1.1 	A bill for an act
1.2 	relating to transportation, taxes, and state government finance; amending various 
1.3 	provisions related to transportation finance and taxes; authorizing sale and 
1.4 	issuance of trunk highway bonds; making technical changes; appropriating 
1.5 	money; amending Minnesota Statutes 2012, sections 163.051; 168.013, 
1.6 	subdivision 1a; 168.31, by adding a subdivision; 296A.07, subdivision 3; 
1.7 	296A.08, subdivision 2; 297A.61, subdivision 3; 297A.68, subdivision 3; 
1.8 	297A.70, subdivisions 2, 3; 297A.815, subdivision 3; 297A.94; 297A.992, 
1.9 	subdivisions 2, 6; 297A.993, subdivision 1; 297B.01, subdivisions 14, 16; 
1.10 	297B.02, subdivision 3; 297B.03; proposing coding for new law in Minnesota 
1.11 	Statutes, chapter 435.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	ARTICLE 1
1.14 	TRUNK HIGHWAY BONDS

1.15 	Section 1. BOND APPROPRIATIONS.
 1.16 	The sums shown in the column under "APPROPRIATIONS" are appropriated from 
1.17 	the bond proceeds account in the trunk highway fund, or another named fund, to the state 
1.18 	agencies or officials indicated, to be spent for public purposes. Appropriations of bond 
1.19 	proceeds must be spent as authorized by the Minnesota Constitution, articles XI and XIV. 
1.20 	Unless otherwise specified, money appropriated in this article for a capital program or 
1.21 	project may be used to pay state agency staff costs that are attributed directly to the capital 
1.22 	program or project in accordance with accounting policies adopted by the commissioner 
1.23 	of 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
	
2.7 	This appropriation is to the commissioner of 
2.8 	transportation for the purposes specified in 
2.9 	this section.

2.10
2.11	Subd. 2.Corridor Investment Management 
Strategy (CIMS) Program
 				200,000,000
	
2.12 	This appropriation is in the amount of 
2.13 	$50,000,000 in each fiscal year for fiscal 
2.14 	years 2014 to 2017.

2.15
2.16	Subd. 3.Transportation Economic 
Development (TED) Program
 				200,000,000
	
2.17 	This appropriation is for the Transportation 
2.18 	Economic Development program under 
2.19 	Minnesota Statutes, section 161.04, 
2.20 	subdivision 6, and is in the amount of 
2.21 	$50,000,000 in each fiscal year for fiscal 
2.22 	years 2014 to 2017.

2.23	Sec. 3. BOND SALE EXPENSES
 			$
	400,000
	
2.24 	This appropriation is to the commissioner 
2.25 	of management and budget for bond sale 
2.26 	expenses under Minnesota Statutes, sections 
2.27 	16A.641, subdivision 8; and 167.50, 
2.28 	subdivision 4.

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

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

3.8 	ARTICLE 2
3.9 	HIGHWAY 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 
3.12 	in section 168.002, subdivision 24, and hearses, except as otherwise provided, the tax 
3.13 	shall be $10 $20 plus an additional tax equal to 1.25 1.375 percent of the base value, 
3.14 	as adjusted under paragraph (h).
3.15 	(b) Subject to the classification provisions herein, "base value" means the 
3.16 	manufacturer's suggested retail price of the vehicle including destination charge using list 
3.17 	price information published by the manufacturer or determined by the registrar if no 
3.18 	suggested retail price exists, and shall not include the cost of each accessory or item of 
3.19 	optional 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 
3.21 	number followed by various descriptions and suggested retail prices, the registrar shall 
3.22 	select 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, 
3.24 	or for any other reason, the registrar may establish such value upon the cost price to the 
3.25 	purchaser or owner as evidenced by a certificate of cost but not including Minnesota sales 
3.26 	or 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
	
3.31 	and thereafter a series of classes successively set in brackets having a spread of $200 
3.32 	consisting 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 
4.2 	the extremes of its class.
4.3 	(g) The registrar shall establish the base value, when new, of every passenger 
4.4 	automobile and hearse registered prior to the effective date of Extra Session Laws 1971, 
4.5 	chapter 31, using list price information published by the manufacturer or any nationally 
4.6 	recognized firm or association compiling such data for the automotive industry. If unable 
4.7 	to ascertain the base value of any registered vehicle in the foregoing manner, the registrar 
4.8 	may use any other available source or method. The registrar shall calculate tax using base 
4.9 	value information available to dealers and deputy registrars at the time the application for 
4.10 	registration is submitted. The tax on all previously registered vehicles shall be computed 
4.11 	upon the base value thus determined taking into account the depreciation provisions of 
4.12 	paragraph (h).
4.13 	(h) The annual additional tax must be computed upon a percentage of the base value 
4.14 	as follows: during the first year of vehicle life, upon 100 percent of the base value; for the 
4.15 	second year, 90 percent of such value; for the third year, 80 percent of such value; for the 
4.16 	fourth year, 70 percent of such value; for the fifth year, 60 percent of such value; for the 
4.17 	sixth year, 50 percent of such value; for the seventh year, 40 percent of such value; for the 
4.18 	eighth year, 30 percent of such value; for the ninth year, 20 percent of such value; for the 
4.19 	tenth 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 
4.22 	due under this subdivision paragraph (a) must not exceed the smallest amount of annual 
4.23 	additional tax previously paid or due on the vehicle.

4.24 	EFFECTIVE DATE. This section is effective the day following final enactment 
4.25 	and 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 
4.27 	to read:
4.28 		Subd. 5a.Late payment penalty. (a) The owner of a vehicle subject to registration 
4.29 	tax under section 168.013, sections 1a to 11, owes a late payment penalty if the registration 
4.30 	tax due for the vehicle is not fully paid within 30 days of the first day of the registration 
4.31 	period for which the tax is owed. The amount of the penalty is equal to five percent of the 
4.32 	total 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 
4.34 	its registration tax notifications.
5.1 	(c) A late payment penalty is included as a fee under this chapter, and chapters 168A 
5.2 	and 169, for registration and operation of the vehicle on public streets and highways, 
5.3 	including but not limited to requirements (1) under sections 168.09, subdivision 1, 168A.08, 
5.4 	and 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 
5.6 	the highway user tax distribution fund. Of the first dollars deposited, an amount equal to 
5.7 	the total start-up costs associated with implementation of this subdivision is appropriated 
5.8 	from 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 
5.10 	are made under subdivision 4 or 4a; or (2) a vehicle registered under section 168.012, 
5.11 	168.031, or 168.187. A late payment penalty is not subject to refund under section 
5.12 	168.022 or 168.16.

5.13 	EFFECTIVE DATE. This section is effective the day following final enactment 
5.14 	and 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 
5.17 	specified 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

5.29 	EFFECTIVE DATE. This section is effective October 1, 2013, and applies to all 
5.30 	gasoline, 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 
5.33 	rates: 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 
6.16 	25 cents per gasoline equivalent. For purposes of this paragraph,(b) For purposes of the 
6.17 	tax rate schedule under paragraph (a), "gasoline equivalent," as defined by the National 
6.18 	Conference 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 
6.20 	specified in the tax rate schedule under section 296A.07, subdivision 2. The tax is payable 
6.21 	in the form and manner prescribed by the commissioner.

6.22 	EFFECTIVE DATE. This section is effective October 1, 2013, and applies to all 
6.23 	gasoline, 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 
6.26 	this subdivision, "net revenue" means an amount equal to:(1) the revenues, including 
6.27 	interest and penalties, collected under this section, during the fiscal year; less(2) in fiscal 
6.28 	year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal year 2013 and 
6.29 	following fiscal years, $32,000,000.
6.30 	(b) On or before June 30 of each fiscal year, the commissioner of revenue shall 
6.31 	estimate 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 
6.34 	and budget shall transfer the net revenue as estimated in paragraph (b) from the general 
6.35 	fund, 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 
6.38 	to the contrary, the commissioner of transportation shall allocate the funds transferred 
7.1 	under this clause to the counties in the metropolitan area, as defined in section 473.121, 
7.2 	subdivision 4, excluding the counties of Hennepin and Ramsey, so that each county shall 
7.3 	receive of such amount the percentage that its population, as defined in section 477A.011, 
7.4 	subdivision 3, estimated or established by July 15 of the year prior to the current calendar 
7.5 	year, 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 
7.7 	be 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.

7.10 	EFFECTIVE DATE. This section is effective June 30, 2013.

7.11 	ARTICLE 3
7.12 	GENERAL 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 
7.15 	to, 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 
7.18 	absolutely 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 
7.20 	in money or by exchange or barter, tangible personal property, other than a manufactured 
7.21 	home 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 
7.23 	tangible personal property for a consideration for consumers who furnish either directly or 
7.24 	indirectly the materials used in the production, fabrication, printing, or processing.
7.25 	(d) Sale and purchase include the preparing for a consideration of food. 
7.26 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
7.27 	to, 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, 
7.34 	gas, 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 
8.2 	computer 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 
8.4 	services:
8.5 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
8.6 	events, and the making available of amusement devices, tanning facilities, reducing 
8.7 	salons, 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, 
8.9 	motel, or trailer camp, including furnishing the guest of the facility with access to 
8.10 	telecommunication services, and the granting of any similar license to use real property in 
8.11 	a specific facility, other than the renting or leasing of it for a continuous period of 30 days 
8.12 	or more under an enforceable written agreement that may not be terminated without prior 
8.13 	notice and including accommodations intermediary services provided in connection with 
8.14 	other services provided under this clause;
8.15 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
8.16 	periodic 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 
8.19 	members sports and athletic facilities, without regard to whether a separate charge is 
8.20 	assessed for use of the facilities; and
8.21 	(ii) use of the sports and athletic facility is not made available to the general public 
8.22 	on the same basis as it is made available to members.
8.23 	Granting of membership means both onetime initiation fees and periodic membership 
8.24 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
8.25 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
8.26 	swimming pools; and other similar athletic or sports facilities;
8.27 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
8.28 	material used in road construction; and delivery of concrete block by a third party if the 
8.29 	delivery 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, 
8.32 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
8.33 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
8.34 	include services provided by coin operated facilities operated by the customer;
9.1 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
9.2 	provided by coin operated facilities operated by the customer, and rustproofing, 
9.3 	undercoating, and towing of motor vehicles;
9.4 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
9.5 	pest control and exterminating services;
9.6 	(iv) detective, security, burglar, fire alarm, and armored car services; but not including 
9.7 	services performed within the jurisdiction they serve by off-duty licensed peace officers as 
9.8 	defined in section 626.84, subdivision 1, or services provided by a nonprofit organization 
9.9 	for monitoring and electronic surveillance of persons placed on in-home detention 
9.10 	pursuant 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 
9.13 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
9.14 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
9.15 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
9.16 	public utility lines. Services performed under a construction contract for the installation of 
9.17 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
9.18 	(vii) massages, except when provided by a licensed health care facility or 
9.19 	professional or upon written referral from a licensed health care facility or professional for 
9.20 	treatment of illness, injury, or disease; and
9.21 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
9.22 	other similar arrangements, but excluding veterinary and horse boarding services.; and
9.23 	(7) the repair and maintenance of motor vehicles; excluding repair and maintenance 
9.24 	covered 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 
9.26 	service contract for the repair or maintenance of a motor vehicle.
9.27 	In applying the provisions of this chapter, the terms "tangible personal property" 
9.28 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
9.29 	and the provision of these taxable services, unless specifically provided otherwise. 
9.30 	Services performed by an employee for an employer are not taxable. Services performed 
9.31 	by a partnership or association for another partnership or association are not taxable if 
9.32 	one of the entities owns or controls more than 80 percent of the voting power of the 
9.33 	equity interest in the other entity. Services performed between members of an affiliated 
9.34 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
9.35 	group of corporations" means those entities that would be classified as members of an 
10.1 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
10.2 	the exclusions in section 1504(b).
10.3 	For purposes of clause (5), "road construction" means construction of (1) public 
10.4 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
10.5 	metropolitan 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 
10.7 	personal property or taxable services by the United States or any of its agencies or 
10.8 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
10.9 	subdivisions.
10.10 	(i) (j) A sale and a purchase includes the furnishing for a consideration of 
10.11 	telecommunications services, ancillary services associated with telecommunication 
10.12 	services, cable television services, and direct satellite services. Telecommunication 
10.13 	services include, but are not limited to, the following services, as defined in section 
10.14 	297A.669: air-to-ground radiotelephone service, mobile telecommunication service, 
10.15 	postpaid calling service, prepaid calling service, prepaid wireless calling service, and 
10.16 	private communication services. The services in this paragraph are taxed to the extent 
10.17 	allowed under federal law.
10.18 	(j) (k) A sale and a purchase includes the furnishing for a consideration of installation 
10.19 	if the installation charges would be subject to the sales tax if the installation were provided 
10.20 	by 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 
10.22 	dealer to a customer when (1) the vehicle is rented by the customer for a consideration, 
10.23 	or (2) the motor vehicle dealer is reimbursed pursuant to a service contract as defined in 
10.24 	section 59B.02, subdivision 11.

10.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
10.26 	December 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, 
10.29 	used, or consumed in providing a taxable service listed in section 297A.61, subdivision 3, 
10.30 	paragraph (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 
10.33 	herbicides, 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 
11.2 	in 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, 
11.4 	except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt 
11.5 	if (i) it is in excess of average climate control or lighting, and (ii) it is necessary to produce 
11.6 	that 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, 
11.9 	accessories, appliances, contrivances, furniture, and fixtures used in providing the taxable 
11.10 	service.

11.11 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
11.12 	December 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), 
11.15 	to the following governments and political subdivisions, or to the listed agencies or 
11.16 	instrumentalities 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 
11.19 	colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts 
11.20 	Education, and an instrumentality of a political subdivision that is accredited as an 
11.21 	optional/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 
11.23 	the state of tangible personal property and taxable services used at or by hospitals and 
11.24 	nursing homes;
11.25 	(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip 
11.26 	operations provided for in section 473.4051;
11.27 	(5) purchasers of goods and services by a local government for transit purposes if 
11.28 	the purchase is funded by revenue from the metropolitan area transit account under section 
11.29 	16A.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 
11.31 	exempt from taxation if it occurred in that state;
11.32 	(6) (7) public libraries, public library systems, multicounty, multitype library systems 
11.33 	as defined in section 134.001, county law libraries under chapter 134A, state agency 
11.34 	libraries, 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 
12.3 	or a subcontractor as a part of a lump-sum contract or similar type of contract with a 
12.4 	guaranteed maximum price covering both labor and materials for use in the construction, 
12.5 	alteration, or repair of a building or facility;
12.6 	(2) construction materials purchased by tax exempt entities or their contractors to 
12.7 	be used in constructing buildings or facilities which will not be used principally by the 
12.8 	tax exempt entities;
12.9 	(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, 
12.10 	except 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 
12.13 	297A.67, subdivision 2, except for lodging, prepared food, candy, soft drinks, and alcoholic 
12.14 	beverages 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 
12.16 	generally provided by a private business and the purchases would be taxable if made by a 
12.17 	private business engaged in the same activity.
12.18 	(c) As used in this subdivision, "school districts" means public school entities and 
12.19 	districts of every kind and nature organized under the laws of the state of Minnesota, and 
12.20 	any 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 
12.22 	business" include, but are not limited to, goods or services provided by liquor stores, gas 
12.23 	and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes, 
12.24 	and laundromats. "Goods or services generally provided by a private business" do not 
12.25 	include housing services, sewer and water services, wastewater treatment, ambulance and 
12.26 	other public safety services, correctional services, chore or homemaking services provided 
12.27 	to elderly or disabled individuals, or road and street maintenance or lighting.

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

14.10 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
14.11 	June 30, 2013.

14.12 	Sec. 5. Minnesota Statutes 2012, section 297A.94, is amended to read:
14.13 	297A.94 DEPOSIT OF REVENUES.
14.14 	(a) Except as provided in this section, the commissioner shall deposit the revenues, 
14.15 	including interest and penalties, derived from the taxes imposed by this chapter in the state 
14.16 	treasury and credit them to the general fund.
14.17 	(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic 
14.18 	account in the special revenue fund if:
14.19 	(1) the taxes are derived from sales and use of property and services purchased for 
14.20 	the 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 
14.22 	was made for a loan guaranty for the project under section 41A.04, subdivision 3.
14.23 	The commissioner of management and budget shall certify to the commissioner the date 
14.24 	on which the project received the conditional commitment. The amount deposited in 
14.25 	the loan guaranty account must be reduced by any refunds and by the costs incurred by 
14.26 	the Department of Revenue to administer and enforce the assessment and collection of 
14.27 	the taxes.
14.28 	(c) The commissioner shall deposit the revenues, including interest and penalties, 
14.29 	derived from the taxes imposed on sales and purchases included in section 297A.61, 
14.30 	subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them 
14.31 	as follows:
14.32 	(1) first to the general obligation special tax bond debt service account in each fiscal 
14.33 	year 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, 
15.2 	collected under section 297A.64, subdivision 5, in the state treasury and credit them to the 
15.3 	general fund. By July 15 of each year the commissioner shall transfer to the highway user 
15.4 	tax distribution fund an amount equal to the excess fees collected under section 297A.64, 
15.5 	subdivision 5, for the previous calendar year.
15.6 	(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and 
15.7 	for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and 
15.8 	penalties, transmitted to the commissioner under section 297A.65, must be deposited by 
15.9 	the commissioner in the state treasury as follows:
15.10 	(1) 50 percent of the receipts must be deposited in the heritage enhancement account 
15.11 	in the game and fish fund, and may be spent only on activities that improve, enhance, or 
15.12 	protect fish and wildlife resources, including conservation, restoration, and enhancement 
15.13 	of 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 
15.15 	may 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 
15.17 	may 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 
15.19 	may be spent only on local trail grants; and
15.20 	(5) two percent of the receipts must be deposited in the natural resources fund, 
15.21 	and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and 
15.22 	Conservatory, and the Duluth Zoo.
15.23 	(f) The revenue dedicated under paragraph (e) may not be used as a substitute 
15.24 	for traditional sources of funding for the purposes specified, but the dedicated revenue 
15.25 	shall supplement traditional sources of funding for those purposes. Land acquired with 
15.26 	money deposited in the game and fish fund under paragraph (e) must be open to public 
15.27 	hunting and fishing during the open season, except that in aquatic management areas or 
15.28 	on lands where angling easements have been acquired, fishing may be prohibited during 
15.29 	certain times of the year and hunting may be prohibited. At least 87 percent of the money 
15.30 	deposited in the game and fish fund for improvement, enhancement, or protection of fish 
15.31 	and 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 
15.33 	revenues, including interest and penalties collected during the fiscal year, on sales made 
15.34 	by and sales made to all vendors classified as auto repair and maintenance businesses 
15.35 	under the North American Industry Classification System code number 8111, minus any 
15.36 	refunds made on those sales and purchases. On or after July 1 of the subsequent fiscal 
16.1 	year, the commissioner of management and budget shall transfer from the general fund the 
16.2 	amounts in clauses (1) and (2) estimated under this paragraph:
16.3 	(1) 50 percent to the greater Minnesota transit account in the transit assistance 
16.4 	fund; 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 
16.7 	revenues, including interest and penalties, generated by the sales tax imposed under 
16.8 	section 297A.62, subdivision 1a, which must be deposited as provided under the 
16.9 	Minnesota Constitution, article XI, section 15.

16.10 	EFFECTIVE DATE. This section is effective for revenues collected in fiscal year 
16.11 	2014 and thereafter.

16.12 	ARTICLE 4
16.13 	MOTOR VEHICLE SALES TAX

16.14 	Section 1. Minnesota Statutes 2012, section 297B.01, subdivision 14, is amended to 
16.15 	read:
16.16 		Subd. 14.Purchase price.  (a) "Purchase price" means the total consideration 
16.17 	valued in money for a sale, whether paid in money or otherwise. The purchase price 
16.18 	excludes the amount of a manufacturer's rebate paid or payable to the purchaser. If a motor 
16.19 	vehicle is taken in trade as a credit or as part payment on a motor vehicle taxable under 
16.20 	this chapter, the credit or trade-in value allowed by the person selling the motor vehicle 
16.21 	shall be deducted from the total selling price to establish the purchase price of the vehicle 
16.22 	being sold and the trade-in allowance allowed by the seller shall constitute the purchase 
16.23 	price of the motor vehicle accepted as a trade-in. The purchase price in those instances 
16.24 	where the motor vehicle is acquired by gift or by any other transfer for a nominal or no 
16.25 	monetary consideration shall also include the average value of similar motor vehicles, 
16.26 	established by standards and guides as determined by the motor vehicle registrar. The 
16.27 	purchase price in those instances where a motor vehicle is manufactured by a person who 
16.28 	registers it under the laws of this state shall mean the manufactured cost of such motor 
16.29 	vehicle and manufactured cost shall mean the amount expended for materials, labor, 
16.30 	and other properly allocable costs of manufacture, except that in the absence of actual 
16.31 	expenditures for the manufacture of a part or all of the motor vehicle, manufactured costs 
16.32 	shall 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 
17.2 	vehicle due solely to modifications necessary to make the motor vehicle disability 
17.3 	accessible.
17.4 	(c) The term "purchase price" shall not include the transfer of a motor vehicle by 
17.5 	way of gift between a husband and wife or parent and child, or to a nonprofit organization 
17.6 	as provided under subdivision 16, paragraph (c), clause (5) (6), nor shall it include 
17.7 	the transfer of a motor vehicle by a guardian to a ward when there is no monetary 
17.8 	consideration and the title to such vehicle was registered in the name of the guardian, as 
17.9 	guardian, 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 
17.11 	gift between a foster parent and foster child. For purposes of this subdivision, a foster 
17.12 	relationship exists, regardless of the age of the child, if (1) a foster parent's home is or was 
17.13 	licensed as a foster family home under Minnesota Rules, parts 9545.0010 to 9545.0260, 
17.14 	and (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 
17.16 	the United States upon or with respect to retail sales whether imposed upon the retailer or 
17.17 	the 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 
17.21 	motor vehicle, whether absolutely or conditionally, for a consideration in money or by 
17.22 	exchange 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 
17.24 	or by holding it in an effort to so lease it, and which is put to no other use by the owner 
17.25 	other than resale after such lease or effort to lease, shall be considered property purchased 
17.26 	for resale.
17.27 	(c) The terms also shall include any transfer of title or ownership of a motor vehicle 
17.28 	by 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 
17.30 	decedent who owned it;
17.31 	(2) the transfer of a motor vehicle which was previously licensed in the names of 
17.32 	two or more joint tenants and subsequently transferred without monetary consideration to 
17.33 	one or more of the joint tenants;
17.34 	(3) the transfer of a motor vehicle by way of gift between individuals, or gift 
17.35 	from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an 
18.1 	individual, when the transfer is with no monetary or other consideration or expectation 
18.2 	of consideration and the parties to the transfer submit an affidavit to that effect at the 
18.3 	time the title transfer is recorded;
18.4 	(4) the transfer of a motor vehicle by gift between spouses or between parent and 
18.5 	child;
18.6 	(5) the voluntary or involuntary transfer of a motor vehicle between a husband and 
18.7 	wife 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 
18.9 	from federal income taxation under section 501(c)(3) of the Internal Revenue Code when 
18.10 	the 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 
18.13 	1, there is imposed a tax of $90$150 on the purchase price of a passenger automobile or a 
18.14 	fire truck described in section 297B.025, subdivision 2.

18.15 	Sec. 4. Minnesota Statutes 2012, section 297B.03, is amended to read:
18.16 	297B.03 EXEMPTIONS.
18.17 	There is specifically exempted from the provisions of this chapter and from 
18.18 	computation 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 
18.20 	sales contract made pursuant to section 465.71, of any motor vehicle by the United States 
18.21 	and its agencies and instrumentalities and by any person described in and subject to the 
18.22 	conditions 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 
18.24 	another state or country at the time of the purchase and who subsequently becomes a 
18.25 	resident of Minnesota, provided the purchase occurred more than 60 days prior to the date 
18.26 	such person began residing in the state of Minnesota and the motor vehicle was registered 
18.27 	in 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 
18.29 	to 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 
18.31 	Minnesota when such transfer constitutes a transfer within the meaning of section 118, 
18.32 	331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal 
18.33 	Revenue Code;
19.1 	(5) (4) purchase or use of any vehicle owned by a resident of another state and 
19.2 	leased to a Minnesota-based private or for-hire carrier for regular use in the transportation 
19.3 	of persons or property in interstate commerce provided the vehicle is titled in the state 
19.4 	of the owner or secured party, and that state does not impose a sales tax or sales tax on 
19.5 	motor vehicles used in interstate commerce;
19.6 	(6) (5) purchase or use of a motor vehicle by a private nonprofit or public educational 
19.7 	institution for use as an instructional aid in automotive training programs operated by the 
19.8 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
19.9 	repair courses but does not include driver education programs;
19.10 	(7) (6) purchase of a motor vehicle by an ambulance service licensed under section 
19.11 	144E.10 when that vehicle is equipped and specifically intended for emergency response 
19.12 	or for providing ambulance service;
19.13 	(8) (7) purchase of a motor vehicle by or for a public library, as defined in section 
19.14 	134.001, 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 
19.17 	maintenance, including snowplows and dump trucks, but not including automobiles, 
19.18 	vans, or pickup trucks;
19.19 	(11) (10) purchase or use of a motor vehicle by a corporation, society, association, 
19.20 	foundation, or institution organized and operated exclusively for charitable, religious, or 
19.21 	educational 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 
19.23 	passenger automobile, as defined in section 168.002, if the automobile is designed and 
19.24 	used for carrying more than nine persons including the driver; and
19.25 	(ii) intended to be used primarily to transport tangible personal property or 
19.26 	individuals, other than employees, to whom the organization provides service in 
19.27 	performing its charitable, religious, or educational purpose;
19.28 	(12) (11) purchase of a motor vehicle for use by a transit provider exclusively to 
19.29 	provide transit service is exempt if the transit provider is either (i) receiving financial 
19.30 	assistance or reimbursement under section 174.24 or 473.384, or (ii) operating under 
19.31 	section 174.29, 473.388, or 473.405;
19.32 	(13) (12) purchase or use of a motor vehicle by a qualified business, as defined 
19.33 	in section 469.310, located in a job opportunity building zone, if the motor vehicle is 
19.34 	principally garaged in the job opportunity building zone and is primarily used as part of or 
19.35 	in direct support of the person's operations carried on in the job opportunity building zone. 
19.36 	The exemption under this clause applies to sales, if the purchase was made and delivery 
20.1 	received during the duration of the job opportunity building zone. The exemption under 
20.2 	this 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 
20.4 	lease-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 
20.8 	for the provision of medical or dental services by a federally qualified health center, as 
20.9 	defined under title 19 of the Social Security Act, as amended by Section 4161 of the 
20.10 	Omnibus Budget Reconciliation Act of 1990.

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

20.14 	ARTICLE 5
20.15 	LOCAL OPTION TRANSPORTATION FINANCE

20.16 	Section 1. Minnesota Statutes 2012, section 163.051, is amended to read:
20.17 	163.051 METROPOLITAN COUNTY WHEELAGE TAX.
20.18 		Subdivision 1.Tax authorized. (a) Except as provided in paragraph (b), the board 
20.19 	of commissioners of each metropolitan county is authorized to levy by resolution a 
20.20 	wheelage tax of $5 for the year 1972 in an amount set by the county for calendar year 
20.21 	2014 and each subsequent year thereafter by resolution on each motor vehicle that is kept 
20.22 	in such county when not in operation and that is subject to annual registration and taxation 
20.23 	under chapter 168. The board may provide by resolution for collection of the wheelage 
20.24 	tax by county officials or it may request that the tax be collected by the state registrar of 
20.25 	motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf 
20.26 	of 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 
20.33 	any metropolitan county, if made collectible by the state registrar of motor vehicles, 
21.1 	shall be certified by the county auditor to the registrar not later than August 1 in the year 
21.2 	before the calendar year or years for which the tax is levied, and the registrar shall collect 
21.3 	such tax with the motor vehicle taxes on the affected vehicles for such year or years. 
21.4 	Every owner and every operator of such a motor vehicle shall furnish to the registrar all 
21.5 	information requested by the registrar. No state motor vehicle tax on any such motor 
21.6 	vehicle for any such year shall be received or deemed paid unless the applicable wheelage 
21.7 	tax is paid therewith. The proceeds of the wheelage tax levied by any metropolitan county, 
21.8 	less any amount retained by the registrar to pay costs of collection of the wheelage tax, 
21.9 	shall be paid to the commissioner of management and budget and deposited in the state 
21.10 	treasury to the credit of the county wheelage tax fund of each metropolitan county.
21.11 		Subd. 2a.Tax proceeds deposited; costs of collection; appropriation.
 21.12 	Notwithstanding the provisions of any other law, the state registrar of motor vehicles shall 
21.13 	deposit the proceeds of the wheelage tax imposed by subdivision 2, to the credit of the 
21.14 	county wheelage tax fund account of each metropolitan county. The amount necessary to 
21.15 	pay 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 
21.18 	1 in 1972 and each subsequent year, the commissioner of management and budget On a 
21.19 	monthly basis, the state registrar of motor vehicles shall issue a warrant in favor of the 
21.20 	treasurer of each metropolitan county for which the registrar has collected a wheelage tax 
21.21 	in the amount of such tax then on hand in the county wheelage tax fund account. There 
21.22 	is hereby appropriated from the county wheelage tax fund account each year, to each 
21.23 	metropolitan 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 
21.27 	bridge fund. The moneys money shall be used for purposes authorized by law which are 
21.28 	highway purposes within the meaning of the Minnesota Constitution, article 14.
21.29 		Subd. 6.Metropolitan county defined. "Metropolitan county" means any of the 
21.30 	counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
21.31 		Subd. 7.Offenses; penalties; application of other laws. (a) Any owner or operator 
21.32 	of a motor vehicle who shall willfully give gives any false information relative to the tax 
21.33 	herein 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, 
21.35 	shall be is guilty of a misdemeanor.
22.1 	(b) Except as otherwise herein provided under this section, the collection and payment 
22.2 	of a wheelage tax and all matters relating thereto shall be are subject to all provisions of 
22.3 	law relating to collection and payment of motor vehicle taxes so far as applicable.

22.4 	EFFECTIVE 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 
22.7 	1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a 
22.8 	joint powers agreement as specified in this section shall impose by resolution (1) a 
22.9 	transportation sales and use tax at a rate of one-quarter three-fourths of one percent on 
22.10 	retail sales and uses taxable under this chapter, and (2) an excise tax of $20 per motor 
22.11 	vehicle, as defined in section 297B.01, subdivision 11, purchased or acquired from any 
22.12 	person engaged in the business of selling motor vehicles at retail, occurring within the 
22.13 	jurisdiction of the taxing authority. The taxes authorized are to fund transportation 
22.14 	improvements as specified in this section, including debt service on obligations issued 
22.15 	to 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 
22.17 	on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986, 
22.18 	chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article 
22.19 	12, section 87, or in determining a tax that may be imposed under any other limitations.

22.20 	EFFECTIVE 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 
22.23 	only 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 
22.26 	rail 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, 
22.28 	subdivision 2;
22.29 	(iii) feasibility studies, planning, alternatives analyses, environmental studies, 
22.30 	engineering, property acquisition for transit way purposes, and construction of transit 
22.31 	ways; 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 
23.2 	county in an amount no less than the amount of sales tax revenue collected within that 
23.3 	county.
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 
23.6 	operation of pedestrian programs and bicycle programs and pathways.

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

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