1.1                          A bill for an act
  1.2             relating to taxes; allowing a special levy for 
  1.3             required staffing of a new detention center and 
  1.4             exempting construction materials for a joint law 
  1.5             enforcement center from the sales and use tax; 
  1.6             amending Minnesota Statutes 1997 Supplement, sections 
  1.7             275.70, subdivision 5; 297A.15, subdivision 7; and 
  1.8             297A.25, by adding a subdivision. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.11  275.70, subdivision 5, is amended to read: 
  1.12     Subd. 5.  [SPECIAL LEVIES.] "Special levies" means those 
  1.13  portions of ad valorem taxes levied by a local governmental unit 
  1.14  for the following purposes or in the following manner: 
  1.15     (1) to pay the costs of the principal and interest on 
  1.16  bonded indebtedness or to reimburse for the amount of liquor 
  1.17  store revenues used to pay the principal and interest due on 
  1.18  municipal liquor store bonds in the year preceding the year for 
  1.19  which the levy limit is calculated; 
  1.20     (2) to pay the costs of principal and interest on 
  1.21  certificates of indebtedness issued for any corporate purpose 
  1.22  except for the following: 
  1.23     (i) tax anticipation or aid anticipation certificates of 
  1.24  indebtedness; 
  1.25     (ii) certificates of indebtedness issued under sections 
  1.26  298.28 and 298.282; 
  1.27     (iii) certificates of indebtedness used to fund current 
  2.1   expenses or to pay the costs of extraordinary expenditures that 
  2.2   result from a public emergency; or 
  2.3      (iv) certificates of indebtedness used to fund an 
  2.4   insufficiency in tax receipts or an insufficiency in other 
  2.5   revenue sources; 
  2.6      (3) to provide for the bonded indebtedness portion of 
  2.7   payments made to another political subdivision of the state of 
  2.8   Minnesota; 
  2.9      (4) to fund payments made to the Minnesota state armory 
  2.10  building commission under section 193.145, subdivision 2, to 
  2.11  retire the principal and interest on armory construction bonds; 
  2.12     (5) for unreimbursed expenses related to flooding that 
  2.13  occurred during the first half of calendar year 1997, as allowed 
  2.14  by the commissioner of revenue under section 275.74, paragraph 
  2.15  (b); 
  2.16     (6) for local units of government located in an area 
  2.17  designated by the Federal Emergency Management Agency pursuant 
  2.18  to a major disaster declaration issued for Minnesota by 
  2.19  President Clinton after April 1, 1997, and before June 11, 1997, 
  2.20  for the amount of tax dollars lost due to abatements authorized 
  2.21  under section 273.123, subdivision 7, and Laws 1997, chapter 
  2.22  231, article 2, section 64, to the extent that they are related 
  2.23  to the major disaster and to the extent that neither the state 
  2.24  or federal government reimburses the local government for the 
  2.25  amount lost; 
  2.26     (7) property taxes approved by voters which are levied 
  2.27  against the referendum market value as provided under section 
  2.28  275.61; 
  2.29     (8) to fund matching requirements needed to qualify for 
  2.30  federal or state grants or programs to the extent that either 
  2.31  (i) the matching requirement exceeds the matching requirement in 
  2.32  calendar year 1997, or (ii) it is a new matching requirement 
  2.33  that didn't exist prior to 1998; and 
  2.34     (9) to pay the expenses reasonably and necessarily incurred 
  2.35  in preparing for or repairing the effects of natural disaster 
  2.36  including the occurrence or threat of widespread or severe 
  3.1   damage, injury, or loss of life or property resulting from 
  3.2   natural causes, in accordance with standards formulated by the 
  3.3   emergency services division of the state department of public 
  3.4   safety, as allowed by the commissioner of revenue under section 
  3.5   275.74, paragraph (b); and 
  3.6      (10) to pay the cost of salaries and benefits for 
  3.7   corrections officers needed to staff a detention facility that 
  3.8   becomes operational after December 31, 1998, to the extent 
  3.9   required by the Minnesota department of corrections. 
  3.10     Sec. 2.  Minnesota Statutes 1997 Supplement, section 
  3.11  297A.15, subdivision 7, is amended to read: 
  3.12     Subd. 7.  [REFUND; APPROPRIATION; ADULT AND JUVENILE 
  3.13  CORRECTIONAL FACILITIES.] If construction materials and supplies 
  3.14  described in section 297A.25, subdivision subdivisions 65 and 
  3.15  73, are purchased by a contractor, subcontractor, or builder as 
  3.16  part of a lump-sum contract or similar type of contract with a 
  3.17  price covering both labor and materials for use in the project, 
  3.18  a refund equal to the taxes paid by the contractor, 
  3.19  subcontractor, or builder must be paid to the governmental 
  3.20  subdivision.  The tax must be imposed and collected as if the 
  3.21  sales were taxable and the rate under section 297A.02, 
  3.22  subdivision 1, applied.  An application for refund must be 
  3.23  submitted by the governmental subdivision and must include 
  3.24  sufficient information to permit the commissioner to verify the 
  3.25  sales taxes paid for the project.  The contractor, 
  3.26  subcontractor, or builder must furnish to the governmental 
  3.27  subdivision a statement of the cost of the construction 
  3.28  materials and supplies and the sales taxes paid on them.  The 
  3.29  amount required to make the refunds is annually appropriated to 
  3.30  the commissioner.  Interest must be paid on the refund at the 
  3.31  rate in section 270.76 from 60 days after the date the refund 
  3.32  claim is filed with the commissioner. 
  3.33     Sec. 3.  Minnesota Statutes 1996, section 297A.25, is 
  3.34  amended by adding a subdivision to read: 
  3.35     Subd. 73.  [CONSTRUCTION MATERIALS; JOINT LAW ENFORCEMENT 
  3.36  FACILITY.] Construction materials and supplies are exempt from 
  4.1   the tax imposed under this chapter, if purchased for use in the 
  4.2   construction of a joint law enforcement facility which includes 
  4.3   a detention center and a courts facility provided that (1) the 
  4.4   project is a joint project with a county and a city, and (2) the 
  4.5   materials and supplies are purchased after December 31, 1997, 
  4.6   and prior to December 31, 1999.  The exemption applies 
  4.7   regardless of whether the materials and supplies are purchased 
  4.8   by the county or city, or by a contractor, subcontractor, or 
  4.9   builder under a contract to the city.  The tax shall be imposed 
  4.10  and collected as if the rate under section 297A.02, subdivision 
  4.11  1, applied and refunded in the manner provided in section 
  4.12  297A.15, subdivision 7. 
  4.13     Sec. 4.  [EFFECTIVE DATE.] 
  4.14     Section 1 is effective for property taxes levied in 1998, 
  4.15  payable in 1999 and thereafter.  Sections 2 and 3 are effective 
  4.16  for purchases made after December 31, 1997, and before December 
  4.17  31, 1999.