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SF 3524

as introduced - 89th Legislature (2015 - 2016) Posted on 04/15/2016 08:51am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to transportation; establishing the governor's supplemental budget
for transportation; appropriating money for transportation and public safety
activities; establishing a gross receipts motor fuels tax; modifying the
metropolitan area transit sales tax; amending provisions governing transportation
finance; authorizing sale and issuance of trunk highway bonds; authorizing
rulemaking; requiring reports; providing penalties; amending Minnesota
Statutes 2014, sections 168.013, subdivisions 1a, 21; 168A.29, subdivision 1;
171.06, subdivision 2; 219.015, subdivisions 1, 2; 219.1651; 222.49; 222.50,
subdivision 6; 296A.11; 296A.12; 296A.16, subdivisions 1, 2, 3, 4, 4a, 4b,
5; 296A.18, subdivisions 2, 3, 4, 5, 6, 7; 297A.99, subdivision 1; 299D.03,
subdivision 5; 360.013, by adding a subdivision; 360.075, subdivision 1, by
adding subdivisions; 360.55, by adding a subdivision; Minnesota Statutes 2015
Supplement, section 222.50, subdivision 7; Laws 2015, chapter 75, article 1,
sections 3, subdivisions 1, 2, 3, 4; 5, subdivision 3; proposing coding for new
law in Minnesota Statutes, chapters 174; 219; 296A; 297A; 360; 473; repealing
Minnesota Statutes 2014, section 473.4051, subdivision 2.

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

ARTICLE 1

TRANSPORTATION APPROPRIATIONS

Section 1.

Laws 2015, chapter 75, article 1, section 3, subdivision 1, is amended to read:


Subdivision 1.

Total Appropriation

$
2,488,269,000
2,508,269,000
$
2,496,573,000
2,911,272,000
Appropriations by Fund
2016
2017
General
44,115,000
21,058,000
34,871,000
Airports
25,109,000
25,109,000
35,681,000
C.S.A.H.
670,768,000
698,495,000
805,898,000
M.S.A.S.
170,743,000
178,141,000
206,353,000
Trunk Highway
1,577,534,000
1,597,534,000
1,573,770,000
1,828,469,000

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Sec. 2.

Laws 2015, chapter 75, article 1, section 3, subdivision 2, is amended to read:


Subd. 2.

Multimodal Systems

(a) Aeronautics

(1) Airport Development and Assistance
19,798,000
19,798,000

This appropriation is from the state
airports fund and must be spent according
to Minnesota Statutes, section 360.305,
subdivision 4
.

The base appropriation in each of fiscal years
2018 and 2019 is $14,298,000.

Notwithstanding Minnesota Statutes, section
16A.28, subdivision 6, this appropriation is
available for five years after appropriation.
If the appropriation for either year is
insufficient, the appropriation for the other
year is available for it.

(2) Aviation Support and Services
6,661,000
6,661,000
6,974,000
Appropriations by Fund
2016
2017
Airports
5,311,000
5,311,000
5,624,000
Trunk Highway
1,350,000
1,350,000

$80,000 in each year is from the state airports
fund for the Civil Air Patrol.

$313,000 in the second year is for software
system upgrades needed to accommodate
the regulation of unmanned aircraft systems
under Minnesota Statutes, sections 360.55,
subdivision 9, and 360.591, through
aircraft regulation and commercial operator
licensing. This a onetime appropriation.

The base appropriation from the trunk
highway fund in fiscal year 2018 is
$1,479,000 and in fiscal year 2019 is
$1,623,000.

(b) Transit
20,543,000
20,567,000
30,567,000
Appropriations by Fund
2016
2017
General
19,745,000
19,745,000
29,745,000
Trunk Highway
798,000
822,000

The base appropriation from the general
fund in each of fiscal years 2018 and 2019 is
$17,245,000 $27,245,000.

The base appropriation from the trunk
highway fund in fiscal year 2018 is $846,000
and in fiscal year 2019 is $873,000.

(c) Safe Routes to School
500,000
500,000
3,000,000

This appropriation is from the general fund
for the safe routes to school program under
Minnesota Statutes, section 174.40.

(d) Passenger Rail
500,000
500,000

This appropriation is from the general
fund for passenger rail system planning,
alternatives analysis, environmental analysis,
design, and preliminary engineering under
Minnesota Statutes, sections 174.632 to
174.636.

(e) Freight
13,445,000
5,452,000
6,765,000
Appropriations by Fund
2016
2017
General
8,401,000
256,000
1,569,000
Trunk Highway
5,044,000
5,196,000

$1,313,000 in the second year is from the
general fund to pay for (1) an interagency
rail director, and (2) freight and rail planning,
engineering, administration, and related
activities.

$145,000 in the first year is from the general
fund for a grant to the Minnesota Commercial
Railway for emergency temporary repairs
to approximately 6.5 miles of railroad track
described as that portion of the Minnesota
Commercial main running lead, between
M&D Junction in White Bear Lake and the
end of track in Hugo.

$3,000,000 in the first year is from the
general fund for port development assistance
program grants under Minnesota Statutes,
chapter 457A. Any improvements made with
the proceeds of these grants must be publicly
owned. This is a onetime appropriation and
is available in the second year.

$5,000,000 in the first year is from the
general fund for rail grade crossing
safety improvements. This is a onetime
appropriation and is available in the second
year.

The base appropriation from the trunk
highway fund in fiscal year 2018 is
$5,350,000 and in fiscal year 2019 is
$5,522,000.

The base appropriation from the general
fund in each of fiscal years 2018 and 2019
is $441,000.

Sec. 3.

Laws 2015, chapter 75, article 1, section 3, subdivision 3, is amended to read:


Subd. 3.

State Roads

(a) Operations and Maintenance
288,405,000
290,916,000
300,633,000

$65,000,000 in the first year and $65,000,000
in the second year are for snow and ice
management. If the appropriation in either
year is insufficient, the appropriation
for the other year is available for it. If
the appropriation in either fiscal year is
insufficient, the commissioner may transfer
an amount of up to $13,000,000 from
the remainder of the appropriation for
general operations and maintenance. If a
balance remains of this appropriation, the
commissioner may transfer up to that amount
for general operations and maintenance.

The base appropriation in fiscal year 2018
is $292,140,000 $308,747,000 and in fiscal
year 2019 is $301,545,000 $318,874,000.

(b) Program Planning and Delivery
237,529,000
231,252,000
262,157,000

$130,000 in each year is available for
administrative costs of the targeted group
business program.

$266,000 in each year is available for grants
to metropolitan planning organizations
outside the seven-county metropolitan area.

$900,000 in each year is available for
grants for transportation studies outside
the metropolitan area to identify critical
concerns, problems, and issues. These
grants are available: (1) to regional
development commissions; (2) in regions
where no regional development commission
is functioning, to joint powers boards
established under agreement of two or
more political subdivisions in the region to
exercise the planning functions of a regional
development commission; and (3) in regions
where no regional development commission
or joint powers board is functioning, to the
department's district office for that region.

$1,000,000 in each year is available
for management of contaminated and
regulated material on property owned by
the Department of Transportation, including
mitigation of property conveyances, facility
acquisition or expansion, chemical release at
maintenance facilities, and spills on the trunk
highway system where there is no known
responsible party. If the appropriation for
either year is insufficient, the appropriation
for the other year is available for it.

$6,804,000 in the first year and $1,000,000 in
the second year are available for the purposes
stated in Minnesota Statutes, section 12A.16,
subdivision 2
.

The base appropriation for program
planning and delivery in fiscal year 2018
is $227,004,000 $277,790,000 and in fiscal
year 2019 is $234,331,000 $282,600,000.

(c) State Road Construction
779,664,000
799,664,000
744,166,000
955,056,000

This appropriation is for the actual
construction, reconstruction, and
improvement of trunk highways, including
design-build contracts, internal department
costs associated with delivering the
construction program, and consultant usage
to support these activities. This includes the
cost of actual payment to landowners for
lands acquired for highway rights-of-way,
payment to lessees, interest subsidies, and
relocation expenses.

$1,000,000 in the first year is to complete
projects using funds made available to
the commissioner of transportation under
title XII of the American Recovery and
Reinvestment Act of 2009, Public Law
111-5, and implemented under Minnesota
Statutes, section 161.36, subdivision 7.

$10,000,000 in each year is for the
transportation economic development
program under Minnesota Statutes, section
174.12.

The commissioner may expend up to one-half
of one percent of the federal appropriations
under this paragraph as grants to opportunity
industrialization centers and other nonprofit
job training centers for job training programs
related to highway construction.

The commissioner may transfer up to
$15,000,000 each year to the transportation
revolving loan fund.

The commissioner may receive money
covering other shares of the cost of
partnership projects. These receipts are
appropriated to the commissioner for these
projects.

The base appropriation for state road
construction in each of fiscal years year 2018
is $953,757,000 and in fiscal year 2019 is
$695,800,000 $931,467,000.

(d) Highway Debt Service
197,381,000
231,199,000
218,020,000

$187,881,000 the first year and $221,699,000
$208,520,000
the second year are for transfer
to the state bond fund. If this appropriation
is insufficient to make all transfers required
in the year for which it is made, the
commissioner of management and budget
shall transfer the deficiency amount under
the statutory open appropriation, and notify
the chairs and ranking minority members of
the legislative committees with jurisdiction
over transportation finance and the chairs of
the senate Committee on Finance and the
house of representatives Committee on Ways
and Means of the amount of the deficiency.
Any excess appropriation cancels to the
trunk highway fund.

(e) Statewide Radio Communications
5,358,000
5,486,000
Appropriations by Fund
2016
2017
General
35,000
3,000
Trunk Highway
5,323,000
5,483,000

$3,000 in each year is from the general fund to
equip and operate the Roosevelt signal tower
for Lake of the Woods weather broadcasting.

$32,000 in the first year is from the general
fund for a weather transmitter in Lake of the
Woods County.

The base appropriation from the trunk
highway fund in fiscal year 2018 is
$5,645,000 and in fiscal year 2019 is
$5,826,000.

Sec. 4.

Laws 2015, chapter 75, article 1, section 3, subdivision 4, is amended to read:


Subd. 4.

Local Roads

(a) County State-Aid Roads
670,768,000
705,450,000
698,495,000
805,898,000

This appropriation is from the county
state-aid highway fund under Minnesota
Statutes, section 161.081, and chapter 162,
and is available until spent.

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 shall notify the commissioner
of management and budget and the chairs
and ranking minority members of the
legislative committees with jurisdiction
over transportation finance concerning
funds appropriated. The commissioner shall
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 Roads
170,743,000
177,734,000
178,141,000
206,353,000

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

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 shall notify the commissioner
of management and budget and the chairs
and ranking minority members of the
legislative committees with jurisdiction
over transportation finance concerning
funds appropriated. The commissioner shall
identify in the next budget submission to the
legislature under Minnesota Statutes, section
16A.11, any amount that is appropriated
under this paragraph.

(c) Small Cities Assistance
12,500,000
0

This appropriation is from the general fund
for small cities assistance under Minnesota
Statutes, section 162.145.

Sec. 5.

Laws 2015, chapter 75, article 1, section 5, subdivision 3, is amended to read:


Subd. 3.

State Patrol

(a) Patrolling Highways
81,516,000
83,121,000
87,621,000
Appropriations by Fund
2016
2017
General
154,000
37,000
H.U.T.D.
92,000
92,000
Trunk Highway
81,270,000
82,992,000
87,492,000

$858,000 from the trunk highway fund in the
first year and $117,000 from the general fund
in the first year is to purchase a single-engine
aircraft for the State Patrol.

$4,500,000 from the trunk highway fund in
the second year is to recruit, hire, train, and
equip a State Patrol Academy.

The base appropriation from the trunk
highway fund for patrolling highways in each
of fiscal years 2018 and 2019 is $87,492,000,
which includes $4,500,000 each year for a
State Patrol Academy.

(b) Commercial Vehicle Enforcement
8,023,000
8,257,000
(c) Capitol Security
8,035,000
8,147,000

This appropriation is from the general fund.

The commissioner may not: (1) spend
any money from the trunk highway fund
for capitol security; or (2) permanently
transfer any state trooper from the patrolling
highways activity to capitol security.

The commissioner may not transfer any
money appropriated to the commissioner
under this section: (1) to capitol security; or
(2) from capitol security.

(d) Vehicle Crimes Unit
715,000
736,000

This appropriation is from the highway user
tax distribution fund.

This appropriation is to investigate: (1)
registration tax and motor vehicle sales tax
liabilities from individuals and businesses
that currently do not pay all taxes owed;
and (2) illegal or improper activity related
to sale, transfer, titling, and registration of
motor vehicles.

ARTICLE 2

BONDING

Section 1. BOND APPROPRIATIONS.

The sums shown in the column under "Appropriations" are appropriated from the
bond proceeds account in the trunk highway 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.

SUMMARY
Department of Transportation
$
2,000,000,000
Department of Management and Budget
2,000,000
TOTAL
$
2,002,000,000
APPROPRIATIONS

Sec. 2. DEPARTMENT OF
TRANSPORTATION

$
2,000,000,000

(a) Of the appropriation in this section,
$200,000,000 each year for eight years is
to the commissioner of transportation for
the corridors of commerce program under
Minnesota Statutes, section 161.088, and
$100,000,000 each year for four years
is to the commissioner of transportation
for the construction, reconstruction, and
improvement of trunk highways, including
design-build contracts and use of consultants
to support these activities. In total, the
appropriations under this section are
available in the amounts of:

$300,000,000 in fiscal year 2017;

$300,000,000 in fiscal year 2018;

$300,000,000 in fiscal year 2019;

$300,000,000 in fiscal year 2020;

$200,000,000 in fiscal year 2021;

$200,000,000 in fiscal year 2022;

$200,000,000 in fiscal year 2023; and

$200,000,000 in fiscal year 2024.

The commissioner may use up to 17 percent
of the amount each year for program delivery.

(b) In any fiscal year covered by this
appropriation, the commissioner may
identify projects based on previous selection
processes or may perform a new selection.

(c) The appropriation in this section cancels
as specified under Minnesota Statutes, section
16A.642, except that the commissioner of
management and budget shall count the start
of authorization for issuance of state bonds
as the first day of the fiscal year during
which the bonds are available to be issued as
specified under paragraph (a), and not as the
date of enactment of this section.

Sec. 3. BOND SALE EXPENSES

$
2,000,000

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, and is effective through 2026.

Sec. 4. BOND SALE AUTHORIZATION.

To provide the money appropriated in this article 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 $2,002,000,000 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.

Sec. 5. EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 3

MOTOR FUELS GROSS RECEIPTS TAX

Section 1.

[296A.085] MOTOR FUELS GROSS RECEIPTS TAX.

Subdivision 1.

Imposition.

In addition to other taxes imposed on the use of motor
fuels under this chapter, a motor fuels gross receipts tax is imposed on the first licensed
distributor receiving motor fuel for use in motor vehicles. The motor fuels gross receipts
tax is imposed at the rate of six and one-half percent of the average wholesale price of
gasoline for Minnesota as calculated in subdivisions 3 and 4. The motor fuels gross
receipts tax is imposed on all motor fuel, in either a liquid or gaseous form.

Subd. 2.

Exemptions.

Subdivision 1 does not apply to gasoline, denatured ethanol,
special fuel, or alternative fuel purchased by an entity described in section 296A.07,
subdivision 4, or 296A.08, subdivision 3.

Subd. 3.

Calculation of tax amount per gallon.

(a) The tax imposed under this
section must be calculated by converting the motor fuels gross receipts tax amount
into a tax rate per gallon. The commissioner of revenue will determine and publish the
motor fuels gross receipts tax amount per gallon annually. The amount is determined by
multiplying the previous calendar year's average wholesale gasoline price for Minnesota,
for all grades of a gallon of gasoline, by six and one-half percent. The wholesale price
used shall not include any tax or fee that can be assessed by the state of Minnesota or the
United States government. The wholesale price published by the United States Energy
Information Administration must be used to determine the motor fuels gross receipts tax
amount per gallon. The minimum average wholesale price to be used for this calculation
is $2.50 per gallon. The motor fuels gross receipts tax amount per gallon will be in effect
for fuel received during a 12-month period from the next July 1 to June 30. By May 1
of each year, the commissioner will publish the upcoming fiscal year's motor fuels gross
receipts tax amounts per gallon and the current gasoline excise tax amount per gallon.
All amounts will be stated in cents per gallon rounded to the nearest one-tenth of a cent,
disregarding amounts less than .05 cents and increasing amounts of .05 cents to .099
cents to the next highest one-tenth of a cent.

(b) For the period of October 1, 2016, through June 30, 2017, the motor fuels gross
receipts tax amount per gallon of gasoline is six and one-half percent of the greater of
$2.50 or the average wholesale gasoline price for Minnesota, for all grades of a gallon of
gasoline, for calendar year 2015, as published by the United States Energy Information
Administration. The commissioner must publish the rates before August 1, 2016.

Subd. 4.

Calculation of tax amount per gallon for other motor fuels.

(a) The
motor fuels gross receipts tax on other motor fuels must be computed at the following
tax rate:

(1) the tax rate per gallon of E85 is 71 percent of the motor fuels gross receipts tax
amount per gallon for gasoline, rounded to the nearest tenth of a cent per gallon;

(2) the tax rate per gallon of M85 is 57 percent of the motor fuels gross receipts tax
amount per gallon for gasoline, rounded to the nearest tenth of a cent per gallon;

(3) the tax rate per gallon of Liquefied Petroleum Gas (LPG) is 75 percent of the
motor fuels gross receipts tax amount per gallon for gasoline, rounded to the nearest
tenth of a cent per gallon;

(4) the tax rate per gallon of Liquid Natural Gas (LNG) is 60 percent of the motor
fuels gross receipts tax amount per gallon for gasoline, rounded to the nearest tenth of a
cent per gallon; and

(5) the tax rate per thousand cubic feet of Compressed Natural Gas (CNG) is the
same as the motor fuels gross receipts tax amount per gallon of gasoline.

(b) The tax rate per gallon of all other special fuel used as a motor fuel is the
same as the motor fuels gross receipts tax amount per gallon of gasoline as specified in
subdivision 3.

Subd. 5.

Administrative provisions.

The motor fuels gross receipts tax shall be
paid and filed on a return, as prescribed by the commissioner, in the same manner and time
as prescribed for gasoline tax as set forth in section 296A.15.

Subd. 6.

Deposit of revenues.

The commissioner shall deposit the revenues from
the motor fuels gross receipts tax into the highway user tax distribution fund.

EFFECTIVE DATE.

This section is effective the day following final enactment,
and applies to motor fuels received after September 30, 2016.

Sec. 2.

Minnesota Statutes 2014, section 296A.11, is amended to read:


296A.11 SELLER MAY COLLECT TAX.

A person who directly or indirectly pays a gasoline or special fuel tax or motor fuels
gross receipts tax
as provided in this chapter and who does not in fact use the gasoline or
special fuel in motor vehicles in this state or receive, store, or withdraw it from storage
to be used personally for the purpose of producing or generating power for propelling
aircraft, but sells or otherwise disposes of the same, except as provided in section 296A.16,
subdivision 3
, is hereby authorized to collect, from the person to whom the gasoline or
special fuel is so sold or disposed of, the tax so paid, and is hereby required, upon request,
to make, sign, and deliver to such person an invoice of such sale or disposition. The sums
collected must be held as a special fund in trust for the state of Minnesota.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2014, section 296A.12, is amended to read:


296A.12 GASOLINE AND SPECIAL FUEL TAX AND MOTOR FUELS
GROSS RECEIPTS TAX
IN LIEU OF OTHER TAXES.

Gasoline and special fuel excise taxes and motor fuels gross receipts tax shall be
in lieu of all other taxes imposed upon the business of selling or dealing in gasoline or
special fuel, whether imposed by the state or by any of its political subdivisions, but are in
addition to all ad valorem taxes now imposed by law. Nothing in this chapter is construed
as prohibiting the governing body of any city of this state from licensing and regulating
such a business where its authority is conferred by state law or city charter.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2014, section 296A.16, subdivision 1, is amended to read:


Subdivision 1.

Credit or refund of gasoline or special fuel tax paid.

The
commissioner shall allow the distributor credit or refund of the excise and motor fuels
gross receipts
tax paid on gasoline and special fuel:

(1) exported or sold for export from the state, other than in the supply tank of a
motor vehicle or of an aircraft;

(2) sold to the United States government to be used exclusively in performing its
governmental functions and activities or to any "cost plus a fixed fee" contractor employed
by the United States government on any national defense project;

(3) if the fuel is placed in a tank used exclusively for residential heating;

(4) destroyed by accident while in the possession of the distributor;

(5) in error;

(6) in the case of gasoline only, sold for storage in an on-farm bulk storage tank, if
the tax was not collected on the sale; and

(7) in such other cases as the commissioner may permit, consistent with the provisions
of this chapter and other laws relating to the gasoline and special fuel excise taxes.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 5.

Minnesota Statutes 2014, section 296A.16, subdivision 2, is amended to read:


Subd. 2.

Fuel used in other vehicle; claim for refund.

Any person who buys and
uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose
other than use in licensed motor vehicles, and who paid the excise and motor fuels gross
receipts
tax directly or indirectly through the amount of the tax being included in the price
of the gasoline or special fuel, or otherwise, shall be reimbursed and repaid the amount
of the tax paid upon filing with the commissioner a claim for refund in the form and
manner prescribed by the commissioner, and containing the information the commissioner
shall require. By signing any such claim which is false or fraudulent, the applicant shall
be subject to the penalties provided in this chapter for knowingly making a false claim.
The claim shall set forth the total amount of the gasoline so purchased and used by the
applicant other than in motor vehicles, or special fuel purchased and used by the applicant
other than in licensed motor vehicles, and shall state when and for what purpose it was
used. When a claim contains an error in computation or preparation, the commissioner
is authorized to adjust the claim in accordance with the evidence shown on the claim or
other information available to the commissioner. The commissioner, on being satisfied
that the claimant is entitled to the payments, shall approve the claim and transmit it to the
commissioner of management and budget. The words "gasoline" or "special fuel" as used
in this subdivision do not include aviation gasoline or special fuel for aircraft. Gasoline or
special fuel bought and used for a "qualifying purpose" means:

(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm
situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose"
have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue
Code as defined in section 289A.02, subdivision 7.

(2) Gasoline or special fuel used for off-highway business use.

(i) "Off-highway business use" means any use off the public highway by a person in
that person's trade, business, or activity for the production of income.

(ii) Off-highway business use includes use of a passenger snowmobile off the public
highways as part of the operations of a resort as defined in section 157.15, subdivision 11;
and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not
including fuel consumed during idling time.

(iii) Off-highway business use does not include use as a fuel in a motor vehicle
which, at the time of use, is registered or is required to be registered for highway use under
the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu
of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in
this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the
fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.

(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles,
manufactured in Minnesota, and shipped by interstate carrier to destinations in other
states or foreign countries.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 6.

Minnesota Statutes 2014, section 296A.16, subdivision 3, is amended to read:


Subd. 3.

Destruction by accident; refund to dealer.

Notwithstanding the
provisions of subdivision 1, the commissioner shall allow a dealer a refund of:

(1) the excise and motor fuels gross receipts tax paid by the distributor on gasoline,
undyed diesel fuel, or undyed kerosene destroyed by accident while in the possession of
the dealer; or

(2) the excise and motor fuels gross receipts tax paid by a distributor or special fuels
dealer on other special fuels destroyed by accident while in the possession of the dealer.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 7.

Minnesota Statutes 2014, section 296A.16, subdivision 4, is amended to read:


Subd. 4.

Refrigerator units; refunds.

Notwithstanding the provisions of
subdivision 1, the commissioner shall allow a special fuel dealer a refund of the excise and
motor fuels gross receipts
tax paid on fuel sold directly into a supply tank of a refrigeration
unit with a separate engine and used exclusively by that refrigeration unit. A claim for
refund may be filed as provided in this section.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 8.

Minnesota Statutes 2014, section 296A.16, subdivision 4a, is amended to read:


Subd. 4a.

Undyed kerosene; refunds.

Notwithstanding subdivision 1, the
commissioner shall allow a refund of the excise and motor fuels gross receipts tax paid
on undyed kerosene used exclusively for a purpose other than as fuel for a motor vehicle
using the streets and highways. To obtain a refund, the person making the sale to an end
user must meet the Internal Revenue Service requirements for sales from a blocked pump.
A claim for a refund may be filed as provided in this section.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 9.

Minnesota Statutes 2014, section 296A.16, subdivision 4b, is amended to read:


Subd. 4b.

Racing gasoline; refunds.

Notwithstanding subdivision 1, the
commissioner shall allow a licensed distributor a refund of the excise and motor fuels
gross receipts
tax paid on leaded gasoline of 110 octane or more that does not meet ASTM
specification D4814 for gasoline and that is sold in bulk for use in nonregistered motor
vehicles. A claim for a refund may be filed as provided for in this section.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 10.

Minnesota Statutes 2014, section 296A.16, subdivision 5, is amended to read:


Subd. 5.

Qualifying service station credit.

Notwithstanding any other provision of
law to the contrary, the combined excise and motor fuels gross receipts tax imposed on
gasoline, undyed diesel fuel, or undyed kerosene delivered to a qualified service station
may not exceed, or must be reduced to, a rate not more than three cents per gallon above
the state tax rate imposed on such products sold by a service station in a contiguous state
located within the distance indicated in this subdivision. A distributor shall be allowed a
credit or refund for the amount of reduction computed in accordance with this subdivision.
For purposes of this subdivision, a "qualifying service station" means a service station
located within 7.5 miles, measured by the shortest route by public road, from a service
station selling like product in the contiguous state.

EFFECTIVE DATE.

This section is effective October 1, 2016.

Sec. 11.

Minnesota Statutes 2014, section 296A.18, subdivision 2, is amended to read:


Subd. 2.

Motorboat.

Approximately 1-1/2 percent of all gasoline received in this
state and 1-1/2 percent of all gasoline produced or brought into this state, except gasoline
used for aviation purposes, is being used as fuel for the operation of motorboats on the
waters of this state and of the total revenue derived from the imposition of the gasoline
fuel tax and motor fuels gross receipts tax on gasoline for uses other than for aviation
purposes, 1-1/2 percent of the revenue is the amount of tax on fuel used in motorboats
operated on the waters of this state. The amount of unrefunded tax paid on gasoline used
for motor boat purposes as computed in this chapter shall be paid into the state treasury
and credited to a water recreation account in the special revenue fund for acquisition,
development, maintenance, and rehabilitation of sites for public access and boating
facilities on public waters; lake and river improvement; and boat and water safety.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 12.

Minnesota Statutes 2014, section 296A.18, subdivision 3, is amended to read:


Subd. 3.

Snowmobile.

Approximately one percent of all gasoline received in and
produced or brought into this state, except gasoline used for aviation purposes, is being
used as fuel for the operation of snowmobiles in this state, and of the total revenue derived
from the imposition of the gasoline fuel tax and motor fuels gross receipts tax on gasoline
for uses other than for aviation purposes, one percent of such revenues is the amount of
tax on fuel used in snowmobiles operated in this state.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 13.

Minnesota Statutes 2014, section 296A.18, subdivision 4, is amended to read:


Subd. 4.

All-terrain vehicle.

Approximately 0.27 of one percent of all gasoline
received in or produced or brought into this state, except gasoline used for aviation
purposes, is being used for the operation of all-terrain vehicles in this state, and of the
total revenue derived from the imposition of the gasoline fuel tax and motor fuels gross
receipts tax on gasoline
, 0.27 of one percent is the amount of tax on fuel used in all-terrain
vehicles operated in this state.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 14.

Minnesota Statutes 2014, section 296A.18, subdivision 5, is amended to read:


Subd. 5.

Off-highway motorcycles.

Approximately 0.046 of one percent of
all gasoline received or produced in or brought into this state, except gasoline used for
aviation purposes, is being used for the operation of off-highway motorcycles in this state,
and of the total revenue derived from the imposition of the gasoline fuel tax and motor
fuels gross receipts tax on gasoline
for uses other than for aviation purposes, 0.046 of one
percent is the amount of tax on fuel used in off-highway motorcycles operated in this state.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 15.

Minnesota Statutes 2014, section 296A.18, subdivision 6, is amended to read:


Subd. 6.

Off-road vehicle.

Approximately 0.164 of one percent of all gasoline
received or produced in or brought into this state, except gasoline used for aviation
purposes, is being used for the off-road operation of off-road vehicles, as defined in
section 84.797, in this state, and of the total revenue derived from the imposition of the
gasoline fuel tax and motor fuels gross receipts tax on gasoline for uses other than aviation
purposes, 0.164 of one percent is the amount of tax on fuel used for off-road operation
of off-road vehicles in this state.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 16.

Minnesota Statutes 2014, section 296A.18, subdivision 7, is amended to read:


Subd. 7.

Forest road.

Approximately 0.116 percent of the total annual unrefunded
revenue from the gasoline fuel tax and motor fuels gross receipts tax on all gasoline and
special fuel received in, produced, or brought into this state, except gasoline and special
fuel used for aviation purposes, is derived from the operation of motor vehicles on state
forest roads and county forest access roads. This revenue, together with interest and
penalties for delinquency in payment, paid or collected pursuant to the provisions of
this chapter, is appropriated from the highway user tax distribution fund and must be
transferred and credited in equal installments on July 1 and January 1 to the state forest
road account established in section 89.70. Of this amount, 0.0605 percent is annually
derived from motor vehicles operated on state forest roads and 0.0555 percent is annually
derived from motor vehicles operated on county forest access roads in this state. An
amount equal to 0.0555 percent of the unrefunded revenue must be annually transferred to
counties for the management and maintenance of county forest roads.

EFFECTIVE DATE.

This section is effective the day following final enactment.

ARTICLE 4

METROPOLITAN AREA TRANSIT SALES AND USE TAX

Section 1.

Minnesota Statutes 2014, section 297A.99, subdivision 1, is amended to read:


Subdivision 1.

Authorization; scope.

(a) A political subdivision of this state may
impose a general sales tax (1) under section 297A.992, (2) under section 297A.9925, (3)
under section 297A.993, (3) (4) if permitted by special law, or (4) (5) if the political
subdivision enacted and imposed the tax before January 1, 1982, and its predecessor
provision.

(b) This section governs the imposition of a general sales tax by the political
subdivision. The provisions of this section preempt the provisions of any special law:

(1) enacted before June 2, 1997, or

(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
provision from this section's rules by reference.

(c) This section does not apply to or preempt a sales tax on motor vehicles or a
special excise tax on motor vehicles.

(d) A political subdivision may not advertise or expend funds for the promotion of a
referendum to support imposing a local option sales tax.

(e) Notwithstanding paragraph (d), a political subdivision may expend funds to:

(1) conduct the referendum;

(2) disseminate information included in the resolution adopted under subdivision 2;

(3) provide notice of, and conduct public forums at which proponents and opponents
on the merits of the referendum are given equal time to express their opinions on the
merits of the referendum;

(4) provide facts and data on the impact of the proposed sales tax on consumer
purchases; and

(5) provide facts and data related to the programs and projects to be funded with
the sales tax.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
September 30, 2016.

Sec. 2.

[297A.9925] METROPOLITAN AREA TRANSIT SALES AND USE
TAX; RATE; IMPOSITION; USES; PRIORITIES.

Subdivision 1.

Definitions.

For purposes of this section, the following terms have
the following meanings:

(1) "metropolitan area" or "area" has the meaning defined in section 473.121,
subdivision 2;

(2) "Metropolitan Council" or "council" means the Metropolitan Council established
by section 473.123; and

(3) "local governmental unit" means any county, city, town, school district, special
district, or other political subdivisions or public corporation, other than the council or a
metropolitan agency, lying in whole or in part within the metropolitan area.

Subd. 2.

Metropolitan area transit sales tax imposition; rate.

Notwithstanding
section 297A.99, subdivisions 1, 2, and 3, 477A.016, or any other law, a metropolitan area
transit sales and use tax is imposed at a rate of one-half of one percent on retail sales and
uses taxable under this chapter occurring within the metropolitan area.

Subd. 3.

Administration; collection; enforcement.

Except as otherwise provided
in this section, the provisions of section 297A.99, subdivisions 4 and 6 to 12a, govern the
administration, collection, and enforcement of the tax authorized under this section.

Subd. 4.

Uses; consistency with transportation policy plan.

(a) The Metropolitan
Council shall utilize the proceeds of the metropolitan area transit sales and use tax imposed
under subdivision 2 for transit purposes within the metropolitan area. This may include,
but is not limited to, transit operations, capital improvements, design, engineering and
environmental work, acquisition of real property, transit planning and feasibility studies,
and to provide grants to local governmental units for transit purposes or for bicycle and
pedestrian projects as specified in subdivision 5.

(b) Projects funded with the metropolitan area transit sales and use tax proceeds
must be consistent with the long-range transportation policy plan adopted by the council
under section 473.146.

Subd. 5.

Priorities.

(a) The council shall allocate revenues from the taxes imposed
under this section in accordance with the transit system development and financial plan
required under section 473.1462, and in conformance with the following priority order:

(1) payment of debt service necessary on bonds or other obligations issued under
subdivision 6;

(2) operating and capital costs to preserve existing bus services that are in
conformance with regional transit performance standards as specified in the council's
transportation policy plan;

(3) 100 percent of the net operating costs of existing arterial bus rapid transit lines
and 50 percent of the net operating costs of other existing transitways;

(4) grants required under paragraph (b);

(5) operating and capital costs for the expansion and modernization of regional bus
services, including replacement services provided under section 473.388, in accordance
with the regional service improvement plan adopted by the council;

(6) operating and capital costs for expansion and improvement of regional
transitways; and

(7) any other costs payable in accordance with subdivision 4.

(b) After accounting for the amounts necessary for paragraph (a), clauses (1) , (2),
and (3), the council shall make five percent of the remaining revenues available through
grants to local units of government within the metropolitan area for bicycle and pedestrian
projects. The council shall establish a grant program, criteria, and oversight procedures
for regional bicycle and pedestrian project grants on at least a biennial schedule.

Subd. 6.

Revenue bonds.

(a) In addition to other authority granted in this section,
the council may, by resolution, authorize the issuance and sale of revenue bonds, notes,
or other obligations to provide funds to implement the council's regional transit system
development and financial plan and to refund bonds issued under this subdivision.

(b) The bonds shall be payable from and secured by a pledge of the revenues
identified in the transit system development and financial plan, including without
limitation all or any part of revenues received from the metropolitan area transit sales and
use tax imposed under subdivision 2, and associated investment earnings on debt proceeds.
The council may by resolution authorize the issuance of the bonds as general obligations
of the council. The bonds shall be sold, issued, and secured in the manner provided in
chapter 475, and the council shall have the same powers and duties as a municipality and
its governing body in issuing bonds under chapter 475, except that no election shall be
required and the net debt limitations in chapter 475 shall not apply to such bonds. The
proceeds of the bonds may also be used to fund necessary reserves and to pay credit
enhancement fees, issuance costs, and other financing costs during the life of the debt.

(c) The bonds may be secured by a bond resolution, or a trust indenture entered into
by the council with a corporate trustee within or outside the state, which shall define the
revenues and bond proceeds pledged for the payment and security of the bonds. The
pledge shall be a valid charge on the revenues received under section 297A.99, subdivision
11. Neither the state, nor any municipality or political subdivision except the council,
nor any member or officer or employee of the council, is liable on the obligations. No
mortgage or security interest in any tangible real or personal property shall be granted to
the bondholders or the trustee, but they shall have a valid security interest in the revenues
and bond proceeds received by the council and pledged to the payment of the bonds. In the
bond resolution or trust indenture, the council may make such covenants as it determines
to be reasonable for the protection of the bondholders.

EFFECTIVE DATE.

This section is effective for sales and purchases made after
September 30, 2016, and applies in the counties of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington.

Sec. 3.

[473.1462] REGIONAL TRANSIT SYSTEM DEVELOPMENT AND
FINANCIAL PLAN.

Subdivision 1.

Annual regional transit system development and financial plan.

By December 15, 2015, and annually thereafter, the council shall prepare and adopt a
comprehensive regional transit system development and financial plan that describes and
accounts for the transit system operating and capital investments planned to occur over
at least the next ten calendar years. The council's adopted annual transit operating and
capital budgets must be consistent with the transit system development and financial
plan. The transit system development and financial plan may be amended as needed. The
council shall annually submit the plan for review by the Legislative Commission on
Metropolitan Government under section 3.8841.

Subd. 2.

Details on transit operations and capital investments; transit revenues.

The regional transit system development and financial plan must contain detail on the
transit operations and capital investments expected for all regional public transit services
funded in whole or in part by the council, including but not limited to regular route bus
services including services operated by the council and replacement service providers under
section 473.388; Metro Mobility special transportation services provided under section
473.386; other dial-a-ride and vanpool services provided by the council; and all regional
transitway operations and capital investments with detail provided for each existing or
new transitway line. The plan must also account for all transit revenues expected to be
available to the council including but not limited to metropolitan area transit sales and use
tax revenue available from the tax imposed under section 297A.9925, subdivision 2; transit
fare revenues; metropolitan area transit state general fund appropriations; motor vehicle
sales tax revenues available through the metropolitan transit assistance account under
section 16A.88, subdivision 2; federal transit funds; regional transit capital bonds issued
by the council pursuant to authorizations under section 473.39; and sales tax revenues
allocated to the council by the joint powers board under section 297A.992. The regional
transit system development and financial plan must be consistent with the adopted regional
transportation policy plan and provide detail on the specific transit operations and capital
investments expected in each year of the plan. The plan may account for the use of debt
financing and the issuance of bonds as authorized under section 297A.9925, subdivision 6.

EFFECTIVE DATE.

This section is effective July 1, 2016, and applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

Sec. 4. REPEALER.

Minnesota Statutes 2014, section 473.4051, subdivision 2, is repealed.

EFFECTIVE DATE.

This section is effective July 1, 2016.

ARTICLE 5

TRANSPORTATION POLICY AND FINANCE

Section 1.

Minnesota Statutes 2014, 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 an amount equal to a combination of the following:

(1) $10 for those vehicles with registration periods beginning on or before June 30,
2018, and $20 for those vehicles with registration periods on or after July 1, 2018,
plus

(2) an additional tax equal to the following:

(i) 1.25 percent of the base value. for those vehicles with registration periods ending
on or before January 1, 2017;

(ii) 1.35 percent of the base value for those vehicles with registration periods
beginning on or after January 1, 2017, and before July 1, 2017;

(iii) 1.45 percent of the base value for those vehicles with registration periods
beginning on or after July 1, 2017, and before July 1, 2018; and

(iv) 1.50 percent of the base value for those vehicles with registration periods
beginning on or after July 1, 2018.

(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 this subdivision must not exceed the smallest amount of annual additional
tax previously paid or due on the vehicle.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 2.

Minnesota Statutes 2014, section 168.013, subdivision 21, is amended to read:


Subd. 21.

Technology surcharge.

For every vehicle registration renewal required
under this chapter, the commissioner shall collect a surcharge of: (1) $1.75 until June 30,
2012; and (2) $1 from July 1, 2012, to June 30, 2016 2019. Surcharges collected under
this subdivision must be credited to the driver and vehicle services technology account in
the special revenue fund under section 299A.705.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2014, section 168A.29, subdivision 1, is amended to read:


Subdivision 1.

Amounts.

(a) The department must be paid the following fees:

(1) for filing an application for and the issuance of an original certificate of title,
the sum of:

(i) until December 31, 2016, $6.25 of which $3.25 must be paid into the vehicle
services operating account of the special revenue fund under section 299A.705, and from
July 1, 2012, to June 30, 2016 2019, a surcharge of $1 must be added to the fee and
credited to the driver and vehicle services technology account; and

(ii) on and after January 1, 2017, $8.25 of which $4.15 must be paid into the vehicle
services operating account;

(2) for each security interest when first noted upon a certificate of title, including the
concurrent notation of any assignment thereof and its subsequent release or satisfaction,
the sum of $2, except that no fee is due for a security interest filed by a public authority
under section 168A.05, subdivision 8;

(3) until December 31, 2016, for the transfer of the interest of an owner and the
issuance of a new certificate of title, the sum of $5.50 of which $2.50 must be paid into the
vehicle services operating account of the special revenue fund under section 299A.705,
and from July 1, 2012, to June 30, 2016 2019, a surcharge of $1 must be added to the fee
and credited to the driver and vehicle services technology account;

(4) for each assignment of a security interest when first noted on a certificate of title,
unless noted concurrently with the security interest, the sum of $1; and

(5) for issuing a duplicate certificate of title, the sum of $7.25 of which $3.25 must
be paid into the vehicle services operating account of the special revenue fund under
section 299A.705; from July 1, 2012, to June 30, 2016 2019, a surcharge of $1 must be
added to the fee and credited to the driver and vehicle services technology account.

(b) In addition to the fee required under paragraph (a), clause (1), the department
must be paid $3.50. The additional $3.50 fee collected under this paragraph must be
deposited in the special revenue fund and credited to the public safety motor vehicle
account established in section 299A.70.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 4.

Minnesota Statutes 2014, section 171.06, subdivision 2, is amended to read:


Subd. 2.

Fees.

(a) The fees for a license and Minnesota identification card are
as follows:

Classified Driver's License
D-$17.25
C-$21.25
B-$28.25
A-$36.25
Classified Under-21 D.L.
D-$17.25
C-$21.25
B-$28.25
A-$16.25
Enhanced Driver's License
D-$32.25
C-$36.25
B-$43.25
A-$51.25
Instruction Permit
$5.25
Enhanced Instruction
Permit
$20.25
Commercial Learner's
Permit
$2.50
Provisional License
$8.25
Enhanced Provisional
License
$23.25
Duplicate License or
duplicate identification
card
$6.75
Enhanced Duplicate
License or enhanced
duplicate identification
card
$21.75
Minnesota identification
card or Under-21
Minnesota identification
card, other than duplicate,
except as otherwise
provided in section 171.07,
subdivisions 3
and 3a
$11.25
Enhanced Minnesota
identification card
$26.25

In addition to each fee required in this paragraph, the commissioner shall collect a
surcharge of: (1) $1.75 until June 30, 2012; and (2) $1.00 from July 1, 2012, to June 30,
2016 2019. Surcharges collected under this paragraph must be credited to the driver and
vehicle services technology account in the special revenue fund under section 299A.705.

(b) Notwithstanding paragraph (a), an individual who holds a provisional license and
has a driving record free of (1) convictions for a violation of section 169A.20, 169A.33,
169A.35, or sections 169A.50 to 169A.53, (2) convictions for crash-related moving
violations, and (3) convictions for moving violations that are not crash related, shall have a
$3.50 credit toward the fee for any classified under-21 driver's license. "Moving violation"
has the meaning given it in section 171.04, subdivision 1.

(c) In addition to the driver's license fee required under paragraph (a), the
commissioner shall collect an additional $4 processing fee from each new applicant
or individual renewing a license with a school bus endorsement to cover the costs for
processing an applicant's initial and biennial physical examination certificate. The
department shall not charge these applicants any other fee to receive or renew the
endorsement.

(d) In addition to the fee required under paragraph (a), a driver's license agent may
charge and retain a filing fee as provided under section 171.061, subdivision 4.

(e) In addition to the fee required under paragraph (a), the commissioner shall
charge a filing fee at the same amount as a driver's license agent under section 171.061,
subdivision 4. Revenue collected under this paragraph must be deposited in the driver
services operating account.

(f) An application for a Minnesota identification card, instruction permit, provisional
license, or driver's license, including an application for renewal, must contain a provision
that allows the applicant to add to the fee under paragraph (a), a $2 donation for the
purposes of public information and education on anatomical gifts under section 171.075.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 5.

[174.57] SNOW AND ICE CONTROL.

The commissioner of transportation, upon written notification to the commissioner
of management and budget and the chairs and ranking minority members of the house
of representatives and senate committees having jurisdiction over transportation finance,
may transfer all or part of the unappropriated balance in the trunk highway fund to pay for
snow and ice management expenditures if the Department of Transportation spends more
than 110 percent of its biennial appropriation for snow and ice management. The amount
transferred is appropriated for the purposes of the account to which it is transferred.

Sec. 6.

Minnesota Statutes 2014, section 219.015, subdivision 1, is amended to read:


Subdivision 1.

Positions established; duties.

(a) The commissioner of
transportation shall establish three a state rail safety inspector positions in the Office
of Freight and Commercial Vehicle Operations of the Minnesota Department of
Transportation. On or after July 1, 2015, the commissioner may establish a fourth state
rail safety inspector position following consultation with railroad companies.
inspection
program, consisting of up to nine positions.
The commissioner shall apply to and enter
into agreements with the Federal Railroad Administration (FRA) of the United States
Department of Transportation to participate in the federal State Rail Safety Participation
Program for training and certification of an inspector inspectors under authority of United
States Code, title 49, sections 20103, 20105, 20106, and 20113, and Code of Federal
Regulations, title 49, part 212.

(b) A state rail safety inspector shall may: (1) inspect mainline track, secondary
track, and yard and industry track; (2) inspect railroad right-of-way, including adjacent or
intersecting drainage, culverts, bridges, overhead structures, and traffic and other public
crossings; (3) inspect yards and, physical plants, and train equipment; (4) review and
enforce safety requirements; (5) review maintenance and repair records; and (6) review
railroad security measures.

(c) A state rail safety inspector may perform, but is not limited to, the duties
described in the federal State Rail Safety Participation Program. An inspector may train,
be certified, and participate in any of the federal State Rail Safety Participation Program
disciplines, including: track, signal and train control, motive power and equipment,
operating practices compliance, hazardous materials, and highway-rail grade crossings.

(d) To the extent delegated by the Federal Railroad Administration and authorized
by the commissioner, an inspector may issue citations for violations of this chapter, or to
ensure railroad employee and public safety and welfare.

Sec. 7.

Minnesota Statutes 2014, section 219.015, subdivision 2, is amended to read:


Subd. 2.

Railroad company assessment; account; appropriation.

(a) As provided
in this subdivision, the commissioner shall annually assess railroad companies that are:
(1) defined as common carriers under section 218.011; (2) classified by federal law
or regulation as Class I Railroads, Class I Rail Carriers, Class II Railroads, or Class II
Carriers; and (3) operating in this state.

(b) The assessment must be by a division of allocate state rail safety inspector
inspection program costs in equal proportion between proportionally among carriers
based on route miles operated in Minnesota, assessed in equal amounts for 365 days of
the calendar year
at the time of the assessment. The commissioner shall assess for all
start-up or re-establishment costs, all related costs of initiating costs of the state rail safety
inspector program, and ongoing state rail inspector duties including but not limited to
administration, supervision, travel, equipment, and training
.

(c) The A state rail safety inspection account is created in the special revenue
fund. The account consists of funds as provided by law, and any other money donated,
allotted, transferred, or otherwise provided to the account.
Assessments collected under
this subdivision
must be deposited in a special account in the special revenue fund, to be
known as
the state rail safety inspection account. Money in the account is appropriated
to the commissioner for the establishment and ongoing responsibilities of the state rail
safety inspector inspection program.

Sec. 8.

[219.016] CRUDE OIL AND HAZARDOUS MATERIALS RAIL SAFETY
ASSESSMENT.

Subdivision 1.

Assessment.

(a) As provided in this section, the commissioner
shall annually assess railroad companies that are: (1) defined as common carriers under
section 218.011; (2) classified by federal law or regulation as Class I Railroads or Class
I Rail Carriers; and (3) operating in this state. The total assessment amount under this
section may not exceed $32,500,000 annually.

(b) The assessment must be allocated proportionally among carriers based on route
miles operated in Minnesota at the time of the assessment.

Subd. 2.

Account created; appropriation.

(a) A crude oil and hazardous materials
rail safety account is created in the special revenue fund. The account consists of funds
as provided by law, and any other money donated, allotted, transferred, or otherwise
provided to the account. Assessments collected under this section must be deposited in
the crude oil and hazardous materials rail safety account.

(b) Money in the account is appropriated to the commissioner for the planning,
engineering, administration, and construction of highway-rail grade crossing
improvements on rail corridors transporting crude oil and other hazardous materials.
Improvements may include upgrades to existing protection systems, the closing of
crossings and necessary roadwork, and reconstruction of at-grade crossings to full grade
separations. Funds in the account are available until expended.

Sec. 9.

Minnesota Statutes 2014, section 219.1651, is amended to read:


219.1651 GRADE CROSSING SAFETY ACCOUNT.

A Minnesota grade crossing safety account is created in the special revenue fund,
consisting of money credited to the account by law
. The account consists of funds as
provided by law, and any other money donated, allotted, transferred, or otherwise provided
to the account.
Money in the account is appropriated to the commissioner of transportation
for rail-highway grade crossing safety projects on public streets and highways, including
planning, engineering costs, and other costs associated with the administration and delivery
of grade crossing safety projects
. At the discretion of the commissioner of transportation,
money in the account at the end of each biennium may cancel to the trunk highway fund.

Sec. 10.

Minnesota Statutes 2014, section 222.49, is amended to read:


222.49 RAIL SERVICE IMPROVEMENT ACCOUNT; APPROPRIATION.

The rail service improvement account is created in the special revenue fund in
the state treasury
. The commissioner shall deposit in this account all consists of funds
as provided by law, and any other
money appropriated to or received by the department
for the purpose of rail service improvement
donated, allotted, transferred, or otherwise
provided to the account
, excluding bond proceeds as authorized by article XI, section 5,
clause (i), of the Minnesota Constitution. All money so deposited is appropriated to the
department for expenditure for rail service improvement in accordance with applicable
state and federal law. This appropriation shall not lapse but shall be available until the
purpose for which it was appropriated has been accomplished. No money appropriated to
the department for the purposes of administering the rail service improvement program
shall be deposited in the rail service improvement account nor shall such administrative
costs be paid from the account.

Sec. 11.

Minnesota Statutes 2014, section 222.50, subdivision 6, is amended to read:


Subd. 6.

Grants.

The commissioner may approve grants from the rail service
improvement account for payment of up to 50 percent of the nonfederal share of the cost
of any rail line project under the federal rail service continuation program
freight rail
service improvements that support economic development
.

Sec. 12.

Minnesota Statutes 2015 Supplement, section 222.50, subdivision 7, is
amended to read:


Subd. 7.

Expenditures.

(a) The commissioner may expend money from the rail
service improvement account for the following purposes:

(1) to make transfers as provided under section 222.57 or to pay interest adjustments
on loans guaranteed under the state rail user and rail carrier loan guarantee program;

(2) to pay a portion of the costs of capital improvement projects designed to improve
rail service of a rail user or a rail carrier;

(3) to pay a portion of the costs of rehabilitation projects designed to improve rail
service of a rail user or a rail carrier;

(4) to acquire, maintain, manage, and dispose of railroad right-of-way pursuant to
the state rail bank program;

(5) to provide for aerial photography survey of proposed and abandoned railroad
tracks for the purpose of recording and reestablishing by analytical triangulation the
existing alignment of the inplace track;

(6) to pay a portion of the costs of acquiring a rail line by a regional railroad
authority established pursuant to chapter 398A;

(7) to pay the state matching portion of federal grants for rail-highway grade
crossing improvement projects;

(8) for expenditures made before July 1, 2017, to pay the state matching portion
of grants under the federal Transportation Investment Generating Economic Recovery
(TIGER) program of the United States Department of Transportation
to pay the state
matching portion of federal grants for freight rail projects
;

(9) to fund rail planning studies activities and other administrative and program
expenses
; and

(10) to pay a portion of the costs of capital improvement projects designed to
improve capacity or safety at rail yards.

(b) All money derived by the commissioner from the disposition of railroad
right-of-way or of any other property acquired pursuant to sections 222.46 to 222.62 shall
be deposited in the rail service improvement account.

Sec. 13.

Minnesota Statutes 2014, section 299D.03, subdivision 5, is amended to read:


Subd. 5.

Traffic fines and forfeited bail money.

(a) All fines and forfeited bail
money collected from persons apprehended or arrested by officers of the State Patrol
shall be transmitted by the person or officer collecting the fines, forfeited bail money,
or installments thereof, on or before the tenth day after the last day of the month in
which these moneys were collected, to the commissioner of management and budget.
Except where a different disposition is required in this subdivision or section 387.213, or
otherwise provided by law, three-eighths of these receipts must be deposited in the state
treasury and credited to the state general fund. The other five-eighths of these receipts
must be deposited in the state treasury and credited as follows: (1) the first $1,000,000
$2,500,000 in each fiscal year must be credited to the Minnesota grade crossing safety
account in the special revenue fund, and (2) remaining receipts must be credited to the state
trunk highway fund. If, however, the violation occurs within a municipality and the city
attorney prosecutes the offense, and a plea of not guilty is entered, one-third of the receipts
shall be deposited in the state treasury and credited to the state general fund, one-third of
the receipts shall be paid to the municipality prosecuting the offense, and one-third shall be
deposited in the state treasury and credited to the Minnesota grade crossing safety account
or the state trunk highway fund as provided in this paragraph. When section 387.213 also
is applicable to the fine, section 387.213 shall be applied before this paragraph is applied.
All costs of participation in a nationwide police communication system chargeable to the
state of Minnesota shall be paid from appropriations for that purpose.

(b) All fines and forfeited bail money from violations of statutes governing the
maximum weight of motor vehicles, collected from persons apprehended or arrested by
employees of the state of Minnesota, by means of stationary or portable scales operated
by these employees, shall be transmitted by the person or officer collecting the fines or
forfeited bail money, on or before the tenth day after the last day of the month in which the
collections were made, to the commissioner of management and budget. Five-eighths of
these receipts shall be deposited in the state treasury and credited to the state highway
user tax distribution fund. Three-eighths of these receipts shall be deposited in the state
treasury and credited to the state general fund.

Sec. 14.

Minnesota Statutes 2014, section 360.013, is amended by adding a subdivision
to read:


Subd. 62.

Unmanned aircraft system.

"Unmanned aircraft system" means an
unmanned, powered aircraft that does not carry a human operator, can be autonomous or
remotely piloted or operated, and can be expendable or recoverable. Unmanned aircraft
system does not include a satellite orbiting the earth.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 15.

Minnesota Statutes 2014, section 360.075, subdivision 1, is amended to read:


Subdivision 1.

Misdemeanor.

Every person who:

(1) operates an aircraft either on or over land or water in this state without the
consent of the owner of such aircraft;

(2) operates aircraft while in the possession of any federal license, certificate, or
permit or any certificate of registration issued by the Transportation Department of this
state
Transportation, or displays, or causes or permits to be displayed, such federal license,
certificate, or permit or such state certificate of registration, knowing either to have been
canceled, revoked, suspended, or altered;

(3) lends to, or knowingly permits the use of by, one not entitled thereto of any
federal airman's or aircraft license, certificate, or permit, or any state airman's or aircraft
certificate of registration issued to that person;

(4) displays or represents as the person's own any federal airman's or aircraft license,
certificate, or permit or any state airman's or aircraft certificate of registration not issued
to that person;

(5) tampers with, climbs upon or into, makes use of, or navigates any aircraft without
the knowledge or consent of the owner or person having control thereof, whether while the
same is in motion or at rest, or hurls stones or any other missiles at aircraft, or the occupants
thereof, or otherwise damages or interferes with the same, or places upon any portion of any
airport any object, obstruction, or other device tending to injure aircraft or parts thereof;

(6) uses a false or fictitious name, gives a false or fictitious address, knowingly
makes any false statement or report, or knowingly conceals a material fact, or otherwise
commits a fraud in any application or form required under the provisions of sections
360.011 to 360.076, or by any rules or orders of the commissioner;

(7) operates any aircraft in such a manner as to indicate either a willful or a wanton
disregard for the safety of persons or property;

(8) carries on or over land or water in this state in an aircraft other than a public
aircraft any explosive substance except as permitted by the Federal Explosives Act, being
the Act of October 6, 1917, as amended by Public Law 775, 77th Congress, approved
November 24, 1942
United States Code, title 18, chapter 40, and Code of Federal
Regulations, title 27, part 555
;

(9) discharges a gun, pistol, or other weapon in or from any aircraft in this state
except as the hunting of certain wild animals from aircraft may be permitted by other laws
of this state, or unless the person is the pilot or officer in command of the aircraft or a
peace officer or a member of the military or naval forces of the United States, engaged in
the performance of duty;

(10) carries in any aircraft, other than a public aircraft, any shotgun, rifle, pistol, or
small arms ammunition except in the manner in which such articles may be lawfully carried
in motor vehicles in this state, or is a person excepted from the provisions of clause (9);

(11) engages in acrobatic or stunt flying without being equipped with a parachute
and without providing any other occupants of the aircraft with parachutes and requiring
that they be worn;

(12) while in flying over a thickly inhabited area or over a public gathering in this
state, engages in trick or acrobatic flying or in any acrobatic feat;

(13) except while in landing or taking off, flies at such low levels as to endanger
persons on the surface beneath, or engages in advertising through the playing of music
or transcribed or oral announcements, or makes any noise with any siren, horn, whistle,
or other audible device which is not necessary for the normal operation of the aircraft,
except that sound amplifying devices may be used in aircraft when operated by or under
the authority of any agency of the state or federal government for the purpose of giving
warning or instructions to persons on the ground;

(14) drops any object, except loose water, loose fuel, or loose sand ballast, without
the prior written consent of the commissioner of transportation and the prior written
consent of the municipality or property owner where objects may land; drops objects
from an aircraft that endanger person or property on the ground, or drops leaflets for any
purpose whatsoever; or

(15) while in flight in an aircraft, whether as a pilot, passenger, or otherwise,
endangers, kills, or attempts to kill any birds or animals or uses any aircraft for the purpose
of concentrating, driving, rallying, or stirring up migratory waterfowl;

except as may be permitted by other laws of this state, shall be guilty of a misdemeanor.

EFFECTIVE DATE.

This section is effective January 1, 2017, and applies to
offenses committed on or after that date.

Sec. 16.

Minnesota Statutes 2014, section 360.075, is amended by adding a subdivision
to read:


Subd. 8.

Unmanned aircraft system operations.

Every person who:

(1) operates an unmanned aircraft system either on or over land or water in this state
without the consent of the owner of such aircraft;

(2) knowingly operates an unmanned aircraft system with a certificate of registration
issued by the commissioner of transportation that is canceled, revoked, suspended, or
altered;

(3) operates any unmanned aircraft system in such a manner as to indicate either a
willful or a wanton disregard for the safety of persons or property;

(4) carries on or over land or water in this state in an aircraft other than a public
aircraft any explosive substance except as permitted by United States Code, title 18,
chapter 40, and Code of Federal Regulations, title 27, part 555;

(5) launches or recovers an unmanned aircraft system from state or private property
without consent; or

(6) interferes with manned aircraft by willfully damaging, disrupting the operations
of, or otherwise interfering with a manned aircraft while taking off, landing, in flight, or
otherwise in motion, through the use of an unmanned aircraft system;

except as may be permitted by other laws of this state, is guilty of a misdemeanor.

EFFECTIVE DATE.

This section is effective January 1, 2017, and applies to
offenses committed on or after that date.

Sec. 17.

Minnesota Statutes 2014, section 360.075, is amended by adding a subdivision
to read:


Subd. 9.

Gross misdemeanor.

Every person who commits any of the acts specified
in subdivision 8 for a second or subsequent time is guilty of a gross misdemeanor.

EFFECTIVE DATE.

This section is effective January 1, 2017, and applies to
offenses committed on or after that date.

Sec. 18.

Minnesota Statutes 2014, section 360.075, is amended by adding a subdivision
to read:


Subd. 10.

Careless or reckless operation.

Every person who operates an unmanned
aircraft system in the air or on the ground or water, in a careless or reckless manner so as
to endanger the life or property of another, is guilty of a misdemeanor.

EFFECTIVE DATE.

This section is effective January 1, 2017, and applies to
offenses committed on or after that date.

Sec. 19.

Minnesota Statutes 2014, section 360.55, is amended by adding a subdivision
to read:


Subd. 9.

Unmanned aircraft system.

(a) An unmanned aircraft system operated for
commercial purposes must be registered for an annual fee of $25 and provide proof of a
sales tax payment. An unmanned aircraft system registered under this paragraph is not
subject to the taxes and fees provided in sections 360.511 to 360.67.

(b) An unmanned aircraft system operated for private, noncommercial purposes is
not subject to registration and fee requirements under this subdivision, or to taxes and fees
under sections 360.511 to 360.67.

(c) An unmanned aircraft system owned and operated by a governmental entity
must be registered for an annual fee of $25 and provide proof of a sales tax payment. An
unmanned aircraft system registered under this paragraph is not subject to the taxes and
fees provided in sections 360.511 to 360.67.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 20.

[360.591] UNMANNED AIRCRAFT SYSTEM; COMMERCIAL USE
PERMIT.

Subdivision 1.

Permit required.

A person is prohibited from operating an
unmanned aircraft system for a commercial purpose in this state unless the person
possesses a valid commercial operator permit issued by the Department of Transportation
for the unmanned aircraft system being operated. An operator must apply for the permit
from the department in the manner provided by the department.

Subd. 2.

Permit requirements; eligibility.

In order to be eligible for a commercial
operator permit under this section, a person must:

(1) be at least 17 years of age;

(2) possess a valid driver's license;

(3) pass a knowledge test for operating an unmanned aircraft system;

(4) register and pay the fee under section 360.55, subdivision 9, paragraph (a); and

(5) satisfy all other applicable state or federal regulations.

Subd. 3.

Knowledge test.

(a) The department must develop and administer a testing
program that complies with all applicable federal regulations for issuance of commercial
operator permits for unmanned aircraft systems.

(b) The testing program must include:

(1) a permit application process, including a requirement that the department provide
notice to an applicant of the department's permit issuance decision no later than ten days
from the date the department receives the application;

(2) technical guidance for complying with program requirements;

(3) criteria the department must use when determining whether to suspend or revoke
a permit;

(4) criteria the department must use when determining whether to waive permitting
requirements for applicants currently holding a valid license or a permit to operate
unmanned aircraft systems issued by another state or territory of the United States, the
District of Columbia, or the United States; and

(5) requirements for marking each unmanned aircraft system to identify the owner of
the system and the person issued a permit to operate it under this section.

Subd. 4.

Unlawful commercial operations.

A person who operates an unmanned
aircraft system for commercial purposes in violation of this section is guilty of a
misdemeanor.

Subd. 5.

Liability insurance required.

In order to operate an unmanned aircraft
system for commercial purposes in Minnesota, a person must carry liability insurance
protecting third parties for both personal injury and property damage.

Subd. 6.

Rulemaking.

The department is authorized to adopt rules to implement the
provisions of this section.

EFFECTIVE DATE.

This section is effective January 1, 2017.

Sec. 21. MINNESOTA LICENSE AND REGISTRATION SYSTEM
OPERATING COSTS; REPORT.

Before January 1, 2019, the commissioners of public safety and MN.IT services
must submit a report documenting the costs of operating the new Minnesota License
and Registration System, including any recommendations for ongoing funding, to the
legislative committees having jurisdiction over transportation and public safety policy
and finance.