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Chapter 297A

Section 297A.71

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297A.71 CONSTRUCTION EXEMPTIONS.
    Subdivision 1. Scope. The gross receipts from the sale of, and storage, distribution, use, or
consumption of the tangible personal property contained in this section are specifically exempted
from the taxes imposed by this chapter. Building materials, equipment, and supplies and other
items exempt under this section are exempt regardless of whether purchased by the owner or a
contractor, subcontractor, or builder.
    Subd. 2.[Repealed, 1Sp2001 c 5 art 12 s 95]
    Subd. 3. Correctional facilities. Building materials and supplies for constructing or
improving an adult or juvenile correctional facility by a county, home rule charter city, or statutory
city are exempt if the project is mandated by state or federal law, rule, or regulation. The tax must
be imposed and collected as if the rate under section 297A.62, subdivision 1, applied and then
refunded in the manner provided in section 297A.75.
    Subd. 4. Lake Superior Center. Building materials and supplies for construction of the
Lake Superior Center are exempt.
    Subd. 5. Science Museum. Building materials and supplies for construction of the Science
Museum of Minnesota are exempt.
    Subd. 6. Business incubator and industrial park. Building materials and supplies for
construction of a facility that includes a business incubator and industrial park are exempt if
the facility:
(1) is owned and operated by a nonprofit charitable organization that qualifies for tax
exemption under section 501(c)(3) of the Internal Revenue Code;
(2) is used for the development of nonretail businesses, offering access to equipment,
space, services, and advice to the tenant businesses, for the purpose of encouraging economic
development and job creation in the area served by the organization, and emphasizes development
of businesses that manufacture products from materials found in the waste stream, or manufacture
alternative energy and conservation systems, or make use of emerging environmental
technologies;
(3) includes in its structure systems of material and energy exchanges that use waste products
from one industrial process as sources of energy and material for other processes; and
(4) makes use of solar and wind energy technology and incorporates salvaged materials in
its construction.
A limited liability company also qualifies for exemption under this subdivision if (1) it
consists of a sole member that would qualify for the exemption, and (2) the items purchased
qualify for the exemption.
    Subd. 7. Alfalfa processing facility. Building materials and supplies for constructing a
facility that either develops market-value agricultural products made from alfalfa leaf material, or
produces biomass energy fuel or electricity from alfalfa stems in accordance with the biomass
mandate imposed under section 216B.2424 are exempt if the total capital investment made in the
value-added agricultural products and biomass electric generation facilities is at least $50,000,000.
    Subd. 8. Wood waste cogeneration facility. Building materials and supplies for
constructing, equipping, or modifying a district heating and cooling system cogeneration facility
are exempt if the facility:
(1) utilizes wood waste as a primary fuel source; and
(2) satisfies the requirements of the biomass mandate in section 216B.2424, subdivision 5.
    Subd. 9. Direct satellite broadcasting facility. Building materials and supplies for
constructing a new facility in Minnesota for providing Federal Communications Commission
licensed direct satellite broadcasting services using direct broadcast satellites operating in the
12-GHz. band or fixed satellite regional or national program services, as defined in section 272.02,
subdivision 16
, are exempt if construction of the facility was commenced after June 30, 1993. All
machinery, equipment, tools, accessories, appliances, contrivances, furniture, fixtures, and all
technical equipment or tangible personal property of any other nature or description necessary to
the construction and equipping of that facility in order to provide those services are also exempt.
    Subd. 10. Aircraft heavy maintenance facility. Materials, equipment, and supplies used
or consumed in constructing a heavy maintenance facility for aircraft that is to be owned by the
state of Minnesota or one of its political subdivisions and leased by an airline company, or an
aircraft engine repair facility described in section 116R.02, subdivision 6, are exempt. Except for
equipment owned or leased by a contractor, all machinery, equipment, and tools necessary to the
construction and equipping of that facility in order to provide those services are also exempt.
    Subd. 11. Building materials; disabled veterans. Building materials to be used in the
construction or remodeling of a residence are exempt when the construction or remodeling is
financed in whole or in part by the United States in accordance with United States Code, title
38, sections 2101 to 2105. The tax must be imposed and collected as if the rate under section
297A.62, subdivision 1, applied and then refunded in the manner provided in section 297A.75.
    Subd. 12. Chair lifts, ramps, elevators. Elevators and building materials used to install
or construct chair lifts, ramps, and elevators are exempt, if they are authorized by a physician
and installed in or attached to the owner's homestead. The tax must be imposed and collected
as if the rate under section 297A.62, subdivision 1, applied and then refunded in the manner
provided in section 297A.75.
    Subd. 13. Agriculture processing facility materials. Building materials and supplies for
constructing an agriculture processing facility as defined in section 469.1811 in which the total
capital investment in the processing facility is expected to exceed $100,000,000 are exempt. The
tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied,
and then refunded in the manner provided in section 297A.75.
    Subd. 14. Mineral production facilities. Building materials, equipment, and supplies used
for the construction of the following mineral production facilities are exempt.
The mineral production facilities that qualify for this exemption are:
(1) a value added iron products plant, which may be either a new plant or a facility
incorporated into an existing plant that produces iron upgraded to a minimum of 75 percent iron
content or any iron alloy with a total minimum metallic content of 90 percent;
(2) a facility used for the manufacture of fluxed taconite pellets as defined in section 298.24;
(3) a new capital project that has a total cost of over $40,000,000 that is directly related to
production, cost, or quality at an existing taconite facility that does not qualify under clause
(1) or (2); and
(4) a new mine or minerals processing plant for any mineral subject to the net proceeds
tax imposed under section 298.015.
The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied, and then refunded in the manner provided in section 297A.75.
    Subd. 15.[Repealed, 1Sp2001 c 5 art 12 s 95]
    Subd. 16.[Repealed, 1Sp2001 c 5 art 12 s 9; 2002 c 377 art 3 s 24]
    Subd. 17. Environmental learning center. Construction materials and supplies are exempt
if they are used or consumed in constructing or improving the Long Lake Conservation Center
pursuant to the funding provided under Laws 1994, chapter 643, section 23, subdivision 28,
as amended by Laws 1995, First Special Session chapter 2, article 1, section 48; Laws 1996,
chapter 463, section 7, subdivision 26; and Laws 1997, chapter 246, section 24. The tax must be
calculated and paid as if the rate in section 297A.62, subdivision 1, was in effect and a refund
applied for in the manner prescribed in section 297A.75.
    Subd. 18. Soybean oilseed processing and refining facility. Construction materials and
supplies are exempt if:
(1) the materials and supplies are used or consumed in constructing a facility for soybean
oilseed processing and refining;
(2) the total capital investment made in the facility is at least $60,000,000; and
(3) the facility is constructed by a Minnesota-based cooperative organized under chapter
308A.
    Subd. 19. Earle Brown Heritage Center. Materials and supplies used or consumed in and
equipment incorporated into the construction, improvement, or expansion of the Earle Brown
Heritage Center in Brooklyn Center are exempt. This subdivision is effective for purchases
made before July 1, 2003.
    Subd. 20. Construction materials and supplies; beef processing facility. Materials and
supplies used or consumed in, and equipment incorporated into, the expansion, remodeling, or
improvement of a facility used for cattle slaughtering are exempt if:
(1) the cost of the project is expected to exceed $15,000,000;
(2) the expansion, remodeling, or improvement of the facility will be used to fabricate beef;
(3) the number of jobs at the facility is expected to increase by at least 150 when the
project is completed; and
(4) the project is expected to be completed by December 31, 2001.
    Subd. 21.MS 2004 [Expired]
    Subd. 22. Materials used to make residential property disabled accessible. Building
materials and equipment sold to, or stored, used, or consumed by, a nonprofit organization are
exempt if:
(1) the materials and equipment are used or incorporated into modifying an existing
residential structure to make it disabled accessible; and
(2) the materials and equipment used in the modification would qualify for an exemption
under either subdivision 11 or 12 if made by the current owner of the residence.
For purposes of this subdivision, "nonprofit organization" means any nonprofit corporation,
society, association, foundation, or institution organized and operated exclusively for charitable,
religious, educational, or civic purposes; or a veterans' group exempt from federal taxation under
section 501(c), clause (19), of the Internal Revenue Code.
    Subd. 23. Construction materials for qualified low-income housing projects. (a)
Purchases of materials and supplies used or consumed in and equipment incorporated into the
construction, improvement, or expansion of qualified low-income housing projects are exempt
from the tax imposed under this chapter if the owner of the qualified low-income housing
project is:
(1) the public housing agency or housing and redevelopment authority of a political
subdivision;
(2) an entity exercising the powers of a housing and redevelopment authority within a
political subdivision;
(3) a limited partnership in which the sole general partner is an authority under clause (1) or
an entity under clause (2);
(4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying under
section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or
(5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604, for a
qualified low-income housing project described in paragraph (b), clause (5).
This exemption applies regardless of whether the purchases are made by the owner of the
facility or a contractor.
(b) For purposes of this exemption, "qualified low-income housing project" means:
(1) a housing or mixed use project in which at least 20 percent of the residential units are
qualifying low-income rental housing units as defined in section 273.126;
(2) a federally assisted low-income housing project financed by a mortgage insured or held
by the United States Department of Housing and Urban Development under United States Code,
title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United States Code, title 42, section
1437f; the Native American Housing Assistance and Self-Determination Act, United States Code,
title 25, section 4101 et seq.; or any similar successor federal low-income housing program;
(3) a qualified low-income housing project as defined in United States Code, title 26, section
42(g), meeting all of the requirements for a low-income housing credit under section 42 of
the Internal Revenue Code regardless of whether the project actually applies for or receives a
low-income housing credit;
(4) a project that will be operated in compliance with Internal Revenue Service revenue
procedure 96-32; or
(5) a housing or mixed use project in which all or a portion of the residential units are subject
to the requirements of section 5 of the United States Housing Act of 1937.
(c) For a project, a portion of which is not used for low-income housing units, the amount of
purchases that are exempt under this subdivision must be determined by multiplying the total
purchases, as specified in paragraph (a), by the ratio of:
(1) the total gross square footage of units subject to the income limits under section 273.126,
the financing for the project, the federal low-income housing tax credit, revenue procedure 96-32,
or section 5 of the United States Housing Act of 1937, as applicable to the project; and
(2) the total gross square footage of all units in the project.
(d) The tax must be imposed and collected as if the rate under section 297A.62, subdivision
1
, applied, and then refunded in the manner provided in section 297A.75.
    Subd. 24.[Expired]
    Subd. 25. Poultry litter and other biomass generation facility construction materials
and equipment. Materials and supplies used or consumed in, and equipment incorporated into,
the construction, improvement, or expansion of a facility using biomass to generate electricity
are exempt if:
(1) the facility is designed to utilize poultry litter biomass or other biomass as established in
section 216B.2424, as a primary fuel source; and
(2) the facility generates power that will be sold under a contract approved by the public
utilities commission in accordance with the biomass mandate imposed under section 216B.2424.
    Subd. 26.[Expired]
    Subd. 27.[Expired]
    Subd. 28.[Expired]
    Subd. 29.[Expired]
    Subd. 30. Nonprofit arts organization. Materials, equipment, and supplies incorporated
into the construction or renovation of a state bond financed facility funded in 2002 which is
owned or operated by a nonprofit arts organization are exempt.
    Subd. 31.[Repealed, 2006 c 257 s 23]
    Subd. 32. Walker Art Center. Materials, equipment, and supplies used or consumed in
construction of the Walker Art Center are exempt if more than $70,000,000 is raised from private
sources to pay for a portion of the costs of the project.
    Subd. 33. Hydroelectric generating facility. Materials and supplies used or consumed
in the construction of a hydroelectric generating facility that meets the requirements of this
subdivision are exempt. To qualify for the exemption under this subdivision, a hydroelectric
generating facility must:
(1) utilize two turbine generators at a dam site existing on March 31, 1994;
(2) be located on land within 1,500 feet of a 13.8 kilovolt distribution circuit; and
(3) be eligible to receive a renewable energy production incentive payment under section
216C.41.
    Subd. 34. Waste recovery facility. Materials and supplies used or consumed in, and
equipment incorporated into, the construction, improvement, or expansion of a waste-to-energy
resource recovery facility are exempt if the facility uses biomass or mixed municipal solid waste
as a primary fuel to generate steam or electricity.
    Subd. 35. Municipal utilities. Materials and supplies used or consumed in, and equipment
incorporated into, the construction, improvement, or expansion of electric generation and related
facilities used pursuant to a joint power purchase agreement to meet the biomass energy mandate
in section 216B.2424 are exempt if the owner or owners of the facilities are a municipal electric
utility or utilities or a joint venture of municipal electric utilities. The tax must be imposed and
collected as if the rate under section 297A.62, subdivision 1, applied and then refunded under
section 297A.75.
    Subd. 36. Chatfield wastewater treatment facility. Materials and supplies used in and
equipment incorporated into the construction, improvement, or expansion of a wastewater
treatment facility owned by the city of Chatfield are exempt. This exemption is effective for
purchases made before December 31, 2007.
    Subd. 37. Construction materials; University of Minnesota football stadium. Materials
and supplies used or consumed in, and equipment incorporated into, the construction of a football
stadium constructed for use by the University of Minnesota are exempt. This subdivision expires
one year after substantial completion of the football stadium.
    Subd. 38. Building materials; exemption. Materials and supplies used or consumed in,
and equipment incorporated into, the construction or improvement of the ballpark and public
infrastructure constructed pursuant to sections 473.75 to 473.763 are exempt. This subdivision
expires one year after the date that the first major league baseball game is played in the ballpark
for materials, supplies, and equipment used in the ballpark, and five years after the issuance of
the first bonds under section 473.757 for materials, supplies, and equipment used in the public
infrastructure.
    Subd. 39. Hydroelectric generating facility. Materials and supplies used or consumed
in the construction of a 10.3 megawatt run-of-the-river hydroelectric generating facility that
meets the requirements of this subdivision are exempt. To qualify for the exemption under this
subdivision, a hydroelectric generating facility must:
(1) utilize between 12 and 16 turbine generators at a dam site existing on March 31, 1994;
(2) be located on land within 3,000 feet of a 13.8 kilovolt distribution circuit; and
(3) be eligible to receive a renewable energy production incentive payment under section
216C.41.
History: 2000 c 418 art 1 s 15,44 subd 3; 2000 c 490 art 8 s 12; 1Sp2001 c 5 art 12 s 65-70;
2002 c 377 art 3 s 13-16; 2002 c 397 s 2; 1Sp2003 c 21 art 8 s 9,16; 2005 c 56 s 1; 2005 c 151 art
7 s 18; 1Sp2005 c 3 art 5 s 14-17,32; 2006 c 247 s 12; 2006 c 257 s 3; 2006 c 259 art 3 s 2

NOTE: Subdivision 25 is effective for sales and purchases made after June 30, 2001, and
before July 1, 2007. Laws 2001, First Special Session chapter 5, article 12, section 67, the
effective date, as amended by Laws 2005, First Special Session chapter 3, article 5, section 32.

NOTE: Subdivision 30, as added by Laws 2002, chapter 377, article 3, section 16, is
effective for sales and purchases made after May 18, 2002, and before July 1, 2007. Laws 2002,
chapter 377, article 3, section 16, the effective date.

NOTE: Subdivision 33, as added by Laws 2005, First Special Session chapter 3, article 5,
section 14, is effective for sales made after December 31, 2004, and on or before December 31,
2009. Laws 2005, First Special Session chapter 3, article 5, section 14, the effective date, as
amended by Laws 2006, chapter 259, article 3, section 5.
NOTE: Subdivision 39, as added by Laws 2006, chapter 259, article 3, section 2, is effective
for sales and purchases made after April 30, 2006, and on or before December 31, 2009. Laws
2006, chapter 259, article 3, section 2, the effective date.