HF 3322

Introduction - 94th Legislature (2025 - 2026)

Posted on 05/15/2025 06:21 p.m.

A bill for an act
relating to taxation; proposing a plastic bottle excise tax; proposing coding for
new law in Minnesota Statutes, chapter 297H.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [297H.50] PLASTIC BOTTLES EXCISE TAX.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Beverage" means a drinkable liquid intended for human oral consumption, excluding:
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new text begin (1) a drug regulated under the federal Food, Drug, and Cosmetic Act, United States
Code, title 21, section 301 et seq.; or
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new text begin (2) infant formula.
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new text begin (c) "Bottle distributor" means:
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new text begin (1) a person who sells a taxable plastic bottle to a retailer in Minnesota; or
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new text begin (2) a beverage producer who engaged in retail sales.
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new text begin (d) "Commissioner" means the commissioner of revenue.
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new text begin (e) "Taxable plastic bottle" means a formed or molded container composed primarily
of plastic resin that:
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new text begin (1) is sealed;
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new text begin (2) contains a beverage; and
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new text begin (3) holds less than three liters when full.
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new text begin Subd. 2. new text end

new text begin Tax imposed. new text end

new text begin An excise tax is imposed on bottle distributors. The tax is imposed
on the first distributor who sells a taxable bottle to a retailer in Minnesota, except, in the
case of a beverage producer who engaged in retail sales, the tax is imposed on the beverage
producer. The tax is payable quarterly and in the form and manner prescribed by the
commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Rate of tax. new text end

new text begin The excise tax is imposed at a rate of ten cents per taxable plastic
bottle sold.
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new text begin Subd. 4. new text end

new text begin Use of proceeds. new text end

new text begin The commissioner must deposit proceeds from the tax in the
water infrastructure account established in section 297H.51.
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new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin This section expires after December 31, 2030.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales on or after January 1, 2026.
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Sec. 2.

new text begin [297H.51] BOTTLE TAX REVENUE DISTRIBUTIONS FOR WATER
INFRASTRUCTURE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Adjusted net tax capacity" means the local government's adjusted net tax capacity
under section 273.1325.
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new text begin (c) "Local government" means a county, statutory or home rule charter city, or township,
located in Minnesota.
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new text begin (d) "Population" means the population estimated by the federal census, a special census
conducted under contract with the United States Bureau of the Census, or a population
estimate of the state demographer made pursuant to section 4A.02, whichever is most recent.
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new text begin (e) "Tax base per capita" means a local government's adjusted net tax capacity divided
by the local government's population.
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new text begin Subd. 2. new text end

new text begin Account established. new text end

new text begin The water infrastructure account is established in the
special revenue fund. Money in the account must be distributed in accordance with this
section.
new text end

new text begin Subd. 3. new text end

new text begin Project prioritization. new text end

new text begin Money from the water infrastructure account established
under this section must be used to provide funding for eligible projects described in this
subdivision. Funding must include paying for all or a portion of costs required to predesign,
design, engineer, construct, equip, or furnish an eligible project. In determining which
eligible projects receive funding, eligible projects in the jurisdictions of local governments
with low tax base per capita must be prioritized. Eligible projects include capital projects
related to:
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new text begin (1) sanitary sewer infrastructure;
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new text begin (2) water treatment facilities;
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new text begin (3) wastewater facilities;
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new text begin (4) the removal of perfluoroalkyl and polyfluoroalkyl substances, nitrates, or other
contaminants from drinking water;
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new text begin (5) the construction of water towers;
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new text begin (6) drinking water system infrastructure;
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new text begin (7) improvements to and replacements of a water distribution system; and
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new text begin (8) storm sewer system infrastructure.
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new text begin Subd. 4. new text end

new text begin Unspent money. new text end

new text begin Any money collected in the prior calendar year and deposited
in the water infrastructure account that is not otherwise appropriated or transferred before
July 1 of each year is appropriated to the Pollution Control Agency. The agency must use
this money for grants to local governments for projects described in subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin This section expires after money in the water infrastructure account
collected prior to January 1, 2031, has been distributed.
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new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning January 1, 2026.
new text end