2003 Minnesota Statutes

     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 Repealed, 1Sp2001 c 5 art 12 s 95 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.  Chair 
 lifts, ramps, and elevators and building materials used to 
 install or construct them 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.    Construction materials and equipment; biomass 
 electrical generating facility.  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 exclusively utilizes residue wood, 
 sawdust, bark, chipped wood, or brush to generate electricity; 

    (2) the facility utilizes a reciprocated grate combination 
 system; and 

    (3) the total gross capacity of the facility is 15 to 21 
 megawatts.  

    Subd. 22.    Materials used to make residential property 
 handicapped 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 
 handicapped 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.    Construction materials and equipment; 
 agricultural processing facility.  Materials and supplies used 
 or consumed in, and machinery and equipment incorporated into 
 the construction, improvement, or expansion of a soybean oilseed 
 processing facility are exempt if: 

    (1) the facility is owned and operated by a cooperative 
 organized under chapter 308A; and 

    (2) the facility is located in a county that has a 
 population of less than 21,000 according to the most recent 
 decennial census. 

    Subd. 25. MS 2001 Supp Expired 

    Subd. 26. MS 2001 Supp Expired 

    Subd. 27.    Construction materials and equipment; waste 
 tires cogeneration electric generating facility.  Materials 
 and supplies used or consumed in, and equipment incorporated 
 into, the construction, improvement, or expansion of a facility 
 using waste tires to generate electricity are exempt if: 

    (1) the facility utilizes waste tires as a primary fuel in 
 generating electricity; 

    (2) the facility is a cogeneration facility; and 

    (3) the installed capacity of the facility is 1 to 25 
 megawatts. 

    Subd. 28.    Construction materials and equipment; 
 replacement agricultural processing facility.  Materials and 
 supplies used or consumed in, and machinery and equipment 
 incorporated into, the construction of a meat-packing or 
 meat-processing facility are exempt if: 

    (1) the cost of the project exceeds $75,000,000; and 

    (2) the facility replaces a facility that was destroyed by 
 fire. 

    Subd. 29.    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 publicly owned land and within 2,500 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. 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.    Construction materials; baseball park.  
 Materials, supplies used or consumed in, and equipment 
 incorporated into the construction or improvement of the 
 baseball park constructed under sections 473I.01 to 473I.10, are 
 exempt.  This subdivision expires one year after the first major 
 league baseball game is played in the baseball park. 

    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.

    HIST: 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 

*   NOTE:  Subdivision 24, as added by Laws 2001, First Special 
*Session chapter 5, article 12, section 66, is effective for 
*sales and purchases made after June 30, 2001, and before July 1, 
*2004.  Laws 2001, First Special Session chapter 5, article 12, 
*section 66, the effective date. 

*   NOTE:  Subdivision 27, as added by Laws 2001, First Special 
*Session chapter 5, article 12, section 69, is effective for 
*purchases and sales made on or after June 1, 2001, and before 
*January 1, 2004.  Laws 2001, First Special Session chapter 5, 
*article 12, section 69, the effective date. 

*   NOTE:  Subdivision 28, as added by Laws 2002, chapter 377, 
*article 3, section 14, is effective for sales and purchases made 
*after March 31, 2002, and before January 1, 2005.  Laws 2002, 
*chapter 377, article 3, section 14, the effective date. 

*   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 21 (formerly section 297A.25, 
*subdivision 82) is effective for purchases made before July 1, 
*2005.  Laws 1999, chapter 243, article 4, section 19, as amended 
*by Laws 2001, First Special Session chapter 5, article 12, 
*section 88; and Laws 2003, First Special Session chapter 21, 
*article 8, section 14. 

*   NOTE:  Subdivision 29, as added by Laws 2002, chapter 377, 
*article 3, section 15, is effective for sales made after August 
*31, 2002, and on or before December 31, 2004.  Laws 2002, 
*chapter 377, article 3, section 15, the effective date, as 
*amended by Laws 2003, First Special Session chapter 21, article 
*8, section 16.