1.1 	A bill for an act
1.2 	relating to sales and use tax; exempting the sales of
1.3 	diesel fuel used to operate commuter rail systems;
1.4 	amending Minnesota Statutes 2004, sections 297A.68,
1.5 	subdivision 19; 297A.75, subdivisions 1, 2.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 297A.68,
1.8 	subdivision 19, is amended to read:
1.9 		Subd. 19.Petroleum products.  The following petroleum
1.10 	products are exempt:
1.11 	(1) products upon which a tax has been imposed and paid
1.12 	under chapter 296A, and for which no refund has been or will be
1.13 	allowed because the buyer used the fuel for nonhighway use;
1.14 	(2) products that are used in the improvement of
1.15 	agricultural land by constructing, maintaining, and repairing
1.16 	drainage ditches, tile drainage systems, grass waterways, water
1.17 	impoundment, and other erosion control structures;
1.18 	(3) products purchased by a transit system receiving
1.19 	financial assistance under section 174.24, 256B.0625,
1.20 	subdivision 17, or 473.384;
1.21 	(4) products purchased by an ambulance service licensed
1.22 	under chapter 144E;
1.23 	(5) products used in a passenger snowmobile, as defined in
1.24 	section 296A.01, subdivision 39, for off-highway business use as
1.25 	part of the operations of a resort as provided under section
2.1 	296A.16, subdivision 2, clause (2); ~~or~~ 
2.2 	(6) products purchased by a state or a political
2.3 	subdivision of a state for use in motor vehicles exempt from
2.4 	registration under section 168.012, subdivision 1, paragraph
2.5 	(b); or 
2.6 	(7) products purchased for use as fuel for a commuter rail
2.7 	system operating under sections 174.80 to 174.90.  The tax must
2.8 	be imposed and collected as if the rate under section 297A.62,
2.9 	subdivision 1, applied, and then refunded in the manner provided
2.10 	in section 297A.75.
2.11 	
EFFECTIVE DATE. This section is effective for purchases
2.12 	made after June 30, 2005.

2.13 	Sec. 2. Minnesota Statutes 2004, section 297A.75,
2.14 	subdivision 1, is amended to read:
2.15 		Subdivision 1.Tax collected.  The tax on the gross
2.16 	receipts from the sale of the following exempt items must be
2.17 	imposed and collected as if the sale were taxable and the rate
2.18 	under section 297A.62, subdivision 1, applied.  The exempt items
2.19 	include:
2.20 	(1) capital equipment exempt under section 297A.68,
2.21 	subdivision 5;
2.22 	(2) building materials for an agricultural processing
2.23 	facility exempt under section 297A.71, subdivision 13;
2.24 	(3) building materials for mineral production facilities
2.25 	exempt under section 297A.71, subdivision 14;
2.26 	(4) building materials for correctional facilities under
2.27 	section 297A.71, subdivision 3;
2.28 	(5) building materials used in a residence for disabled
2.29 	veterans exempt under section 297A.71, subdivision 11;
2.30 	(6) chair lifts, ramps, elevators, and associated building
2.31 	materials exempt under section 297A.71, subdivision 12;
2.32 	(7) building materials for the Long Lake Conservation
2.33 	Center exempt under section 297A.71, subdivision 17;
2.34 	(8) materials, supplies, fixtures, furnishings, and
2.35 	equipment for a county law enforcement and family service center
2.36 	under section 297A.71, subdivision 26; ~~and~~ 
3.1 	(9) materials and supplies for qualified low-income housing
3.2 	under section 297A.71, subdivision 23; and 
3.3 	(10) fuel purchased for commuter rail systems under section
3.4 	297A.68, subdivision 19, clause (7).
3.5 	
EFFECTIVE DATE. This section is effective for purchases
3.6 	made after June 30, 2005.

3.7 	Sec. 3. Minnesota Statutes 2004, section 297A.75,
3.8 	subdivision 2, is amended to read:
3.9 		Subd. 2.Refund; eligible persons.  Upon application on
3.10 	forms prescribed by the commissioner, a refund equal to the tax
3.11 	paid on the gross receipts of the exempt items must be paid to
3.12 	the applicant.  Only the following persons may apply for the
3.13 	refund:
3.14 	(1) for subdivision 1, clauses (1) to (3), the applicant
3.15 	must be the purchaser;
3.16 	(2) for subdivision 1, clauses (4), (7), and (8), the
3.17 	applicant must be the governmental subdivision;
3.18 	(3) for subdivision 1, clause (5), the applicant must be
3.19 	the recipient of the benefits provided in United States Code,
3.20 	title 38, chapter 21;
3.21 	(4) for subdivision 1, clause (6), the applicant must be
3.22 	the owner of the homestead property; ~~and~~ 
3.23 	(5) for subdivision 1, clause (9), the owner of the
3.24 	qualified low-income housing project; and 
3.25 	(6) for subdivision 1, clause (10), the operator of the
3.26 	commuter rail system.
3.27 	
EFFECTIVE DATE. This section is effective for purchases
3.28 	made after June 30, 2005.