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SF 2797

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/21/2025 10:24 a.m.

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to school buses; modifying the motor vehicle registration renewal period
for certain vehicles; increasing penalties for violations of school bus stop-signal
arm law; requiring an annual school bus inspection report and specifying report
contents; authorizing public transit operators to perform third-party testing for
school buses; modifying the number of tests required to maintain third-party testing
certification; modifying electric school bus grants to include propane buses;
requiring rulemaking; requiring reports; appropriating money; amending Minnesota
Statutes 2024, sections 168.013, subdivisions 1f, 18; 169.444, subdivision 2;
169.451, by adding a subdivision; 171.01, by adding subdivisions; 171.3213;
216C.374, subdivisions 1, 2, 3, 5, 6.

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

Section 1.

Minnesota Statutes 2024, section 168.013, subdivision 1f, is amended to read:


Subd. 1f.

Bus; commuter van.

(a) deleted text begin On all intercity buses, the tax during each the first
two years of vehicle life shall be
deleted text end new text begin An intercity bus must be taxed once every two yearsnew text end based
on the gross weight of the vehicle deleted text begin anddeleted text end new text begin . In the first year of vehicle life, the tax isnew text end graduated
according to the following schedule:

Gross Weight of Vehicle
Tax
Under 6,000 lbs. .
$deleted text begin 125deleted text end new text begin
250
new text end
6,000 to 8,000 lbs., incl. .
deleted text begin 125 deleted text end new text begin
250
new text end
8,001 to 10,000 lbs., incl. .
deleted text begin 125 deleted text end new text begin
250
new text end
10,001 to 12,000 lbs., incl. .
deleted text begin 150 deleted text end new text begin
300
new text end
12,001 to 14,000 lbs., incl. .
deleted text begin 190 deleted text end new text begin
380
new text end
14,001 to 16,000 lbs., incl. .
deleted text begin 210 deleted text end new text begin
420
new text end
16,001 to 18,000 lbs., incl. .
deleted text begin 225 deleted text end new text begin
450
new text end
18,001 to 20,000 lbs., incl. .
deleted text begin 260 deleted text end new text begin
520
new text end
20,001 to 22,000 lbs., incl. .
deleted text begin 300 deleted text end new text begin
600
new text end
22,001 to 24,000 lbs., incl. .
deleted text begin 350 deleted text end new text begin
700
new text end
24,001 to 26,000 lbs., incl. .
deleted text begin 400 deleted text end new text begin
800
new text end
26,001 to 28,000 lbs., incl. .
deleted text begin 450 deleted text end new text begin
900
new text end
28,001 to 30,000 lbs., incl. .
deleted text begin 500 deleted text end new text begin
1,000
new text end
30,001 and over .
deleted text begin 550 deleted text end new text begin
1,100
new text end

(b) During deleted text begin each ofdeleted text end the third deleted text begin and fourth yearsdeleted text end new text begin yearnew text end of vehicle life, the tax deleted text begin shalldeleted text end new text begin mustnew text end be
75 percent of the foregoing scheduled tax; during the fifth year of vehicle life, the tax deleted text begin shalldeleted text end new text begin
must
new text end be 50 percent of the foregoing scheduled tax; deleted text begin during the sixth year of vehicle life, the
tax shall be 37-1/2 percent of the foregoing scheduled tax;
deleted text end and during the seventh and deleted text begin each
succeeding year
deleted text end new text begin every two yearsnew text end of vehicle lifenew text begin thereafternew text end , the tax deleted text begin shalldeleted text end new text begin mustnew text end be 25 percent
of the foregoing scheduled tax; provided that the annual tax paid in any year of its life for
an intercity bus deleted text begin shalldeleted text end new text begin mustnew text end be not less than deleted text begin $175deleted text end new text begin $350new text end for a vehicle of over 25-passenger
seating capacity and not less than deleted text begin $125deleted text end new text begin $250new text end for a vehicle of 25-passenger and less seating
capacity.

(c) deleted text begin On alldeleted text end new text begin Annew text end intracity deleted text begin busesdeleted text end new text begin busnew text end operated by an auto transportation company in the
business of transporting persons for compensation as a common carrier and operating within
the limits of citiesdeleted text begin , the tax during each year of the vehicle life of each such bus shall be $2deleted text end new text begin
must be taxed every other year of the vehicle life in the amount of $4
new text end .

(d) deleted text begin Ondeleted text end All other buses and commuter vans, as defined in section 168.126, deleted text begin the tax during
each of the first three years of the vehicle life shall be
deleted text end new text begin must be taxed once every two yearsnew text end
based on the gross weight of the vehicle and graduated according to the following scheduledeleted text begin :deleted text end new text begin .new text end
Where the gross weight of the vehicle is 6,000 pounds or less, deleted text begin $25deleted text end new text begin the tax must be $50new text end .
Where the gross weight of the vehicle is more than 6,000 pounds, and not more than 8,000
pounds, the tax deleted text begin shalldeleted text end new text begin mustnew text end be deleted text begin $25deleted text end new text begin $50new text end plus an additional tax of deleted text begin $5deleted text end new text begin $10new text end per ton for the ton
or major portion in excess of 6,000 pounds. Where the gross weight of the vehicle is more
than 8,000 pounds, and not more than 20,000 pounds, the tax deleted text begin shalldeleted text end new text begin mustnew text end be deleted text begin $30deleted text end new text begin $60new text end plus
an additional tax of deleted text begin $10deleted text end new text begin $20new text end per ton for each ton or major portion in excess of 8,000 pounds.
Where the gross weight of the vehicle is more than 20,000 pounds and not more than 24,000
pounds, the tax deleted text begin shalldeleted text end new text begin mustnew text end be deleted text begin $90deleted text end new text begin $180new text end plus an additional tax of deleted text begin $15deleted text end new text begin $30new text end per ton for each
ton or major portion in excess of 20,000 pounds. Where the gross weight of the vehicle is
more than 24,000 pounds and not more than 28,000 pounds, the tax deleted text begin shalldeleted text end new text begin mustnew text end be deleted text begin $120deleted text end new text begin
$240
new text end plus an additional tax of deleted text begin $25deleted text end new text begin $50new text end per ton for each ton or major portion in excess of
24,000 pounds. Where the gross weight of the vehicle is more than 28,000 pounds, the tax
deleted text begin shalldeleted text end new text begin mustnew text end be deleted text begin $170deleted text end new text begin $340new text end plus an additional tax of deleted text begin $30deleted text end new text begin $60new text end per ton for each ton or major
portion in excess of 28,000 pounds.

(e) During the deleted text begin fourth and succeeding yearsdeleted text end new text begin fifth yearnew text end of vehicle lifenew text begin and every other year
thereafter
new text end , the tax deleted text begin shalldeleted text end new text begin mustnew text end be 80 percent of the foregoing scheduled tax but in no event
less than deleted text begin $20deleted text end new text begin $40new text end per vehicle.

new text begin (f) A filing fee imposed under section 168.33, subdivision 7, paragraph (a), collected
for vehicles taxed under this subdivision, must be multiplied by two. Funds collected by
the commissioner under this paragraph must be allocated proportionally in the same manner
as provided in section 168.33, subdivision 7, paragraph (e).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025, for registrations issued on
or after that date.
new text end

Sec. 2.

Minnesota Statutes 2024, section 168.013, subdivision 18, is amended to read:


Subd. 18.

School buses.

Notwithstanding the provisions of subdivision 1, school buses
used exclusively for the transportation of students under contract with a school district, used
in connection with transportation for nonprofit educational institutions, or used as provided
under section 169.4475, deleted text begin shalldeleted text end new text begin mustnew text end be taxed deleted text begin during eachdeleted text end new text begin every othernew text end year of the vehicle life
of deleted text begin suchdeleted text end new text begin thenew text end bus in the amount of deleted text begin $25deleted text end new text begin $50new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025, for registrations issued on
or after that date.
new text end

Sec. 3.

Minnesota Statutes 2024, section 169.444, subdivision 2, is amended to read:


Subd. 2.

Violations by drivers; penalties.

(a) A person who fails to stop a vehicle or
to keep it stopped, as required in subdivision 1, or who violates subdivision 1a, is guilty of
a misdemeanor punishable by a fine ofnew text begin : (1)new text end not less than $500new text begin ; (2) not less than $700 for a
violation occurring within ten years of a prior violation; or (3) not less than $950 for a
violation occurring within ten years of two or more prior violations
new text end .

(b) A person is guilty of a gross misdemeanor if the person fails to stop a motor vehicle
or to keep it stopped, as required in subdivision 1, or who violates subdivision 1a, and
commits either or both of the following acts:

(1) passes or attempts to pass the school bus in a motor vehicle on the right-hand,
passenger-door side of the bus; or

(2) passes or attempts to pass the school bus in a motor vehicle when a school child is
outside of and on the street or highway used by the school bus or on the adjacent sidewalk.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2025, and applies to violations
occurring on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2024, section 169.451, is amended by adding a subdivision to
read:


new text begin Subd. 1a. new text end

new text begin Reporting required. new text end

new text begin (a) By February 15 each year, the commissioner of
public safety must compile and publish a report detailing the outcomes of all school bus
inspections conducted within the prior year by the State Patrol. The purpose of the report
is to:
new text end

new text begin (1) educate school bus operators and companies about inspection standards;
new text end

new text begin (2) inform operators about inspection trends to enable better understanding of inspection
standards; and
new text end

new text begin (3) provide the public with transparent information regarding the safety of pupil
transportation by school buses in the state.
new text end

new text begin (b) The report must include:
new text end

new text begin (1) a classification of infractions based on severity, with a distinction between:
new text end

new text begin (i) minor defects or infractions that do not immediately compromise safety; and
new text end

new text begin (ii) major or severe defects or infractions that pose a significant safety risk necessitating
immediate remediation and potential removal of the bus from service;
new text end

new text begin (2) a statistical trend analysis, including:
new text end

new text begin (i) year-over-year comparison of inspection pass-fail rates;
new text end

new text begin (ii) common infractions and their frequencies; and
new text end

new text begin (iii) identification of operators or companies with recurrent violations; and
new text end

new text begin (3) educational insights into compliance issues, including an explanation of prevalent
violations, their potential impact on safety, and resources for training and improvement.
new text end

new text begin (c) The commissioner must develop a process to securely disseminate inspection results,
along with the report to all registered school bus operators and companies, including a
website portal where operators may promptly access their inspection results and facilitate
timely correction of identified issues.
new text end

new text begin (d) The commissioner of public safety must publish the report on the Department of
Public Safety's website and offer insights into statewide inspection statistics, prevalent safety
issues, and compliance trends.
new text end

new text begin (e) By March 1 each year, the commissioner must submit the report to the chairs and
ranking minority members of the legislative committees with jurisdiction over transportation
and education policy. The report may be accompanied by proposed legislative changes to
improve school bus safety, strengthen inspection standards or criteria, or identify potential
areas for improvement in the inspection program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to school bus inspections on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2024, section 171.01, is amended by adding a subdivision to
read:


new text begin Subd. 46a. new text end

new text begin School bus service. new text end

new text begin "School bus service" means transportation service
provided to students using either a school bus as defined in section 169.011, subdivision
71, or public transportation service as defined in section 174.22, subdivision 7.
new text end

Sec. 6.

Minnesota Statutes 2024, section 171.01, is amended by adding a subdivision to
read:


new text begin Subd. 48f. new text end

new text begin Transit operator. new text end

new text begin "Transit operator" means a provider of transit bus service
as defined in section 169.011, subdivision 87.
new text end

Sec. 7.

Minnesota Statutes 2024, section 171.3213, is amended to read:


171.3213 THIRD-PARTY TESTING OF SCHOOL BUS DRIVERS.

new text begin (a) new text end A school district that is a third-party testing program and owns or operates school
buses may enter into an agreement with other school districts to test the other districts'
school bus driver employees. A school bus company that is a third-party testing program
and owns or operates school buses may enter into an agreement with other school bus
companiesnew text begin , school districts, or transit operatorsnew text end to test the other companies'new text begin employees,
districts'
new text end school bus driver employeesnew text begin , or transit operators' transit bus driver employees who
provide school bus service
new text end . A third-party testing program may be reimbursed by the tested
driver's school district or company. The agreement must be submitted to the commissioner
for approval. A certified third-party tester must be employed by a school district or a school
bus company providing the testing services.

new text begin (b) Notwithstanding any rule or statute to the contrary, a test applicant's test results and
test passage administered under a third-party testing program are contingent upon:
new text end

new text begin (1) remaining employed with a third-party testing program for six months following the
test administration date; or
new text end

new text begin (2) completing the approved school bus driver training program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025, for tests administered on
or after that date.
new text end

Sec. 8.

Minnesota Statutes 2024, section 216C.374, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms have
the meanings given.

(b) "Battery exchange station" means a physical location deploying equipment that
enables a used electric vehicle battery to be removed and exchanged for a fully charged
electric vehicle battery.

(c) "Electric school bus" means an electric vehicle: (1) designed to carry a driver and
more than ten passengers; and (2) primarily used to transport preprimary, primary, and
secondary students.

(d) "Electric utility" means any utility that provides wholesale or retail electric service
to customers in Minnesota.

(e) "Electric vehicle" has the meaning given in section 169.011, subdivision 26a.

(f) "Electric vehicle charging station" means a physical location deploying equipment
that provides electricity to charge a battery in an electric vehicle.

(g) "Electric vehicle infrastructure" means electric vehicle charging stations and any
associated electric panels, machinery, equipment, and infrastructure necessary for an electric
utility to supply electricity to an electric vehicle charging station and to support electric
vehicle operation.

(h) "Electric vehicle service provider" means an organization that installs, maintains, or
otherwise services a battery exchange station, electric vehicle infrastructure, or electric
vehicle charging stations.

(i) "Eligible applicant" means a school district or an electric utility, electric vehicle
service provider, or transportation service provider applying for a grant under this section
on behalf of a school district.

(j) "Federal vehicle electrification grants" means grants that fund electric school buses
or electric vehicle infrastructure under the federal Infrastructure Investment and Jobs Act,
Public Law 117-58, or the Inflation Reduction Act of 2022, Public Law 117-169.

(k) "Poor air quality" means:

(1) ambient air levels that air monitoring data reveals approach or exceed state or federal
air quality standards or chronic health inhalation risk benchmarks for total suspended
particulates, particulate matter less than ten microns wide (PM-10), particulate matter less
than 2.5 microns wide (PM-2.5), sulfur dioxide, or nitrogen dioxide; or

(2) areas in which levels of asthma among children significantly exceed the statewide
average.

new text begin (l) "Propane" has the meaning given in section 296A.01, subdivision 31, and refers to
propane used exclusively as fuel for a vehicle.
new text end

new text begin (m) "Propane school bus" means a school bus that operates exclusively on propane.
new text end

deleted text begin (l)deleted text end new text begin (n)new text end "Prioritized school district" means:

(1) a school district listed in the Small Area Income and Poverty Estimates School
District Estimates as having 7.5 percent or more students living in poverty based on the
most recent decennial U.S. census;

(2) a school district identified with locale codes "43-Rural: Remote" and "42-Rural:
Distant" by the National Center for Education Statistics;

(3) a school district funded by the Bureau of Indian Affairs; or

(4) a school district that receives basic support payments under United States Code, title
20, section 7703(b)(1), for children who reside on Indian land.

deleted text begin (m)deleted text end new text begin (o)new text end "School" means a school that operates as part of an independent or special school
district.

deleted text begin (n)deleted text end new text begin (p)new text end "School bus" has the meaning given in section 169.011, subdivision 71.

deleted text begin (o)deleted text end new text begin (q)new text end "School district" means:

(1) an independent school district, as defined in section 120A.05, subdivision 10; or

(2) a special school district, as defined in section 120A.05, subdivision 14.

deleted text begin (p)deleted text end new text begin (r)new text end "Transportation service provider" means a person that has a contract with a school
district to transport students to and from school.

Sec. 9.

Minnesota Statutes 2024, section 216C.374, subdivision 2, is amended to read:


Subd. 2.

Establishment; purpose.

An electric new text begin and propane new text end school bus deployment
program is established in the department. The purpose of the program is to provide grants
to accelerate the deployment of electric new text begin and propane new text end school buses by school districts deleted text begin and
to encourage schools to use vehicle electrification as a teaching tool that can be integrated
into the school's curriculum
deleted text end .

Sec. 10.

Minnesota Statutes 2024, section 216C.374, subdivision 3, is amended to read:


Subd. 3.

Establishment of account.

An electric new text begin and propane new text end school bus program account
is established as a separate account in the special revenue fund in the state treasury. The
commissioner shall credit to the account appropriations and transfers to the account. Earnings,
including interest, dividends, and any other earnings arising from assets of the account,
must be credited to the account. Money in the account at the end of a fiscal year does not
cancel to the general fund but remains available in the account until June 30, 2027. The
commissioner shall manage the account.

Sec. 11.

Minnesota Statutes 2024, section 216C.374, subdivision 5, is amended to read:


Subd. 5.

Eligible grant expenditures.

A grant awarded under this section may be used
only to pay:

(1) a school district or transportation service provider to purchase one or more electric
school buses, or convert or repower fossil-fuel-powered school buses to be powered by
electricity;

(2) up to 75 percent of the cost a school district or transportation service provider incurs
to purchase one or more electric school buses, or to convert or repower deleted text begin fossil-fuel-powereddeleted text end new text begin
diesel
new text end school buses to be powered by electricity;

new text begin (3) up to 75 percent of the cost a school district or transportation service provider incurs
to purchase one or more propane school buses;
new text end

deleted text begin (3)deleted text end new text begin (4)new text end for prioritized school districts, up to 95 percent of the cost a school district or
transportation service provider incurs to purchase one or more electric school buses, or to
convert or repower fossil-fuel-powered school buses to be powered by electricity;

deleted text begin (4)deleted text end new text begin (5)new text end up to 75 percent of the cost of deploying, on the school district or transportation
service provider's real property, infrastructure required to operate electric school buses,
including but not limited to battery exchange stations, electric vehicle infrastructure, or
electric vehicle charging stations;

deleted text begin (5)deleted text end new text begin (6)new text end for prioritized school districts, up to 95 percent of the cost of deploying, on the
school district or transportation service provider's real property, infrastructure required to
operate electric school buses, including but not limited to battery exchange stations, electric
vehicle infrastructure, or electric vehicle charging stations; and

deleted text begin (6)deleted text end new text begin (7)new text end the reasonable costs of technical assistance related to electric school bus
deployment program planning and to prepare grant applications for federal vehicle
electrification grants.

Sec. 12.

Minnesota Statutes 2024, section 216C.374, subdivision 6, is amended to read:


Subd. 6.

Application process.

(a) The commissioner must develop administrative
procedures governing the application and grant award process.

(b) The commissioner must issue a request for proposals to eligible applicants who may
wish to apply for a grant under this section on behalf of a school.

(c) An eligible applicant must submit an application for an electric new text begin or propane new text end school
bus deployment grant to the commissioner on a form prescribed by the commissioner. The
form must require an applicant to supply, at a minimum, the following information:

(1) the number of and a description of the electric new text begin or propane new text end school buses the school
district or transportation service provider intends to purchase;

(2) new text begin if applicable, new text end the total cost to purchase the electric school buses and the incremental
cost, if any, of the electric school buses when compared with fossil-fuel-powered school
buses;

new text begin (3) if applicable, the total cost to purchase the propane school buses and the savings of
the propane school bus when compared with diesel-powered school buses or electric school
buses;
new text end

deleted text begin (3)deleted text end new text begin (4) if applicable,new text end a copy of the proposed contract agreement between the school
district, the electric utility, the electric vehicle service provider, or the transportation service
provider that includes provisions addressing responsibility for maintenance of the electric
school buses and related electric vehicle infrastructure and battery exchange stations;

deleted text begin (4)deleted text end new text begin (5)new text end whether the school district is a prioritized school district;

deleted text begin (5)deleted text end new text begin (6)new text end areas of the school district that serve significant numbers of students eligible for
free and reduced-price school meals, and areas that disproportionately experience poor air
quality, as measured by indicators such as the Minnesota Pollution Control Agency's air
quality monitoring network, the Minnesota Department of Health's air quality and health
monitoring, or other relevant indicators;

deleted text begin (6)deleted text end new text begin (7)new text end the school district's plan to prioritize the deployment of electric new text begin or propane new text end school
buses in areas of the school district that:

(i) serve students eligible for free and reduced-price school meals;

(ii) experience disproportionately poor air quality; or

(iii) are located within environmental justice areas, as defined in section 216B.1691,
subdivision 1, paragraph (e);

deleted text begin (7) the school district's plan, if any, to make the electric school buses serve as a visible
learning tool for students, teachers, and visitors to the school, including how vehicle
electrification may be integrated into the school district's curriculum;
deleted text end

(8) information that demonstrates the school district's level of need for financial assistance
available under this section;

(9) new text begin if applicable, new text end any federal vehicle electrification grants awarded to or applied for by
the eligible applicant for the same electric school buses or electric vehicle infrastructure
proposed by the eligible applicant in a grant application made under this section;

(10) information that demonstrates the school district's readiness to implement the project
and to operate the electric new text begin or propane new text end school buses for no less than five years;

(11) new text begin if applicable, new text end whether the electric utility or electric vehicle service provider will
deploy electric vehicle infrastructure on the school district's or transportation service
provider's property, and if so, the willingness and ability of the electric vehicle service
provider or the electric utility to:

(i) pay employees and contractors a prevailing wage rate, as defined in section 177.42,
subdivision 6; and

(ii) comply with section 177.43; and

(12) any other information deemed relevant by the commissioner.

(d) An eligible applicant may seek a technical assistance grant under this section to assist
the eligible applicant apply for federal vehicle electrification grants. An eligible applicant
seeking a technical assistance grant under this section must submit an application to the
commissioner on behalf of a school district on a form prescribed by the commissioner. The
form must include, at a minimum, the following information:

(1) the names of the federal programs to which the applicant intends to apply;

(2) a description of the technical assistance the applicants need in order to complete the
federal application; and

(3) any other information deemed relevant by the commissioner.

(e) The commissioner must administer an open application process under this section
at least twice annually.

Sec. 13. new text begin RULEMAKING; THIRD-PARTY TESTER MAINTAINING
CERTIFICATION.
new text end

new text begin (a) By January 1, 2026, the commissioner of public safety must amend Minnesota Rules,
part 7410.6420, subpart 6, item A, to strike "12" and insert "6."
new text end

new text begin (b) The commissioner may use the good-cause exemption under Minnesota Statutes,
section 14.388, subdivision 1, clause (3), to adopt rules under this section, and Minnesota
Statutes, section 14.386, does not apply except as provided under Minnesota Statutes, section
14.388.
new text end

Sec. 14. new text begin APPROPRIATION; SCHOOL BUS SAFETY.
new text end

new text begin $8,400,000 in fiscal year 2026 is appropriated from the general fund to the commissioner
of public safety for grants to school districts, nonpublic schools, charter schools, and
companies that provide school bus service for the purchase and installation of school bus
stop-signal arm camera systems. In awarding grants, the commissioner must follow the
same requirements as under Laws 2021, First Special Session chapter 5, article 1, section
4, subdivision 5. This is a onetime appropriation and is available until June 30, 2027.
new text end

Sec. 15. new text begin REVISOR INSTRUCTION.
new text end

new text begin The revisor of statutes shall rename the "electric school bus deployment program" under
Minnesota Statutes, section 216C.374, to "electric and propane school bus deployment
program" and make conforming changes to similar terms wherever they appear in Minnesota
Statutes and Minnesota Rules. The revisor shall also make grammatical changes related to
the insertion.
new text end