1.1                          A bill for an act
  1.2             relating to taxation; sales and use tax; exempting 
  1.3             construction material used in building certain low- 
  1.4             and moderate-income housing; amending Minnesota 
  1.5             Statutes 1994, sections 297A.15, by adding a 
  1.6             subdivision; and 297A.25, by adding a subdivision. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1994, section 297A.15, is 
  1.9   amended by adding a subdivision to read: 
  1.10     Subd. 7.  [REFUND FOR HOUSING; APPROPRIATION.] The tax on 
  1.11  the gross receipts from the sales of items exempt under section 
  1.12  297A.25, subdivision 60, must be imposed and collected as if the 
  1.13  sale was taxable and the rates under sections 297A.01, 
  1.14  subdivision 1, and 297A.021 applied. 
  1.15     Upon application by the purchaser on forms prescribed by 
  1.16  the commissioner, a refund equal to the tax paid on the gross 
  1.17  receipts of the building materials and supplies must be paid to 
  1.18  the purchaser.  In the case of building materials and supplies 
  1.19  in which the tax was paid by a contractor, subcontractor, or 
  1.20  builder, application must be made by the purchaser for the sales 
  1.21  tax paid by the contractor.  The application must include 
  1.22  sufficient information to permit the commissioner to verify the 
  1.23  sales tax paid for the project.  The contractor, subcontractor, 
  1.24  or builder must furnish to the purchaser a statement of the cost 
  1.25  of building materials and supplies and the sales tax paid on 
  1.26  them.  The amount required to make the refunds is annually 
  2.1   appropriated to the commissioner. 
  2.2      Sec. 2.  Minnesota Statutes 1994, section 297A.25, is 
  2.3   amended by adding a subdivision to read: 
  2.4      Subd. 60.  [CONSTRUCTION MATERIALS FOR LOW- AND 
  2.5   MODERATE-INCOME HOUSING.] Construction materials and supplies 
  2.6   are exempt from the tax imposed under this chapter, regardless 
  2.7   of whether purchased by the owner, or a contractor, 
  2.8   subcontractor, or builder if: 
  2.9      (1) the materials and supplies are used or consumed in 
  2.10  constructing new rental housing for low- and moderate-income 
  2.11  persons and families; 
  2.12     (2) the housing will be owned by a housing and 
  2.13  redevelopment authority, or a housing and redevelopment 
  2.14  authority will be the general partner in the housing; 
  2.15     (3) the housing is financed in whole or in part with 
  2.16  federal low-income tax credits; and 
  2.17     (4) that the same entity that owned the property during 
  2.18  construction maintains ownership for at least a five-year period 
  2.19  while renting the housing to the occupants. 
  2.20     The exemption under this subdivision shall apply only to 
  2.21  the portion of construction materials and supplies used in 
  2.22  constructing units that provide housing for low- and 
  2.23  moderate-income persons or families.  As used in this 
  2.24  subdivision, "low- and moderate-income persons and families" has 
  2.25  the meaning established by the United States Department of 
  2.26  Housing and Urban Development with income limits determined for 
  2.27  the county in which the property is located and adjusted for 
  2.28  family size. 
  2.29     Sec. 3.  [EFFECTIVE DATE.] 
  2.30     Sections 1 and 2 are effective for purchases made after 
  2.31  June 30, 1995.