1.1A bill for an act1.2relating to transportation; appropriating federal transit funds for disbursement 1.3by commissioner of transportation; modifying or adding provisions relating to 1.4transit financial assistance;amending Minnesota Statutes 2008, sections 174.22, 1.5by adding a subdivision; 174.23, subdivisions 1, 2; 174.24, subdivisions 2, 3b, 1.6by adding a subdivision; 174.247; Minnesota Statutes 2009 Supplement, section 1.7174.24, subdivisions 1a, 5.1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.9    Section 1. Minnesota Statutes 2008, section 174.22, is amended by adding a 1.10subdivision to read:1.11    Subd. 14a.State sources of funds."State sources of funds" means funding for the 1.12public transit participation program appropriated from (1) the general fund, and (2) the 1.13greater Minnesota transit account.1.14    Sec. 2. Minnesota Statutes 2008, section 174.23, subdivision 1, is amended to read:1.15    Subdivision 1. General.(a) The commissioner shall have all powers necessary and 1.16convenient to carry out the provisions of sections 
         174.21 to 
         174.27 including the power to: 1.17(1) review applications for financial assistance, execute contracts, and obligate 1.18and expend program funds, upon conditions and limitations as the commissioner deems 1.19necessary for purposes of program and project implementation, operation, and evaluation,;1.20(2) accept and disburse federal funds available for the purposes of sections 
         174.21 to 1.21174.27
         , and such funds are appropriated to the commissioner; and1.22(3) act upon request as the designated agent of any eligible person for the receipt and 1.23disbursal of federal funds.2.1(b) The commissioner shall perform the duties and exercise the powers under 2.2sections 
         174.21 to 
         174.27 in coordination with and in furtherance of statewide, 2.3regional, and local transportation plans and transportation development programs. The 2.4commissioner shall set guidelines for financial assistance under the public transit subsidy 2.5program. The commissioner shall present any proposed guidelines regarding public transit 2.6financial assistance to a legislative committee composed of equal numbers appointed by 2.7the house of representatives local and urban affairs and senate transportation committees. 2.8The commissioner shall not implement any new guidelines regarding public transit 2.9financial assistance, between the period January 1, 1981 to April 15, 1982, without the 2.10prior approval of that committee. 2.11    Sec. 3. Minnesota Statutes 2008, section 174.23, subdivision 2, is amended to read:2.12    Subd. 2. Financial assistance; application, approval.(a) The commissioner 2.13shall seek out and select eligible recipients of financial assistance under sections 
         174.212.14to 
         174.27.2.15(b) The commissioner shall establish by rule the procedures and standards for review 2.16and approval of applications for financial assistance submitted to the commissioner 2.17pursuant to sections 
         174.21 to 
         174.27. Any applicant shall provide to the commissioner 2.18any financial or other information required by the commissioner to carry out the 2.19commissioner's duties. The commissioner may require local contributions from applicants 2.20as a condition for receiving financial assistance.2.21(c) Before the commissioner approves any grant, the application for the grant shall2.22may be reviewed and approved by the appropriate regional development commission only 2.23for consistency with regional transportation plans and development guides. If an applicant 2.24proposes a project within the jurisdiction of a transit authority or commission or a transit 2.25system assisted or operated by a city or county, the application shall also be reviewed 2.26by that commission, authority, or political subdivision for consistency with its transit 2.27programs, policies, and plans. Any regional development commission that has not adopted 2.28a transportation plan may review but may not approve or disapprove of any application.2.29    Sec. 4. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 1a, is 2.30amended to read:2.31    Subd. 1a. Transit service needs implementation Greater Minnesota transit 2.32investment plan.(a) The commissioner shall develop a  greater Minnesota transit service 2.33needs implementation investment plan that contains a goal of meeting at least 80 percent 3.1of unmet total transit service needs in greater Minnesota by July 1, 2015, and meeting at 3.2least 90 percent of unmet total transit service needs in greater Minnesota by July 1, 2025.3.3(b) The plan must include, but is not limited to, the following:3.4(1) an analysis of ridership and total transit service needs throughout greater 3.5Minnesota;3.6(2) a calculation of unmet needs; an assessment of the level and type of service 3.7required to meet unmet total transit service needs, for the transit system classifications 3.8as provided under subdivision 3b, paragraph (c), of urbanized area, small urban area, 3.9rural area, and elderly and disabled service;3.10(3) an analysis of costs and revenue options; and,3.11(4) a plan to reduce unmet total transit service needs as specified in this subdivision; 3.12and3.13(5) identification of the operating and capital costs necessary to meet 100 percent of 3.14the greater Minnesota transit targeted and projected bus service hours, as identified in the 3.15greater Minnesota transit plan, for 2010, 2015, 2020, 2025, and 2030.3.16(c) The plan must specifically address special transportation service ridership and 3.17needs. The plan must also provide that recipients of operating assistance under this 3.18section provide fixed route public transit service without charge for disabled veterans in 3.19accordance with subdivision 7. The commissioner may amend the plan as necessary, and 3.20may use all or part of the 2001 greater Minnesota public transportation plan created by the 3.21Minnesota Department of Transportation.3.22    Sec. 5. Minnesota Statutes 2008, section 174.24, subdivision 2, is amended to read:3.23    Subd. 2. Eligibility; application. Any legislatively established public transit 3.24commission or authority, any county or statutory or home rule charter city providing 3.25financial assistance to or operating public transit, any private operator of public transit, or 3.26any combination thereof is eligible to receive financial assistance through the public transit 3.27participation program. Except as provided in subdivision 2b for assistance provided from 3.28federal funds, eligible recipients must be located outside of the metropolitan area.3.29    Sec. 6. Minnesota Statutes 2008, section 174.24, is amended by adding a subdivision 3.30to read:3.31    Subd. 2b.Federal aid.(a) The commissioner may accept and disburse federal funds 3.32received and appropriated under section 174.23, subdivision 1, as an additional source of 3.33funds for implementing the public transit participation program established in this section. 3.34This authority includes, but is not limited to:4.1(1) adopting administrative rules to establish financial assistance allocation priorities, 4.2identify factors to consider in reviewing an applicant's management plan, evaluate a 4.3request for financial assistance, and determine the amount of financial assistance to be 4.4provided; and4.5(2) establishing project selection criteria under the United States Code, title 49, 4.6section 5311, state management plan as approved by the Federal Transit Administration, 4.7United States Department of Transportation.4.8(b) If the commissioner accepts and disburses federal funds as provided in paragraph 4.9(a), the commissioner shall:4.10(1) maintain separate accounts for (i) state sources of funds, and (ii) federal sources 4.11of funding; and4.12(2) ensure that all state sources of funds are only used for assistance to eligible 4.13recipients as provided in subdivision 2.4.14    Sec. 7. Minnesota Statutes 2008, section 174.24, subdivision 3b, is amended to read:4.15    Subd. 3b. Operating assistance; recipient classifications. (a) The commissioner 4.16shall determine the total operating cost of any public transit system receiving or applying 4.17for assistance in accordance with generally accepted accounting principles. To be eligible 4.18for financial assistance, an applicant or recipient shall provide to the commissioner 4.19all financial records and other information and shall permit any inspection reasonably 4.20necessary to determine total operating cost and correspondingly the amount of assistance 4.21that may be paid to the applicant or recipient. Where more than one county or municipality 4.22contributes assistance to the operation of a public transit system, the commissioner shall 4.23identify one as lead agency for the purpose of receiving money under this section.4.24    (b) Prior to distributing operating assistance to eligible recipients for any contract 4.25period, the commissioner shall place all recipients into one of the following classifications: 4.26urbanized area service, small urban area service, rural area service, and elderly and 4.27disabled service.4.28(c) The commissioner shall distribute funds under this section so that the percentage 4.29of total contracted operating cost paid by any recipient from local sources will not exceed 4.30the percentage for that recipient's classification, except as provided in an undue hardship 4.31case this subdivision. The percentages must be:4.32(1) for urbanized area service and small urban area service, 20 percent;4.33(2) for rural area service, 15 percent; and4.34(3) for elderly and disabled service, 15 percent. 5.1Except as provided in a United States Department of Transportation program allowing 5.2or requiring a lower percentage to be paid from local sources, the remainder of the 5.3recipient's total contracted operating cost will be paid from state sources of funds less any 5.4assistance received by the recipient from any federal source the United States Department 5.5of Transportation.5.6(d) For purposes of this subdivision, "local sources" means all local sources of funds 5.7and includes all operating revenue, tax levies, and contributions from public funds, except 5.8that the commissioner may exclude from the total assistance contract revenues derived 5.9from operations the cost of which is excluded from the computation of total operating 5.10cost. Total operating costs of the Duluth Transit Authority or a successor agency does 5.11not include costs related to the Superior, Wisconsin service contract and the Independent 5.12School District No. 709 service contract.5.13    (c) (e) If a recipient informs the commissioner in writing after the establishment of 5.14these percentages but prior to the distribution of financial assistance for any year that 5.15paying its designated percentage of total operating cost from local sources will cause 5.16undue hardship, the commissioner may reduce the percentage to be paid from local 5.17sources by the recipient and increase the percentage to be paid from local sources by one 5.18or more other recipients inside or outside the classification. However, the commissioner 5.19may not reduce or increase any recipient's percentage under this paragraph for more than 5.20two years successively. If for any year the funds appropriated to the commissioner to carry 5.21out the purposes of this section are insufficient to allow the commissioner to pay the state 5.22share of total operating cost as provided in this paragraph, the commissioner shall reduce 5.23the state share in each classification to the extent necessary.5.24    Sec. 8. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 5, is 5.25amended to read:5.26    Subd. 5. Method of payment, operating assistance. Payments for operating 5.27assistance under this section from state sources of funds must be made in the following 5.28manner:5.29    (a) For payments made from the general fund:5.30    (1) 50 percent of the total contract amount in or before the first month of operation;5.31    (2) 40 percent of the total contract amount in or before the seventh month of 5.32operation;5.33    (3) 9 percent of the total contract amount in or before the 12th month of operation; 5.34and5.35    (4) 1 percent of the total contract amount after the final audit.6.1    (b) For payments made from the greater Minnesota transit account:6.2    (1) 50 percent of the total contract amount in or before the seventh month of 6.3operation; and6.4    (2) 50 percent of the total contract amount in or before the 11th month of operation.6.5    Sec. 9. Minnesota Statutes 2008, section 174.247, is amended to read:6.6174.247 ANNUAL TRANSIT REPORT.6.7    (a) By February 15 annually, the commissioner shall submit a report to the legislature 6.8on transit services outside the metropolitan area. The Metropolitan Council and any 6.9public transit system receiving assistance under section 
         174.24 shall provide assistance 6.10in creating the report, as requested by the commissioner.6.11    (b) The report must include, at a minimum, the following:6.12    (1) a descriptive overview of public transit in Minnesota;6.13    (2) a descriptive summary of funding sources and assistance programs;6.14    (3) a summary of each public transit system receiving assistance under section 6.15174.24
         ;6.16    (4) data that identifies use of volunteers in providing transit service;6.17    (5) financial data that identifies operating and capital costs, and funding sources,6.18for each public transit system and for each transit system classification under section 6.19174.24, subdivision 3b
         :6.20(i) the operating and capital costs;6.21(ii) each of the funding sources used to provide financial assistance; and6.22(iii) for federal funds, the amount from each specific federal program under which 6.23funding is provided;6.24    (6) a summary of the differences in program implementation requirements and aid 6.25recipient eligibility between federal aid and state sources of funds;6.26(7) in each odd-numbered year, an analysis of public transit system needs and 6.27operating expenditures on an annual basis, which must include a methodology for 6.28identifying monetary needs, and calculations of:6.29(i) the total monetary needs for all public transit systems, for the year of the report 6.30and the ensuing five years;6.31(ii) the total expenditures from local sources for each transit system classification;6.32(iii) the comprehensive transit assistance percentage for each transit system 6.33classification, which equals (A) the expenditures identified under clause (7), item (ii), for 6.34a transit system classification, divided by (B) the amounts identified under subitem (A), 7.1plus the sum of state sources of funds plus federal funds provided to all transit systems 7.2in that classification; and7.3(iv) in each odd-numbered year, beginning in 2009, a calculation of the amounts the 7.4amount of surplus or insufficient funds available for (i) paying the state share of transit 7.5operating costs under section 174.24, subdivision 3b, and (ii) paying capital and operating 7.6costs to fully implement the transit service needs implementation greater Minnesota transit 7.7investment plan under section 
         174.24, subdivision 1a.