1.1 	A bill for an act
1.2 	relating to taxation; sales and use; exempting
1.3 	construction materials used to construct certain
1.4 	utility facilities; amending Minnesota Statutes 2004,
1.5 	sections 297A.71, by adding a subdivision; 297A.75,
1.6 	subdivisions 1, 2, 3.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 297A.71, is
1.9 	amended by adding a subdivision to read:
1.10 		Subd. 33.Municipal utilities. Materials and supplies
1.11 	used or consumed in, and equipment incorporated into, the
1.12 	construction, improvement, or expansion of electric generation
1.13 	and related facilities used pursuant to a joint power purchase
1.14 	agreement to meet the biomass energy mandate in section
1.15 	216B.2424 are exempt if the owner or owners of the facilities
1.16 	are a municipal electric utility or utilities or a joint venture
1.17 	of municipal electric utilities.  The tax must be imposed and
1.18 	collected as if the rate under section 297A.62, subdivision 1,
1.19 	applied and then refunded under section 297A.75.
1.20 	
EFFECTIVE DATE. This section is effective for sales and
1.21 	purchases made after January 1, 2005.

1.22 	Sec. 2. Minnesota Statutes 2004, section 297A.75,
1.23 	subdivision 1, is amended to read:
1.24 		Subdivision 1.Tax collected.  The tax on the gross
1.25 	receipts from the sale of the following exempt items must be
1.26 	imposed and collected as if the sale were taxable and the rate
2.1 	under section 297A.62, subdivision 1, applied.  The exempt items
2.2 	include:
2.3 	(1) capital equipment exempt under section 297A.68,
2.4 	subdivision 5;
2.5 	(2) building materials for an agricultural processing
2.6 	facility exempt under section 297A.71, subdivision 13;
2.7 	(3) building materials for mineral production facilities
2.8 	exempt under section 297A.71, subdivision 14;
2.9 	(4) building materials for correctional facilities under
2.10 	section 297A.71, subdivision 3;
2.11 	(5) building materials used in a residence for disabled
2.12 	veterans exempt under section 297A.71, subdivision 11;
2.13 	(6) chair lifts, ramps, elevators, and associated building
2.14 	materials exempt under section 297A.71, subdivision 12;
2.15 	(7) building materials for the Long Lake Conservation
2.16 	Center exempt under section 297A.71, subdivision 17;
2.17 	(8) materials, supplies, fixtures, furnishings, and
2.18 	equipment for a county law enforcement and family service center
2.19 	under section 297A.71, subdivision 26; ~~and~~ 
2.20 	(9) materials and supplies for qualified low-income housing
2.21 	under section 297A.71, subdivision 23; and 
2.22 	(10) materials, supplies, and equipment for municipal
2.23 	electric utility facilities under section 297A.71, subdivision
2.24 	33.
2.25 	
EFFECTIVE DATE. This section is effective for sales and
2.26 	purchases made after January 1, 2005.

2.27 	Sec. 3. Minnesota Statutes 2004, section 297A.75,
2.28 	subdivision 2, is amended to read:
2.29 		Subd. 2.Refund; eligible persons.  Upon application on
2.30 	forms prescribed by the commissioner, a refund equal to the tax
2.31 	paid on the gross receipts of the exempt items must be paid to
2.32 	the applicant.  Only the following persons may apply for the
2.33 	refund:
2.34 	(1) for subdivision 1, clauses (1) to (3), the applicant
2.35 	must be the purchaser;
2.36 	(2) for subdivision 1, clauses (4), (7), and (8), the
3.1 	applicant must be the governmental subdivision;
3.2 	(3) for subdivision 1, clause (5), the applicant must be
3.3 	the recipient of the benefits provided in United States Code,
3.4 	title 38, chapter 21;
3.5 	(4) for subdivision 1, clause (6), the applicant must be
3.6 	the owner of the homestead property; ~~and~~ 
3.7 	(5) for subdivision 1, clause (9), the owner of the
3.8 	qualified low-income housing project; and 
3.9 	(6) for subdivision 1, clause (10), the applicant must be a
3.10 	municipal electric utility or a joint venture of municipal
3.11 	electric utilities.
3.12 	
EFFECTIVE DATE. This section is effective for sales and
3.13 	purchases made after January 1, 2005.

3.14 	Sec. 4. Minnesota Statutes 2004, section 297A.75,
3.15 	subdivision 3, is amended to read:
3.16 		Subd. 3.Application.  (a) The application must include
3.17 	sufficient information to permit the commissioner to verify the
3.18 	tax paid.  If the tax was paid by a contractor, subcontractor,
3.19 	or builder, under subdivision 1, clause (4), (5), (6), (7), (8),
3.20 	~~or~~ (9), or (10),the contractor, subcontractor, or builder must
3.21 	furnish to the refund applicant a statement including the cost
3.22 	of the exempt items and the taxes paid on the items unless
3.23 	otherwise specifically provided by this subdivision.  The
3.24 	provisions of sections 289A.40 and 289A.50 apply to refunds
3.25 	under this section.
3.26 	(b) An applicant may not file more than two applications
3.27 	per calendar year for refunds for taxes paid on capital
3.28 	equipment exempt under section 297A.68, subdivision 5.
3.29 	
EFFECTIVE DATE. This section is effective for sales and
3.30 	purchases made after January 1, 2005.