HF 3036

as introduced - 88th Legislature (2013 - 2014) Posted on 03/13/2014 02:45pm

A bill for an act
relating to transportation; exempting the Department of Transportation from
payment of sales tax and providing for appropriation of sales tax amounts to
be paid to contractors; adjusting distribution of motor vehicle lease sales tax
revenues; amending formula for payment of replacement service operation costs;
amending Minnesota Statutes 2012, section 473.388, subdivision 4; Minnesota
Statutes 2013 Supplement, sections 297A.70, subdivision 2; 297A.815,
subdivision 3; proposing coding for new law in Minnesota Statutes, chapter 161.

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

Section 1.

new text begin [161.087] BUDGET SUBMISSION FOR SALES TAX PAYMENTS
TO CONTRACTORS.
new text end

new text begin In each biennial budget submission, the commissioner shall specify the amounts
estimated to be paid to contractors and subcontractors in the biennium that are attributable
to sales tax for materials purchased by contractors and subcontractors under lump sum
contracts or similar types of contracts that contain a guaranteed maximum price covering
both labor and materials for use in the construction, reconstruction, improvement,
or maintenance of trunk highways. The legislature shall include these amounts in
appropriations for Department of Transportation state road construction.
new text end

Sec. 2.

Minnesota Statutes 2013 Supplement, 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) school districts, local governments, the University of Minnesota, state universities,
community colleges, technical colleges, state academies, the Perpich Minnesota Center for
Arts Education, 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;

(3) 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;

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

(5) 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

(6) public libraries, public library systems, multicounty, multitype library systems
as defined in section 134.001, county law libraries under chapter 134A, 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 (7) the Department of Transportation 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;

(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; or

(5) goods or services purchased by a local government as inputs to goods and
services that are generally provided by a private business and the purchases would be
taxable if made by a private business engaged in the same activity.

(c) As used in this subdivision, "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.

(d) As used in this subdivision, "local governments" means cities, counties, and
townships.

(e) As used in this subdivision, "goods or services generally provided by a private
business" include, but are not limited to, goods or services provided by liquor stores, gas
and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
and laundromats. "Goods or services generally provided by a private business" do not
include housing services, sewer and water services, wastewater treatment, ambulance and
other public safety services, correctional services, chore or homemaking services provided
to elderly or disabled individuals, or road and street maintenance or lighting.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014, and applies to sales and
purchases on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2013 Supplement, section 297A.815, subdivision 3, is
amended to read:

Subd. 3.

Motor vehicle lease sales tax revenue.

(a) deleted text begin For purposes of this
subdivision, "net revenue" means an amount equal to:
deleted text end

deleted text begin (1) the revenues, including interest and penalties, collected under this section, during
the fiscal year; less
deleted text end

deleted text begin (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
year 2013 and following fiscal years, $32,000,000.
deleted text end

deleted text begin (b) deleted text end On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the amount of the revenues deleted text begin and subtraction under paragraph (a) for the current
fiscal year deleted text end new text begin , including interest and penalties, collected under this section during the fiscal
year new text end .

deleted text begin (c) deleted text end new text begin (b) new text end On or after July 1 of the subsequent fiscal year, the commissioner of
management and budget shall transfer the deleted text begin net revenue deleted text end new text begin revenues new text end as estimated in paragraph
deleted text begin (b) deleted text end new text begin (a) new text end from the general fund, as follows:

(1) deleted text begin $9,000,000 annually until January 1, 2016, and deleted text end new text begin $32,000,000 to the county
state-aid highway fund;
new text end

new text begin (2) new text end 50 percent deleted text begin annually thereafter deleted text end new text begin of the remainder new text end to the county state-aid highway
fund new text begin , subject to the following limitation new text end . Notwithstanding any other law to the contrary,
the commissioner of transportation shall allocate the funds transferred under this clause
to the counties in the metropolitan area, as defined in section 473.121, subdivision 4,
excluding the counties of Hennepin and Ramsey, so that each county shall receive of such
amount the percentage that its population, as defined in section 477A.011, subdivision 3,
estimated or established by July 15 of the year prior to the current calendar year, bears to
the total population of the counties receiving funds under this clause; and

deleted text begin (2) the remainder deleted text end new text begin (3) remaining revenues new text end to the greater Minnesota transit account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014, and applies to sales and
purchases on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2012, section 473.388, subdivision 4, is amended to read:

Subd. 4.

Financial assistance.

(a) The council must grant the requested financial
assistance if it determines that the proposed service is intended to replace the service to
the applying city or town or combination thereof by the council and that the proposed
service will meet the needs of the applicant at least as efficiently and effectively as the
existing service.

(b) The amount of assistance which the council must provide to a system under this
section may not be less than the sum of the amounts determined for each municipality
comprising the system as follows:

(1) the transit operating assistance grants received under this subdivision by the
municipality in calendar year 2001 or the tax revenues for transit services levied by the
municipality for taxes payable in 2001, including that portion of the levy derived from
the areawide pool under section 473F.08, subdivision 3, clause (a), plus the portion of
the municipality's aid under section 273.1398, subdivision 2, attributable to the transit
levy; times

(2) the ratio of (i) an amount equal to deleted text begin 3.74 deleted text end new text begin 4.5 new text end percent of the state revenues generated
from the taxes imposed under chapter 297B for the current fiscal year to (ii) the total
transit operating assistance grants received under this subdivision in calendar year 2001 or
the tax revenues for transit services levied by all replacement service municipalities under
this section for taxes payable in 2001, including that portion of the levy derived from
the areawide pool under section 473F.08, subdivision 3, clause (a), plus the portion of
homestead and agricultural credit aid under section 273.1398, subdivision 2, attributable
to nondebt transit levies, times

(3) the ratio of (i) the municipality's total taxable market value for taxes payable
in 2006 divided by the municipality's total taxable market value for taxes payable in
2001, to (ii) the total taxable market value of all property located in replacement service
municipalities for taxes payable in 2006 divided by the total taxable market value of all
property located in replacement service municipalities for taxes payable in 2001.

(c) The council shall pay the amount to be provided to the recipient from the funds
the council receives in the metropolitan area transit account under section 16A.88.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end