1.1.................... moves to amend H.F. No. 1777, the delete everything amendment
1.2(H1777DE1), as follows:
1.3Page 4, delete section 4 and insert:

1.4    "Sec. 4. Minnesota Statutes 2012, section 290.01, subdivision 19a, is amended to read:
1.5    Subd. 19a. Additions to federal taxable income. For individuals, estates, and
1.6trusts, there shall be added to federal taxable income:
1.7    (1)(i) interest income on obligations of any state other than Minnesota or a political
1.8or governmental subdivision, municipality, or governmental agency or instrumentality
1.9of any state other than Minnesota exempt from federal income taxes under the Internal
1.10Revenue Code or any other federal statute; and
1.11    (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
1.12Code, except:
1.13(A) the portion of the exempt-interest dividends exempt from state taxation under
1.14the laws of the United States; and
1.15(B) the portion of the exempt-interest dividends derived from interest income
1.16on obligations of the state of Minnesota or its political or governmental subdivisions,
1.17municipalities, governmental agencies or instrumentalities, but only if the portion of the
1.18exempt-interest dividends from such Minnesota sources paid to all shareholders represents
1.1995 percent or more of the exempt-interest dividends, including any dividends exempt
1.20under subitem (A), that are paid by the regulated investment company as defined in section
1.21851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
1.22defined in section 851(g) of the Internal Revenue Code, making the payment; and
1.23    (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
1.24government described in section 7871(c) of the Internal Revenue Code shall be treated as
1.25interest income on obligations of the state in which the tribe is located;
1.26    (2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
1.27accrued within the taxable year under this chapter and the amount of taxes based on net
2.1income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state
2.2or to any province or territory of Canada, to the extent allowed as a deduction under
2.3section 63(d) of the Internal Revenue Code, but the addition may not be more than the
2.4amount by which the itemized deductions as allowed under section 63(d) of the Internal
2.5Revenue Code state itemized deduction exceeds the amount of the standard deduction as
2.6defined in section 63(c) of the Internal Revenue Code, disregarding the amounts allowed
2.7under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code, minus any
2.8addition that would have been required under clause (21) (17) if the taxpayer had claimed
2.9the standard deduction. For the purpose of this paragraph, the disallowance of itemized
2.10deductions under section 68 of the Internal Revenue Code of 1986, income, sales and use,
2.11motor vehicle sales, or excise taxes are the last itemized deductions disallowed;
2.12    (3) the capital gain amount of a lump-sum distribution to which the special tax under
2.13section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
2.14    (4) the amount of income taxes paid or accrued within the taxable year under this
2.15chapter and taxes based on net income paid to any other state or any province or territory
2.16of Canada, to the extent allowed as a deduction in determining federal adjusted gross
2.17income. For the purpose of this paragraph, income taxes do not include the taxes imposed
2.18by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
2.19    (5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
2.20other than expenses or interest used in computing net interest income for the subtraction
2.21allowed under subdivision 19b, clause (1);
2.22    (6) the amount of a partner's pro rata share of net income which does not flow
2.23through to the partner because the partnership elected to pay the tax on the income under
2.24section 6242(a)(2) of the Internal Revenue Code;
2.25    (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
2.26Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
2.27in the taxable year generates a deduction for depreciation under section 168(k) and the
2.28activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
2.29the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
2.30limited to excess of the depreciation claimed by the activity under section 168(k) over the
2.31amount of the loss from the activity that is not allowed in the taxable year. In succeeding
2.32taxable years when the losses not allowed in the taxable year are allowed, the depreciation
2.33under section 168(k) is allowed;
2.34    (8) 80 percent of the amount by which the deduction allowed by section 179 of the
2.35Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
2.36Revenue Code of 1986, as amended through December 31, 2003;
3.1    (9) to the extent deducted in computing federal taxable income, the amount of the
3.2deduction allowable under section 199 of the Internal Revenue Code;
3.3    (10) for taxable years beginning before January 1, 2013, the exclusion allowed under
3.4section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
3.5(11) the amount of expenses disallowed under section 290.10, subdivision 2;
3.6    (12) (11) for taxable years beginning before January 1, 2010, the amount deducted
3.7for qualified tuition and related expenses under section 222 of the Internal Revenue Code,
3.8to the extent deducted from gross income;
3.9    (13) (12) for taxable years beginning before January 1, 2010, the amount deducted
3.10for certain expenses of elementary and secondary school teachers under section
3.1162(a)(2)(D) of the Internal Revenue Code, to the extent deducted from gross income;
3.12(14) the additional standard deduction for property taxes payable that is allowable
3.13under section 63(c)(1)(C) of the Internal Revenue Code;
3.14(15) the additional standard deduction for qualified motor vehicle sales taxes
3.15allowable under section 63(c)(1)(E) of the Internal Revenue Code;
3.16(16) (13) discharge of indebtedness income resulting from reacquisition of business
3.17indebtedness and deferred under section 108(i) of the Internal Revenue Code;
3.18(17) the amount of unemployment compensation exempt from tax under section
3.1985(c) of the Internal Revenue Code;
3.20(18) (14) changes to federal taxable income attributable to a net operating loss that
3.21the taxpayer elected to carry back for more than two years for federal purposes but for
3.22which the losses can be carried back for only two years under section 290.095, subdivision
3.2311 , paragraph (c);
3.24(19) (15) to the extent included in the computation of federal taxable income in
3.25taxable years beginning after December 31, 2010, the amount of disallowed itemized
3.26deductions, but the amount of disallowed itemized deductions plus the addition required
3.27under clause (2) may not be more than the amount by which the itemized deductions as
3.28allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the
3.29standard deduction as defined in section 63(c) of the Internal Revenue Code, disregarding
3.30the amounts allowed under sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue
3.31Code, and reduced by any addition that would have been required under clause (21) (17) if
3.32the taxpayer had claimed the standard deduction:
3.33(i) the amount of disallowed itemized deductions is equal to the lesser of:
3.34(A) three percent of the excess of the taxpayer's federal adjusted gross income
3.35over the applicable amount; or
4.1(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
4.2taxpayer under the Internal Revenue Code for the taxable year;
4.3(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
4.4married individual filing a separate return. Each dollar amount shall be increased by
4.5an amount equal to:
4.6(A) such dollar amount, multiplied by
4.7(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
4.8Revenue Code for the calendar year in which the taxable year begins, by substituting
4.9"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;
4.10(iii) the term "itemized deductions" does not include:
4.11(A) the deduction for medical expenses under section 213 of the Internal Revenue
4.12Code;
4.13(B) any deduction for investment interest as defined in section 163(d) of the Internal
4.14Revenue Code; and
4.15(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
4.16theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
4.17Code or for losses described in section 165(d) of the Internal Revenue Code;
4.18(20) (16) to the extent included in federal taxable income in taxable years beginning
4.19after December 31, 2010, the amount of disallowed personal exemptions for taxpayers
4.20with federal adjusted gross income over the threshold amount:
4.21(i) the disallowed personal exemption amount is equal to the dollar amount of the
4.22personal exemptions claimed by the taxpayer in the computation of federal taxable income
4.23multiplied by the applicable percentage;
4.24(ii) "applicable percentage" means two percentage points for each $2,500 (or
4.25fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
4.26year exceeds the threshold amount. In the case of a married individual filing a separate
4.27return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
4.28no event shall the applicable percentage exceed 100 percent;
4.29(iii) the term "threshold amount" means:
4.30(A) $150,000 in the case of a joint return or a surviving spouse;
4.31(B) $125,000 in the case of a head of a household;
4.32(C) $100,000 in the case of an individual who is not married and who is not a
4.33surviving spouse or head of a household; and
4.34(D) $75,000 in the case of a married individual filing a separate return; and
4.35(iv) the thresholds shall be increased by an amount equal to:
4.36(A) such dollar amount, multiplied by
5.1(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
5.2Revenue Code for the calendar year in which the taxable year begins, by substituting
5.3"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; and
5.4(21) (17) to the extent deducted in the computation of federal taxable income, for
5.5taxable years beginning after December 31, 2010, and before January 1, 2013 2014, the
5.6difference between the standard deduction allowed under section 63(c) of the Internal
5.7Revenue Code and the standard deduction allowed for 2011 and, 2012, and 2013 under the
5.8Internal Revenue Code as amended through December 1, 2010.
5.9EFFECTIVE DATE.This section is effective retroactively for taxable years
5.10beginning after December 31, 2012."
5.11Page 14, line 1, delete "(11) to (14), and (18) to (19)" and insert "and (11) to (14)"
5.12Page 14, line 9, delete "(11) to (14), and (18) to (19)" and insert "and (11) to (14)"
5.13Page 18, line 36, delete "2013" and insert "2012"
5.14Page 19, line 4, delete "2013" and insert "2012"
5.15Page 19, line 19, after "effective" insert "retroactively"
5.16Page 19, line 20, delete "2013" and insert "2012"
5.17Page 20, line 34, delete "(11) to (14), and (18) to (19)" and insert "and (11) to (14)"