1.1                          A bill for an act 
  1.2             relating to transportation; modifying transit 
  1.3             assistance provisions for annually appropriating money 
  1.4             for transit operations; abolishing property tax 
  1.5             replacement aid program; making technical and 
  1.6             clarifying changes; amending Minnesota Statutes 2002, 
  1.7             sections 16A.88, subdivision 1; 174.24, subdivisions 
  1.8             1, 3b; 275.71, subdivision 5; repealing Minnesota 
  1.9             Statutes 2002, section 174.242. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2002, section 16A.88, 
  1.12  subdivision 1, is amended to read: 
  1.13     Subdivision 1.  [GREATER MINNESOTA TRANSIT FUND.] The 
  1.14  greater Minnesota transit fund is established within the state 
  1.15  treasury.  Money in the fund is annually appropriated to the 
  1.16  commissioner of transportation for assistance to transit systems 
  1.17  outside the metropolitan area under section 174.24.  Beginning 
  1.18  in fiscal year 2003, the commissioner may use up to $400,000 
  1.19  each year for administration of the transit program.  The 
  1.20  commissioner shall use the fund for transit operations as 
  1.21  provided in section 174.24 and related program administration. 
  1.22     Sec. 2.  Minnesota Statutes 2002, section 174.24, 
  1.23  subdivision 1, is amended to read: 
  1.24     Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A public transit 
  1.25  participation program is established to carry out the objectives 
  1.26  stated in section 174.21 by providing financial assistance from 
  1.27  the state, including the greater Minnesota transit fund 
  2.1   established in section 16A.88, to eligible recipients outside of 
  2.2   the metropolitan area.  
  2.3      Sec. 3.  Minnesota Statutes 2002, section 174.24, 
  2.4   subdivision 3b, is amended to read: 
  2.5      Subd. 3b.  [OPERATING ASSISTANCE.] (a) The commissioner 
  2.6   shall determine the total operating cost of any public transit 
  2.7   system receiving or applying for assistance in accordance with 
  2.8   generally accepted accounting principles.  To be eligible for 
  2.9   financial assistance, an applicant or recipient shall provide to 
  2.10  the commissioner all financial records and other information and 
  2.11  shall permit any inspection reasonably necessary to determine 
  2.12  total operating cost and correspondingly the amount of 
  2.13  assistance which that may be paid to the applicant or recipient. 
  2.14  Where more than one county or municipality contributes 
  2.15  assistance to the operation of a public transit system, the 
  2.16  commissioner shall identify one as lead agency for the purpose 
  2.17  of receiving money under this section.  
  2.18     (b) Prior to distributing operating assistance to eligible 
  2.19  recipients for any contract period, the commissioner shall place 
  2.20  all recipients into one of the following classifications:  
  2.21  urbanized area service, small urban area service, rural area 
  2.22  service, and elderly and handicapped service.  The commissioner 
  2.23  shall distribute funds under this section so that the percentage 
  2.24  of total operating cost paid by any recipient from local sources 
  2.25  will not exceed the percentage for that recipient's 
  2.26  classification, except as provided in an undue hardship case.  
  2.27  The percentages must be:  for urbanized area service and small 
  2.28  urban area service, 40 20 percent; for rural area service, 35 15 
  2.29  percent; and for elderly and handicapped service, 35 15 percent. 
  2.30  The remainder of the total operating cost will be paid from 
  2.31  state funds less any assistance received by the recipient from 
  2.32  any federal source.  For purposes of this subdivision "local 
  2.33  sources" means payments under section 174.242 plus all local 
  2.34  sources of funds and includes all operating revenue, tax levies, 
  2.35  and contributions from public funds, except that the 
  2.36  commissioner may exclude from the total assistance contract 
  3.1   revenues derived from operations the cost of which is excluded 
  3.2   from the computation of total operating cost.  Total operating 
  3.3   costs of the Duluth transit authority or a successor agency 
  3.4   shall does not include costs related to the Superior, Wisconsin 
  3.5   service contract and the independent school district No. 709 
  3.6   service contract.  For calendar years 2004 and 2005, to enable 
  3.7   public transit systems to meet the provisions of this section 
  3.8   the commissioner may adjust payments of financial assistance to 
  3.9   recipients that were under a contract with the department on 
  3.10  January 1, 2003. 
  3.11     (c) If a recipient informs the commissioner in writing 
  3.12  after the establishment of these percentages but prior to the 
  3.13  distribution of financial assistance for any year that paying 
  3.14  its designated percentage of total operating cost from local 
  3.15  sources will cause undue hardship, the commissioner may reduce 
  3.16  the percentage to be paid from local sources by the recipient 
  3.17  and increase the percentage to be paid from local sources by one 
  3.18  or more other recipients inside or outside the classification, 
  3.19  provided that no recipient shall have its.  However, the 
  3.20  commissioner may not reduce or increase any recipient's 
  3.21  percentage thus reduced or increased under this paragraph for 
  3.22  more than two years successively.  If for any year the funds 
  3.23  appropriated to the commissioner to carry out the purposes of 
  3.24  this section are insufficient to allow the commissioner to pay 
  3.25  the state share of total operating cost as provided in this 
  3.26  paragraph, the commissioner shall reduce the state share in each 
  3.27  classification to the extent necessary. 
  3.28     Sec. 4.  Minnesota Statutes 2002, section 275.71, 
  3.29  subdivision 5, is amended to read: 
  3.30     Subd. 5.  [PROPERTY TAX LEVY LIMIT.] Notwithstanding any 
  3.31  other provision of a municipal charter which limits ad valorem 
  3.32  taxes to a lesser amount, or which would require a separate 
  3.33  voter approval for any increase, for taxes levied in 2001 and 
  3.34  2002, the property tax levy limit for a local governmental unit 
  3.35  is equal to its adjusted levy limit base determined under 
  3.36  subdivision 4 plus any additional levy authorized under section 
  4.1   275.73, which is levied against net tax capacity, reduced by the 
  4.2   sum of (i) the total amount of aids and reimbursements that the 
  4.3   local governmental unit is certified to receive under sections 
  4.4   477A.011 to 477A.014, except for the increases in city aid bases 
  4.5   in calendar year 2002 under section 477A.011, subdivision 36, 
  4.6   paragraphs (n), (p), and (q), (ii) homestead and agricultural 
  4.7   aids it is certified to receive under section 273.1398, (iii) 
  4.8   taconite aids under sections 298.28 and 298.282 including any 
  4.9   aid which was required to be placed in a special fund for 
  4.10  expenditure in the next succeeding year, and (iv) low-income 
  4.11  housing aid under sections 477A.06 and 477A.065, and (v) 
  4.12  property tax replacement aids under section 174.242. 
  4.13     Sec. 5.  [REPEALER.] 
  4.14     Minnesota Statutes 2002, section 174.242, is repealed.