1.1                          A bill for an act 
  1.2             relating to transportation; establishing debt service 
  1.3             and interest requirements for rail service improvement 
  1.4             accounts; amending Minnesota Statutes 1998, sections 
  1.5             222.49; 222.50, subdivision 5; and 222.57. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1998, section 222.49, is 
  1.8   amended to read: 
  1.9      222.49 [RAIL SERVICE IMPROVEMENT ACCOUNT; APPROPRIATION.] 
  1.10     The rail service improvement account is created in the 
  1.11  special revenue fund in the state treasury.  The commissioner 
  1.12  shall deposit in this account all money appropriated to or 
  1.13  received by the department for the purpose of rail service 
  1.14  improvement, including bond proceeds as authorized by article 
  1.15  XI, section 5, clause (i) of the Minnesota Constitution.  After 
  1.16  payment of debt service assessments under section 16A.643, for 
  1.17  bonds sold to provide the bond proceeds deposited in the 
  1.18  account, all money so deposited is appropriated to the 
  1.19  department for expenditure for rail service improvement in 
  1.20  accordance with applicable state and federal law.  This 
  1.21  appropriation shall not lapse but shall be available until the 
  1.22  purpose for which it was appropriated has been accomplished.  No 
  1.23  money appropriated to the department for the purposes of 
  1.24  administering the rail service improvement program shall be 
  1.25  deposited in the rail service improvement account nor shall such 
  2.1   administrative costs be paid from the account. 
  2.2      Sec. 2.  Minnesota Statutes 1998, section 222.50, 
  2.3   subdivision 5, is amended to read: 
  2.4      Subd. 5.  [CONTRACTUAL CONDITIONS.] In making any contract 
  2.5   pursuant to subdivision 4 the commissioner may: 
  2.6      (a) stipulate minimum operating standards for rail lines 
  2.7   designed to achieve reasonable transportation service for 
  2.8   shippers and to achieve best use of funds invested in rail line 
  2.9   rehabilitation; 
  2.10     (b) require a portion of the total assistance for improving 
  2.11  a rail line to be loaned to the railroad by rail users and 
  2.12  require the railroad to reimburse rail users for any loan on the 
  2.13  basis of use of the line and the revenues produced when the line 
  2.14  has been improved; 
  2.15     (c) determine the terms and conditions under which all or 
  2.16  any portion of state funds allocated shall be repaid to the 
  2.17  department by the railroads.  The terms of repayment must 
  2.18  provide that repayment be at a rate of interest equal to the 
  2.19  rate of interest on the most recent issue of state general 
  2.20  obligation bonds authorized under section 16A.641, subdivision 
  2.21  1.  Reimbursement may be made as a portion of the increased 
  2.22  revenue derived from the improved rail line.  Any reimbursement 
  2.23  received by the department pursuant to this clause shall be 
  2.24  deposited in the rail service improvement account and shall be 
  2.25  appropriated exclusively for rehabilitating other rail lines in 
  2.26  the state pursuant to subdivision 4; and 
  2.27     (d) to the extent not prohibited by federal law or 
  2.28  regulation, require that when the railroad elects to contract 
  2.29  for portions of the rehabilitation work or rail service 
  2.30  improvement, the railroad must select a contractor who is 
  2.31  experienced in rail rehabilitation work, and must require the 
  2.32  contractor to: 
  2.33     (1) recruit any new workers from the area where the work is 
  2.34  to be done; and 
  2.35     (2) pay workers under the contract wages that are equal to 
  2.36  or greater than the wages the railroad pays its own workers for 
  3.1   similar work, but not less than twice the state minimum wage 
  3.2   that state-covered employers are required to pay under section 
  3.3   177.24, subdivision 1, paragraph (b). 
  3.4      Sec. 3.  Minnesota Statutes 1998, section 222.57, is 
  3.5   amended to read: 
  3.6      222.57 [RAIL USER AND RAIL CARRIER LOAN GUARANTEE ACCOUNT.] 
  3.7      There is created a rail user and rail carrier loan 
  3.8   guarantee account as a separate account in the rail service 
  3.9   improvement account, which shall be used by the commissioner for 
  3.10  carrying out the provisions of sections 222.55 to 222.62 with 
  3.11  respect to loans insured under section 222.58.  The commissioner 
  3.12  may transfer to the rail user and rail carrier loan guarantee 
  3.13  account from money otherwise available in the rail service 
  3.14  improvement account whatever amount is necessary to implement 
  3.15  the rail user and rail carrier loan guarantee program, except 
  3.16  that bond proceeds may not be transferred to the account for 
  3.17  insurance of loans made for the purposes specified in section 
  3.18  222.58, subdivision 2, paragraph (b), clauses (3) to (5).  The 
  3.19  commissioner may withdraw any amount from the rail user and rail 
  3.20  carrier loan guarantee account that is not required to insure 
  3.21  outstanding loans as provided in section 222.60, subdivision 1.  
  3.22  All debt service on bond proceeds used to finance appropriations 
  3.23  to carry out the purposes of sections 222.55 to 222.62 must be 
  3.24  repaid by the department of transportation under section 16A.643.