Brief ⁽¹⁾

SB 138, as amended, would amend the property tax exemption for farm storage and drying equipment. Specifically, the bill would remove the requirement that exempt property be "used exclusively" for the storage or drying of enumerated grains. This would have the effect of expanding the property tax exemption to include property which is acquired through a lease agreement.

The bill also would make permanent beginning January 1, 2001, a sales tax exemption which had sunset on that date for materials and services purchased for the original construction, reconstruction, repair, or replacement of grain storage facilities, including railroad sidings providing access to such facilities.

Additional language would clarify that a sales tax exemption for material handling and storage equipment would apply to such equipment used on the farm site, as well as in a public grain warehouse or other commercial grain storage facility.

Background

The original SB 138 dealt only with the property tax exemption.

The Senate Committee made amendments to the bill at the suggestion of the Revisor.

The House Committee amended the bill to include the provisions of HB 2065 as that legislation passed the House.

The Department of Revenue anticipates that the property tax exemption would have an insignificant fiscal note. The House Committee version of the bill would be expected to reduce receipts by the following amounts attributable to the sales tax exemption:

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi