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HF 931

as introduced - 88th Legislature (2013 - 2014) Posted on 02/28/2013 01:28pm

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

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Introduction Pdf Posted on 02/25/2013

Current Version - as introduced

1.1A bill for an act
1.2relating to transportation, taxes, and state government finance; amending various
1.3provisions related to transportation finance and taxes; authorizing sale and
1.4issuance of trunk highway bonds; making technical changes; appropriating
1.5money; amending Minnesota Statutes 2012, sections 163.051; 168.013,
1.6subdivision 1a; 168.31, by adding a subdivision; 296A.07, subdivision 3;
1.7296A.08, subdivision 2; 297A.61, subdivision 3; 297A.68, subdivision 3;
1.8297A.70, subdivisions 2, 3; 297A.815, subdivision 3; 297A.94; 297A.992,
1.9subdivisions 2, 6; 297A.993, subdivision 1; 297B.01, subdivisions 14, 16;
1.10297B.02, subdivision 3; 297B.03; proposing coding for new law in Minnesota
1.11Statutes, chapter 435.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13ARTICLE 1
1.14TRUNK HIGHWAY BONDS

1.15    Section 1. BOND APPROPRIATIONS.
1.16The sums shown in the column under "APPROPRIATIONS" are appropriated from
1.17the bond proceeds account in the trunk highway fund, or another named fund, to the state
1.18agencies or officials indicated, to be spent for public purposes. Appropriations of bond
1.19proceeds must be spent as authorized by the Minnesota Constitution, articles XI and XIV.
1.20Unless otherwise specified, money appropriated in this article for a capital program or
1.21project may be used to pay state agency staff costs that are attributed directly to the capital
1.22program or project in accordance with accounting policies adopted by the commissioner
1.23of management and budget.
1.24
SUMMARY
1.25
Department of Transportation
$
400,000,000
2.1
Department of Management and Budget
400,000
2.2
TOTAL
$
400,400,000
2.3
APPROPRIATIONS

2.4
2.5
Sec. 2. DEPARTMENT OF
TRANSPORTATION
2.6
Subdivision 1.Total Appropriation
$
400,000,000
2.7This appropriation is to the commissioner of
2.8transportation for the purposes specified in
2.9this section.
2.10
2.11
Subd. 2.Corridor Investment Management
Strategy (CIMS) Program
200,000,000
2.12This appropriation is in the amount of
2.13$50,000,000 in each fiscal year for fiscal
2.14years 2014 to 2017.
2.15
2.16
Subd. 3.Transportation Economic
Development (TED) Program
200,000,000
2.17This appropriation is for the Transportation
2.18Economic Development program under
2.19Minnesota Statutes, section 161.04,
2.20subdivision 6, and is in the amount of
2.21$50,000,000 in each fiscal year for fiscal
2.22years 2014 to 2017.

2.23
Sec. 3. BOND SALE EXPENSES
$
400,000
2.24This appropriation is to the commissioner
2.25of management and budget for bond sale
2.26expenses under Minnesota Statutes, sections
2.2716A.641, subdivision 8; and 167.50,
2.28subdivision 4.

2.29    Sec. 4. BOND SALE AUTHORIZATION.
2.30    To provide the money appropriated in subdivision 1 from the bond proceeds account
2.31in the trunk highway fund, the commissioner of management and budget shall sell and
2.32issue bonds of the state in an amount up to $400,400,000 in the manner, upon the terms,
3.1and with the effect prescribed by Minnesota Statutes, sections 167.50 to 167.52, and
3.2by the Minnesota Constitution, article XIV, section 11, at the times and in the amounts
3.3requested by the commissioner of transportation. The proceeds of the bonds, except
3.4accrued interest and any premium received from the sale of the bonds, must be deposited
3.5in the bond proceeds account in the trunk highway fund.

3.6    Sec. 5. EFFECTIVE DATE.
3.7This article is effective the day following final enactment.

3.8ARTICLE 2
3.9HIGHWAY USER TAXES

3.10    Section 1. Minnesota Statutes 2012, section 168.013, subdivision 1a, is amended to read:
3.11    Subd. 1a. Passenger automobile; hearse. (a) On passenger automobiles as defined
3.12in section 168.002, subdivision 24, and hearses, except as otherwise provided, the tax
3.13shall be $10 $20 plus an additional tax equal to 1.25 1.375 percent of the base value,
3.14as adjusted under paragraph (h).
3.15    (b) Subject to the classification provisions herein, "base value" means the
3.16manufacturer's suggested retail price of the vehicle including destination charge using list
3.17price information published by the manufacturer or determined by the registrar if no
3.18suggested retail price exists, and shall not include the cost of each accessory or item of
3.19optional equipment separately added to the vehicle and the suggested retail price.
3.20    (c) If the manufacturer's list price information contains a single vehicle identification
3.21number followed by various descriptions and suggested retail prices, the registrar shall
3.22select from those listings only the lowest price for determining base value.
3.23    (d) If unable to determine the base value because the vehicle is specially constructed,
3.24or for any other reason, the registrar may establish such value upon the cost price to the
3.25purchaser or owner as evidenced by a certificate of cost but not including Minnesota sales
3.26or use tax or any local sales or other local tax.
3.27    (e) The registrar shall classify every vehicle in its proper base value class as follows:
3.28
FROM
TO
3.29
$
0
$ 199.99
3.30
$
200
$ 399.99
3.31and thereafter a series of classes successively set in brackets having a spread of $200
3.32consisting of such number of classes as will permit classification of all vehicles.
4.1    (f) The base value for purposes of this section shall be the middle point between
4.2the extremes of its class.
4.3    (g) The registrar shall establish the base value, when new, of every passenger
4.4automobile and hearse registered prior to the effective date of Extra Session Laws 1971,
4.5chapter 31, using list price information published by the manufacturer or any nationally
4.6recognized firm or association compiling such data for the automotive industry. If unable
4.7to ascertain the base value of any registered vehicle in the foregoing manner, the registrar
4.8may use any other available source or method. The registrar shall calculate tax using base
4.9value information available to dealers and deputy registrars at the time the application for
4.10registration is submitted. The tax on all previously registered vehicles shall be computed
4.11upon the base value thus determined taking into account the depreciation provisions of
4.12paragraph (h).
4.13    (h) The annual additional tax must be computed upon a percentage of the base value
4.14as follows: during the first year of vehicle life, upon 100 percent of the base value; for the
4.15second year, 90 percent of such value; for the third year, 80 percent of such value; for the
4.16fourth year, 70 percent of such value; for the fifth year, 60 percent of such value; for the
4.17sixth year, 50 percent of such value; for the seventh year, 40 percent of such value; for the
4.18eighth year, 30 percent of such value; for the ninth year, 20 percent of such value; for the
4.19tenth year, ten percent of such value; for the 11th and each succeeding year, the sum of $25.
4.20    (i) In no event shall the annual additional tax be less than $25.
4.21    (j) For any vehicle previously registered in Minnesota, the annual additional tax
4.22due under this subdivision paragraph (a) must not exceed the smallest amount of annual
4.23additional tax previously paid or due on the vehicle.
4.24EFFECTIVE DATE.This section is effective the day following final enactment
4.25and applies to taxes payable for a registration period starting on or after July 1, 2013.

4.26    Sec. 2. Minnesota Statutes 2012, section 168.31, is amended by adding a subdivision
4.27to read:
4.28    Subd. 5a. Late payment penalty. (a) The owner of a vehicle subject to registration
4.29tax under section 168.013, sections 1a to 11, owes a late payment penalty if the registration
4.30tax due for the vehicle is not fully paid within 30 days of the first day of the registration
4.31period for which the tax is owed. The amount of the penalty is equal to five percent of the
4.32total registration tax amount for the registration period, rounded to the nearest dollar.
4.33(b) The commissioner shall include notice of potential late payment penalties in
4.34its registration tax notifications.
5.1(c) A late payment penalty is included as a fee under this chapter, and chapters 168A
5.2and 169, for registration and operation of the vehicle on public streets and highways,
5.3including but not limited to requirements (1) under sections 168.09, subdivision 1, 168A.08,
5.4and 169.79, subdivision 1; and (2) related to issuance of plates and validation stickers.
5.5(d) Proceeds from penalties collected under this subdivision must be deposited in
5.6the highway user tax distribution fund. Of the first dollars deposited, an amount equal to
5.7the total start-up costs associated with implementation of this subdivision is appropriated
5.8from the highway user tax distribution fund to the commissioner of public safety.
5.9(e) This subdivision does not apply to (1) a vehicle for which installment payments
5.10are made under subdivision 4 or 4a; or (2) a vehicle registered under section 168.012,
5.11168.031, or 168.187. A late payment penalty is not subject to refund under section
5.12168.022 or 168.16.
5.13EFFECTIVE DATE.This section is effective the day following final enactment
5.14and applies to taxes payable for a registration period starting on or after January 1, 2014.

5.15    Sec. 3. Minnesota Statutes 2012, section 296A.07, subdivision 3, is amended to read:
5.16    Subd. 3. Rate of tax. The gasoline excise tax is imposed at the following rates: as
5.17specified in the following tax rate schedule.
5.18    (1) E85 is taxed at the rate of 17.75 cents per gallon;
5.19    (2) M85 is taxed at the rate of 14.25 cents per gallon; and
5.20    (3) all other gasoline is taxed at the rate of 25 cents per gallon.
5.21
Tax Rate Schedule (in cents per gallon)
5.22
5.23
5.24
Type of Fuel
Rate from
October 1, 2013,
to June 30, 2014
Rate in Fiscal
Year 2015
Rate in Fiscal
Year 2016
Rate in Fiscal
Year 2017 and
Thereafter
5.25
E85
21.3
22.365
23.43
24.495
5.26
M85
17.1
17.955
18.81
19.665
5.27
5.28
All other
gasoline
30.0
31.5
33.0
34.5
5.29EFFECTIVE DATE.This section is effective October 1, 2013, and applies to all
5.30gasoline, undyed diesel fuel, and special fuel in distributor storage on that date.

5.31    Sec. 4. Minnesota Statutes 2012, section 296A.08, subdivision 2, is amended to read:
5.32    Subd. 2. Rate of tax. (a) The special fuel excise tax is imposed at the following
5.33rates: as specified in the following tax rate schedule.
5.34    (a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.
5.35    (b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.
6.1
Tax Rate Schedule (in cents per gallon unless otherwise specified)
6.2
6.3
6.4
Type of Fuel
Rate from
October 1, 2013,
to June 30, 2014
Rate in Fiscal
Year 2015
Rate in Fiscal
Year 2016
Rate in Fiscal
Year 2017 and
Thereafter
6.5
6.6
6.7
Liquefied
petroleum gas or
propane
22.5
23.63
24.75
25.88
6.8
6.9
Liquefied natural
gas
18.0
18.9
19.8
20.7
6.10
6.11
6.12
6.13
6.14
Compressed
natural gas
$2.609 per
thousand cubic
feet, or 30.0 cents
per gasoline
equivalent
$2.739 per
thousand cubic
feet, or 31.5 cents
per gasoline
equivalent
$2.87 per
thousand cubic
feet, or 33.0 cents
per gasoline
equivalent
$3.0 per
thousand cubic
feet, or 34.5 cents
per gasoline
equivalent
6.15    (c) Compressed natural gas is taxed at the rate of $2.174 per thousand cubic feet; or
6.1625 cents per gasoline equivalent. For purposes of this paragraph, (b) For purposes of the
6.17tax rate schedule under paragraph (a), "gasoline equivalent," as defined by the National
6.18Conference on Weights and Measures, is 5.66 pounds of natural gas.
6.19    (d) (c) All other special fuel is taxed at the same rate as the gasoline excise tax as
6.20specified in the tax rate schedule under section 296A.07, subdivision 2. The tax is payable
6.21in the form and manner prescribed by the commissioner.
6.22EFFECTIVE DATE.This section is effective October 1, 2013, and applies to all
6.23gasoline, undyed diesel fuel, and special fuel in distributor storage on that date.

6.24    Sec. 5. Minnesota Statutes 2012, section 297A.815, subdivision 3, is amended to read:
6.25    Subd. 3. Motor vehicle lease sales tax revenue allocation. (a) For purposes of
6.26this subdivision, "net revenue" means an amount equal to:(1) the revenues, including
6.27interest and penalties, collected under this section, during the fiscal year; less(2) in fiscal
6.28year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal year 2013 and
6.29following fiscal years, $32,000,000.
6.30    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
6.31estimate the amount of the revenues and subtraction under paragraph (a) net revenue
6.32 for the current fiscal year.
6.33    (c) On or after July 1 of the subsequent fiscal year, the commissioner of management
6.34and budget shall transfer the net revenue as estimated in paragraph (b) from the general
6.35fund, as follows:
6.36    (1) 50 percent to the greater Minnesota transit account; and
6.37    (2) 50 percent to the county state-aid highway fund. Notwithstanding any other law
6.38to the contrary, the commissioner of transportation shall allocate the funds transferred
7.1under this clause to the counties in the metropolitan area, as defined in section 473.121,
7.2subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall
7.3receive of such amount the percentage that its population, as defined in section 477A.011,
7.4subdivision 3, estimated or established by July 15 of the year prior to the current calendar
7.5year, bears to the total population of the counties receiving funds under this clause.
7.6    (d) For fiscal years 2010 and 2011, the amount under paragraph (a), clause (1), must
7.7be calculated using the following percentages of the total revenues:
7.8    (1) for fiscal year 2010, 83.75 percent; and
7.9    (2) for fiscal year 2011, 93.75 percent.
7.10EFFECTIVE DATE.This section is effective June 30, 2013.

7.11ARTICLE 3
7.12GENERAL SALES TAX

7.13    Section 1. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
7.14    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
7.15to, each of the transactions listed in this subdivision.
7.16    (b) Sale and purchase include:
7.17    (1) any transfer of title or possession, or both, of tangible personal property, whether
7.18absolutely or conditionally, for a consideration in money or by exchange or barter; and
7.19    (2) the leasing of or the granting of a license to use or consume, for a consideration
7.20in money or by exchange or barter, tangible personal property, other than a manufactured
7.21home used for residential purposes for a continuous period of 30 days or more.
7.22    (c) Sale and purchase include the production, fabrication, printing, or processing of
7.23tangible personal property for a consideration for consumers who furnish either directly or
7.24indirectly the materials used in the production, fabrication, printing, or processing.
7.25    (d) Sale and purchase include the preparing for a consideration of food.
7.26Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
7.27to, the following:
7.28    (1) prepared food sold by the retailer;
7.29    (2) soft drinks;
7.30    (3) candy;
7.31    (4) dietary supplements; and
7.32    (5) all food sold through vending machines.
7.33    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
7.34gas, water, or steam for use or consumption within this state.
8.1    (f) A sale and a purchase includes the transfer for a consideration of prewritten
8.2computer software whether delivered electronically, by load and leave, or otherwise.
8.3    (g) A sale and a purchase includes the furnishing for a consideration of the following
8.4services:
8.5    (1) the privilege of admission to places of amusement, recreational areas, or athletic
8.6events, and the making available of amusement devices, tanning facilities, reducing
8.7salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
8.8    (2) lodging and related services by a hotel, rooming house, resort, campground,
8.9motel, or trailer camp, including furnishing the guest of the facility with access to
8.10telecommunication services, and the granting of any similar license to use real property in
8.11a specific facility, other than the renting or leasing of it for a continuous period of 30 days
8.12or more under an enforceable written agreement that may not be terminated without prior
8.13notice and including accommodations intermediary services provided in connection with
8.14other services provided under this clause;
8.15    (3) nonresidential parking services, whether on a contractual, hourly, or other
8.16periodic basis, except for parking at a meter;
8.17    (4) the granting of membership in a club, association, or other organization if:
8.18    (i) the club, association, or other organization makes available for the use of its
8.19members sports and athletic facilities, without regard to whether a separate charge is
8.20assessed for use of the facilities; and
8.21    (ii) use of the sports and athletic facility is not made available to the general public
8.22on the same basis as it is made available to members.
8.23Granting of membership means both onetime initiation fees and periodic membership
8.24dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
8.25squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
8.26swimming pools; and other similar athletic or sports facilities;
8.27    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
8.28material used in road construction; and delivery of concrete block by a third party if the
8.29delivery would be subject to the sales tax if provided by the seller of the concrete block; and
8.30    (6) services as provided in this clause:
8.31    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
8.32and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
8.33drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
8.34include services provided by coin operated facilities operated by the customer;
9.1    (ii) motor vehicle washing, waxing, and cleaning services, including services
9.2provided by coin operated facilities operated by the customer, and rustproofing,
9.3undercoating, and towing of motor vehicles;
9.4    (iii) building and residential cleaning, maintenance, and disinfecting services and
9.5pest control and exterminating services;
9.6    (iv) detective, security, burglar, fire alarm, and armored car services; but not including
9.7services performed within the jurisdiction they serve by off-duty licensed peace officers as
9.8defined in section 626.84, subdivision 1, or services provided by a nonprofit organization
9.9for monitoring and electronic surveillance of persons placed on in-home detention
9.10pursuant to court order or under the direction of the Minnesota Department of Corrections;
9.11    (v) pet grooming services;
9.12    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
9.13and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
9.14plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
9.15clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
9.16public utility lines. Services performed under a construction contract for the installation of
9.17shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
9.18    (vii) massages, except when provided by a licensed health care facility or
9.19professional or upon written referral from a licensed health care facility or professional for
9.20treatment of illness, injury, or disease; and
9.21    (viii) the furnishing of lodging, board, and care services for animals in kennels and
9.22other similar arrangements, but excluding veterinary and horse boarding services.; and
9.23    (7) the repair and maintenance of motor vehicles; excluding repair and maintenance
9.24covered by a warranty, service contract, or a manufacturer's recall.
9.25    (h) A sale and a purchase include the furnishing for consideration of a warranty or
9.26service contract for the repair or maintenance of a motor vehicle.
9.27    In applying the provisions of this chapter, the terms "tangible personal property"
9.28and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
9.29and the provision of these taxable services, unless specifically provided otherwise.
9.30Services performed by an employee for an employer are not taxable. Services performed
9.31by a partnership or association for another partnership or association are not taxable if
9.32one of the entities owns or controls more than 80 percent of the voting power of the
9.33equity interest in the other entity. Services performed between members of an affiliated
9.34group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
9.35group of corporations" means those entities that would be classified as members of an
10.1affiliated group as defined under United States Code, title 26, section 1504, disregarding
10.2the exclusions in section 1504(b).
10.3    For purposes of clause (5), "road construction" means construction of (1) public
10.4roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
10.5metropolitan area up to the point of the emergency response location sign.
10.6    (h) (i) A sale and a purchase includes the furnishing for a consideration of tangible
10.7personal property or taxable services by the United States or any of its agencies or
10.8instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
10.9subdivisions.
10.10    (i) (j) A sale and a purchase includes the furnishing for a consideration of
10.11telecommunications services, ancillary services associated with telecommunication
10.12services, cable television services, and direct satellite services. Telecommunication
10.13services include, but are not limited to, the following services, as defined in section
10.14297A.669 : air-to-ground radiotelephone service, mobile telecommunication service,
10.15postpaid calling service, prepaid calling service, prepaid wireless calling service, and
10.16private communication services. The services in this paragraph are taxed to the extent
10.17allowed under federal law.
10.18    (j) (k) A sale and a purchase includes the furnishing for a consideration of installation
10.19if the installation charges would be subject to the sales tax if the installation were provided
10.20by the seller of the item being installed.
10.21    (k) (l) A sale and a purchase includes the rental of a vehicle by a motor vehicle
10.22dealer to a customer when (1) the vehicle is rented by the customer for a consideration,
10.23or (2) the motor vehicle dealer is reimbursed pursuant to a service contract as defined in
10.24section 59B.02, subdivision 11.
10.25EFFECTIVE DATE.This section is effective for sales and purchases made after
10.26December 31, 2013.

10.27    Sec. 2. Minnesota Statutes 2012, section 297A.68, subdivision 3, is amended to read:
10.28    Subd. 3. Materials used in providing certain taxable services. (a) Materials stored,
10.29used, or consumed in providing a taxable service listed in section 297A.61, subdivision 3,
10.30paragraph (g), clause clauses (6) and (7), intended to be sold ultimately at retail are exempt.
10.31(b) This exemption includes, but is not limited to:
10.32(1) chemicals, lubricants, packaging materials, seeds, trees, fertilizers, and
10.33herbicides, if these items are used or consumed in providing the taxable service;
10.34(2) chemicals used to treat waste generated as a result of providing the taxable service;
11.1(3) accessory tools, equipment, and other items that are separate detachable units used
11.2in providing the service and that have an ordinary useful life of less than 12 months; and
11.3(4) fuel, electricity, gas, and steam used or consumed in the production process,
11.4except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt
11.5if (i) it is in excess of average climate control or lighting, and (ii) it is necessary to produce
11.6that particular service.; and
11.7(5) parts and materials incorporated into a motor vehicle as part of automotive repair.
11.8(c) This exemption does not include machinery, equipment, implements, tools,
11.9accessories, appliances, contrivances, furniture, and fixtures used in providing the taxable
11.10service.
11.11EFFECTIVE DATE.This section is effective for sales and purchases made after
11.12December 31, 2013.

11.13    Sec. 3. Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read:
11.14    Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
11.15to the following governments and political subdivisions, or to the listed agencies or
11.16instrumentalities of governments and political subdivisions, are exempt:
11.17(1) the United States and its agencies and instrumentalities;
11.18(2) school districts, the University of Minnesota, state universities, community
11.19colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
11.20Education, and an instrumentality of a political subdivision that is accredited as an
11.21optional/special function school by the North Central Association of Colleges and Schools;
11.22(3) hospitals and nursing homes owned and operated by political subdivisions of
11.23the state of tangible personal property and taxable services used at or by hospitals and
11.24nursing homes;
11.25(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
11.26operations provided for in section 473.4051;
11.27(5) purchasers of goods and services by a local government for transit purposes if
11.28the purchase is funded by revenue from the metropolitan area transit account under section
11.2916A.88 or the greater Minnesota transit account under section 16A.88;
11.30(5) (6) other states or political subdivisions of other states, if the sale would be
11.31exempt from taxation if it occurred in that state;
11.32(6) (7) public libraries, public library systems, multicounty, multitype library systems
11.33as defined in section 134.001, county law libraries under chapter 134A, state agency
11.34libraries, the state library under section 480.09, and the Legislative Reference Library; and
11.35(7) (8) towns.
12.1(b) This exemption does not apply to the sales of the following products and services:
12.2(1) building, construction, or reconstruction materials purchased by a contractor
12.3or a subcontractor as a part of a lump-sum contract or similar type of contract with a
12.4guaranteed maximum price covering both labor and materials for use in the construction,
12.5alteration, or repair of a building or facility;
12.6(2) construction materials purchased by tax exempt entities or their contractors to
12.7be used in constructing buildings or facilities which will not be used principally by the
12.8tax exempt entities;
12.9(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
12.10except for leases entered into by the United States or its agencies or instrumentalities;
12.11(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
12.12(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
12.13297A.67, subdivision 2 , except for lodging, prepared food, candy, soft drinks, and alcoholic
12.14beverages purchased directly by the United States or its agencies or instrumentalities; or
12.15(5) goods or services purchased by a town as inputs to goods and services that are
12.16generally provided by a private business and the purchases would be taxable if made by a
12.17private business engaged in the same activity.
12.18(c) As used in this subdivision, "school districts" means public school entities and
12.19districts of every kind and nature organized under the laws of the state of Minnesota, and
12.20any instrumentality of a school district, as defined in section 471.59.
12.21(d) As used in this subdivision, "goods or services generally provided by a private
12.22business" include, but are not limited to, goods or services provided by liquor stores, gas
12.23and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
12.24and laundromats. "Goods or services generally provided by a private business" do not
12.25include housing services, sewer and water services, wastewater treatment, ambulance and
12.26other public safety services, correctional services, chore or homemaking services provided
12.27to elderly or disabled individuals, or road and street maintenance or lighting.
12.28EFFECTIVE DATE.This section is effective for sales and purchases made after
12.29June 30, 2013.

12.30    Sec. 4. Minnesota Statutes 2012, section 297A.70, subdivision 3, is amended to read:
12.31    Subd. 3. Sales of certain goods and services to government. (a) The following
12.32sales to or use by the specified governments and political subdivisions of the state are
12.33exempt:
12.34    (1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
12.35fire apparatus to a political subdivision;
13.1    (2) machinery and equipment, except for motor vehicles, used directly for mixed
13.2municipal solid waste management services at a solid waste disposal facility as defined in
13.3section 115A.03, subdivision 10;
13.4    (3) chore and homemaking services to a political subdivision of the state to be
13.5provided to elderly or disabled individuals;
13.6    (4) telephone services to the Office of Enterprise Technology that are used to provide
13.7telecommunications services through the enterprise technology revolving fund;
13.8    (5) firefighter personal protective equipment as defined in paragraph (b), if purchased
13.9or authorized by and for the use of an organized fire department, fire protection district, or
13.10fire company regularly charged with the responsibility of providing fire protection to the
13.11state or a political subdivision;
13.12    (6) bullet-resistant body armor that provides the wearer with ballistic and trauma
13.13protection, if purchased by a law enforcement agency of the state or a political subdivision
13.14of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
13.15    (7) motor vehicles purchased or leased by political subdivisions of the state if the
13.16vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
13.17exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
13.18under section 297B.03, clause (12) (11);
13.19    (8) equipment designed to process, dewater, and recycle biosolids for wastewater
13.20treatment facilities of political subdivisions, and materials incidental to installation of
13.21that equipment;
13.22    (9) the removal of trees, bushes, or shrubs for the construction and maintenance
13.23of roads, trails, or firebreaks when purchased by an agency of the state or a political
13.24subdivision of the state;
13.25    (10) purchases by the Metropolitan Council or the Department of Transportation of
13.26vehicles and repair parts to equip operations provided for in section 174.90, including,
13.27but not limited to, the Northstar Corridor Rail project; and
13.28(11) purchases of water used directly in providing public safety services by an
13.29organized fire department, fire protection district, or fire company regularly charged with
13.30the responsibility of providing fire protection to the state or a political subdivision.; and
13.31(12) taxable services purchased by:
13.32(i) the Department of Transportation and funded by revenues from the trunk highway
13.33fund;
13.34(ii) a county and funded by revenues from the county state-aid highway fund; or
13.35(iii) a home-rule charter or statutory city and funded by revenues from the municipal
13.36state-aid street fund.
14.1    (b) For purposes of this subdivision, "firefighters personal protective equipment"
14.2means helmets, including face shields, chin straps, and neck liners; bunker coats and
14.3pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
14.4protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
14.5personal alert safety systems; spanner belts; optical or thermal imaging search devices;
14.6and all safety equipment required by the Occupational Safety and Health Administration.
14.7    (c) For purchases of items listed in paragraph (a), clause (10), the tax must be
14.8imposed and collected as if the rate under section 297A.62, subdivision 1, applied and
14.9then refunded in the manner provided in section 297A.75.
14.10EFFECTIVE DATE.This section is effective for sales and purchases made after
14.11June 30, 2013.

14.12    Sec. 5. Minnesota Statutes 2012, section 297A.94, is amended to read:
14.13297A.94 DEPOSIT OF REVENUES.
14.14(a) Except as provided in this section, the commissioner shall deposit the revenues,
14.15including interest and penalties, derived from the taxes imposed by this chapter in the state
14.16treasury and credit them to the general fund.
14.17(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
14.18account in the special revenue fund if:
14.19(1) the taxes are derived from sales and use of property and services purchased for
14.20the construction and operation of an agricultural resource project; and
14.21(2) the purchase was made on or after the date on which a conditional commitment
14.22was made for a loan guaranty for the project under section 41A.04, subdivision 3.
14.23The commissioner of management and budget shall certify to the commissioner the date
14.24on which the project received the conditional commitment. The amount deposited in
14.25the loan guaranty account must be reduced by any refunds and by the costs incurred by
14.26the Department of Revenue to administer and enforce the assessment and collection of
14.27the taxes.
14.28(c) The commissioner shall deposit the revenues, including interest and penalties,
14.29derived from the taxes imposed on sales and purchases included in section 297A.61,
14.30subdivision 3
, paragraph (g), clauses (1) and (4), in the state treasury, and credit them
14.31as follows:
14.32(1) first to the general obligation special tax bond debt service account in each fiscal
14.33year the amount required by section 16A.661, subdivision 3, paragraph (b); and
14.34(2) after the requirements of clause (1) have been met, the balance to the general fund.
15.1(d) The commissioner shall deposit the revenues, including interest and penalties,
15.2collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
15.3general fund. By July 15 of each year the commissioner shall transfer to the highway user
15.4tax distribution fund an amount equal to the excess fees collected under section 297A.64,
15.5subdivision 5
, for the previous calendar year.
15.6(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
15.7for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
15.8penalties, transmitted to the commissioner under section 297A.65, must be deposited by
15.9the commissioner in the state treasury as follows:
15.10(1) 50 percent of the receipts must be deposited in the heritage enhancement account
15.11in the game and fish fund, and may be spent only on activities that improve, enhance, or
15.12protect fish and wildlife resources, including conservation, restoration, and enhancement
15.13of land, water, and other natural resources of the state;
15.14(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
15.15may be spent only for state parks and trails;
15.16(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
15.17may be spent only on metropolitan park and trail grants;
15.18(4) three percent of the receipts must be deposited in the natural resources fund, and
15.19may be spent only on local trail grants; and
15.20(5) two percent of the receipts must be deposited in the natural resources fund,
15.21and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
15.22Conservatory, and the Duluth Zoo.
15.23(f) The revenue dedicated under paragraph (e) may not be used as a substitute
15.24for traditional sources of funding for the purposes specified, but the dedicated revenue
15.25shall supplement traditional sources of funding for those purposes. Land acquired with
15.26money deposited in the game and fish fund under paragraph (e) must be open to public
15.27hunting and fishing during the open season, except that in aquatic management areas or
15.28on lands where angling easements have been acquired, fishing may be prohibited during
15.29certain times of the year and hunting may be prohibited. At least 87 percent of the money
15.30deposited in the game and fish fund for improvement, enhancement, or protection of fish
15.31and wildlife resources under paragraph (e) must be allocated for field operations.
15.32(g) On or before June 30 of each fiscal year, the commissioner shall estimate the
15.33revenues, including interest and penalties collected during the fiscal year, on sales made
15.34by and sales made to all vendors classified as auto repair and maintenance businesses
15.35under the North American Industry Classification System code number 8111, minus any
15.36refunds made on those sales and purchases. On or after July 1 of the subsequent fiscal
16.1year, the commissioner of management and budget shall transfer from the general fund the
16.2amounts in clauses (1) and (2) estimated under this paragraph:
16.3(1) 50 percent to the greater Minnesota transit account in the transit assistance
16.4fund; and
16.5(2) 50 percent to the county state-aid highway fund.
16.6(h) The revenues deposited under paragraphs (a) to (f) (g) do not include the
16.7revenues, including interest and penalties, generated by the sales tax imposed under
16.8section 297A.62, subdivision 1a, which must be deposited as provided under the
16.9Minnesota Constitution, article XI, section 15.
16.10EFFECTIVE DATE.This section is effective for revenues collected in fiscal year
16.112014 and thereafter.

16.12ARTICLE 4
16.13MOTOR VEHICLE SALES TAX

16.14    Section 1. Minnesota Statutes 2012, section 297B.01, subdivision 14, is amended to
16.15read:
16.16    Subd. 14. Purchase price. (a) "Purchase price" means the total consideration
16.17valued in money for a sale, whether paid in money or otherwise. The purchase price
16.18excludes the amount of a manufacturer's rebate paid or payable to the purchaser. If a motor
16.19vehicle is taken in trade as a credit or as part payment on a motor vehicle taxable under
16.20this chapter, the credit or trade-in value allowed by the person selling the motor vehicle
16.21shall be deducted from the total selling price to establish the purchase price of the vehicle
16.22being sold and the trade-in allowance allowed by the seller shall constitute the purchase
16.23price of the motor vehicle accepted as a trade-in. The purchase price in those instances
16.24where the motor vehicle is acquired by gift or by any other transfer for a nominal or no
16.25monetary consideration shall also include the average value of similar motor vehicles,
16.26established by standards and guides as determined by the motor vehicle registrar. The
16.27purchase price in those instances where a motor vehicle is manufactured by a person who
16.28registers it under the laws of this state shall mean the manufactured cost of such motor
16.29vehicle and manufactured cost shall mean the amount expended for materials, labor,
16.30and other properly allocable costs of manufacture, except that in the absence of actual
16.31expenditures for the manufacture of a part or all of the motor vehicle, manufactured costs
16.32shall mean the reasonable value of the completed motor vehicle.
17.1(b) The term "purchase price" shall not include the portion of the value of a motor
17.2vehicle due solely to modifications necessary to make the motor vehicle disability
17.3accessible.
17.4(c) The term "purchase price" shall not include the transfer of a motor vehicle by
17.5way of gift between a husband and wife or parent and child, or to a nonprofit organization
17.6as provided under subdivision 16, paragraph (c), clause (5) (6), nor shall it include
17.7the transfer of a motor vehicle by a guardian to a ward when there is no monetary
17.8consideration and the title to such vehicle was registered in the name of the guardian, as
17.9guardian, only because the ward was a minor.
17.10(d) The term "purchase price" shall not include the transfer of a motor vehicle as a
17.11gift between a foster parent and foster child. For purposes of this subdivision, a foster
17.12relationship exists, regardless of the age of the child, if (1) a foster parent's home is or was
17.13licensed as a foster family home under Minnesota Rules, parts 9545.0010 to 9545.0260,
17.14and (2) the county verifies that the child was a state ward or in permanent foster care.
17.15(e) There shall not be included in "purchase price" the amount of any tax imposed by
17.16the United States upon or with respect to retail sales whether imposed upon the retailer or
17.17the consumer.

17.18    Sec. 2. Minnesota Statutes 2012, section 297B.01, subdivision 16, is amended to read:
17.19    Subd. 16. Sale, sells, selling, purchase, purchased, or acquired. (a) "Sale,"
17.20"sells," "selling," "purchase," "purchased," or "acquired" means any transfer of title of any
17.21motor vehicle, whether absolutely or conditionally, for a consideration in money or by
17.22exchange or barter for any purpose other than resale in the regular course of business.
17.23    (b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
17.24or by holding it in an effort to so lease it, and which is put to no other use by the owner
17.25other than resale after such lease or effort to lease, shall be considered property purchased
17.26for resale.
17.27    (c) The terms also shall include any transfer of title or ownership of a motor vehicle
17.28by other means, for or without consideration, except that these terms shall not include:
17.29    (1) the acquisition of a motor vehicle by inheritance from or by bequest of, a
17.30decedent who owned it;
17.31    (2) the transfer of a motor vehicle which was previously licensed in the names of
17.32two or more joint tenants and subsequently transferred without monetary consideration to
17.33one or more of the joint tenants;
17.34    (3) the transfer of a motor vehicle by way of gift between individuals, or gift
17.35from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an
18.1individual, when the transfer is with no monetary or other consideration or expectation
18.2of consideration and the parties to the transfer submit an affidavit to that effect at the
18.3time the title transfer is recorded;
18.4    (4) the transfer of a motor vehicle by gift between spouses or between parent and
18.5child;
18.6(5) the voluntary or involuntary transfer of a motor vehicle between a husband and
18.7wife in a divorce proceeding; or
18.8    (5) (6) the transfer of a motor vehicle by way of a gift to an organization that is exempt
18.9from federal income taxation under section 501(c)(3) of the Internal Revenue Code when
18.10the motor vehicle will be used exclusively for religious, charitable, or educational purposes.

18.11    Sec. 3. Minnesota Statutes 2012, section 297B.02, subdivision 3, is amended to read:
18.12    Subd. 3. In lieu tax for collector vehicle. In lieu of the tax imposed in subdivision
18.131, there is imposed a tax of $90 $150 on the purchase price of a passenger automobile or a
18.14fire truck described in section 297B.025, subdivision 2.

18.15    Sec. 4. Minnesota Statutes 2012, section 297B.03, is amended to read:
18.16297B.03 EXEMPTIONS.
18.17    There is specifically exempted from the provisions of this chapter and from
18.18computation of the amount of tax imposed by it the following:
18.19    (1) purchase or use, including use under a lease purchase agreement or installment
18.20sales contract made pursuant to section 465.71, of any motor vehicle by the United States
18.21and its agencies and instrumentalities and by any person described in and subject to the
18.22conditions provided in section 297A.67, subdivision 11;
18.23    (2) purchase or use of any motor vehicle by any person who was a resident of
18.24another state or country at the time of the purchase and who subsequently becomes a
18.25resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
18.26such person began residing in the state of Minnesota and the motor vehicle was registered
18.27in the person's name in the other state or country;
18.28    (3) (2) purchase or use of any motor vehicle by any person making a valid election
18.29to be taxed under the provisions of section 297A.90;
18.30    (4) (3) purchase or use of any motor vehicle previously registered in the state of
18.31Minnesota when such transfer constitutes a transfer within the meaning of section 118,
18.32331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
18.33Revenue Code;
19.1    (5) (4) purchase or use of any vehicle owned by a resident of another state and
19.2leased to a Minnesota-based private or for-hire carrier for regular use in the transportation
19.3of persons or property in interstate commerce provided the vehicle is titled in the state
19.4of the owner or secured party, and that state does not impose a sales tax or sales tax on
19.5motor vehicles used in interstate commerce;
19.6    (6) (5) purchase or use of a motor vehicle by a private nonprofit or public educational
19.7institution for use as an instructional aid in automotive training programs operated by the
19.8institution. "Automotive training programs" includes motor vehicle body and mechanical
19.9repair courses but does not include driver education programs;
19.10    (7) (6) purchase of a motor vehicle by an ambulance service licensed under section
19.11144E.10 when that vehicle is equipped and specifically intended for emergency response
19.12or for providing ambulance service;
19.13    (8) (7) purchase of a motor vehicle by or for a public library, as defined in section
19.14134.001, subdivision 2 , as a bookmobile or library delivery vehicle;
19.15    (9) (8) purchase of a ready-mixed concrete truck;
19.16    (10) (9) purchase or use of a motor vehicle by a town for use exclusively for road
19.17maintenance, including snowplows and dump trucks, but not including automobiles,
19.18vans, or pickup trucks;
19.19    (11) (10) purchase or use of a motor vehicle by a corporation, society, association,
19.20foundation, or institution organized and operated exclusively for charitable, religious, or
19.21educational purposes, except a public school, university, or library, but only if the vehicle is:
19.22    (i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
19.23passenger automobile, as defined in section 168.002, if the automobile is designed and
19.24used for carrying more than nine persons including the driver; and
19.25    (ii) intended to be used primarily to transport tangible personal property or
19.26individuals, other than employees, to whom the organization provides service in
19.27performing its charitable, religious, or educational purpose;
19.28    (12) (11) purchase of a motor vehicle for use by a transit provider exclusively to
19.29provide transit service is exempt if the transit provider is either (i) receiving financial
19.30assistance or reimbursement under section 174.24 or 473.384, or (ii) operating under
19.31section 174.29, 473.388, or 473.405;
19.32    (13) (12) purchase or use of a motor vehicle by a qualified business, as defined
19.33in section 469.310, located in a job opportunity building zone, if the motor vehicle is
19.34principally garaged in the job opportunity building zone and is primarily used as part of or
19.35in direct support of the person's operations carried on in the job opportunity building zone.
19.36The exemption under this clause applies to sales, if the purchase was made and delivery
20.1received during the duration of the job opportunity building zone. The exemption under
20.2this clause also applies to any local sales and use tax;
20.3    (14) (13) purchase of a leased vehicle by the lessee who was a participant in a
20.4lease-to-own program from a charitable organization that is:
20.5    (i) described in section 501(c)(3) of the Internal Revenue Code; and
20.6    (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and
20.7(15) (14) purchase of a motor vehicle used exclusively as a mobile medical unit
20.8for the provision of medical or dental services by a federally qualified health center, as
20.9defined under title 19 of the Social Security Act, as amended by Section 4161 of the
20.10Omnibus Budget Reconciliation Act of 1990.

20.11    Sec. 5. EFFECTIVE DATE.
20.12Except as otherwise specified, sections 1 to 4 are effective July 1, 2013, and apply to
20.13transfers of title that occur on or after that date.

20.14ARTICLE 5
20.15LOCAL OPTION TRANSPORTATION FINANCE

20.16    Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
20.17163.051 METROPOLITAN COUNTY WHEELAGE TAX.
20.18    Subdivision 1. Tax authorized. (a) Except as provided in paragraph (b), the board
20.19of commissioners of each metropolitan county is authorized to levy by resolution a
20.20wheelage tax of $5 for the year 1972 in an amount set by the county for calendar year
20.212014 and each subsequent year thereafter by resolution on each motor vehicle that is kept
20.22in such county when not in operation and that is subject to annual registration and taxation
20.23under chapter 168. The board may provide by resolution for collection of the wheelage
20.24tax by county officials or it may request that the tax be collected by the state registrar of
20.25motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf
20.26of the county if requested, as provided in subdivision 2.
20.27    (b) The following vehicles are exempt from the wheelage tax:
20.28    (1) motorcycles, as defined in section 169.011, subdivision 44;
20.29    (2) motorized bicycles, as defined in section 169.011, subdivision 45; and
20.30    (3) electric-assisted bicycles, as defined in section 169.011, subdivision 27; and
20.31    (4) motorized foot scooters, as defined in section 169.011, subdivision 46.
20.32    Subd. 2. Collection by registrar of motor vehicles. The wheelage tax levied by
20.33any metropolitan county, if made collectible by the state registrar of motor vehicles,
21.1shall be certified by the county auditor to the registrar not later than August 1 in the year
21.2before the calendar year or years for which the tax is levied, and the registrar shall collect
21.3such tax with the motor vehicle taxes on the affected vehicles for such year or years.
21.4Every owner and every operator of such a motor vehicle shall furnish to the registrar all
21.5information requested by the registrar. No state motor vehicle tax on any such motor
21.6vehicle for any such year shall be received or deemed paid unless the applicable wheelage
21.7tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county,
21.8less any amount retained by the registrar to pay costs of collection of the wheelage tax,
21.9shall be paid to the commissioner of management and budget and deposited in the state
21.10treasury to the credit of the county wheelage tax fund of each metropolitan county.
21.11    Subd. 2a. Tax proceeds deposited; costs of collection; appropriation.
21.12Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall
21.13deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the
21.14county wheelage tax fund account of each metropolitan county. The amount necessary to
21.15pay the costs of collection of said tax is appropriated from the county wheelage tax fund
21.16 account of each metropolitan county to the state registrar of motor vehicles.
21.17    Subd. 3. Distribution to metropolitan county; appropriation. On or before April
21.181 in 1972 and each subsequent year, the commissioner of management and budget On a
21.19monthly basis, the state registrar of motor vehicles shall issue a warrant in favor of the
21.20treasurer of each metropolitan county for which the registrar has collected a wheelage tax
21.21in the amount of such tax then on hand in the county wheelage tax fund account. There
21.22is hereby appropriated from the county wheelage tax fund account each year, to each
21.23metropolitan county entitled to payments authorized by this section, sufficient moneys
21.24 money to make such payments.
21.25    Subd. 4. Use of tax. The treasurer of each metropolitan county receiving moneys
21.26 money under subdivision 3 shall deposit such moneys money in the county road and
21.27bridge fund. The moneys money shall be used for purposes authorized by law which are
21.28highway purposes within the meaning of the Minnesota Constitution, article 14.
21.29    Subd. 6. Metropolitan county defined. "Metropolitan county" means any of the
21.30counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
21.31    Subd. 7. Offenses; penalties; application of other laws. (a) Any owner or operator
21.32of a motor vehicle who shall willfully give gives any false information relative to the tax
21.33herein authorized under this section to the registrar of motor vehicles or any metropolitan
21.34 county, or who shall willfully fail or refuse fails or refuses to furnish any such information,
21.35shall be is guilty of a misdemeanor.
22.1(b) Except as otherwise herein provided under this section, the collection and payment
22.2of a wheelage tax and all matters relating thereto shall be are subject to all provisions of
22.3law relating to collection and payment of motor vehicle taxes so far as applicable.
22.4EFFECTIVE DATE.This section is effective August 1, 2013.

22.5    Sec. 2. Minnesota Statutes 2012, section 297A.992, subdivision 2, is amended to read:
22.6    Subd. 2. Authorization; rates. (a) Notwithstanding section 297A.99, subdivisions
22.71, 2, and 3, or 477A.016, or any other law, the board of a county participating in a
22.8joint powers agreement as specified in this section shall impose by resolution (1) a
22.9transportation sales and use tax at a rate of one-quarter three-fourths of one percent on
22.10retail sales and uses taxable under this chapter, and (2) an excise tax of $20 per motor
22.11vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired from any
22.12person engaged in the business of selling motor vehicles at retail, occurring within the
22.13jurisdiction of the taxing authority. The taxes authorized are to fund transportation
22.14improvements as specified in this section, including debt service on obligations issued
22.15to finance such improvements pursuant to subdivision 7.
22.16    (b) The tax imposed under this section is not included in determining if the total tax
22.17on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
22.18chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
22.1912, section 87, or in determining a tax that may be imposed under any other limitations.
22.20EFFECTIVE DATE.This section is effective July 1, 2013.

22.21    Sec. 3. Minnesota Statutes 2012, section 297A.992, subdivision 6, is amended to read:
22.22    Subd. 6. Allocation of grant awards. (a) The board must allocate grant awards
22.23only as follows:
22.24    (1) two-thirds for the following transit purposes:
22.25    (i) capital improvements to transit ways, including, but not limited to, commuter
22.26rail rolling stock, light rail vehicles, and transit way buses;
22.27    (ii) capital costs for park-and-ride facilities, as defined in section 174.256,
22.28subdivision 2;
22.29    (iii) feasibility studies, planning, alternatives analyses, environmental studies,
22.30engineering, property acquisition for transit way purposes, and construction of transit
22.31ways; and
22.32    (iv) operating assistance for transit ways; and
22.33    (2) one-third for construction, reconstruction, or maintenance of county highways.
23.1    (b) The joint powers board must annually award grants to each minimum guarantee
23.2county in an amount no less than the amount of sales tax revenue collected within that
23.3county.
23.4    (c) No more than 1.25 percent of the total awards under paragraph (a), clause (1),
23.5 may be annually allocated for planning, studies, design, construction, maintenance, and
23.6operation of pedestrian programs and bicycle programs and pathways.
23.7EFFECTIVE DATE.This section is effective July 1, 2013.

23.8    Sec. 4. Minnesota Statutes 2012, section 297A.993, subdivision 1, is amended to read:
23.9    Subdivision 1. Authorization; rates. Notwithstanding section 297A.99,
23.10subdivisions 1, 2, 3, 5, and 13, or 477A.016, or any other law, the board of a county outside
23.11the metropolitan transportation area, as defined under section 297A.992, subdivision 1, or
23.12more than one county outside the metropolitan transportation area acting under a joint
23.13powers agreement, may by resolution of the county board, or each of the county boards,
23.14following a public hearing impose (1) a transportation sales tax at a rate of up to one-half
23.15of one percent on retail sales and uses taxable under this chapter, and (2) an excise tax
23.16of $20 per motor vehicle, as defined in section 297B.01, subdivision 11, purchased or
23.17acquired from any person engaged in the business of selling motor vehicles at retail,
23.18occurring within the jurisdiction of the taxing authority. The taxes imposed under this
23.19section are subject to approval by a majority of the voters in each of the counties affected
23.20at a general election who vote on the question to impose the taxes.
23.21EFFECTIVE DATE.This section is effective the day following final enactment.

23.22    Sec. 5. [435.39] MUNICIPAL STREET IMPROVEMENT DISTRICTS.
23.23    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
23.24have the meanings given them.
23.25(b) "Governing body" means the city council of a municipality.
23.26(c) "Improvements" means construction, reconstruction, and facility upgrades
23.27involving: right-of-way acquisition; paving; curbs and gutters; bridges and culverts and
23.28their repair; milling; overlaying; drainage and storm sewers; excavation; base work;
23.29subgrade corrections; street lighting; traffic signals; signage; sidewalks; pavement
23.30markings; boulevard and easement restoration; impact mitigation; connection and
23.31reconnection of utilities; turn lanes; medians; street and alley returns; retaining walls;
23.32fences; lane additions; and fixed transit infrastructure, trails, or pathways. "Fixed transit
23.33infrastructure" does not include commuter rail rolling stock, light rail vehicles, or
24.1transit way buses; capital costs for park-and-ride facilities; feasibility studies, planning,
24.2alternative analyses, environmental studies, engineering, or construction of transit ways;
24.3or operating assistance for transit ways.
24.4(d) "Maintenance" means striping, seal coating, crack sealing, pavement repair,
24.5sidewalk maintenance, signal maintenance, street light maintenance, and signage.
24.6(e) "Municipal street" means a street, alley, or public way in which the municipality
24.7is the road authority with powers conferred by section 429.021.
24.8(f) "Municipality" means a home rule charter or statutory city.
24.9(g) "Street improvement district" means a geographic area designated by a
24.10municipality and located within the municipality within which street improvements and
24.11maintenance may be undertaken and financed according to this section.
24.12    Subd. 2. Authorization. A municipality may establish by ordinance municipal
24.13street improvement districts and may defray all or part of the total costs of municipal
24.14street improvements and maintenance by apportioning street improvement fees to all of
24.15the parcels located in the district.
24.16    Subd. 3. Uniformity. The total costs of municipal street improvements and
24.17maintenance must be apportioned to all parcels or tracts of land located in the established
24.18street improvement district on a uniform basis within each classification of real estate.
24.19    Subd. 4. Adoption of plan. Before establishing a municipal street improvement
24.20district or authorizing a street improvement fee, a municipality must propose and adopt a
24.21street improvement plan that identifies the location of the municipal street improvement
24.22district and identifies and estimates the costs of the proposed improvements during the
24.23proposed period of collection of municipal street improvement fees, which must be for
24.24a period of at least five years and at most 20 years. Notice of a public hearing on the
24.25proposed plan must be given by mail to all affected landowners at least ten days before
24.26the hearing and posted for at least ten days before the hearing. At the public hearing, the
24.27governing body must present the plan and all affected landowners in attendance must have
24.28the opportunity to comment before the governing body considers adoption of the plan.
24.29    Subd. 5. Citywide districts. A municipality that establishes a street improvement
24.30district that encompasses the entire political jurisdiction may adjust the fees annually as
24.31part of the annual budget process, utilizing truth in taxation notices and hearings to satisfy
24.32the notice and hearing requirements in this section. A citywide district may be renewed
24.33annually for an indefinite period.
24.34    Subd. 6. Use of fees. Revenues from street improvement fees must be placed in
24.35a separate account and used only for projects located within the district and identified
24.36in the municipal street improvement plan.
25.1    Subd. 7. Collection; up to 20 years. (a) An ordinance adopted under this section
25.2must provide for billing and payment of the fee on a monthly, quarterly, or other basis
25.3as directed by the governing body. The governing body may collect municipal street
25.4improvement fees within a street improvement district for a maximum of 20 years.
25.5    (b) Fees that, as of October 15 of each year, have remained unpaid for at least 30
25.6days may be certified to the county auditor for collection as a special assessment payable
25.7in the following calendar year against the affected property.
25.8    Subd. 8. Notice; hearings. A municipality may impose a municipal street
25.9improvement fee by ordinance. The ordinance must not be voted on or adopted until after
25.10a public hearing has been held on the question.
25.11    Subd. 9. Not exclusive means of financing improvements. The use of the
25.12municipal street improvement fee by a municipality does not restrict the municipality from
25.13imposing other measures to pay the costs of local street improvements or maintenance,
25.14except that a municipality must not impose special assessments for projects funded with
25.15street improvement fees.

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