HF 3436

1st Engrossment - 93rd Legislature (2023 - 2024) Posted on 02/26/2024 04:28pm

A bill for an act
relating to transportation; modifying various policies, including but not limited to
legislative routes, driving rules, small business contract preferences, nondivisible
loads, and greater Minnesota transit programs; making technical corrections;
appropriating money; amending Minnesota Statutes 2022, sections 161.115,
subdivisions 116, 117, by adding a subdivision; 161.321, subdivisions 2, 2b;
169.19, subdivision 2; 169.34, subdivision 1; 169.444, subdivision 4; 169.80, by
adding a subdivision; 174.03, subdivision 12; 174.22, subdivisions 2b, 7, 12, 14,
by adding subdivisions; 174.23, subdivision 2; 174.24, subdivisions 1a, 3b, 3c;
174.247; 473.121, subdivision 19; Minnesota Statutes 2023 Supplement, sections
4.076, subdivision 3; 161.045, subdivision 3; 168.1259, subdivision 5; 174.40,
subdivision 4a; 256B.0625, subdivision 17; 609.855, subdivision 7; Laws 2021,
First Special Session chapter 5, article 4, section 114; Laws 2023, chapter 68,
article 1, section 2, subdivision 4; article 2, section 2, subdivisions 3, 4, 5, 7, 9;
proposing coding for new law in Minnesota Statutes, chapter 174; repealing
Minnesota Statutes 2022, sections 169.011, subdivision 70; 169.25; 174.22,
subdivisions 5, 15; 174.23, subdivision 7; Minnesota Rules, parts 8835.0110,
subparts 1, 1a, 6, 7, 10, 11a, 12a, 12b, 13a, 14a, 15, 15a, 16, 17, 18, 19; 8835.0210;
8835.0220; 8835.0230; 8835.0240; 8835.0250; 8835.0260; 8835.0265; 8835.0270;
8835.0275; 8835.0280; 8835.0290; 8835.0310; 8835.0320; 8835.0330, subparts
1, 3, 4; 8835.0350, subparts 1, 3, 4, 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

MISCELLANEOUS POLICY

Section 1.

Minnesota Statutes 2023 Supplement, section 4.076, subdivision 3, is amended
to read:

Subd. 3.

Membership; chair.

(a) The advisory council consists of the following
members:

(1) the chair, which is filled on a two-year rotating basis by a designee from:

(i) the Office of Traffic Safety in the Department of Public Safety;

(ii) the Office of Traffic Engineering in the Department of Transportation; and

(iii) the Injury and Violence Prevention Section in the Department of Health;

(2) two vice chairs, which must be filled by the two designees who are not currently
serving as chair of the advisory council under clause (1);

(3) the statewide Toward Zero Deaths coordinator;

(4) a regional coordinator from the Toward Zero Deaths program;

(5) the chief of the State Patrol or a designee;

(6) the state traffic safety engineer in the Department of Transportation or a designee;

(7) a law enforcement liaison from the Department of Public Safety;

(8) a representative from the Department of Human Services;

(9) a representative from the Department of Education;

(10) a representative from the Council on Disability;

(11) a representative for Tribal governments;

(12) a representative from the Center for Transportation Studies at the University of
Minnesota;

(13) a representative from the Minnesota Chiefs of Police Association;

(14) a representative from the Minnesota Sheriffs' Association;

(15) a representative from the Minnesota Safety Council;

(16) a representative from AAA Minnesota;

(17) a representative from the Minnesota Trucking Association;

(18) a representative from the Insurance Federation of Minnesota;

(19) a representative from the Association of Minnesota Counties;

(20) a representative from the League of Minnesota Cities;

(21) the American Bar Association State Judicial Outreach Liaison;

(22) a representative from the City Engineers Association of Minnesota;

(23) a representative from the Minnesota County Engineers Association;

(24) a representative from the Bicycle Alliance of Minnesota;

(25) two individuals representing vulnerable road users, including pedestrians, bicyclists,
and other operators of a personal conveyance;

(26) a representative from Minnesota Operation Lifesaver;

(27) a representative from the Minnesota Driver and Traffic Safety Education Association;

(28) a representative from the Minnesota Association for Pupil Transportation;

(29) a representative from the State Trauma Advisory Council;

(30) a person representing metropolitan planning organizations; deleted text begin and
deleted text end

(31) a person representing contractors engaged in construction and maintenance of
highways and other infrastructure new text begin ;
new text end

new text begin (32) the director of the Minnesota Emergency Medical Services Regulatory Board; and
new text end

new text begin (33) a person representing a victims advocacy organization new text end .

(b) The commissioners of public safety and transportation must jointly appoint the
advisory council members under paragraph (a), clauses (11), (25), (30), deleted text begin and deleted text end (31) new text begin , and (33) new text end .

Sec. 2.

Minnesota Statutes 2023 Supplement, section 161.045, subdivision 3, is amended
to read:

Subd. 3.

Limitations on spending.

(a) A commissioner must not pay for any of the
following with funds from the highway user tax distribution fund or the trunk highway fund:

(1) Bureau of Criminal Apprehension laboratory;

(2) Explore Minnesota Tourism kiosks;

(3) Minnesota Safety Council;

(4) driver education programs;

(5) Emergency Medical Services Regulatory Board;

(6) Mississippi River Parkway Commission;

(7) payments to the Department of Information Technology Services in excess of actual
costs incurred for trunk highway purposes;

(8) personnel costs incurred on behalf of the governor's office;

(9) the Office of Aeronautics within the Department of Transportation;

(10) the Office of Transit and Active Transportation within the Department of
Transportation;

(11) the Office of Passenger Rail;

(12) purchase and maintenance of soft body armor under section 299A.38;

(13) tourist information centers;

(14) parades, events, or sponsorships of events;

deleted text begin (15) the installation, construction, expansion, or maintenance of public electric vehicle
infrastructure;
deleted text end

deleted text begin (16) deleted text end new text begin (15) new text end the statewide notification center for excavation services pursuant to chapter
216D; and

deleted text begin (17) deleted text end new text begin (16) new text end manufacturing license plates.

(b) The prohibition in paragraph (a) includes all expenses for the named entity or program,
including but not limited to payroll, purchased services, supplies, repairs, and equipment.
This prohibition on spending applies to any successor entities or programs that are
substantially similar to the entity or program named in this subdivision.

Sec. 3.

Minnesota Statutes 2022, section 161.115, subdivision 116, is amended to read:

Subd. 116.

Route No. 185.

Beginning at a point on Route No. 1 deleted text begin at Sandstone deleted text end new text begin and Route
No. 390 new text end , thence extending in a northeasterly direction to a point on Route No. 103 as herein
established in Duluth.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the commissioner of
transportation receives a copy of the agreement between the commissioner and the governing
body of Pine County to transfer jurisdiction of a portion of Legislative Route No. 185 and
notifies the revisor of statutes electronically or in writing that the conditions required to
transfer the route have been satisfied.
new text end

Sec. 4.

Minnesota Statutes 2022, section 161.115, subdivision 117, is amended to read:

Subd. 117.

Route No. 186.

Beginning at a point on Route No. 110 as herein established,
thence extending in an easterly direction to a point on Route No. deleted text begin 185 as herein established
at or near Askov deleted text end new text begin 1 and Route No. 390 new text end ; affording Isle deleted text begin , deleted text end new text begin and new text end Finlayson deleted text begin , and Askov, deleted text end a reasonable
means of communication each with the other and other places within the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the commissioner of
transportation notifies the revisor of statutes electronically or in writing of the effective
date.
new text end

Sec. 5.

Minnesota Statutes 2022, section 161.115, is amended by adding a subdivision to
read:

new text begin Subd. 272. new text end

new text begin Route No. 341. new text end

new text begin Beginning at a point on Route No. 1 at Sandstone, thence
extending in a generally easterly direction to a point at or near the east bank of the Kettle
River.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the commissioner of
transportation notifies the revisor of statutes electronically or in writing of the effective
date.
new text end

Sec. 6.

Minnesota Statutes 2022, section 161.321, subdivision 2, is amended to read:

Subd. 2.

Small targeted group business, small business; contract preferences.

(a)
The commissioner may award up to a deleted text begin six deleted text end new text begin 12 new text end percent preference in the amount bid for
specified construction work to small targeted group businesses.

(b) The commissioner may designate a contract for construction work for award only
to small targeted group businesses if the commissioner determines that at least three small
targeted group businesses are likely to bid.

(c) The commissioner may award up to a four percent preference in the amount bid for
specified construction work to small businesses located in an economically disadvantaged
area as defined in section 16C.16, subdivision 7.

Sec. 7.

Minnesota Statutes 2022, section 161.321, subdivision 2b, is amended to read:

Subd. 2b.

Veteran-owned small business; contract preferences.

(a) The commissioner
may award up to a deleted text begin six deleted text end new text begin 12 new text end percent preference in the amount bid for specified construction
work to veteran-owned small businesses, except when prohibited by the federal government
as a condition of receiving federal funds. When a bid preference is provided under this
section, the percentage of preference in bid amount under this subdivision may not be less
than the percentage of bid preference provided to any small targeted group business under
subdivision 2.

(b) When a bid preference is provided under this subdivision, the commissioner must
be as inclusive as possible in specifying contracts for construction work, as well as for
construction-related professional and technical services, available under this bid preference
program for veteran-owned small businesses. The term "construction" must be given broad
meaning for purposes of specifying and letting contracts for veteran-owned small businesses
and must include, but is not limited to, preplanning, planning, and all other
construction-related professional and technical services.

(c) When a bid preference is provided under this subdivision, the commissioner must
strive to ensure that contracts will be awarded on a proportional basis with contracts awarded
under subdivision 2.

(d) The commissioner may designate a contract for construction work for award only
to veteran-owned small businesses, if the commissioner determines that at least three
veteran-owned small businesses are likely to bid.

Sec. 8.

Minnesota Statutes 2023 Supplement, section 168.1259, subdivision 5, is amended
to read:

Subd. 5.

Contributions; account; appropriation.

Contributions collected under
subdivision 2, paragraph (a), clause (5), must be deposited in the Minnesota professional
sports team foundations account, which is established in the special revenue fund. Money
in the account is new text begin annually new text end appropriated to the commissioner of public safety. This
appropriation is first for the annual cost of administering the account funds, and the remaining
funds are for distribution to the foundations in proportion to the total number of Minnesota
professional sports team foundation plates issued for that year. Proceeds from a plate that
includes the marks and colors of all foundations must be divided evenly between all
foundations. The foundations must only use the proceeds for philanthropic or charitable
purposes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2022, section 169.19, subdivision 2, is amended to read:

Subd. 2.

U-turn.

deleted text begin No vehicle shall be turned deleted text end new text begin The operator of a vehicle must not turn new text end to
proceed in the opposite direction upon any curve, or upon the approach to or near the crest
of a grade, where the vehicle cannot be seen by the deleted text begin driver deleted text end new text begin operator new text end of any other vehicle
approaching from either direction within 1,000 feet deleted text begin , deleted text end new text begin . new text end deleted text begin nor shall the driver deleted text end new text begin The operator new text end of a
vehicle new text begin must not new text end turn the vehicle to proceed in the opposite direction unless the movement
can be made safely and without interfering with other traffic. deleted text begin When necessary to
accommodate vehicle configuration on deleted text end new text begin The operator of a vehicle is permitted to make a
right-hand turn into the farthest lane of new text end a roadway with two or more lanes in the same
direction deleted text begin , a driver may turn the vehicle into the farthest lane and temporarily use the shoulder
to make a U-turn deleted text end new text begin in order to make a U-turn at a reduced-conflict intersection if it is safe to
do so new text end .

Sec. 10.

Minnesota Statutes 2022, section 169.34, subdivision 1, is amended to read:

Subdivision 1.

Prohibitions.

(a) deleted text begin No person shall deleted text end new text begin A person must not new text end stop, stand, or park
a vehicle, except when necessary to avoid conflict with other traffic or in compliance with
the directions of a police officer or traffic-control device, in any of the following places:

(1) on a sidewalk;

(2) in front of a public or private driveway;

(3) within an intersection;

(4) within ten feet of a fire hydrant;

(5) on a crosswalk;

(6) within 20 feet of a crosswalk at an intersection;

(7) within 30 feet upon the approach to any flashing beacon, stop sign, or traffic-control
signal located at the side of a roadway;

deleted text begin (8) between a safety zone and the adjacent curb or within 30 feet of points on the curb
immediately opposite the ends of a safety zone, unless a different length is indicated by
signs or markings;
deleted text end

deleted text begin (9) deleted text end new text begin (8) new text end within 50 feet of the nearest rail of a railroad crossing;

deleted text begin (10) deleted text end new text begin (9) new text end within 20 feet of the driveway entrance to any fire station and on the side of a
street opposite the entrance to any fire station within 75 feet of said entrance when properly
signposted;

deleted text begin (11) deleted text end new text begin (10) new text end alongside or opposite any street excavation or obstruction when such stopping,
standing, or parking would obstruct traffic;

deleted text begin (12) deleted text end new text begin (11) new text end on the roadway side of any vehicle stopped or parked at the edge or curb of a
street;

deleted text begin (13) deleted text end new text begin (12) new text end upon any bridge or other elevated structure upon a highway or within a highway
tunnel, except as otherwise provided by ordinance;

deleted text begin (14) deleted text end new text begin (13) new text end within a bicycle lane, except when posted signs permit parking; or

deleted text begin (15) deleted text end new text begin (14) new text end at any place where official signs prohibit stopping.

(b) No person shall move a vehicle not owned by such person into any prohibited area
or away from a curb such distance as is unlawful.

(c) deleted text begin No person shall deleted text end new text begin A person must not new text end , for camping purposes, leave or park a travel
trailer on or within the limits of any highway or on any highway right-of-way, except where
signs are erected designating the place as a campsite.

(d) deleted text begin No person shall deleted text end new text begin A person must not new text end stop or park a vehicle on a street or highway when
directed or ordered to proceed by any peace officer invested by law with authority to direct,
control, or regulate traffic.

Sec. 11.

Minnesota Statutes 2022, section 169.444, subdivision 4, is amended to read:

Subd. 4.

Exception for separated roadway.

(a) A person driving a vehicle on a street
or highway with separated roadways is not required to stop the vehicle when approaching
or meeting a school bus that is on a different roadway.

(b) "Separated roadway" means a road that is separated from a parallel road by a new text begin barrier, new text end
safety isle new text begin , new text end or deleted text begin safety zone deleted text end new text begin median new text end .

Sec. 12.

Minnesota Statutes 2022, section 169.80, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Nondivisible load or vehicle. new text end

new text begin (a) "Nondivisible load" or "nondivisible vehicle"
means any load or vehicle exceeding the applicable length, width, height, or weight limits
set forth in this chapter, which, if separated into smaller loads or vehicles would:
new text end

new text begin (1) compromise the intended use of the load or vehicle;
new text end

new text begin (2) destroy the value of the load or vehicle; or
new text end

new text begin (3) require more than eight work hours to dismantle using appropriate equipment. The
applicant for a nondivisible load permit has the burden of proof as to the number of work
hours required to dismantle the load.
new text end

new text begin (b) A vehicle transporting a divisible load may simultaneously transport multiple items
unless doing so would require an additional permit because the vehicle, when loaded with
multiple items, would exceed the limits set forth in this chapter.
new text end

Sec. 13.

Minnesota Statutes 2022, section 174.03, subdivision 12, is amended to read:

Subd. 12.

Trunk highway performance, resiliency, and sustainability.

(a) The
commissioner must implement performance measures and deleted text begin annual deleted text end targets for the trunk
highway system in order to construct resilient infrastructure, enhance the project selection
for all transportation modes, improve economic security, and achieve the state transportation
goals established in section 174.01.

(b) At a minimum, the transportation planning process must include:

(1) an inventory of transportation assets, including but not limited to bridge, pavement,
geotechnical, pedestrian, bicycle, and transit asset categories;

(2) deleted text begin lag (resulting), and where practicable lead (predictive), deleted text end new text begin establishment of statewide
new text end performance measures and deleted text begin annual deleted text end targets new text begin , reporting of performance measure results, and
where possible, performance forecasts new text end that are:

(i) statewide and new text begin , where data allow, new text end district-specific;

(ii) for assets in each asset category specified in clause (1) deleted text begin for a period of up to 60 years deleted text end ;
and

(iii) identified in collaboration with the public;

(3) gap identification and an explanation of the difference between performance targets
and current status; and

(4) life cycle assessment and corridor risk assessment as part of asset management
programs in each district of the department.

(c) At a minimum, the ten-year capital highway investment plan in each district of the
department must:

(1) be based on expected funding during the plan period;

(2) identify investments within each of the asset categories specified in paragraph (b),
clause (1) new text begin , that are funded through the trunk highway capital program new text end ;

(3) deleted text begin recommend deleted text end new text begin identify new text end specific trunk highway segments new text begin programmed new text end to be removed
from the trunk highway system; and

(4) deliver annual progress toward achieving the state transportation goals established
in section 174.01.

(d) Annually by December 15, the commissioner must report trunk highway performance
measures and deleted text begin annual deleted text end targets and identify gaps, including information detailing the
department's progress on achieving the state transportation goals, to the chairs and ranking
minority members of the legislative committees having jurisdiction over transportation
policy and finance. deleted text begin The report must be signed by the department's chief engineer.
deleted text end

Sec. 14.

Minnesota Statutes 2023 Supplement, section 174.40, subdivision 4a, is amended
to read:

Subd. 4a.

Eligibility.

A statutory or home rule charter city, county, town, or federally
recognized Indian Tribe is eligible to receive funding under this section new text begin . A statutory or home
rule charter city, county, or town is eligible to receive funding for infrastructure projects
under this section new text end only if it has adopted subdivision regulations that require safe routes to
school infrastructure in developments authorized on or after June 1, 2016.

Sec. 15.

new text begin [174.595] TRANSPORTATION FACILITIES CAPITAL PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Capital building asset" includes but is not limited to district headquarters buildings,
truck stations, salt storage or other unheated storage buildings, deicing and anti-icing
facilities, fuel dispensing facilities, highway rest areas, and vehicle weigh and inspection
stations.
new text end

new text begin (c) "Commissioner" means the commissioner of transportation.
new text end

new text begin (d) "Department" means the Department of Transportation.
new text end

new text begin (e) "Program" means the transportation facilities capital program established in this
section.
new text end

new text begin Subd. 2. new text end

new text begin Program established. new text end

new text begin The commissioner must establish a transportation
facilities capital program in conformance with this section to provide for capital building
asset projects related to buildings and other capital facilities of the department.
new text end

new text begin Subd. 3. new text end

new text begin Transportation facilities capital accounts. new text end

new text begin (a) A transportation facilities
capital account is established in the trunk highway fund. The account consists of money
appropriated from the trunk highway fund for the purposes of the program and any other
money donated, allotted, transferred, or otherwise provided to the account by law.
new text end

new text begin (b) A transportation facilities capital subaccount is established in the bond proceeds
account in the trunk highway fund. The account consists of trunk highway bond proceeds
appropriated to the commissioner for the purposes of the program. Money in the account
may only be expended on trunk highway purposes, including the purposes specified in this
section.
new text end

new text begin Subd. 4. new text end

new text begin Implementation standards. new text end

new text begin The commissioner must establish a process to
implement the program that includes allocation of funding based on review of eligible
projects as provided under subdivision 5 and prioritization as provided under subdivision
6. The process must be in conformance with trunk highway fund uses for the purposes of
constructing, improving, and maintaining the trunk highway system in the state pursuant
to the Minnesota Constitution, article XIV.
new text end

new text begin Subd. 5. new text end

new text begin Eligible expenditures. new text end

new text begin A project is eligible under this section only if it:
new text end

new text begin (1) involves the construction, improvement, or maintenance of a capital building asset
that is part of the trunk highway system; and
new text end

new text begin (2) performs at least one of the following:
new text end

new text begin (i) supports the programmatic mission of the department;
new text end

new text begin (ii) extends the useful life of existing buildings; or
new text end

new text begin (iii) renovates or constructs facilities to meet the department's current and future
operational needs.
new text end

new text begin Subd. 6. new text end

new text begin Prioritization. new text end

new text begin In prioritizing funding allocation among projects under the
program, the commissioner must consider:
new text end

new text begin (1) whether a project ensures effective and efficient condition and operation of the
facility;
new text end

new text begin (2) the urgency in ensuring the safe use of existing buildings;
new text end

new text begin (3) the project's total life-cycle cost;
new text end

new text begin (4) additional criteria for priorities otherwise specified in law that apply to a category
listed in the act making an appropriation for the program; and
new text end

new text begin (5) any other criteria the commissioner deems necessary.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 16.

Laws 2021, First Special Session chapter 5, article 4, section 114, the effective
date, is amended to read:

EFFECTIVE DATE; APPLICATION.

This section is effective July 1, deleted text begin 2024 deleted text end new text begin 2023 new text end ,
and applies beginning with the November deleted text begin 2024 deleted text end new text begin 2023 new text end forecast for each fiscal year beginning
on or after July 1, 2025. This section applies in the counties of Anoka, Carver, Dakota,
Hennepin, Ramsey, Scott, and Washington.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2023.
new text end

Sec. 17.

Laws 2023, chapter 68, article 1, section 2, subdivision 4, is amended to read:

Subd. 4. Local Roads
(a) County State-Aid Highways				917,782,000		991,615,000

This appropriation is from the county state-aid
highway fund under Minnesota Statutes,
sections 161.081, 174.49, and 297A.815,
subdivision 3, and chapter 162, and is
available until June 30, 2033.

If the commissioner of transportation
determines that a balance remains in the
county state-aid highway fund following the
appropriations and transfers made in this
paragraph and that the appropriations made
are insufficient for advancing county state-aid
highway projects, an amount necessary to
advance the projects, not to exceed the balance
in the county state-aid highway fund, is
appropriated in each year to the commissioner.
Within two weeks of a determination under
this contingent appropriation, the
commissioner of transportation must notify
the commissioner of management and budget
and the chairs, ranking minority members, and
staff of the legislative committees with
jurisdiction over transportation finance
concerning funds appropriated. The governor
must identify in the next budget submission
to the legislature under Minnesota Statutes,
section 16A.11, any amount that is
appropriated under this paragraph.

(b) Municipal State-Aid Streets

236,360,000

251,748,000

This appropriation is from the municipal
state-aid street fund under Minnesota Statutes,
chapter 162, and is available until June 30,
2033.

If the commissioner of transportation
determines that a balance remains in the
municipal state-aid street fund following the
appropriations and transfers made in this
paragraph and that the appropriations made
are insufficient for advancing municipal
state-aid street projects, an amount necessary
to advance the projects, not to exceed the
balance in the municipal state-aid street fund,
is appropriated in each year to the
commissioner. Within two weeks of a
determination under this contingent
appropriation, the commissioner of
transportation must notify the commissioner
of management and budget and the chairs,
ranking minority members, and staff of the
legislative committees with jurisdiction over
transportation finance concerning funds
appropriated. The governor must identify in
the next budget submission to the legislature
under Minnesota Statutes, section 16A.11, any
amount that is appropriated under this
paragraph.

(c) Other Local Roads

(1) Local Bridges

18,013,000

-0-

This appropriation is from the general fund to
replace or rehabilitate local deficient bridges
under Minnesota Statutes, section 174.50. This
is a onetime appropriation and is available
until June 30, 2027.

(2) Local Road Improvement

18,013,000

-0-

This appropriation is from the general fund
for construction and reconstruction of local
roads under Minnesota Statutes, section
174.52. This is a onetime appropriation and
is available until June 30, 2027.

(3) Local Transportation Disaster Support

4,300,000

1,000,000

This appropriation is from the general fund to
provide new text begin :
new text end

new text begin (i) new text end a cost-share for federal assistance from the
Federal Highway Administration for the
emergency relief program under United States
Code, title 23, section 125 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (ii) assistance for roadway damage on the
state-aid or federal-aid system associated with
state or federally declared disasters ineligible
for assistance from existing state and federal
disaster programs.
new text end

Of the appropriation in fiscal year 2024,
$3,300,000 is onetime and is available until
June 30, 2027.

(4) Metropolitan Counties

20,000,000

-0-

This appropriation is from the general fund
for distribution to metropolitan counties as
provided under Minnesota Statutes, section
174.49, subdivision 5, for use in conformance
with the requirements under Minnesota
Statutes, section 174.49, subdivision 6.

Sec. 18.

Laws 2023, chapter 68, article 2, section 2, subdivision 3, is amended to read:

Subd. 3. Transportation Facilities Capital Improvements

87,440,000

This appropriation is for deleted text begin capital improvements
to Department of Transportation facilities. The
improvements must: (1) support the
programmatic mission of the department; (2)
extend the useful life of existing buildings; or
(3) renovate or construct facilities to meet the
department's current and future operational
needs deleted text end new text begin the transportation facilities capital
program under Minnesota Statutes, section
174.595 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 19.

Laws 2023, chapter 68, article 2, section 2, subdivision 4, is amended to read:

Subd. 4. Trunk Highway 65; Anoka County

68,750,000

This appropriation is for deleted text begin one or more grants
to the city of Blaine, Anoka County, or both
for the deleted text end predesign, right-of-way acquisition,
design, engineering, and construction of
intersection improvements along Trunk
Highway 65 at 99th Avenue Northeast; 105th
Avenue Northeast; Anoka County State-Aid
Highway 12; 109th Avenue Northeast; 117th
Avenue Northeast; and the associated frontage
roads and backage roads within the trunk
highway system.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20.

Laws 2023, chapter 68, article 2, section 2, subdivision 5, is amended to read:

Subd. 5. U.S. Highway 10; Coon Rapids

30,000,000

This appropriation is for deleted text begin a grant to Anoka
County for deleted text end preliminary engineering,
environmental analysis, final design,
right-of-way acquisition, construction, and
construction administration of a third travel
lane in each direction of marked U.S. Highway
10 from east of the interchange with Hanson
Boulevard to Round Lake Boulevard in the
city of Coon Rapids.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 21.

Laws 2023, chapter 68, article 2, section 2, subdivision 7, is amended to read:

Subd. 7. U.S. Highway 169 Interchange; Scott County

4,200,000

This appropriation is deleted text begin for a grant to Scott
County deleted text end to design and construct trunk highway
improvements associated with an interchange
at U.S. Highway 169, marked Trunk Highway
282, and Scott County State-Aid Highway 9
in the city of Jordan, including
accommodations for bicycles and pedestrians
and for bridge and road construction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 22.

Laws 2023, chapter 68, article 2, section 2, subdivision 9, is amended to read:

Subd. 9. U.S. Highway 8; Chisago County

42,000,000

This appropriation is for deleted text begin a grant to Chisago
County for deleted text end predesign, design, engineering,
and reconstruction of marked U.S. Highway
8 from Karmel Avenue in Chisago City to
marked Interstate Highway 35, including
pedestrian and bike trails along and crossings
of this segment of marked U.S. Highway 8.
The reconstruction project may include
expanding segments of marked U.S. Highway
8 to four lanes, constructing or reconstructing
frontage roads and backage roads, and
realigning local roads to consolidate, remove,
and relocate access onto and off of U.S.
Highway 8. This appropriation is for the
portion of the project that is eligible for use
of proceeds of trunk highway bonds. deleted text begin This
appropriation is not available until the
commissioner of management and budget
determines that sufficient resources have been
committed from nonstate sources to complete
the project.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 23. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, sections 169.011, subdivision 70; and 169.25, new text end new text begin are repealed.
new text end

ARTICLE 2

GREATER MINNESOTA TRANSIT PROGRAM

Section 1.

Minnesota Statutes 2022, section 174.22, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Complementary paratransit service (ADA). new text end

new text begin "Complementary paratransit
service (ADA)" means public transportation service provided on a regular basis where fixed
route public transit service exists and is designed exclusively or primarily to serve individuals
who are elderly or disabled and unable to use regular means of public transportation.
new text end

Sec. 2.

Minnesota Statutes 2022, section 174.22, subdivision 2b, is amended to read:

Subd. 2b.

Elderly and disabled service.

"Elderly and disabled service" means
transportation service provided on a regular basis in new text begin small new text end urbanized or large urbanized
areas and designed exclusively or primarily to serve individuals who are elderly or disabled
and unable to use regular means of public transportation.

Sec. 3.

Minnesota Statutes 2022, section 174.22, is amended by adding a subdivision to
read:

new text begin Subd. 3a. new text end

new text begin Large urbanized area service. new text end

new text begin "Large urbanized area service" means a public
transportation service operated in areas located outside the metropolitan area with a
population greater than 200,000 that is designated by the United States Census Bureau.
Large urbanized area service does not include complementary paratransit service (ADA),
as defined in subdivision 1a.
new text end

Sec. 4.

Minnesota Statutes 2022, section 174.22, subdivision 7, is amended to read:

Subd. 7.

Public deleted text begin transit or transit deleted text end new text begin transportation new text end .

deleted text begin "Public transit" or "transit" means
general or specific transportation service provided to the public on a regular and continuing
basis. "Public transit" or "transit" includes paratransit and regular route transit. deleted text end new text begin "Public
transportation" means regular, continuing shared-ride surface transportation services that
are open to the general public or open to a segment of the general public defined by age,
disability, or low income. Public transportation does not include:
new text end

new text begin (1) intercity passenger rail transportation provided by the entity described in United
States Code, title 49, section 243, or a successor entity;
new text end

new text begin (2) intercity bus service;
new text end

new text begin (3) charter bus service;
new text end

new text begin (4) school bus service;
new text end

new text begin (5) sightseeing service;
new text end

new text begin (6) courtesy shuttle service for patrons of one or more specific establishments; or
new text end

new text begin (7) intraterminal or intrafacility shuttle services.
new text end

Sec. 5.

Minnesota Statutes 2022, section 174.22, subdivision 12, is amended to read:

Subd. 12.

Rural area service.

"Rural area service" means a new text begin public new text end transportation service
deleted text begin primarily deleted text end operated in deleted text begin an area having population centers of less than 2,500 persons deleted text end new text begin rural
areas that have not been designated in the most recent decennial census as an urbanized
area by the United States Census Bureau new text end .

Sec. 6.

Minnesota Statutes 2022, section 174.22, subdivision 14, is amended to read:

Subd. 14.

Small deleted text begin urban deleted text end new text begin urbanized new text end area service.

"Small deleted text begin urban deleted text end new text begin urbanized new text end area service"
means a new text begin public new text end transportation service deleted text begin operating in an area with a population between 2,500
and 50,000 deleted text end new text begin operated in areas located outside the metropolitan area with a population of at
least 50,000 but less than 200,000 that is designated by the United States Census Bureau.
Small urbanized area service does not include complementary paratransit service (ADA),
as defined in subdivision 1a new text end .

Sec. 7.

Minnesota Statutes 2022, section 174.23, subdivision 2, is amended to read:

Subd. 2.

Financial assistance; application, approval.

(a) The commissioner deleted text begin shall deleted text end new text begin must new text end
seek out and select eligible recipients of financial assistance under sections 174.21 to 174.27.

(b) The commissioner deleted text begin shall deleted text end new text begin must new text end establish deleted text begin by rule the deleted text end procedures and standards for
review and approval of applications for financial assistance submitted to the commissioner
pursuant to sections 174.21 to 174.27. Any applicant deleted text begin shall deleted text end new text begin must new text end provide to the commissioner
any financial or other information required by the commissioner to carry out the
commissioner's duties. The commissioner may require local contributions from applicants
as a condition for receiving financial assistance.

deleted text begin (c) Before the commissioner approves any grant, the application for the grant may be
reviewed by the appropriate regional development commission only for consistency with
regional transportation plans and development guides. If an applicant proposes a project
within the jurisdiction of a transit authority or commission or a transit system assisted or
operated by a city or county, the application shall also be reviewed by that commission,
authority, or political subdivision for consistency with its transit programs, policies, and
plans.
deleted text end

Sec. 8.

Minnesota Statutes 2022, section 174.24, subdivision 1a, is amended to read:

Subd. 1a.

Greater Minnesota transit investment plan.

(a) The commissioner deleted text begin shall deleted text end
new text begin must new text end develop a greater Minnesota transit investment plan that contains a goal of meeting
at least 80 percent of total transit service needs in greater Minnesota by July 1, 2015, and
meeting at least 90 percent of total transit service needs in greater Minnesota by July 1,
2025.

(b) The plan must include, but is not limited to, the following:

(1) an analysis of ridership and total transit service needs throughout greater Minnesota;

(2) a calculation of the level and type of service required to meet total transit service
needs, for the transit system classifications as provided under subdivision 3b, paragraph
(c), of new text begin large new text end urbanized area, small deleted text begin urban deleted text end new text begin urbanized new text end area, rural area, deleted text begin and deleted text end elderly and disabled
service new text begin , and complementary paratransit service (ADA) new text end ;

(3) an analysis of costs and revenue options;

(4) a plan to reduce total transit service needs as specified in this subdivision; and

(5) identification of the operating and capital costs necessary to meet 100 percent of the
greater Minnesota transit targeted and projected bus service hours, as identified in the greater
Minnesota transit plan, for 2010, 2015, 2020, 2025, and 2030.

(c) The plan must specifically address special transportation service ridership and needs.
The plan must also provide that recipients of operating assistance under this section provide
fixed route public transit service without charge for disabled veterans in accordance with
subdivision 7.

Sec. 9.

Minnesota Statutes 2022, section 174.24, subdivision 3b, is amended to read:

Subd. 3b.

Operating assistance; recipient classifications.

deleted text begin (a) The commissioner shall
determine the total operating cost of any public transit system receiving or applying for
assistance in accordance with generally accepted accounting principles. To be eligible for
financial assistance, an applicant or recipient shall provide to the commissioner all financial
records and other information and shall permit any inspection reasonably necessary to
determine total operating cost and correspondingly the amount of assistance that may be
paid to the applicant or recipient. Where more than one county or municipality contributes
assistance to the operation of a public transit system, the commissioner shall identify one
as lead agency for the purpose of receiving money under this section.
deleted text end

deleted text begin (b) deleted text end new text begin (a) new text end Prior to distributing operating assistance to eligible recipients for any contract
period, the commissioner deleted text begin shall deleted text end new text begin must new text end place all recipients into one of the following
classifications: new text begin large new text end urbanized area service, small deleted text begin urban deleted text end new text begin urbanized new text end area service, rural area
service, deleted text begin and deleted text end elderly and disabled service new text begin , and complementary paratransit service (ADA) new text end .

deleted text begin (c) deleted text end new text begin (b) new text end The commissioner deleted text begin shall deleted text end new text begin must new text end distribute deleted text begin funds deleted text end new text begin the operating assistance amount new text end
under this section so that the percentage deleted text begin of total contracted operating cost deleted text end new text begin from local sources new text end
paid by any recipient deleted text begin from local sources deleted text end will not exceed the new text begin following new text end percentage for that
recipient's classification, except as provided in this subdivision deleted text begin . The percentages must be deleted text end :

(1) for urbanized area service and small urban area service, 20 percent;

(2) for rural area service, 15 percent; and

(3) for elderly and disabled service new text begin and complementary paratransit service (ADA) new text end , 15
percent.

deleted text begin Except as provided in a United States Department of Transportation program allowing or
requiring a lower percentage to be paid from local sources, the remainder of the recipient's
total contracted operating cost will be paid from state sources of funds less any assistance
received by the recipient from the United States Department of Transportation.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end For purposes of this subdivision, "local sources" means all local sources of funds
and includes all operating revenue, tax levies, and contributions from public funds deleted text begin , except
that the commissioner may exclude from the total assistance contract revenues derived from
operations the cost of which is excluded from the computation of total operating cost deleted text end .

deleted text begin (e) deleted text end new text begin (d) new text end If a recipient informs the commissioner in writing after the establishment of these
percentages but prior to the distribution of financial assistance for any year that paying its
designated percentage of deleted text begin total operating cost deleted text end new text begin the operating assistance amount new text end from local
sources will cause undue hardship, the commissioner may reduce the percentage to be paid
from local sources by the recipient and increase the percentage to be paid from local sources
by one or more other recipients inside or outside the classification. However, the
commissioner may not reduce or increase any recipient's percentage under this paragraph
for more than two years successively. If for any year the funds appropriated to the
commissioner to carry out the purposes of this section are insufficient to allow the
commissioner to pay the state share of deleted text begin total operating cost deleted text end new text begin the operating assistance amount new text end
as provided in this paragraph, the commissioner deleted text begin shall deleted text end new text begin must new text end reduce the state share in each
classification to the extent necessary.

Sec. 10.

Minnesota Statutes 2022, section 174.24, subdivision 3c, is amended to read:

Subd. 3c.

Nonoperating assistance.

The commissioner deleted text begin shall deleted text end new text begin must new text end determine the total
cost of any planning and engineering design, capital assistance, other capital expenditures,
and other assistance for public transit services that furthers the purposes of section 174.21
for any public transit system receiving or applying for the assistance in accordance with
generally accepted accounting principles. new text begin The percentage of local sources paid by any
recipient must not exceed 20 percent of the awarded amount. new text end To be eligible for
non-operating-cost financial assistance, an applicant or recipient deleted text begin shall deleted text end new text begin must new text end provide to the
commissioner all financial records and other information and deleted text begin shall deleted text end new text begin must new text end permit any inspection
reasonably necessary to determine total cost and the amount of assistance that may be paid
to the applicant or recipient. When more than one county or municipality contributes
assistance to the operation of a public transit system, the commissioner deleted text begin shall deleted text end new text begin must new text end identify
one as a lead agency for the purpose of receiving money under this section. The commissioner
has the sole discretion to determine the amount of state funds distributed to any recipient
for non-operating-cost assistance.

Sec. 11.

Minnesota Statutes 2022, section 174.247, is amended to read:

174.247 ANNUAL TRANSIT REPORT.

(a) By February 15 annually, the commissioner deleted text begin shall deleted text end new text begin must new text end submit a report to the
legislature on transit services outside the metropolitan area. deleted text begin The Metropolitan Council and deleted text end
Any public transit system receiving assistance under section 174.24 deleted text begin shall deleted text end new text begin must new text end provide
assistance in creating the report, as requested by the commissioner.

(b) The report must include, at a minimum, the following:

(1) a descriptive overview of public transit in Minnesota;

(2) a descriptive summary of funding sources and assistance programs;

(3) a summary of each public transit system receiving assistance under section 174.24;

(4) data that identifies use of volunteers in providing transit service;

(5) financial data that identifies for each public transit system and for each transit system
classification under section 174.24, subdivision 3b:

(i) the operating and capital costs;

(ii) each of the funding sources used to provide financial assistance; and

(iii) for federal funds, the amount from each specific federal program under which
funding is provided;

(6) a summary of the differences in program implementation requirements and aid
recipient eligibility between federal aid and state sources of funds; new text begin and
new text end

(7) deleted text begin in each odd-numbered year, deleted text end an analysis of public transit system needs and operating
expenditures on an annual basis, which must include a methodology for identifying monetary
needs, and calculations of:

(i) the total monetary needs for all public transit systems, for the year of the report and
the ensuing five years;

(ii) the total expenditures from local sources for each transit system classification;

(iii) the comprehensive transit assistance percentage for each transit system classification,
which equals (A) the expenditures identified under item (ii), for a transit system classification,
divided by (B) the amounts identified under subitem (A), plus the sum of state sources of
funds plus federal funds provided to all transit systems in that classification; and

(iv) the amount of surplus or insufficient funds available for paying capital and operating
costs to fully implement the greater Minnesota transit investment plan under section 174.24,
subdivision 1a.

Sec. 12. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, sections 174.22, subdivisions 5 and 15; and 174.23,
subdivision 7, new text end new text begin are repealed.
new text end

new text begin (b) Minnesota Rules, parts 8835.0110, subparts 1, 1a, 6, 7, 10, 11a, 12a, 12b, 13a, 14a,
15, 15a, 16, 17, 18, and 19; 8835.0210; 8835.0220; 8835.0230; 8835.0240; 8835.0250;
8835.0260; 8835.0265; 8835.0270; 8835.0275; 8835.0280; 8835.0290; 8835.0310;
8835.0320; 8835.0330, subparts 1, 3, and 4; and 8835.0350, subparts 1, 3, 4, and 5, new text end new text begin are
repealed.
new text end

ARTICLE 3

CONFORMING CHANGES

Section 1.

Minnesota Statutes 2023 Supplement, section 256B.0625, subdivision 17, is
amended to read:

Subd. 17.

Transportation costs.

(a) "Nonemergency medical transportation service"
means motor vehicle transportation provided by a public or private person that serves
Minnesota health care program beneficiaries who do not require emergency ambulance
service, as defined in section 144E.001, subdivision 3, to obtain covered medical services.

(b) For purposes of this subdivision, "rural urban commuting area" or "RUCA" means
a census-tract based classification system under which a geographical area is determined
to be urban, rural, or super rural.

(c) Medical assistance covers medical transportation costs incurred solely for obtaining
emergency medical care or transportation costs incurred by eligible persons in obtaining
emergency or nonemergency medical care when paid directly to an ambulance company,
nonemergency medical transportation company, or other recognized providers of
transportation services. Medical transportation must be provided by:

(1) nonemergency medical transportation providers who meet the requirements of this
subdivision;

(2) ambulances, as defined in section 144E.001, subdivision 2;

(3) taxicabs that meet the requirements of this subdivision;

(4) public transit, new text begin within the meaning of "public transportation" new text end as defined in section
174.22, subdivision 7; or

(5) not-for-hire vehicles, including volunteer drivers, as defined in section 65B.472,
subdivision 1, paragraph (h).

(d) Medical assistance covers nonemergency medical transportation provided by
nonemergency medical transportation providers enrolled in the Minnesota health care
programs. All nonemergency medical transportation providers must comply with the
operating standards for special transportation service as defined in sections 174.29 to 174.30
and Minnesota Rules, chapter 8840, and all drivers must be individually enrolled with the
commissioner and reported on the claim as the individual who provided the service. All
nonemergency medical transportation providers shall bill for nonemergency medical
transportation services in accordance with Minnesota health care programs criteria. Publicly
operated transit systems, volunteers, and not-for-hire vehicles are exempt from the
requirements outlined in this paragraph.

(e) An organization may be terminated, denied, or suspended from enrollment if:

(1) the provider has not initiated background studies on the individuals specified in
section 174.30, subdivision 10, paragraph (a), clauses (1) to (3); or

(2) the provider has initiated background studies on the individuals specified in section
174.30, subdivision 10, paragraph (a), clauses (1) to (3), and:

(i) the commissioner has sent the provider a notice that the individual has been
disqualified under section 245C.14; and

(ii) the individual has not received a disqualification set-aside specific to the special
transportation services provider under sections 245C.22 and 245C.23.

(f) The administrative agency of nonemergency medical transportation must:

(1) adhere to the policies defined by the commissioner;

(2) pay nonemergency medical transportation providers for services provided to
Minnesota health care programs beneficiaries to obtain covered medical services;

(3) provide data monthly to the commissioner on appeals, complaints, no-shows, canceled
trips, and number of trips by mode; and

(4) by July 1, 2016, in accordance with subdivision 18e, utilize a web-based single
administrative structure assessment tool that meets the technical requirements established
by the commissioner, reconciles trip information with claims being submitted by providers,
and ensures prompt payment for nonemergency medical transportation services.

(g) Until the commissioner implements the single administrative structure and delivery
system under subdivision 18e, clients shall obtain their level-of-service certificate from the
commissioner or an entity approved by the commissioner that does not dispatch rides for
clients using modes of transportation under paragraph (l), clauses (4), (5), (6), and (7).

(h) The commissioner may use an order by the recipient's attending physician, advanced
practice registered nurse, physician assistant, or a medical or mental health professional to
certify that the recipient requires nonemergency medical transportation services.
Nonemergency medical transportation providers shall perform driver-assisted services for
eligible individuals, when appropriate. Driver-assisted service includes passenger pickup
at and return to the individual's residence or place of business, assistance with admittance
of the individual to the medical facility, and assistance in passenger securement or in securing
of wheelchairs, child seats, or stretchers in the vehicle.

(i) Nonemergency medical transportation providers must take clients to the health care
provider using the most direct route, and must not exceed 30 miles for a trip to a primary
care provider or 60 miles for a trip to a specialty care provider, unless the client receives
authorization from the local agency.

(j) Nonemergency medical transportation providers may not bill for separate base rates
for the continuation of a trip beyond the original destination. Nonemergency medical
transportation providers must maintain trip logs, which include pickup and drop-off times,
signed by the medical provider or client, whichever is deemed most appropriate, attesting
to mileage traveled to obtain covered medical services. Clients requesting client mileage
reimbursement must sign the trip log attesting mileage traveled to obtain covered medical
services.

(k) The administrative agency shall use the level of service process established by the
commissioner to determine the client's most appropriate mode of transportation. If public
transit or a certified transportation provider is not available to provide the appropriate service
mode for the client, the client may receive a onetime service upgrade.

(l) The covered modes of transportation are:

(1) client reimbursement, which includes client mileage reimbursement provided to
clients who have their own transportation, or to family or an acquaintance who provides
transportation to the client;

(2) volunteer transport, which includes transportation by volunteers using their own
vehicle;

(3) unassisted transport, which includes transportation provided to a client by a taxicab
or public transit. If a taxicab or public transit is not available, the client can receive
transportation from another nonemergency medical transportation provider;

(4) assisted transport, which includes transport provided to clients who require assistance
by a nonemergency medical transportation provider;

(5) lift-equipped/ramp transport, which includes transport provided to a client who is
dependent on a device and requires a nonemergency medical transportation provider with
a vehicle containing a lift or ramp;

(6) protected transport, which includes transport provided to a client who has received
a prescreening that has deemed other forms of transportation inappropriate and who requires
a provider: (i) with a protected vehicle that is not an ambulance or police car and has safety
locks, a video recorder, and a transparent thermoplastic partition between the passenger and
the vehicle driver; and (ii) who is certified as a protected transport provider; and

(7) stretcher transport, which includes transport for a client in a prone or supine position
and requires a nonemergency medical transportation provider with a vehicle that can transport
a client in a prone or supine position.

(m) The local agency shall be the single administrative agency and shall administer and
reimburse for modes defined in paragraph (l) according to paragraphs (p) and (q) when the
commissioner has developed, made available, and funded the web-based single administrative
structure, assessment tool, and level of need assessment under subdivision 18e. The local
agency's financial obligation is limited to funds provided by the state or federal government.

(n) The commissioner shall:

(1) verify that the mode and use of nonemergency medical transportation is appropriate;

(2) verify that the client is going to an approved medical appointment; and

(3) investigate all complaints and appeals.

(o) The administrative agency shall pay for the services provided in this subdivision and
seek reimbursement from the commissioner, if appropriate. As vendors of medical care,
local agencies are subject to the provisions in section 256B.041, the sanctions and monetary
recovery actions in section 256B.064, and Minnesota Rules, parts 9505.2160 to 9505.2245.

(p) Payments for nonemergency medical transportation must be paid based on the client's
assessed mode under paragraph (k), not the type of vehicle used to provide the service. The
medical assistance reimbursement rates for nonemergency medical transportation services
that are payable by or on behalf of the commissioner for nonemergency medical
transportation services are:

(1) $0.22 per mile for client reimbursement;

(2) up to 100 percent of the Internal Revenue Service business deduction rate for volunteer
transport;

(3) equivalent to the standard fare for unassisted transport when provided by public
transit, and $12.10 for the base rate and $1.43 per mile when provided by a nonemergency
medical transportation provider;

(4) $14.30 for the base rate and $1.43 per mile for assisted transport;

(5) $19.80 for the base rate and $1.70 per mile for lift-equipped/ramp transport;

(6) $75 for the base rate and $2.40 per mile for protected transport; and

(7) $60 for the base rate and $2.40 per mile for stretcher transport, and $9 per trip for
an additional attendant if deemed medically necessary.

(q) The base rate for nonemergency medical transportation services in areas defined
under RUCA to be super rural is equal to 111.3 percent of the respective base rate in
paragraph (p), clauses (1) to (7). The mileage rate for nonemergency medical transportation
services in areas defined under RUCA to be rural or super rural areas is:

(1) for a trip equal to 17 miles or less, equal to 125 percent of the respective mileage
rate in paragraph (p), clauses (1) to (7); and

(2) for a trip between 18 and 50 miles, equal to 112.5 percent of the respective mileage
rate in paragraph (p), clauses (1) to (7).

(r) For purposes of reimbursement rates for nonemergency medical transportation services
under paragraphs (p) and (q), the zip code of the recipient's place of residence shall determine
whether the urban, rural, or super rural reimbursement rate applies.

(s) The commissioner, when determining reimbursement rates for nonemergency medical
transportation under paragraphs (p) and (q), shall exempt all modes of transportation listed
under paragraph (l) from Minnesota Rules, part 9505.0445, item R, subitem (2).

(t) Effective for the first day of each calendar quarter in which the price of gasoline as
posted publicly by the United States Energy Information Administration exceeds $3.00 per
gallon, the commissioner shall adjust the rate paid per mile in paragraph (p) by one percent
up or down for every increase or decrease of ten cents for the price of gasoline. The increase
or decrease must be calculated using a base gasoline price of $3.00. The percentage increase
or decrease must be calculated using the average of the most recently available price of all
grades of gasoline for Minnesota as posted publicly by the United States Energy Information
Administration.

Sec. 2.

Minnesota Statutes 2022, section 473.121, subdivision 19, is amended to read:

Subd. 19.

Public transit or transit.

"Public transit" or "transit" has the meaning given new text begin
to "public transportation" new text end in section 174.22, subdivision 7.

Sec. 3.

Minnesota Statutes 2023 Supplement, section 609.855, subdivision 7, is amended
to read:

Subd. 7.

Definitions.

(a) The definitions in this subdivision apply in this section.

(b) "Public transit" or "transit" has the meaning given new text begin to "public transportation" new text end in section
174.22, subdivision 7.

(c) "Public transit vehicle" or "transit vehicle" means any vehicle used for the purpose
of providing public transit, whether or not the vehicle is owned or operated by a public
entity.

(d) "Public transit facilities" or "transit facilities" means any vehicles, equipment,
property, structures, stations, improvements, plants, parking or other facilities, or rights that
are owned, leased, held, or used for the purpose of providing public transit, whether or not
the facility is owned or operated by a public entity.

(e) "Fare medium" means a ticket, smart card, pass, coupon, token, transfer, or other
medium sold or distributed by a public transit provider, or its authorized agents, for use in
gaining entry to or use of the public transit facilities or vehicles of the provider.

(f) "Proof of fare payment" means a fare medium valid for the place or time at, or the
manner in, which it is used. If using a reduced-fare medium, proof of fare payment also
includes proper identification demonstrating a person's eligibility for the reduced fare. If
using a fare medium issued solely for the use of a particular individual, proof of fare payment
also includes an identification document bearing a photographic likeness of the individual
and demonstrating that the individual is the person to whom the fare medium is issued.

(g) "Authorized transit representative" means the person authorized by the transit provider
to operate the transit vehicle, a peace officer, a transit official under section 473.4075,
subdivision 1, or any other person designated by the transit provider as an authorized transit
representative under this section.

Sec. 4. new text begin REVISOR INSTRUCTION.
new text end

new text begin (a) The revisor of statutes must renumber the subdivisions in Minnesota Statutes, section
174.22, in alphabetical order and correct any cross-reference changes that result.
new text end

new text begin (b) In Minnesota Statutes, the revisor of statutes must change the term "public transit"
to "public transportation" wherever the term appears in Minnesota Statutes, sections 174.21
to 174.27.
new text end

new text begin (c) Except as otherwise provided in this article, in Minnesota Statutes, the revisor of
statutes must change the term "public transit" to "public transportation" wherever the term
appears in statutes in conjunction with a specific reference to Minnesota Statutes, section
174.22, subdivision 7.
new text end

APPENDIX

Repealed Minnesota Statutes: H3436-1

169.011 DEFINITIONS.

Subd. 70.

Safety zone.

"Safety zone" means the area or space officially set apart within a roadway for the exclusive use of pedestrians and which is protected or is so marked or indicated by adequate signs as to be plainly visible at all times set apart as a safety zone.

169.25 SAFETY ZONE.

No vehicle shall at any time be driven through a safety zone.

174.22 DEFINITIONS.

Subd. 5.

Operating deficit.

"Operating deficit" means the amount by which the total prudent operating expenses incurred in the operation of the public transit system exceeds the amount of operating revenue derived from the system.

Subd. 15.

Urbanized area service.

"Urbanized area service" means a transportation service operating in an urban area of more than 50,000 persons but does not include elderly and disabled service, as defined in subdivision 2b.

174.23 GENERAL POWERS AND DUTIES.

Subd. 7.

Rulemaking; total operating cost.

The commissioner shall by rule define "total operating cost" as the term is used in carrying out the purposes of section 174.24. "Total operating cost" may include provisions for a fee for service. The commissioner shall consult with eligible recipients to the maximum extent feasible in formulating these rules and develop necessary and reasonable changes in cost and fee allowability provisions and financial examination procedures where possible. The rules are subject to the provisions in the Administrative Procedure Act of sections 14.001 to 14.69.

Repealed Minnesota Rule: H3436-1

8835.0110 DEFINITIONS.

Subpart 1.

Scope.

The terms used in this chapter have the meanings given them in this part.

Subp. 1a.

Applicant.

"Applicant" means an entity that is eligible under Minnesota Statutes, section 174.24, subdivision 2, for financial assistance for a new or existing public transit system.

Subp. 6.

Cost reimbursement contract.

"Cost reimbursement contract" means a contract providing for payment to the contractor of allowable costs incurred in the performance of the contract, to the extent prescribed in the contract.

Subp. 7.

Department.

"Department" means the Department of Transportation.

Subp. 10.

Financial assistance.

"Financial assistance" means state funds paid to a recipient in accordance with the public transit participation program established under Minnesota Statutes, section 174.24.

Subp. 11a.

Greater Minnesota.

"Greater Minnesota" has the meaning given in Minnesota Statutes, section 116O.02, subdivision 5.

Subp. 12a.

Local share.

"Local share" means the percentage of total operating costs paid by a recipient according to the distribution classifications in Minnesota Statutes, section 174.24, subdivision 3b, and the percentage of capital costs paid by a recipient according to part 8835.0320.

Subp. 12b.

Local source.

"Local source" has the meaning given it in Minnesota Statutes, section 174.24, subdivision 3b.

Subp. 13a.

Management plan.

"Management plan" means a description of all the elements of a proposed public transit system, as required by part 8835.0260.

Subp. 14a.

Passenger trip.

"Passenger trip" means a one-way movement of a person between two points. Each time a passenger boards a transit vehicle counts as one passenger trip.

Subp. 15.

Public transit or transit.

"Public transit" or "transit" has the meaning given it in Minnesota Statutes, section 174.22, subdivision 7.

Subp. 15a.

Public transit participation program.

"Public transit participation program" means the department's program for providing financial assistance for public transit services in greater Minnesota under Minnesota Statutes, section 174.24.

Subp. 16.

Reasonable cost.

"Reasonable cost" means a price for a commodity or service which, in its nature or amount, does not exceed that which would be incurred by an ordinarily prudent person in the conduct of competitive business.

Subp. 17.

Regional Development Commission.

"Regional Development Commission" has the meaning given it in Minnesota Statutes, section 462.384, subdivision 4.

Subp. 18.

Revenue.

"Revenue" means sources of income.

Subp. 19.

Total operating cost.

"Total operating cost" means the categories of allowable expenses provided in part 8835.0280.

8835.0210 STATUTORY AUTHORITY.

This chapter is adopted pursuant to Minnesota Statutes, section 174.23, subdivisions 2 and 7.

8835.0220 PURPOSE.

The purpose of this chapter is to establish the procedures and standards for review and approval of applications for financial assistance under the public transit participation program in Minnesota Statutes, section 174.24, and to define "total operating cost" as the term is used in carrying out the public transit participation program.

8835.0230 SCOPE.

This chapter applies to applicants for financial assistance under the public transit participation program established by Minnesota Statutes, section 174.24.

8835.0240 ADMINISTRATION OF PUBLIC TRANSIT PARTICIPATION PROGRAM.

The Office of Transit shall administer the public transit participation program as provided by Minnesota Statutes, section 174.23, subdivision 8. The Office of Transit shall allocate:

A.

operating assistance to public transit systems according to the distribution classifications in Minnesota Statutes, section 174.24, subdivision 3b; and

B.

nonoperating or capital assistance to public transit systems according to the discretion provided to the commissioner by Minnesota Statutes, section 174.24, subdivision 3c, and according to part 8835.0320.

The Office of Transit shall make payments of financial assistance by a contract between the department and a recipient as required by Minnesota Statutes, section 174.24, subdivision 3.

8835.0250 APPLICATION FOR FINANCIAL ASSISTANCE.

Subpart 1.

Who may apply.

An applicant may apply for financial assistance under the public transit participation program to provide public transit in greater Minnesota.

Subp. 2.

Public transit.

Public transit includes a single service or a combination of services, such as route deviations, fixed route, flexible fixed route, demand-response/dial-a-ride, rideshare, subscription, volunteer driver services, and other services that meet the needs of individual transit systems to the extent they are consistent with Minnesota Statutes, section 174.21. A public transit system must be available and accessible to the general public.

Subp. 3.

Submission; deadline.

An applicant shall request financial assistance using an application prescribed by the department. The department shall establish a deadline for submission of applications for financial assistance and shall provide adequate notice of the deadline to applicants. A complete application contains a management plan, a resolution from the applicant's governing body, and other forms and certifications required by federal or state law or regulation.

Subp. 4.

Additional review.

In addition to submitting an application to the department, an applicant shall submit an application for review and approval as provided in Minnesota Statutes, section 174.23, subdivision 2.

Subp. 5.

Resolution.

An applicant shall submit with the application a resolution by the governing body that:

A.

resolves to provide public transit;

B.

indicates the person or persons authorized by title to execute a contract with the department and all amendments to the contract; and

C.

authorizes funds for the local share of financial assistance, if applicable.

8835.0260 MANAGEMENT PLAN.

Subpart 1.

Submission in application.

An applicant shall submit a management plan as part of its application for financial assistance.

Subp. 2.

Contents.

The management plan must include the following information:

A.

a service plan that describes the levels of service to be provided during the contract period, including a discussion of service area and general population, type or types of service, vehicle descriptions, days and hours of service, service schedules, contract services, and route maps;

B.

a description of unmet service needs;

C.

a financial plan, including:

(1)

a general narrative that supports and explains the budget;

(2)

a detailed narrative for each line item in the budget, including increases;

(3)

actual statistics on operating expenses and operating revenues for the most recent calendar years;

(4)

anticipated statistics on operating expenses and operating revenues for the new contract period;

(5)

actual statistics on miles and hours of service and passenger trips for the most recent calendar year; and

(6)

anticipated statistics on miles and hours of service and passenger trips for the new contract period;

D.

a coordination and marketing plan, including costs and benefits of major elements;

E.

a capital plan that describes the major capital assets of the transit system with an outline of how they will be maintained, improved, or replaced;

F.

a description of revenue-producing contracts relating to the transit services provided by or for the applicant;

G.

a description of expense contracts for services and goods procured by the transit system;

H.

a description of the participating public transit system's vehicle maintenance program for the period of financial assistance;

I.

a description of the organizational structure established to direct, control, review, and implement the management plan;

J.

a description of measurable goals and objectives for the transit system, illustrating the benefits expected to be realized by the investment of state financial assistance;

K.

a description of the fare structure of the public transit system;

L.

a listing of transit and paratransit systems and their union affiliations currently operating in the applicant's area, and a description of existing or potential coordination with these systems;

M.

a description of the transit system's safety and training policies, including its driver selection process;

N.

a description of the proposed insurance carrier and the limits of coverage;

O.

a description of the internal controls policy for the collection and deposit of fares;

P.

a copy of the transit system's most recent drug and alcohol policy as approved by the local recipient's governing body;

Q.

all third party contracts relating to transit operations; and

R.

a copy of the governing body's third-party contract procurement policy.

Subp. 3.

Incorporation into contract.

The department shall incorporate an approved management plan into the financial assistance contract between the department and the recipient, as provided in part 8835.0330. The department shall approve a management plan after it determines the financial assistance according to part 8835.0270.

8835.0265 THIRD-PARTY CONTRACT FOR OPERATING SERVICES.

A recipient shall include a copy of the third-party contract procurement policy of its governing body in the management plan required in part 8835.0260. A third-party contract for operating services must contain all relevant terms contained in the financial assistance contract between the recipient and the department. The recipient is responsible for third-party contractor compliance with local, state, and federal laws, rules, and regulations. A third-party contract must be available for audit according to part 8835.0350, subpart 3. Before a recipient awards a third-party contract for operating services, the department shall review the third-party contract for compliance with the terms of the financial assistance contract between the department and the recipient.

8835.0270 FINANCIAL ASSISTANCE.

Subpart 1.

Allocation priorities.

The department shall allocate financial assistance to recipients for purposes of the public transit participation program according to the following order of priority:

A.

first priority: operating costs for existing public transit systems;

B.

second priority: capital costs for existing public transit systems; and

C.

third priority: operating and capital costs for the provision of public transit services in a community or area not currently served by public transit.

Subp. 2.

Determination of financial assistance.

To determine financial assistance, the department shall review an applicant's management plan and evaluate the proposed public transit system by considering:

A.

the degree to which the proposed system meets the objectives of the public transit participation program;

B.

the accessibility of the proposed system to the general public, including persons with disabilities;

C.

the amount of local government and community support for the proposed system;

D.

the plan for continuation of the proposed system after the first year; and

E.

the plan for coordination of transit services in the geographical area.

The department shall evaluate the budget, service delivery and design, and administration of a public transit system. The department shall compare the past performance of a transit system to its current performance and to the performance of other similar transit systems. To measure the performance of a public transit system, the department shall consider cost efficiency, cost-effectiveness, service effectiveness, and quality.

Subp. 3.

Approval of management plan.

The department shall approve a management plan for incorporation into a financial assistance contract after determining the reasonable costs of the proposed public transit system.

8835.0275 DETERMINING FINANCIAL ASSISTANCE; EXPENSE CATEGORIES.

In determining the total operating costs of a public transit system, upon which financial assistance is based, part 8835.0290 and the definitions of expense categories in part 8835.0280 apply and have the meanings given them.

8835.0280 TOTAL OPERATING COST.

Subpart 1.

Definition.

"Total operating cost" means the categories of allowable expenses provided in subparts 2 to 7. The total operating cost is subject to the audit provisions of part 8835.0350, subpart 3.

Subp. 2.

Personnel services expense.

The "personnel services" expense category includes:

A.

administrative, management, and supervisory services, which are the amount paid to transit system employees classified as managers, supervisors, coordinators, or administrators and for which the amounts claimed by employees must be supported by daily time distribution records or a cost allocation plan that is supported by the applicant and approved by the department as part of the management plan;

B.

operators' wages, which are the total amount paid to transit system employees classified as vehicle operators and for which the amounts claimed by employees must be supported by daily time distribution records;

C.

maintenance and repair wages, which are the labor charges incurred in the performance of maintenance and repair of vehicles and other property required for the operation of the transit system, including only wages of maintenance personnel employed by the transit system, and for which the amounts claimed by employees must be supported by daily time distribution records;

D.

other direct wages, which are the amount paid to transit system employees not classified as operators, maintenance, or administrative personnel, such as dispatchers, bookkeepers, clerical personnel, janitors, and security personnel, and for which the amounts claimed by employees must be supported by daily time distribution records;

E.

indirect labor charges, which are the amount to be allocated to the transit contract for labor that is not traceable to a specific transit activity but which benefits the transit operation and which must be based on a cost allocation plan approved by the department; and

F.

fringe benefits, which are the cost of providing fringe benefits for active and retired transit system employees, including pension benefits, vacation and sick leave benefits, social security taxes, workers' compensation insurance, unemployment insurance, life insurance, and first party medical coverage, and which may be allocated indirectly based on a cost allocation plan approved by the department.

Subp. 3.

Administrative charges expense.

The "administrative charges" expense category includes:

A.

management fees, which are the amount paid for professional services provided by a management service company engaged contractually to provide operating management to the transit system;

B.

tariffs and traffic expenses, which are any necessary tariff filing fees and costs for the procurement of tickets, tokens, and transfers;

C.

advertising, marketing, and promotional charges, including the necessary cost of advertising and promoting the transit system;

D.

legal, auditing, and other professional fees rendered by individuals or firms, other than transit system employees, for the purpose of maintaining continuing operations of the transit system, including:

(1)

attorney fees and expenses, court costs, witness fees, and fees for accounting and auditing services, such as accident claims, defending workers' compensation claims, or other items directly related to the management plan and approved by the department; and

(2)

fees paid for planning, engineering, or other consultant services that are directly related to the management plan approved by the department;

E.

security costs, which are the costs necessary to provide armored car services, patrol services, and electronic surveillance for vehicles, stations, yards, and buildings to detect and prevent criminal activity, fires, and unsafe conditions, when the patrolling is performed by an outside security agency and not by transit system employees;

F.

office supplies expense, which is the cost of office supplies and materials and printing and photocopying charges solely attributable to and necessary for the operation of the transit system;

G.

lease and rental costs of administrative facilities used for performing the general administrative functions of the transit system, including leases and rentals of such items as land, buildings, office equipment, and furnishings;

H.

utilities expense, which is the cost of utilities such as gas, electricity, water, telephone and other communications services, and trash collection;

I.

other direct administrative charges, including administrative charges necessary for the continuing operation of the transit system, such as mileage reimbursement for transit support vehicles, approved conference fees, employee travel expenses, employee development, driver's training, approved membership fees for transit associations if the cost of membership is reasonably related to the value of the services or benefits received, and subscriptions to transit publications; and

J.

indirect administrative charges, which are the amount allocated to the transit contract for administrative services not traceable to a specific transit activity but which benefit the transit operation and which must be based on a cost allocation plan approved by the department.

For purposes of item I, mileage reimbursement must be based on a rate approved by the local governing body, as long as the rate is reasonable and consistent with similar rates approved by the local governing body.

Subp. 4.

Vehicle charges expense.

The "vehicle charges" expense category applies to vehicles owned or leased by the public transit system and includes:

A.

fuel and lubricants expense, including net costs of gasoline, diesel, and alternative fuels and costs of antifreeze, propane, lubricating oil, transmission fluid, and grease used by revenue and service vehicles;

B.

maintenance and repair material expense, including costs of parts, materials, and supplies used in the maintenance and repair of revenue and service equipment;

C.

contract service maintenance labor expense, which is the cost of labor for maintenance and repair service provided by persons other than transit system employees;

D.

tire expense, which is the cost of tires and tubes used on revenue and service equipment including the cost of recapping or regrooving and the rental costs for tires and tubes; and

E.

other vehicle charges, including the costs of:

(1)

first aid equipment, fire extinguishers, and other emergency equipment required for vehicles; and

(2)

noncapitalized vehicle improvements that do not remake a vehicle or appreciably extend its useful life and that have received approval from the department.

Subp. 5.

Operations charges expense.

The "operations charges" expense category includes:

A.

purchase of service, which is the cost of having a subcontractor operate the project service, with cost established:

(1)

through competitive bidding procedures, except for those recipients covered under Minnesota Statutes, chapter 221;

(2)

through a negotiated contract with the prime contractor in bid situations when only one bid is received; or

(3)

through a negotiated subcontract in a nonbid situation;

B.

depreciation, which is the amount of depreciation or use allowance on depreciable items such as structures, revenue equipment, service vehicles and equipment, and office furniture and equipment and is the amount allowed based on a company's existing depreciation schedule or, if a schedule does not already exist, a depreciation schedule submitted to and approved by the department, but which may not be charged for items purchased, totally or in part, with state or federal funds;

C.

mileage reimbursement for passenger service, including the cost of volunteer driver reimbursement for projects incorporating this type of service, as well as mileage reimbursement for transit personnel using private vehicles for emergency replacement passenger transport in the event of mechanical breakdown of transit vehicles;

D.

repair and maintenance of other property, including material costs associated with the upkeep and repair of buildings and stations, grounds, nonrevenue equipment owned or leased by the transit company, and miscellaneous expenses such as small tool replacement, and supplies used for cleaning and for general shop and garage purposes;

E.

leases and rentals of facilities or equipment used in the operation of the transit system, including leases and rentals of garages, depots, passenger vehicles, service vehicles, passenger stations, communication equipment, and computers, with allowability based on the reasonableness of rates and the presence of evidence that the lease will not give rise to material equity in the property; and

F.

other operations charges, including the cost of such things as the purchase or rental and cleaning of uniforms, tools and equipment, sanding and snowplow operations, passenger amenities, and station agents and which may be allocated indirectly based on a cost allocation plan approved by the department.

For purposes of item C, mileage reimbursement must be based on a rate approved by the local governing body, as long as the rate is reasonable and consistent with similar rates approved by the local governing body.

Subp. 6.

Insurance charges expense.

The "insurance charges" expense category includes:

A.

public liability and property damage insurance expense on vehicles, including premiums paid to insure the transit system against loss through damage to its own property and to indemnify the transit system and all financial and operational participants against loss from liability for its acts that cause damage to the person or property of others; and

B.

public liability and property damage insurance charges other than on vehicles, including excess liability insurance, baggage and express insurance, and fire and theft insurance.

Subp. 7.

Taxes and fees expense.

The "taxes and fees" expense category includes:

A.

vehicle registration and permit fees on vehicles; and

B.

other taxes and fees, including applicable real estate, property, and sales taxes.

8835.0290 UNALLOWABLE EXPENSES.

Subpart 1.

Scope.

In determining the total operating costs of a public transit system, upon which financial assistance is based, the definitions of unallowable expenses in subparts 2 to 8 apply and have the meanings given them.

Subp. 2.

General purpose equipment.

Expenditures for general purpose equipment are unallowable as operating costs. "General purpose equipment" means equipment that is used for other than transit contract purposes, such as communications equipment, office equipment and furnishings, air conditioning equipment, reproduction and printing equipment, and computers and related equipment.

Subp. 3.

Interest and other financial costs.

Interest on borrowing (however represented), bond discounts, cost of financing and refinancing operations, and legal and professional fees paid in connection with these costs are unallowable.

Subp. 4.

Fines and penalties.

Costs resulting from violations of, or failure to comply with federal, state, or local laws and regulations are unallowable.

Subp. 5.

Contingencies.

Contributions to a contingency reserve or any similar provision for unseen events are unallowable.

Subp. 6.

Bad debts.

Any losses arising from uncollectible accounts, other claims, and related costs are unallowable.

Subp. 7.

Donations and entertainment expense.

Contributions and donations are unallowable as are any entertainment expenses.

Subp. 8.

Unrelated costs.

Costs that are not directly related to the provision of public transit are unallowable.

8835.0310 REVENUE CATEGORIES.

Subpart 1.

Operating revenue categories; local sources.

In determining the local sources of funds that may comprise the fixed percentage of total operating costs to be paid by a recipient in accordance with the distribution classifications in Minnesota Statutes, sections 174.24, subdivision 3b, the definitions of revenue categories in subparts 2 to 7 apply and have the meanings given them.

Subp. 2.

Passenger fare.

"Passenger fare" means revenue earned from transporting passengers on the public transit system, including a cash fare, a donation received instead of a set fare, and an advance fare received from the sale of a coupon, token, or pass.

Subp. 3.

Contract revenue.

"Contract revenue" means revenue received from a contract with a beneficiary of a specific transit service. Contract revenue includes:

A.

an amount paid by an organization for a special route guarantee; and

B.

revenue earned for a ride given in regular transit service but paid for by an organization, including a state or local social service agency or a private social service organization, for the benefit of the rider.

Subp. 4.

School revenue.

"School revenue" means revenue earned from service provided under a contract with a school district, including an amount paid for transporting school children on regularly scheduled service, and an amount paid by a college or university for operating a transit vehicle on or between campuses.

Subp. 5.

Charter revenue.

"Charter revenue" includes reimbursement for charter service received in association with publicly funded transit service, providing that charter service rates are developed so that cost recovery equals or exceeds the full cost of providing the charter service.

Subp. 6.

Auxiliary revenue.

"Auxiliary revenue" means revenue earned from an activity closely associated with the transit operation, including revenue received from an advertising service, delivery, a lease, and station and vehicle concessions.

Subp. 7.

Other financial assistance.

"Other financial assistance" includes revenue earned from an activity not associated with the provision of the recipient's transit service but which is applied to help cover the system's costs, including tax levies, a federal cash grant, senior citizen fare assistance, investment income, and any general donation.

8835.0320 CAPITAL ASSISTANCE.

Subpart 1.

Budget.

An applicant seeking financial assistance for capital costs shall include in its budget a description of the vehicle, facility, or equipment desired, its cost and the reason for the request.

Subp. 2.

Criteria.

The department shall use the following criteria to evaluate requests for capital assistance:

A.

the extent to which the request maintains public transit services, promotes safety, and promotes efficient operations;

B.

the extent to which accessibility is enhanced; and

C.

the availability of local share money.

Subp. 3.

Allocation formula.

The department shall determine the amount of capital assistance for the public transit participation program according to the discretion provided to the commissioner in Minnesota Statutes, section 174.24, subdivision 3c. Except as provided in subparts 4 and 5, the department shall fund 80 percent of the capital costs approved by the department under the public transit participation program. The recipient shall provide the remaining 20 percent of the approved capital costs from local sources.

Subp. 4.

Program deviation from allocation formula.

Under the discretion provided to the commissioner in Minnesota Statutes, section 174.24, subdivision 3c, the department may establish a capital assistance allocation formula that deviates from the formula established in subpart 3. In setting this formula, the department must consider all relevant conditions relating to funding the public transit participation program.

Subp. 5.

Individual exception to allocation formula.

The department may deviate from the capital assistance allocation formula for an exceptional circumstance. A recipient that seeks capital assistance from the public transit participation program in an amount greater than the allocation formula, established under subpart 3 or 4, must make a written request to the department that includes:

A.

a detailed description of the exceptional circumstance that is the basis of the written request; and

B.

a resolution from the governing body that the request is due to an exceptional circumstance.

The department shall consider a request for an individual exception to the allocation formula after assessing the nature of the exceptional circumstance, balancing the request against other requests from recipients for capital assistance, and considering the assurance provided by the governing body that the circumstance that gave rise to the request is exceptional.

Subp. 6.

Vehicle replacement or disposition.

The department shall determine financial assistance to a public transit system to replace, refurbish, or dispose of a vehicle based on the condition of the vehicle and the availability of funds.

Subp. 7.

Contract.

The financial assistance contract between the department and the recipient must specify the maximum amount of capital assistance to be allocated to the recipient and the terms and conditions of assistance. The department shall determine the actual amount of capital assistance based on the availability of funds.

8835.0330 CONTRACT FOR FINANCIAL ASSISTANCE.

Subpart 1.

Content.

The financial assistance contract is a cost reimbursement contract that is based on the total operating cost in part 8835.0280. The contract must specify the maximum amount of financial assistance to be awarded to the recipient by the department and state the terms and conditions of assistance. The management plan must be incorporated into the contract as a legal part of the contract document. A resolution by the governing body, as provided in part 8835.0250, subpart 5, must be included with the contract.

Subp. 3.

Penalties.

If a recipient fails to comply with the terms and conditions of the contract, the department may withhold payment at any time or may terminate the financial assistance contract upon 30 days' written notice.

Subp. 4.

Amendments.

A recipient or the department may initiate an amendment to the contract. Before implementation, an amendment must be fully executed by the parties to the original contract, or their successors.

8835.0350 FINANCIAL RECORDS.

Subpart 1.

Records.

A recipient and any third party contractor shall maintain their financial records in accordance with generally accepted accounting principles. The records must permit audit verification of transit cost allocations claimed during the contract period. The recipient and any third party contractor also shall keep records on miles and hours of service and passenger trips. Records must be kept available for a period of six years from the date of final payment or the expiration date of the contract, whichever occurs first.

Subp. 3.

Audits.

The financial records of the recipient must be audited. They may be audited by the department or the department may accept all or part of the audit of an independent auditor instead of a departmental audit if the audit meets department standards. In addition to chapter 8835, department audits must be based on the contract cost principles and procedures in Code of Federal Regulations, title 48, chapter 1, part 31, and Office of Management and Budget Circular, Number A-87 and Number A-122, as amended. The financial records of a subcontractor may be audited at the department's discretion. The department shall submit year-end financial statements to the department auditor by April 15 of the year following the period covered by the financial assistance contract. Audits at the end of a contract period must establish approved total operating costs. New recipients are subject to a preaward audit before contract execution and fund encumbrance. As provided by Minnesota Statutes, section 16C.05, subdivision 5, the records, books, documents, and accounting practices of the recipient and of any third party contractor relating to the contract are subject to audit and examination by the department and the legislative auditor during working hours. If the department determines it has overpaid a recipient on a previous contract, the department may reduce payments under the current contract by the amount of overpayment.

Subp. 4.

Project monitoring.

The department shall use the management plan required under part 8835.0260 as a basis for monitoring and evaluating the performance of the public transit system during the contract period. Public transit policy decisions made by the recipient and actions taken during the contract period must conform with the management plan. A proposed deviation from the management plan must be reported to the department and approval secured in writing before implementation. Approval will be granted if it is clearly documented that the proposed deviation will not increase overall project costs. Failure to secure approval jeopardizes continued financial assistance.

Subp. 5.

Reserve account.

If a public transit system generates operating revenue in excess of the recipient's local share amount, the recipient shall deposit the excess into a reserve account to be used for approved operating expenses that are not covered by the contract or for part of the local share of capital expenses of the transit system. The recipient shall report this revenue and expenses charged against it to the department on reporting forms provided by the department.