1.1 	A bill for an act
1.2 	relating to taxation; exempting public personal rapid
1.3 	transit systems from certain taxes; amending Minnesota
1.4 	Statutes 2004, sections 272.02, by adding a
1.5 	subdivision; 290.05, subdivision 1; 297A.61, by adding
1.6 	a subdivision; 297A.68, by adding a subdivision;
1.7 	297A.71, by adding a subdivision.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 272.02, is
1.10 	amended by adding a subdivision to read:
1.11 		Subd. 68.Personal rapid transit system. All property
1.12 	used in the operation and support of a personal rapid transit
1.13 	system as defined in section 297A.61, subdivision 37, that
1.14 	provides service to the public on a regular and continuing
1.15 	basis, is exempt, provided that it is operated independent of
1.16 	any government subsidies.
1.17 	
EFFECTIVE DATE. This section is effective for taxes
1.18 	payable in 2006 and subsequent years.

1.19 	Sec. 2. Minnesota Statutes 2004, section 290.05,
1.20 	subdivision 1, is amended to read:
1.21 		Subdivision 1.Exempt entities.  The following
1.22 	corporations, individuals, estates, trusts, and organizations
1.23 	shall be exempted from taxation under this chapter, provided
1.24 	that every such person or corporation claiming exemption under
1.25 	this chapter, in whole or in part, must establish to the
1.26 	satisfaction of the commissioner the taxable status of any
2.1 	income or activity:
2.2 	(a) corporations, individuals, estates, and trusts engaged
2.3 	in the business of mining or producing iron ore and other ores
2.4 	the mining or production of which is subject to the occupation
2.5 	tax imposed by section 298.01; but if any such corporation,
2.6 	individual, estate, or trust engages in any other business or
2.7 	activity or has income from any property not used in such
2.8 	business it shall be subject to this tax computed on the net
2.9 	income from such property or such other business or activity.
2.10 	Royalty shall not be considered as income from the business of
2.11 	mining or producing iron ore within the meaning of this section;
2.12 	(b) the United States of America, the state of Minnesota or
2.13 	any political subdivision of either agencies or
2.14 	instrumentalities, whether engaged in the discharge of
2.15 	governmental or proprietary functions; and 
2.16 	(c) any insurance company; and 
2.17 	(d) a corporation engaged in the business of operating a
2.18 	personal rapid transit system, as defined in section 297A.61,
2.19 	subdivision 37, in this state, independent of any government
2.20 	subsidies, but if the corporation engages in any other business
2.21 	or activity or has income from any property not used in the
2.22 	business of operating a personal rapid transit system, it is
2.23 	subject to this tax computed on the net income from the property
2.24 	or business or activity.
2.25 	
EFFECTIVE DATE. This section is effective for taxable
2.26 	years beginning after December 31, 2004.

2.27 	Sec. 3. Minnesota Statutes 2004, section 297A.61, is
2.28 	amended by adding a subdivision to read:
2.29 		Subd. 37.Personal rapid transit system. "Personal rapid
2.30 	transit system" means a transportation system of small,
2.31 	computer-controlled vehicles, transporting one to three
2.32 	passengers on elevated guideways in a transportation network
2.33 	operating on demand and nonstop directly to any stations in the
2.34 	network.
2.35 	
EFFECTIVE DATE. This section is effective for sales and
2.36 	purchases made after June 30, 2005.

3.1 	Sec. 4. Minnesota Statutes 2004, section 297A.68, is
3.2 	amended by adding a subdivision to read:
3.3 		Subd. 40.Personal rapid transit system. (a) Machinery,
3.4 	equipment, and supplies purchased or leased, and used by the
3.5 	purchaser or lessee in this state directly in the provision of a
3.6 	personal rapid transit system as defined in section 297A.61,
3.7 	subdivision 37, which provides service to the public on a
3.8 	regular and continuing basis, are exempt, provided that the
3.9 	system is operated independent of any government subsidies.
3.10 	Machinery, equipment, and supplies that qualify for this
3.11 	exemption include, but are not limited to, the following:
3.12 	(1) vehicles, guideways, and related parts used directly in
3.13 	the transit system;
3.14 	(2) computers and equipment used primarily for operating,
3.15 	controlling, and regulating the system;
3.16 	(3) machinery, equipment, furniture, and fixtures necessary
3.17 	for the functioning of system stations;
3.18 	(4) machinery, equipment, implements, tools, and supplies
3.19 	used to maintain vehicles, guideways, and stations; and 
3.20 	(5) electricity and other fuels used in the provision of
3.21 	the transit service, including heating, cooling, and lighting of
3.22 	system stations.
3.23 	(b) This exemption does not include machinery, equipment,
3.24 	and supplies used for nonproduction purposes such as operations
3.25 	support and administration.
3.26 	
EFFECTIVE DATE. This section is effective for sales and
3.27 	purchases made after June 30, 2005.

3.28 	Sec. 5. Minnesota Statutes 2004, section 297A.71, is
3.29 	amended by adding a subdivision to read:
3.30 		Subd. 33.Personal rapid transit system. Materials,
3.31 	equipment, and supplies used in the construction, expansion, or
3.32 	improvement of a personal rapid transit system as defined in
3.33 	section 297A.61, subdivision 37, which provides service to the
3.34 	public on a regular and continuing basis, are exempt, provided
3.35 	that the system is operated independent of any government
3.36 	subsidies.
4.1 	
EFFECTIVE DATE. This section is effective for sales and
4.2 	purchases made after June 30, 2005.