HF 1781

as introduced - 88th Legislature (2013 - 2014) Posted on 04/16/2013 09:26am

A bill for an act
relating to taxation; sales and use; providing an exemption for a
biopharmaceutical manufacturing facility; amending Minnesota Statutes 2012,
sections 297A.71, by adding a subdivision; 297A.75.

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

Section 1.

Minnesota Statutes 2012, section 297A.71, is amended by adding a
subdivision to read:

new text begin Subd. 45. new text end

new text begin Biopharmaceutical manufacturing facility. new text end

new text begin (a) Materials and
supplies used or consumed in, capital equipment incorporated into, and privately
owned infrastructure in support of the construction, improvement, or expansion of a
biopharmaceutical manufacturing facility in the state are exempt if the following criteria
are met:
new text end

new text begin (1) the facility is used for the manufacturing of biologics;
new text end

new text begin (2) the total capital investment made at the facility exceeds $50,000,000; and
new text end

new text begin (3) the facility creates and maintains at least 190 full-time equivalent positions at the
facility. These positions must be new jobs in Minnesota and not the result of relocating
jobs that currently exist in Minnesota.
new text end

new text begin (b) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied, and refunded in the manner provided in section 297A.75.
new text end

new text begin (c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
facility must:
new text end

new text begin (1) initially apply to the Department of Employment and Economic Development
for certification no later than one year from the final completion date of construction,
improvement, or expansion of the facility; and
new text end

new text begin (2) for each year that the owner of the biopharmaceutical manufacturing facility
applies for a refund, the owner must have received written certification from the
Department of Employment and Economic Development that the facility has met the
criteria of paragraph (a).
new text end

new text begin (d) The refund is to be paid annually at a rate of 25 percent of the total allowable
refund payable to date, with the commissioner making annual payments of the remaining
refund until all of the refund has been paid.
new text end

new text begin (e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
interchangeable and mean medical drugs or medicinal preparations produced using
technology that uses biological systems, living organisms or derivatives of living
organisms, to make or modify products or processes for specific use. The medical drugs or
medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
and vaccines.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively to investments entered
into and jobs created after December 31, 2012, and effective retroactively for sales and
purchases made after December 31, 2012, and before July 1, 2019.
new text end

Sec. 2.

Minnesota Statutes 2012, section 297A.75, is amended to read:

297A.75 REFUND; APPROPRIATION.

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment exempt under section 297A.68, subdivision 5;

(2) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(3) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(4) building materials for correctional facilities under section 297A.71, subdivision 3;

(5) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(6) elevators and building materials exempt under section 297A.71, subdivision 12;

(7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;

(8) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(9) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(10) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37;

(11) commuter rail vehicle and repair parts under section 297A.70, subdivision 3,
paragraph (a), clause (10);

(12) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivision 40;

(13) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section 297A.71, subdivision 41;

(14) materials, supplies, and equipment for construction, improvement, or expansion
of an aerospace defense manufacturing facility exempt under section 297A.71, subdivision
42;

(15) enterprise information technology equipment and computer software for use in
a qualified data center exempt under section 297A.68, subdivision 42; deleted text begin and
deleted text end

(16) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (17) materials, supplies, and equipment for construction, improvement, or expansion
of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision
45.
new text end

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;

(2) for subdivision 1, clauses (4) and (7), the applicant must be the governmental
subdivision;

(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (8), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (9), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (10), (13), (14), deleted text begin and deleted text end (15), new text begin and (17), new text end the owner of the
qualifying business; and

(8) for subdivision 1, clauses (11), (12), and (16), the applicant must be the
governmental entity that owns or contracts for the project or facility.

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
(12), (13), (14), (15), deleted text begin or deleted text end (16), new text begin or (17), new text end the contractor, subcontractor, or builder must
furnish to the refund applicant a statement including the cost of the exempt items and the
taxes paid on the items unless otherwise specifically provided by this subdivision. The
provisions of sections 289A.40 and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

(c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
subdivision 40, must not be filed until after June 30, 2009. new text begin Applications for refunds for
purchases of items in section 297A.71, subdivision 45, must not be filed until after June
30, 2016, and only one refund may be filed annually thereafter.
new text end

Subd. 4.

Interest.

Interest must be paid on the refund at the rate in section 270C.405
from 90 days after the refund claim is filed with the commissioner for taxes paid under
subdivision 1.

Subd. 5.

Appropriation.

The amount required to make the refunds is annually
appropriated to the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively to investments entered
into and jobs created after December 31, 2012, and effective retroactively for sales and
purchases made after December 31, 2012, and before July 1, 2019.
new text end