1.1    .................... moves to amend H. F. No. 2362, the delete everything amendment
1.2(A07-0842), as follows:
1.3Page 26, line 30, strike "2008" and insert "2010"
1.4Page 72, after line 15, insert:

1.5    "Sec. 48. Laws 1973, chapter 393, section 1, as amended by Laws 1974, chapter
1.6153, section 1, is amended to read:
1.7    Section 1. MINNEAPOLIS, CITY OF; STREET MAINTENANCE AND
1.8LIGHTING.
1.9    Notwithstanding the provisions of any statute or the charter of the city of
1.10Minneapolis to the contrary, the city council of said city may provide that all or part of the
1.11costs of construction, operation, and maintenance of streets and street lighting within the
1.12city may hereafter be paid from the general revenues of the city of Minneapolis; provided
1.13that the portion of the costs assessable against nongovernmental real property exempt from
1.14ad valorem taxation may be levied as a special assessment against the property."
1.15Page 76, after line 19, insert:
1.16"(b) Laws 1973, chapter 393, section 2, is repealed."
1.17Page 76, line 20, delete "(b)" and insert "(c)"
1.18Page 82, after line 16, insert:

1.19    "Sec. 5. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
1.20    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
1.21income" is Minnesota net income as defined in section 290.01, subdivision 19, and
1.22includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
1.23(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
1.24Minnesota tax return, the minimum tax must be computed on a separate company basis.
1.25If a corporation is part of a tax group filing a unitary return, the minimum tax must be
1.26computed on a unitary basis. The following adjustments must be made.
2.1    (1) For purposes of the depreciation adjustments under section 56(a)(1) and
2.256(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
2.3service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
2.4income tax purposes, including any modification made in a taxable year under section
2.5290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
2.6paragraph (c).
2.7    For taxable years beginning after December 31, 2000, the amount of any remaining
2.8modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
2.9section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
2.10allowance in the first taxable year after December 31, 2000.
2.11    (2) The portion of the depreciation deduction allowed for federal income tax
2.12purposes under section 168(k) of the Internal Revenue Code that is required as an addition
2.13under section 290.01, subdivision 19c, clause (16) (13), is disallowed in determining
2.14alternative minimum taxable income.
2.15    (3) The subtraction for depreciation allowed under section 290.01, subdivision
2.1619d , clause (19) (15), is allowed as a depreciation deduction in determining alternative
2.17minimum taxable income.
2.18    (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
2.19of the Internal Revenue Code does not apply.
2.20    (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
2.21Revenue Code does not apply.
2.22    (6) The special rule for dividends from section 936 companies under section
2.2356(g)(4)(C)(iii) does not apply.
2.24    (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
2.25Code does not apply.
2.26    (8) The tax preference for intangible drilling costs under section 57(a)(2) of the
2.27Internal Revenue Code must be calculated without regard to subparagraph (E) and the
2.28subtraction under section 290.01, subdivision 19d, clause (4).
2.29    (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
2.30Revenue Code does not apply.
2.31    (10) The tax preference for charitable contributions of appreciated property under
2.32section 57(a)(6) of the Internal Revenue Code does not apply.
2.33    (11) For purposes of calculating the tax preference for accelerated depreciation or
2.34amortization on certain property placed in service before January 1, 1987, under section
2.3557(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
2.36deduction allowed under section 290.01, subdivision 19e.
3.1    For taxable years beginning after December 31, 2000, the amount of any remaining
3.2modification made under section 290.01, subdivision 19e, not previously deducted is a
3.3depreciation or amortization allowance in the first taxable year after December 31, 2004.
3.4    (12) For purposes of calculating the adjustment for adjusted current earnings in
3.5section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
3.6income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
3.7minimum taxable income as defined in this subdivision, determined without regard to the
3.8adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
3.9    (13) For purposes of determining the amount of adjusted current earnings under
3.10section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
3.1156(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
3.12gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
3.13amount of refunds of income, excise, or franchise taxes subtracted as provided in section
3.14290.01, subdivision 19d , clause (10), or (iii) the amount of royalties, fees or other like
3.15income subtracted as provided in section 290.01, subdivision 19d, clause (11) (8).
3.16    (14) Alternative minimum taxable income excludes the income from operating in a
3.17job opportunity building zone as provided under section 469.317.
3.18    (15) Alternative minimum taxable income excludes the income from operating in a
3.19biotechnology and health sciences industry zone as provided under section 469.337.
3.20    (16) Alternative minimum taxable income excludes the income from operating in an
3.21international economic development zone as provided under section 469.326.
3.22    Items of tax preference must not be reduced below zero as a result of the
3.23modifications in this subdivision.
3.24EFFECTIVE DATE.This section is effective for taxable years beginning after
3.25December 31, 2006."
3.26Page 97, line 8, after "(11)" insert "to the extent included in federal taxable income"
3.27Page 97, line 19, after "(12)" insert "to the extent included in federal taxable income"
3.28Page 105, line 2, delete "receive Part 3 certification and"
3.29Page 113, after line 16, insert:

3.30    "Sec. 28. Minnesota Statutes 2006, section 297A.68, is amended by adding a
3.31subdivision to read:
3.32    Subd. 42. Agricultural feed processing facility; capital equipment. Capital
3.33equipment purchased by a contractor for incorporation into an agricultural feed processing
3.34facility is exempt from sales tax when purchased by the contractor if the following
3.35conditions are met:
4.1    (1) the equipment would meet the definition of capital equipment under subdivision
4.25 if purchased by the user instead of the contractor;
4.3    (2) the equipment was incorporated into a facility that was constructed in part to
4.4replace manufacturing capability destroyed in a fire;
4.5    (3) the processing facility is located in the city of Freeport.
4.6    The user of the equipment must apply for the refund and the maximum amount of
4.7the refund is limited to $....... Refund provisions for taxes paid under subdivision 5 apply.
4.8EFFECTIVE DATE.This section is effective for sales and purchases made after
4.9June 30, 2002, and before December 31, 2003."
4.10Page 135, after line 21, insert:

"Sec. 5. Minnesota Statutes 2006, section 469.169, is amended by adding a subdivision to read:Subd. 18. Additional border city allocations; 2007. (a) In addition to tax reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $750,000 for tax reductions to border city enterprise zones in cities located on the western border of the state. The commissioner shall make allocations to zones in cities on the western border on a per capita basis. Allocations made under this subdivision may be used for tax reductions as provided in section 469.171, or for other offsets of taxes imposed on or remitted by businesses located in the enterprise zone, but only if the municipality determines that the granting of the tax reduction or offset is necessary in order to retain a business within or attract a business to the zone. The city alternatively may elect to use any portion of the allocation provided in this paragraph for tax reductions under section 469.1732 or 469.1734.(b) The commissioner shall allocate $750,000 for tax reductions under section 469.1732 or 469.1734 to cities with border city enterprise zones located on the western border of the state. The commissioner shall allocate this amount among the cities on a per capita basis. The city alternatively may elect to use any portion of the allocation provided in this paragraph for tax reductions as provided in section 469.171.EFFECTIVE DATE.This section is effective the day following final enactment."4.30Page 149, line 34, delete "and"
4.31Page 149, after line 34, insert:
4.32    "(3) is located outside the metropolitan area, as defined in section 473.21,
4.33subdivision 2; and"
4.34Page 149, line 35, delete "(3)" and insert "(4)"
4.35Page 155, delete lines 5 to 9 and insert:
5.1    "(e) The grant evaluation team and any outside experts consulted by the grant
5.2evaluation team must handle grant applications in accordance with the requirements of
5.3chapter 13. The grant applicant's name, address, and amount requested is classified as
5.4public data. All other data contained in a grant application is classified as nonpublic data,
5.5as defined in section 13.02, subdivision 9, or private data on individuals, as defined in
5.6section 13.02, subdivision 12."
5.7Page 159, after line 5, insert:

5.8    "Sec. 33. CITY OF TAYLORS FALLS; BORDER CITY DEVELOPMENT
5.9ZONE.
5.10    Subdivision 1. Authorization. The governing body of the city of Taylors Falls may
5.11designate all or any part of the city as a border city development zone.
5.12    Subd. 2. Application of general law. (a) Minnesota Statutes, sections 469.1731 to
5.13469.1735, apply to the border city development zones designated under this section. The
5.14governing body of the city may exercise the powers granted under Minnesota Statutes,
5.15sections 469.1731 to 469.1735, including powers that apply outside of the zones.
5.16    (b) The allocation under subdivision 3 for purposes of Minnesota Statutes, section
5.17469.1735, subdivision 2, is appropriated to the commissioner of revenue.
5.18    Subd. 3. Allocation of state tax reductions. (a) The cumulative total amount of the
5.19state portion of the tax reductions for all years of the program under Minnesota Statutes,
5.20sections 469.1731 to 469.1735, for the city of Taylors Falls, is limited to $100,000.
5.21    (b) This allocation may be used for tax reductions provided in Minnesota Statutes,
5.22section 469.1732 or 469.1734, or for reimbursements under Minnesota Statutes, section
5.23469.1735, subdivision 3, but only if the governing body of the city of Taylors Falls
5.24determines that the tax reduction or offset is necessary to enable a business to expand
5.25within the city or to attract a business to the city.
5.26    (c) The commissioner of revenue may waive the limit under this subdivision using
5.27the same rules and standards provided in Minnesota Statutes, section 469.169, subdivision
5.2812, paragraph (b).
5.29EFFECTIVE DATE.This section is effective upon approval by the governing
5.30body of the city of Taylors Falls and upon timely compliance by the city with Minnesota
5.31Statutes, section 645.021."
5.32Page 160, line 20, delete "St. Louis County" and insert "the Iron Range Resources
5.33and Rehabilitation Board"
5.34Page 160, line 22, delete "St. Louis County" and insert "the Iron Range Resources
5.35and Rehabilitation Board"
6.1Page 167, line 33, delete "10, but" and insert "9, and qualified small business
6.2property under section 291.03, subdivision 10, but not to exceed $500,000."
6.3Page 167, delete lines 34 and 35
6.4Page 168, line 11, strike "gross" and insert "taxable"
6.5Page 168, line 25, after "(4)," insert "or under subdivision 10, clause (6),"
6.6Page 168, line 26, after "9" insert ", and qualified small business property under
6.7subdivision 10"
6.8Page 169, line 11, delete "10" and insert "11"
6.9Page 169, after line 13, insert:

6.10    "Sec. 4. Minnesota Statutes 2006, section 291.03, is amended by adding a subdivision
6.11to read:
6.12    Subd. 10. Qualified small business property. Property satisfying all of the
6.13following requirements is qualified small business property:
6.14    (1) The value of the property was included in the federal adjusted taxable estate.
6.15    (2) The property consists of the assets of a trade or business or shares of stock or
6.16other ownership interests in a corporation or other entity engaged in a trade or business.
6.17The decedent or the decedent's spouse must have materially participated in the trade or
6.18business within the meaning of section 469 of the Internal Revenue Code during the
6.19taxable year that ended before the date of the decedent's death. Shares of stock in a
6.20corporation or an ownership interest in another type of entity do not qualify under this
6.21subdivision, if the shares or ownership interests are traded on a public stock exchange at
6.22any time during the three-year period ending on the decedent's date of death.
6.23    (3) The gross annual sales of the trade or business were $10,000,000 or less for the
6.24last taxable year that ended before the date of the death of the decedent.
6.25    (4) The property does not consist of cash or cash equivalents. For property consisting
6.26of shares of stock or other ownership interests in an entity, the amount of cash or cash
6.27equivalents held by the corporation or other entity must be deducted from the value of
6.28the property qualifying under this subdivision in proportion to the decedent's share of
6.29ownership of the entity on the date of death.
6.30    (5) The decedent continuously owned the property for the three-year period ending
6.31on the date of death of the decedent.
6.32    (6) A family member continuously uses the property in the operation of the trade or
6.33business for three years following the date of death of the decedent.
6.34    (7) The estate and the qualified heir elect to treat the property as qualified small
6.35business property and agree, in the form prescribed by the commissioner, to pay the
6.36recapture tax under subdivision 11, if applicable.
7.1EFFECTIVE DATE.This section is effective for decedents dying after December
7.231, 2006."
7.3Page 169, line 16, delete "10" and insert "11"
7.4Page 169, line 19, after "(4)," insert "and subdivision 10, clause (6),"
7.5Page 171, line 33, delete "297F.01" and insert "297F.05"
7.6Page 172, line 12, after the first comma, insert "or in the possession of a consumer
7.7within this state on that date,"
7.8Page 172, line 13, delete "297F.01, subdivision 3" and insert "297F.05, subdivisions
7.93 and 4"
7.10Page 259, delete section 14
7.11Page 262, line 16, delete "January 1, 2008" and insert "the day following final
7.12enactment"
7.13Page 269, after line 4, insert:

7.14    "Sec. 18. LIGNOCELLULOSIC ETHANOL PRODUCTION GRANT;
7.15APPROPRIATION.
7.16    $5,000,000 is appropriated in fiscal year 2008 from the general fund to the
7.17commissioner of agriculture for a competitive grant to a biofuel producer for the design
7.18and construction of a new plant or the conversion of an existing plant in Minnesota that
7.19produces ethanol from lignocellulosic feedstocks. The commissioner of agriculture shall
7.20solicit proposals for demonstration projects. The proposals shall be reviewed and the
7.21winning proposal chosen by the NextGen Energy Board established by the 85th Legislative
7.22Session House File 2227, the third engrossment. Eligible lignocellulosic feedstocks
7.23include dedicated energy crops and trees, wood and wood residues, plants, grasses,
7.24agricultural residues, fibers, animal wastes and other waste materials, and municipal solid
7.25waste. The NextGen Energy Board shall select a proposal that: (1) demonstrates sufficient
7.26funding from all sources to fully construct or retrofit an ethanol plant and produce ethanol
7.27from eligible lignocellulosic feedstocks; (2) demonstrates the continued economic viability
7.28of the project once the initial construction costs are paid; and (3) proposes to construct or
7.29retrofit an ethanol plant that can be easily replicated in Minnesota. Proposals solely to
7.30replace energy inputs derived from fossil fuels with energy derived from lignocellulosic
7.31sources are not eligible. This appropriation is available until expended."
7.32Renumber the sections in sequence and correct the internal references
7.33Amend the title accordingly