SF 87

as introduced - 89th Legislature (2015 - 2016) Posted on 03/24/2015 03:09pm

A bill for an act
relating to transportation; capital investment; taxes; amending provisions
governing transportation finance; establishing gross receipts motor fuels tax;
amending vehicle registration tax and metropolitan area transit sales tax;
amending distribution of highway user fund and county state-aid funding;
authorizing sale and issuance of trunk highway bonds and general obligation
bonds; requiring a report; appropriating money; amending Minnesota Statutes
2014, sections 161.081, subdivision 1; 161.20, by adding a subdivision; 162.07,
subdivision 1a; 168.013, subdivisions 1a, 8; 168.31, by adding a subdivision;
174.42, by adding a subdivision; 222.50, subdivision 7; 296A.061; 296A.11;
296A.12; 296A.16; 297A.815, subdivision 3; 297A.992; 473.167; 473.915;
Laws 2014, chapter 312, article 11, section 33; proposing coding for new law in
Minnesota Statutes, chapters 161; 174; 296A; 297A; 435; repealing Minnesota
Statutes 2014, sections 161.081, subdivision 3; 297A.992, subdivision 3.

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

ARTICLE 1

TRUNK HIGHWAY

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 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 1,000,000,000 new text end
new text begin Department of Management and Budget new text end		new text begin 1,000,000 new text end
new text begin TOTAL new text end	new text begin $ new text end	new text begin 1,001,000,000 new text end

new text begin APPROPRIATIONS new text end

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

new text begin $ new text end

new text begin 800,000,000 new text end

new text begin (a) The appropriation in this section is
to the commissioner of transportation for
the corridors of commerce program under
Minnesota Statutes, section 161.088, and is
available in the amounts of $200,000,000 in
each fiscal year from 2016 to 2019.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

Sec. 3. new text begin TRANSPORTATION ECONOMIC DEVELOPMENT PROGRAM new text end

new text begin $ new text end

new text begin 200,000,000 new text end

new text begin (a) This appropriation is for the transportation
economic development program under
Minnesota Statutes, section 174.12, and is
available in the amounts of $50,000,000 in
each fiscal year from 2016 to 2019.
new text end

new text begin (b) 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.
new text end

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

new text begin $ new text end

new text begin 1,000,000 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. 5. new text begin BOND SALE AUTHORIZATION.
new text end

new text begin 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 $1,001,000,000 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.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective July 1, 2015.
new text end

ARTICLE 2

CAPITAL IMPROVEMENTS

Section 1. new text begin CAPITAL IMPROVEMENT APPROPRIATIONS.
new text end

new text begin The sums stated are appropriated from the bond proceeds fund, or another named
fund, to the commissioner of transportation to be spent for public purposes, as described
in this article. Appropriations of bond proceeds must be spent as authorized by the
Minnesota Constitution, article XI, section 5, paragraph (a), to acquire and better public
land and buildings and other public improvements of a capital nature, or as authorized
by the Minnesota Constitution, article XI, section 5, paragraphs (b) to (j), or article XIV.
Unless otherwise specified, money appropriated in this act 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. Unless otherwise specified, the appropriations in this article
are available until the project is completed or abandoned subject to Minnesota Statutes,
section 16A.642. Unless otherwise specified in this article, money appropriated in this
article for activities under Minnesota Statutes, sections 16B.307, 84.946, and 135A.046,
should not be used for projects that can be financed within a reasonable time frame under
Minnesota Statutes, section 16B.322 or 16C.144.
new text end

Sec. 2. new text begin TOTAL APPROPRIATIONS new text end

new text begin $ new text end

new text begin $ new text end

Sec. 3. new text begin LOCAL BRIDGE REPLACEMENT AND REHABILITATION new text end

new text begin $ new text end

new text begin $ new text end

new text begin 300,000,000 new text end

new text begin This appropriation is from the bond proceeds
account in the state transportation fund
to match federal money and to replace or
rehabilitate local deficient bridges as provided
in Minnesota Statutes, section 174.50. This
appropriation is for the actual construction,
reconstruction, and improvement of local
bridges, including design-build contracts and
consultant usage to support these activities.
This includes the cost of actual payments to
landowners for lands acquired for highway
rights-of-way, payments to lessees, interest
subsidies, and relocation expenses. The
commissioner, in awarding grants under
this appropriation may establish priorities
according to the master bridge priority list,
but must use a minimum of $100,000,000
of this appropriation for replacement or
rehabilitation of bridges where the in-place
structure is ineligible for federal funding but
meets at least two of the three criteria under
the federal highway bridge replacement and
rehabilitation program.
new text end

Sec. 4. new text begin LOCAL ROAD IMPROVEMENT FUND GRANTS new text end

new text begin $ new text end

new text begin $ new text end

new text begin 100,000,000 new text end

new text begin This appropriation is for: (1) construction and
reconstruction of local roads with statewide
or regional significance under Minnesota
Statutes, section 174.52, subdivision 4, with
priority given to projects that will expand the
state's ten-ton road system; and (2) grants to
counties to assist in paying the costs of rural
road safety capital improvement projects on
county state-aid highways under Minnesota
Statutes, section 174.52, subdivision 4a.
new text end

Sec. 5. new text begin AT-GRADE RAIL CROSSING IMPROVEMENTS new text end

new text begin $ new text end

new text begin $ new text end

new text begin 5,000,000 new text end

new text begin This appropriation is for implementation of
safety improvements at highway-rail grade
crossings. The commissioner shall identify
highway-rail grade crossing locations and
improvements in consultation with railroads
and relevant road authorities.
new text end new text begin new text end

new text begin This appropriation is not available until the
commissioner of management and budget
has determined that 50 percent of the total
cost of each project has been committed
to the project from the entity that owns
the railroad track, and the conditions of
Minnesota Statutes, section 16A.502, have
been satisfied.
new text end

Sec. 6. new text begin RAIL GRADE SEPARATION IMPROVEMENTS new text end

new text begin $ new text end

new text begin $ new text end

new text begin 122,000,000 new text end

new text begin This appropriation is for the construction of
priority grade separation projects to improve
rail corridor safety, as identified in the report
on grade crossings and rail safety for oil and
other hazardous materials under Laws 2014,
chapter 312, article 10, section 10.
new text end

new text begin This appropriation is not available until the
commissioner of management and budget
has determined that 50 percent of the total
cost of each project has been committed
to the project from the entity that owns
the railroad track, and the conditions of
Minnesota Statutes, section 16A.502, have
been satisfied.
new text end

Sec. 7. new text begin RAIL SERVICE IMPROVEMENT new text end

new text begin $ new text end

new text begin $ new text end

new text begin 10,000,000 new text end

new text begin This appropriation is for the rail service
improvement program to be spent for capital
improvement purposes set forth in Minnesota
Statutes, section 222.50, subdivision 7.
new text end

Sec. 8. new text begin INTERCITY PASSENGER RAIL PROJECTS new text end

new text begin $ new text end

new text begin $ new text end

new text begin 10,000,000 new text end

new text begin This appropriation is to implement capital
improvements and betterments for intercity
passenger rail projects as identified in the
statewide freight and passenger rail plan
under Minnesota Statutes, section 174.03,
subdivision 1b, which are determined to be
eligible for United States Department of
Transportation funding. Notwithstanding
any law to the contrary, a portion or phase
of an intercity passenger rail project may
be accomplished with one or more state
appropriations, and an intercity passenger rail
project need not be completed with any one
appropriation. Capital improvements and
betterments include preliminary engineering,
design, engineering, environmental analysis
and mitigation, acquisition of land and
right-of-way, and construction.
new text end

Sec. 9. new text begin PORT DEVELOPMENT ASSISTANCE new text end

new text begin $ new text end

new text begin $ new text end

new text begin 10,000,000 new text end

new text begin This appropriation is for grants under
Minnesota Statutes, chapter 457A. Any
improvements made with the proceeds of
these grants must be publicly owned.
new text end

Sec. 10. new text begin AIRPORT DEVELOPMENT ASSISTANCE new text end

new text begin $ new text end

new text begin $ new text end

new text begin 10,000,000 new text end

new text begin This appropriation is for grants to airport
authorities for state airport improvements
to meet applicable system objectives as
provided in the Minnesota State Aviation
System Plan.
new text end

Sec. 11. new text begin BOND SALE AUTHORIZATION.
new text end

new text begin Subdivision 1. new text end

new text begin State transportation fund bonds. new text end

new text begin To provide the money
appropriated in this article from the state transportation fund, the commissioner of
management and budget shall sell and issue bonds of the state in an amount up to
$400,400,0000 in the manner, upon the terms, and with the effect prescribed by Minnesota
Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI,
sections 4 to 7. The proceeds of the bonds, except accrued interest and any premium
received on the sale of the bonds, must be credited to a bond proceeds account in the
state transportation fund.
new text end

new text begin Subd. 2. new text end

new text begin Bond proceeds fund. new text end

new text begin To provide the money appropriated in this article
from the bond proceeds fund, the commissioner of management and budget shall sell and
issue bonds of the state in an amount up to $167,167,000 in the manner, upon the terms,
and with the effect prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and
by the Minnesota Constitution, article XI, sections 4 to 7.
new text end

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin Except where otherwise specified, this article is effective July 1, 2015.
new text end

ARTICLE 3

GROSS RECEIPTS TAX

Section 1.

Minnesota Statutes 2014, section 296A.061, is amended to read:

296A.061 CANCELLATION OR NONRENEWAL OF LICENSES.

The commissioner may cancel a license or not renew a license if one of the following
conditions occurs:

(1) the license holder has not filed a petroleum tax return or report for at least one year;

(2) new text begin the license holder has not filed a gross receipts tax return for at least one year;
new text end

new text begin (3) new text end the license holder has not reported any petroleum tax liability new text begin or gross receipts
tax liability new text end on the license holder's returns or reports for at least one year; or

deleted text begin (3) deleted text end new text begin (4) new text end the license holder requests cancellation of the license.

Sec. 2.

new text begin [296A.085] MOTOR FUELS GROSS RECEIPTS TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Imposition. new text end

new text begin A tax is imposed on the wholesale business of selling
the means or substance used for propelling vehicles on the highways of this state. The tax
is imposed at the rate of 6.5 percent of gross receipts derived by a distributor from the first
sale at wholesale of gasoline, gasoline blended with ethanol, agricultural alcohol gasoline,
and special fuels within this state for use in motor vehicles.
new text end

new text begin Subd. 2. new text end

new text begin Exemptions. new text end

new text begin 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.
new text end

new text begin Subd. 3. new text end

new text begin Conversion of tax rate. new text end

new text begin (a) Annually on or before August 1, the
commissioner shall determine the applicable gross receipts motor fuels tax rate per gallon.
The tax per gallon shall be the greater of either:
new text end

new text begin (1) ten cents; or
new text end

new text begin (2) 6.5 percent of the prior fiscal year's average wholesale gasoline price per
gallon in Minnesota for all grades by refiners, as published by the United States Energy
Information Administration and rounded to the nearest tenth of a cent per gallon.
new text end

new text begin (b) The announced rate is effective for a 12-month period consisting of the next
October 1 to September 30. The commissioner shall publish on the department's Web site
the total of the gross receipts tax and the excise tax.
new text end

new text begin Subd. 4. new text end

new text begin Administrative provisions. new text end

new text begin Except as otherwise provided in this chapter,
the relevant audit, assessment, refund, penalty, interest, enforcement, collection remedies,
appeal, and administrative provisions of chapter 289A apply to taxes imposed under
this section.
new text end

new text begin Subd. 5. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner shall deposit the revenues from
the gross receipts tax into the highway user tax distribution fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2015, and applies to
gross receipts attributable to the described products and derived by a distribution on or
after that day.
new text end

Sec. 3.

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 new text begin or motor fuels
gross receipts tax new text end 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.

Sec. 4.

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

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

Gasoline and special fuel excise taxes new text begin and motor fuels gross receipts tax new text end 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
deleted text begin such deleted text end new text begin a new text end business where its authority is conferred by state law or city charter.

Sec. 5.

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

296A.16 REFUND OR CREDIT.

Subdivision 1.

Credit or refund of gasoline or special fuel tax paid.

The
commissioner shall allow the distributor credit or refund of the tax paid on gasoline and
special fuel new text begin and of the motor fuels gross receipts tax attributed to fuel new text end :

(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.

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 new text begin excise or gross receipts new text end 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.

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 tax paid by the distributor on new text begin , or gross receipts from the sale of, new text end gasoline,
undyed diesel fuel, or undyed kerosene destroyed by accident while in the possession of
the dealer; or

(2) the tax paid by a distributor or special fuels dealer on new text begin , or gross receipts from the
sale of, new text end other special fuels destroyed by accident while in the possession of the dealer.

Subd. 4.

Refrigerator units; refunds.

Notwithstanding the provisions of
subdivision 1, the commissioner shall allow a special fuel dealer a refund of the tax paid
on new text begin , or gross receipts from the sale of, new text end 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.

Subd. 4a.

Undyed kerosene; refunds.

Notwithstanding subdivision 1, the
commissioner shall allow a refund of the tax paid on new text begin , or gross receipts from the sale of, new text end
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.

Subd. 4b.

Racing gasoline; refunds.

Notwithstanding subdivision 1, the
commissioner shall allow a licensed distributor a refund of the tax paid on new text begin , or gross
receipts from the sale of, new text end 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.

Subd. 5.

Qualifying service station credit.

Notwithstanding any other provision of
law to the contrary, the tax imposed on gasoline, undyed diesel fuel, or undyed kerosene new text begin ,
together with the amount attributable to gross receipts tax on these fuels, new text end 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.

Subd. 7.

Civil penalty for filing false claim.

A person who violates section
296A.23, subdivision 1, shall forfeit the full amount of the claim. In addition, a person who
is convicted under section 296A.23 for filing a false statement or claim shall, in addition
to any criminal penalties imposed, be prohibited from filing with the commissioner any
claim for refund upon gasoline purchased within six months after such conviction.

Subd. 8.

Appropriation.

There is appropriated to the persons entitled to refund or
credit under this section, from the fund or account in the state treasury to which the money
was credited, an amount sufficient to make the credit or refund.

Sec. 6. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin In Minnesota Statutes, the revisor of statutes shall rename Minnesota Statutes,
chapter 296A, to be "Tax on Petroleum and Other Fuels; Gross Receipts Tax."
new text end

ARTICLE 4

VEHICLE REGISTRATION TAX

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 $10 plus an additional tax equal to deleted text begin 1.25 deleted text end new text begin 1.5 new text end percent of the base value.

(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 deleted text begin $25 deleted text end new text begin $30 new text end .

(i) In no event shall the annual additional tax be less than deleted text begin $25 deleted text end new text begin $30 new text end .

(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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to any annual additional tax for a registration period that begins on or after
September 1, 2015.
new text end

ARTICLE 5

METROPOLITAN AREA SALES TAX FOR TRANSIT

Section 1.

Minnesota Statutes 2014, section 297A.992, is amended to read:

297A.992 METROPOLITAN deleted text begin TRANSPORTATION deleted text end AREA new text begin TRANSIT new text end SALES
TAX new text begin ; TAX, JOINT POWERS BOARD new text end .

Subdivision 1.

Definitions.

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

(1) "metropolitan deleted text begin transportation deleted text end area" means the counties deleted text begin participating in the joint
powers agreement under subdivision 3;
deleted text end

deleted text begin (2) "eligible county" means the county deleted text end of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, deleted text begin or deleted text end new text begin and new text end Washington;

deleted text begin (3) deleted text end new text begin (2) new text end "committee" means the Grant Evaluation and Ranking System (GEARS)
Committee;

deleted text begin (4) "minimum guarantee county" means any metropolitan county or eligible county
that is participating in the joint powers agreement under subdivision 3, whose proportion
of the annual sales tax revenue under this section collected within that county is less
than or equal to three percent; and
deleted text end

new text begin (3) "net transit sales tax proceeds" means the total proceeds from the sales and use
taxes imposed under this section, less the deductions identified under subdivision 8; and
new text end

deleted text begin (5) deleted text end new text begin (4) new text end "population" means the population, as defined in section 477A.011,
subdivision 3, estimated or established by July 15 of the year prior to the calendar year
in which the representatives will serve on the Grant Evaluation and Ranking System
Committee established under subdivision 5.

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
deleted text begin transportation deleted text end new text begin transit new text end sales and use tax at a rate of one-quarter 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 Subd. 2a. new text end

new text begin Additional tax; rates. new text end

new text begin (a) A local sales tax is imposed in the metropolitan
counties, as defined in section 473.121, subdivision 4. In order to maintain the same rate
across the region, the tax is imposed in each county as follows:
new text end

new text begin (1) effective for sales and purchases made after June 30, 2015, a sales and use tax on
retail sales and uses taxable under this chapter, at a rate equal to one percent minus the
tax rate imposed by each county under subdivision 2; and
new text end

new text begin (2) effective for vehicles acquired after June 30, 2015, if not imposed by a county
under subdivision 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 county.
new text end

new text begin (b) The taxes imposed under this subdivision are 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, and Laws 2012, chapter 299, article 3, section 3, or in
determining a tax that may be imposed under any other limitations.
new text end

Subd. 3.

Joint powers agreement.

Before imposing the taxes authorized in
subdivision 2, an eligible county must declare by resolution of its county board to be part
of the metropolitan transportation area and must enter into a joint powers agreement. The
joint powers agreement:

(1) must form a joint powers board, as specified in subdivision 4;

(2) must provide a process that allows any eligible county, by resolution of its county
board, to join the joint powers board and impose the taxes authorized in subdivision 2;

(3) may provide for withdrawal of a participating county before final termination of
the agreement; and

(4) may provide for a weighted voting system for joint powers board decisions.

new text begin Subd. 3a. new text end

new text begin Joint powers agreement. new text end

new text begin Each county in the metropolitan area shall
enter into a joint powers agreement that conforms to the provisions of this section and
that supersedes and revokes any previous joint powers agreement executed under this
section. The joint powers agreement:
new text end

new text begin (1) must form a joint powers board, as specified in subdivision 4;
new text end

new text begin (2) may provide for a weighted voting system for joint powers board decisions;
new text end

new text begin (3) must not provide for withdrawal of a participating county before final termination
of the agreement; and
new text end

new text begin (4) must be designed to carry out the provisions of this section.
new text end

Subd. 4.

Joint powers board.

(a) The joint powers board must consist of one
or more commissioners of each county deleted text begin that is deleted text end in the metropolitan deleted text begin transportation deleted text end area,
appointed by its county board, and the chair of the Metropolitan Council, deleted text begin who deleted text end new text begin all of whom new text end
must have voting rights, subject to subdivision 3, clause (4). The joint powers board has
the powers and duties provided in this section and section 471.59.

(b) The joint powers board may utilize no more than deleted text begin three-fourths deleted text end new text begin one-half new text end of one
percent of the new text begin net transit sales tax new text end proceeds deleted text begin of the taxes imposed under this section deleted text end for
ordinary administrative expenses incurred in carrying out the provisions of this section.
Any additional administrative expenses must be paid by the participating counties.

(c) The joint powers board may establish a technical advisory group that is separate
from the GEARS Committee. The group must consist of representatives of cities, counties,
or public agencies, including the Metropolitan Council. The technical advisory group
must be used solely for technical consultation purposes.

new text begin (d) The chair of the joint powers board must be a county commissioner who is
elected by the board.
new text end

Subd. 5.

Grant deleted text begin application and deleted text end awards; deleted text begin Grant Evaluation and Ranking System
(GEARS) Committee deleted text end new text begin process and general requirements new text end .

(a) The joint powers board
shall establish a grant application process and identify the amount of available funding
for grant awards. Grant applications must be submitted in a form prescribed by the joint
powers board. An applicant must provide, in addition to all other information required by
the joint powers board, the estimated cost of the project, the amount of the grant sought,
possible sources of funding in addition to the grant sought, and identification of any federal
funds that will be utilized if the grant is awarded. A grant application seeking transit capital
funding must identify the source of money necessary to operate the transit improvement.

(b) The joint powers board shall establish a timeline and procedures for the award of
grants, and may award grants only to the state and political subdivisions. The board shall
define objective criteria for the award of grants, which must include, but not be limited to,
consistency with the most recent version of the transportation policy plan adopted by the
Metropolitan Council under section 473.146. The joint powers board shall maximize the
availability and use of federal funds in projects funded under this section.

(c) new text begin Grants must be funded by the proceeds of the taxes imposed under this section, or
by bonds, notes, or other obligations issued by the joint powers board under subdivision 7.
new text end

new text begin Subd. 5a. new text end

new text begin Grant awards; Grant Evaluation and Ranking System (GEARS)
Committee. new text end

new text begin (a) new text end The joint powers board shall establish a GEARS Committee, which
must consist of:

(1) one county commissioner from each county deleted text begin that is deleted text end in the metropolitan
deleted text begin transportation deleted text end area, appointed by its county board;

(2) one elected city representative from each county deleted text begin that is deleted text end in the metropolitan
deleted text begin transportation deleted text end area;

(3) one additional elected city representative from each county for every additional
400,000 in population, or fraction of 400,000, in the county that is above 400,000 in
population; and

(4) the chair of the Metropolitan Council Transportation Committee.

deleted text begin (d) deleted text end new text begin (b) new text end Each city representative must be elected at a meeting of cities in the
metropolitan deleted text begin transportation deleted text end area, which must be convened for that purpose by the
Association of Metropolitan Municipalities.

deleted text begin (e) deleted text end new text begin (c) new text end The committee shall new text begin : new text end

new text begin (1) new text end evaluate grant applications following objective criteria established by the joint
powers board deleted text begin , and must deleted text end new text begin ; new text end

new text begin (2) new text end provide to the joint powers board a selection list of transportation projects that
includes a priority ranking new text begin ;
new text end

new text begin (3) annually evaluate and award grants to local units of government, including
park districts for construction and maintenance of regional bicycle, trail, and pedestrian
infrastructure, and for safe routes to school infrastructure; and
new text end

new text begin (4) annually evaluate and award grants to cities for planning activities related to
land use and transportation linkages, streetcar development, or bicycle and pedestrian
connections.
new text end

new text begin (d) Grants awarded by the committee under paragraph (c), clauses (3) and (4), are
not subject to approval by the board. Annually, the committee shall award grants under
those clauses in a total amount that equals ten percent of the net transit sales tax proceeds,
of which amount no more than ten percent may be used for planning activities.
new text end

new text begin (e) The committee may award a grant under paragraph (c), clause (3), only if the
project being funded is in compliance with:
new text end

new text begin (1) a regional nonmotorized transportation system plan developed by the
Metropolitan Council; or
new text end

new text begin (2) a municipal nonmotorized transportation plan, which must provide coordinated
development of transportation facilities located in adjacent communities, including
connections between facilities in each community new text end .

new text begin Subd. 5b. new text end

new text begin Grant awards; consistency with transportation plans. new text end

deleted text begin (f) deleted text end A grant
award for a transit project located within the metropolitan area, as defined in section
473.121, subdivision 2, may be funded only after the Metropolitan Council reviews the
project for consistency with the transit portion of the Metropolitan Council policy plan
and one of the following occurs:

(1) the Metropolitan Council finds the project to be consistent;

(2) the Metropolitan Council initially finds the project to be inconsistent, but after a
good faith effort to resolve the inconsistency through negotiations with the joint powers
board, agrees that the grant award may be funded; or

(3) the Metropolitan Council finds the project to be inconsistent, and submits the
consistency issue for final determination to a panel, which determines the project to be
consistent. The panel is composed of a member appointed by the chair of the Metropolitan
Council, a member appointed by the joint powers board, and a member agreed upon by
both the chair and the joint powers board.

deleted text begin (g) Grants must be funded by the proceeds of the taxes imposed under this section,
bonds, notes, or other obligations issued by the joint powers board under subdivision 7.
deleted text end

deleted text begin (h) Notwithstanding the provisions of this section except subdivision 6a, of
the revenue collected under this section, the joint powers board shall allocate to the
Metropolitan Council, in fiscal years 2012 and 2013, an amount not less than 75 percent of
the net cost of operations for those transitways that were receiving metropolitan sales tax
funds through an operating grant agreement on June 30, 2011.
deleted text end

deleted text begin (i) The Metropolitan Council shall expend any funds allocated under paragraph (h)
for the operations of the specified transitways solely within those counties that are in the
metropolitan transportation area.
deleted text end

deleted text begin (j) Nothing in paragraph (h) or (i) prevents grant awards to the Metropolitan Council
for capital and operating assistance for transitways and park-and-ride facilities.
deleted text end

Subd. 6.

deleted text begin Allocation of deleted text end Grant awards new text begin ; eligible uses new text end .

(a) The board must allocate
grant awards only for the following deleted text begin transit deleted text end purposes:

new text begin (1) transitway development and operations, consisting of:
new text end

(i) capital improvements to transitways, including, but not limited to, commuter rail
rolling stock, light rail vehicles, and transitway 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 transitway purposes, and construction of transitways new text begin ,
as identified in the transportation policy plan most recently adopted by the Metropolitan
Council new text end ; and

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

new text begin (2) as specified under subdivision 5a new text end .

(b) The joint powers board must deleted text begin annually deleted text end award grants deleted text begin to each minimum guarantee
county in an amount no less than the amount of sales tax revenue collected within that
county deleted text end new text begin as follows:
new text end

new text begin (1) to Scott County and Carver County, the amount of the net sales tax proceeds
generated by one-quarter of one percent collected in each county respectively for calendar
years 2015 to 2019;
new text end

new text begin (2) to the Metropolitan Council for development and construction of transitways,
including all corridors and locally preferred alternatives adopted into the Metropolitan
Council transportation policy plan;
new text end

new text begin (3) to each county in the metropolitan area, an amount that equals one-eighth of
the net transit sales tax proceeds, to be distributed to each county proportionally based
on the sales and use tax proceeds under this section generated in that county divided
by the total sales and use taxes generated in the metropolitan area. Grant awards under
this clause must be used by Hennepin County only for transit purposes, but by all other
counties for any transit purpose or any transportation purpose that has a nexus to transit
or transit-oriented development. Grant awards under this section are not subject to the
joint certification process;
new text end

new text begin (4) to transit authorities to establish, replace, or modify transit shelters to conform
with design specifications and maintenance requirements within the meaning of section
473.41; and
new text end

new text begin (5) to the Center for Transportation Studies, University of Minnesota, $500,000
annually for research to improve accessibility, operational efficiency, and safety of transit
systems new text end .

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

Subd. 6a.

Priority of fund uses.

The joint powers board shall allocate all revenues
from the taxes imposed under this section in conformance with the following priority order:

(1) payment of debt service necessary for the fiscal year on bonds or other
obligations deleted text begin issued prior to January 1, 2011, deleted text end under subdivision 7; and

(2) as otherwise authorized under this section.

Subd. 7.

Bonds.

(a) The joint powers board or any county, acting under a joint
powers agreement as specified in this section, may, by resolution, authorize, issue, and sell
its bonds, notes, or other obligations for the purpose of funding grants under subdivision
6. The joint powers board or county may also, by resolution, issue bonds to refund the
bonds issued pursuant to this subdivision.

(b) The bonds of the joint powers board must be limited obligations, payable solely
from or secured by taxes levied under this section.

(c) The bonds of any county may be limited obligations, payable solely from or
secured by taxes levied under this section. A county may also pledge its full faith, credit,
and taxing power as additional security for the bonds.

(d) Bonds may be issued in one or more series and sold without an election. The bonds
shall be secured, bear the interest rate or rates or a variable rate, have the rank or priority,
be executed in the manner, be payable in the manner, mature, and be subject to the defaults,
redemptions, repurchases, tender options, or other terms, and shall be sold in such manner
as the joint powers board, the regional railroad authority, or the county may determine.

(e) The joint powers board or any regional railroad authority or any county may
enter into and perform all contracts deemed necessary or desirable by it to issue and secure
the bonds, including an indenture of trust with a trustee within or without the state.

(f) Except as otherwise provided in this subdivision, the bonds must be issued and
sold in the manner provided under chapter 475.

(g) The joint powers board or any regional railroad authority wholly within the
metropolitan transportation area also may authorize, issue, and sell its bonds, notes, or
other obligations for the purposes, and in accordance with the procedures, set forth in
section 398A.07 to fund grants as provided in subdivision 6. The bonds of any regional
railroad authority may be limited obligations, payable solely from or secured by taxes
levied under this section. A regional railroad authority may also pledge its taxing powers
as additional security for the bonds.

Subd. 8.

deleted text begin Allocation deleted text end new text begin Remittance new text end of revenues.

After the deductions allowed in
section 297A.99, subdivision 11, the commissioner of revenue shall remit the new text begin net new text end proceeds
of the taxes imposed under this section on a monthly basis, as deleted text begin directed by the joint powers
board under this section deleted text end new text begin provided under section 297A.9925 new text end .

Subd. 9.

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. 10.

Termination of new text begin local option new text end taxes.

(a) The taxes imposed under deleted text begin section
297A.99, subdivision 1, deleted text end new text begin subdivision 2 new text end by a county that withdraws from the joint powers
agreement pursuant to subdivision 3, clause (3), shall terminate when the county has
satisfied its portion, as defined in the joint powers agreement, of all outstanding bonds or
obligations entered into while the county was a member of the agreement.

(b) If the joint powers agreement under subdivision 3 is terminated, the taxes
imposed under deleted text begin section 297A.99, subdivision 1, deleted text end new text begin subdivision 2 new text end at the time of the agreement
termination will terminate when all outstanding bonds or obligations are satisfied. The
auditors of the counties in which the taxes are imposed shall see to the administration of
this paragraph.

Subd. 11.

Report.

The joint powers board shall report annually by February 1 to the
deleted text begin house of representatives and senate deleted text end new text begin chairs and ranking minority members of the legislative
new text end committees having jurisdiction over transportation policy and finance concerning deleted text begin the deleted text end new text begin :
(1) board activities and actions; (2) bonds authorized or issued under subdivision 7; (3) new text end
revenues received new text begin ; new text end and new text begin (4) new text end grants awarded.

Subd. 12.

Grant awards to Metropolitan Council.

Any grant award under this
section made to the Metropolitan Council must supplement, and must not supplant,
operating and capital assistance provided by the state.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, for sales and purchases
made after June 30, 2015, except that the imposition of the tax under subdivision 2a shall
be on the first day of the calendar quarter beginning at least 60 days after the date of final
enactment. This section applies in the counties of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington.
new text end

Sec. 2.

new text begin [297A.9925] METROPOLITAN AREA TRANSIT SALES TAX;
ALLOCATION OF FUNDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have
the meanings given them:
new text end

new text begin (1) "board" means the joint powers board established under section 297A.992; and
new text end

new text begin (2) "net transit sales tax proceeds" has the meaning given in section 297A.992,
subdivision 1.
new text end

new text begin Subd. 2. new text end

new text begin Allocation formula. new text end

new text begin In the manner specified under subdivision 6, the net
transit sales tax proceeds shall be allocated under subdivision 3 by the board and the
Metropolitan Council for all of the following purposes:
new text end

new text begin (1) payment of debt service on bonds or other obligations;
new text end

new text begin (2) Metropolitan Council transit operations;
new text end

new text begin (3) 100 percent of the net operating subsidies for transitways and arterial bus rapid
transit;
new text end

new text begin (4) grants awarded by the GEARS Committee under section 297A.992, subdivision
5a;
new text end

new text begin (5) grants awarded by the joint powers board under section 297A.992, subdivision 6,
paragraph (b), clause (3);
new text end

new text begin (6) expansion and operation of regular route and commuter bus service provided
by metropolitan transit and suburban transit providers with expansion of service by an
annual average rate of four percent;
new text end

new text begin (7) $500,000 annually for a grant to the Center for Transportation Studies at the
University of Minnesota; and
new text end

new text begin (8) the remaining revenues following the allocations under clauses (1) to (7), to the
board, the council, or both, as specified in the joint certification under subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Joint certification. new text end

new text begin (a) The board and the Metropolitan Council shall
annually develop a joint certification as provided in this subdivision. The joint certification
must include, at a minimum, allocations for the purposes stated in subdivision 2 and must
be separately adopted by the board and by the council no later than August 31 of each year.
new text end

new text begin (b) By July 1, 2015, and by March 15 of each subsequent year, the commissioner of
Minnesota management and budget shall provide to the board and council an estimate of
the net transit sales tax proceeds for the subsequent calendar year.
new text end

new text begin (c) If, on October 1 in any year, the board and the Metropolitan Council have not
reached agreement as to the contents of the joint certification, they shall submit the issue
to a panel for dispute resolution. The panel shall be composed of a member appointed by
the chair of the Metropolitan Council, a member appointed by the board, and a member
agreed upon by both the chair and the board. The panel shall mediate discussion of areas
of disagreement and shall issue advisory recommendations.
new text end

new text begin (d) If the commissioner does not receive a joint certification by December 1, the
commissioner may not remit the proceeds identified under subdivision 2, clause (8),
except as provided by a legislatively enacted appropriation.
new text end

new text begin (e) The joint certification must specify the use of sales tax proceeds and account for
deposit of the remainder after allocations.
new text end

new text begin (f) A joint certification may not exceed the estimated net transit sales tax proceeds
less the allocations required under subdivision 2, clauses (1) to (7).
new text end

new text begin (g) By December 15 annually, the board shall electronically submit a copy of any
joint certification to the chairs and ranking minority members of the legislative committees
with jurisdiction over transportation policy and finance.
new text end

new text begin Subd. 4. new text end

new text begin Uses and priorities; Metropolitan Council. new text end

new text begin The Metropolitan Council
shall use funds remitted to the council under this section in the following priority order:
new text end

new text begin (1) continuation of bus and rail transit operations, including but not limited to
operations of providers under section 473.388, and operations and maintenance of all
transitways under revenue operations; and
new text end

new text begin (2) transit expansion in accordance with the transit portion of the council's policy
transit plan, including but not limited to:
new text end

new text begin (i) expansion and upgrades of bus service and related amenities, including transit
provided under section 473.388;
new text end

new text begin (ii) development of arterial bus rapid transit, transitways, and streetcar systems
as appropriate; and
new text end

new text begin (iii) maintenance of affordable transit fares.
new text end

new text begin Subd. 5. new text end

new text begin Uses and priorities; joint powers board. new text end

new text begin The board shall use all funds
remitted to the board under this section as provided in section 297A.992.
new text end

new text begin Subd. 6. new text end

new text begin Remittance schedule. new text end

new text begin (a) The commissioner of revenue shall remit the net
transit sales tax proceeds on a monthly basis to a fiscal agent selected by the board and
council. The fiscal agent shall maintain a council account, a board account, and an escrow
account. Proceeds shall be deposited in order as follows:
new text end

new text begin (1) an amount equal to the net transit sales tax proceeds generated by one-quarter of
one percent collected in Anoka, Dakota, Hennepin, Ramsey, and Washington Counties
into the board account;
new text end

new text begin (2) an amount required under subdivisions 2, 3, and 7, into the board and council
accounts; and
new text end

new text begin (3) the remainder into the escrow account.
new text end

new text begin (b) The rate of deposit for all or any portion of the proceeds into any account may
be modified by mutual agreement of the parties to reflect bond covenants or cash flow
needs. Proceeds deposited into the board and council accounts shall be transferred to the
board and council, respectively, within five business days of receipt. Unless otherwise
directed herein, money held in the escrow account is subject to the joint certification
process under subdivision 3.
new text end

new text begin Subd. 7. new text end

new text begin Transition. new text end

new text begin (a) Notwithstanding subdivision 2, for the calendar year
ending December 31, 2015, the board shall advance proceeds from the net transit sales
tax imposed in section 297A.992, subdivision 2, for transit operations under chapter
473 and for capital needs.
new text end

new text begin (b) The board account will be reimbursed ....... from net sales tax proceeds in
calendar year 2016.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
new text end

Sec. 3. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 297A.992, subdivision 3, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

ARTICLE 6

OTHER TAXES

Section 1.

Minnesota Statutes 2014, section 161.081, subdivision 1, is amended to read:

Subdivision 1.

Distribution of five percent.

deleted text begin (a) deleted text end Pursuant to article 14, section 5, of
the Constitution, five percent of the net highway user tax distribution fund is set aside, and
apportioned deleted text begin to the county state-aid highway fund.
deleted text end

deleted text begin (b) That apportionment is further distributed deleted text end as follows:

(1) deleted text begin 30.5 percent to the town road account created in section 162.081;
deleted text end

deleted text begin (2) 16 percent to the town bridge account, which is created in the state treasury deleted text end new text begin 56.5
percent to the county state-aid highway fund, consisting of: (i) 30.5 percent to the town
road account created in section 162.081; (ii) 16 percent to the town bridge account created
in the state treasury; and (iii) ten percent to the county municipal accounts for purposes
described in section 162.08 new text end ; and

deleted text begin (3) 53.5 percent to the flexible highway account created in subdivision 3 deleted text end new text begin (2) 43.5
percent to the municipal state-aid street fund new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, section 162.07, subdivision 1a, is amended to read:

Subd. 1a.

Apportionment sum and excess sum.

(a) For purposes of this
subdivision, "distribution amount" means the amount identified in section 162.06,
subdivision 1, after the deductions provided for in section 162.06 for administrative costs,
disaster account, research account, and state park road account.

(b) The apportionment sum is calculated deleted text begin by subtracting the excess sum, as calculated
in paragraph (c), from deleted text end new text begin as 68 percent of new text end the distribution amount.

(c) The excess sum is calculated as deleted text begin the sum of revenue within deleted text end new text begin 32 percent of new text end the
distribution amount deleted text begin : deleted text end new text begin .
new text end

deleted text begin (1) attributed to that portion of the gasoline excise tax rate under section 296A.07,
subdivision 3, in excess of 20 cents per gallon, and to that portion of the excise tax rates
in excess of the energy equivalent of a gasoline excise tax rate of 20 cents per gallon
for E85 and M85 under section 296A.07, subdivision 3, and special fuel under section
296A.08, subdivision 2;
deleted text end

deleted text begin (2) attributed to a change in the passenger vehicle registration tax under section
168.013, imposed on or after July 1, 2008, that exceeds (i) the amount collected in fiscal
year 2008, multiplied by (ii) the annual average United States Consumer Price Index for
the calendar year previous to the current calendar year, divided by the annual average
United States Consumer Price Index for calendar year 2007; and
deleted text end

deleted text begin (3) attributed to that portion of the motor vehicle sales tax revenue in excess of the
percentage allocated to the county state-aid highway fund in fiscal year 2007.
deleted text end

deleted text begin (d) For purposes of this subdivision, the United States Consumer Price Index
identified in paragraph (c) is for all urban consumers, United States city average, as
determined by the United States Department of Labor.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2015.
new text end

Sec. 3.

Minnesota Statutes 2014, section 297A.815, subdivision 3, is amended to read:

Subd. 3.

Motor vehicle lease sales tax revenue.

(a) deleted text begin For purposes of this subdivision,
"net revenue" means an amount equal to the revenues, including interest and penalties,
collected under this section, during the fiscal year; less $32,000,000 in each fiscal year.
deleted text end

deleted text begin (b) deleted text end On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the amount of the deleted text begin net revenue deleted text end new text begin revenues new text end for the current fiscal year new text begin , including
interest and penalties collected during the fiscal year under this section new text end .

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

(1) deleted text begin $9,000,000 annually until January 1, 2015, and deleted text end 50 percent deleted text begin annually thereafter deleted text end 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, excluding
the counties of Hennepin and Ramsey, 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; and

(2) deleted text begin the remainder deleted text end new text begin 50 percent new text end to the greater Minnesota transit account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2017.
new text end

Sec. 4. new text begin GREATER MINNESOTA TRANSIT APPROPRIATION.
new text end

new text begin $16,000,000 is appropriated from the general fund to the commissioner of
transportation in each of fiscal years 2016 and 2017, for assistance to transit systems
outside the metropolitan area under Minnesota Statutes, section 174.24.
new text end

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 161.081, subdivision 3, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

ARTICLE 7

EFFICIENCY MEASURES

Section 1.

Minnesota Statutes 2014, section 161.20, is amended by adding a
subdivision to read:

new text begin Subd. 3a. new text end

new text begin Transfer of appropriations. new text end

new text begin With the approval of the commissioner of
management and budget, the commissioner of transportation may transfer unencumbered
balances among appropriations from the trunk highway fund and the state airports fund.
No transfer may be made from appropriations for state road construction, for operations
and maintenance, or for debt service. Transfers under this paragraph may not be made
between funds. Transfers under this paragraph must be reported immediately to the
chairs and ranking minority members of the legislative committees with jurisdiction
over transportation finance.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

new text begin [161.225] LOANS FOR LAND ACQUISITION FOR HIGHWAY
PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Account established. new text end

new text begin The state right-of-way acquisition loan
account is created in the trunk highway fund for the purposes specified in this section.
Money in the account is annually appropriated to the commissioner and does not lapse.
Interest from the investment of money in this account must be deposited in the state
right-of-way acquisition loan account.
new text end

new text begin Subd. 2. new text end

new text begin Loans. new text end

new text begin (a) The commissioner may make loans to counties, towns, and
statutory and home rule charter cities to purchase property within the right-of-way of
a state trunk highway shown on an official map adopted pursuant to section 394.361
or 462.359, or to purchase property within the proposed right-of-way of a principal or
intermediate arterial highway. The loans shall be made from the fund established under this
subdivision for purchases approved by the commissioner. The loans shall bear no interest.
new text end

new text begin (b) The commissioner shall make loans only to:
new text end

new text begin (1) accelerate the acquisition of primarily undeveloped property when there
is a reasonable probability that the property will increase in value before highway
construction, and to update an expired environmental impact statement on a project for
which the right-of-way is being purchased;
new text end

new text begin (2) avert the imminent conversion or the granting of approvals which would allow
the conversion of property to uses which would jeopardize its availability for highway
construction;
new text end

new text begin (3) advance planning and environmental activities on highest priority major
metropolitan river crossing projects under the transportation development guide chapter
policy plan; or
new text end

new text begin (4) take advantage of open market opportunities when developed properties become
available for sale, provided all parties involved are agreeable to the sale and funds are
available.
new text end

new text begin (c) The commissioner shall not make loans to purchase property at a price which
exceeds the fair market value of the property or which includes the costs of relocating or
moving persons or property. The eminent domain process may be used to settle differences
of opinion as to fair market value, provided all parties agree to the process.
new text end

new text begin (d) A private property owner may elect to receive the purchase price either
in a lump sum or in not more than four annual installments without interest on the
deferred installments. If the purchase agreement provides for installment payments,
the commissioner shall make the loan in installments corresponding to those in the
purchase agreement. The recipient of an acquisition loan shall convey the property for the
construction of the highway at the same price which the recipient paid for the property. The
price may include the costs of preparing environmental documents that were required for
the acquisition and that were paid for with money that the recipient received from the loan
fund. Upon notification by the commissioner that the plan to construct the highway has been
abandoned or the anticipated location of the highway has changed, the recipient shall sell
the property at market value in accordance with the procedures required for the disposition
of the property. All rents and other money received because of the recipient's ownership
of the property and all proceeds from the conveyance or sale of the property shall be paid
to the commissioner. If a recipient is not permitted to include in the conveyance price the
cost of preparing environmental documents that were required for the acquisition, then the
recipient is not required to repay the commissioner an amount equal to 40 percent of the
money received from the loan fund and spent in preparing the environmental documents.
new text end

new text begin (e) For administration of the loan program, the commissioner may expend from the
fund each year an amount no greater than three percent of the amount of the proceeds for
that year.
new text end

new text begin Subd. 3. new text end

new text begin Loans for acquisition and relocation. new text end

new text begin (a) The commissioner may
make loans to acquiring authorities within the metropolitan area to purchase homestead
property located in a proposed state trunk highway right-of-way or project, and to provide
relocation assistance. Acquiring authorities are authorized to accept the loans and to
acquire the property. Except as provided in this subdivision, the loans shall be made as
provided in subdivision 2. Loans shall be in the amount of the fair market value of the
homestead property plus relocation costs and less salvage value. Before construction of
the highway begins, the acquiring authority shall convey the property to the commissioner
at the same price it paid, plus relocation costs and less its salvage value. Acquisition and
assistance under this subdivision must conform to sections 117.50 to 117.56.
new text end

new text begin (b) The commissioner may make loans only when:
new text end

new text begin (1) the owner of affected homestead property requests acquisition and relocation
assistance from an acquiring authority;
new text end

new text begin (2) federal or state financial participation is not available;
new text end

new text begin (3) the owner is unable to sell the homestead property at its appraised market value
because the property is located in a proposed state trunk highway right-of-way or project as
indicated on an official map or plat adopted under section 160.085, 394.361, or 462.359; and
new text end

new text begin (4) the commissioner agrees to and approves the fair market value of the homestead
property, which approval shall not be unreasonably withheld.
new text end

new text begin (c) For purposes of this subdivision, the following terms have the meanings given
them:
new text end

new text begin (1) "acquiring authority" means counties, towns, and statutory and home rule
charter cities;
new text end

new text begin (2) "homestead property" means: (i) a single-family dwelling occupied by the
owner, and the surrounding land, not exceeding a total of ten acres; or (ii) a manufactured
home, as defined in section 327B.01, subdivision 13; and
new text end

new text begin (3) "salvage value" means the probable sale price of the dwelling and other property
that is severable from the land if offered for sale on the condition that it be removed from
the land at the buyer's expense, allowing a reasonable time to find a buyer with knowledge
of the possible uses of the property, including separate use of serviceable components and
scrap when there is no other reasonable prospect of sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2016.
new text end

Sec. 3.

Minnesota Statutes 2014, section 168.013, subdivision 8, is amended to read:

Subd. 8.

Tax proceeds to highway user fund; fee proceeds to vehicle services
account.

(a) Unless otherwise specified in this chapter, the net proceeds of the registration
tax imposed under this chapter new text begin , including the penalty surcharge for late payment, imposed
in section 168.31, subdivision 1a, new text end must be collected by the commissioner, paid into the
state treasury, and credited to the highway user tax distribution fund.

(b) All fees collected under this chapter, unless otherwise specified, must be
deposited in the vehicle services operating account in the special revenue fund under
section 299A.705.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies to vehicle
registration taxes due and unpaid on and after that date.
new text end

Sec. 4.

Minnesota Statutes 2014, section 168.31, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Penalty surcharge for late payment. new text end

new text begin Except as otherwise provided in
subdivisions 4 and 4a, a vehicle owner who has failed to pay the tax required under this
chapter on or before the due date shall pay in full the tax due on the vehicle, together with
a penalty surcharge of $25 for each month or portion of a month following the expiration
of the registration period, except that the amount of the late fee may not exceed $100.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and applies to vehicle
registration taxes due and unpaid on and after that date.
new text end

Sec. 5.

new text begin [174.53] FEDERAL FUND FLEXIBILITY PROGRAM.
new text end

new text begin The commissioner shall establish a program to allow greater flexibility and
efficiency in the allocation of federal funds for state-aid transportation projects. The
commissioner shall:
new text end

new text begin (1) establish and administer selection criteria and a process under which a local unit
of government that would otherwise receive federal funds for a local transportation project
would be able to finance the project with state funds instead of federal funds;
new text end

new text begin (2) redirect the unused federal funds to transportation projects for which federal
funds could be utilized by the state more efficiently and productively;
new text end

new text begin (3) achieve a reasonable degree of equity among the department districts in
distributing funds under the program; and
new text end

new text begin (4) ensure that the state's receipt of federal funds for transportation projects is not
jeopardized by the program.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

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
transitway buses; capital costs for park-and-ride facilities; feasibility studies, planning,
alternative analyses, environmental studies, engineering, or construction of transitways; or
operating assistance for transitways.
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 (h) "Unimproved parcel" means a parcel of land that abuts an unimproved municipal
street and that is not served by municipal sewer or water utilities; or in the case of a parcel
abutting an improved municipal street and served by municipal sewer or water utilities,
the parcel contains a structure that has not previously been occupied.
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. A street improvement district must not include any
property already located in another street improvement district.
new text end

new text begin Subd. 3. new text end

new text begin Uniformity. new text end

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

new text begin (1) estimated market value;
new text end

new text begin (2) tax capacity;
new text end

new text begin (3) front footage;
new text end

new text begin (4) land or building area; or
new text end

new text begin (5) some combination of clauses (1) to (4).
new text end

new text begin (b) Costs must not be apportioned in such a way that the cost borne by any
classification of property is more than twice the cost that would be borne by that
classification if costs were apportioned uniformly to all classifications of property under
the method selected in paragraph (a), clauses (1) to (5).
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 30 days before
the hearing and posted for at least 30 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 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. 6. 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. 7. new text end

new text begin Improvement fee. 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
public notice is provided and a public hearing is held in the same manner as provided in
subdivision 4.
new text end

new text begin Subd. 8. 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

new text begin Subd. 9. new text end

new text begin Undeveloped parcels; fees. new text end

new text begin A municipality may not impose a street
improvement fee on any undeveloped parcel located within an established street
improvement district until at least three years after either the date of substantial completion
of the paving of the previous unimproved municipal street or the date which a previously
unoccupied structure is first occupied, whichever is later.
new text end

new text begin Subd. 10. new text end

new text begin Exempt property. new text end

new text begin A municipality must not impose a municipal street
improvement fee on property that is exempt from taxation under the provisions of the
Minnesota Constitution, article X, section 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015, and expires on June
30, 2020, except as to municipal street improvement fees that were imposed before the
expiration date. Municipal street improvement fees imposed before the expiration date
continue until they expire by the terms of the original ordinance.
new text end

Sec. 7.

Minnesota Statutes 2014, section 473.167, is amended to read:

473.167 HIGHWAY new text begin AND TRANSIT new text end PROJECTS.

Subd. 2.

Loans for acquisition.

(a) The council may make loans to counties, towns,
and statutory and home rule charter cities within the metropolitan area for the purchase of
property within the right-of-way of a state trunk highway shown on an official map adopted
pursuant to section 394.361 or 462.359 deleted text begin or deleted text end new text begin , new text end for the purchase of property within the proposed
right-of-way of a principal or intermediate arterial highway designated by the council as a
part of the metropolitan highway system plan and approved by the council pursuant to
section 473.166 new text begin , or for the purchase of property needed for proposed transit-related capital
improvements, including transitways designated in the council's most recent transportation
policy plan new text end . The loans shall be made by the council, from the fund established pursuant to
this subdivision, for purchases approved by the council. The loans shall bear no interest.

(b) The council shall make loans only:

(1) to accelerate the acquisition of primarily undeveloped property when there
is a reasonable probability that the property will increase in value before highway new text begin or
transit-related new text end construction, and to update an expired environmental impact statement on
a project for which the right-of-way is being purchased;

(2) to avert the imminent conversion or the granting of approvals which would allow
the conversion of property to uses which would jeopardize its availability for highway new text begin or
transit-related new text end construction;

(3) to advance planning and environmental activities on highest priority major
metropolitan river crossing projects, under the transportation development guide
chapter/policy plan; or

(4) to take advantage of open market opportunities when developed properties
become available for sale, provided all parties involved are agreeable to the sale and
funds are available.

(c) The council shall not make loans for the purchase of property at a price which
exceeds the fair market value of the property or which includes the costs of relocating or
moving persons or property. The eminent domain process may be used to settle differences
of opinion as to fair market value, provided all parties agree to the process.

(d) A private property owner may elect to receive the purchase price either in a
lump sum or in not more than four annual installments without interest on the deferred
installments. If the purchase agreement provides for installment payments, the council
shall make the loan in installments corresponding to those in the purchase agreement. The
recipient of an acquisition loan shall convey the property for the construction of the highway
at the same price which the recipient paid for the property. The price may include the costs
of preparing environmental documents that were required for the acquisition and that were
paid for with money that the recipient received from the loan fund. Upon notification by
the council that the plan to construct the highway new text begin or transit project new text end has been abandoned or
the anticipated location of the highway new text begin or transit project new text end changed, the recipient shall sell
the property at market value in accordance with the procedures required for the disposition
of the property. All rents and other money received because of the recipient's ownership
of the property and all proceeds from the conveyance or sale of the property shall be paid
to the council. If a recipient is not permitted to include in the conveyance price the cost
of preparing environmental documents that were required for the acquisition, then the
recipient is not required to repay the council an amount equal to 40 percent of the money
received from the loan fund and spent in preparing the environmental documents.

(e) The proceeds of the tax authorized by subdivision 3, all money paid to the
council by recipients of loans, and all interest on the proceeds and payments shall be
maintained as a separate fund. For administration of the loan program, the council may
expend from the fund each year an amount no greater than three percent of the amount of
the proceeds for that year.

Subd. 2a.

Loans for acquisition and relocation.

(a) The council may make loans
to acquiring authorities within the metropolitan area to purchase homestead property
located in a proposed state trunk highway right-of-way or project new text begin or transit-related project new text end ,
and to provide relocation assistance. Acquiring authorities are authorized to accept the
loans and to acquire the property. Except as provided in this subdivision, the loans shall
be made as provided in subdivision 2. Loans shall be in the amount of the fair market
value of the homestead property plus relocation costs and less salvage value. Before
construction of the highway new text begin or transit-related project new text end begins, the acquiring authority shall
convey the property to the commissioner of transportation new text begin or council new text end at the same price it
paid, plus relocation costs and less its salvage value. Acquisition and assistance under this
subdivision must conform to sections 117.50 to 117.56.

(b) The council may make loans only when:

(1) the owner of affected homestead property requests acquisition and relocation
assistance from an acquiring authority;

(2) federal or state financial participation is not available;

(3) the owner is unable to sell the homestead property at its appraised market
value because the property is located in a proposed state trunk highway right-of-way or
project as indicated on an official map or plat adopted under section 160.085, 394.361,
or 462.359 new text begin , or transit-related project new text end ; and

(4) the council agrees to and approves the fair market value of the homestead
property, which approval shall not be unreasonably withheld.

(c) For purposes of this subdivision, the following terms have the meanings given
them.

(1) "Acquiring authority" means counties, towns, and statutory and home rule
charter cities in the metropolitan area.

(2) "Homestead property" means: (i) a single-family dwelling occupied by the
owner, and the surrounding land, not exceeding a total of ten acres; or (ii) a manufactured
home, as defined in section 327B.01, subdivision 13.

(3) "Salvage value" means the probable sale price of the dwelling and other property
that is severable from the land if offered for sale on the condition that it be removed from
the land at the buyer's expense, allowing a reasonable time to find a buyer with knowledge
of the possible uses of the property, including separate use of serviceable components and
scrap when there is no other reasonable prospect of sale.

Subd. 3.

Tax.

The council may levy a tax on all taxable property in the metropolitan
area, as defined in section 473.121, to provide funds for loans made pursuant to
subdivisions 2 and 2a. This tax for the right-of-way acquisition loan fund shall be certified
by the council, levied, and collected in the manner provided by section 473.13. The tax
shall be in addition to that authorized by section 473.249 and any other law and shall not
affect the amount or rate of taxes which may be levied by the council or any metropolitan
agency or local governmental unit. The amount of the levy shall be as determined and
certified by the council, provided that the tax levied by the Metropolitan Council for the
right-of-way acquisition loan fund shall not exceed deleted text begin $2,828,379 for taxes payable in 2004
and $2,828,379 for taxes payable in 2005. The amount of the levy for taxes payable in
2006 and subsequent years shall not exceed deleted text end the product of (1) the Metropolitan Council's
property tax levy limitation under this subdivision for the previous year, multiplied by
(2) one plus a percentage equal to the growth in the implicit price deflator as defined
in section 275.70, subdivision 2.

Subd. 4.

State review.

The commissioner of revenue shall certify the council's levy
limitation under this section to the council by August 1 of the levy year. The council must
certify its proposed property tax levy to the commissioner of revenue by September 1 of
the levy year. The commissioner of revenue shall annually determine whether the property
tax for the right-of-way acquisition loan fund certified by the Metropolitan Council for
levy following the adoption of its proposed budget is within the levy limitation imposed
by this section. The determination must be completed prior to September 10 of each year.
If current information regarding market valuation in any county is not transmitted to the
commissioner in a timely manner, the commissioner may estimate the current market
valuation within that county for purposes of making the calculation.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Laws 2014, chapter 312, article 11, section 33, is amended to read:

Sec. 33. TRANSPORTATION EFFICIENCIES.

new text begin (a) new text end The commissioner of transportation shall include in the report under Minnesota
Statutes, section 174.56, due by December 15, 2015, information on efficiencies
implemented in fiscal year 2015 in planning and project management and delivery,
along with an explanation of the efficiencies employed to achieve the savings and the
methodology used in the calculations. The level of savings achieved must equal, in
comparison with the total state road construction budget for that year, a minimum of five
percent in fiscal year 2015. The report must identify the projects that have been advanced
or completed due to the implementation of efficiency measures.

new text begin (b) The commissioner shall identify in the report those recommendations from the
Transportation Strategic Management and Operations Advisory Task Force Report dated
January 23, 2009, submitted to the legislature by the Departments of Administration
and Transportation, as required by Laws 2008, chapter 152, article 6, section 9,
that the commissioner has implemented, with a description of current status of the
recommendation and results of implementation.
new text end

new text begin (c) The commissioner shall present in the report plans to incorporate greater
efficiencies in department operation and decision-making, including, but not limited to,
the following: financing innovations, mode choice in project selection and design, land
use planning, return on investment calculation, project delivery, including selection of
materials and decreasing project delivery time, and efficiencies in multiagency permitting.
new text end

Sec. 9. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the trunk highway fund to the commissioner of
transportation for deposit in the state right-of-way acquisition loan account under
Minnesota Statutes, section 161.225.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2015.
new text end

ARTICLE 8

TRANSPORTATION POLICY

Section 1.

Minnesota Statutes 2014, section 174.42, is amended by adding a
subdivision to read:

new text begin Subd. 3. new text end

new text begin Funding requirement for greater Minnesota. new text end

new text begin (a) In each federal fiscal
year, the commissioner shall spend out of National Highway Performance Program funds
a total amount in federal transportation funds for an active transportation competitive
grant program in greater Minnesota that totals a minimum of $16,000,000 in excess of
the average annual spending on greater Minnesota transportation alternatives projects in
federal fiscal years between October 2009 and September 2012. This requirement must
not reduce the amount of federal transportation funding for metropolitan projects.
new text end

new text begin (b) The commissioner of transportation shall create and implement the active
transportation competitive grant program. The program must receive funds under this
subdivision and may receive funds from any other source. The commissioner shall
establish criteria for grant awards, in collaboration with experts in bicycle, pedestrian,
trail, and safe routes to school infrastructure. The criteria must clarify statewide priorities,
ensure that grant awards further these statewide priorities, and require grant recipients
to be accountable for their use of program resources. Cities, counties, and townships in
greater Minnesota are eligible to apply for grants for projects related to safe routes to
school infrastructure and noninfrastructure activities, bicycle and pedestrian elements
of a main street program, and planning activities and construction and maintenance of
bicycle, trail, and pedestrian infrastructure.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, 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; deleted text begin and
deleted text end

(9) to fund rail planning studies new text begin ; and
new text end

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

(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. 3.

Minnesota Statutes 2014, section 473.915, is amended to read:

473.915 PROCUREMENTS.

new text begin Subdivision 1. new text end

new text begin Review by Legislative Advisory Commission. new text end

All proposed
Metropolitan Council procurements over $125,000,000 must be reviewed by the
members of the Legislative Advisory Commission under section 3.30 and the ranking
minority members of the house of representatives and senate committees or divisions
responsible for overseeing the items subject to the proposed procurement. The chair
of the Metropolitan Council shall give notice to the Legislative Advisory Commission
secretary when a procurement over $125,000,000 is being considered. The commission
shall take testimony on the procurements.

new text begin Subd. 2. new text end

new text begin Review by Transportation Accessibility Advisory Committee.
new text end

new text begin The council shall consult with the Transportation Accessibility Advisory Committee
concerning all proposed Metropolitan Council procurements of transit vehicles and shall
consider the committee's input before ordering vehicles.
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 in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.
new text end

Sec. 4. new text begin COST SHARE POLICY.
new text end

new text begin The commissioner of transportation, in consultation with representatives of local
units of government, shall create and adopt a policy concerning cost participation
for cooperative construction projects and maintenance responsibilities between the
Department of Transportation and local units of government. The policy must minimize
the share of cooperative project costs to be funded by the local units of government,
while complying in all respects with the state constitutional requirements concerning
allowable uses of the trunk highway fund. The policy must be completed and adopted by
the commissioner no later than September 1, 2015.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5. new text begin PUBLIC-PRIVATE PARTNERSHIP PILOT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Public-private partnership initiatives. new text end

new text begin (a) The commissioner
of transportation and Metropolitan Council are authorized to consider and utilize
public-private partnership procurement methods for up to three pilot projects as provided
in this section. Utilization of public-private partnerships is a recognition of the importance
to the state of an efficient and safe transportation system, and the necessity of developing
alternative funding sources to supplement traditional sources of transportation revenues.
A public-private partnership initiative must take advantage of private sector efficiencies in
design and construction, along with expertise in finance and development, and provide a
better long-term value for the state than could be obtained through traditional procurement
methods.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 160.845, 160.98, or any other law
to the contrary, the commissioner or council may consider for use in the pilot program any
existing public-private partnership mechanism or any proposed mechanism that proves the
best available option for the state. Mechanisms the commissioner or council may consider
include, but are not limited to, toll facilities, BOT facilities, BTO facilities, user fees,
construction payments, joint development agreements, negotiated exactions, air rights
development, street improvement districts, or tax increment financing districts for transit.
For the purposes this section, toll facilities, BOT facilities, and BTO facilities have the
meanings given under Minnesota Statutes, section 160.84.
new text end

new text begin (c) As part of the pilot program, the commissioner and council are directed to form
an independent advisory and oversight office, the Joint Program Office for Economic
Development and Alternative Finance. The office shall consist of the commissioner of
management and budget, the commissioner of employment and economic development,
the commissioner of administration, the commissioner of transportation, the Metropolitan
Council, and one representative each from the American Council of Engineering
Companies - Minnesota chapter, the Central Minnesota Transportation Alliance, the
Counties Transit Improvement Board, and the Minnesota County Engineers Association.
In addition, the commissioner and Metropolitan Council shall invite the Federal Highway
Administration and the Federal Transit Administration to participate in the office's
activities. The office's duties shall include, but are not limited to, reviewing and approving
projects proposed under this section, reviewing any contractual or financial agreements
to ensure program requirements are met, and ensuring that any proposed or executed
agreement serves the public interest.
new text end

new text begin Subd. 2. new text end

new text begin Pilot program restrictions and project selection. new text end

new text begin (a) The commissioner
or council may receive or solicit and evaluate proposals to build, operate, and finance
projects that are not inconsistent with the commissioner's most recent statewide
transportation plan or the council's most recent transportation policy plan. If the
department or council receives an unsolicited proposal, the department or council shall
publish a notice in the State Register at least once a week for two weeks stating that the
department or council has received the proposal and will accept, for 120 days after the
initial date of publication, other proposals for the same project purpose. The private
proposer must be selected on a competitive basis.
new text end

new text begin (b) When entering into a public-private partnership, the commissioner or
Metropolitan Council may not enter into any noncompete agreement that inhibits the
state's ability to address ongoing or future infrastructure needs.
new text end

new text begin (c) If the commissioner or council enters into a public-private partnership agreement
that includes a temporary transfer of ownership or control of a road, bridge, or other
infrastructure investment to the private entity, the agreement must include a provision
requiring the return of the road, bridge, or other infrastructure investment to the state
after a specified period of time.
new text end

new text begin (d) The commissioner and council may only consider new projects for a
public-private partnership. The commissioner and council are prohibited from considering
projects involving existing infrastructure for a public-private partnership, unless the
proposed project adds capacity to the existing infrastructure.
new text end

new text begin Subd. 3. new text end

new text begin Evaluation and selection of private entity and project. new text end

new text begin (a) The
commissioner and council shall contract with one or more consultants to assist in proposal
evaluation. The consultant must possess expertise and experience in public-private
partnership project evaluation methodology, such as value for money, costs of
public-private partnership compared with costs of public project delivery, and cost-benefit
analysis.
new text end

new text begin (b) When soliciting, evaluating, and selecting a private entity with which to enter
into a public-private partnership and before selecting a project, the commissioner or
council must consider:
new text end

new text begin (1) the ability of the proposed project to improve safety, reduce congestion, increase
capacity, and promote economic growth;
new text end

new text begin (2) the proposed cost of and financial plan for the project;
new text end

new text begin (3) the general reputation, qualifications, industry experience, and financial capacity
of the private entity;
new text end

new text begin (4) the project's proposed design, operation, and feasibility;
new text end

new text begin (5) length and extent of transportation and transit service disruption;
new text end

new text begin (6) comments from local citizens and affected jurisdictions;
new text end

new text begin (7) benefits to the public;
new text end

new text begin (8) the safety record of the private entity; and
new text end

new text begin (9) any other criteria the commissioner or council deems appropriate.
new text end

new text begin (c) The independent advisory and oversight office established under subdivision
1, paragraph (c), shall review proposals evaluated by the commissioner or council to
ensure the requirements of this section are being met. The independent advisory and
oversight office shall first determine whether the project, as proposed, serves the public
interest. In making this determination, the office must identify and consider advantages
and disadvantages for various stakeholders, including taxpayers, workers, transportation
and transit providers and operators, transportation and transit users, commercial vehicle
operators, and the general public, including the impact on the state's economy. If the
proposed project serves the public interest, the office must evaluate the proposals
according to the criteria specified in this section.
new text end

new text begin Subd. 4. new text end

new text begin Public-private agreement. new text end

new text begin (a) A public-private agreement between the
commissioner or the council and a private entity shall, at a minimum, specify:
new text end

new text begin (1) the planning, acquisition, financing, development, design, construction,
reconstruction, replacement, improvement, maintenance, management, repair, leasing, or
operation of the project;
new text end

new text begin (2) the term of the public-private agreement;
new text end

new text begin (3) the type of property interest, if any, that the private entity will have in the project;
new text end

new text begin (4) a description of the actions the commissioner or council may take to ensure
proper maintenance of the project;
new text end

new text begin (5) whether user fees will be collected on the project and the basis by which the user
fees shall be determined and modified along with identification of the public agency that
will determine and modify fees;
new text end

new text begin (6) compliance with applicable federal, state, and local laws;
new text end

new text begin (7) grounds for termination of the public-private agreement by the commissioner
or council;
new text end

new text begin (8) adequate safeguards for the traveling public and residents of the state in event of
default on the contract;
new text end

new text begin (9) financial protection for the state in the event of default; and
new text end

new text begin (10) procedures for amendment of the agreement.
new text end

new text begin (b) A public-private agreement between the commissioner or council and a private
entity may provide for:
new text end

new text begin (1) review and approval by the commissioner or council of the private entity's plans
for the development and operation of the project;
new text end

new text begin (2) inspection by the commissioner or council of construction and improvements
to the project;
new text end

new text begin (3) maintenance by the private entity of a liability insurance policy;
new text end

new text begin (4) filing of appropriate financial statements by the private entity on a periodic basis;
new text end

new text begin (5) filing of traffic reports by the private entity on a periodic basis;
new text end

new text begin (6) financing obligations of the commissioner or council and the private entity;
new text end

new text begin (7) apportionment of expenses between the commissioner or council and the private
entity;
new text end

new text begin (8) the rights and remedies available in the event of a default or delay;
new text end

new text begin (9) the rights and duties of the private entity, the commissioner or council, and other
state or local governmental entities with respect to the use of the project;
new text end

new text begin (10) the terms and conditions of indemnification of the private entity by the
commissioner or council;
new text end

new text begin (11) assignment, subcontracting, or other delegations of responsibilities of (i)
the private entity, or (ii) the commissioner or council under agreement to third parties,
including other private entities or state agencies;
new text end

new text begin (12) if applicable, sale or lease to the private entity of private property related to
the project;
new text end

new text begin (13) traffic enforcement and other policing issues; and
new text end

new text begin (14) any other terms and conditions the commissioner or council deems appropriate.
new text end

new text begin (c) The independent advisory and oversight office established under subdivision
1, paragraph (c), shall review any proposed contractual agreement prior to execution
in order to ensure that the contract serves the public interest and the requirements of
this section are met.
new text end

new text begin Subd. 5. new text end

new text begin Funding from federal government. new text end

new text begin (a) The commissioner or council may
accept from the United States or any of its agencies funds that are available to the state
for carrying out the pilot program, whether the funds are available by grant, loan, or
other financial assistance.
new text end

new text begin (b) The commissioner or council may enter into agreements or other arrangements
with the United States or any of its agencies as necessary for carrying out the pilot program.
new text end

new text begin (c) The commissioner or council shall seek to maximize project funding from
nonstate sources and may combine federal, state, local, and private funds to finance a
public-private partnership pilot project.
new text end

new text begin Subd. 6. new text end

new text begin Reporting. new text end

new text begin By August 1, 2016, and annually by August 1 thereafter, the
commissioner and council shall submit to the chairs and ranking minority members of the
house of representatives and senate committees having jurisdiction over transportation
policy and finance a list of all agreements executed under the pilot program authority. The
list must identify each agreement, the contracting entities, contract amount and duration,
any repayment requirements, and provide an update on the project's progress. The list
may be submitted electronically and is subject to Minnesota Statutes, section 3.195,
subdivision 1.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after an appropriation is
effective to pay administrative expenses creating and operating the Joint Program Office
for Economic Development and Alternative Finance, hiring a consultant, and preparing
required reports.
new text end

Sec. 6. new text begin TRANSPORTATION PROJECT SELECTION PROCESS.
new text end

new text begin Subdivision 1. new text end

new text begin Adoption of process and public input. new text end

new text begin The commissioner of
transportation shall, after consultation with metropolitan planning organizations, regional
development commissions, area transportation partnerships, local governments, and the
Metropolitan Council, draft a proposed transportation project data-driven evaluation
process to provide an objective and consistent analysis to assist in prioritization of
highway construction, reconstruction, and improvement projects. No later than January
10, 2016, the proposed process must be reported to the chairs and ranking minority
members of the house of representatives and senate committees on transportation policy
and finance and publicized, along with a schedule for public hearings and additional
opportunities for public input electronically and at locations throughout the state. No
later than March 1, 2016, after public comment has been heard and incorporated into the
proposed evaluation process, the commissioner shall adopt a final process for use in
highway project investment decisions on and after July 1, 2016.
new text end

new text begin Subd. 2. new text end

new text begin Factors in analysis. new text end

new text begin The process must be based on objective, consistent,
and quantifiable analysis. Factors in the analysis must include return on investment,
benefit-cost, local rankings, safety, congestion mitigation, economic development,
accessibility, environmental quality, regional and metropolitan-rural balance, and land
use. The process may assign different weights to factors in evaluating projects on the
trunk highway system, the county state-aid highway system, and the municipal state-aid
street system.
new text end

new text begin Subd. 3. new text end

new text begin Exemptions. new text end

new text begin A proposed project is exempt from the process if it is funded
by a grant from: (1) the corridors of commerce program under Minnesota Statutes, section
161.088; (2) the transportation economic development program under Minnesota Statutes,
section 174.12; or (3) the joint powers board under Minnesota Statutes, section 297A.992,
subdivision 6, paragraph (b), clause (3); or if subjecting it to the evaluation process would
result in a loss of federal funds.
new text end

new text begin Subd. 4. new text end

new text begin Information on department Web site. new text end

new text begin For each proposed project evaluated
under this process, the applicable scoring process, the score for each factor, and the overall
score are public information and must be publicized on the department's Web site.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7. new text begin REPORT ON DEDICATED FUND EXPENDITURES. new text end

new text begin
By January 15, 2016, the commissioner of management and budget shall submit
a report to the chairs and ranking minority members of the legislative committees with
jurisdiction over transportation finance. The report must list detailed expenditures and
transfers from the trunk highway fund and highway user tax distribution fund for fiscal
years 2010 through 2015, and shall include information on the purpose of each expenditure.
new text end