1.1                          A bill for an act 
  1.2             relating to transportation; proposing an amendment to 
  1.3             the Minnesota Constitution, article XI, section 5; 
  1.4             article XIV, sections 5, 6, by adding a new section; 
  1.5             removing constitutional limitations on issuing general 
  1.6             obligation bonds for highways; establishing 
  1.7             constitutional fund and dedicating proceeds of sales 
  1.8             tax on vehicles to financing highways and public 
  1.9             transit; increasing tax on motor fuels; authorizing 
  1.10            bonding; appropriating money; amending Minnesota 
  1.11            Statutes 2000, sections 296A.07, subdivision 3, by 
  1.12            adding a subdivision; 296A.08, subdivision 2, by 
  1.13            adding a subdivision; Minnesota Statutes 2001 
  1.14            Supplement, section 297B.09, subdivision 1. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16                             ARTICLE 1 
  1.17                      CONSTITUTIONAL AMENDMENT 
  1.18     Section 1.  [CONSTITUTIONAL AMENDMENT.] 
  1.19     An amendment to the Minnesota Constitution, changing 
  1.20  article XI, section 5, and article XIV, sections 5, 6, and by 
  1.21  adding a section, is proposed to the people. 
  1.22     If the amendment is adopted, article XI, section 5, will 
  1.23  read: 
  1.24     Sec. 5.  Public debt may be contracted and works of 
  1.25  internal improvements carried on for the following purposes: 
  1.26     (a) to acquire and to better public land and buildings and 
  1.27  other public improvements of a capital nature and to provide 
  1.28  money to be appropriated or loaned to any agency or political 
  1.29  subdivision of the state for such purposes if the law 
  1.30  authorizing the debt is adopted by the vote of at least 
  2.1   three-fifths of the members of each house of the legislature; 
  2.2      (b) to repel invasion or suppress insurrection; 
  2.3      (c) to borrow temporarily as authorized in section 6; 
  2.4      (d) to refund outstanding bonds of the state or any of its 
  2.5   agencies whether or not the full faith and credit of the state 
  2.6   has been pledged for the payment of the bonds; 
  2.7      (e) to establish and maintain highways ~~subject to the~~ 
  2.8   ~~limitations of article XIV~~; 
  2.9      (f) to promote forestation and prevent and abate forest 
  2.10  fires, including the compulsory clearing and improving of wild 
  2.11  lands whether public or private; 
  2.12     (g) to construct, improve and operate airports and other 
  2.13  air navigation facilities; 
  2.14     (h) to develop the state's agricultural resources by 
  2.15  extending credit on real estate security in the manner and on 
  2.16  the terms and conditions prescribed by law; 
  2.17     (i) to improve and rehabilitate railroad rights-of-way and 
  2.18  other rail facilities whether public or private, provided that 
  2.19  bonds issued and unpaid shall not at any time exceed 
  2.20  $200,000,000 par value; and 
  2.21     (j) as otherwise authorized in this constitution. 
  2.22     As authorized by law political subdivisions may engage in 
  2.23  the works permitted by (f), (g), and (i) and contract debt 
  2.24  therefor. 
  2.25     and the title of article XIV will be changed to read 
  2.26  "TRANSPORTATION" 
  2.27     and article XIV, section 5, will read: 
  2.28     Sec. 5.  There is hereby created a highway user tax 
  2.29  distribution fund to be used solely for highway purposes as 
  2.30  specified in this article.  The fund consists of the proceeds of 
  2.31  any taxes authorized by sections 9 ~~and~~, 10, and 12 of this 
  2.32  article.  The net proceeds of the taxes shall be apportioned:  
  2.33  62 percent to the trunk highway fund; 29 percent to the county 
  2.34  state-aid highway fund; nine percent to the municipal state-aid 
  2.35  street fund.  Five percent of the net proceeds of the highway 
  2.36  user tax distribution fund may be set aside and apportioned by 
  3.1   law to one or more of the three foregoing funds.  The balance of 
  3.2   the highway user tax distribution fund shall be transferred to 
  3.3   the trunk highway fund, the county state-aid highway fund, and 
  3.4   the municipal state-aid street fund in accordance with the 
  3.5   percentages set forth in this section.  No change in the 
  3.6   apportionment of the five percent may be made within six years 
  3.7   of the last previous change. 
  3.8      and article XIV, section 6, will read: 
  3.9      Sec. 6.  There is hereby created a trunk highway fund which 
  3.10  shall be used solely for the purposes specified in ~~section~~ 
  3.11  sections 2 and 12 of this article and the payment of principal 
  3.12  and interest of any bonds issued under the authority of section 
  3.13  11 of this article and any bonds issued for trunk highway 
  3.14  purposes prior to July 1, 1957.  All payments of principal and 
  3.15  interest on bonds issued shall be a first charge on money coming 
  3.16  into this fund during the year in which the principal or 
  3.17  interest is payable. 
  3.18     and a section will be added to article XIV, to read: 
  3.19     Sec. 12.  The motor vehicle sales tax fund is hereby 
  3.20  established consisting of 75 percent of the net proceeds 
  3.21  collected through June 30, 2004, and all of the net proceeds 
  3.22  collected after that date from any tax on the sale of new and 
  3.23  used motor vehicles.  The proceeds shall be apportioned as 
  3.24  follows:  32 percent transferred to the highway user tax 
  3.25  distribution fund; 24.75 percent transferred to the trunk 
  3.26  highway fund and appropriated for major highway projects, as 
  3.27  determined by law; 23.75 percent appropriated by law for 
  3.28  operating assistance to public transit systems; and, 19.5 
  3.29  percent appropriated by law for operating and capital assistance 
  3.30  to public transit systems. 
  3.31     Sec. 2.  [SUBMISSION TO VOTERS.] 
  3.32     "Shall the Minnesota Constitution be amended to dedicate 
  3.33  the proceeds from the sales tax on motor vehicles and authorize 
  3.34  the issuance, without special limitations, of general obligation 
  3.35  bonds for highway and public transit purposes? 
  3.36                                     Yes .......
  4.1                                      No ........"
  4.2                              ARTICLE 2 
  4.3                FINANCING HIGHWAYS AND PUBLIC TRANSIT 
  4.4      Section 1.  Minnesota Statutes 2000, section 296A.07, 
  4.5   subdivision 3, is amended to read: 
  4.6      Subd. 3.  [RATE OF TAX.] From July 1, 2003, through June 
  4.7   30, 2004, the gasoline excise tax is imposed at the following 
  4.8   rates: 
  4.9      (1) E85 is taxed at the rate of ~~14.2~~ 15.6 cents per gallon; 
  4.10     (2) M85 is taxed at the rate of ~~11.4~~ 12.5 cents per gallon; 
  4.11  and 
  4.12     (3) all other gasoline is taxed at the rate of ~~20~~ 22 cents 
  4.13  per gallon. 
  4.14     Sec. 2.  Minnesota Statutes 2000, section 296A.07, is 
  4.15  amended by adding a subdivision to read: 
  4.16     Subd. 3a.  [RATE OF TAX.] After June 30, 2004, the gasoline 
  4.17  excise tax is imposed at the following rates: 
  4.18     (1) E85 is taxed at the rate of 16.7 cents per gallon; 
  4.19     (2) M85 is taxed at the rate of 13.4 cents per gallon; and 
  4.20     (3) all other gasoline is taxed at the rate of 23.5 cents 
  4.21  per gallon. 
  4.22     Sec. 3.  Minnesota Statutes 2000, section 296A.08, 
  4.23  subdivision 2, is amended to read: 
  4.24     Subd. 2.  [RATE OF TAX.] From July 1, 2003, through June 
  4.25  30, 2004, the special fuel excise tax is imposed at the 
  4.26  following rates: 
  4.27     (1) Liquefied petroleum gas or propane is taxed at the rate 
  4.28  of ~~15~~ 16.5 cents per gallon. 
  4.29     (2) Liquefied natural gas is taxed at the rate of ~~12~~ 13.2 
  4.30  cents per gallon. 
  4.31     (3) Compressed natural gas is taxed at the rate 
  4.32  of ~~$1.739~~ $1.913 per thousand cubic feet; or ~~20~~ 22 cents per 
  4.33  gasoline equivalent, as defined by the National Conference on 
  4.34  Weights and Measures, which is 5.66 pounds of natural gas. 
  4.35     (4) All other special fuel is taxed at the same rate as the 
  4.36  gasoline excise tax as specified in section 296A.07, subdivision 
  5.1   2.  The tax is payable in the form and manner prescribed by the 
  5.2   commissioner. 
  5.3      Sec. 4.  Minnesota Statutes 2000, section 296A.08, is 
  5.4   amended by adding a subdivision to read: 
  5.5      Subd. 2a.  [RATE OF TAX.] After June 30, 2004, the special 
  5.6   fuel excise tax is imposed at the following rates: 
  5.7      (1) Liquefied petroleum gas or propane is taxed at the rate 
  5.8   of 17.6 cents per gallon. 
  5.9      (2) Liquefied natural gas is taxed at the rate of 14.1 
  5.10  cents per gallon. 
  5.11     (3) Compressed natural gas is taxed at the rate of $2.04 
  5.12  per thousand cubic feet; or 23.5 cents per gasoline equivalent, 
  5.13  as defined by the National Conference on Weights and Measures, 
  5.14  which is 5.66 pounds of natural gas. 
  5.15     (4) All other special fuel is taxed at the same rate as the 
  5.16  gasoline excise tax as specified in section 296A.07, subdivision 
  5.17  2.  The tax is payable in the form and manner prescribed by the 
  5.18  commissioner. 
  5.19     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
  5.20  297B.09, subdivision 1, is amended to read: 
  5.21     Subdivision 1.  [DEPOSIT OF REVENUES.] (a) Money collected 
  5.22  and received under this chapter must be deposited as provided in 
  5.23  this subdivision.  
  5.24     (b) ~~From July 1, 2001, to June 30, 2002, 30.86~~ Before July 
  5.25  1, 2004, 75 percent of the ~~money~~ net proceeds collected and 
  5.26  received must be deposited in the ~~highway user tax distribution~~ 
  5.27  motor vehicle sales tax fund, and the remaining money must be 
  5.28  deposited in the general fund.  
  5.29     (c) On and after July 1, ~~2002, 32 percent~~ 2004, all of the 
  5.30  ~~money~~ net proceeds collected and received must be deposited in 
  5.31  the ~~highway user tax distribution fund, 20.5 percent must be~~ 
  5.32  ~~deposited in the metropolitan area transit fund under section~~ 
  5.33  ~~16A.88, and 1.25 percent must be deposited in the greater~~ 
  5.34  ~~Minnesota transit fund under section 16A.88.  In fiscal year~~ 
  5.35  ~~2004 and thereafter, two percent of the money collected and~~ 
  5.36  ~~received must be deposited in the metropolitan area transit~~ 
  6.1   ~~appropriation account under section 16A.88.  The remaining money~~ 
  6.2   ~~must be deposited in the general~~ motor vehicle sales tax fund. 
  6.3      Sec. 6.  [APPROPRIATIONS.] 
  6.4      Subdivision 1.  [EXPENDITURES FINANCED BY GENERAL 
  6.5   OBLIGATION BONDS.] $500,000,000 is appropriated in total from 
  6.6   the bond proceeds fund to the commissioner of transportation for 
  6.7   fiscal years 2003 through 2007.  $100,000,000 is appropriated 
  6.8   for each fiscal year with $62,500,000 allocated for public 
  6.9   transit capital costs and $37,500,000 allocated for local 
  6.10  bridges, right-of-way acquisition, increasing accessibility to 
  6.11  employment and commercial centers, providing to the greatest 
  6.12  number of people alternative transportation options, and other 
  6.13  road and highway capital expenses. 
  6.14     Subd. 2.  [EXPENDITURES FINANCED BY TRUNK HIGHWAY 
  6.15  BONDS.] $750,000,000 is appropriated in total from the trunk 
  6.16  highway bond proceeds account in the trunk highway fund to the 
  6.17  commissioner of transportation for fiscal years 2003 through 
  6.18  2007.  $150,000,000 is appropriated for each fiscal year for 
  6.19  major projects within the trunk highway system, including 
  6.20  relieving metropolitan area bottlenecks and generally reducing 
  6.21  traffic congestion, improving interregional transportation 
  6.22  corridors, and other heavily traveled highway corridors. 
  6.23     Sec. 7.  [BOND SALE.] 
  6.24     To provide the money appropriated in section 6, subdivision 
  6.25  1, from the bond proceeds fund, the commissioner of finance 
  6.26  shall sell and issue bonds of the state in an amount up to 
  6.27  $500,000,000 in the manner, upon the terms, and with the effect 
  6.28  prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, 
  6.29  and by the Minnesota Constitution, article XI, sections 4 to 7. 
  6.30     Sec. 8.  [TRUNK HIGHWAY BONDS; ISSUANCE.] 
  6.31     To provide the money appropriated in section 6, subdivision 
  6.32  2, the commissioner of finance, on recommendation of the 
  6.33  commissioner of transportation, shall sell and issue Minnesota 
  6.34  trunk highway bonds under Minnesota Statutes, sections 167.50 to 
  6.35  167.52, and the Minnesota Constitution, article XI, sections 4 
  6.36  to 7, and article XIV, section 11, at such times and in such 
  7.1   amounts as are determined by the commissioner of transportation 
  7.2   according to section 6, subdivision 2.  Bonds issued under this 
  7.3   section are authorized in an aggregate principal amount of 
  7.4   $750,000,000.  Not more than $150,000,000 of the bonds 
  7.5   authorized under this section may be sold in any fiscal year. 
  7.6      Sec. 9.  [EFFECTIVE DATE.] 
  7.7      Sections 1 to 4 are effective July 1, 2003.  Section 5 is 
  7.8   effective the day after the constitutional amendment proposed in 
  7.9   article 1 is ratified by the people at the 2002 general election 
  7.10  and takes effect, but only if so ratified.