1.1                          A bill for an act
  1.2             relating to transportation; increasing tax rates on 
  1.3             motor fuels and providing for annual adjustment of tax 
  1.4             rates based on changes in state personal income; 
  1.5             creating a metropolitan transit assistance fund and 
  1.6             appropriating money in the fund to the metropolitan 
  1.7             council for transit in the metropolitan area; 
  1.8             providing for the deposit of net revenues from motor 
  1.9             fuel taxes in the metropolitan transit assistance fund 
  1.10            and the highway user tax distribution fund; providing 
  1.11            for the deposit of revenue from sales taxes on certain 
  1.12            taxable sales related to motor vehicles to be 
  1.13            deposited in the metropolitan transit assistance fund; 
  1.14            requiring the metropolitan council to reduce transit 
  1.15            operating levies in the metropolitan area; proposing 
  1.16            an amendment to the Minnesota Constitution, article 
  1.17            XIV, sections 5, 6, 7, 8, and 10; permitting the 
  1.18            highway user tax distribution fund to be used for 
  1.19            public highways and public transit; apportioning the 
  1.20            trunk highway fund between the metropolitan area and 
  1.21            greater Minnesota; permitting up to 15 percent of the 
  1.22            net proceeds from motor fuel taxes to be deposited in 
  1.23            a transit assistance fund; amending Minnesota Statutes 
  1.24            1994, sections 296.02, by adding a subdivision; 
  1.25            296.421, by adding a subdivision; 297A.44, subdivision 
  1.26            1; and 473.446, by adding a subdivision; Minnesota 
  1.27            Statutes 1995 Supplement, section 296.02, subdivision 
  1.28            1b; proposing coding for new law in Minnesota 
  1.29            Statutes, chapter 174. 
  1.30  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.31     Section 1.  [174.33] [METROPOLITAN TRANSIT ASSISTANCE 
  1.32  FUND.] 
  1.33     A metropolitan transit assistance fund is created as a 
  1.34  separate fund in the state treasury.  The fund consists of money 
  1.35  deposited in the fund under sections 296.421, subdivision 9, and 
  1.36  297A.44, subdivision 1, paragraph (e).  Money in the fund is 
  1.37  appropriated to the metropolitan council for the purpose of 
  2.1   assisting transit, as defined in the Minnesota Constitution, 
  2.2   article XIV, section 5, in the seven-county metropolitan area. 
  2.3      Sec. 2.  Minnesota Statutes 1995 Supplement, section 
  2.4   296.02, subdivision 1b, is amended to read: 
  2.5      Subd. 1b.  [RATES IMPOSED.] (a) The gasoline excise tax is 
  2.6   imposed at the ~~following~~ rates specified in this subdivision.  
  2.7      (b) From July 1, 1997, to June 30, 1998: 
  2.8      (1) E85 is taxed at the rate of ~~14.2~~ 14.9 cents per gallon; 
  2.9      (2) M85 is taxed at the rate of ~~11.4~~ 12 cents per gallon; 
  2.10  and 
  2.11     (3) all other gasoline is taxed at the rate of ~~20~~ 21 cents 
  2.12  per gallon.  
  2.13     (c) From July 1, 1998, to June 30, 1999: 
  2.14     (1) E85 is taxed at the rate of 15.6 cents per gallon; 
  2.15     (2) M85 is taxed at the rate of 12.5 cents per gallon; and 
  2.16     (3) all other gasoline is taxed at the rate of 22 cents per 
  2.17  gallon. 
  2.18     (d) On and after July 1, 1999: 
  2.19     (1) E85 is taxed at the rate of 16.3 cents per gallon; 
  2.20     (2) M85 is taxed at the rate of 13.1 cents per gallon; and 
  2.21     (3) all other gasoline is taxed at the rate of 23 cents per 
  2.22  gallon. 
  2.23     Sec. 3.  Minnesota Statutes 1994, section 296.02, is 
  2.24  amended by adding a subdivision to read: 
  2.25     Subd. 1c.  [ANNUAL GASOLINE TAX RATE ADJUSTMENT.] (a) 
  2.26  Beginning in 1997 and annually thereafter, before April 1 of 
  2.27  each year the commissioner of revenue shall adjust the rate of 
  2.28  the gasoline excise tax.  The new rate per gallon must be 
  2.29  calculated by multiplying the rate in effect at the time of the 
  2.30  calculation by an amount obtained under paragraph (b).  The new 
  2.31  rate must be rounded to the nearest 0.1 cent and is effective on 
  2.32  April 1 of each year. 
  2.33     (b) Divide total Minnesota personal income for the previous 
  2.34  year, as determined by the commissioner, by that amount for the 
  2.35  year before the previous year. 
  2.36     Sec. 4.  Minnesota Statutes 1994, section 296.421, is 
  3.1   amended by adding a subdivision to read: 
  3.2      Subd. 9.  [NET REVENUE.] After deductions for refunds and 
  3.3   for deposits under subdivisions 4 and 8 and sections 84.794, 
  3.4   subdivision 1; 84.803, subdivision 1; 84.83, subdivision 2; and 
  3.5   84.927, subdivision 1, the net revenue from the taxes on taxable 
  3.6   gallons of motor fuel imposed under sections 296.02, subdivision 
  3.7   1, and 296.025, subdivision 1, must be deposited as follows: 
  3.8      (1) From July 1, 1997, to June 30, 1999, an amount 
  3.9   determined by the commissioner as equal to the revenue from one 
  3.10  cent of those taxes must be deposited in the metropolitan 
  3.11  transit assistance fund and the remainder deposited in the 
  3.12  highway user tax distribution fund. 
  3.13     (2) From July 1, 1999, to June 30, 2001, an amount 
  3.14  determined by the commissioner as equal to the revenue from two 
  3.15  cents of those taxes must be deposited in the metropolitan 
  3.16  transit assistance fund and the remainder deposited in the 
  3.17  highway user tax distribution fund. 
  3.18     (3) On and after July 1, 2001, an amount determined by the 
  3.19  commissioner as equal to the revenue from three cents of those 
  3.20  taxes must be deposited in the metropolitan transit assistance 
  3.21  fund and the remainder deposited in the highway user tax 
  3.22  distribution fund. 
  3.23     Sec. 5.  Minnesota Statutes 1994, section 297A.44, 
  3.24  subdivision 1, is amended to read: 
  3.25     Subdivision 1.  (a) Except as provided in paragraphs (b), 
  3.26  (c), ~~and~~ (d), and (e), all revenues, including interest and 
  3.27  penalties, derived from the excise and use taxes imposed by 
  3.28  sections 297A.01 to 297A.44 shall be deposited by the 
  3.29  commissioner in the state treasury and credited to the general 
  3.30  fund.  
  3.31     (b) All excise and use taxes derived from sales and use of 
  3.32  property and services purchased for the construction and 
  3.33  operation of an agricultural resource project, from and after 
  3.34  the date on which a conditional commitment for a loan guaranty 
  3.35  for the project is made pursuant to section 41A.04, subdivision 
  3.36  3, shall be deposited in the Minnesota agricultural and economic 
  4.1   account in the special revenue fund.  The commissioner of 
  4.2   finance shall certify to the commissioner the date on which the 
  4.3   project received the conditional commitment.  The amount 
  4.4   deposited in the loan guaranty account shall be reduced by any 
  4.5   refunds and by the costs incurred by the department of revenue 
  4.6   to administer and enforce the assessment and collection of the 
  4.7   taxes.  
  4.8      (c) All revenues, including interest and penalties, derived 
  4.9   from the excise and use taxes imposed on sales and purchases 
  4.10  included in section 297A.01, subdivision 3, paragraphs (d) and 
  4.11  (l), clauses (1) and (2), must be deposited by the commissioner 
  4.12  in the state treasury, and credited as follows: 
  4.13     (1) first to the general obligation special tax bond debt 
  4.14  service account in each fiscal year the amount required by 
  4.15  section 16A.661, subdivision 3, paragraph (b); and 
  4.16     (2) after the requirements of clause (1) have been met, the 
  4.17  balance must be credited to the general fund. 
  4.18     (d) The revenues, including interest and penalties, derived 
  4.19  from the taxes imposed on solid waste collection services as 
  4.20  described in section 297A.45, except for the tax imposed under 
  4.21  section 297A.021, shall be deposited by the commissioner in the 
  4.22  state treasury and credited to the general fund to be used for 
  4.23  funding solid waste reduction and recycling programs. 
  4.24     (e) The revenue, including interest and penalties, derived 
  4.25  from the excise and use taxes imposed on the following taxable 
  4.26  sales must be deposited in the state treasury and credited to 
  4.27  the metropolitan transit assistance fund: 
  4.28     (1) tires, batteries, and lubricating oil sold for use in 
  4.29  or on motor vehicles; and 
  4.30     (2) parts used in the repair of motor vehicles. 
  4.31     Sec. 6.  Minnesota Statutes 1994, section 473.446, is 
  4.32  amended by adding a subdivision to read: 
  4.33     Subd. 1b.  [OPERATING LEVY REDUCED.] The council shall 
  4.34  reduce the levy authorized by subdivision 1, clause (a), each 
  4.35  year by an amount equal to the total amount the council received 
  4.36  in the previous year and from the metropolitan transit 
  5.1   assistance fund established under section 174.32. 
  5.2      Sec. 7.  [CONSTITUTIONAL AMENDMENT PROPOSED.] 
  5.3      An amendment to the Minnesota Constitution, article XIV, 
  5.4   sections 5, 6, 7, 8, and 10 is proposed to the people.  If the 
  5.5   amendment is adopted, article XIV, section 5, will read as 
  5.6   follows: 
  5.7      Sec. 5.  There is hereby created a highway user tax 
  5.8   distribution fund to be used solely for ~~highway purposes~~ the 
  5.9   movement of goods and people on public highways and by transit 
  5.10  as specified in this article.  The fund consists of the proceeds 
  5.11  of any taxes authorized by sections 9 and 10 of this article.  
  5.12  The net proceeds of the taxes shall be apportioned:  62 percent 
  5.13  to the trunk highway fund; 29 percent to the county state-aid 
  5.14  highway fund; nine percent to the municipal state-aid street 
  5.15  fund.  Five percent of the net proceeds of the highway user tax 
  5.16  distribution fund may be set aside and apportioned by law to one 
  5.17  or more of the three foregoing funds.  The balance of the 
  5.18  highway user tax distribution fund shall be transferred to the 
  5.19  trunk highway fund, the county state-aid highway fund, and the 
  5.20  municipal state-aid street fund in accordance with the 
  5.21  percentages set forth in this section.  No change in the 
  5.22  apportionment of the five percent may be made within six years 
  5.23  of the last previous change. 
  5.24     For purposes of this article, "transit" means general or 
  5.25  specific transportation service available to the general public 
  5.26  for hire on a regular and continuing basis, including bus 
  5.27  service on fixed routes and schedules and dial-a-ride bus 
  5.28  service provided in vehicles with a capacity for ten or more 
  5.29  passengers; commuter rail service; and equipment, facilities, 
  5.30  and operations related to those transit services. 
  5.31     article XIV, section 6, will read: 
  5.32     Sec. 6.  There is hereby created a trunk highway fund which 
  5.33  shall be used ~~solely~~ for the purposes specified in section 2 of 
  5.34  this article; for transit; and for the payment of principal and 
  5.35  interest of any bonds issued under the authority of section 11 
  5.36  of this article and any bonds issued for trunk highway purposes 
  6.1   prior to July 1, 1957.  All payments of principal and interest 
  6.2   on bonds issued shall be a first charge on money coming into 
  6.3   this fund during the year in which the principal or interest is 
  6.4   payable. 
  6.5      In any fiscal year, not less than 45 percent of the trunk 
  6.6   highway fund shall be allocated by law to the Minneapolis-Saint 
  6.7   Paul metropolitan area, which is the area included in the 
  6.8   counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
  6.9   Washington as they exist at the time this provision is adopted, 
  6.10  and not less than 45 percent shall be allocated by law to the 
  6.11  area of the state outside the Minneapolis-Saint Paul 
  6.12  metropolitan area.  In each allocation the legislature shall 
  6.13  specify the percent of the allocation to be spent for highway 
  6.14  purposes, bicycle and pedestrian pathways, and transit purposes. 
  6.15     article XIV, section 7, will read: 
  6.16     Sec. 7.  There is hereby created a county state-aid highway 
  6.17  fund.  The county state-aid highway fund shall be apportioned 
  6.18  among the counties as provided by law.  The funds apportioned 
  6.19  shall be used by the counties as provided by law for aid in the 
  6.20  construction, improvement and maintenance of county state-aid 
  6.21  highways, and for transit in the counties.  Each county may 
  6.22  determine what portion of its county state-aid highway fund 
  6.23  allocation may be spent on county state-aid highways and on 
  6.24  transit.  The legislature may authorize the counties by law to 
  6.25  use a part of the funds apportioned to them to aid in the 
  6.26  construction, improvement and maintenance of other county 
  6.27  highways, township roads, municipal streets and any other public 
  6.28  highways, including but not limited to trunk highways and 
  6.29  municipal state-aid streets within the respective counties. 
  6.30     article XIV, section 8, will read: 
  6.31     Sec. 8.  There is hereby created a municipal state-aid 
  6.32  street fund to be apportioned as provided by law among 
  6.33  municipalities having a population of 5,000 or more.  The fund 
  6.34  shall be used by municipalities as provided by law for the 
  6.35  construction, improvement and maintenance of municipal state-aid 
  6.36  streets, and for transit in the municipalities.  Each 
  7.1   municipality may determine what portion of its municipal 
  7.2   state-aid street fund allocation may be spent on municipal 
  7.3   state-aid streets and on transit.  The legislature may authorize 
  7.4   municipalities to use a part of the fund in the construction, 
  7.5   improvement and maintenance of other municipal streets, trunk 
  7.6   highways, and county state-aid highways within the counties in 
  7.7   which the municipality is located. 
  7.8      and article XIV, section 10, will read: 
  7.9      Sec. 10.  The legislature may levy an excise tax on any 
  7.10  means or substance used for propelling vehicles on the public 
  7.11  highways of this state or on the business of selling it.  
  7.12  The ~~proceeds of the tax shall~~ legislature may provide by law 
  7.13  that not more than 15 percent of the net proceeds from such a 
  7.14  tax may be deposited in a fund exclusively for transit 
  7.15  assistance.  The net proceeds of the tax not deposited in such a 
  7.16  fund must be paid into the highway user tax distribution fund. 
  7.17     Sec. 8.  [SUBMISSION TO VOTERS.] 
  7.18     The proposed amendment must be submitted to the people at 
  7.19  the 1996 general election. 
  7.20     If the amendment is adopted, its provision shall apply to 
  7.21  highway user tax distribution fund money spent after June 30, 
  7.22  1997. 
  7.23     The question submitted shall be: 
  7.24     "Shall the Minnesota Constitution be amended to: 
  7.25     (1) permit up to 15 percent of the net proceeds from motor 
  7.26  fuel taxes to be placed in a transit assistance fund; 
  7.27     (2) permit money in the highway user tax distribution fund, 
  7.28  which consists of the net proceeds of motor vehicle registration 
  7.29  taxes and motor fuel excise taxes, to be spent for transit as 
  7.30  well as for highways and streets; and 
  7.31     (3) provide that at least 45 percent of the state's share 
  7.32  of the trunk highway fund be allocated to the Minneapolis-Saint 
  7.33  Paul metropolitan area and at least 45 percent be allocated to 
  7.34  the area of the state outside that metropolitan area? 
  7.35                                     Yes .......
  7.36                                     No ........"
  8.1      Sec. 9.  [EFFECTIVE DATE.] 
  8.2      Sections 1, 2, 3, 4, 5, and 6 become effective only on 
  8.3   ratification of the constitutional amendment proposed in section 
  8.4   7.  If the constitutional amendment is ratified, sections 1, 2, 
  8.5   3, 4, 5, and 6 are effective July 1, 1997.