1.1 	A bill for an act
1.2 	relating to transportation; modifying distribution of
1.3 	county state-aid highway funds; adjusting passenger
1.4 	automobile tax rates and depreciation schedule;
1.5 	increasing motor fuel tax rates; allocating revenue
1.6 	from motor vehicle sales tax; authorizing issuance of
1.7 	$1,000,000,000 in state trunk highway bonds;
1.8 	appropriating money; amending Minnesota Statutes 2004,
1.9 	sections 162.07, subdivision 1, by adding
1.10 	subdivisions; 168.013, subdivision 1a; 296A.07,
1.11 	subdivision 3; 296A.08, subdivision 2; 297B.09,
1.12 	subdivision 1.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 162.07,
1.15 	subdivision 1, is amended to read:
1.16 		Subdivision 1.Formula.  After deducting for
1.17 	administrative costs and for the disaster account and research
1.18 	account and state park roads as heretofore provided in section
1.19 	162.06, subdivisions 2 to 5, the remainder of the total sum
1.20 	provided for in section 162.06, subdivision 1, shall be is 
1.21 	identified as the apportionment sum and shall be apportioned by
1.22 	the commissioner to the several counties on the basis of the
1.23 	needs of the counties as determined in accordance with the
1.24 	following formula:
1.25 	(a) An amount equal to ten percent of the apportionment sum
1.26 	shall be apportioned equally among the 87 counties.
1.27 	(b) An amount equal to ten percent of the apportionment sum
1.28 	shall be apportioned among the several counties so that each
1.29 	county shall receive of such amount the percentage that its
2.1 	motor vehicle registration for the calendar year preceding the
2.2 	one last past, determined by residence of registrants, bears to
2.3 	the total statewide motor vehicle registration.
2.4 	(c) An amount equal to 30 percent of the apportionment sum
2.5 	shall be apportioned among the several counties so that each
2.6 	county shall receive of such amount the percentage that its
2.7 	total lane-miles of approved county state-aid highways bears to
2.8 	the total lane-miles of approved statewide county state-aid
2.9 	highways.  In 1997 and subsequent years no county may receive,
2.10 	as a result of an apportionment under this clause based on
2.11 	lane-miles rather than miles of approved county state-aid
2.12 	highways, an apportionment that is less than its apportionment
2.13 	in 1996.
2.14 	(d) An amount equal to 50 percent of the apportionment sum
2.15 	shall be apportioned among the several counties so that each
2.16 	county shall receive of such amount the percentage that its
2.17 	money needs bears to the sum of the money needs of all of the
2.18 	individual counties; provided, that the percentage of such
2.19 	amount that each county is to receive shall be adjusted so that
2.20 	each county shall receive in 1958 a total apportionment at least
2.21 	ten percent greater than its total 1956 apportionments from the
2.22 	state road and bridge fund; and provided further that those
2.23 	counties whose money needs are thus adjusted shall never receive
2.24 	a percentage of the apportionment sum less than the percentage
2.25 	that such county received in 1958 the excess sum.
2.26 	(a) The excess sum is calculated as the sum of the amounts
2.27 	described in clauses (1) and (2), reduced by a proportionate
2.28 	share of the deductions for administrative costs and for the
2.29 	disaster account and research account, as follows:
2.30 	(1) on or after July 1, 2005, the amount due to an increase
2.31 	imposed in the gasoline excise tax rate above a rate of 20 cents
2.32 	per gallon; or in the excise tax rate for E85, M85, and special
2.33 	fuels above the energy equivalent of a gasoline tax rate of 20
2.34 	cents per gallon; and 
2.35 	(2) the amount due to a change in the passenger vehicle
2.36 	registration tax under section 168.013, imposed on or after July
3.1 	1, 2005, that exceeds the amount collected in fiscal year 2005
3.2 	multiplied by the annual average United States Consumer Price
3.3 	Index for all urban consumers, United States city average, as
3.4 	determined by the United States Department of Labor for the
3.5 	previous year, divided by that annual average for calendar year
3.6 	2004.
3.7 	(b) The apportionment sum is calculated by subtracting the
3.8 	excess sum from the remainder of the total sum.

3.9 	Sec. 2. Minnesota Statutes 2004, section 162.07, is
3.10 	amended by adding a subdivision to read:
3.11 		Subd. 1a.Apportionment sum. The commissioner shall
3.12 	apportion the apportionment sum among the several counties on
3.13 	the basis of the needs of the counties as determined in
3.14 	accordance with the following formula:
3.15 	(a) An amount equal to ten percent of the apportionment sum
3.16 	must be apportioned equally among the 87 counties.
3.17 	(b) An amount equal to ten percent of the apportionment sum
3.18 	must be apportioned among the several counties so that each
3.19 	county receives of that amount the percentage that its motor
3.20 	vehicle registration for the calendar year preceding the one
3.21 	last past, determined by residence of registrants, bears to the
3.22 	total statewide motor vehicle registration.
3.23 	(c) An amount equal to 30 percent of the apportionment sum
3.24 	must be apportioned among the several counties so that each
3.25 	county receives of that amount the percentage that its total
3.26 	lane-miles of approved county state-aid highways bears to the
3.27 	total lane-miles of approved statewide county state-aid
3.28 	highways.  In 1997 and subsequent years, no county may receive,
3.29 	as a result of an apportionment under this paragraph based on
3.30 	lane-miles rather than miles of approved county state-aid
3.31 	highways, an apportionment that is less than its apportionment
3.32 	in 1996.
3.33 	(d) An amount equal to 50 percent of the apportionment sum
3.34 	must be apportioned among the several counties so that each
3.35 	county receives of that amount the percentage that its money
3.36 	needs bears to the sum of the money needs of all of the
4.1 	individual counties.

4.2 	Sec. 3. Minnesota Statutes 2004, section 162.07, is
4.3 	amended by adding a subdivision to read:
4.4 		Subd. 1b.Excess sum. The commissioner shall apportion
4.5 	the excess sum to the several counties on the basis of the needs
4.6 	of the counties as determined in accordance with the following
4.7 	formula:
4.8 	(a) An amount equal to 40 percent of the excess sum must be
4.9 	apportioned among the several counties so that each county
4.10 	receives of that amount the percentage that its motor vehicle
4.11 	registration for the calendar year preceding the one last past,
4.12 	determined by residence of registrants, bears to the total
4.13 	statewide motor vehicle registration.
4.14 	(b) An amount equal to 60 percent of the excess sum must be
4.15 	apportioned among the several counties so that each county
4.16 	receives of that amount the percentage that its money needs
4.17 	bears to the sum of the money needs of all of the individual
4.18 	counties.

4.19 	Sec. 4. Minnesota Statutes 2004, section 168.013,
4.20 	subdivision 1a, is amended to read:
4.21 		Subd. 1a.Passenger automobile; hearse.  (a) On passenger
4.22 	automobiles as defined in section 168.011, subdivision 7, and
4.23 	hearses, except as otherwise provided, the tax shall be $10 plus
4.24 	an additional tax equal to 1.25 percent of the base value.
4.25 	(b) Subject to the classification provisions herein, "base
4.26 	value" means the manufacturer's suggested retail price of the
4.27 	vehicle including destination charge using list price
4.28 	information published by the manufacturer or determined by the
4.29 	registrar if no suggested retail price exists, and shall not
4.30 	include the cost of each accessory or item of optional equipment
4.31 	separately added to the vehicle and the suggested retail price.
4.32 	(c) If the manufacturer's list price information contains a
4.33 	single vehicle identification number followed by various
4.34 	descriptions and suggested retail prices, the registrar shall
4.35 	select from those listings only the lowest price for determining
4.36 	base value.
5.1 	(d) If unable to determine the base value because the
5.2 	vehicle is specially constructed, or for any other reason, the
5.3 	registrar may establish such value upon the cost price to the
5.4 	purchaser or owner as evidenced by a certificate of cost but not
5.5 	including Minnesota sales or use tax or any local sales or other
5.6 	local tax.
5.7 	(e) The registrar shall classify every vehicle in its
5.8 	proper base value class as follows:
5.9 	FROM                   TO
5.10 	                      $  0                $199.99
5.11 	                       200                 399.99
5.12 	and thereafter a series of classes successively set in brackets
5.13 	having a spread of $200 consisting of such number of classes as
5.14 	will permit classification of all vehicles.
5.15 	(f) The base value for purposes of this section shall be
5.16 	the middle point between the extremes of its class.
5.17 	(g) The registrar shall establish the base value, when new,
5.18 	of every passenger automobile and hearse registered prior to the
5.19 	effective date of Extra Session Laws 1971, chapter 31, using
5.20 	list price information published by the manufacturer or any
5.21 	nationally recognized firm or association compiling such data
5.22 	for the automotive industry.  If unable to ascertain the base
5.23 	value of any registered vehicle in the foregoing manner, the
5.24 	registrar may use any other available source or method.  The
5.25 	registrar shall calculate tax using base value information
5.26 	available to dealers and deputy registrars at the time the
5.27 	application for registration is submitted.  The tax on all
5.28 	previously registered vehicles shall be computed upon the base
5.29 	value thus determined taking into account the depreciation
5.30 	provisions of paragraph (h).
5.31 	(h) The annual additional tax computed upon the base value
5.32 	as provided herein, during the first and second years year of
5.33 	vehicle life shall be computed upon 100 percent of the base
5.34 	value; for the second year, 80 percent of such value;for the
5.35 	third and fourth years year, 90 70 percent of such value; for
5.36 	the fourth year, 60 percent of such value;for the fifth and
6.1 	sixth years year, 75 50 percent of such value; for the sixth
6.2 	year, 40 percent of such value;for the seventh year, 60 35 
6.3 	percent of such value; for the eighth year, 40 30 percent of
6.4 	such value; for the ninth year, 30 20 percent of such value; for
6.5 	the tenth year, ten percent of such value; for the 11th and each
6.6 	succeeding year, the sum of $25.
6.7 	In no event shall the annual additional tax be less than $25.
6.8 	In the second and subsequent years of vehicle life the total tax
6.9 	under this subdivision shall not exceed $189 for the first
6.10 	renewal period and shall not exceed $99 for subsequent renewal
6.11 	periods.  The total tax under this subdivision on any vehicle
6.12 	filing its initial registration in Minnesota in the second year 
6.13 	and subsequent years of vehicle life shall not exceed $189 and
6.14 	shall not exceed $99 for subsequent renewal periods.  The total
6.15 	tax under this subdivision on any vehicle filing its initial
6.16 	registration in Minnesota in the third or subsequent year of
6.17 	vehicle life shall not exceed $99 and shall not exceed $99 in
6.18 	any subsequent renewal period.
6.19 	(i) As used in this subdivision and section 168.017, the
6.20 	following terms have the meanings given:  "initial registration"
6.21 	means the 12 consecutive months calendar period from the day of
6.22 	first registration of a vehicle in Minnesota; and "renewal
6.23 	periods" means the 12 consecutive calendar months periods
6.24 	following the initial registration period.
6.25 	(j) The annual additional tax under paragraph (h) in any
6.26 	registration year on a passenger automobile on which the first
6.27 	annual tax was paid before November 15, 2005, must not exceed
6.28 	the tax that was paid on that vehicle in the previous
6.29 	registration year.
6.30 	
EFFECTIVE DATE. This section is effective November 15,
6.31 	2005, for registration year 2006 and subsequent years.

6.32 	Sec. 5. Minnesota Statutes 2004, section 296A.07,
6.33 	subdivision 3, is amended to read:
6.34 		Subd. 3.Rate of tax.  The gasoline excise tax is imposed
6.35 	at the following rates:
6.36 	(1) E85 is taxed at the rate of 14.2 17.75 cents per
7.1 	gallon;
7.2 	(2) M85 is taxed at the rate of 11.4 14.25 cents per
7.3 	gallon; and
7.4 	(3) all other gasoline is taxed at the rate of 20 25 cents
7.5 	per gallon.
7.6 	
EFFECTIVE DATE. This section is effective August 1, 2005.

7.7 	Sec. 6. Minnesota Statutes 2004, section 296A.08,
7.8 	subdivision 2, is amended to read:
7.9 		Subd. 2.Rate of tax.  The special fuel excise tax is
7.10 	imposed at the following rates:
7.11 	(a) Liquefied petroleum gas or propane is taxed at the rate
7.12 	of 15 18.75 cents per gallon.
7.13 	(b) Liquefied natural gas is taxed at the rate of 12 15 
7.14 	cents per gallon.
7.15 	(c) Compressed natural gas is taxed at the rate
7.16 	of $1.739 $2.174 per thousand cubic feet; or 20 25 cents per
7.17 	gasoline equivalent, as defined by the National Conference on
7.18 	Weights and Measures, which is 5.66 pounds of natural gas.
7.19 	(d) All other special fuel is taxed at the same rate as the
7.20 	gasoline excise tax as specified in section 296A.07, subdivision
7.21 	2.  The tax is payable in the form and manner prescribed by the
7.22 	commissioner.
7.23 	
EFFECTIVE DATE. This section is effective August 1, 2005.

7.24 	Sec. 7. Minnesota Statutes 2004, section 297B.09,
7.25 	subdivision 1, is amended to read:
7.26 		Subdivision 1.Deposit of revenues.  (a) Money collected
7.27 	and received under this chapter must be deposited as provided in
7.28 	this subdivision.
7.29 	(b) From July 1, 2002, to June 30, 2003, 32 percent of the
7.30 	money collected and received must be deposited in the highway
7.31 	user tax distribution fund, 20.5 percent must be deposited in
7.32 	the metropolitan area transit fund under section 16A.88, and
7.33 	1.25 percent must be deposited in the greater Minnesota transit
7.34 	fund under section 16A.88.  The remaining money must be
7.35 	deposited in the general fund.
7.36 	(c) From July 1, 2003, to June 30, 2007, 30 26.93 percent
8.1 	of the money collected and received must be deposited in the
8.2 	highway user tax distribution fund, 21.5 24.38 percent must be
8.3 	deposited in the metropolitan area transit fund under section
8.4 	16A.88, 1.43 1.62 percent must be deposited in the greater
8.5 	Minnesota transit fund under section 16A.88, 0.65 percent must
8.6 	be deposited in the county state-aid highway fund, and 0.17
8.7 	percent must be deposited in the municipal state-aid street
8.8 	fund.  The remaining money must be deposited in the general fund.
8.9 	(d) (c) On and after July 1, 2007, 32 percent of the money
8.10 	collected and received must be deposited in the highway user tax
8.11 	distribution fund, 20.5 percent must be deposited in the
8.12 	metropolitan area transit fund under section 16A.88, and 1.25
8.13 	percent must be deposited in the greater Minnesota transit fund
8.14 	under section 16A.88.  The remaining money must be deposited in
8.15 	the general fund.
8.16 	
EFFECTIVE DATE. This section is effective July 1, 2005.

8.17 	Sec. 8. APPROPRIATION; TRUNK HIGHWAY FUND.
 8.18 	$100,000,000 is appropriated from the bond proceeds account
8.19 	in the trunk highway fund to the commissioner of transportation
8.20 	on the first day of each of fiscal years 2006 through 2015, for
8.21 	improvements to the state trunk highway system.  Of this
8.22 	appropriation:
8.23 	(1) $50,000,000 each year is for improvements to the
8.24 	interregional corridor system as identified by the commissioner
8.25 	where the improvements are physically located entirely or
8.26 	primarily outside the seven-county metropolitan area; and 
8.27 	(2) $50,000,000 each year is for the elimination of traffic
8.28 	bottlenecks on arterial highways physically located entirely
8.29 	within the seven-county metropolitan area.
8.30 	The commissioner may spend up to 15 percent of this
8.31 	appropriation each year on program delivery.

8.32 	Sec. 9. BOND SALE AUTHORIZATIONS.
 8.33 	To provide the money appropriated in section 8 from the
8.34 	bond proceeds account in the trunk highway fund, the
8.35 	commissioner of finance shall sell and issue bonds of the state
8.36 	in an amount up to $1,000,000,000 in the manner, upon the terms,
9.1 	and with the effect prescribed by Minnesota Statutes, sections
9.2 	167.50 to 167.52, and by the Minnesota Constitution, article
9.3 	XIV, section 11, at the times and in the amounts requested by
9.4 	the commissioner of transportation.  The proceeds of the bonds,
9.5 	except accrued interest and any premium received on the sale of
9.6 	the bonds, must be credited to the bond proceeds account in the
9.7 	trunk highway fund.