1.1                          A bill for an act 
  1.2             relating to taxation; providing a sales tax exemption 
  1.3             for building materials purchased for use in 
  1.4             constructing certain low-income housing to be built by 
  1.5             offenders; amending Minnesota Statutes 1997 
  1.6             Supplement, section 297A.25, subdivision 11. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.9   297A.25, subdivision 11, is amended to read: 
  1.10     Subd. 11.  [SALES TO GOVERNMENT.] (a) The gross receipts 
  1.11  from all sales, including sales in which title is retained by a 
  1.12  seller or a vendor or is assigned to a third party under an 
  1.13  installment sale or lease purchase agreement under section 
  1.14  465.71, of tangible personal property to, and all storage, use 
  1.15  or consumption of such property by, the United States and its 
  1.16  agencies and instrumentalities, the University of Minnesota, 
  1.17  state universities, community colleges, technical colleges, 
  1.18  state academies, the Lola and Rudy Perpich Minnesota center for 
  1.19  arts education, and school districts are exempt. 
  1.20     (b) As used in this subdivision, "school districts" means 
  1.21  public school entities and districts of every kind and nature 
  1.22  organized under the laws of the state of Minnesota, including, 
  1.23  without limitation, school districts, intermediate school 
  1.24  districts, education districts, service cooperatives, secondary 
  1.25  vocational cooperative centers, special education cooperatives, 
  1.26  joint purchasing cooperatives, telecommunication cooperatives, 
  2.1   regional management information centers, and any instrumentality 
  2.2   of a school district, as defined in section 471.59. 
  2.3      (c) Sales exempted by this subdivision include sales under 
  2.4   section 297A.01, subdivision 3, paragraph (f).  
  2.5      Sales to hospitals and nursing homes owned and operated by 
  2.6   political subdivisions of the state are exempt under this 
  2.7   subdivision.  
  2.8      (d) The sales to and exclusively for the use of libraries 
  2.9   of books, periodicals, audio-visual materials and equipment, 
  2.10  photocopiers for use by the public, and all cataloguing and 
  2.11  circulation equipment, and cataloguing and circulation software 
  2.12  for library use are exempt under this subdivision.  For purposes 
  2.13  of this paragraph "libraries" means libraries as defined in 
  2.14  section 134.001, county law libraries under chapter 134A, the 
  2.15  state library under section 480.09, and the legislative 
  2.16  reference library. 
  2.17     (e) Sales of supplies and equipment used in the operation 
  2.18  of an ambulance service owned and operated by a political 
  2.19  subdivision of the state are exempt under this subdivision 
  2.20  provided that the supplies and equipment are used in the course 
  2.21  of providing medical care.  Sales to a political subdivision of 
  2.22  repair and replacement parts for emergency rescue vehicles and 
  2.23  fire trucks and apparatus are exempt under this subdivision.  
  2.24     (f) Sales to a political subdivision of machinery and 
  2.25  equipment, except for motor vehicles, used directly for mixed 
  2.26  municipal solid waste management services at a solid waste 
  2.27  disposal facility as defined in section 115A.03, subdivision 10, 
  2.28  are exempt under this subdivision.  
  2.29     (g) Sales to political subdivisions of chore and homemaking 
  2.30  services to be provided to elderly or disabled individuals are 
  2.31  exempt. 
  2.32     (h) Sales of telephone services to the department of 
  2.33  administration that are used to provide telecommunications 
  2.34  services through the intertechnologies revolving fund are exempt 
  2.35  under this subdivision. 
  2.36     (i)(1) This exemption shall not apply to building, 
  3.1   construction or reconstruction materials purchased by a 
  3.2   contractor or a subcontractor as a part of a lump-sum contract 
  3.3   or similar type of contract with a guaranteed maximum price 
  3.4   covering both labor and materials for use in the construction, 
  3.5   alteration, or repair of a building or facility.  This exemption 
  3.6   does not apply to construction materials purchased by tax exempt 
  3.7   entities or their contractors to be used in constructing 
  3.8   buildings or facilities which will not be used principally by 
  3.9   the tax exempt entities. 
  3.10     (2) Notwithstanding clause (1), sales of building, 
  3.11  construction, or reconstruction materials to the department of 
  3.12  corrections or to a nonprofit organization that has entered into 
  3.13  a contract with the department of corrections are exempt if the 
  3.14  materials are purchased for use (i) in the construction of 
  3.15  housing for low-income persons to be constructed with labor 
  3.16  provided by offenders, or (ii) for the manufacture of building 
  3.17  components by offenders in a program operated by the department 
  3.18  of corrections. 
  3.19     (j) This exemption does not apply to the leasing of a motor 
  3.20  vehicle as defined in section 297B.01, subdivision 5, except for 
  3.21  leases entered into by the United States or its agencies or 
  3.22  instrumentalities.  
  3.23     (k) The tax imposed on sales to political subdivisions of 
  3.24  the state under this section applies to all political 
  3.25  subdivisions other than those explicitly exempted under this 
  3.26  subdivision, notwithstanding section 115A.69, subdivision 6, 
  3.27  116A.25, 360.035, 458A.09, 458A.30, 458D.23, 469.101, 
  3.28  subdivision 2, 469.127, 473.448, 473.545, or 473.608 or any 
  3.29  other law to the contrary enacted before 1992. 
  3.30     (l) Sales exempted by this subdivision include sales made 
  3.31  to other states or political subdivisions of other states, if 
  3.32  the sale would be exempt from taxation if it occurred in that 
  3.33  state, but do not include sales under section 297A.01, 
  3.34  subdivision 3, paragraphs (c) and (e). 
  3.35     Sec. 2.  [EFFECTIVE DATE.] 
  3.36     Section 1 is effective for sales after June 30, 1998.