1.1                          A bill for an act 
  1.2             relating to transportation; modifying provisions on 
  1.3             transit operating assistance; amending Minnesota 
  1.4             Statutes 1999 Supplement, section 174.24, subdivision 
  1.5             3b. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.8   174.24, subdivision 3b, is amended to read: 
  1.9      Subd. 3b.  [OPERATING ASSISTANCE.] The commissioner shall 
  1.10  determine the total operating cost of any public transit system 
  1.11  receiving or applying for assistance in accordance with 
  1.12  generally accepted accounting principles.  For the Duluth 
  1.13  transit authority, revenue contract costs must be subtracted 
  1.14  from the total cost of the system before applying the formula.  
  1.15  To be eligible for financial assistance, an applicant or 
  1.16  recipient shall provide to the commissioner all financial 
  1.17  records and other information and shall permit any inspection 
  1.18  reasonably necessary to determine total operating cost and 
  1.19  correspondingly the amount of assistance which may be paid to 
  1.20  the applicant or recipient.  Where more than one county or 
  1.21  municipality contributes assistance to the operation of a public 
  1.22  transit system, the commissioner shall identify one as lead 
  1.23  agency for the purpose of receiving moneys under this section.  
  1.24     Prior to distributing operating assistance to eligible 
  1.25  recipients for any contract period, the commissioner shall place 
  2.1   all recipients into one of the following classifications:  large 
  2.2   urbanized area service, urbanized area service, small urban area 
  2.3   service, rural area service, and elderly and handicapped 
  2.4   service.  The commissioner shall distribute funds under this 
  2.5   section so that the percentage of total operating cost paid by 
  2.6   any recipient from local sources will not exceed the percentage 
  2.7   for that recipient's classification, except as provided in an 
  2.8   undue hardship case.  The percentages shall be:  for large 
  2.9   urbanized area service, 50 percent; for urbanized area service 
  2.10  and small urban area service, 40 percent; for rural area 
  2.11  service, 35 percent; and for elderly and handicapped service, 35 
  2.12  percent.  The remainder of the total operating cost will be paid 
  2.13  from state funds less any assistance received by the recipient 
  2.14  from any federal source.  For purposes of this subdivision 
  2.15  "local sources" means all local sources of funds and includes 
  2.16  all operating revenue, tax levies, and contributions from public 
  2.17  funds, except that the commissioner may exclude from the total 
  2.18  assistance contract revenues derived from operations the cost of 
  2.19  which is excluded from the computation of total operating cost.  
  2.20     If a recipient informs the commissioner in writing after 
  2.21  the establishment of these percentages but prior to the 
  2.22  distribution of financial assistance for any year that paying 
  2.23  its designated percentage of total operating cost from local 
  2.24  sources will cause undue hardship, the commissioner may reduce 
  2.25  the percentage to be paid from local sources by the recipient 
  2.26  and increase the percentage to be paid from local sources by one 
  2.27  or more other recipients inside or outside the classification, 
  2.28  provided that no recipient shall have its percentage thus 
  2.29  reduced or increased for more than two years successively.  If 
  2.30  for any year the funds appropriated to the commissioner to carry 
  2.31  out the purposes of this section are insufficient to allow the 
  2.32  commissioner to pay the state share of total operating cost as 
  2.33  provided in this paragraph, the commissioner shall reduce the 
  2.34  state share in each classification to the extent necessary.