1.1    .................... moves to amend H. F. No. 1812, the first engrossment, as follows:
1.2Page .., after line .., insert:


1.5    Section 1. Minnesota Statutes 2007 Supplement, section 80A.28, subdivision 1,
1.6is amended to read:
1.7    Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of
1.8$100 for every application for registration or notice filing. There shall be an additional fee
1.9of one-tenth of one percent of the maximum aggregate offering price at which the securities
1.10are to be offered in this state, and the maximum combined fees shall not exceed $300.
1.11    (b) When an application for registration is withdrawn before the effective date or a
1.12preeffective stop order is entered under section 80A.13, subdivision 1, all but the $100
1.13filing fee shall be returned. If an application to register securities is denied, the total of all
1.14fees received shall be retained.
1.15    (c) Where a filing is made in connection with a federal covered security under
1.16section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing.
1.17If the filing is made in connection with redeemable securities issued by an open end
1.18management company or unit investment trust, as defined in the Investment Company
1.19Act of 1940, there is an additional annual fee of 1/20 of one percent of the maximum
1.20aggregate offering price at which the securities are to be offered in this state during the
1.21notice filing period. The fee must be paid at the time of the initial filing and thereafter
1.22in connection with each renewal no later than July 1 of each year and must be sufficient
1.23to cover the shares the issuer expects to sell in this state over the next 12 months. If
1.24during a current notice filing the issuer determines it is likely to sell shares in excess of
1.25the shares for which fees have been paid to the commissioner, the issuer shall submit an
1.26amended notice filing to the commissioner under section 80A.122, subdivision 1, clause
2.1(3), together with a fee of 1/20 of one percent of the maximum aggregate offering price
2.2of the additional shares. Shares for which a fee has been paid, but which have not been
2.3sold at the time of expiration of the notice filing, may not be sold unless an additional fee
2.4to cover the shares has been paid to the commissioner as provided in this section and
2.5section 80A.122, subdivision 4a. If the filing is made in connection with redeemable
2.6securities issued by such a company or trust, there is no maximum fee for securities filings
2.7made according to this paragraph. If the filing is made in connection with any other
2.8federal covered security under Section 18(b)(2) of the Securities Act of 1933, there is an
2.9additional fee of one-tenth of one percent of the maximum aggregate offering price at
2.10which the securities are to be offered in this state, and the combined fees shall not exceed
2.11$300. Beginning with fiscal year 2001 and continuing each fiscal year thereafter, as of the
2.12last day of each fiscal year, the commissioner shall determine the total amount of all fees
2.13that were collected under this paragraph in connection with any filings made for that fiscal
2.14year for securities of an open-end investment company on behalf of a security that is a
2.15federal covered security pursuant to section 18(b)(2) of the Securities Act of 1933. To the
2.16extent the total fees collected by the commissioner in connection with these filings exceed
2.17$25,600,000 $31,385,000 in a fiscal year, the commissioner shall refund, on a pro rata
2.18basis, to all persons who paid any fees for that fiscal year, the amount of fees collected by
2.19the commissioner in excess of $25,600,000 $31,385,000. No individual refund is required
2.20of amounts of $100 or less for a fiscal year.
2.21EFFECTIVE DATE.This section is effective beginning for refunds paid for fiscal
2.22year 2008.

2.23    Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 5, is amended to read:
2.24    Subd. 5. Domestic corporation. The term "domestic" when applied to a corporation
2.25means a corporation:
2.26    (1) created or organized in the United States, or under the laws of the United States
2.27or of any state, the District of Columbia, or any political subdivision of any of the
2.28foregoing but not including the Commonwealth of Puerto Rico, or any possession of
2.29the United States;
2.30    (2) which qualifies as a DISC, as defined in section 992(a) of the Internal Revenue
2.31Code; or
2.32    (3) which qualifies as a FSC, as defined in section 922 of the Internal Revenue Code;
2.33    (4) which is incorporated in a tax haven;
2.34    (5) which is engaged in activity in a tax haven sufficient for the tax haven to impose
2.35a net income tax under United States constitutional standards and section 290.015; or
3.1    (6) which has the average of its property, payroll, and sales factors, as defined under
3.2section 290.191, within the 50 states of the United States and the District of Columbia of
3.320 percent or more.
3.4EFFECTIVE DATE.This section is effective for taxable years beginning after
3.5December 31, 2007.

3.6    Sec. 3. Minnesota Statutes 2006, section 290.01, is amended by adding a subdivision
3.7to read:
3.8    Subd. 5c. Tax haven. (a) "Tax haven" means a foreign jurisdiction designated
3.9under this subdivision.
3.10    (b) The commissioner may designate a foreign jurisdiction as a tax haven by revenue
3.11notice if the jurisdiction has:
3.12    (1) no or a nominal effective tax on income of a corporation; and
3.13    (2) corporate, business, bank, or tax secrecy rules or practices that, in the judgment
3.14of the commissioner, unreasonably restrict the ability of the United States, and thereby
3.15the state of Minnesota, to obtain information relevant to the enforcement of taxes on
3.16corporations based on net income. These rules or practices may be either formal laws,
3.17regulations, or rules or be informal government and business practices that have the effect
3.18of inhibiting access by law enforcement and tax administration authorities.
3.19    (c) The following foreign jurisdictions are deemed to be tax havens, unless the
3.20commissioner, by revenue notice, revokes the listing of a jurisdiction:
3.21    (1) Anguilla;
3.22    (2) Antigua and Barbuda;
3.23    (3) Aruba;
3.24    (4) Bahamas;
3.25    (5) Barbados;
3.26    (6) Belize;
3.27    (7) Bermuda;
3.28    (8) British Virgin Islands;
3.29    (9) Cayman Islands;
3.30    (10) Cook Islands;
3.31    (11) Dominica;
3.32    (12) Gibraltar;
3.33    (13) Grenada;
3.34    (14) Guernsey-Sark-Alderney;
3.35    (15) Isle of Man;
4.1    (16) Jersey;
4.2    (17) Latvia;
4.3    (18) Liechtenstein;
4.4    (19) Luxembourg;
4.5    (20) Nauru;
4.6    (21) Netherlands Antilles;
4.7    (22) Panama;
4.8    (23) Samoa;
4.9    (24) Saint Kitts and Nevis;
4.10    (25) Saint Lucia;
4.11    (26) Saint Vincent and Grenadines;
4.12    (27) Turks and Caicos; and
4.13    (28) Vanuatu.
4.14    (d) The commissioner shall revoke a foreign jurisdiction's listing under paragraph
4.15(b) or (c), as applicable, if the United States enters into a tax treaty or other agreement
4.16with the foreign jurisdiction that provides for prompt, obligatory, and automatic exchange
4.17of information with the United States government relevant to enforcing the provisions of
4.18federal tax laws and the treaty or other agreement was in effect for the taxable year.
4.19EFFECTIVE DATE.This section is effective for taxable years beginning after
4.20December 31, 2007.

4.21    Sec. 4. Minnesota Statutes 2006, section 290.01, subdivision 19c, as amended by Laws
4.222008, chapter 154, article 4, section 4, is amended to read:
4.23    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
4.24there shall be added to federal taxable income:
4.25    (1) the amount of any deduction taken for federal income tax purposes for income,
4.26excise, or franchise taxes based on net income or related minimum taxes, including but not
4.27limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
4.28another state, a political subdivision of another state, the District of Columbia, or any
4.29foreign country or possession of the United States;
4.30    (2) interest not subject to federal tax upon obligations of: the United States, its
4.31possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
4.32state, any of its political or governmental subdivisions, any of its municipalities, or any
4.33of its governmental agencies or instrumentalities; the District of Columbia; or Indian
4.34tribal governments;
5.1    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
5.2Revenue Code;
5.3    (4) the amount of any net operating loss deduction taken for federal income tax
5.4purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
5.5deduction under section 810 of the Internal Revenue Code;
5.6    (5) the amount of any special deductions taken for federal income tax purposes
5.7under sections 241 to 247 and 965 of the Internal Revenue Code;
5.8    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
5.9clause (a), that are not subject to Minnesota income tax;
5.10    (7) the amount of any capital losses deducted for federal income tax purposes under
5.11sections 1211 and 1212 of the Internal Revenue Code;
5.12    (8) the exempt foreign trade income of a foreign sales corporation under sections
5.13921(a) and 291 of the Internal Revenue Code;
5.14    (9) the amount of percentage depletion deducted under sections 611 through 614 and
5.15291 of the Internal Revenue Code;
5.16    (10) for certified pollution control facilities placed in service in a taxable year
5.17beginning before December 31, 1986, and for which amortization deductions were elected
5.18under section 169 of the Internal Revenue Code of 1954, as amended through December
5.1931, 1985, the amount of the amortization deduction allowed in computing federal taxable
5.20income for those facilities;
5.21    (11) the amount of any deemed dividend from a foreign operating corporation
5.22determined pursuant to section 290.17, subdivision 4, paragraph (g);
5.23    (12) the amount of a partner's pro rata share of net income which does not flow
5.24through to the partner because the partnership elected to pay the tax on the income under
5.25section 6242(a)(2) of the Internal Revenue Code;
5.26    (13) (12) the amount of net income excluded under section 114 of the Internal
5.27Revenue Code;
5.28    (14) (13) any increase in subpart F income, as defined in section 952(a) of the
5.29Internal Revenue Code, for the taxable year when subpart F income is calculated without
5.30regard to the provisions of section 103 of Public Law 109-222;
5.31    (15) (14) 80 percent of the depreciation deduction allowed under section
5.32168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
5.33the taxpayer has an activity that in the taxable year generates a deduction for depreciation
5.34under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
5.35year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
5.36allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
6.1of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
6.2over the amount of the loss from the activity that is not allowed in the taxable year. In
6.3succeeding taxable years when the losses not allowed in the taxable year are allowed, the
6.4depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
6.5    (16) (15) 80 percent of the amount by which the deduction allowed by section 179 of
6.6the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
6.7Revenue Code of 1986, as amended through December 31, 2003;
6.8    (17) (16) to the extent deducted in computing federal taxable income, the amount of
6.9the deduction allowable under section 199 of the Internal Revenue Code;
6.10    (18) (17) the exclusion allowed under section 139A of the Internal Revenue Code
6.11for federal subsidies for prescription drug plans; and
6.12    (19) (18) for taxable years beginning after December 31, 2006, and before January 1,
6.132008, the additional amount allowed as a deduction for donation of computer technology
6.14and equipment under section 170(e)(6) of the Internal Revenue Code, to the extent
6.15deducted from taxable income.
6.16EFFECTIVE DATE.This section is effective for taxable years beginning after
6.17December 31, 2007.

6.18    Sec. 5. Minnesota Statutes 2006, section 290.01, subdivision 19d, as amended by Laws
6.192008, chapter 154, article 11, section 12, is amended to read:
6.20    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
6.21corporations, there shall be subtracted from federal taxable income after the increases
6.22provided in subdivision 19c:
6.23    (1) the amount of foreign dividend gross-up added to gross income for federal
6.24income tax purposes under section 78 of the Internal Revenue Code;
6.25    (2) the amount of salary expense not allowed for federal income tax purposes due to
6.26claiming the work opportunity credit under section 51 of the Internal Revenue Code;
6.27    (3) any dividend (not including any distribution in liquidation) paid within the
6.28taxable year by a national or state bank to the United States, or to any instrumentality of
6.29the United States exempt from federal income taxes, on the preferred stock of the bank
6.30owned by the United States or the instrumentality;
6.31    (4) amounts disallowed for intangible drilling costs due to differences between
6.32this chapter and the Internal Revenue Code in taxable years beginning before January
6.331, 1987, as follows:
7.1    (i) to the extent the disallowed costs are represented by physical property, an amount
7.2equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
7.3subdivision 7 , subject to the modifications contained in subdivision 19e; and
7.4    (ii) to the extent the disallowed costs are not represented by physical property, an
7.5amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
7.6290.09, subdivision 8 ;
7.7    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
7.8Internal Revenue Code, except that:
7.9    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
7.10capital loss carrybacks shall not be allowed;
7.11    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
7.12a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
7.13allowed;
7.14    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
7.15capital loss carryback to each of the three taxable years preceding the loss year, subject to
7.16the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
7.17    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
7.18a capital loss carryover to each of the five taxable years succeeding the loss year to the
7.19extent such loss was not used in a prior taxable year and subject to the provisions of
7.20Minnesota Statutes 1986, section 290.16, shall be allowed;
7.21    (6) an amount for interest and expenses relating to income not taxable for federal
7.22income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
7.23expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
7.24291 of the Internal Revenue Code in computing federal taxable income;
7.25    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
7.26which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
7.27reasonable allowance for depletion based on actual cost. In the case of leases the deduction
7.28must be apportioned between the lessor and lessee in accordance with rules prescribed
7.29by the commissioner. In the case of property held in trust, the allowable deduction must
7.30be apportioned between the income beneficiaries and the trustee in accordance with the
7.31pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
7.32of the trust's income allocable to each;
7.33    (8) for certified pollution control facilities placed in service in a taxable year
7.34beginning before December 31, 1986, and for which amortization deductions were elected
7.35under section 169 of the Internal Revenue Code of 1954, as amended through December
8.131, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
8.21986, section 290.09, subdivision 7;
8.3    (9) amounts included in federal taxable income that are due to refunds of income,
8.4excise, or franchise taxes based on net income or related minimum taxes paid by the
8.5corporation to Minnesota, another state, a political subdivision of another state, the
8.6District of Columbia, or a foreign country or possession of the United States to the extent
8.7that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
8.8clause (1), in a prior taxable year;
8.9    (10) 80 percent of royalties, fees, or other like income accrued or received from a
8.10foreign operating corporation or a foreign corporation which is part of the same unitary
8.11business as the receiving corporation;
8.12    (11) income or gains from the business of mining as defined in section 290.05,
8.13subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
8.14    (12) (11) the amount of disability access expenditures in the taxable year which are
8.15not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
8.16Code;
8.17    (13) (12) the amount of qualified research expenses not allowed for federal income
8.18tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
8.19that the amount exceeds the amount of the credit allowed under section 290.068;
8.20    (14) (13) the amount of salary expenses not allowed for federal income tax purposes
8.21due to claiming the Indian employment credit under section 45A(a) of the Internal
8.22Revenue Code;
8.23    (15) (14) for taxable years beginning before January 1, 2008, the amount of the
8.24federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
8.25Revenue Code which is included in gross income under section 87 of the Internal Revenue
8.26Code;
8.27    (16) (15) for a corporation whose foreign sales corporation, as defined in section
8.28922 of the Internal Revenue Code, constituted a foreign operating corporation during any
8.29taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
8.30claiming the deduction under section 290.21, subdivision 4, for income received from
8.31the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
8.32income excluded under section 114 of the Internal Revenue Code, provided the income is
8.33not income of a foreign operating company;
8.34    (17) (16) any decrease in subpart F income, as defined in section 952(a) of the
8.35Internal Revenue Code, for the taxable year when subpart F income is calculated without
8.36regard to the provisions of section 103 of Public Law 109-222;
9.1    (16) (17) in each of the five tax years immediately following the tax year in which an
9.2addition is required under subdivision 19c, clause (15) (14), an amount equal to one-fifth
9.3of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
9.4amount of the addition made by the taxpayer under subdivision 19c, clause (15) (14). The
9.5resulting delayed depreciation cannot be less than zero; and
9.6    (17) (18) in each of the five tax years immediately following the tax year in which an
9.7addition is required under subdivision 19c, clause (16) (15), an amount equal to one-fifth
9.8of the amount of the addition.
9.9EFFECTIVE DATE.This section is effective for taxable years beginning after
9.10December 31, 2008, provided that for taxable years beginning after December 31,
9.112007, and before January 1, 2009, the subtraction under clause (10) is not allowed to
9.12foreign operating corporations and is limited to income paid to the corporation by a
9.13foreign corporation that is part of the unitary business for the use of or privilege of using
9.14outside of the United States patents, copyrights, secret processes and formulas, good will,
9.15know-how, trademarks, trade brands, franchises, and other like property and is further
9.16limited to the extent those items are included in the corporation's federal taxable income
9.17for the taxable year.

9.18    Sec. 6. Minnesota Statutes 2006, section 290.17, subdivision 4, is amended to read:
9.19    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
9.20within this state or partly within and partly without this state is part of a unitary business,
9.21the entire income of the unitary business is subject to apportionment pursuant to section
9.22290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
9.23business is considered to be derived from any particular source and none may be allocated
9.24to a particular place except as provided by the applicable apportionment formula. The
9.25provisions of this subdivision do not apply to business income subject to subdivision 5,
9.26income of an insurance company, or income of an investment company determined under
9.27section 290.36.
9.28    (b) The term "unitary business" means business activities or operations which
9.29result in a flow of value between them. The term may be applied within a single legal
9.30entity or between multiple entities and without regard to whether each entity is a sole
9.31proprietorship, a corporation, a partnership or a trust.
9.32    (c) Unity is presumed whenever there is unity of ownership, operation, and use,
9.33evidenced by centralized management or executive force, centralized purchasing,
9.34advertising, accounting, or other controlled interaction, but the absence of these
9.35centralized activities will not necessarily evidence a nonunitary business. Unity is also
10.1presumed when business activities or operations are of mutual benefit, dependent upon or
10.2contributory to one another, either individually or as a group.
10.3    (d) Where a business operation conducted in Minnesota is owned by a business
10.4entity that carries on business activity outside the state different in kind from that
10.5conducted within this state, and the other business is conducted entirely outside the state, it
10.6is presumed that the two business operations are unitary in nature, interrelated, connected,
10.7and interdependent unless it can be shown to the contrary.
10.8    (e) Unity of ownership is not deemed to exist when a corporation is involved unless
10.9that corporation is a member of a group of two or more business entities and more than 50
10.10percent of the voting stock of each member of the group is directly or indirectly owned
10.11by a common owner or by common owners, either corporate or noncorporate, or by one
10.12or more of the member corporations of the group. For this purpose, the term "voting
10.13stock" shall include membership interests of mutual insurance holding companies formed
10.14under section 66A.40.
10.15    (f) The net income and apportionment factors under section 290.191 or 290.20 of
10.16foreign corporations and other foreign entities which are part of a unitary business shall
10.17not be included in the net income or the apportionment factors of the unitary business.
10.18A foreign corporation or other foreign entity which is required to file a return under this
10.19chapter shall file on a separate return basis. The net income and apportionment factors
10.20under section 290.191 or 290.20 of foreign operating corporations shall not be included in
10.21the net income or the apportionment factors of the unitary business except as provided in
10.22paragraph (g).
10.23    (g) The adjusted net income of a foreign operating corporation shall be deemed to
10.24be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
10.25proportion to each shareholder's ownership, with which such corporation is engaged in
10.26a unitary business. Such deemed dividend shall be treated as a dividend under section
10.27290.21, subdivision 4.
10.28    Dividends actually paid by a foreign operating corporation to a corporate shareholder
10.29which is a member of the same unitary business as the foreign operating corporation shall
10.30be eliminated from the net income of the unitary business in preparing a combined report
10.31for the unitary business. The adjusted net income of a foreign operating corporation
10.32shall be its net income adjusted as follows:
10.33    (1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
10.34Rico, or a United States possession or political subdivision of any of the foregoing shall
10.35be a deduction; and
11.1    (2) the subtraction from federal taxable income for payments received from foreign
11.2corporations or foreign operating corporations under section 290.01, subdivision 19d,
11.3clause (10), shall not be allowed.
11.4    If a foreign operating corporation incurs a net loss, neither income nor deduction
11.5from that corporation shall be included in determining the net income of the unitary
11.6business.
11.7    (h) For purposes of determining the net income of a unitary business and the factors
11.8to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there
11.9must be included only the income and apportionment factors of domestic corporations or
11.10other domestic entities other than foreign operating corporations that are determined to
11.11be part of the unitary business pursuant to this subdivision, notwithstanding that foreign
11.12corporations or other foreign entities might be included in the unitary business.
11.13    (i) (h) Deductions for expenses, interest, or taxes otherwise allowable under
11.14this chapter that are connected with or allocable against dividends, deemed dividends
11.15described in paragraph (g), or royalties, fees, or other like income described in section
11.16290.01, subdivision 19d, clause (10), shall not be disallowed.
11.17    (j) (i) Each corporation or other entity, except a sole proprietorship, that is part of
11.18a unitary business must file combined reports as the commissioner determines. On the
11.19reports, all intercompany transactions between entities included pursuant to paragraph
11.20(h) (g) must be eliminated and the entire net income of the unitary business determined in
11.21accordance with this subdivision is apportioned among the entities by using each entity's
11.22Minnesota factors for apportionment purposes in the numerators of the apportionment
11.23formula and the total factors for apportionment purposes of all entities included pursuant
11.24to paragraph (h) (g) in the denominators of the apportionment formula.
11.25    (k) (j) If a corporation has been divested from a unitary business and is included in a
11.26combined report for a fractional part of the common accounting period of the combined
11.27report:
11.28    (1) its income includable in the combined report is its income incurred for that part
11.29of the year determined by proration or separate accounting; and
11.30    (2) its sales, property, and payroll included in the apportionment formula must
11.31be prorated or accounted for separately.
11.32EFFECTIVE DATE.This section is effective for taxable years beginning after
11.33December 31, 2007, except the modifications to the new paragraph (h) are effective for
11.34taxable years beginning after December 31, 2008.

11.35    Sec. 7. REPEALER.
12.1Minnesota Statutes 2006, section 290.01, subdivision 6b, is repealed.
12.2EFFECTIVE DATE.This section is effective for taxable years beginning after
12.3December 31, 2007."
12.4Renumber the articles in sequence and correct the internal references
12.5Amend the title accordingly