal Revenue Code;
3.19    (17) for a corporation whose foreign sales corporation, as defined in section 922
3.20of the Internal Revenue Code, constituted a foreign operating corporation during any
3.21taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
3.22claiming the deduction under section 290.21, subdivision 4, for income received from
3.23the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
3.24income excluded under section 114 of the Internal Revenue Code, provided the income is
3.25not income of a foreign operating company;
3.26    (18) any decrease in subpart F income, as defined in section 952(a) of the Internal
3.27Revenue Code, for the taxable year when subpart F income is calculated without regard
3.28to the provisions of section 614 of Public Law 107-147;
3.29    (19) in each of the five tax years immediately following the tax year in which an
3.30addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
3.31the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
3.32amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
3.33resulting delayed depreciation cannot be less than zero; and
3.34    (20) in each of the five tax years immediately following the tax year in which an
3.35addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
3.36amount of the addition.
4.1EFFECTIVE DATE.This section is effective for taxable years beginning after
4.2December 31, 2006."
4.3Renumber the sections in sequence and correct the internal references
4.4Amend the title accordingly