1.1                          A bill for an act
  1.2             relating to taxation; corporate franchise; increasing 
  1.3             the rate of the research credit; amending Minnesota 
  1.4             Statutes 1996, section 290.068, subdivision 1. 
  1.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.6      Section 1.  Minnesota Statutes 1996, section 290.068, 
  1.7   subdivision 1, is amended to read: 
  1.8      Subdivision 1.  [CREDIT ALLOWED.] A corporation, other than 
  1.9   a corporation with a valid election in effect under section 1362 
  1.10  of the Internal Revenue Code, is allowed a credit against the 
  1.11  portion of the franchise tax computed under section 290.06, 
  1.12  subdivision 1, for the taxable year equal to: 
  1.13     (a) ~~5~~ 7.5 percent of the first $2 million of the excess (if 
  1.14  any) of 
  1.15     (1) the qualified research expenses for the taxable year, 
  1.16  over 
  1.17     (2) the base amount; and 
  1.18     (b) ~~2.5~~ 3.75 percent on all of such excess expenses over $2 
  1.19  million. 
  1.20     Sec. 2.  [EFFECTIVE DATE.] 
  1.21     Section 1 is effective for taxable years beginning after 
  1.22  December 31, 1996.