HF 3387

as introduced - 86th Legislature (2009 - 2010) Posted on 03/04/2010 09:50am

A bill for an act
relating to economic development; establishing a health insurance pool for
farmers; modifying environmental permitting for agriculture-related businesses;
modifying environmental review requirements; providing tax incentives for
angel investments and water conservation; allowing environmental assessment
worksheets to be completed online; conforming to federal section 179 expensing
allowances; amending Minnesota Statutes 2008, sections 116D.04, subdivisions
2a, 3a, 11, 13, by adding subdivisions; 290.06, by adding a subdivision;
Minnesota Statutes 2009 Supplement, section 290.01, subdivisions 19a, 19c;
proposing coding for new law in Minnesota Statutes, chapters 16E; 43A; 116J;
290; repealing Minnesota Statutes 2008, sections 116D.04, subdivisions 4a, 5a,
9, 10; 116D.045, subdivisions 1, 2, 3, 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [16E.23] ELECTRONIC LICENSING; ENVIRONMENTAL
ASSESSMENT WORKSHEETS.
new text end

new text begin The statewide electronic licensing system must provide a means for responsible
governmental units to complete environmental assessment worksheets online, and must
include online templates that will assist responsible governmental units in completing
these worksheets.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2011.
new text end

Sec. 2.

new text begin [43A.3175] MINNESOTA FARMERS INSURANCE POOL.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the terms defined
have the meanings given.
new text end

new text begin (b) "Commissioner" means the commissioner of management and budget.
new text end

new text begin (c) "Eligible person" means a farmer or dependent of a farmer.
new text end

new text begin (d) "Farmer" means an individual who devotes more than 50 percent of the
individual's work time within a calendar year to farming in this state as an owner,
employee, or independent contractor of a farm or farm-processing facility.
new text end

new text begin (e) "Pool" means the Minnesota farmers insurance pool created in this section.
new text end

new text begin (f) "The insurer" means the insurer or insurers, whether singular or plural, that
contract with the commissioner to provide health coverage under this section.
new text end

new text begin Subd. 2. new text end

new text begin Creation and operation of pool. new text end

new text begin (a) The commissioner shall create and
administer the Minnesota farmers insurance pool, including:
new text end

new text begin (1) contracting for individual health insurance with one or more insurers licensed to
provide health coverage in this state, in the commissioner's discretion;
new text end

new text begin (2) designing at least two benefit sets that offer varying levels of coverage and
cost. One of the benefit sets need not comply with mandated benefits otherwise required
under state law and must be designed to permit lower premiums due to appropriate use of
deductibles, co-pays, and other enrollee cost-sharing; and
new text end

new text begin (3) engaging in outreach activities to publicize the availability of coverage under
the pool.
new text end

new text begin (b) The insurer contracted under paragraph (a) shall enroll any eligible person who
applies for coverage under one of the two benefit sets and pays the premium to the
insurer, except that the insurer need not enroll a person who is eligible for coverage by the
Minnesota Comprehensive Health Association under chapter 62E.
new text end

new text begin (c) The insurer shall process and pay claims and otherwise perform the customary
duties of an insurer.
new text end

new text begin (d) The coverage may be restricted to a network of providers under contract with
the insurer, provided that the provider network makes care available within a reasonable
distance in all parts of the state.
new text end

new text begin (e) The commissioner shall recover costs incurred by the commissioner in
connection with creation and operation of the pool from the insurer out of premiums
paid to the insurer, based upon an annual certification of those costs to the insurer by
the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for coverage to begin January 1, 2011.
new text end

Sec. 3.

Minnesota Statutes 2008, section 116D.04, subdivision 2a, is amended to read:

Subd. 2a.

When prepared.

Where there is potential for significant environmental
effects resulting from any major governmental action, the action shall be preceded by a
detailed environmental impact statement prepared by the responsible governmental unit.
new text begin A responsible governmental unit may contract for the preparation of an environmental
impact statement. new text end The environmental impact statement shall be an analytical rather than
an encyclopedic document which describes the proposed action in detail, analyzes its
significant environmental impacts, discusses appropriate alternatives to the proposed
action and their impacts, and explores methods by which adverse environmental impacts
of an action could be mitigated. deleted text begin The environmental impact statement shall also analyze
those economic, employment and sociological effects that cannot be avoided should
the action be implemented. deleted text end To ensure its use in the decision-making process, the
environmental impact statement shall be prepared as new text begin rapidly and new text end early as practical in the
formulation of an action. No mandatory environmental impact statement may be required
for an ethanol plant, as defined in section 41A.09, subdivision 2a, paragraph (b), that
produces less than 125,000,000 gallons of ethanol annually and is located outside of the
seven-county metropolitan area.

(a) The board shall by rule establish categories of actions for which environmental
impact statements and for which environmental assessment worksheets shall be prepared
as well as categories of actions for which no environmental review is required under
this section.

(b) The responsible governmental unit shall promptly publish notice of the
completion of an environmental assessment worksheet in a manner to be determined by
the board and shall provide copies of the environmental assessment worksheet to the board
and its member agencies. Comments on the need for an environmental impact statement
may be submitted to the responsible governmental unit during a 30 day period following
publication of the notice that an environmental assessment worksheet has been completed.
The responsible governmental unit's decision on the need for an environmental impact
statement shall be based on the environmental assessment worksheet and the comments
received during the comment period, and shall be made within 15 days after the close of
the comment period. deleted text begin The board's chair may extend the 15 day period by not more than 15
additional days upon the request of the responsible governmental unit.
deleted text end

deleted text begin (c) An environmental assessment worksheet shall also be prepared for a proposed
action whenever material evidence accompanying a petition by not less than 25
individuals, submitted before the proposed project has received final approval by the
appropriate governmental units, demonstrates that, because of the nature or location of a
proposed action, there may be potential for significant environmental effects. Petitions
requesting the preparation of an environmental assessment worksheet shall be submitted to
the board. The chair of the board shall determine the appropriate responsible governmental
unit and forward the petition to it. A decision on the need for an environmental assessment
worksheet shall be made by the responsible governmental unit within 15 days after the
petition is received by the responsible governmental unit. The board's chair may extend
the 15 day period by not more than 15 additional days upon request of the responsible
governmental unit.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end Except in an environmentally sensitive location where Minnesota Rules, part
4410.4300, subpart 29, item B, applies, the proposed action is exempt from environmental
review under this chapter and rules of the board, if:

(1) the proposed action is:

(i) an animal feedlot facility with a capacity of less than 1,000 animal units; or

(ii) an expansion of an existing animal feedlot facility with a total cumulative
capacity of less than 1,000 animal units;

(2) the application for the animal feedlot facility includes a written commitment by
the proposer to design, construct, and operate the facility in full compliance with Pollution
Control Agency feedlot rules; and

(3) the county board holds a public meeting for citizen input at least ten business
days prior to the Pollution Control Agency or county issuing a feedlot permit for the
animal feedlot facility unless another public meeting for citizen input has been held with
regard to the feedlot facility to be permitted. The exemption in this paragraph is in
addition to other exemptions provided under other law and rules of the board.

deleted text begin (e) The board may, prior to final approval of a proposed project, require preparation
of an environmental assessment worksheet by a responsible governmental unit selected
by the board for any action where environmental review under this section has not been
specifically provided for by rule or otherwise initiated.
deleted text end

deleted text begin (f) deleted text end new text begin (d) new text end An deleted text begin early and open deleted text end new text begin expedited new text end process shall be utilized to limit the scope of
the environmental impact statement to a discussion of those impacts, which, because of
the nature or location of the project, have the potential for significant environmental
effects. The same process shall be utilized to determine the form, content and level of
detail of the statement as well as the alternatives which are appropriate for consideration
in the statement. In addition, the permits which will be required for the proposed action
shall be identified during the scoping process. Further, the process shall identify those
permits for which information will be developed concurrently with the environmental
impact statement. The board shall provide in its rules for the expeditious completion of
the scoping process. The determinations reached in the process shall be incorporated into
the order requiring the preparation of an environmental impact statement.

deleted text begin (g) deleted text end new text begin (e) new text end Whenever practical, information needed by a governmental unit for making
final decisions on permits or other actions required for a proposed project shall be
developed in conjunction with the preparation of an environmental impact statement.

deleted text begin (h) deleted text end new text begin (f) new text end An environmental impact statement shall be prepared and its adequacy
determined within deleted text begin 280 deleted text end new text begin 120 new text end days after notice of its preparation deleted text begin unless the time is extended
by consent of the parties or by the governor for good cause deleted text end . The responsible governmental
unit shall determine the adequacy of an environmental impact statement deleted text begin , unless within 60
days after notice is published that an environmental impact statement will be prepared,
the board chooses to determine the adequacy of an environmental impact statement deleted text end . If an
environmental impact statement is found to be inadequate, the responsible governmental
unit shall have deleted text begin 60 deleted text end new text begin 45 new text end days to prepare an adequate environmental impact statement. new text begin If the
responsible governmental unit fails to act within the time required under this paragraph,
the environmental impact statement is deemed adequate, unless a written contract of
exception has been agreed to by the project proposer.
new text end

new text begin (g) The total time allowed for public comments during an environmental assessment
worksheet or environmental impact statement process shall be 30 days.
new text end

Sec. 4.

Minnesota Statutes 2008, section 116D.04, subdivision 3a, is amended to read:

Subd. 3a.

Final decisions.

Within deleted text begin 90 deleted text end new text begin 60 new text end days after final approval of an
environmental impact statement, final decisions shall be made by the appropriate
governmental units on those permits which were identified as required and for which
information was developed concurrently with the preparation of the environmental impact
statement. Provided, however, that the deleted text begin 90-day deleted text end new text begin 60-day new text end period may be extended where a
longer period is required by federal law or state statute or is consented to by the permit
applicant. The permit decision shall include the reasons for the decision, including
any conditions under which the permit is issued, together with a final order granting or
denying the permit.

Sec. 5.

Minnesota Statutes 2008, section 116D.04, subdivision 11, is amended to read:

Subd. 11.

Failure to act.

If the board or governmental unit which is required to
act within a time period specified in this section fails to so act, deleted text begin any person may seek an
order of the district court requiring the board or governmental unit to immediately take
the action mandated by subdivisions 2a and 3a deleted text end new text begin the permit or other government action
necessary is deemed approved and the project proposer may proceed with the project new text end .

Sec. 6.

Minnesota Statutes 2008, section 116D.04, subdivision 13, is amended to read:

Subd. 13.

Enforcement.

This section may be enforced by injunction, action to
compel performance, or other appropriate action in the district court of the county where
the violation takes place. deleted text begin Upon the request of the board or the chair of the board, the
attorney general may bring an action under this subdivision.
deleted text end

Sec. 7.

Minnesota Statutes 2008, section 116D.04, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Environmental review costs. new text end

new text begin The responsible governmental unit
and any other governmental units participating in the preparation or distribution of an
environmental assessment worksheet or environmental impact statement is responsible
for the costs of preparing and distributing the environmental assessment worksheet or
environmental impact statement and shall not charge a project proposer for those costs.
new text end

Sec. 8.

Minnesota Statutes 2008, section 116D.04, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Rules. new text end

new text begin The board shall, by June 30, 2011, amend rules to conform to
the changes to this section. The rules adopted under this section are not subject to the
rulemaking procedures of chapter 14 and section 14.386 does not apply. Subsequent
rulemaking authority under this section must be explicitly authorized by the legislature.
new text end

Sec. 9.

new text begin [116J.8737] JOB GROWTH INVESTMENT TAX CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Qualifying small business" means a business that:
new text end

new text begin (1) is engaged in, or is committed to engage in, biotechnology, technology,
manufacturing, agriculture, processing or assembling products, conducting research and
development, or developing a new product or business process;
new text end

new text begin (2) is not engaged in real estate development, insurance, banking, lobbying, political
consulting, wholesale or retail trade, leisure, hospitality, construction, or professional
services provided by attorneys, accountants, business consultants, physicians, or health
care consultants;
new text end

new text begin (3) has its headquarters in Minnesota;
new text end

new text begin (4) employs at least 51 percent of the business's employees in Minnesota;
new text end

new text begin (5) has less than 100 employees;
new text end

new text begin (6) has less than $2,000,000 in annual gross sales receipts for the previous year;
new text end

new text begin (7) is not a subsidiary or an affiliate of a business which employs more than 100
employees or has total gross sales receipts for the previous year of more than $2,000,000,
computed by aggregating all of the employees and gross sales receipts of the business
entities affiliated with the business;
new text end

new text begin (8) has not previously received more than $2,000,000 in private equity investments;
new text end

new text begin (9) has not previously received more than $500,000 in investments that have
qualified for and received tax credits under this section; and
new text end

new text begin (10) for a business with five or more employees, measured on a full-time equivalent
basis:
new text end

new text begin (i) provides wages and benefits to at least 75 percent of its employees in excess of
the first five employees, equal to or greater than 175 percent of the federal poverty level
for a family of four; and
new text end

new text begin (ii) provides wages and benefits to its employees in excess of the first five employees,
equal to or greater than 110 percent of the federal poverty level for a family of four.
new text end

new text begin (c) "Qualifying green job small business" means a business that satisfies all of the
requirements of paragraph (b), except clause (1), and is predominantly engaged in one
or more of the following industry sectors:
new text end

new text begin (1) green products: businesses related to the manufacture of products used by
the building, transport, consumer products, and industrial products sectors, that reduce
environmental impact and increase the efficiency of the use of resources such as energy,
water, and materials;
new text end

new text begin (2) renewable energy: businesses related to the production of energy from natural
resources such as solar, wind, hydropower, geothermal, biomass (including but not limited
to animal waste and crop waste), and biofuels (including but not limited to ethanol and
biodiesel), as well as from waste heat recovery and from the use of biomass for energy
production including cogeneration;
new text end

new text begin (3) green services: businesses that provide services that help other businesses or
consumers utilize green products and technologies, build energy infrastructure, recycle,
and manage waste; or
new text end

new text begin (4) environmental conservation: businesses related to the conservation of energy,
air, water, and land, including air emissions control, environmental monitoring and
compliance, water conservation, wastewater treatment, land management (including but
not limited to prairie), natural pesticides, aquaculture, and organic farming.
new text end

new text begin (d) "Regional investment fund" means a pooled investment fund that:
new text end

new text begin (1) invests in qualifying small businesses;
new text end

new text begin (2) invests in qualifying green job small businesses;
new text end

new text begin (3) is organized as a limited liability company or other pass-through entity; and
new text end

new text begin (4) has no fewer than five separate investors, each of whom is a qualified taxpayer, as
defined in paragraph (e), and owns no more than 20 percent of the outstanding ownership
interests in the fund.
new text end

new text begin For purposes of determining the number of investors and the ownership interests of
an investor under this clause, the ownership interests of an investor include those of the
investor's spouse, children, or siblings, and any corporation, limited liability company,
partnership, or trust in which the investor has a controlling equity interest or in which the
investor exercises management control.
new text end

new text begin (e) "Qualified taxpayer" means:
new text end

new text begin (1) an accredited investor, within the meaning of Regulation D of the Securities and
Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
part of a pass-through entity or not, who:
new text end

new text begin (i) does not own, control, or hold power to vote 20 percent or more of the outstanding
securities of the qualifying small business or the qualifying green job small business in
which the eligible investment is proposed; or
new text end

new text begin (ii) does not receive more than 50 percent of the gross annual income from the
qualifying small business or the qualifying green job small business in which the eligible
investment is proposed.
new text end

new text begin (2) A member of the immediate family of a taxpayer disqualified by this subdivision
is not eligible for a credit under this section. For purposes of this subdivision, "immediate
family" means the taxpayer's spouse, parent, sibling, or child, or the spouse of any person
listed in this paragraph.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed, holding period, limitations, and carryover. new text end

new text begin (a) A
qualified taxpayer is allowed a credit against the tax imposed under chapter 290 for
investments made in a qualified regional investment fund, a qualifying small business,
or a qualifying green job small business. The credit equals 25 percent of the qualified
taxpayer's investment in the business, but not to exceed the lesser of:
new text end

new text begin (1) the liability for tax under chapter 290, including the applicable alternative
minimum tax, but excluding the minimum fee under section 290.0922, and:
new text end

new text begin (2)(i) the amount of the certificate provided to the taxpayer under subdivision
4, paragraph (c); or
new text end

new text begin (ii) the amount of the certificate provided to the qualified individual investor under
subdivision 6, paragraph (d).
new text end

new text begin (b) No taxpayer may receive more than $100,000 in provisional credits under this
section in any one year.
new text end

new text begin (c) A qualified taxpayer must claim the credit in the third tax year after which the
investment in the qualified regional investment fund, the qualifying small business, or the
qualifying green job small business was made. The credit is allowed only for investments
made in:
new text end

new text begin (1) a qualified regional investment fund that remains invested for at least three
years and that are made after the fund has been certified by the commissioner under
subdivision 4;
new text end

new text begin (2) a qualifying small business that remains invested for at least three years and that
are made after the qualified individual investor has been certified by the commissioner
under subdivision 6; or
new text end

new text begin (3) a qualifying green job small business that remains invested for at least three
years and that are made after the qualified individual investor has been certified by the
commissioner under subdivision 6.
new text end

new text begin (d) The three-year investment holding period required by paragraph (c) does not
apply if:
new text end

new text begin (1) the investment by the qualified regional investment fund or the qualified
individual investor becomes worthless before the end of the three-year period; or
new text end

new text begin (2) the qualifying small business or qualifying green job small business is sold
before the end of the three-year period.
new text end

new text begin (e) If the amount of the credit under this subdivision for any taxable year exceeds
the limitations under paragraph (a), the excess is a credit carryover to each of the ten
succeeding taxable years. The entire amount of the excess unused credit for the taxable
year must be carried first to the earliest of the taxable years to which the credit may be
carried. The amount of the unused credit that may be added under this paragraph may not
exceed the taxpayer's liability for tax less the credit for the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Qualified regional investment fund; requirements. new text end

new text begin (a) To be certified as
a qualified regional investment fund for the purposes of this section, a regional investment
fund must:
new text end

new text begin (1) have a minimum of two-thirds of the regional investment fund's members,
shareholders, or partners be residents of the region that is the focus of the fund;
new text end

new text begin (2) allocate at least 60 percent of the funds it invests to qualifying small businesses
or to qualifying green job small businesses within its region of focus; and
new text end

new text begin (3) allocate at least 50 percent of the funds it invests to qualifying green job small
businesses.
new text end

new text begin (b) The allocations in paragraph (a), clauses (2) and (3), need not be exclusive.
new text end

new text begin (c) Investments from other qualified regional investment funds into the qualifying
small businesses or qualifying green job small businesses that are the recipients of the
qualified regional investment fund's investment shall count toward the allocations in
paragraph (a), clauses (2) and (3).
new text end

new text begin (d) Investments in the fund may consist of equity investments or notes that pay
interest or other fixed amounts, or any combination of both, as the fund's governing body
determines appropriate.
new text end

new text begin Subd. 4. new text end

new text begin Certification of funds. new text end

new text begin (a) Regional investment funds may apply to the
commissioner for certification as a qualified regional investment fund. The application
must be in the form and be made under the procedures specified by the commissioner,
accompanied by an application fee of $1,250. Fees are appropriated to the commissioner
for personnel and administrative expenses related to administering the program.
new text end

new text begin (b) The commissioner may certify up to 20 regional investment funds per year.
Certifications shall be awarded in the order of the qualifying applications received, subject
to the following limitations:
new text end

new text begin (1) the commissioner may certify no more than three regional investment funds per
year that seek business investment opportunities that may qualify for and receive tax
credits under this section in more than 15 Minnesota counties; and
new text end

new text begin (2) the commissioner may certify no more than five regional investment funds
per year that seek business investment opportunities that may qualify for and receive
tax credits under this section in the metropolitan area, as defined in section 473.121,
subdivision 2.
new text end

new text begin (c) The commissioner shall provide provisional credit certificates to investors in a
qualified regional fund to credits under this section, in proportion to the investment of
the investor in the fund and upon a showing by the fund of an investment in a qualifying
small business or qualifying green job small business, of no more than $500,000 per fund
per year. The commissioner may not issue a total of more than $2,000,000 per year in
provisional credit certificates to fund investors in fiscal years 2011, 2012, 2013, and 2014.
new text end

new text begin (d) The commissioner shall provide a final credit certificate to investors in the fund
upon a showing by the fund that the holding requirements of subdivision 2, paragraph (b),
have been met and that the investors in the fund are otherwise eligible for the credit.
new text end

new text begin Subd. 5. new text end

new text begin Fund requirements. new text end

new text begin The commissioner shall enter into an agreement
with each of the qualified regional investment funds certified under subdivision 4. Each
agreement must include a provision requiring the qualified regional investment fund to
annually report on the employment figures and wages and benefits paid by the businesses
in which investments are made and a provision stating the specific manner in which
the qualified regional investment fund will comply or is complying with the allocation
requirements under subdivision 3, paragraph (a), clauses (2) and (3).
new text end

new text begin Subd. 6. new text end

new text begin Certification of individual investors. new text end

new text begin (a) Qualified taxpayers may apply
to the commissioner of employment and economic development for certification as a
qualified individual investor. The application must be in the form and be made under the
procedures specified by the commissioner, accompanied by an application fee of $250.
Fees are appropriated to the commissioner for personnel and administrative expenses
related to administering the program.
new text end

new text begin (b) The commissioner may certify up to 40 qualified individual investors per year.
Certifications shall be awarded in the order of qualifying applications received, however
the commissioner may certify no more than ten qualified individual investors per year that
seek business investment opportunities that may qualify for and receive tax credits under
this section in the metropolitan area, as defined in section 473.121, subdivision 2.
new text end

new text begin (c) The commissioner shall provide provisional credit certificates to qualified
individual investors, upon a showing by the qualified individual investor of investments of
at least $25,000 in qualifying small businesses or qualifying green job small businesses; at
least one-half of the investments made by the investor must be in qualifying green job
businesses. The commissioner may not issue more than $100,000 in provisional credit
certificates per qualified individual investor per year. The commissioner may not issue
a total of more than $1,000,000 per year in provisional credit certificates to qualified
individual investors in fiscal years 2011, 2012, 2013, and 2014.
new text end

new text begin (d) The commissioner shall provide a final credit certificate to the qualified individual
investor upon a showing by the investor that the holding requirements of subdivision 2,
paragraph (c), have been met and that the investor is otherwise eligible for the credit.
new text end

new text begin Subd. 7. new text end

new text begin Qualified individual investor requirements. new text end

new text begin The commissioner shall
enter into an agreement with each qualified individual investor certified under subdivision
6. Each agreement must include a provision requiring the qualified individual investor to
annually report on the employment figures and wages and benefits paid by the businesses
in which investments are made and a provision stating the specific manner in which the
qualified individual investor will comply or is complying with the allocation requirements
under subdivision 6, paragraph (c).
new text end

new text begin Subd. 8. new text end

new text begin Rulemaking. new text end

new text begin The commissioner's actions in establishing procedures and
requirements and in making determinations and certifications to administer this section are
not a rule for purposes of chapter 14, are not subject to the Administrative Procedures Act
contained in chapter 14, and are not subject to section 14.386.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010, for taxable years
beginning after December 31, 2009, and only applies to investments made after the
qualified regional investment fund or qualified individual investor has been certified by
the commissioner of economic development.
new text end

Sec. 10.

Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19a,
is amended to read:

Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends that are paid by the regulated
investment company as defined in section 851(a) of the Internal Revenue Code, or the
fund of the regulated investment company as defined in section 851(g) of the Internal
Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on
net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a deduction
under section 63(d) of the Internal Revenue Code, but the addition may not be more
than the amount by which the itemized deductions as allowed under section 63(d) of
the Internal Revenue Code exceeds the amount of the standard deduction as defined in
section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
this paragraph, the disallowance of itemized deductions under section 68 of the Internal
Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed;

(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) new text begin for property placed in service before January 1, 2010, new text end 80 percent of the amount
by which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(11) the amount of expenses disallowed under section 290.10, subdivision 2;

(12) the amount deducted for qualified tuition and related expenses under section
222 of the Internal Revenue Code, to the extent deducted from gross income;

(13) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;

(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;

(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;

(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code; and

(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 11.

Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19c,
is amended to read:

Subd. 19c.

Corporations; additions to federal taxable income.

For corporations,
there shall be added to federal taxable income:

(1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;

(2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;

(4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;

(6) losses from the business of mining, as defined in section 290.05, subdivision 1,
clause (a), that are not subject to Minnesota income tax;

(7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;

(8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;

(9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;

(10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;

(11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (20), (21),
(22), and (23);

(12) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(13) the amount of net income excluded under section 114 of the Internal Revenue
Code;

(14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;

(16) new text begin for property placed in service before January 1, 2010, new text end 80 percent of the amount
by which the deduction allowed by section 179 of the Internal Revenue Code exceeds the
deduction allowable by section 179 of the Internal Revenue Code of 1986, as amended
through December 31, 2003;

(17) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(18) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

(19) the amount of expenses disallowed under section 290.10, subdivision 2;

(20) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:

(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;

(ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar expenses and costs.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;

(21) except as already included in the taxpayer's taxable income pursuant to clause
(20), any interest income and income generated from intangible property received or
accrued by a foreign operating corporation that is a member of the taxpayer's unitary
group. For purposes of this clause, income generated from intangible property includes:

(i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;

(ii) income from factoring transactions or discounting transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar income.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;

(22) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;

(23) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States;

(24) the additional amount allowed as a deduction for donation of computer
technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
extent deducted from taxable income; and

(25) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 12.

Minnesota Statutes 2008, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 36. new text end

new text begin Job growth investment credit. new text end

new text begin A taxpayer is allowed a credit
as determined under section 116J.8737 against the tax imposed by this chapter.
Notwithstanding the certification eligibility issued by the commissioner of the Department
of Employment and Economic Development under section 116J.8737, the commissioner
may utilize any audit and examination powers under chapter 270C or 289A to the extent
necessary to verify that the taxpayer is eligible for the credit and to assess for the amount
of any improperly claimed credit.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010, for taxable years
beginning after December 31, 2009, and only applies to investments made after the
qualified regional investment fund or qualified individual investor has been certified by
the commissioner of economic development.
new text end

Sec. 13.

new text begin [290.0681] WATER CONSERVATION CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin A taxpayer who operates a water-intensive business
is allowed a credit against the tax computed under this chapter. The credit equals five
percent of expenses for the taxable year for purchase and installation of water recycling
systems that reduce water use.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Water-intensive business" means:
new text end

new text begin (i) an ethanol plant, as defined in section 41A.09, subdivision 2a, paragraph (b);
new text end

new text begin (ii) a distillery licensed under section 340A.301, subdivision 6, or 340A.315,
subdivision 2; or
new text end

new text begin (iii) a facility engaged in food processing, as defined in section 181.635, subdivision
1, paragraph (d).
new text end

new text begin (c) "Liability for tax" means the tax imposed under this chapter reduced by the
sum of the nonrefundable credits allowed under this chapter, other than the credit under
this section.
new text end

new text begin Subd. 3. new text end

new text begin Limitations; carryover. new text end

new text begin (a) The credit for the taxable year shall not
exceed the liability for tax.
new text end

new text begin (b) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under paragraph (a), the excess shall be a water conservation credit
carryover to each of the 15 succeeding taxable years. The entire amount of the excess
unused credit for the taxable year shall be carried first to the earliest of the taxable years to
which the credit may be carried and then to each successive year to which the credit may
be carried. The amount of the unused credit which may be added under this paragraph
shall not exceed the taxpayer's liability for tax less the water conservation credit for the
taxable year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 116D.04, subdivisions 4a, 5a, 9, and 10; and
116D.045, subdivisions 1, 2, 3, and 4, new text end new text begin are repealed.
new text end