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HF 2628

as introduced - 90th Legislature (2017 - 2018) Posted on 05/04/2017 04:41pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 05/01/2017

Current Version - as introduced

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A bill for an act
relating to transportation finance; amending certain local option transportation
sales taxes; limiting authority to impose a sales tax; allocating and limiting uses
of funds; requiring a referendum under certain circumstances; amending Minnesota
Statutes 2016, sections 174.93, subdivision 1; 297A.992, subdivisions 1, 2, 3, 4,
6a, 7, 10; 297A.993, subdivisions 1, 2, by adding a subdivision; 398A.10,
subdivisions 3, 4; repealing Minnesota Statutes 2016, section 297A.992,
subdivisions 5, 6, 11, 12.

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

Section 1.

Minnesota Statutes 2016, section 174.93, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings givendeleted text begin:deleted text endnew text begin.
new text end

deleted text begin (1)deleted text endnew text begin (b)new text end "Commissioner" means the commissioner of transportationdeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (2)deleted text endnew text begin (c)new text end "Guideway" means a form of transportation service provided to the public on a
regular and ongoing basisdeleted text begin,deleted text end that operates deleted text beginon exclusive or controlleddeleted text endnew text begin primarily or substantially
within separated
new text end rights-of-way ornew text begin operates onnew text end rails deleted text beginin whole or in partdeleted text end, and includesnew text begin:
new text end

new text begin (1)new text end each line for intercity passenger rail, commuter rail, light rail transit,new text begin andnew text end streetcarsdeleted text begin,
and
deleted text endnew text begin;
new text end

new text begin (2) each line for dedicated bus service, which may include arterial or highwaynew text end bus rapid
transitnew text begin, limited stop bus service, and express bus service, that operates primarily or
substantially within separated rights-of-way
new text end; and

new text begin (3) any intermodal facility serving two or more lines identified in clauses (1) and (2).
new text end

deleted text begin (3)deleted text endnew text begin (d)new text end "Local unit of government" means a county, statutory or home rule charter city,
town, or other political subdivision including, but not limited to, a regional railroad authority
or joint powers board.

deleted text begin (b)deleted text endnew text begin (e)new text end For purposes of this section, "sources of funds" includes, but is not limited to,
money from federal aid, state appropriations, the Metropolitan Council, special taxing
districts, local units of government, fare box recovery, and nonpublic sources.

deleted text begin (c)deleted text endnew text begin (f)new text end For purposes of this section, "budget activity" includes, but is not limited to,
environmental analysis, land acquisition, easements, design, preliminary and final
engineering, acquisition of vehicles and rolling stock, track improvement and rehabilitation,
and construction.

new text begin (g) "Separated rights-of-way" includes exclusive, dedicated, or primary use of a
right-of-way by the public transportation service. Separated rights-of-way does not include
a shoulder, dynamic shoulder lane, or priced lane under section 160.93.
new text end

Sec. 2.

Minnesota Statutes 2016, section 297A.992, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

new text begin(a) new text endFor purposes of this section, the following terms have
the meanings given themdeleted text begin:deleted text endnew text begin.
new text end

deleted text begin (1)deleted text endnew text begin (b)new text end "Metropolitan transportation area" means the counties participating in the joint
powers agreement under subdivision 3deleted text begin;deleted text endnew text begin.
new text end

deleted text begin (2)deleted text endnew text begin (c)new text end "Eligible county" means the county of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, or Washingtondeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (3) "committee" means the Grant Evaluation and Ranking System (GEARS) Committee;
deleted text end

deleted text begin (4) "minimum guarantee county" means any metropolitan county or eligible county that
is participating in the joint powers agreement under subdivision 3, whose proportion of the
annual sales tax revenue under this section collected within that county is less than or equal
to three percent; and
deleted text end

deleted text begin (5) "population" means the population, as defined in section 477A.011, subdivision 3,
estimated or established by July 15 of the year prior to the calendar year in which the
representatives will serve on the Grant Evaluation and Ranking System Committee
established under subdivision 5.
deleted text end

Sec. 3.

Minnesota Statutes 2016, section 297A.992, subdivision 2, is amended to read:


Subd. 2.

Authorization; rates.

(a)new text begin Subject to subdivision 10,new text end notwithstanding section
297A.99, subdivisions 1, 2, and 3, or 477A.016, or any other law, the board of a county
participating in a joint powers agreement as specified in this section shall impose by
resolution (1) a transportation sales and use tax at a rate of one-quarter of one percent on
retail sales and uses taxable under this chapter, and (2) an excise tax of $20 per motor
vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired from any
person engaged in the business of selling motor vehicles at retail, occurring within the
jurisdiction of the taxing authority. The taxes authorized are to fund transportation
improvements as specified in this section, including debt service on obligations issued to
finance such improvements pursuant to subdivision 7.

(b) The tax imposed under this section is not included in determining if the total tax on
lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
12, section 87, or in determining a tax that may be imposed under any other limitations.

Sec. 4.

Minnesota Statutes 2016, section 297A.992, subdivision 3, is amended to read:


Subd. 3.

Joint powers agreement.

Before imposing the taxes authorized in subdivision
2, an eligible county must declare by resolution of its county board to be part of the
metropolitan transportation area and must enter into a joint powers agreement. The joint
powers agreement:

(1) must form a joint powers board, as specified in subdivision 4;

(2) must provide a process that allows any eligible county, by resolution of its county
board, to join the joint powers board and impose the taxes authorized in subdivision 2;new text begin and
new text end

(3) may provide for withdrawal of a participating county before final termination of the
agreementdeleted text begin; and
deleted text end

deleted text begin (4) may provide for a weighted voting system for joint powers board decisionsdeleted text end.

Sec. 5.

Minnesota Statutes 2016, section 297A.992, subdivision 4, is amended to read:


Subd. 4.

Joint powers board.

(a) The joint powers board must consist of one or more
commissioners of each county that is in the metropolitan transportation area, appointed by
its county board, and the chair of the Metropolitan Councildeleted text begin, who must have voting rights,
subject to subdivision 3, clause (4)
deleted text end. The joint powers board has the powers and duties
provided in this section and section 471.59.

(b) The joint powers board deleted text beginmay utilize no more than three-fourths of one percent ofdeleted text end new text beginis
prohibited from using
new text endthe proceeds of the taxes imposed under this section for ordinary
administrative expenses incurred in carrying out the provisions of this section. Any deleted text beginadditionaldeleted text end
administrative expenses must be paid by the participating counties.

deleted text begin (c) The joint powers board may establish a technical advisory group that is separate from
the GEARS Committee. The group must consist of representatives of cities, counties, or
public agencies, including the Metropolitan Council. The technical advisory group must be
used solely for technical consultation purposes.
deleted text end

Sec. 6.

Minnesota Statutes 2016, section 297A.992, subdivision 6a, is amended to read:


Subd. 6a.

deleted text beginPriority of fund usesdeleted text endnew text begin Use of fundsnew text end.

new text begin(a) On and after the effective date of this
section,
new text endthe joint powers board deleted text beginshalldeleted text endnew text begin mustnew text end allocatenew text begin all available funds andnew text end all revenues from
the taxes imposed under this section new text beginsolely new text endin deleted text beginconformance withdeleted text end the following priority order:

(1) deleted text beginpayment ofdeleted text endnew text begin to paynew text end debt service necessary for the fiscal year on bonds or other
obligations issued prior to January 1, 2011, under subdivision 7; deleted text beginand
deleted text end

(2) deleted text beginas otherwise authorized under this section.deleted text endnew text begin to place in escrow to defease bonds or
other obligations issued prior to January 1, 2011, under subdivision 7;
new text end

new text begin (3) for grants to counties in the following amounts:
new text end

new text begin (i) $5,925,378 to Anoka County;
new text end

new text begin (ii) $46,815,505 to Dakota County;
new text end

new text begin (iii) $27,841,593 to Washington County; and
new text end

new text begin (iv) $125,949,244 to Hennepin County, provided that calculation of this amount includes
any grants for capital projects provided in 2017; and
new text end

new text begin (4) for any funds remaining after the payments under clauses (1) to (3), the following
amounts to counties:
new text end

new text begin (i) 10.3 percent to Anoka County;
new text end

new text begin (ii) 15.9 percent to Dakota County;
new text end

new text begin (iii) 7.1 percent to Washington County; and
new text end

new text begin (iv) 66.7 percent to Hennepin County.
new text end

new text begin (b) The available funds that must be allocated under this subdivision include (1) the
entire cash balance under the control of the joint powers board, and (2) any payments or
refunds provided to the joint powers board. Available funds does not include operating grant
awards or other expenditures provided under paragraph (c).
new text end

new text begin (c) Notwithstanding paragraphs (a) and (b), the joint powers board may expend funds
for expenditures and operating grant awards that were established in a budget adopted prior
to March 31, 2017. The authority granted under this paragraph does not include payments
of grant awards for the capital costs of transitways on or after the effective date of this
section.
new text end

new text begin (d) When funds are available for distribution under paragraph (a), clause (3), the funds
must be distributed among the counties proportionally based on the amounts specified for
each county. The amounts under paragraph (a), clause (3), items (i) to (iii), must be calculated
only for funds provided on and after the effective date of this section.
new text end

new text begin (e) To the extent available, all funds to be provided under paragraph (a), clauses (3) and
(4), must be distributed by January 1, 2018.
new text end

new text begin (f) Funds received by a county under paragraph (a) may be used for any of the purposes
specified in section 297A.993, subdivision 2, paragraph (a), subject to the requirements in
section 297A.993, subdivision 2, paragraphs (a) and (b).
new text end

Sec. 7.

Minnesota Statutes 2016, section 297A.992, subdivision 7, is amended to read:


Subd. 7.

Bonds.

(a)new text begin On or before March 31, 2017,new text end the joint powers board or any county,
acting under a joint powers agreement as specified in this section, may, by resolution,
authorize, issue, and sell its bonds, notes, or other obligations for the purpose of funding
grants deleted text beginunder subdivision 6deleted text end. The joint powers board or county may also, by resolution, issue
bonds to refund the bonds issued pursuant to this subdivision.

(b) The bonds of the joint powers board must be limited obligations, payable solely from
or secured by taxes levied under this section.

(c) The bonds of any county may be limited obligations, payable solely from or secured
by taxes levied under this section. A county may also pledge its full faith, credit, and taxing
power as additional security for the bonds.

(d) Bonds may be issued in one or more series and sold without an election. The bonds
shall be secured, bear the interest rate or rates or a variable rate, have the rank or priority,
be executed in the manner, be payable in the manner, mature, and be subject to the defaults,
redemptions, repurchases, tender options, or other terms, and shall be sold in such manner
as the joint powers board, the regional railroad authority, or the county may determine.

(e) The joint powers board or any regional railroad authority or any county may enter
into and perform all contracts deemed necessary or desirable by it to issue and secure the
bonds, including an indenture of trust with a trustee within or without the state.

(f) Except as otherwise provided in this subdivision, the bonds must be issued and sold
in the manner provided under chapter 475.

deleted text begin (g) The joint powers board or any regional railroad authority wholly within the
metropolitan transportation area also may authorize, issue, and sell its bonds, notes, or other
obligations for the purposes, and in accordance with the procedures, set forth in section
398A.07 to fund grants as provided in subdivision 6. The bonds of any regional railroad
authority may be limited obligations, payable solely from or secured by taxes levied under
this section. A regional railroad authority may also pledge its taxing powers as additional
security for the bonds.
deleted text end

Sec. 8.

Minnesota Statutes 2016, section 297A.992, subdivision 10, is amended to read:


Subd. 10.

Termination of taxes.

(a) The taxes imposed under deleted text beginsection 297A.99,
subdivision 1,
deleted text endnew text begin subdivision 2new text end by a county that withdraws from the joint powers agreement
pursuant to subdivision 3, clause (3), deleted text beginshalldeleted text end terminate when the county has satisfied its portion,
as defined in the joint powers agreement, of all outstanding bonds or obligations entered
intonew text begin under subdivision 7new text end while the county was a member of the agreement.

(b) deleted text beginIf the joint powers agreement under subdivision 3 is terminated, the taxes imposed
under section 297A.99, subdivision 1, at the time of the agreement termination will terminate
when all outstanding bonds or obligations are satisfied. The auditors of the counties in which
the taxes are imposed shall see to the administration of this paragraph
deleted text endnew text begin Notwithstanding
section 297A.99, subdivision 12, the joint powers board must terminate imposition of the
taxes under subdivision 2 on sales and purchases made on or after July 1, 2017. The joint
powers board is prohibited from reimposing taxes under subdivision 2 after July 1, 2017
new text end.

Sec. 9.

Minnesota Statutes 2016, section 297A.993, subdivision 1, is amended to read:


Subdivision 1.

Authorization; rates.

Notwithstanding section 297A.99, subdivisions
1, 2, 3, 5, and 13, or 477A.016, or any other law,new text begin but subject to subdivision 1a,new text end the board
of a county deleted text beginoutside the metropolitan transportation area, as defined under section 297A.992,
subdivision 1
deleted text end, or more than one county deleted text beginoutside the metropolitan transportation areadeleted text end acting
under a joint powers agreement, may by resolution of the county board, or each of the county
boards, following a public hearing impose (1) a transportation sales tax at a rate of up to
one-half of one percent on retail sales and uses taxable under this chapter, and (2) an excise
tax of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
acquired from any person engaged in the business of selling motor vehicles at retail, occurring
within the jurisdiction of the taxing authority.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 31, 2017, and
applies to new taxes or expansions of the use of existing taxes on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2016, section 297A.993, is amended by adding a subdivision
to read:


new text begin Subd. 1a. new text end

new text begin Certain counties; voter approval; limitations. new text end

new text begin Notwithstanding subdivision
1, a county that imposed the taxes under section 297A.992 may not impose taxes under this
section at a rate greater than one quarter of one percent unless the taxes are approved at a
general election by the majority of voters who vote on a question to impose the taxes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from March 31, 2017.
new text end

Sec. 11.

Minnesota Statutes 2016, section 297A.993, subdivision 2, is amended to read:


Subd. 2.

Allocation; termination.

new text begin(a) Subject to paragraph (b), new text endthe proceeds of the taxes
must be dedicated exclusively to: (1) payment of the capital cost of a specific transportation
project or improvement; (2) payment of the costs, which may include both capital and
operating costs, of a specific transit project or improvement; (3) payment of the capital costs
of a safe routes to school program under section 174.40; or (4) payment of transit operating
costs. The transportation or transit project or improvement must be designated by the board
of the county, or more than one county acting under a joint powers agreement.

new text begin (b) A county is prohibited from providing funds under this section for (1) the capital
costs of a guideway project; and (2) unless a guideway is in revenue operations on the
effective date of this section, operating or capital maintenance costs of a guideway. For
purposes of this paragraph, "guideway" has the meaning given in section 174.93, subdivision
1.
new text end

new text begin (c)new text end Except for taxes for operating costs of a transit project or improvement, or for transit
operations, the taxes must terminate when revenues raised are sufficient to finance the
project.

Sec. 12.

Minnesota Statutes 2016, section 398A.10, subdivision 3, is amended to read:


Subd. 3.

Application.

This section only applies to a county that has imposed the
metropolitan transportation sales and use tax under section 297A.992new text begin and applies whether
or not the tax is currently in effect
new text end.

Sec. 13.

Minnesota Statutes 2016, section 398A.10, subdivision 4, is amended to read:


Subd. 4.

Definition.

For purposes of this section, "project" means the initial construction
new text begin or extension new text endof a minimum operable segment of a new light rail transit or commuter rail
line, but does not include infill stations, project enhancements, deleted text beginextensions,deleted text end or supportive
infrastructure, constructed after the rail transit is operational.

Sec. 14. new text beginCHANGE IN TAX IMPOSITION.
new text end

new text begin A county terminating its imposition of the tax under Minnesota Statutes, section
297A.992, beginning with sales and purchases made on or after July 1, 2017, must notify
the commissioner of revenue by May 31, 2017, of the county's intent to impose or not impose
a tax under Minnesota Statutes, section 297A.993, beginning with sales and purchases made
on or after July 1, 2017, and include the proposed rate. A county does not violate Minnesota
Statutes, section 297A.99, subdivision 12, if the tax under Minnesota Statutes, section
297A.993, is imposed at a rate of one-quarter of one percent.
new text end

Sec. 15. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2016, section 297A.992, subdivisions 5, 6, 11, and 12, new text end new text begin are repealed.
new text end

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin Unless specified otherwise, this act is effective the day following final enactment.
new text end

APPENDIX

Repealed Minnesota Statutes: 17-4525

297A.992 METROPOLITAN TRANSPORTATION AREA SALES TAX.

Subd. 5.

Grant application and awards; Grant Evaluation and Ranking System (GEARS) Committee.

(a) The joint powers board shall establish a grant application process and identify the amount of available funding for grant awards. Grant applications must be submitted in a form prescribed by the joint powers board. An applicant must provide, in addition to all other information required by the joint powers board, the estimated cost of the project, the amount of the grant sought, possible sources of funding in addition to the grant sought, and identification of any federal funds that will be utilized if the grant is awarded. A grant application seeking transit capital funding must identify the source of money necessary to operate the transit improvement.

(b) The joint powers board shall establish a timeline and procedures for the award of grants, and may award grants only to the state and political subdivisions. The board shall define objective criteria for the award of grants, which must include, but not be limited to, consistency with the most recent version of the transportation policy plan adopted by the Metropolitan Council under section 473.146. The joint powers board shall maximize the availability and use of federal funds in projects funded under this section.

(c) The joint powers board shall establish a GEARS Committee, which must consist of:

(1) one county commissioner from each county that is in the metropolitan transportation area, appointed by its county board;

(2) one elected city representative from each county that is in the metropolitan transportation area;

(3) one additional elected city representative from each county for every additional 400,000 in population, or fraction of 400,000, in the county that is above 400,000 in population; and

(4) the chair of the Metropolitan Council Transportation Committee.

(d) Each city representative must be elected at a meeting of cities in the metropolitan transportation area, which must be convened for that purpose by the Association of Metropolitan Municipalities.

(e) The committee shall evaluate grant applications following objective criteria established by the joint powers board, and must provide to the joint powers board a selection list of transportation projects that includes a priority ranking.

(f) A grant award for a transit project located within the metropolitan area, as defined in section 473.121, subdivision 2, may be funded only after the Metropolitan Council reviews the project for consistency with the transit portion of the Metropolitan Council policy plan and one of the following occurs:

(1) the Metropolitan Council finds the project to be consistent;

(2) the Metropolitan Council initially finds the project to be inconsistent, but after a good faith effort to resolve the inconsistency through negotiations with the joint powers board, agrees that the grant award may be funded; or

(3) the Metropolitan Council finds the project to be inconsistent, and submits the consistency issue for final determination to a panel, which determines the project to be consistent. The panel is composed of a member appointed by the chair of the Metropolitan Council, a member appointed by the joint powers board, and a member agreed upon by both the chair and the joint powers board.

(g) Grants must be funded by the proceeds of the taxes imposed under this section, bonds, notes, or other obligations issued by the joint powers board under subdivision 7.

(h) Notwithstanding the provisions of this section except subdivision 6a, of the revenue collected under this section, the joint powers board shall allocate to the Metropolitan Council, in fiscal years 2012 and 2013, an amount not less than 75 percent of the net cost of operations for those transitways that were receiving metropolitan sales tax funds through an operating grant agreement on June 30, 2011.

(i) The Metropolitan Council shall expend any funds allocated under paragraph (h) for the operations of the specified transitways solely within those counties that are in the metropolitan transportation area.

(j) Nothing in paragraph (h) or (i) prevents grant awards to the Metropolitan Council for capital and operating assistance for transitways and park-and-ride facilities.

Subd. 6.

Allocation of grant awards.

(a) The board must allocate grant awards only for the following transit purposes:

(i) capital improvements to transitways, including, but not limited to, commuter rail rolling stock, light rail vehicles, and transitway buses;

(ii) capital costs for park-and-ride facilities, as defined in section 174.256, subdivision 2;

(iii) feasibility studies, planning, alternatives analyses, environmental studies, engineering, property acquisition for transitway purposes, and construction of transitways; and

(iv) operating assistance for transitways.

(b) The joint powers board must annually award grants to each minimum guarantee county in an amount no less than the amount of sales tax revenue collected within that county.

(c) No more than 1.25 percent of the total awards may be annually allocated for planning, studies, design, construction, maintenance, and operation of pedestrian programs and bicycle programs and pathways.

Subd. 11.

Report.

The joint powers board shall report annually by February 1 to the house of representatives and senate committees having jurisdiction over transportation policy and finance concerning the revenues received and grants awarded.

Subd. 12.

Grant awards to Metropolitan Council.

Any grant award under this section made to the Metropolitan Council must supplement, and must not supplant, operating and capital assistance provided by the state.