HF 4437

as introduced - 90th Legislature (2017 - 2018) Posted on 04/24/2018 11:42am

A bill for an act
relating to transportation; governing transportation finance; proposing a
constitutional amendment to the Minnesota Constitution, article XIV, to allocate
state general sales tax revenue related to motor vehicle repair and replacement
parts exclusively to fund roads; amending Minnesota Statutes 2017 Supplement,
section 297A.94.

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

ARTICLE 1

CONSTITUTIONAL AMENDMENT

Section 1. new text begin CONSTITUTIONAL AMENDMENT PROPOSED.
new text end

new text begin An amendment to the Minnesota Constitution is proposed to the people. If the amendment
is adopted, article XIV, section 5, will read:
new text end

Sec. 5.

There is hereby created a highway user tax distribution fund to be used solely
for highway purposes as specified in this article. The fund consists of the proceeds of any
taxes authorized by sections 9 and 10 of this article new text begin , and the revenue specified under section
14 of this article new text end . The net proceeds of the taxes shall be apportioned: 62 percent to the trunk
highway fund; 29 percent to the county state-aid highway fund; nine percent to the municipal
state-aid street fund. Five percent of the net proceeds of the highway user tax distribution
fund may be set aside and apportioned by law to one or more of the three foregoing funds.
The balance of the highway user tax distribution fund shall be transferred to the trunk
highway fund, the county state-aid highway fund, and the municipal state-aid street fund
in accordance with the percentages set forth in this section. No change in the apportionment
of the five percent may be made within six years of the last previous change.

new text begin a section shall be added to article XIV, to read:
new text end

new text begin Sec. 14. new text end

new text begin Beginning July 1, 2020, the revenue from the general state sales and use tax
law that is attributed by law to the sale and purchase of motor vehicle repair and replacement
parts must be allocated solely to the highway user tax distribution fund. Revenue under this
section does not include revenue from the tax under article XI, section 15.
new text end

Sec. 2. new text begin SUBMISSION TO VOTERS.
new text end

new text begin (a) The proposed amendment under section 1 must be submitted to the people at the
2018 general election. The question submitted must be:
new text end

new text begin "Shall the Minnesota Constitution be amended to dedicate current sales tax revenue from
the sale of motor vehicle repair and replacement parts, so that beginning July 1, 2020, all
of the revenue is used exclusively for roads, including repair of state and local streets,
highways, and bridges and to match federal highway dollars? This amendment does not
increase the rate of the current tax.
new text end

	new text begin Yes . new text end
	new text begin No . new text end	new text begin " new text end

new text begin (b) The title required under Minnesota Statutes, section 204D.15, subdivision 1, for the
question submitted to the people under paragraph (a) is "Dedication of current motor vehicle
fees to road and bridge repair."
new text end

ARTICLE 2

CONSTITUTIONAL AMENDMENT IMPLEMENTATION

Section 1.

Minnesota Statutes 2017 Supplement, section 297A.94, is amended to read:

297A.94 DEPOSIT OF REVENUES.

new text begin Subdivision 1. new text end

new text begin Deposits. new text end

(a) Except as provided in this section, the commissioner shall
deposit the revenues, including interest and penalties, derived from the taxes imposed by
this chapter in the state treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for the
construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment was
made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of management and budget shall certify to the commissioner the date on
which the project received the conditional commitment. The amount deposited in the loan
guaranty account must be reduced by any refunds and by the costs incurred by the Department
of Revenue to administer and enforce the assessment and collection of the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties, derived
from the taxes imposed on sales and purchases included in section 297A.61, subdivision 3,
paragraph (g), clauses (1) and (4), in the state treasury, and credit them as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general fund.

(d) Beginning with sales taxes remitted after July 1, 2017, the commissioner shall deposit
in the state treasury the revenues collected under section 297A.64, subdivision 1, including
interest and penalties and minus refunds, and credit them to the highway user tax distribution
fund.

(e) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.

(f) Beginning with sales taxes remitted after July 1, 2017, in conjunction with the deposit
of revenues under paragraph (d), the commissioner shall deposit into the state treasury and
credit to the highway user tax distribution fund an amount equal to the estimated revenues
derived from the tax rate imposed under section 297A.62, subdivision 1, on the lease or
rental for not more than 28 days of rental motor vehicles subject to section 297A.64. The
commissioner shall estimate the amount of sales tax revenue deposited under this paragraph
based on the amount of revenue deposited under paragraph (d).

(g) deleted text begin Starting after July 1, 2017, deleted text end The commissioner shall deposit deleted text begin an amount of the
remittances deleted text end monthly into the state treasury and credit deleted text begin them deleted text end to the highway user tax
distribution fund deleted text begin as a portion of the estimated amount of deleted text end taxes collected from the sale and
purchase of motor vehicle repair new text begin and replacement new text end parts in that month new text begin , in the amounts provided
under this paragraph new text end . For the remittances between July 1, 2017, and June 30, 2019, the
monthly deposit amount is $2,628,000. new text begin For the remittances between July 1, 2019, and June
30, 2020, the monthly deposit amount is $16,688,000. new text end For remittances in each subsequent
fiscal year, the monthly deposit amount is deleted text begin $12,137,000 deleted text end new text begin equal to 1/12 of the most recent
percentage estimate for the fiscal year under subdivision 2 or Laws 2017, First Special
Session chapter 3, article 3, section 123, multiplied by the total sales tax revenues collected
in the previous calendar year new text end . For purposes of this paragraph, "motor vehicle" has the
meaning given in section 297B.01, subdivision 11 deleted text begin , and deleted text end new text begin . For purposes of this section, new text end "motor
vehicle repair and replacement parts" includes (i) all parts, tires, accessories, and equipment
incorporated into or affixed to the motor vehicle as part of the motor vehicle maintenance
and repair, and (ii) paint, oil, and other fluids that remain on or in the motor vehicle as part
of the motor vehicle maintenance or repair. For purposes of this paragraph, "tire" means
any tire of the type used on highway vehicles, if wholly or partially made of rubber and if
marked according to federal regulations for highway use.

(h) 72.43 percent of the revenues, including interest and penalties, transmitted to the
commissioner under section 297A.65, must be deposited by the commissioner in the state
treasury as follows:

(1) 50 percent of the receipts must be deposited in the heritage enhancement account in
the game and fish fund, and may be spent only on activities that improve, enhance, or protect
fish and wildlife resources, including conservation, restoration, and enhancement of land,
water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and

(5) two percent of the receipts must be deposited in the natural resources fund, and may
be spent only for the Minnesota Zoological Garden, the Como Park Zoo and Conservatory,
and the Duluth Zoo.

(i) The revenue dedicated under paragraph (h) may not be used as a substitute for
traditional sources of funding for the purposes specified, but the dedicated revenue shall
supplement traditional sources of funding for those purposes. Land acquired with money
deposited in the game and fish fund under paragraph (h) must be open to public hunting
and fishing during the open season, except that in aquatic management areas or on lands
where angling easements have been acquired, fishing may be prohibited during certain times
of the year and hunting may be prohibited. At least 87 percent of the money deposited in
the game and fish fund for improvement, enhancement, or protection of fish and wildlife
resources under paragraph (h) must be allocated for field operations.

(j) The commissioner must deposit the revenues, including interest and penalties minus
any refunds, derived from the sale of items regulated under section 624.20, subdivision 1,
that may be sold to persons 18 years old or older and that are not prohibited from use by
the general public under section 624.21, in the state treasury and credit:

(1) 25 percent to the volunteer fire assistance grant account established under section
88.068;

(2) 25 percent to the fire safety account established under section 297I.06, subdivision
3; and

(3) the remainder to the general fund.

For purposes of this paragraph, the percentage of total sales and use tax revenue derived
from the sale of items regulated under section 624.20, subdivision 1, that are allowed to be
sold to persons 18 years old or older and are not prohibited from use by the general public
under section 624.21, is a set percentage of the total sales and use tax revenues collected in
the state, with the percentage determined under section 39.

(k) The revenues deposited under paragraphs (a) to (j) do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section 297A.62,
subdivision 1a, which must be deposited as provided under the Minnesota Constitution,
article XI, section 15.

new text begin Subd. 2. new text end

new text begin Motor vehicle repair and replacement parts estimation; legislative report.
new text end

new text begin (a) Beginning June 30, 2023, and by June 30 of every fourth year or more frequently
thereafter, the commissioner must estimate the percentage of total sales tax revenues,
including interest and penalties, collected in the previous calendar year that is attributable
to sales and purchases of motor vehicle repair and replacement parts, based on federal data
and department consumption models. Beginning July 1 following a percentage estimate
revision, the estimate is effective for deposits under subdivision 1, paragraph (g).
new text end

new text begin (b) By November 1 in a fiscal year in which a revised estimate becomes effective, the
commissioner must submit a report on the estimate and estimation methodology to the
chairs, ranking minority members, and staff of the legislative committees with jurisdiction
over taxes and transportation policy and finance.
new text end

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective June 30, 2019, if the constitutional amendment in article 1 is
ratified.
new text end