Minnesota Legislature
HF 3186
1st Engrossment - 89th Legislature (2015 - 2016) Posted on 03/30/2016 12:35pm
Bill Text Versions
| Engrossments | ||
|---|---|---|
| Introduction | Posted on 03/16/2016 | |
| 1st Engrossment | Posted on 03/30/2016 |
Current Version - 1st Engrossment
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A bill for an act
relating to agriculture; establishing a grain credit contract indemnity program;
increasing bond amounts for licensed grain buyers; dedicating a portion of sales
tax revenue derived from the sale of grain bins; eliminating the sales tax on
grain bins; establishing a gross receipts tax for grain bins to fund the indemnity
payments if program funding falls below a threshold amount; appropriating
money; amending Minnesota Statutes 2014, sections 223.15; 223.16, subdivision
1; 223.17, subdivision 4; 223.19; 297A.61, subdivision 12; proposing coding for
new law in Minnesota Statutes, chapters 223; 295.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2014, section 223.15, is amended to read:
223.15 CITATION.
Sections 223.15 to deleted text begin 223.19deleted text end new text begin 223.23new text end may be cited as the "Grain Buyers Act."
Sec. 2.
Minnesota Statutes 2014, section 223.16, subdivision 1, is amended to read:
Subdivision 1.
Applicability.
For the purpose of sections 223.15 to deleted text begin 223.22deleted text end new text begin 223.23new text end ,
the terms defined in this section have the meanings given them.
Sec. 3.
Minnesota Statutes 2014, section 223.17, subdivision 4, is amended to read:
Subd. 4.
Bond.
(a) Before a grain buyer's license is issued, the applicant for
the license must file with the commissioner a bond in a penal sum prescribed by the
commissioner but not less than the following amounts:
(1) $10,000 for grain buyers whose gross annual purchases are $100,000 or less;
(2) $20,000 for grain buyers whose gross annual purchases are more than $100,000
but not more than $750,000;
(3) $30,000 for grain buyers whose gross annual purchases are more than $750,000
but not more than $1,500,000;
(4) $40,000 for grain buyers whose gross annual purchases are more than $1,500,000
but not more than $3,000,000;
(5) deleted text begin $50,000deleted text end new text begin $300,000new text end for grain buyers whose gross annual purchases are more than
$3,000,000 but not more than $6,000,000;
(6) deleted text begin $70,000deleted text end new text begin $400,000new text end for grain buyers whose gross annual purchases are more than
$6,000,000 but not more than $12,000,000;
(7) deleted text begin $125,000deleted text end new text begin $500,000new text end for grain buyers whose gross annual purchases are more than
$12,000,000 but not more than $24,000,000; and
(8) deleted text begin $150,000deleted text end new text begin $600,000new text end for grain buyers whose gross annual purchases exceed
$24,000,000.
(b) A grain buyer who has filed a bond with the commissioner prior to July 1, deleted text begin 2004deleted text end new text begin
2016new text end , is not required to increase the amount of the bond to comply with this section until
July 1, deleted text begin 2005deleted text end new text begin 2017new text end . The commissioner may postpone an increase in the amount of the bond
until July 1, deleted text begin 2006deleted text end new text begin 2018new text end , if a licensee demonstrates that the increase will impose undue
financial hardship on the licensee, and that producers will not be harmed as a result of
the postponement. The commissioner may impose other restrictions on a licensee whose
bond increase has been postponed. The amount of the bond shall be based on the most
recent gross annual grain purchase report of the grain buyer.
(c) A first-time applicant for a grain buyer's license shall file a $50,000 bond with
the commissioner. This bond shall remain in effect for the first year of the license.
Thereafter, the licensee shall comply with the applicable bonding requirements contained
in paragraph (a), clauses (1) to (8).
(d) In lieu of the bond required by this subdivision the applicant may deposit with
the commissioner of management and budget cash, a certified check, a cashier's check,
a postal, bank, or express money order, assignable bonds or notes of the United States,
or an assignment of a bank savings account or investment certificate or an irrevocable
bank letter of credit as defined in section 336.5-102, in the same amount as would be
required for a bond.
(e) Bonds must be continuous until canceled. To cancel a bond, a surety must provide
90 days' written notice of the bond's termination date to the licensee and the commissioner.
Sec. 4.
Minnesota Statutes 2014, section 223.19, is amended to read:
223.19 RULES.
The commissioner may make rules pursuant to chapter 14 to carry out the provisions
of sections 223.15 to deleted text begin 223.22deleted text end new text begin 223.23new text end .
Sec. 5.
new text begin
[223.23] INDEMNITY PAYMENTS; APPROPRIATION.
new text end
new text begin Subdivision 1. new text end
new text begin Establishment. new text end
new text begin
A grain credit contract indemnity program is
established. The commissioner must administer the program and award indemnity
payments to eligible producers.
new text end
new text begin Subd. 2. new text end
new text begin Eligibility. new text end
new text begin
A producer is eligible to receive an indemnity payment from
the commissioner if the producer sold grain by a voluntary extension of credit contract
to a licensed grain buyer or a person licensed as a public grain warehouse operator
under chapter 232 and the producer is damaged by the licensee's breach of the voluntary
extension of credit contract.
new text end
new text begin Subd. 3. new text end
new text begin Application. new text end
new text begin
(a) A producer asserting eligibility under subdivision 2 must
file a completed claim with the commissioner within 180 days of the alleged breach of
contract. The producer must state the facts constituting the claim and all other information
required by the commissioner.
new text end
new text begin
(b) The commissioner shall promptly determine the validity of each filed claim
and notify the claimant accordingly. An aggrieved party may appeal the commissioner's
determination by requesting, within 15 days, that the commissioner initiate a contested
case proceeding under chapter 14.
new text end
new text begin Subd. 4. new text end
new text begin Court order. new text end
new text begin
The commissioner may apply to the district court for an
order appointing a trustee or receiver to manage and supervise the operations of a grain
buyer or public grain warehouse operator in default. The commissioner may participate
in any resulting court proceeding as an interested party.
new text end
new text begin Subd. 5. new text end
new text begin Payment limitation. new text end
new text begin
(a) For each breach of contract, the commissioner
must pay the eligible producer an amount equal to the lesser of $650,000 or 80 percent of
the amount owed to the producer pursuant to the voluntary extension of credit contract
in default.
new text end
new text begin
(b) If valid claims exceed funds available in the grain credit contract indemnity
account, the commissioner must prorate the claims and pay prorated amounts to each
eligible producer. When additional funds become available, the commissioner must
resume issuing indemnity payments to each eligible producer until each producer receives
the maximum amount payable under paragraph (a).
new text end
new text begin Subd. 6. new text end
new text begin Debt obligation; subrogated claim. new text end
new text begin
(a) Money paid by the commissioner
to satisfy a valid claim constitutes a debt obligation of the grain buyer or public grain
warehouse operator in default. The commissioner may take action against the grain buyer
or public grain warehouse operator to recover the amount of any claim payment plus
reasonable costs, attorney fees, and interest computed at the rate provided in section
270C.40. The commissioner must deposit any amount recovered under this subdivision in
the grain credit contract indemnity account.
new text end
new text begin
(b) As a condition of payment from the commissioner, a producer must subrogate the
producer's interest in the voluntary extension of credit contract to the commissioner in an
amount equal to any claim payment or payments the producer received under this section.
new text end
new text begin Subd. 7. new text end
new text begin Account; appropriation. new text end
new text begin
A grain credit contract indemnity account
is established in the agricultural fund. Money in the account, including interest, is
appropriated to the commissioner to pay valid claims and to administer this section.
new text end
Sec. 6.
new text begin
[295.80] GRAIN BIN GROSS RECEIPTS TAX.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
(a) For purposes of this section, the following terms
have the meanings given.
new text end
new text begin
(b) "Commissioner" means the commissioner of revenue.
new text end
new text begin
(c) "Grain bin" means a storage bin used in the agricultural production process that
is exempt from sales tax under chapter 297A, as part of exempt farm machinery. Grain bin
does not include accessories to grain bins such as dryers and sweepers.
new text end
new text begin
(d) "Grain bin retailer" means a retailer that sells grain bins.
new text end
new text begin
(e) "Gross receipts" means the total amount received in money, or by barter or
exchange for all grain bins sold at retail as measured by the sales price, but excludes
delivery and installation charges.
new text end
new text begin
(f) "Retail sale" has the meaning given in section 297A.61, subdivision 4.
new text end
new text begin Subd. 2. new text end
new text begin Gross receipts tax imposed. new text end
new text begin
Beginning with fiscal year 2019, if the grain
contract indemnity account in the agricultural fund, established under section 223.23, is
anticipated by the commissioner to be less than $2,000,000, as provided under subdivision
3, a tax is imposed on each grain bin retailer in the state equal to 2.0 percent of gross
receipts of retail sales of grain bins in Minnesota. The tax remains in effect until such time
as determined by the commissioner under subdivision 3.
new text end
new text begin Subd. 3. new text end
new text begin Imposition and expiration of the tax. new text end
new text begin
(a) By December 1 of 2017,
and each December 1 thereafter, the commissioner of management and budget, in
consultation with the commissioner of agriculture, shall determine the projected balance
in the grain contract indemnity account for the next fiscal year. If the commissioner of
management and budget determines that the projected balance in the account will be less
than $2,000,000 for the fiscal year, the commissioner of management and budget shall
impose the tax under subdivision 2, beginning with sales and purchases made after the
last day of the current fiscal year.
new text end
new text begin
(b) The tax under subdivision 2 shall expire on the first day of a calendar quarter
after the first calendar quarter in which the revenue raised from the tax is projected to be
sufficient to raise the amount in the grain contract indemnity account to at least $6,000,000.
The commissioner of management and budget shall, in consultation with the commissioner
of revenue, determine the projected expiration date of the tax at the time that the tax is
imposed. The tax shall expire on that date unless the commissioner of management and
budget estimates that the revenue in the grain contract indemnity account at the time of
the expiration will still be less than $6,000,000 in which case the commissioner shall
announce, at least 60 days before the current expiration date, a new expiration date for the
tax. The new expiration date would be determined by the commissioner of management
and budget, in consultation with the commissioner of revenue, as the next calendar quarter
in which the amount in the account would be projected to reach or exceed $6,000,000.
new text end
new text begin Subd. 4. new text end
new text begin Use tax imposed; credit for taxes paid. new text end
new text begin
(a) A person that receives a grain
bin for use or storage in Minnesota, other than from a grain bin retailer that paid the tax
under subdivision 2, is subject to tax at the rate imposed under subdivision 2. Liability
for the tax is incurred when the person has possession of the grain bin in Minnesota.
The tax must be remitted to the commissioner in the same manner prescribed for taxes
imposed under chapter 297A.
new text end
new text begin
(b) A person that has paid taxes to another jurisdiction on the same transaction and
is subject to tax under this section is entitled to a credit for the tax legally due and paid
to another jurisdiction to the extent of the lesser of: (1) the tax actually paid to the other
jurisdiction, or (2) the amount of tax imposed by Minnesota on the transaction subject to
tax in the other jurisdiction.
new text end
new text begin Subd. 5. new text end
new text begin Tax collection required. new text end
new text begin
A grain bin retailer with nexus in Minnesota who
is not subject to tax under subdivision 2 is required to collect the tax imposed under
subdivision 4, from the purchaser of the grain bin and to give the purchaser a receipt for
the tax paid. The tax collected must be remitted to the commissioner in the same manner
prescribed for the taxes imposed under chapter 297A.
new text end
new text begin Subd. 6. new text end
new text begin Taxes paid to another jurisdiction; credit. new text end
new text begin
A grain bin retailer that has
paid taxes to another jurisdiction measured by gross receipts and is subject to tax under
this section on the same gross receipts is entitled to a credit for the tax legally due and
paid to another jurisdiction to the extent of the lesser of: (1) the tax actually paid to the
other jurisdiction, or (2) the amount of tax imposed by Minnesota on the gross receipts
subject to tax in the other taxing jurisdictions.
new text end
new text begin Subd. 7. new text end
new text begin Sourcing of sales. new text end
new text begin
All of the provisions of section 297A.668 apply to
the taxes imposed by this section.
new text end
new text begin Subd. 8. new text end
new text begin Payment; reporting. new text end
new text begin
A grain bin retailer shall report the tax on a return
prescribed by the commissioner and shall remit the tax with the return. The return and
the tax must be filed and paid using the filing cycle and due dates provided for taxes
imposed under chapter 297A.
new text end
new text begin Subd. 9. new text end
new text begin Administration. new text end
new text begin
Unless specifically provided otherwise by this section,
the audit, assessment, refund, penalty, interest, enforcement, collection remedies, appeal,
and administrative provisions of chapters 270C and 289A that are applicable to taxes
imposed under chapter 297A apply to taxes imposed under this section.
new text end
new text begin Subd. 10. new text end
new text begin Interest on overpayments. new text end
new text begin
Interest must be paid on an overpayment
refunded or credited to the taxpayer from the date of payment of the tax until the date the
refund is paid or credited. For purposes of this subdivision, the date of payment is the due
date of the return or the date of actual payment of the tax, whichever is later.
new text end
new text begin Subd. 11. new text end
new text begin Deposit of revenues. new text end
new text begin
The commissioner shall deposit all revenues,
including penalties and interest, derived from the tax imposed by this section in the state
treasury and credit it to the grain contract indemnity account in the agricultural fund
established under section 223.30.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment,
and the earliest the grain bin gross receipts tax may be imposed is July 1, 2018, for sales
and purchases made on or after that date.
new text end
Sec. 7.
Minnesota Statutes 2014, section 297A.61, subdivision 12, is amended to read:
Subd. 12.
Farm machinery.
(a) "Farm machinery" means new or used machinery,
equipment, implements, accessories, and contrivances used directly and principally in
agricultural production of tangible personal property intended to be sold ultimately at
retail including, but not limited to:
(1) machinery for the preparation, seeding, or cultivation of soil for growing
agricultural crops;
(2) barn cleaners, milking systems, grain dryers,new text begin grain bins,new text end feeding systems
including stationary feed bunks, and similar installations, whether or not the equipment is
installed by the seller and becomes part of the real property; and
(3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe
fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not the equipment is installed
by the seller and becomes part of the real property.
(b) Farm machinery does not include:
(1) repair or replacement parts;
(2) tools, shop equipment, deleted text begin grain bins,deleted text end fencing material, communication equipment,
and other farm supplies;
(3) motor vehicles taxed under chapter 297B;
(4) snowmobiles or snow blowers;
(5) lawn mowers except those used in the production of sod for sale, or garden-type
tractors or garden tillers; or
(6) machinery, equipment, implements, accessories, and contrivances used directly in
the production of horses not raised for slaughter, fur-bearing animals, or research animals.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for sales and purchases made after
June 30, 2018.
new text end
Sec. 8. new text begin DEPOSITS OF REVENUES; GRAIN CONTRACT INDEMNITY
ACCOUNT.new text end
new text begin
In fiscal year 2016, the commissioner shall deposit $2,500,000 of the revenue
derived from taxes imposed under Minnesota Statutes, chapter 297A, in the grain contract
indemnity account in the agricultural fund, established under Minnesota Statutes, section
223.23, as a proxy for a portion of sales tax revenues collected on the sales of grain
bins during that fiscal year. The amount shall be deposited as soon as possible after the
enactment of this section. For fiscal years 2017 and 2018, if the grain credit contract
indemnity account in the agricultural fund, established under Minnesota Statutes, section
223.23, is less than $6,000,000, the commissioner shall deposit up to $2,500,000 per fiscal
year of the revenue, including interest and penalties, derived from the taxes imposed by
Minnesota Statutes, chapter 297A, on grain bins into that account on a quarterly basis
until the fund contains $6,000,000. For purposes of this section, the amount of sales tax
revenue generated from the sale of grain bins deposited under this paragraph is $625,000
per calendar quarter.
new text end
Sec. 9. new text begin EFFECTIVE DATE.
new text end
new text begin
Unless otherwise provided, this act is effective the day following final enactment.
Section 5 applies to voluntary extension of credit contracts in default on or after January 1,
2015. Notwithstanding section 5, subdivision 3, paragraph (a), for a voluntary extension
of credit contract in default prior to final enactment of this act, a producer has 90 days
from the date of final enactment to file a claim with the commissioner.
new text end