1.1 	A bill for an act
1.2 	relating to taxation; exempting certain hybrid
1.3 	vehicles from the motor vehicle sales tax; amending
1.4 	Minnesota Statutes 2004, sections 297B.01, by adding a
1.5 	subdivision; 297B.03.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 297B.01, is
1.8 	amended by adding a subdivision to read:
1.9 		Subd. 10.Fuel-efficient motor vehicle. (a) A
1.10 	"fuel-efficient motor vehicle" is a passenger automobile, as
1.11 	defined in section 168.011, subdivision 7, that has an unloaded
1.12 	weight, as defined in section 168.011, subdivision 15, of not
1.13 	more than 6,000 pounds that achieves a city fuel economy, as
1.14 	measured by the Environmental Protection Agency, within the
1.15 	following guidelines:
1.16 	(1) for a passenger automobile, except a pickup truck, with
1.17 	an unloaded weight of:
1.18 	(i) 0 to 1,750 pounds, a city fuel economy of at least 67.8
1.19 	miles per gallon;
1.20 	(ii) 1,751 to 2,000 pounds, a city fuel economy of at least
1.21 	59.4 miles per gallon;
1.22 	(iii) 2,001 to 2,250 pounds, a city fuel economy of at
1.23 	least 52.8 miles per gallon;
1.24 	(iv) 2,251 to 2,500 pounds, a city fuel economy of at least
1.25 	47.6 miles per gallon;
2.1 	(v) 2,501 to 2,750 pounds, a city fuel economy of at least
2.2 	43.2 miles per gallon;
2.3 	(vi) 2,751 to 3,000 pounds, a city fuel economy of at least
2.4 	39.6 miles per gallon;
2.5 	(vii) 3,001 to 3,500 pounds, a city fuel economy of at
2.6 	least 33.9 miles per gallon;
2.7 	(viii) 3,501 to 4,000 pounds, a city fuel economy of at
2.8 	least 29.7 miles per gallon;
2.9 	(ix) 4,001 to 4,500 pounds, a city fuel economy of at least
2.10 	26.4 miles per gallon;
2.11 	(x) 4,501 to 5,000 pounds, a city fuel economy of at least
2.12 	23.9 miles per gallon;
2.13 	(xi) 5,001 to 5,500 pounds, a city fuel economy of at least
2.14 	21.6 miles per gallon; and 
2.15 	(xii) 5,501 to 6,000 pounds, a city fuel economy of at
2.16 	least 19.8 miles per gallon;
2.17 	(2) for a pickup truck classified as a passenger automobile
2.18 	with an unloaded weight of:
2.19 	(i) 0 to 1,750 pounds, a city fuel economy of at least 59.1
2.20 	miles per gallon;
2.21 	(ii) 1,751 to 2,000 pounds, a city fuel economy of at least
2.22 	52.8 miles per gallon;
2.23 	(iii) 2,001 to 2,250 pounds, a city fuel economy of at
2.24 	least 47.7 miles per gallon;
2.25 	(iv) 2,251 to 2,500 pounds, a city fuel economy of at least
2.26 	43.5 miles per gallon;
2.27 	(v) 2,501 to 2,750 pounds, a city fuel economy of at least
2.28 	40.2 miles per gallon;
2.29 	(vi) 2,751 to 3,000 pounds, a city fuel economy of at least
2.30 	37.35 miles per gallon;
2.31 	(vii) 3,001 to 3,500 pounds, a city fuel economy of at
2.32 	least 32.7 miles per gallon;
2.33 	(viii) 3,501 to 4,000 pounds, a city fuel economy of at
2.34 	least 29.1 miles per gallon;
2.35 	(ix) 4,001 to 4,500 pounds, a city fuel economy of at least
2.36 	26.4 miles per gallon;
3.1 	(x) 4,501 to 5,000 pounds, a city fuel economy of at least
3.2 	24.2 miles per gallon;
3.3 	(xi) 5,001 to 5,500 pounds, a city fuel economy of at least
3.4 	22.2 miles per gallon; and 
3.5 	(xii) 5,501 to 6,000 pounds, a city fuel economy of at
3.6 	least 20.6 miles per gallon.
3.7 	
EFFECTIVE DATE. This section is effective for sales and
3.8 	transfers made after June 30, 2005, and before July 1, 2009.

3.9 	Sec. 2. Minnesota Statutes 2004, section 297B.03, is
3.10 	amended to read:
3.11 	297B.03 EXEMPTIONS.
3.12 	(a) There is specifically exempted from the provisions of
3.13 	this chapter and from computation of the amount of tax imposed
3.14 	by it the following:
3.15 	(1) purchase or use, including use under a lease purchase
3.16 	agreement or installment sales contract made pursuant to section
3.17 	465.71, of any motor vehicle by the United States and its
3.18 	agencies and instrumentalities and by any person described in
3.19 	and subject to the conditions provided in section 297A.67,
3.20 	subdivision 11;
3.21 	(2) purchase or use of any motor vehicle by any person who
3.22 	was a resident of another state or country at the time of the
3.23 	purchase and who subsequently becomes a resident of Minnesota,
3.24 	provided the purchase occurred more than 60 days prior to the
3.25 	date such person began residing in the state of Minnesota and
3.26 	the motor vehicle was registered in the person's name in the
3.27 	other state or country;
3.28 	(3) purchase or use of any motor vehicle by any person
3.29 	making a valid election to be taxed under the provisions of
3.30 	section 297A.90;
3.31 	(4) purchase or use of any motor vehicle previously
3.32 	registered in the state of Minnesota when such transfer
3.33 	constitutes a transfer within the meaning of section 118, 331,
3.34 	332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or
3.35 	1563(a) of the Internal Revenue Code of 1986, as amended through
3.36 	December 31, 1999;
4.1 	(5) purchase or use of any vehicle owned by a resident of
4.2 	another state and leased to a Minnesota-based private or
4.3 	for-hire carrier for regular use in the transportation of
4.4 	persons or property in interstate commerce provided the vehicle
4.5 	is titled in the state of the owner or secured party, and that
4.6 	state does not impose a sales tax or sales tax on motor vehicles
4.7 	used in interstate commerce;
4.8 	(6) purchase or use of a motor vehicle by a private
4.9 	nonprofit or public educational institution for use as an
4.10 	instructional aid in automotive training programs operated by
4.11 	the institution.  "Automotive training programs" includes motor
4.12 	vehicle body and mechanical repair courses but does not include
4.13 	driver education programs;
4.14 	(7) purchase of a motor vehicle for use as an ambulance by
4.15 	an ambulance service licensed under section 144E.10;
4.16 	(8) purchase of a motor vehicle by or for a public library,
4.17 	as defined in section 134.001, subdivision 2, as a bookmobile or
4.18 	library delivery vehicle;
4.19 	(9) purchase of a ready-mixed concrete truck;
4.20 	(10) purchase or use of a motor vehicle by a town for use
4.21 	exclusively for road maintenance, including snowplows and dump
4.22 	trucks, but not including automobiles, vans, or pickup trucks;
4.23 	(11) purchase or use of a motor vehicle by a corporation,
4.24 	society, association, foundation, or institution organized and
4.25 	operated exclusively for charitable, religious, or educational
4.26 	purposes, except a public school, university, or library, but
4.27 	only if the vehicle is:
4.28 	(i) a truck, as defined in section 168.011, a bus, as
4.29 	defined in section 168.011, or a passenger automobile, as
4.30 	defined in section 168.011, if the automobile is designed and
4.31 	used for carrying more than nine persons including the driver;
4.32 	and
4.33 	(ii) intended to be used primarily to transport tangible
4.34 	personal property or individuals, other than employees, to whom
4.35 	the organization provides service in performing its charitable,
4.36 	religious, or educational purpose;
5.1 	(12) purchase of a motor vehicle for use by a transit
5.2 	provider exclusively to provide transit service is exempt if the
5.3 	transit provider is either (i) receiving financial assistance or
5.4 	reimbursement under section 174.24 or 473.384, or (ii) operating
5.5 	under section 174.29, 473.388, or 473.405;
5.6 	(13) purchase or use of a motor vehicle by a qualified
5.7 	business, as defined in section 469.310, located in a job
5.8 	opportunity building zone, if the motor vehicle is principally
5.9 	garaged in the job opportunity building zone and is primarily
5.10 	used as part of or in direct support of the person's operations
5.11 	carried on in the job opportunity building zone.  The exemption
5.12 	under this clause applies to sales, if the purchase was made and
5.13 	delivery received during the duration of the job opportunity
5.14 	building zone.  The exemption under this clause also applies to
5.15 	any local sales and use tax;
5.16 	(14) purchase or use after June 30, 2005, and before July
5.17 	1, 2009, of a hybrid motor vehicle.
5.18 	(b) For purposes of paragraph (a), clause (14), "hybrid
5.19 	vehicle" means a fuel-efficient vehicle as defined in section
5.20 	297B.01, subdivision 10, which:
5.21 	(1) draws propulsion energy from onboard sources which are
5.22 	both an internal combustion or heat engine using consumable fuel
5.23 	and a rechargeable energy storage system; and 
5.24 	(2) has received a certificate that the vehicle meets or
5.25 	exceeds the Bin 5 Tier II emission level established in
5.26 	regulation prescribed by the administrator of the United States
5.27 	Environmental Protection Agency under section 202(i) of the
5.28 	federal Clean Air Act.

5.29 	EFFECTIVE DATE. This section is effective for sales and
5.30 	transfers made after June 30, 2005, and before July 1, 2009.