1.1.................... moves to amend H.F. No. 3788 as follows:
1.2Delete everything after the enacting clause and 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    Section 1. Minnesota Statutes 2008, section 297A.71, is amended by adding a
3.10subdivision to read:
3.11    Subd. 42. Aerospace defense manufacturing facility. (a) Materials used or
3.12consumed in and equipment incorporated into the construction, renovation, upgrading,
3.13or expansion of a facility used for manufacturing aerospace or defense products and the
3.14provisions of related services are exempt if the total capital investment for the project
3.15is at least $80,000,000.
3.16(b) For purposes of this subdivision, "facility" includes associated office and parking
3.17facilities necessary to provide direct support to the manufacturing facility and provision
3.18of related aerospace or defense services.
3.19(c) In addition, all technical equipment, including data processing and data
3.20storage equipment, hardware, and software necessary to the operation of the qualifying
3.21manufacturing facility and the provision of related aerospace and defense services, are
3.22exempt. The tax must be imposed and collected as if the rates under section 297A.62,
3.23subdivisions 1 and 1a, applied and refunded in the manner provided under section 297A.75
3.24EFFECTIVE DATE.This section is effective for sales and purchases made after
3.25June 30, 2010, and before January 1, 2018.

3.26    Sec. 3. Minnesota Statutes 2008, section 297A.75, as amended by Laws 2009, chapter
3.2788, article 4, sections 7, 8, is amended to read:
3.28297A.75 REFUND; APPROPRIATION.
3.29    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
3.30following exempt items must be imposed and collected as if the sale were taxable and the
3.31rate under section 297A.62, subdivision 1, applied. The exempt items include:
3.32    (1) capital equipment exempt under section 297A.68, subdivision 5;
4.1    (2) building materials for an agricultural processing facility exempt under section
4.2297A.71, subdivision 13 ;
4.3    (3) building materials for mineral production facilities exempt under section
4.4297A.71, subdivision 14 ;
4.5    (4) building materials for correctional facilities under section 297A.71, subdivision
4.63 ;
4.7    (5) building materials used in a residence for disabled veterans exempt under section
4.8297A.71, subdivision 11 ;
4.9    (6) elevators and building materials exempt under section 297A.71, subdivision 12;
4.10    (7) building materials for the Long Lake Conservation Center exempt under section
4.11297A.71, subdivision 17 ;
4.12    (8) materials and supplies for qualified low-income housing under section 297A.71,
4.13subdivision 23 ;
4.14    (9) materials, supplies, and equipment for municipal electric utility facilities under
4.15section 297A.71, subdivision 35;
4.16    (10) equipment and materials used for the generation, transmission, and distribution
4.17of electrical energy and an aerial camera package exempt under section 297A.68,
4.18subdivision 37;
4.19    (11) tangible personal property and taxable services and construction materials,
4.20supplies, and equipment exempt under section 297A.68, subdivision 41;
4.21    (12) commuter rail vehicle and repair parts under section 297A.70, subdivision
4.223, clause (11);
4.23    (13) materials, supplies, and equipment for construction or improvement of projects
4.24and facilities under section 297A.71, subdivision 40; and
4.25(14) materials, supplies, and equipment for construction or improvement of a meat
4.26processing facility exempt under section 297A.71, subdivision 41.; and
4.27(15) materials, supplies, and equipment used in an aerospace defense manufacturing
4.28facility exempt under section 297A.71, subdivision 42.
4.29    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
4.30commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
4.31must be paid to the applicant. Only the following persons may apply for the refund:
4.32    (1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;
4.33    (2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
4.34subdivision;
4.35    (3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
4.36provided in United States Code, title 38, chapter 21;
5.1    (4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
5.2property;
5.3    (5) for subdivision 1, clause (8), the owner of the qualified low-income housing
5.4project;
5.5    (6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
5.6a joint venture of municipal electric utilities;
5.7    (7) for subdivision 1, clauses (10), (11), and (14), and (15), the owner of the
5.8qualifying business; and
5.9    (8) for subdivision 1, clauses (12) and (13), the applicant must be the governmental
5.10entity that owns or contracts for the project or facility.
5.11    Subd. 3. Application. (a) The application must include sufficient information
5.12to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
5.13subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
5.14(12), (13), or (14), or (15), the contractor, subcontractor, or builder must furnish to the
5.15refund applicant a statement including the cost of the exempt items and the taxes paid on
5.16the items unless otherwise specifically provided by this subdivision. The provisions of
5.17sections 289A.40 and 289A.50 apply to refunds under this section.
5.18    (b) An applicant may not file more than two applications per calendar year for
5.19refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
5.20    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must
5.21not exceed $5,000,000 in fiscal years 2010 and 2011. Total refunds paid for purchases of
5.22items in section 297A.71, subdivision 42, must not exceed $1,000,000 in any fiscal year.
5.23Refunds in excess of the $1,000,000 may be paid in the next fiscal year. Applications for
5.24refunds for purchases of items in sections 297A.70, subdivision 3, paragraph (a), clause
5.25(11), and 297A.71, subdivision 40, must not be filed until after June 30, 2009.
5.26    Subd. 4. Interest. Interest must be paid on the refund at the rate in section 270C.405
5.27from 90 days after the refund claim is filed with the commissioner for taxes paid under
5.28subdivision 1.
5.29    Subd. 5. Appropriation. The amount required to make the refunds is annually
5.30appropriated to the commissioner. The refund of the total tax imposed under section
5.31297A.62, subdivisions 1 and 1a, on the purchase of items in section 297A.71, subdivision
5.3242, shall be made from the general fund. and no offset will be made to deposits in the
5.33funds under the Minnesota Constitution, article XI, section 15.
5.34EFFECTIVE DATE.This section is effective for sales and purchases made after
5.35June 30, 2010."
5.36Amend the title accordingly