1.1                          A bill for an act 
  1.2             relating to transportation; abolishing population 
  1.3             threshold for municipal state-aid fund eligibility; 
  1.4             amending Minnesota Statutes 1998, sections 160.02, 
  1.5             subdivision 5, and by adding a subdivision; 161.083; 
  1.6             162.02, subdivision 1; 162.08, subdivisions 2, 3, and 
  1.7             4; 162.09, subdivision 1; 162.12, subdivisions 1 and 
  1.8             3; 162.13; 162.14, subdivision 1; 162.17, subdivision 
  1.9             1; and 162.18, subdivision 1; repealing Minnesota 
  1.10            Statutes 1998, sections 162.02, subdivision 12; 
  1.11            162.08, subdivisions 1, 5, and 6; 162.09, subdivision 
  1.12            4; and 162.17, subdivisions 2 and 3. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1998, section 160.02, 
  1.15  subdivision 5, is amended to read: 
  1.16     Subd. 5.  [MUNICIPAL STATE-AID STREETS.] "Municipal 
  1.17  state-aid streets" includes all streets within the cities having 
  1.18  a population of 5,000 or more, established in accordance with 
  1.19  law as municipal state-aid streets.  
  1.20     Sec. 2.  Minnesota Statutes 1998, section 160.02, is 
  1.21  amended by adding a subdivision to read: 
  1.22     Subd. 17.  [CITY.] Notwithstanding section 410.015, "city" 
  1.23  includes statutory and home rule charter cities. 
  1.24     Sec. 3.  Minnesota Statutes 1998, section 161.083, is 
  1.25  amended to read: 
  1.26     161.083 [MUNICIPAL TURNBACK ACCOUNT, EXPENDITURE.] 
  1.27     Except as hereinafter provided, all money accruing to the 
  1.28  municipal turnback account shall be expended in accordance with 
  1.29  rules of the commissioner of transportation in paying a 
  2.1   municipality having a population of 5,000 or more for the 
  2.2   reconstruction and improvement of former trunk highways, or 
  2.3   portions thereof, that have reverted to such municipality in 
  2.4   accordance with law, and have become a part of the municipal 
  2.5   state-aid street system. 
  2.6      Sec. 4.  Minnesota Statutes 1998, section 162.02, 
  2.7   subdivision 1, is amended to read: 
  2.8      Subdivision 1.  [CREATION.] There is created a county 
  2.9   state-aid highway system which must be established, located, 
  2.10  constructed, reconstructed, improved, and maintained as public 
  2.11  highways by the counties under rules not inconsistent with this 
  2.12  section made and promulgated by the commissioner as provided in 
  2.13  this chapter.  The counties are vested with the rights, title, 
  2.14  easements, and their appurtenances, held by or vested in any of 
  2.15  the towns or municipal subdivisions or dedicated to the public 
  2.16  use prior to the time a road or portion of a road is taken over 
  2.17  by the county as a county state-aid highway.  If a county 
  2.18  state-aid highway is established over a center portion of a 
  2.19  street in a city having a population of 5,000 or more, then the 
  2.20  remaining portion of the street may be established as a 
  2.21  municipal state-aid street. 
  2.22     Sec. 5.  Minnesota Statutes 1998, section 162.08, 
  2.23  subdivision 2, is amended to read: 
  2.24     Subd. 2.  [STATEMENT OF AMOUNT APPORTIONED AND ALLOCATED.] 
  2.25  Upon determining the amount of money to be apportioned to each 
  2.26  of the counties and the sum of such amount to be allocated for 
  2.27  expenditure on those county state-aid highways located within 
  2.28  cities having a population of less than 5,000, the commissioner 
  2.29  shall forthwith send a statement of the amount to the 
  2.30  commissioner of finance, and the county auditor and county 
  2.31  engineer of each county.  The amounts so apportioned and 
  2.32  allocated to each county shall be paid by the state to the 
  2.33  treasurer of each county out of the county state-aid highway 
  2.34  fund as hereinafter provided, and in accordance with rules made 
  2.35  and promulgated by the commissioner not inconsistent herewith. 
  2.36     Sec. 6.  Minnesota Statutes 1998, section 162.08, 
  3.1   subdivision 3, is amended to read: 
  3.2      Subd. 3.  [AID TO TOWNS.] Any county having within its 
  3.3   boundaries organized town governments may, by resolution, 
  3.4   allocate to the towns within its boundaries so much of the money 
  3.5   apportioned to it under the provisions of sections 162.01 to 
  3.6   162.181, that it deems necessary to aid the townships in the 
  3.7   construction of town roads.  The resolution shall set forth the 
  3.8   amount of money or the percentage of its apportionment that the 
  3.9   county has allocated to the towns.  A certified copy of the 
  3.10  resolution shall be forwarded to the commissioner on or before 
  3.11  the second Tuesday of January of each year.  Upon receipt of 
  3.12  such resolution and upon determining the amount of money to be 
  3.13  apportioned to the county, the commissioner shall certify to the 
  3.14  commissioner of finance the amount of money, as set forth in the 
  3.15  resolution, that is to be paid out of the county's apportionment 
  3.16  for distribution to the towns.  The commissioner of finance 
  3.17  shall thereupon issue a warrant in that amount payable to the 
  3.18  county treasurer, and the proceeds thereof shall be distributed 
  3.19  by the county to the towns.  All money so allocated and 
  3.20  distributed shall be used by the towns solely for the 
  3.21  construction of town roads.  Each county board so allocating 
  3.22  such funds may devise a formula taking into account each town's 
  3.23  levy for road and bridge purposes, its mileage of town roads and 
  3.24  population outside the corporate limits of all cities within the 
  3.25  township, and such other factors as the county board shall deem 
  3.26  advisable as a means of dividing the allocation among the 
  3.27  several towns in order that such division among the towns be as 
  3.28  equitable as possible.  No part of the money allocated for 
  3.29  expenditure solely within cities having a population of less 
  3.30  than 5,000 shall be allocated or distributed to the towns.  The 
  3.31  commissioner of transportation shall maintain a permanent record 
  3.32  of the allocations of county state-aid highway funds to the 
  3.33  townships in each county.  In making the annual apportionments 
  3.34  of county state-aid highway funds, the commissioner shall reduce 
  3.35  the money needs of said counties in the amounts necessary to 
  3.36  equalize their status with those counties not making such 
  4.1   township allotments. 
  4.2      Sec. 7.  Minnesota Statutes 1998, section 162.08, 
  4.3   subdivision 4, is amended to read: 
  4.4      Subd. 4.  [PURPOSES; OTHER USES OF MUNICIPAL ACCOUNT 
  4.5   ALLOCATION.] (a) Except as provided in subdivision 3, money so 
  4.6   apportioned and allocated to each county shall be used for aid 
  4.7   in the establishment, location, construction, reconstruction, 
  4.8   improvement, and maintenance of the county state-aid highway 
  4.9   system within each county, including the expense of sidewalks, 
  4.10  commissioner-approved signals and safety devices on county 
  4.11  state-aid highways, and systems that permit an emergency vehicle 
  4.12  operator to activate a green traffic signal for the emergency 
  4.13  vehicle; provided, that in the event of hardship, or in the 
  4.14  event that the county state-aid highway system of any county is 
  4.15  improved to the standards set forth in the commissioner's rules, 
  4.16  a portion of the money apportioned other than the money 
  4.17  allocated for expenditures within cities having a population of 
  4.18  less than 5,000, may be used on other roads within the county 
  4.19  with the consent and in accordance with the commissioner's rules.
  4.20     (b) If the portion of the county state-aid highway system 
  4.21  lying within cities having a population of less than 5,000 is 
  4.22  improved to the standard set forth in the commissioner's rules, 
  4.23  a portion of the money credited to the municipal account may be 
  4.24  used on other county highways or other streets lying within such 
  4.25  cities.  Upon the authorization of the commissioner, a county 
  4.26  may expend accumulated municipal account funds on county 
  4.27  state-aid highways within the county outside of cities having a 
  4.28  population of less than 5,000.  The commissioner shall authorize 
  4.29  the expenditure if: 
  4.30     (1) the county submits a written request to the 
  4.31  commissioner and holds a hearing within 30 days of the request 
  4.32  to receive and consider any objections by the governing bodies 
  4.33  of cities within the county having a population of less than 
  4.34  5,000; and 
  4.35     (2) no written objection is filed with the commissioner by 
  4.36  any such city within 14 days of that hearing as provided in this 
  5.1   subdivision. 
  5.2      The county shall notify all of the cities of the public 
  5.3   hearing by certified mail and shall notify the commissioner in 
  5.4   writing of the results of the hearing and any objections to the 
  5.5   use of the funds as requested by the county. 
  5.6      (c) If, within 14 days of the hearing under paragraph (b), 
  5.7   a city having a population of less than 5,000 files a written 
  5.8   objection with the commissioner identifying a specific county 
  5.9   state-aid highway within the city which is requested for 
  5.10  improvement, the commissioner shall investigate the nature of 
  5.11  the requested improvement.  Notwithstanding paragraph (b), 
  5.12  clause (2), the commissioner may authorize the expenditure 
  5.13  requested by the county if:  
  5.14     (1) the identified highway is not deficient in meeting 
  5.15  minimum state-aid street standards; 
  5.16     (2) the county shows evidence that the identified highway 
  5.17  has been programmed for construction in the county's five-year 
  5.18  capital improvement budget in a manner consistent with the 
  5.19  county's transportation plan; or 
  5.20     (3) there are conditions created by or within the city and 
  5.21  beyond the control of the county that prohibit programming or 
  5.22  constructing the identified highway. 
  5.23     (d) Notwithstanding any contrary provisions of paragraph 
  5.24  (b) or (c), accumulated balances in excess of two years of 
  5.25  municipal account apportionments may be spent on projects 
  5.26  located outside of municipalities under 5,000 population when 
  5.27  approved solely by resolution of the county board.  
  5.28     (e) Authorization for use of municipal account funds on 
  5.29  county state-aid highways outside of cities having a population 
  5.30  of less than 5,000 shall be applicable only to the county's 
  5.31  accumulated and current year allocation.  Future municipal 
  5.32  account allocations shall be used as directed by law unless 
  5.33  subsequent requests are made by the county and approved by the 
  5.34  commissioner, or approved by resolution of the county board, as 
  5.35  applicable, in accordance with the applicable provisions of this 
  5.36  section. 
  6.1      Sec. 8.  Minnesota Statutes 1998, section 162.09, 
  6.2   subdivision 1, is amended to read: 
  6.3      Subdivision 1.  [CREATION; MILEAGE LIMITATION; RULES.] 
  6.4   There is created a municipal state-aid street system within 
  6.5   statutory and home rule charter cities having a population of 
  6.6   5,000 or more.  The extent of the municipal state-aid street 
  6.7   system for a city shall not exceed:  (1) 20 percent of the total 
  6.8   miles of city streets and county roads within the jurisdiction 
  6.9   of that city, plus (2) the mileage of all trunk highways 
  6.10  reverted or turned back to the jurisdiction of the city pursuant 
  6.11  to law on and after July 1, 1965, plus (3) the mileage of county 
  6.12  highways reverted or turned back to the jurisdiction of the city 
  6.13  pursuant to law on or after May 11, 1994.  For purposes of this 
  6.14  subdivision, the total miles of city streets and county roads 
  6.15  within the jurisdiction of a city includes all miles of county 
  6.16  highways turned back to that city's jurisdiction on or after May 
  6.17  11, 1994.  The system shall be established, located, 
  6.18  constructed, reconstructed, improved, and maintained as public 
  6.19  highways within such cities under rules, not inconsistent with 
  6.20  this section, made and promulgated by the commissioner as 
  6.21  hereinafter provided. 
  6.22     Sec. 9.  Minnesota Statutes 1998, section 162.12, 
  6.23  subdivision 1, is amended to read: 
  6.24     Subdivision 1.  [ESTIMATE OF ACCRUALS.] On or before the 
  6.25  second Tuesday of January of each year the commissioner shall 
  6.26  estimate the probable sum of money that will accrue to the 
  6.27  municipal state-aid street fund during the first six months of 
  6.28  each year ending June 30.  To the estimated amount the 
  6.29  commissioner shall add the sum of money already accrued in the 
  6.30  municipal state-aid street fund for the last preceding six-month 
  6.31  period ending December 31, adjusted to reflect the amount by 
  6.32  which actual receipts for the preceding January 1 to June 30 
  6.33  were different from estimated receipts.  The total of such sums, 
  6.34  except for deductions to be first made as provided herein, shall 
  6.35  be apportioned by the commissioner to the cities having a 
  6.36  population of 5,000 or more as hereinafter provided. 
  7.1      Sec. 10.  Minnesota Statutes 1998, section 162.12, 
  7.2   subdivision 3, is amended to read: 
  7.3      Subd. 3.  [DISASTER ACCOUNT.] After deducting 
  7.4   administrative costs as provided in subdivision 2, the 
  7.5   commissioner shall set aside each year a sum of money equal to 
  7.6   two percent of the remaining money in the municipal state-aid 
  7.7   street fund to provide for a disaster account; provided, that 
  7.8   the total amount of money in the disaster account shall never 
  7.9   exceed five percent of the total sums to be apportioned to the 
  7.10  statutory and home rule charter cities having a population of 
  7.11  5,000 or more.  The disaster account shall be used to provide 
  7.12  aid to any such city encountering disaster or unforeseen event 
  7.13  affecting the municipal state-aid street system of the city, and 
  7.14  resulting in an undue and burdensome financial hardship.  Any 
  7.15  such city desiring aid by reason of such disaster or unforeseen 
  7.16  event shall request aid in the form required by the commissioner.
  7.17  Upon receipt of the request the commissioner shall appoint a 
  7.18  board consisting of two representatives of the cities, who must 
  7.19  be either a city engineer or member of the governing body of a 
  7.20  city, from cities other than the requesting city, and a 
  7.21  representative of the commissioner.  The board shall investigate 
  7.22  the matter and report its findings and recommendations in 
  7.23  writing to the commissioner.  Final determination of the amount 
  7.24  of aid, if any, to be paid to the city from the disaster account 
  7.25  shall be made by the commissioner.  Upon determining to aid the 
  7.26  city, the commissioner shall certify to the commissioner of 
  7.27  finance the amount of aid, and the commissioner of finance shall 
  7.28  thereupon issue a warrant in that amount payable to the fiscal 
  7.29  officer of the city.  Money so paid shall be expended on the 
  7.30  municipal state-aid street system in accordance with rules of 
  7.31  the commissioner. 
  7.32     Sec. 11.  Minnesota Statutes 1998, section 162.13, is 
  7.33  amended to read: 
  7.34     162.13 [FORMULA FOR APPORTIONMENT TO CITIES.] 
  7.35     Subdivision 1.  [FACTORS IN FORMULA.] After deducting for 
  7.36  administrative costs and for the disaster fund and research 
  8.1   account as heretofore provided, the remainder of the total sum 
  8.2   provided for in subdivision 1 of section 162.12 shall be 
  8.3   identified as the apportionment sum, and shall be apportioned by 
  8.4   the commissioner to the cities having a population of 5,000 or 
  8.5   more, in accordance with the following formula: 
  8.6      (1) An amount equal to 50 percent of such apportionment sum 
  8.7   shall be apportioned among the cities having a population of 
  8.8   5,000 or more so that each such city shall receive of such 
  8.9   amount the percentage that its money needs bears to the total 
  8.10  money needs of all such cities.  
  8.11     (2) An amount equal to 50 percent of such apportionment sum 
  8.12  shall be apportioned among the cities having a population of 
  8.13  5,000 or more so that each such city shall receive of such 
  8.14  amount the percentage that its population bears to the total 
  8.15  population of all such cities.  
  8.16     Subd. 2.  [MONEY NEEDS DEFINED.] For the purpose of this 
  8.17  section money needs of each city having a population of 5,000 or 
  8.18  more are defined as the estimated cost of constructing and 
  8.19  maintaining over a period of 25 years the municipal state-aid 
  8.20  street system in such city.  Right-of-way costs and drainage 
  8.21  shall be included in money needs. Lighting costs and other costs 
  8.22  incidental to construction and maintenance, or a specified 
  8.23  portion of such costs, as set forth in the commissioner's rules, 
  8.24  may be included in determining money needs.  When a county 
  8.25  locates a county state-aid highway over a portion of a street in 
  8.26  any such city and the remaining portion is designated as a 
  8.27  municipal state-aid street only the construction and maintenance 
  8.28  costs of the portion of the street other than the portions taken 
  8.29  over by the county shall be included in the money needs of the 
  8.30  city.  To avoid variances in costs due to differences in 
  8.31  construction and maintenance policy, construction and 
  8.32  maintenance costs shall be estimated on the basis of the 
  8.33  engineering standards developed cooperatively by the 
  8.34  commissioner and the engineers, or a committee thereof, of the 
  8.35  cities.  Any variance granted pursuant to section 162.09, 
  8.36  subdivision 3a shall be reflected in the estimated construction 
  9.1   and maintenance costs in determining money needs.  
  9.2      Subd. 3.  [SCREENING COMMITTEE.] On or before September 1 
  9.3   of each year, the engineer of each city having a population of 
  9.4   5,000 or more shall forward to the commissioner on forms 
  9.5   prepared by the commissioner, all information relating to the 
  9.6   money needs of the city that the commissioner deems necessary in 
  9.7   order to apportion the municipal state-aid street fund in 
  9.8   accordance with the apportionment formula heretofore set forth.  
  9.9   Upon receipt of the information the commissioner shall appoint a 
  9.10  board of city engineers.  The board shall be composed of one 
  9.11  engineer from each state highway construction district, and in 
  9.12  addition thereto, one engineer from each city of the first 
  9.13  class.  The board shall investigate and review the information 
  9.14  submitted by each city.  On or before November 1 of each year, 
  9.15  the board shall submit its findings and recommendations in 
  9.16  writing as to each city's money needs to the commissioner on a 
  9.17  form prepared by the commissioner.  Final determination of the 
  9.18  money needs of each city shall be made by the commissioner.  In 
  9.19  the event that any city shall fail to submit the information 
  9.20  provided for herein, the commissioner shall estimate the money 
  9.21  needs of the city.  The estimate shall be used in solving the 
  9.22  apportionment formula.  The commissioner may withhold payment of 
  9.23  the amount apportioned to the city until the information is 
  9.24  submitted.  
  9.25     Sec. 12.  Minnesota Statutes 1998, section 162.14, 
  9.26  subdivision 1, is amended to read: 
  9.27     Subdivision 1.  [STATEMENT OF APPORTIONMENT TO EACH CITY.] 
  9.28  Upon determining the amount of money to be apportioned to 
  9.29  each of the cities having a population of 5,000 or more city, 
  9.30  the commissioner shall forthwith send a statement of the amount 
  9.31  to the commissioner of finance and to the clerk and engineer of 
  9.32  each such city.  The amount so apportioned to each city shall be 
  9.33  paid by the state to the fiscal officer of the city out of the 
  9.34  municipal state-aid street fund as hereinafter provided and in 
  9.35  accordance with rules promulgated by the commissioner, not 
  9.36  inconsistent herewith.  
 10.1      Sec. 13.  Minnesota Statutes 1998, section 162.17, 
 10.2   subdivision 1, is amended to read: 
 10.3      Subdivision 1.  [AGREEMENTS WITH CITY HAVING POPULATION OF 
 10.4   5,000 OR MORE.] The governing body of any city having a 
 10.5   population of 5,000 or more may enter into cooperative 
 10.6   agreements with the county board of the county in which the city 
 10.7   is located, providing for the division of costs and 
 10.8   responsibilities to be borne by each for right-of-way, 
 10.9   construction, improvement and maintenance, including snow 
 10.10  removal, of county state-aid highways and municipal state-aid 
 10.11  streets established and located within such cities. 
 10.12     Sec. 14.  Minnesota Statutes 1998, section 162.18, 
 10.13  subdivision 1, is amended to read: 
 10.14     Subdivision 1.  [LIMITATION ON AMOUNT.] Any city having a 
 10.15  population of 5,000 or more may in accordance with chapter 475, 
 10.16  except as otherwise provided herein, issue and sell its 
 10.17  obligations for the purpose of establishing, locating, 
 10.18  relocating, constructing, reconstructing, and improving 
 10.19  municipal state-aid streets therein.  In the resolution 
 10.20  providing for the issuance of the obligations, the governing 
 10.21  body of the municipality shall irrevocably pledge and 
 10.22  appropriate to the sinking fund from which the obligations are 
 10.23  payable, an amount of the moneys allotted or to be allotted to 
 10.24  the municipality from its account in the municipal state-aid 
 10.25  street fund sufficient to pay the principal of and the interest 
 10.26  on the obligations as they respectively come due.  The 
 10.27  obligations shall be issued in amounts and on terms such that 
 10.28  the average annual amount of principal and interest due in all 
 10.29  subsequent calendar years on the obligations, including any 
 10.30  similar obligations of the municipality which are outstanding, 
 10.31  shall not exceed 50 percent of the amount of the last annual 
 10.32  allotment preceding the bond issue received by the municipality 
 10.33  from the construction account in the municipal state-aid street 
 10.34  fund; except that the municipality may issue general obligation 
 10.35  bonds for said purpose, to be purchased by it for the account of 
 10.36  any one or more of its own funds, including debt redemption 
 11.1   funds, in which case such bonds shall mature in not exceeding 
 11.2   five years from their respective dates of issue, in principal 
 11.3   amounts not exceeding in any calendar year, with the principal 
 11.4   amount of all other municipal state-aid street obligations 
 11.5   maturing in such year, the total amount of the last annual 
 11.6   allotment preceding the bond issue received by the municipality 
 11.7   from the construction account in the municipal state-aid street 
 11.8   fund.  All interest on the obligations shall be paid out of the 
 11.9   municipality's normal maintenance account in the municipal 
 11.10  state-aid street fund.  Any such obligations may be made general 
 11.11  obligations, but if moneys of the municipality other than moneys 
 11.12  received from the municipal state-aid street fund, are used for 
 11.13  payment of the obligations, the moneys so used shall be restored 
 11.14  to the appropriate fund from the moneys next received by the 
 11.15  municipality from the construction or maintenance account in the 
 11.16  municipal state-aid street fund which are not required to be 
 11.17  paid into a sinking fund for obligations.  
 11.18     Sec. 15.  [REPEALER.] 
 11.19     Minnesota Statutes 1998, sections 162.02, subdivision 12; 
 11.20  162.08, subdivisions 1, 5, and 6; 162.09, subdivision 4; and 
 11.21  162.17, subdivisions 2 and 3, are repealed. 
 11.22     Sec. 16.  [EFFECTIVE DATE.] 
 11.23     Sections 1 to 15 are effective July 1, 1999.