HF 931

as introduced - 88th Legislature (2013 - 2014) Posted on 02/28/2013 01:28pm

A bill for an act
relating to transportation, taxes, and state government finance; amending various
provisions related to transportation finance and taxes; authorizing sale and
issuance of trunk highway bonds; making technical changes; appropriating
money; amending Minnesota Statutes 2012, sections 163.051; 168.013,
subdivision 1a; 168.31, by adding a subdivision; 296A.07, subdivision 3;
296A.08, subdivision 2; 297A.61, subdivision 3; 297A.68, subdivision 3;
297A.70, subdivisions 2, 3; 297A.815, subdivision 3; 297A.94; 297A.992,
subdivisions 2, 6; 297A.993, subdivision 1; 297B.01, subdivisions 14, 16;
297B.02, subdivision 3; 297B.03; proposing coding for new law in Minnesota
Statutes, chapter 435.

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

ARTICLE 1

TRUNK HIGHWAY BONDS

Section 1. new text begin BOND APPROPRIATIONS.
new text end

new text begin The sums shown in the column under "APPROPRIATIONS" are appropriated from
the bond proceeds account in the trunk highway fund, or another named fund, to the state
agencies or officials indicated, to be spent for public purposes. Appropriations of bond
proceeds must be spent as authorized by the Minnesota Constitution, articles XI and XIV.
Unless otherwise specified, money appropriated in this article for a capital program or
project may be used to pay state agency staff costs that are attributed directly to the capital
program or project in accordance with accounting policies adopted by the commissioner
of management and budget.
new text end

new text begin SUMMARY new text end
new text begin Department of Transportation new text end	new text begin $ new text end	new text begin 400,000,000 new text end
new text begin Department of Management and Budget new text end		new text begin 400,000 new text end
new text begin TOTAL new text end	new text begin $ new text end	new text begin 400,400,000 new text end

new text begin APPROPRIATIONS new text end

Sec. 2. new text begin DEPARTMENT OF TRANSPORTATION new text end

new text begin Subdivision 1. new text end new text begin Total Appropriation new text end

new text begin $ new text end

new text begin 400,000,000 new text end

new text begin This appropriation is to the commissioner of
transportation for the purposes specified in
this section.
new text end

new text begin Subd. 2. new text end new text begin Corridor Investment Management Strategy (CIMS) Program new text end

new text begin 200,000,000 new text end

new text begin This appropriation is in the amount of
$50,000,000 in each fiscal year for fiscal
years 2014 to 2017.
new text end

new text begin Subd. 3. new text end new text begin Transportation Economic Development (TED) Program new text end

new text begin 200,000,000 new text end

new text begin This appropriation is for the Transportation
Economic Development program under
Minnesota Statutes, section 161.04,
subdivision 6, and is in the amount of
$50,000,000 in each fiscal year for fiscal
years 2014 to 2017.
new text end

Sec. 3. new text begin BOND SALE EXPENSES new text end

new text begin $ new text end

new text begin 400,000 new text end

new text begin This appropriation is to the commissioner
of management and budget for bond sale
expenses under Minnesota Statutes, sections
16A.641, subdivision 8; and 167.50,
subdivision 4.
new text end

Sec. 4. new text begin BOND SALE AUTHORIZATION.
new text end

new text begin To provide the money appropriated in subdivision 1 from the bond proceeds account
in the trunk highway fund, the commissioner of management and budget shall sell and
issue bonds of the state in an amount up to $400,400,000 in the manner, upon the terms,
and with the effect prescribed by Minnesota Statutes, sections 167.50 to 167.52, and
by the Minnesota Constitution, article XIV, section 11, at the times and in the amounts
requested by the commissioner of transportation. The proceeds of the bonds, except
accrued interest and any premium received from the sale of the bonds, must be deposited
in the bond proceeds account in the trunk highway fund.
new text end

Sec. 5. new text begin EFFECTIVE DATE.
new text end

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

ARTICLE 2

HIGHWAY USER TAXES

Section 1.

Minnesota Statutes 2012, section 168.013, subdivision 1a, is amended to read:

Subd. 1a.

Passenger automobile; hearse.

(a) On passenger automobiles as defined
in section 168.002, subdivision 24, and hearses, except as otherwise provided, the tax
shall be deleted text begin $10 deleted text end new text begin $20 new text end plus an additional tax equal to deleted text begin 1.25 deleted text end new text begin 1.375 new text end percent of the base value new text begin ,
as adjusted under paragraph (h) new text end .

(b) Subject to the classification provisions herein, "base value" means the
manufacturer's suggested retail price of the vehicle including destination charge using list
price information published by the manufacturer or determined by the registrar if no
suggested retail price exists, and shall not include the cost of each accessory or item of
optional equipment separately added to the vehicle and the suggested retail price.

(c) If the manufacturer's list price information contains a single vehicle identification
number followed by various descriptions and suggested retail prices, the registrar shall
select from those listings only the lowest price for determining base value.

(d) If unable to determine the base value because the vehicle is specially constructed,
or for any other reason, the registrar may establish such value upon the cost price to the
purchaser or owner as evidenced by a certificate of cost but not including Minnesota sales
or use tax or any local sales or other local tax.

(e) The registrar shall classify every vehicle in its proper base value class as follows:

	FROM		TO
$	0		$ 199.99
$	200		$ 399.99

and thereafter a series of classes successively set in brackets having a spread of $200
consisting of such number of classes as will permit classification of all vehicles.

(f) The base value for purposes of this section shall be the middle point between
the extremes of its class.

(g) The registrar shall establish the base value, when new, of every passenger
automobile and hearse registered prior to the effective date of Extra Session Laws 1971,
chapter 31, using list price information published by the manufacturer or any nationally
recognized firm or association compiling such data for the automotive industry. If unable
to ascertain the base value of any registered vehicle in the foregoing manner, the registrar
may use any other available source or method. The registrar shall calculate tax using base
value information available to dealers and deputy registrars at the time the application for
registration is submitted. The tax on all previously registered vehicles shall be computed
upon the base value thus determined taking into account the depreciation provisions of
paragraph (h).

(h) The annual additional tax must be computed upon a percentage of the base value
as follows: during the first year of vehicle life, upon 100 percent of the base value; for the
second year, 90 percent of such value; for the third year, 80 percent of such value; for the
fourth year, 70 percent of such value; for the fifth year, 60 percent of such value; for the
sixth year, 50 percent of such value; for the seventh year, 40 percent of such value; for the
eighth year, 30 percent of such value; for the ninth year, 20 percent of such value; for the
tenth year, ten percent of such value; for the 11th and each succeeding year, the sum of $25.

(i) In no event shall the annual additional tax be less than $25.

(j) For any vehicle previously registered in Minnesota, the annual additional tax
due under deleted text begin this subdivision deleted text end new text begin paragraph (a) new text end must not exceed the smallest amount of annual
additional tax previously paid or due on the vehicle.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to taxes payable for a registration period starting on or after July 1, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 168.31, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Late payment penalty. new text end

new text begin (a) The owner of a vehicle subject to registration
tax under section 168.013, sections 1a to 11, owes a late payment penalty if the registration
tax due for the vehicle is not fully paid within 30 days of the first day of the registration
period for which the tax is owed. The amount of the penalty is equal to five percent of the
total registration tax amount for the registration period, rounded to the nearest dollar.
new text end

new text begin (b) The commissioner shall include notice of potential late payment penalties in
its registration tax notifications.
new text end

new text begin (c) A late payment penalty is included as a fee under this chapter, and chapters 168A
and 169, for registration and operation of the vehicle on public streets and highways,
including but not limited to requirements (1) under sections 168.09, subdivision 1, 168A.08,
and 169.79, subdivision 1; and (2) related to issuance of plates and validation stickers.
new text end

new text begin (d) Proceeds from penalties collected under this subdivision must be deposited in
the highway user tax distribution fund. Of the first dollars deposited, an amount equal to
the total start-up costs associated with implementation of this subdivision is appropriated
from the highway user tax distribution fund to the commissioner of public safety.
new text end

new text begin (e) This subdivision does not apply to (1) a vehicle for which installment payments
are made under subdivision 4 or 4a; or (2) a vehicle registered under section 168.012,
168.031, or 168.187. A late payment penalty is not subject to refund under section
168.022 or 168.16.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to taxes payable for a registration period starting on or after January 1, 2014.
new text end

Sec. 3.

Minnesota Statutes 2012, section 296A.07, subdivision 3, is amended to read:

Subd. 3.

Rate of tax.

The gasoline excise tax is imposed deleted text begin at the following rates: deleted text end new text begin as
specified in the following tax rate schedule.
new text end

deleted text begin (1) E85 is taxed at the rate of 17.75 cents per gallon;
deleted text end

deleted text begin (2) M85 is taxed at the rate of 14.25 cents per gallon; and
deleted text end

deleted text begin (3) all other gasoline is taxed at the rate of 25 cents per gallon.
deleted text end

new text begin Tax Rate Schedule (in cents per gallon) new text end
new text begin Type of Fuel new text end	new text begin Rate from October 1, 2013, to June 30, 2014 new text end	new text begin Rate in Fiscal Year 2015 new text end	new text begin Rate in Fiscal Year 2016 new text end	new text begin Rate in Fiscal Year 2017 and Thereafter new text end
new text begin E85 new text end	new text begin 21.3 new text end	new text begin 22.365 new text end	new text begin 23.43 new text end	new text begin 24.495 new text end
new text begin M85 new text end	new text begin 17.1 new text end	new text begin 17.955 new text end	new text begin 18.81 new text end	new text begin 19.665 new text end
new text begin All other gasoline new text end	new text begin 30.0 new text end	new text begin 31.5 new text end	new text begin 33.0 new text end	new text begin 34.5 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2013, and applies to all
gasoline, undyed diesel fuel, and special fuel in distributor storage on that date.
new text end

Sec. 4.

Minnesota Statutes 2012, section 296A.08, subdivision 2, is amended to read:

Subd. 2.

Rate of tax.

new text begin (a) new text end The special fuel excise tax is imposed deleted text begin at the following
rates: deleted text end new text begin as specified in the following tax rate schedule.
new text end

deleted text begin (a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.
deleted text end

deleted text begin (b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.
deleted text end

new text begin Tax Rate Schedule (in cents per gallon unless otherwise specified) new text end
new text begin Type of Fuel new text end	new text begin Rate from October 1, 2013, to June 30, 2014 new text end	new text begin Rate in Fiscal Year 2015 new text end	new text begin Rate in Fiscal Year 2016 new text end	new text begin Rate in Fiscal Year 2017 and Thereafter new text end
new text begin Liquefied petroleum gas or propane new text end	new text begin 22.5 new text end	new text begin 23.63 new text end	new text begin 24.75 new text end	new text begin 25.88 new text end
new text begin Liquefied natural gas new text end	new text begin 18.0 new text end	new text begin 18.9 new text end	new text begin 19.8 new text end	new text begin 20.7 new text end
new text begin Compressed natural gas new text end	new text begin $2.609 per thousand cubic feet, or 30.0 cents per gasoline equivalent new text end	new text begin $2.739 per thousand cubic feet, or 31.5 cents per gasoline equivalent new text end	new text begin $2.87 per thousand cubic feet, or 33.0 cents per gasoline equivalent new text end	new text begin $3.0 per thousand cubic feet, or 34.5 cents per gasoline equivalent new text end

deleted text begin (c) Compressed natural gas is taxed at the rate of $2.174 per thousand cubic feet; or
25 cents per gasoline equivalent. For purposes of this paragraph, deleted text end new text begin (b) For purposes of the
tax rate schedule under paragraph (a), new text end "gasoline equivalent," as defined by the National
Conference on Weights and Measures, is 5.66 pounds of natural gas.

deleted text begin (d) deleted text end new text begin (c) new text end All other special fuel is taxed at the same rate as the gasoline excise tax as
specified in new text begin the tax rate schedule under new text end section 296A.07, subdivision 2. The tax is payable
in the form and manner prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2013, and applies to all
gasoline, undyed diesel fuel, and special fuel in distributor storage on that date.
new text end

Sec. 5.

Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:

Subd. 3.

Motor vehicle lease sales tax revenue new text begin allocation new text end .

(a) For purposes of
this subdivision, "net revenue" means an amount equal to deleted text begin :(1) deleted text end the revenues, including
interest and penalties, collected under this section, during the fiscal year deleted text begin ; less(2) in fiscal
year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal year 2013 and
following fiscal years, $32,000,000 deleted text end .

(b) On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the deleted text begin amount of the revenues and subtraction under paragraph (a) deleted text end new text begin net revenue
new text end for the current fiscal year.

(c) On or after July 1 of the subsequent fiscal year, the commissioner of management
and budget shall transfer the net revenue as estimated in paragraph (b) from the general
fund, as follows:

(1) 50 percent to the greater Minnesota transit account; and

(2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
to the contrary, the commissioner of transportation shall allocate the funds transferred
under this clause to the counties in the metropolitan area, as defined in section 473.121,
subdivision 4, deleted text begin excluding the counties of Hennepin and Ramsey, deleted text end so that each county shall
receive of such amount the percentage that its population, as defined in section 477A.011,
subdivision 3, estimated or established by July 15 of the year prior to the current calendar
year, bears to the total population of the counties receiving funds under this clause.

deleted text begin (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
be calculated using the following percentages of the total revenues:
deleted text end

deleted text begin (1) for fiscal year 2010, 83.75 percent; and
deleted text end

deleted text begin (2) for fiscal year 2011, 93.75 percent.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective June 30, 2013.
new text end

ARTICLE 3

GENERAL SALES TAX

Section 1.

Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property in
a specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without prior
notice and including accommodations intermediary services provided in connection with
other services provided under this clause;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction; and delivery of concrete block by a third party if the
delivery would be subject to the sales tax if provided by the seller of the concrete block; deleted text begin and
deleted text end

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not including
services performed within the jurisdiction they serve by off-duty licensed peace officers as
defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
for monitoring and electronic surveillance of persons placed on in-home detention
pursuant to court order or under the direction of the Minnesota Department of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services deleted text begin . deleted text end new text begin ; and
new text end

new text begin (7) the repair and maintenance of motor vehicles; excluding repair and maintenance
covered by a warranty, service contract, or a manufacturer's recall.
new text end

new text begin (h) A sale and a purchase include the furnishing for consideration of a warranty or
service contract for the repair or maintenance of a motor vehicle.
new text end

In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).

For purposes of clause (5), "road construction" means construction of (1) public
roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
metropolitan area up to the point of the emergency response location sign.

deleted text begin (h) deleted text end new text begin (i) new text end A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

deleted text begin (i) deleted text end new text begin (j) new text end A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, cable television services, and direct satellite services. Telecommunication
services include, but are not limited to, the following services, as defined in section
297A.669: air-to-ground radiotelephone service, mobile telecommunication service,
postpaid calling service, prepaid calling service, prepaid wireless calling service, and
private communication services. The services in this paragraph are taxed to the extent
allowed under federal law.

deleted text begin (j) deleted text end new text begin (k) new text end A sale and a purchase includes the furnishing for a consideration of installation
if the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

deleted text begin (k) deleted text end new text begin (l) new text end A sale and a purchase includes the rental of a vehicle by a motor vehicle
dealer to a customer when (1) the vehicle is rented by the customer for a consideration,
or (2) the motor vehicle dealer is reimbursed pursuant to a service contract as defined in
section 59B.02, subdivision 11.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 297A.68, subdivision 3, is amended to read:

Subd. 3.

Materials used in providing certain taxable services.

(a) Materials stored,
used, or consumed in providing a taxable service listed in section 297A.61, subdivision 3,
paragraph (g), deleted text begin clause deleted text end new text begin clauses new text end (6) new text begin and (7) new text end , intended to be sold ultimately at retail are exempt.

(b) This exemption includes, but is not limited to:

(1) chemicals, lubricants, packaging materials, seeds, trees, fertilizers, and
herbicides, if these items are used or consumed in providing the taxable service;

(2) chemicals used to treat waste generated as a result of providing the taxable service;

(3) accessory tools, equipment, and other items that are separate detachable units used
in providing the service and that have an ordinary useful life of less than 12 months; deleted text begin and
deleted text end

(4) fuel, electricity, gas, and steam used or consumed in the production process,
except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt
if (i) it is in excess of average climate control or lighting, and (ii) it is necessary to produce
that particular service deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) parts and materials incorporated into a motor vehicle as part of automotive repair.
new text end

(c) This exemption does not include machinery, equipment, implements, tools,
accessories, appliances, contrivances, furniture, and fixtures used in providing the taxable
service.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

new text begin (5) purchasers of goods and services by a local government for transit purposes if
the purchase is funded by revenue from the metropolitan area transit account under section
16A.88 or the greater Minnesota transit account under section 16A.88;
new text end

deleted text begin (5) deleted text end new text begin (6) new text end other states or political subdivisions of other states, if the sale would be
exempt from taxation if it occurred in that state;

deleted text begin (6) deleted text end new text begin (7) new text end public libraries, public library systems, multicounty, multitype library systems
as defined in section 134.001, county law libraries under chapter 134A, state agency
libraries, the state library under section 480.09, and the Legislative Reference Library; and

deleted text begin (7) deleted text end new text begin (8) new text end towns.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
except for leases entered into by the United States or its agencies or instrumentalities;

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, and alcoholic
beverages purchased directly by the United States or its agencies or instrumentalities; or

(5) goods or services purchased by a town as inputs to goods and services that are
generally provided by a private business and the purchases would be taxable if made by a
private business engaged in the same activity.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

(d) As used in this subdivision, "goods or services generally provided by a private
business" include, but are not limited to, goods or services provided by liquor stores, gas
and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
and laundromats. "Goods or services generally provided by a private business" do not
include housing services, sewer and water services, wastewater treatment, ambulance and
other public safety services, correctional services, chore or homemaking services provided
to elderly or disabled individuals, or road and street maintenance or lighting.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 297A.70, subdivision 3, is amended to read:

Subd. 3.

Sales of certain goods and services to government.

(a) The following
sales to or use by the specified governments and political subdivisions of the state are
exempt:

(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
fire apparatus to a political subdivision;

(2) machinery and equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10;

(3) chore and homemaking services to a political subdivision of the state to be
provided to elderly or disabled individuals;

(4) telephone services to the Office of Enterprise Technology that are used to provide
telecommunications services through the enterprise technology revolving fund;

(5) firefighter personal protective equipment as defined in paragraph (b), if purchased
or authorized by and for the use of an organized fire department, fire protection district, or
fire company regularly charged with the responsibility of providing fire protection to the
state or a political subdivision;

(6) bullet-resistant body armor that provides the wearer with ballistic and trauma
protection, if purchased by a law enforcement agency of the state or a political subdivision
of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;

(7) motor vehicles purchased or leased by political subdivisions of the state if the
vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
under section 297B.03, clause deleted text begin (12) deleted text end new text begin (11) new text end ;

(8) equipment designed to process, dewater, and recycle biosolids for wastewater
treatment facilities of political subdivisions, and materials incidental to installation of
that equipment;

(9) the removal of trees, bushes, or shrubs for the construction and maintenance
of roads, trails, or firebreaks when purchased by an agency of the state or a political
subdivision of the state;

(10) purchases by the Metropolitan Council or the Department of Transportation of
vehicles and repair parts to equip operations provided for in section 174.90, including,
but not limited to, the Northstar Corridor Rail project; deleted text begin and
deleted text end

(11) purchases of water used directly in providing public safety services by an
organized fire department, fire protection district, or fire company regularly charged with
the responsibility of providing fire protection to the state or a political subdivision deleted text begin . deleted text end new text begin ; and
new text end

new text begin (12) taxable services purchased by:
new text end

new text begin (i) the Department of Transportation and funded by revenues from the trunk highway
fund;
new text end

new text begin (ii) a county and funded by revenues from the county state-aid highway fund; or
new text end

new text begin (iii) a home-rule charter or statutory city and funded by revenues from the municipal
state-aid street fund.
new text end

(b) For purposes of this subdivision, "firefighters personal protective equipment"
means helmets, including face shields, chin straps, and neck liners; bunker coats and
pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
personal alert safety systems; spanner belts; optical or thermal imaging search devices;
and all safety equipment required by the Occupational Safety and Health Administration.

(c) For purchases of items listed in paragraph (a), clause (10), the tax must be
imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
then refunded in the manner provided in section 297A.75.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2013.
new text end

Sec. 5.

Minnesota Statutes 2012, section 297A.94, is amended to read:

297A.94 DEPOSIT OF REVENUES.

(a) Except as provided in this section, the commissioner shall deposit the revenues,
including interest and penalties, derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for
the construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment
was made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of management and budget shall certify to the commissioner the date
on which the project received the conditional commitment. The amount deposited in
the loan guaranty account must be reduced by any refunds and by the costs incurred by
the Department of Revenue to administer and enforce the assessment and collection of
the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties,
derived from the taxes imposed on sales and purchases included in section 297A.61,
subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them
as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general fund.

(d) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.

(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
penalties, transmitted to the commissioner under section 297A.65, must be deposited by
the commissioner in the state treasury as follows:

(1) 50 percent of the receipts must be deposited in the heritage enhancement account
in the game and fish fund, and may be spent only on activities that improve, enhance, or
protect fish and wildlife resources, including conservation, restoration, and enhancement
of land, water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and

(5) two percent of the receipts must be deposited in the natural resources fund,
and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
Conservatory, and the Duluth Zoo.

(f) The revenue dedicated under paragraph (e) may not be used as a substitute
for traditional sources of funding for the purposes specified, but the dedicated revenue
shall supplement traditional sources of funding for those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to public
hunting and fishing during the open season, except that in aquatic management areas or
on lands where angling easements have been acquired, fishing may be prohibited during
certain times of the year and hunting may be prohibited. At least 87 percent of the money
deposited in the game and fish fund for improvement, enhancement, or protection of fish
and wildlife resources under paragraph (e) must be allocated for field operations.

(g) new text begin On or before June 30 of each fiscal year, the commissioner shall estimate the
revenues, including interest and penalties collected during the fiscal year, on sales made
by and sales made to all vendors classified as auto repair and maintenance businesses
under the North American Industry Classification System code number 8111, minus any
refunds made on those sales and purchases. On or after July 1 of the subsequent fiscal
year, the commissioner of management and budget shall transfer from the general fund the
amounts in clauses (1) and (2) estimated under this paragraph:
new text end

new text begin (1) 50 percent to the greater Minnesota transit account in the transit assistance
fund; and
new text end

new text begin (2) 50 percent to the county state-aid highway fund.
new text end

new text begin (h) new text end The revenues deposited under paragraphs (a) to deleted text begin (f) deleted text end new text begin (g) new text end do not include the
revenues, including interest and penalties, generated by the sales tax imposed under
section 297A.62, subdivision 1a, which must be deposited as provided under the
Minnesota Constitution, article XI, section 15.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenues collected in fiscal year
2014 and thereafter.
new text end

ARTICLE 4

MOTOR VEHICLE SALES TAX

Section 1.

Minnesota Statutes 2012, section 297B.01, subdivision 14, is amended to
read:

Subd. 14.

Purchase price.

(a) "Purchase price" means the total consideration
valued in money for a sale, whether paid in money or otherwise. The purchase price
excludes the amount of a manufacturer's rebate paid or payable to the purchaser. If a motor
vehicle is taken in trade as a credit or as part payment on a motor vehicle taxable under
this chapter, the credit or trade-in value allowed by the person selling the motor vehicle
shall be deducted from the total selling price to establish the purchase price of the vehicle
being sold and the trade-in allowance allowed by the seller shall constitute the purchase
price of the motor vehicle accepted as a trade-in. The purchase price in those instances
where the motor vehicle is acquired by gift or by any other transfer for a nominal or no
monetary consideration shall also include the average value of similar motor vehicles,
established by standards and guides as determined by the motor vehicle registrar. The
purchase price in those instances where a motor vehicle is manufactured by a person who
registers it under the laws of this state shall mean the manufactured cost of such motor
vehicle and manufactured cost shall mean the amount expended for materials, labor,
and other properly allocable costs of manufacture, except that in the absence of actual
expenditures for the manufacture of a part or all of the motor vehicle, manufactured costs
shall mean the reasonable value of the completed motor vehicle.

(b) The term "purchase price" shall not include the portion of the value of a motor
vehicle due solely to modifications necessary to make the motor vehicle disability
accessible.

(c) The term "purchase price" shall not include the transfer of a motor vehicle by
way of gift between a husband and wife or parent and child, or to a nonprofit organization
as provided under subdivision 16, paragraph (c), clause deleted text begin (5) deleted text end new text begin (6) new text end , nor shall it include
the transfer of a motor vehicle by a guardian to a ward when there is no monetary
consideration and the title to such vehicle was registered in the name of the guardian, as
guardian, only because the ward was a minor.

(d) The term "purchase price" shall not include the transfer of a motor vehicle as a
gift between a foster parent and foster child. For purposes of this subdivision, a foster
relationship exists, regardless of the age of the child, if (1) a foster parent's home is or was
licensed as a foster family home under Minnesota Rules, parts 9545.0010 to 9545.0260,
and (2) the county verifies that the child was a state ward or in permanent foster care.

(e) There shall not be included in "purchase price" the amount of any tax imposed by
the United States upon or with respect to retail sales whether imposed upon the retailer or
the consumer.

Sec. 2.

Minnesota Statutes 2012, section 297B.01, subdivision 16, is amended to read:

Subd. 16.

Sale, sells, selling, purchase, purchased, or acquired.

(a) "Sale,"
"sells," "selling," "purchase," "purchased," or "acquired" means any transfer of title of any
motor vehicle, whether absolutely or conditionally, for a consideration in money or by
exchange or barter for any purpose other than resale in the regular course of business.

(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.

(c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:

(1) the acquisition of a motor vehicle by inheritance from or by bequest of, a
decedent who owned it;

(2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;

(3) the transfer of a motor vehicle by way of deleted text begin gift between individuals, or deleted text end gift
from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an
individual, when the transfer is with no monetary or other consideration or expectation
of consideration and the parties to the transfer submit an affidavit to that effect at the
time the title transfer is recorded;

(4) new text begin the transfer of a motor vehicle by gift between spouses or between parent and
child;
new text end

new text begin (5) new text end the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or

deleted text begin (5) deleted text end new text begin (6) new text end the transfer of a motor vehicle by way of a gift to an organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code when
the motor vehicle will be used exclusively for religious, charitable, or educational purposes.

Sec. 3.

Minnesota Statutes 2012, section 297B.02, subdivision 3, is amended to read:

Subd. 3.

In lieu tax for collector vehicle.

In lieu of the tax imposed in subdivision
1, there is imposed a tax of deleted text begin $90 deleted text end new text begin $150 new text end on the purchase price of a passenger automobile or a
fire truck described in section 297B.025, subdivision 2.

Sec. 4.

Minnesota Statutes 2012, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;

deleted text begin (2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end purchase or use of any motor vehicle by any person making a valid election
to be taxed under the provisions of section 297A.90;

deleted text begin (4) deleted text end new text begin (3) new text end purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code;

deleted text begin (5) deleted text end new text begin (4) new text end purchase or use of any vehicle owned by a resident of another state and
leased to a Minnesota-based private or for-hire carrier for regular use in the transportation
of persons or property in interstate commerce provided the vehicle is titled in the state
of the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;

deleted text begin (6) deleted text end new text begin (5) new text end purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;

deleted text begin (7) deleted text end new text begin (6) new text end purchase of a motor vehicle by an ambulance service licensed under section
144E.10 when that vehicle is equipped and specifically intended for emergency response
or for providing ambulance service;

deleted text begin (8) deleted text end new text begin (7) new text end purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2, as a bookmobile or library delivery vehicle;

deleted text begin (9) deleted text end new text begin (8) new text end purchase of a ready-mixed concrete truck;

deleted text begin (10) deleted text end new text begin (9) new text end purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;

deleted text begin (11) deleted text end new text begin (10) new text end purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious, or
educational purposes, except a public school, university, or library, but only if the vehicle is:

(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
passenger automobile, as defined in section 168.002, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(ii) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose;

deleted text begin (12) deleted text end new text begin (11) new text end purchase of a motor vehicle for use by a transit provider exclusively to
provide transit service is exempt if the transit provider is either (i) receiving financial
assistance or reimbursement under section 174.24 or 473.384, or (ii) operating under
section 174.29, 473.388, or 473.405;

deleted text begin (13) deleted text end new text begin (12) new text end purchase or use of a motor vehicle by a qualified business, as defined
in section 469.310, located in a job opportunity building zone, if the motor vehicle is
principally garaged in the job opportunity building zone and is primarily used as part of or
in direct support of the person's operations carried on in the job opportunity building zone.
The exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax;

deleted text begin (14) deleted text end new text begin (13) new text end purchase of a leased vehicle by the lessee who was a participant in a
lease-to-own program from a charitable organization that is:

(i) described in section 501(c)(3) of the Internal Revenue Code; and

(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and

deleted text begin (15) deleted text end new text begin (14) new text end purchase of a motor vehicle used exclusively as a mobile medical unit
for the provision of medical or dental services by a federally qualified health center, as
defined under title 19 of the Social Security Act, as amended by Section 4161 of the
Omnibus Budget Reconciliation Act of 1990.

Sec. 5. new text begin EFFECTIVE DATE.
new text end

new text begin Except as otherwise specified, sections 1 to 4 are effective July 1, 2013, and apply to
transfers of title that occur on or after that date.
new text end

ARTICLE 5

LOCAL OPTION TRANSPORTATION FINANCE

Section 1.

Minnesota Statutes 2012, section 163.051, is amended to read:

163.051 deleted text begin METROPOLITAN deleted text end COUNTY WHEELAGE TAX.

Subdivision 1.

Tax authorized.

(a) Except as provided in paragraph (b), the board
of commissioners of each deleted text begin metropolitan deleted text end county is authorized to levy new text begin by resolution new text end a
wheelage tax deleted text begin of $5 for the year 1972 deleted text end new text begin in an amount set by the county for calendar year
2014 new text end and each subsequent year thereafter deleted text begin by resolution deleted text end on each motor vehicle that is kept
in such county when not in operation and that is subject to annual registration and taxation
under chapter 168. The board may provide by resolution for collection of the wheelage
tax by county officials or it may request that the tax be collected by the state registrar of
motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf
of the county if requested, as provided in subdivision 2.

(b) The following vehicles are exempt from the wheelage tax:

(1) motorcycles, as defined in section 169.011, subdivision 44;

(2) motorized bicycles, as defined in section 169.011, subdivision 45; new text begin and
new text end

(3) deleted text begin electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
deleted text end

deleted text begin (4) deleted text end motorized foot scooters, as defined in section 169.011, subdivision 46.

Subd. 2.

Collection by registrar of motor vehicles.

The wheelage tax levied by
any deleted text begin metropolitan deleted text end county, if made collectible by the state registrar of motor vehicles,
shall be certified by the county auditor to the registrar not later than August 1 in the year
before the calendar year or years for which the tax is levied, and the registrar shall collect
such tax with the motor vehicle taxes on the affected vehicles for such year or years.
Every owner and every operator of such a motor vehicle shall furnish to the registrar all
information requested by the registrar. No state motor vehicle tax on any such motor
vehicle for any such year shall be received or deemed paid unless the applicable wheelage
tax is paid therewith. deleted text begin The proceeds of the wheelage tax levied by any metropolitan county,
less any amount retained by the registrar to pay costs of collection of the wheelage tax,
shall be paid to the commissioner of management and budget and deposited in the state
treasury to the credit of the county wheelage tax fund of each metropolitan county.
deleted text end

Subd. 2a.

Tax proceeds deposited; costs of collection; appropriation.

Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall
deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the
county wheelage tax deleted text begin fund deleted text end new text begin account new text end of each deleted text begin metropolitan deleted text end county. The amount necessary to
pay the costs of collection of said tax is appropriated from the county wheelage tax deleted text begin fund
deleted text end new text begin account new text end of each deleted text begin metropolitan deleted text end county to the state registrar of motor vehicles.

Subd. 3.

Distribution to deleted text begin metropolitan deleted text end county; appropriation.

deleted text begin On or before April
1 in 1972 and each subsequent year, the commissioner of management and budget deleted text end new text begin On a
monthly basis, the state registrar of motor vehicles new text end shall issue a warrant in favor of the
treasurer of each deleted text begin metropolitan deleted text end county for which the registrar has collected a wheelage tax
in the amount of such tax then on hand in the county wheelage tax deleted text begin fund deleted text end new text begin account new text end . There
is hereby appropriated from the county wheelage tax deleted text begin fund deleted text end new text begin account new text end each year, to each
deleted text begin metropolitan deleted text end county entitled to payments authorized by this section, sufficient deleted text begin moneys
deleted text end new text begin money new text end to make such payments.

Subd. 4.

Use of tax.

The treasurer of each deleted text begin metropolitan deleted text end county receiving deleted text begin moneys
deleted text end new text begin money new text end under subdivision 3 shall deposit such deleted text begin moneys deleted text end new text begin money new text end in the county road and
bridge fund. The deleted text begin moneys deleted text end new text begin money new text end shall be used for purposes authorized by law which are
highway purposes within the meaning of the Minnesota Constitution, article 14.

deleted text begin Subd. 6. deleted text end

deleted text begin Metropolitan county defined. deleted text end

deleted text begin "Metropolitan county" means any of the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
deleted text end

Subd. 7.

Offenses; penalties; application of other laws.

new text begin (a) new text end Any owner or operator
of a motor vehicle who deleted text begin shall deleted text end willfully deleted text begin give deleted text end new text begin gives new text end any false information relative to the tax
deleted text begin herein deleted text end authorized new text begin under this section new text end to the registrar of motor vehicles or any deleted text begin metropolitan
deleted text end county, or who deleted text begin shall deleted text end willfully deleted text begin fail or refuse deleted text end new text begin fails or refuses new text end to furnish any such information,
deleted text begin shall be deleted text end new text begin is new text end guilty of a misdemeanor.

new text begin (b) new text end Except as otherwise deleted text begin herein deleted text end provided new text begin under this section new text end , the collection and payment
of a wheelage tax and all matters relating thereto deleted text begin shall be deleted text end new text begin are new text end subject to all provisions of
law relating to collection and payment of motor vehicle taxes so far as applicable.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2013.
new text end

Sec. 2.

Minnesota Statutes 2012, section 297A.992, subdivision 2, is amended to read:

Subd. 2.

Authorization; rates.

(a) Notwithstanding section 297A.99, subdivisions
1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a
joint powers agreement as specified in this section shall impose by resolution (1) a
transportation sales and use tax at a rate of deleted text begin one-quarter deleted text end new text begin three-fourths new text end of one percent on
retail sales and uses taxable under this chapter, and (2) an excise tax of $20 per motor
vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired from any
person engaged in the business of selling motor vehicles at retail, occurring within the
jurisdiction of the taxing authority. The taxes authorized are to fund transportation
improvements as specified in this section, including debt service on obligations issued
to finance such improvements pursuant to subdivision 7.

(b) The tax imposed under this section is not included in determining if the total tax
on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
12, section 87, or in determining a tax that may be imposed under any other limitations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 3.

Minnesota Statutes 2012, section 297A.992, subdivision 6, is amended to read:

Subd. 6.

Allocation of grant awards.

(a) The board must allocate grant awards
deleted text begin only deleted text end new text begin as follows:
new text end

new text begin (1) two-thirds new text end for the following transit purposes:

(i) capital improvements to transit ways, including, but not limited to, commuter
rail rolling stock, light rail vehicles, and transit way buses;

(ii) capital costs for park-and-ride facilities, as defined in section 174.256,
subdivision 2;

(iii) feasibility studies, planning, alternatives analyses, environmental studies,
engineering, property acquisition for transit way purposes, and construction of transit
ways; and

(iv) operating assistance for transit ways new text begin ; and
new text end

new text begin (2) one-third for construction, reconstruction, or maintenance of county highways new text end .

(b) The joint powers board must annually award grants to each minimum guarantee
county in an amount no less than the amount of sales tax revenue collected within that
county.

(c) No more than 1.25 percent of the deleted text begin total deleted text end awards new text begin under paragraph (a), clause (1),
new text end may be annually allocated for planning, studies, design, construction, maintenance, and
operation of pedestrian programs and bicycle programs and pathways.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 4.

Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:

Subdivision 1.

Authorization; rates.

Notwithstanding section 297A.99,
subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
more than one county outside the metropolitan transportation area acting under a joint
powers agreement, may new text begin by resolution of the county board, or each of the county boards,
following a public hearing new text end impose (1) a transportation sales tax at a rate of up to one-half
of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax
of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
acquired from any person engaged in the business of selling motor vehicles at retail,
occurring within the jurisdiction of the taxing authority. deleted text begin The taxes imposed under this
section are subject to approval by a majority of the voters in each of the counties affected
at a general election who vote on the question to impose the taxes.
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. 5.

new text begin [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

new text begin (b) "Governing body" means the city council of a municipality.
new text end

new text begin (c) "Improvements" means construction, reconstruction, and facility upgrades
involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
markings; boulevard and easement restoration; impact mitigation; connection and
reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
alternative analyses, environmental studies, engineering, or construction of transit ways;
or operating assistance for transit ways.
new text end

new text begin (d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
sidewalk maintenance, signal maintenance, street light maintenance, and signage.
new text end

new text begin (e) "Municipal street" means a street, alley, or public way in which the municipality
is the road authority with powers conferred by section 429.021.
new text end

new text begin (f) "Municipality" means a home rule charter or statutory city.
new text end

new text begin (g) "Street improvement district" means a geographic area designated by a
municipality and located within the municipality within which street improvements and
maintenance may be undertaken and financed according to this section.
new text end

new text begin Subd. 2. new text end

new text begin Authorization. new text end

new text begin A municipality may establish by ordinance municipal
street improvement districts and may defray all or part of the total costs of municipal
street improvements and maintenance by apportioning street improvement fees to all of
the parcels located in the district.
new text end

new text begin Subd. 3. new text end

new text begin Uniformity. new text end

new text begin The total costs of municipal street improvements and
maintenance must be apportioned to all parcels or tracts of land located in the established
street improvement district on a uniform basis within each classification of real estate.
new text end

new text begin Subd. 4. new text end

new text begin Adoption of plan. new text end

new text begin Before establishing a municipal street improvement
district or authorizing a street improvement fee, a municipality must propose and adopt a
street improvement plan that identifies the location of the municipal street improvement
district and identifies and estimates the costs of the proposed improvements during the
proposed period of collection of municipal street improvement fees, which must be for
a period of at least five years and at most 20 years. Notice of a public hearing on the
proposed plan must be given by mail to all affected landowners at least ten days before
the hearing and posted for at least ten days before the hearing. At the public hearing, the
governing body must present the plan and all affected landowners in attendance must have
the opportunity to comment before the governing body considers adoption of the plan.
new text end

new text begin Subd. 5. new text end

new text begin Citywide districts. new text end

new text begin A municipality that establishes a street improvement
district that encompasses the entire political jurisdiction may adjust the fees annually as
part of the annual budget process, utilizing truth in taxation notices and hearings to satisfy
the notice and hearing requirements in this section. A citywide district may be renewed
annually for an indefinite period.
new text end

new text begin Subd. 6. new text end

new text begin Use of fees. new text end

new text begin Revenues from street improvement fees must be placed in
a separate account and used only for projects located within the district and identified
in the municipal street improvement plan.
new text end

new text begin Subd. 7. new text end

new text begin Collection; up to 20 years. new text end

new text begin (a) An ordinance adopted under this section
must provide for billing and payment of the fee on a monthly, quarterly, or other basis
as directed by the governing body. The governing body may collect municipal street
improvement fees within a street improvement district for a maximum of 20 years.
new text end

new text begin (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
days may be certified to the county auditor for collection as a special assessment payable
in the following calendar year against the affected property.
new text end

new text begin Subd. 8. new text end

new text begin Notice; hearings. new text end

new text begin A municipality may impose a municipal street
improvement fee by ordinance. The ordinance must not be voted on or adopted until after
a public hearing has been held on the question.
new text end

new text begin Subd. 9. new text end

new text begin Not exclusive means of financing improvements. new text end

new text begin The use of the
municipal street improvement fee by a municipality does not restrict the municipality from
imposing other measures to pay the costs of local street improvements or maintenance,
except that a municipality must not impose special assessments for projects funded with
street improvement fees.
new text end