1.1 	A bill for an act
1.2 	relating to transportation; authorizing a local sales tax to fund transit services; 
1.3 	allocating motor vehicle sales tax proceeds; requiring a study of providing transit 
1.4 	service between the Twin Cities and regional centers in Minnesota; appropriating 
1.5 	money for the feasibility study;amending Minnesota Statutes 2006, sections 
1.6 	297A.99, subdivision 1, by adding a subdivision; 297B.09, subdivision 1; 
1.7 	proposing coding for new law in Minnesota Statutes, chapter 297A.
1.8 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to 
1.10 	read:
1.11 		Subdivision 1.Authorization; scope. (a) A political subdivision of this state may 
1.12 	impose a general sales tax if permitted by special law or if the political subdivision enacted 
1.13 	and imposed the tax before the effective date of section 477A.016 and its predecessor 
1.14 	provision or if the tax is allowed under subdivision 1a. 
1.15 	(b) This section governs the imposition of a general sales tax by the political 
1.16 	subdivision. The provisions of this section preempt the provisions of any special law:
1.17 	(1) enacted before June 2, 1997, or
1.18 	(2) enacted on or after June 2, 1997, that does not explicitly exempt the special law 
1.19 	provision from this section's rules by reference.
1.20 	(c) This section does not apply to or preempt a sales tax on motor vehicles or a 
1.21 	special excise tax on motor vehicles.

1.22 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
1.23 	authorizing referendum is held after June 30, 2007.

2.1 	Sec. 2. Minnesota Statutes 2006, section 297A.99, is amended by adding a subdivision 
2.2 	to read:
2.3 		Subd. 1a.General authority; transit purposes. (a) Any city, county, or transit 
2.4 	special taxing district, located outside of the metropolitan area as defined in section 
2.5 	473.121, subdivision 2, or any combination of these political subdivisions acting under a 
2.6 	joint powers agreement, or the Metropolitan Council, may impose a local sales tax of up 
2.7 	to one-fourth of one percent without authorization under special law provided that:
2.8 	(1) imposition of the tax is approved by the majority of the voters in the region in 
2.9 	which the tax will be imposed pursuant to subdivision 3, paragraph (a);
2.10 	(2) the revenues must be used to provide transit services, and may be used to fund 
2.11 	capital, operations, and maintenance costs of providing that service; and
2.12 	(3) all the conditions for adoption, use, administration, and termination of the tax 
2.13 	contained in this subdivision and subdivisions 4 to 12a are met.
2.14 	(b) The governing body of the entity imposing the tax may, by ordinance, terminate 
2.15 	the tax at any time upon appropriate notice to the commissioner of revenue, as required 
2.16 	under subdivision 12.
2.17 	(c) The combination of any tax imposed under this subdivision plus any other local 
2.18 	sales taxes authorized by special law may not exceed three-fourths of one percent in 
2.19 	any political subdivision unless the total local sales taxes imposed in the area already 
2.20 	exceeds one-half of one percent as of June 30, 1997, in which case the total combined tax 
2.21 	rate may not exceed the tax rate in effect as of June 30, 2007, by more than one-fourth 
2.22 	of one percent.
2.23 	(d) A tax imposed under this subdivision by a border city, as defined in section 
2.24 	469.1731, shall not be effective until a local tax with an equivalent rate is imposed in an 
2.25 	adjacent political subdivision in the bordering state. During the period between the time 
2.26 	the tax would have first been imposed absent this paragraph, and when the tax is imposed 
2.27 	under this paragraph, the city shall receive a payment under section 3.

2.28 	EFFECTIVE DATE. This section is effective for local sales taxes for which the 
2.29 	authorizing referendum is held after June 30, 2007.

2.30 	Sec. 3. [297A.9905] BORDER CITY; PAYMENT IN LIEU OF LOCAL SALES 
2.31 	TAX; APPROPRIATION.
2.32 	(a) The commissioner of revenue shall make annual payments to any city that has 
2.33 	received voter approval to impose a local sales tax for transit purposes under section 
2.34 	297A.99, subdivision 1a, for which imposition of the tax is delayed under paragraph (d) of 
2.35 	that subdivision. The payment shall equal the estimated amount that the tax would have 
3.1 	raised during the previous calendar year, or the portion of the previous calendar year 
3.2 	during which the tax could not be imposed. The commissioner shall estimate the amount 
3.3 	of foregone revenue based on a reasonable methodology which shall be made public 
3.4 	and consistently applied to all cities that qualify for payment under this section. The 
3.5 	commissioner shall certify the estimated payment amount by October 1 of the year prior to 
3.6 	the year in which the payment is made. All determinations by the commissioner are final.
3.7 	(b) Payments under this subdivision shall be made with the July 20th payment of 
3.8 	other aids under section 477A.015. The amount required to make these payments is 
3.9 	annually appropriated to the commissioner from the general fund.

3.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

3.11 	Sec. 4. Minnesota Statutes 2006, section 297B.09, subdivision 1, is amended to read:
3.12 		Subdivision 1.Deposit of revenues. (a) Money collected and received under this 
3.13 	chapter must be deposited as provided in this subdivision.
3.14 	~~(b) From July 1, 2002, to June 30, 2003, 32 percent of the money collected and~~ 
3.15 	~~received must be deposited in the highway user tax distribution fund, 20.5 percent must be~~ 
3.16 	~~deposited in the metropolitan area transit fund under section 16A.88, and 1.25 percent~~ 
3.17 	~~must be deposited in the greater Minnesota transit fund under section 16A.88. The~~ 
3.18 	~~remaining money must be deposited in the general fund.~~ 
3.19 	~~(c) From July 1, 2003, to June 30, 2007, 30 percent of the money collected and~~ 
3.20 	~~received must be deposited in the highway user tax distribution fund, 21.5 percent must be~~ 
3.21 	~~deposited in the metropolitan area transit fund under section 16A.88, 1.43 percent must be~~ 
3.22 	~~deposited in the greater Minnesota transit fund under section 16A.88, 0.65 percent must~~ 
3.23 	~~be deposited in the county state-aid highway fund, and 0.17 percent must be deposited~~ 
3.24 	~~in the municipal state-aid street fund. The remaining money must be deposited in the~~ 
3.25 	~~general fund.~~ 
3.26 	~~(d) On and after~~ (b) From July 1, 2007, ~~32~~ through June 30, 2008, 38.25 percent ~~of~~ 
3.27 	~~the money collected and received~~ must be deposited in the highway user tax distribution 
3.28 	fund, ~~20.5~~ 23.36 percent must be deposited in the metropolitan area transit fund under 
3.29 	section 16A.88, and ~~1.25~~ 2.14 percent must be deposited in the greater Minnesota transit 
3.30 	fund under section 16A.88. The remaining money must be deposited in the general fund. 
3.31 	(c) From July 1, 2008, through June 30, 2009, 44.25 percent must be deposited in the 
3.32 	highway user tax distribution fund, 26.64 percent must be deposited in the metropolitan 
3.33 	area transit fund under section 16A.88, and 2.86 percent must be deposited in the greater 
3.34 	Minnesota transit fund under section 16A.88. The remaining money must be deposited 
3.35 	in the general fund.
4.1 	(d) From July 1, 2009, through June 30, 2010, 50.25 percent must be deposited in the 
4.2 	highway user tax distribution fund, 29.93 percent must be deposited in the metropolitan 
4.3 	area transit fund under section 16A.88, and 3.57 percent must be deposited in the greater 
4.4 	Minnesota transit fund under section 16A.88. The remaining money must be deposited 
4.5 	in the general fund.
4.6 	(e) From July 1, 2010, through June 30, 2011, 56.25 percent must be deposited in the 
4.7 	highway user tax distribution fund, 33.21 percent must be deposited in the metropolitan 
4.8 	area transit fund under section 16A.88, and 4.29 percent must be deposited in the greater 
4.9 	Minnesota transit fund under section 16A.88. The remaining money must be deposited 
4.10 	in the general fund.
4.11 	(f) On and after July 1, 2011, 60 percent must be deposited in the highway user 
4.12 	tax distribution fund, 35 percent must be deposited in the metropolitan area transit fund 
4.13 	under section 16A.88, and five percent must be deposited in the greater Minnesota transit 
4.14 	fund under section 16A.88.

4.15 	EFFECTIVE DATE. This section is effective July 1, 2007.

4.16 	Sec. 5. STUDY OF TRANSIT SERVICE TO REGIONAL CENTERS.
 4.17 		Subdivision 1.Appropriation. Of the amount appropriated to the commissioner of 
4.18 	transportation for fiscal year 2008 from federal transportation planning aid provided to 
4.19 	Minnesota under United States Code, title 49, sections 5303 to 5304, $500,000 is allocated 
4.20 	for the feasibility study required under this section, in accordance with the provisions of 
4.21 	federal law and any rules or regulations promulgated under federal law.
4.22 		Subd. 2.Study requirements. (a) The commissioner of transportation shall conduct 
4.23 	a study to evaluate the feasibility of establishing express transit service between the Twin 
4.24 	Cities metropolitan area and each regional center in Minnesota. For purposes of this 
4.25 	section, "regional center" means the city of Duluth, Mankato, Rochester, St. Cloud, or 
4.26 	Willmar. 
4.27 	(b) The study must include, but is not limited to:
4.28 	(1) evaluation and analysis of current and future transit service needs between the 
4.29 	Twin Cities and each regional center;
4.30 	(2) identification of transit provision options, including but not limited to commuter 
4.31 	rail and bus service;
4.32 	(3) identification of estimated costs and revenues associated with each transit 
4.33 	provision option identified in clause (2), for each regional center; and
4.34 	(4) analysis of regional transit provided in neighboring and other states.
5.1 	(c) The study must also include an evaluation of the feasibility of extending the Red 
5.2 	Rock corridor transit way to include the cities of Red Wing and Winona.
5.3 		Subd. 3.Report. The commissioner shall submit a report on the results of the study 
5.4 	to the chairs and ranking minority members of the senate and house of representatives 
5.5 	committees and divisions with jurisdiction over transportation no later than January 14, 
5.6 	2008.

5.7 	EFFECTIVE DATE. This section is effective the day following final enactment.