1.1 	A bill for an act
1.2 	relating to transportation; increasing motor fuel tax
1.3 	rates and providing for annual indexing; allocating
1.4 	revenue from motor vehicle sales tax; authorizing
1.5 	issuance of $2,100,000,000 in state trunk highway
1.6 	bonds; appropriating money; amending Minnesota
1.7 	Statutes 2004, sections 296A.07, subdivision 3;
1.8 	296A.08, subdivision 2; 297B.09, subdivision 1;
1.9 	proposing coding for new law in Minnesota Statutes,
1.10 	chapter 296A.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2004, section 296A.07,
1.13 	subdivision 3, is amended to read:
1.14 		Subd. 3.Rate of tax.  The gasoline excise tax is imposed
1.15 	at the following rates:
1.16 	(1) E85 is taxed at the rate of ~~14.2~~ 17.75 cents per
1.17 	gallon;
1.18 	(2) M85 is taxed at the rate of ~~11.4~~ 14.25 cents per
1.19 	gallon; and
1.20 	(3) all other gasoline is taxed at the rate of ~~20~~ 25 cents
1.21 	per gallon.
1.22 	
EFFECTIVE DATE. This section is effective June 1, 2005,
1.23 	and applies to all gasoline in distributor storage on that date.

1.24 	Sec. 2. Minnesota Statutes 2004, section 296A.08,
1.25 	subdivision 2, is amended to read:
1.26 		Subd. 2.Rate of tax.  The special fuel excise tax is
1.27 	imposed at the following rates:
1.28 	(a) Liquefied petroleum gas or propane is taxed at the rate
2.1 	of ~~15~~ 18.75 cents per gallon.
2.2 	(b) Liquefied natural gas is taxed at the rate of ~~12~~ 15 
2.3 	cents per gallon.
2.4 	(c) Compressed natural gas is taxed at the rate
2.5 	of ~~$1.739~~ $2.174 per thousand cubic feet; or ~~20~~ 25 cents per
2.6 	gasoline equivalent, as defined by the National Conference on
2.7 	Weights and Measures, which is 5.66 pounds of natural gas.
2.8 	(d) All other special fuel is taxed at the same rate as the
2.9 	gasoline excise tax as specified in section 296A.07, subdivision
2.10 	2.  The tax is payable in the form and manner prescribed by the
2.11 	commissioner.
2.12 	
EFFECTIVE DATE. This section is effective June 1, 2005.

2.13 	Sec. 3. [296A.081] ANNUAL ADJUSTMENT.
2.14 	(a) On April 1, 2008, and each April 1 thereafter, the
2.15 	commissioner of revenue shall recompute and publish the rate of
2.16 	each fuel tax provided for in sections 296A.07, subdivision 3,
2.17 	and 296A.08, subdivision 2.  The new rate for each fuel tax must
2.18 	be calculated by multiplying the rate in effect at the time of
2.19 	the calculation by an amount obtained as follows:  divide the
2.20 	annual average United States Consumer Price Index for all urban
2.21 	consumers, United States city average, as determined by the
2.22 	United States Department of Labor for the previous year by that
2.23 	annual average for the year before the previous year.
2.24 	(b) The new rate must be rounded to the nearest 0.1 cent,
2.25 	is effective on June 1 of each year, and applies to all gasoline
2.26 	in distributor storage on that date.

2.27 	Sec. 4. Minnesota Statutes 2004, section 297B.09,
2.28 	subdivision 1, is amended to read:
2.29 		Subdivision 1.Deposit of revenues.  (a) Money collected
2.30 	and received under this chapter must be deposited as provided in
2.31 	this subdivision.
2.32 	(b) ~~From July 1, 2002, to June 30, 2003, 32 percent of the~~
2.33 	~~money collected and received must be deposited in the highway~~
2.34 	~~user tax distribution fund, 20.5 percent must be deposited in~~
2.35 	~~the metropolitan area transit fund under section 16A.88, and~~
2.36 	~~1.25 percent must be deposited in the greater Minnesota transit~~
3.1 	~~fund under section 16A.88.  The remaining money must be~~
3.2 	~~deposited in the general fund.~~
3.3 	~~(c)~~ From July 1, 2003, to June 30, 2007, 30 percent of the
3.4 	money collected and received must be deposited in the highway
3.5 	user tax distribution fund, 21.5 percent must be deposited in
3.6 	the metropolitan area transit fund under section 16A.88, 1.43
3.7 	percent must be deposited in the greater Minnesota transit fund
3.8 	under section 16A.88, 0.65 percent must be deposited in the
3.9 	county state-aid highway fund, and 0.17 percent must be
3.10 	deposited in the municipal state-aid street fund. The remaining
3.11 	money must be deposited in the general fund.
3.12 	~~(d)~~ (c) On and after July 1, 2007, ~~32~~ 50 percent of the
3.13 	money collected and received must be deposited in the highway
3.14 	user tax distribution fund, ~~20.5~~ 47 percent must be deposited in
3.15 	the metropolitan area transit fund under section 16A.88,
3.16 	and ~~1.25~~ 3 percent must be deposited in the greater Minnesota
3.17 	transit fund under section 16A.88.  The remaining money must be
3.18 	deposited in the general fund.

3.19 	Sec. 5. APPROPRIATION; TRUNK HIGHWAY FUND.
 3.20 	(a) $210,000,000 is appropriated from the bond proceeds
3.21 	account in the trunk highway fund to the commissioner of
3.22 	transportation on the first day of each fiscal year from July 1,
3.23 	2006, through June 30, 2016, for improvements to the state trunk
3.24 	highway system.  Of this appropriation:
3.25 	(1) $105,000,000 each year is for improvements to the
3.26 	interregional corridor system as identified by the commissioner
3.27 	where the improvements are physically located entirely or
3.28 	primarily outside the seven-county metropolitan area; and 
3.29 	(2) $105,000,000 each year is for the elimination of
3.30 	traffic bottlenecks on arterial highways physically located
3.31 	entirely within the seven-county metropolitan area.
3.32 	(b) The commissioner may spend up to 15 percent of this
3.33 	appropriation each year on program delivery.

3.34 	Sec. 6. HIGHWAY BOND SALE AUTHORIZATION.
 3.35 	To provide the money appropriated in section 5 from the
3.36 	bond proceeds account in the trunk highway fund, the
4.1 	commissioner of finance shall sell and issue bonds of the state
4.2 	in an amount up to $2,100,000,000 in the manner, upon the terms,
4.3 	and with the effect prescribed by Minnesota Statutes, sections
4.4 	167.50 to 167.52, and by the Minnesota Constitution, article
4.5 	XIV, section 11, at the times and in the amounts requested by
4.6 	the commissioner of transportation.  The proceeds of the bonds,
4.7 	except accrued interest and any premium received on the sale of
4.8 	the bonds, must be credited to the bond proceeds account in the
4.9 	trunk highway fund.