1.1.................... moves to amend H.F. No. 3764 as follows:
1.2Page 1, after line 5, insert:

1.3    "Section 1. Minnesota Statutes 2008, section 290.21, subdivision 4, is amended to read:
1.4    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
1.5of dividends received by a corporation during the taxable year from another corporation,
1.6in which the recipient owns 20 percent or more of the stock, by vote and value, not
1.7including stock described in section 1504(a)(4) of the Internal Revenue Code when the
1.8corporate stock with respect to which dividends are paid does not constitute the stock in
1.9trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
1.10constitute property held by the taxpayer primarily for sale to customers in the ordinary
1.11course of the taxpayer's trade or business, or when the trade or business of the taxpayer
1.12does not consist principally of the holding of the stocks and the collection of the income
1.13and gains therefrom; and
1.14    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
1.15an affiliated company transferred in an overall plan of reorganization and the dividend
1.16is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
1.17amended through December 31, 1989;
1.18    (ii) the remaining 20 percent of dividends if the dividends are received from a
1.19corporation which is subject to tax under section 290.36 and which is a member of an
1.20affiliated group of corporations as defined by the Internal Revenue Code and the dividend
1.21is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
1.22amended through December 31, 1989, or is deducted under an election under section
1.23243(b) of the Internal Revenue Code; or
1.24    (iii) the remaining 20 percent of the dividends if the dividends are received from a
1.25property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
1.26member of an affiliated group of corporations as defined by the Internal Revenue Code
1.27and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
2.11.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
2.2under an election under section 243(b) of the Internal Revenue Code.
2.3    (b) Seventy percent of dividends received by a corporation during the taxable year
2.4from another corporation in which the recipient owns less than 20 percent of the stock,
2.5by vote or value, not including stock described in section 1504(a)(4) of the Internal
2.6Revenue Code when the corporate stock with respect to which dividends are paid does not
2.7constitute the stock in trade of the taxpayer, or does not constitute property held by the
2.8taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
2.9business, or when the trade or business of the taxpayer does not consist principally of the
2.10holding of the stocks and the collection of income and gain therefrom.
2.11    (c) The dividend deduction provided in this subdivision shall be allowed only with
2.12respect to dividends that are included in a corporation's Minnesota taxable net income
2.13for the taxable year.
2.14    The dividend deduction provided in this subdivision does not apply to a dividend
2.15from a corporation which, for the taxable year of the corporation in which the distribution
2.16is made or for the next preceding taxable year of the corporation, is a corporation exempt
2.17from tax under section 501 of the Internal Revenue Code.
2.18    The dividend deduction provided in this subdivision applies to the amount of
2.19regulated investment company dividends only to the extent determined under section
2.20854(b) of the Internal Revenue Code.
2.21    The dividend deduction provided in this subdivision shall not be allowed with
2.22respect to any dividend for which a deduction is not allowed under the provisions of
2.23section 246(c) of the Internal Revenue Code.
2.24    (d) If dividends received by a corporation that does not have nexus with Minnesota
2.25under the provisions of Public Law 86-272 are included as income on the return of
2.26an affiliated corporation permitted or required to file a combined report under section
2.27290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
2.28determination as to whether the trade or business of the corporation consists principally
2.29of the holding of stocks and the collection of income and gains therefrom shall be made
2.30with reference to the trade or business of the affiliated corporation having a nexus with
2.31Minnesota.
2.32    (e) The deduction provided by this subdivision does not apply if the dividends are
2.33paid by a FSC as defined in section 922 of the Internal Revenue Code.
2.34    (f) If one or more of the members of the unitary group whose income is included on
2.35the combined report received a dividend, the deduction under this subdivision for each
2.36member of the unitary business required to file a return under this chapter is the product
3.1of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
3.2allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
3.3income apportionable to this state for the taxable year under section 290.191 or 290.20.
3.4    (g) The deduction provided by this subdivision does not apply to dividends received
3.5from a real estate investment trust, if the dividends are not considered to be dividends
3.6under section 243(d)(3) and section 857(c) of the Internal Revenue Code.
3.7EFFECTIVE DATE.This section is effective for taxable years beginning after
3.8December 31, 2009.

3.9    Sec. 2. Minnesota Statutes 2008, section 297F.01, subdivision 3, is amended to read:
3.10    Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in
3.11part of tobacco,:
3.12    (1) the wrapper or cover of which is made of paper or another substance or material
3.13except tobacco.; or
3.14    (2) wrapped in any substance, however labeled or named, which because of its
3.15appearance, size, the type of tobacco used in the filler, or its packaging, pricing, marketing,
3.16or labeling, is likely to be offered to, purchased by, or consumed by consumers as a
3.17cigarette, as defined in clause (1), including but not limited to, any roll for smoking made
3.18wholly or in part of tobacco that weighs four and a half pounds or less per thousand unless
3.19it is wrapped in whole tobacco leaf and does not have a filter.

3.20    Sec. 3. Minnesota Statutes 2008, section 297F.01, subdivision 19, is amended to read:
3.21    Subd. 19. Tobacco products. "Tobacco products" means any product containing,
3.22made, or derived from tobacco that is intended for human consumption, whether chewed,
3.23smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means,
3.24or any component, part, or accessory of a tobacco product, including, but not limited
3.25to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut,
3.26ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist
3.27tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings and
3.28sweepings of tobacco, and other kinds and forms of tobacco, prepared in such manner
3.29as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and
3.30smoking; but does not include cigarettes as defined in this section. Tobacco products
3.31excludes any tobacco product that has been approved by the United States Food and
3.32Drug Administration for sale as a tobacco cessation product, as a tobacco dependence
3.33product, or for other medical purposes, and is being marketed and sold solely for such an
3.34approved purpose."
4.1Renumber the sections in sequence and correct the internal references
4.2Amend the title accordingly