1.1                          A bill for an act 
  1.2             relating to taxation; conforming to federal treatment 
  1.3             of S corporations for financial institutions; amending 
  1.4             Minnesota Statutes 1999 Supplement, section 290.9725; 
  1.5             repealing Minnesota Statutes 1999 Supplement, sections 
  1.6             290.06, subdivision 26; and 290.9726, subdivision 7. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.9   290.9725, is amended to read: 
  1.10     290.9725 [S CORPORATION.] 
  1.11     For purposes of this chapter, the term "S corporation" 
  1.12  means any corporation having a valid election in effect for the 
  1.13  taxable year under section 1362 of the Internal Revenue Code.  
  1.14  An S corporation shall not be subject to the taxes imposed by 
  1.15  this chapter, except:  
  1.16     (1) the taxes imposed under sections 290.0922, 290.92, 
  1.17  290.9727, 290.9728, and 290.9729; and 
  1.18     (2) the tax under sections 290.06, subdivision 1, and 
  1.19  290.0921 apply to a financial institution to which either 
  1.20  section 585 or 593 of the Internal Revenue Code applies or that 
  1.21  has a wholly owned subsidiary as described in section 
  1.22  1361(b)(3)(B) of the Internal Revenue Code which is a financial 
  1.23  institution under section 585 or 593 of the Internal Revenue 
  1.24  Code. 
  1.25     Sec. 2.  [REPEALER.] 
  1.26     Minnesota Statutes 1999 Supplement, sections 290.06, 
  2.1   subdivision 26; and 290.9726, subdivision 7, are repealed. 
  2.2      Sec. 3.  [EFFECTIVE DATE.] 
  2.3      Sections 1 and 2 are effective for taxable years beginning 
  2.4   after December 31, 1999.