1.1.................... moves to amend H.F. No. 2527 as follows:
1.2Page 1, line 21 delete "corporation which is a wholly owned subsidiary of" and
1.3insert "company that consists of a sole member that is"
1.4Page 2, after line 31, insert:

1.5    "Sec. 2. Minnesota Statutes 2008, section 290.21, subdivision 4, is amended to read:
1.6    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
1.7of dividends received by a corporation during the taxable year from another corporation,
1.8in which the recipient owns 20 percent or more of the stock, by vote and value, not
1.9including stock described in section 1504(a)(4) of the Internal Revenue Code when the
1.10corporate stock with respect to which dividends are paid does not constitute the stock in
1.11trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
1.12constitute property held by the taxpayer primarily for sale to customers in the ordinary
1.13course of the taxpayer's trade or business, or when the trade or business of the taxpayer
1.14does not consist principally of the holding of the stocks and the collection of the income
1.15and gains therefrom; and
1.16    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
1.17an affiliated company transferred in an overall plan of reorganization and the dividend
1.18is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
1.19amended through December 31, 1989;
1.20    (ii) the remaining 20 percent of dividends if the dividends are received from a
1.21corporation which is subject to tax under section 290.36 and which is a member of an
1.22affiliated group of corporations as defined by the Internal Revenue Code and the dividend
1.23is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
1.24amended through December 31, 1989, or is deducted under an election under section
1.25243(b) of the Internal Revenue Code; or
1.26    (iii) the remaining 20 percent of the dividends if the dividends are received from a
1.27property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
2.1member of an affiliated group of corporations as defined by the Internal Revenue Code
2.2and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
2.31.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
2.4under an election under section 243(b) of the Internal Revenue Code.
2.5    (b) Seventy percent of dividends received by a corporation during the taxable year
2.6from another corporation in which the recipient owns less than 20 percent of the stock,
2.7by vote or value, not including stock described in section 1504(a)(4) of the Internal
2.8Revenue Code when the corporate stock with respect to which dividends are paid does not
2.9constitute the stock in trade of the taxpayer, or does not constitute property held by the
2.10taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
2.11business, or when the trade or business of the taxpayer does not consist principally of the
2.12holding of the stocks and the collection of income and gain therefrom.
2.13    (c) The dividend deduction provided in this subdivision shall be allowed only with
2.14respect to dividends that are included in a corporation's Minnesota taxable net income
2.15for the taxable year.
2.16    The dividend deduction provided in this subdivision does not apply to a dividend
2.17from a corporation which, for the taxable year of the corporation in which the distribution
2.18is made or for the next preceding taxable year of the corporation, is a corporation exempt
2.19from tax under section 501 of the Internal Revenue Code.
2.20    The dividend deduction provided in this subdivision applies to the amount of
2.21regulated investment company dividends only to the extent determined under section
2.22854(b) of the Internal Revenue Code.
2.23    The dividend deduction provided in this subdivision shall not be allowed with
2.24respect to any dividend for which a deduction is not allowed under the provisions of
2.25section 246(c) of the Internal Revenue Code.
2.26    (d) If dividends received by a corporation that does not have nexus with Minnesota
2.27under the provisions of Public Law 86-272 are included as income on the return of
2.28an affiliated corporation permitted or required to file a combined report under section
2.29290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
2.30determination as to whether the trade or business of the corporation consists principally
2.31of the holding of stocks and the collection of income and gains therefrom shall be made
2.32with reference to the trade or business of the affiliated corporation having a nexus with
2.33Minnesota.
2.34    (e) The deduction provided by this subdivision does not apply if the dividends are
2.35paid by a FSC as defined in section 922 of the Internal Revenue Code.
3.1    (f) If one or more of the members of the unitary group whose income is included on
3.2the combined report received a dividend, the deduction under this subdivision for each
3.3member of the unitary business required to file a return under this chapter is the product
3.4of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
3.5allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
3.6income apportionable to this state for the taxable year under section 290.191 or 290.20.
3.7(g) The deduction provided by this subdivision does not apply to dividends received
3.8from a real estate investment trust, if the dividends are not considered to be dividends
3.9under section 243(d)(3) and section 857(c) of the Internal Revenue Code.
3.10EFFECTIVE DATE.This section is effective for taxable years beginning after
3.11December 31, 2009."
3.12Renumber the sections in sequence and correct the internal references
3.13Amend the title accordingly