1.1                          A bill for an act 
  1.2             relating to taxation; corporate franchise tax; 
  1.3             increasing the rate of the research credit; amending 
  1.4             Minnesota Statutes 1998, section 290.068, subdivision 
  1.5             1. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 290.068, 
  1.8   subdivision 1, is amended to read: 
  1.9      Subdivision 1.  [CREDIT ALLOWED.] A corporation, other than 
  1.10  a corporation treated as an "S" corporation under section 
  1.11  290.9725, is allowed a credit against the portion of the 
  1.12  franchise tax computed under section 290.06, subdivision 1, for 
  1.13  the taxable year equal to: 
  1.14     (a) 5 10 percent of the first $2,000,000 of the excess (if 
  1.15  any) of 
  1.16     (1) the qualified research expenses for the taxable year, 
  1.17  over 
  1.18     (2) the base amount; and 
  1.19     (b) 2.5 5 percent on all of such excess expenses over 
  1.20  $2,000,000. 
  1.21     Sec. 2.  [EFFECTIVE DATE.] 
  1.22     Section 1 is effective for taxable years beginning after 
  1.23  December 31, 1998.