1.1                          A bill for an act 
  1.2             relating to taxation; sales and use; providing an 
  1.3             exemption to cities or counties for certain adult and 
  1.4             juvenile correctional facilities projects; 
  1.5             appropriating money; amending Minnesota Statutes 1994, 
  1.6             sections 297A.15, by adding a subdivision; and 
  1.7             297A.25, by adding a subdivision. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1994, section 297A.15, is 
  1.10  amended by adding a subdivision to read: 
  1.11     Subd. 7.  [REFUND; APPROPRIATION; ADULT AND JUVENILE 
  1.12  CORRECTIONAL FACILITIES.] If construction materials and supplies 
  1.13  exempt under section 297A.25, subdivision 53, are purchased by a 
  1.14  contractor, subcontractor, or builder as part of a lump-sum 
  1.15  contract or similar type of contract with a price covering both 
  1.16  labor and materials for use in the project, the tax must be 
  1.17  imposed and collected as if the sale were taxable, and the rates 
  1.18  under sections 297A.02, subdivision 1, and 297A.021, applied.  
  1.19  Upon application of the governmental subdivision in the manner 
  1.20  prescribed by the commissioner, a refund equal to the taxes paid 
  1.21  by the contractor, subcontractor, or builder must be paid to the 
  1.22  governmental subdivision.  The application must include 
  1.23  sufficient information to permit the commissioner to verify the 
  1.24  sales taxes paid for the project.  The contractor, 
  1.25  subcontractor, or builder must furnish to the governmental 
  1.26  subdivision a statement of the cost of the construction 
  2.1   materials and supplies and the sales taxes paid on them.  The 
  2.2   amount required to make the refunds is annually appropriated to 
  2.3   the commissioner.  Interest must be paid on the refund at the 
  2.4   rate in section 270.76 from 60 days after the date the refund 
  2.5   claim is filed with the commissioner. 
  2.6      Sec. 2.  Minnesota Statutes 1994, section 297A.25, is 
  2.7   amended by adding a subdivision to read: 
  2.8      Subd. 60.  [ADULT AND JUVENILE CORRECTIONAL FACILITIES; 
  2.9   MATERIALS AND SUPPLIES.] Gross receipts from the sale of 
  2.10  construction materials and supplies are exempt if:  (1) the 
  2.11  materials and supplies are for use in a project to construct or 
  2.12  improve an adult or juvenile correctional facility in a county, 
  2.13  home rule charter city, or statutory city, and (2) the project 
  2.14  is mandated by state or federal law, rule, or regulation.  The 
  2.15  exemption applies regardless of whether the materials and 
  2.16  supplies are purchased by the city or county, or by a 
  2.17  contractor, subcontractor, or builder under a contract with the 
  2.18  city or county. 
  2.19     Sec. 3.  [EFFECTIVE DATE.] 
  2.20     Sections 1 and 2 are effective retroactively for sales 
  2.21  after May 31, 1992.