SF 734

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to the military; providing for special
"Support Our Troops" plates; establishing an account;
providing funding for certain National Guard incentive
programs; providing funding for a World War II
veterans memorial and the maintenance and improvement
of veterans homes; providing certain income tax
benefits; appropriating money; amending Minnesota
Statutes 2004, sections 289A.02, subdivision 7;
290.01, subdivisions 19, 19b, 31; 290.06, subdivision
2c; 290.091, subdivision 2; 290A.03, subdivision 15;
proposing coding for new law in Minnesota Statutes,
chapters 168; 190.

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

ARTICLE 1

LICENSE PLATES

Section 1.

new text begin [168.1298] SPECIAL "SUPPORT OUR TROOPS"
LICENSE PLATES.
new text end

new text begin Subdivision 1. new text end

new text begin General requirements and procedures. new text end

new text begin (a)
The commissioner shall issue special "Support Our Troops"
license plates to an applicant who:
new text end

new text begin (1) is an owner of a passenger automobile, one-ton pickup
truck, recreational vehicle, or motorcycle;
new text end

new text begin (2) pays a fee of $10 to cover the costs of handling and
manufacturing the plates;
new text end

new text begin (3) pays the registration tax required under section
168.013;
new text end

new text begin (4) pays the fees required under this chapter;
new text end

new text begin (5) contributes a minimum of $30 annually to the Minnesota
"Support Our Troops" account established in section 190.19; and
new text end

new text begin (6) complies with laws and rules governing registration and
licensing of vehicles and drivers.
new text end

new text begin (b) The license application under this section must
indicate that the annual contribution specified under paragraph
(a), clause (5), is a minimum contribution to receive the plate
and that the applicant may make an additional contribution to
the account.
new text end

new text begin Subd. 2. new text end

new text begin Design. new text end

new text begin After consultation with interested
groups, the adjutant general and the commissioner of veterans
affairs shall design the special plate, subject to the approval
of the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin No refund. new text end

new text begin Contributions under this section
must not be refunded.
new text end

new text begin Subd. 4. new text end

new text begin Plate transfers. new text end

new text begin Notwithstanding section
168.12, subdivision 1, on payment of a transfer fee of $5,
plates issued under this section may be transferred to another
passenger automobile, one-ton pickup truck, recreational
vehicle, or motorcycle owned by the individual to whom the
special plates were issued.
new text end

new text begin Subd. 5. new text end

new text begin Contribution and fees credited. new text end

new text begin Contributions
under subdivision 1, paragraph (a), clause (5), must be paid to
the commissioner and credited to the Minnesota "Support Our
Troops" account established in section 190.19. The fees
collected under this section must be deposited in the vehicle
services operating account in the special revenue fund.
new text end

new text begin Subd. 6. new text end

new text begin Record. new text end

new text begin The commissioner shall maintain a
record of the number of plates issued under this section.
new text end

Sec. 2.

new text begin [190.19] MINNESOTA "SUPPORT OUR TROOPS" ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Minnesota "Support Our
Troops" account is established in the state treasury. The
account shall consist of contributions from private sources and
appropriations.
new text end

new text begin Subd. 2. new text end

new text begin Grants. new text end

new text begin (a) Money in the Minnesota "Support Our
Troops" account is appropriated to the adjutant general for the
purpose of making grants:
new text end

new text begin (1) directly to eligible individuals; or
new text end

new text begin (2) to one or more eligible foundations for the purpose of
making grants to eligible individuals, as provided in this
section.
new text end

new text begin (b) The term, "eligible individual" includes any person who
is:
new text end

new text begin (1) a member of the Minnesota National Guard or a reserve
unit based in Minnesota who has been called to active service as
defined in section 190.05, subdivision 5;
new text end

new text begin (2) a Minnesota resident who is a member of a military
reserve unit not based in Minnesota, if the member is called to
active service as defined in section 190.05, subdivision 5;
new text end

new text begin (3) any other Minnesota resident performing active service
for any branch of the military of the United States; and
new text end

new text begin (4) members of the immediate family of an individual
identified in clause (1), (2), or (3). For purposes of this
clause, "immediate family" means the individual's spouse and
minor children and, if they are dependents of the member of the
military, the member's parents, grandparents, siblings,
stepchildren, and adult children.
new text end

new text begin (c) The term "eligible foundation" includes any
organization that:
new text end

new text begin (1) is a tax-exempt organization under section 501(c)(3) of
the Internal Revenue Code;
new text end

new text begin (2) has articles of incorporation under chapter 317A
specifying the purpose of the organization as including the
provision of financial assistance to members of the Minnesota
National Guard and other United States armed forces reserves and
their families and survivors; and
new text end

new text begin (3) agrees in writing to distribute any grant money
received from the adjutant general under this section to
eligible individuals as defined in this section and in
accordance with any written policies and rules the adjutant
general may impose as conditions of the grant to the foundation.
new text end

new text begin (d) The maximum grant awarded to an eligible individual in
a calendar year with funds from the Minnesota "Support Our
Troops" account, either through an eligible institution or
directly from the adjutant general, may not exceed $2,000.
new text end

new text begin Subd. 3. new text end

new text begin Annual report. new text end

new text begin The adjutant general must report
by February 1, 2007, and each year thereafter, to the chairs and
ranking minority members of the legislative committees and
divisions with jurisdiction over military and veterans' affairs
on the number, amounts, and use of grants issued from the
Minnesota "Support Our Troops" account in the previous year.
new text end

ARTICLE 2

NATIONAL GUARD FUNDING

Section 1. new text begin APPROPRIATION.
new text end

new text begin (a) $3,850,000 is appropriated in fiscal year 2006 and
$3,850,000 is appropriated in fiscal year 2007 from the general
fund to the adjutant general to provide the additional amount
necessary for full funding of the tuition reimbursement program
in Minnesota Statutes, section 192.501, subdivision 2.
new text end

new text begin (b) $1,500,000 is appropriated in fiscal year 2006 and
$1,500,000 is appropriated in fiscal year 2007 from the general
fund to the adjutant general to provide for reenlistment bonuses
under Minnesota Statutes, section 192.501, subdivision 1b.
new text end

ARTICLE 3

BONDING

Section 1. new text begin APPROPRIATION.
new text end

new text begin (a) $670,000 is appropriated from the bond proceeds fund to
the commissioner of administration for the construction of a
World War II veterans memorial on the Capitol Mall. The design
is subject to approval by the Capitol Area Architectural and
Planning Board.
new text end

new text begin (b) $6,306,000 is appropriated from the bond proceeds fund
to the Veterans Homes Board for the maintenance and improvement
of Minnesota's veterans homes, including $6,000,000 for asset
preservation and $306,000 for the Luverne Veterans Home dementia
unit common area.
new text end

Sec. 2. new text begin BOND SALE.
new text end

new text begin To provide the money appropriated in this act from the bond
proceeds fund, the commissioner of finance shall sell and issue
bonds of the state in an amount up to $6,976,000 in the manner,
upon the terms, and with the effect prescribed by Minnesota
Statutes, sections 16A.631 to 16A.675, and by the Minnesota
Constitution, article XI, sections 4 to 7.
new text end

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective the day following final
enactment.
new text end

ARTICLE 4

INCOME TAX

Section 1.

Minnesota Statutes 2004, section 289A.02,
subdivision 7, is amended to read:

Subd. 7.

Internal revenue code.

Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through deleted text begin June 15 deleted text end new text begin November 15 new text end ,
2003.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2004, section 290.01,
subdivision 19, is amended to read:

Subd. 19.

Net income.

The term "net income" means the
federal taxable income, as defined in section 63 of the Internal
Revenue Code of 1986, as amended through the date named in this
subdivision, incorporating new text begin the federal effective dates of
changes to the Internal Revenue Code and new text end any elections made by
the taxpayer in accordance with the Internal Revenue Code in
determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions
19a to 19f.

In the case of a regulated investment company or a fund
thereof, as defined in section 851(a) or 851(g) of the Internal
Revenue Code, federal taxable income means investment company
taxable income as defined in section 852(b)(2) of the Internal
Revenue Code, except that:

(1) the exclusion of net capital gain provided in section
852(b)(2)(A) of the Internal Revenue Code does not apply;

(2) the deduction for dividends paid under section
852(b)(2)(D) of the Internal Revenue Code must be applied by
allowing a deduction for capital gain dividends and
exempt-interest dividends as defined in sections 852(b)(3)(C)
and 852(b)(5) of the Internal Revenue Code; and

(3) the deduction for dividends paid must also be applied
in the amount of any undistributed capital gains which the
regulated investment company elects to have treated as provided
in section 852(b)(3)(D) of the Internal Revenue Code.

The net income of a real estate investment trust as defined
and limited by section 856(a), (b), and (c) of the Internal
Revenue Code means the real estate investment trust taxable
income as defined in section 857(b)(2) of the Internal Revenue
Code.

The net income of a designated settlement fund as defined
in section 468B(d) of the Internal Revenue Code means the gross
income as defined in section 468B(b) of the Internal Revenue
Code.

deleted text begin The provisions of sections 1113(a), 1117, 1206(a), 1313(a),
1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612,
1616, 1617, 1704(l), and 1704(m) of the Small Business Job
Protection Act, Public Law 104-188, the provisions of Public Law
104-117, the provisions of sections 313(a) and (b)(1), 602(a),
913(b), 941, 961, 971, 1001(a) and (b), 1002, 1003, 1012, 1013,
1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 1111(a), 1131(b)
and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) and (h), and
1604(d)(1) of the Taxpayer Relief Act of 1997, Public Law
105-34, the provisions of section 6010 of the Internal Revenue
Service Restructuring and Reform Act of 1998, Public Law
105-206, the provisions of section 4003 of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act,
1999, Public Law 105-277, and the provisions of section 318 of
the Consolidated Appropriation Act of 2001, Public Law 106-554,
shall become effective at the time they become effective for
federal purposes.
deleted text end

The Internal Revenue Code of 1986, as amended through
deleted text begin December 31, 1996 deleted text end new text begin November 15, 2003 new text end , shall be in effect for
taxable years beginning after December 31, 1996.

deleted text begin The provisions of sections 202(a) and (b), 221(a), 225,
312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and
(c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306,
1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528,
1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e)
of the Taxpayer Relief Act of 1997, Public Law 105-34, the
provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 7002,
and 7003 of the Internal Revenue Service Restructuring and
Reform Act of 1998, Public Law 105-206, the provisions of
section 3001 of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999, Public Law 105-277, the
provisions of section 3001 of the Miscellaneous Trade and
Technical Corrections Act of 1999, Public Law 106-36, and the
provisions of section 316 of the Consolidated Appropriation Act
of 2001, Public Law 106-554, shall become effective at the time
they become effective for federal purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through
December 31, 1997, shall be in effect for taxable years
beginning after December 31, 1997.
deleted text end

deleted text begin The provisions of sections 5002, 6009, 6011, and 7001 of
the Internal Revenue Service Restructuring and Reform Act of
1998, Public Law 105-206, the provisions of section 9010 of the
Transportation Equity Act for the 21st Century, Public Law
105-178, the provisions of sections 1004, 4002, and 5301 of the
Omnibus Consolidation and Emergency Supplemental Appropriations
Act, 1999, Public Law 105-277, the provision of section 303 of
the Ricky Ray Hemophilia Relief Fund Act of 1998, Public Law
105-369, the provisions of sections 532, 534, 536, 537, and 538
of the Ticket to Work and Work Incentives Improvement Act of
1999, Public Law 106-170, the provisions of the Installment Tax
Correction Act of 2000, Public Law 106-573, and the provisions
of section 309 of the Consolidated Appropriation Act of 2001,
Public Law 106-554, shall become effective at the time they
become effective for federal purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through
December 31, 1998, shall be in effect for taxable years
beginning after December 31, 1998.
deleted text end

deleted text begin The provisions of the FSC Repeal and Extraterritorial
Income Exclusion Act of 2000, Public Law 106-519, and the
provision of section 412 of the Job Creation and Worker
Assistance Act of 2002, Public Law 107-147, shall become
effective at the time it became effective for federal purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through
December 31, 1999, shall be in effect for taxable years
beginning after December 31, 1999. The provisions of sections
306 and 401 of the Consolidated Appropriation Act of 2001,
Public Law 106-554, and the provision of section 632(b)(2)(A) of
the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law 107-16, and provisions of sections 101 and 402 of the
Job Creation and Worker Assistance Act of 2002, Public Law
107-147, shall become effective at the same time it became
effective for federal purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through
December 31, 2000, shall be in effect for taxable years
beginning after December 31, 2000. The provisions of sections
659a and 671 of the Economic Growth and Tax Relief
Reconciliation Act of 2001, Public Law 107-16, the provisions of
sections 104, 105, and 111 of the Victims of Terrorism Tax
Relief Act of 2001, Public Law 107-134, and the provisions of
sections 201, 403, 413, and 606 of the Job Creation and Worker
Assistance Act of 2002, Public Law 107-147, shall become
effective at the same time it became effective for federal
purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through March
15, 2002, shall be in effect for taxable years beginning after
December 31, 2001.
deleted text end

deleted text begin The provisions of sections 101 and 102 of the Victims of
Terrorism Tax Relief Act of 2001, Public Law 107-134, shall
become effective at the same time it becomes effective for
federal purposes.
deleted text end

deleted text begin The Internal Revenue Code of 1986, as amended through June
15, 2003, shall be in effect for taxable years beginning after
December 31, 2002. The provisions of section 201 of the Jobs
and Growth Tax Relief and Reconciliation Act of 2003, H.R. 2, if
it is enacted into law, are effective at the same time it became
effective for federal purposes.
deleted text end

Except as otherwise provided, references to the Internal
Revenue Code in subdivisions deleted text begin 19a deleted text end new text begin 19 new text end to deleted text begin 19g deleted text end new text begin 19f new text end mean the code in
effect for purposes of determining net income for the applicable
year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2004, section 290.01,
subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

For
individuals, estates, and trusts, there shall be subtracted from
federal taxable income:

(1) interest income on obligations of any authority,
commission, or instrumentality of the United States to the
extent includable in taxable income for federal income tax
purposes but exempt from state income tax under the laws of the
United States;

(2) if included in federal taxable income, the amount of
any overpayment of income tax to Minnesota or to any other
state, for any previous taxable year, whether the amount is
received as a refund or as a credit to another taxable year's
income tax liability;

(3) the amount paid to others, less the amount used to
claim the credit allowed under section 290.0674, not to exceed
$1,625 for each qualifying child in grades kindergarten to 6 and
$2,500 for each qualifying child in grades 7 to 12, for tuition,
textbooks, and transportation of each qualifying child in
attending an elementary or secondary school situated in
Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin,
wherein a resident of this state may legally fulfill the state's
compulsory attendance laws, which is not operated for profit,
and which adheres to the provisions of the Civil Rights Act of
1964 and chapter 363A. For the purposes of this clause,
"tuition" includes fees or tuition as defined in section
290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and
equipment purchased or leased for use in elementary and
secondary schools in teaching only those subjects legally and
commonly taught in public elementary and secondary schools in
this state. Equipment expenses qualifying for deduction
includes expenses as defined and limited in section 290.0674,
subdivision 1, clause (3). "Textbooks" does not include
instructional books and materials used in the teaching of
religious tenets, doctrines, or worship, the purpose of which is
to instill such tenets, doctrines, or worship, nor does it
include books or materials for, or transportation to,
extracurricular activities including sporting events, musical or
dramatic events, speech activities, driver's education, or
similar programs. For purposes of the subtraction provided by
this clause, "qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross
income, income realized on disposition of property exempt from
tax under section 290.491;

(6) to the extent included in federal taxable income,
postservice benefits for youth community service under section
124D.42 for volunteer service under United States Code, title
42, sections 12601 to 12604;

(7) to the extent not deducted in determining federal
taxable income by an individual who does not itemize deductions
for federal income tax purposes for the taxable year, an amount
equal to 50 percent of the excess of charitable contributions
allowable as a deduction for the taxable year under section
170(a) of the Internal Revenue Code over $500;

(8) for taxable years beginning before January 1, 2008, the
amount of the federal small ethanol producer credit allowed
under section 40(a)(3) of the Internal Revenue Code which is
included in gross income under section 87 of the Internal
Revenue Code;

(9) for individuals who are allowed a federal foreign tax
credit for taxes that do not qualify for a credit under section
290.06, subdivision 22, an amount equal to the carryover of
subnational foreign taxes for the taxable year, but not to
exceed the total subnational foreign taxes reported in claiming
the foreign tax credit. For purposes of this clause, "federal
foreign tax credit" means the credit allowed under section 27 of
the Internal Revenue Code, and "carryover of subnational foreign
taxes" equals the carryover allowed under section 904(c) of the
Internal Revenue Code minus national level foreign taxes to the
extent they exceed the federal foreign tax credit;

(10) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19a, clause (7), an amount equal to one-fifth of the delayed
depreciation. For purposes of this clause, "delayed
depreciation" means the amount of the addition made by the
taxpayer under subdivision 19a, clause (7), minus the positive
value of any net operating loss under section 172 of the
Internal Revenue Code generated for the tax year of the
addition. The resulting delayed depreciation cannot be less
than zero; deleted text begin and
deleted text end

(11) job opportunity building zone income as provided under
section 469.316 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (12) to the extent included in federal taxable income,
compensation paid to a service member as defined in United
States Code, title 10, section 101(a)(5), for military service
as defined in the Service Members Civil Relief Act, Public Law
108-189, section 101(2), and compensation paid for state active
service as defined in section 190.05, subdivision 5a, clauses
(1) and (3), or federally funded state active service as defined
in section 190.05, subdivision 5b. This subtraction does not
apply to "retirement income" as defined in section 290.17,
subdivision 2, paragraph (a), clause (3).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years
beginning after December 31, 2004.
new text end

Sec. 4.

Minnesota Statutes 2004, section 290.01,
subdivision 31, is amended to read:

Subd. 31.

Internal revenue code.

Unless specifically
defined otherwise, "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through deleted text begin June 15 deleted text end new text begin November 15 new text end ,
2003.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment, except the changes incorporated by
federal changes are effective at the same times as the changes
were effective for federal purposes.
new text end

Sec. 5.

Minnesota Statutes 2004, section 290.06,
subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates,
and trusts.

(a) The income taxes imposed by this chapter upon
married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be
computed by applying to their taxable net income the following
schedule of rates:

(1) On the first $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05
percent;

(3) On all over $102,030, 7.85 percent.

Married individuals filing separate returns, estates, and
trusts must compute their income tax by applying the above rates
to their taxable income, except that the income brackets will be
one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried
individuals must be computed by applying to taxable net income
the following schedule of rates:

(1) On the first $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05
percent;

(3) On all over $57,710, 7.85 percent.

(c) The income taxes imposed by this chapter upon unmarried
individuals qualifying as a head of household as defined in
section 2(b) of the Internal Revenue Code must be computed by
applying to taxable net income the following schedule of rates:

(1) On the first $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05
percent;

(3) On all over $86,910, 7.85 percent.

(d) In lieu of a tax computed according to the rates set
forth in this subdivision, the tax of any individual taxpayer
whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in
accordance with tables prepared and issued by the commissioner
of revenue based on income brackets of not more than $100. The
amount of tax for each bracket shall be computed at the rates
set forth in this subdivision, provided that the commissioner
may disregard a fractional part of a dollar unless it amounts to
50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the
entire year must compute the individual's Minnesota income tax
as provided in this subdivision. After the application of the
nonrefundable credits provided in this chapter, the tax
liability must then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source
federal adjusted gross income as defined in section 62 of the
Internal Revenue Code and increased by the additions required
under section 290.01, subdivision 19a, clauses (1), (5), and
(6), and reduced by the subtraction under section 290.01,
subdivision 19b, clause (11), and the Minnesota assignable
portion of the subtraction for United States government interest
under section 290.01, subdivision 19b, clause (1), new text begin and the
subtraction under clause (12), new text end after applying the allocation and
assignability provisions of section 290.081, clause (a), or
290.17; and

(2) the denominator is the individual's federal adjusted
gross income as defined in section 62 of the Internal Revenue
Code of 1986, increased by the amounts specified in section
290.01, subdivision 19a, clauses (1), (5), and (6), and reduced
by the amounts specified in section 290.01, subdivision 19b,
clauses (1) deleted text begin and deleted text end new text begin , new text end (11) new text begin , and (12) 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, 2004.
new text end

Sec. 6.

Minnesota Statutes 2004, section 290.091,
subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by
this section, the following terms have the meanings given:

(a) "Alternative minimum taxable income" means the sum of
the following for the taxable year:

(1) the taxpayer's federal alternative minimum taxable
income as defined in section 55(b)(2) of the Internal Revenue
Code;

(2) the taxpayer's itemized deductions allowed in computing
federal alternative minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170
of the Internal Revenue Code to the extent that the deduction
exceeds 1.0 percent of adjusted gross income, as defined in
section 62 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled
person;

(3) for depletion allowances computed under section 613A(c)
of the Internal Revenue Code, with respect to each property (as
defined in section 614 of the Internal Revenue Code), to the
extent not included in federal alternative minimum taxable
income, the excess of the deduction for depletion allowable
under section 611 of the Internal Revenue Code for the taxable
year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion
deduction for the taxable year);

(4) to the extent not included in federal alternative
minimum taxable income, the amount of the tax preference for
intangible drilling cost under section 57(a)(2) of the Internal
Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative
minimum taxable income, the amount of interest income as
provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01,
subdivision 19a, clause (7);

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01,
subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by
section 290.01, subdivision 19b, clause (2), to the extent
included in federal alternative minimum taxable income;

(3) the amount of investment interest paid or accrued
within the taxable year on indebtedness to the extent that the
amount does not exceed net investment income, as defined in
section 163(d)(4) of the Internal Revenue Code. Interest does
not include amounts deducted in computing federal adjusted gross
income; and

(4) amounts subtracted from federal taxable income as
provided by section 290.01, subdivision 19b, clauses (10) deleted text begin and deleted text end new text begin ,
new text end (11) new text begin , and (12) new text end .

In the case of an estate or trust, alternative minimum
taxable income must be computed as provided in section 59(c) of
the Internal Revenue Code.

(b) "Investment interest" means investment interest as
defined in section 163(d)(3) of the Internal Revenue Code.

(c) "Tentative minimum tax" equals 6.4 percent of
alternative minimum taxable income after subtracting the
exemption amount determined under subdivision 3.

(d) "Regular tax" means the tax that would be imposed under
this chapter (without regard to this section and section
290.032), reduced by the sum of the nonrefundable credits
allowed under this chapter.

(e) "Net minimum tax" means the minimum tax imposed by this
section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years
beginning after December 31, 2004.
new text end

Sec. 7.

Minnesota Statutes 2004, section 290A.03,
subdivision 15, is amended to read:

Subd. 15.

Internal revenue code.

"Internal Revenue Code"
means the Internal Revenue Code of 1986, as amended through deleted text begin June
deleted text end new text begin November new text end 15, 2003.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property
tax refunds based on property taxes payable on or after December
31, 2004, and rent paid on or after December 31, 2003.
new text end