HF 514

as introduced - 87th Legislature (2011 - 2012) Posted on 02/14/2011 11:13am

A bill for an act
relating to taxation; suspending maintenance of effort requirements; modifying
sales tax exemption; amending Minnesota Statutes 2010, section 297A.70,
subdivisions 2, 3; proposing coding for new law in Minnesota Statutes, chapter
275.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [275.761] MAINTENANCE OF EFFORT AND MATCHING
REQUIREMENTS SUSPENDED.
new text end

new text begin (a) Notwithstanding any law to the contrary and except as provided in paragraphs (b)
and (c), all maintenance of effort and matching fund requirements for counties, including
but not limited to those under sections 116L.872, 119B.11, 134.34, 145.882, 145A.131,
245.4835, 245.714, 254B.03, 256B.0625, 256F.10, and 256F.13, are suspended for the
taxes payable years that levy limits are in effect.
new text end

new text begin (b) This section does not permit a county to suspend or otherwise reduce a
maintenance of effort or matching fund requirement to the extent that the suspension
or reduction would:
new text end

new text begin (1) require the state to expend additional money or incur additional costs; or
new text end

new text begin (2) cause a reduction in the receipt by the state or the county of federal funds.
new text end

new text begin (c) The commissioner of finance may determine the maintenance of effort and
matching funding requirements that are not permitted, in whole or in part, to be suspended
or reduced under paragraph (b). The commissioner shall publish these determinations
on the department's Web site and no county may suspend or reduce a maintenance of
effort or matching fund requirement that the commissioner determines is not subject to
suspension or reduction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 297A.70, subdivision 2, is amended to read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) deleted text begin school districts, deleted text end the University of Minnesota, state universities, community
colleges, technical colleges, state academies, new text begin and new text end the Perpich Minnesota Center for
Arts Education deleted text begin , and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools deleted text end ;

(3) deleted text begin hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;
deleted text end

deleted text begin (4) deleted text end the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

deleted text begin (5) deleted text end new text begin (4) new text end other states or political subdivisions of other states, if the sale would be
exempt from taxation if it occurred in that state; deleted text begin and
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end sales to public libraries, public library systems, deleted text begin multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, deleted text end state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library new text begin ; and
new text end

new text begin (6) goods and services purchased by a political subdivision of the state of Minnesota,
except for items purchased for the provision of goods or services that are:
new text end

new text begin (i) generally provided by a private business; and
new text end

new text begin (ii) taxable purchases if made by a private business engaged in the same activity new text end .

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities new text begin ,
or by a political subdivision new text end ; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g),
clause (2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in
section 297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks,
and alcoholic beverages purchased directly by the United States or its agencies or
instrumentalities.

(c) As used in this subdivision, deleted text begin "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59 deleted text end new text begin "goods or services
that are generally provided by a private business" include, but are not limited to, goods
and services generally provided by liquor stores, gas and electric utilities, golf courses,
marinas, health and fitness centers, campgrounds, cafes, and laundromats. "Goods and
services that are generally provided by a private business" do not include housing, sewer
and water services, wastewater treatment, ambulances and other public safety services,
chore or homemaking services provided to elderly or disabled individuals, or road and
street maintenance or lighting new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2011.
new text end

Sec. 3.

Minnesota Statutes 2010, section 297A.70, subdivision 3, is amended to read:

Subd. 3.

Sales of certain goods and services to government.

(a) The following
sales to or use by the specified new text begin persons, new text end governments new text begin , new text end and political subdivisions of the
state are exempt:

(1) deleted text begin repair and replacement parts for emergency rescue vehicles, fire trucks, and
fire apparatus to a political subdivision;
deleted text end

deleted text begin (2) machinery and equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10;
deleted text end

deleted text begin (3) chore and homemaking services to a political subdivision of the state to be
provided to elderly or disabled individuals;
deleted text end

deleted text begin (4) deleted text end telephone services to the Office of Enterprise Technology that are used to provide
telecommunications services through the enterprise technology revolving fund;

deleted text begin (5) deleted text end new text begin (2) new text end firefighter personal protective equipment as defined in paragraph (b), if
purchased or authorized by and for the use of an organized fire department, fire protection
district, or fire company regularly charged with the responsibility of providing fire
protection to the state or a political subdivision;

deleted text begin (6) deleted text end new text begin (3) new text end bullet-resistant body armor that provides the wearer with ballistic and trauma
protection, if purchased by a law enforcement agency of the state deleted text begin or a political subdivision
of the state, deleted text end or a licensed peace officer, as defined in section 626.84, subdivision 1;

deleted text begin (7) deleted text end new text begin (4) new text end motor vehicles purchased or leased by political subdivisions of the state if the
vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
under section 297B.03, clause (12);

deleted text begin (8) equipment designed to process, dewater, and recycle biosolids for wastewater
treatment facilities of political subdivisions, and materials incidental to installation of
that equipment;
deleted text end

deleted text begin (9) sales to a town of gravel and of machinery, equipment, and accessories, except
motor vehicles, used exclusively for road and bridge maintenance, and deleted text end new text begin (5) new text end leases by a
town of motor vehicles exempt from tax under section 297B.03, clause (10);

deleted text begin (10) deleted text end new text begin (6) new text end the removal of trees, bushes, or shrubs for the construction and maintenance
of roads, trails, or firebreaks when purchased by an agency of the state deleted text begin or a political
subdivision of the state deleted text end ; and

deleted text begin (11) deleted text end new text begin (7) new text end purchases by the Metropolitan Council or the Department of Transportation
of vehicles and repair parts to equip operations provided for in section 174.90, including,
but not limited to, the Northstar Corridor Rail project.

(b) For purposes of this subdivision, "firefighters personal protective equipment"
means helmets, including face shields, chin straps, and neck liners; bunker coats and
pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
personal alert safety systems; spanner belts; optical or thermal imaging search devices;
and all safety equipment required by the Occupational Safety and Health Administration.

(c) For purchases of items listed in paragraph (a), clause (11), the tax must be
imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
then refunded in the manner provided in section 297A.75.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2011.
new text end