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174.24 PUBLIC TRANSIT PARTICIPATION PROGRAM.
    Subdivision 1. Establishment; purpose. A public transit participation program is established
to carry out the objectives stated in section 174.21 by providing financial assistance from the
state, including the greater Minnesota transit account established in section 16A.88, to eligible
recipients outside of the metropolitan area.
    Subd. 2. Eligibility; application. Any legislatively established public transit commission
or authority, any county or statutory or home rule charter city providing financial assistance to
or operating public transit, any private operator of public transit, or any combination thereof is
eligible to receive financial assistance through the public transit participation program. Eligible
recipients must be located outside of the metropolitan area.
    Subd. 2a. Eligible activities. Activities eligible for assistance under the program include
but are not limited to:
(1) planning and engineering design for transit services and facilities;
(2) capital assistance to purchase or refurbish transit vehicles and other capital expenditures
necessary to provide a transit service;
(3) operating assistance as provided under subdivision 3b; and
(4) other assistance for public transit services that furthers the purposes of section 174.21.
    Subd. 3. Financial assistance. Payment of financial assistance shall be by contract between
the commissioner and an eligible recipient.
    Subd. 3a.[Repealed, 1984 c 654 art 3 s 153 subd 1]
    Subd. 3b. Operating assistance; recipient classifications. (a) The commissioner shall
determine the total operating cost of any public transit system receiving or applying for assistance
in accordance with generally accepted accounting principles. To be eligible for financial
assistance, an applicant or recipient shall provide to the commissioner all financial records
and other information and shall permit any inspection reasonably necessary to determine total
operating cost and correspondingly the amount of assistance that may be paid to the applicant or
recipient. Where more than one county or municipality contributes assistance to the operation of
a public transit system, the commissioner shall identify one as lead agency for the purpose of
receiving money under this section.
    (b) Prior to distributing operating assistance to eligible recipients for any contract period,
the commissioner shall place all recipients into one of the following classifications: urbanized
area service, small urban area service, rural area service, and elderly and disabled service. The
commissioner shall distribute funds under this section so that the percentage of total operating
cost paid by any recipient from local sources will not exceed the percentage for that recipient's
classification, except as provided in an undue hardship case. The percentages must be: for
urbanized area service and small urban area service, 20 percent; for rural area service, 15 percent;
and for elderly and disabled service, 15 percent. The remainder of the total operating cost will be
paid from state funds less any assistance received by the recipient from any federal source. For
purposes of this subdivision, "local sources" means all local sources of funds and includes all
operating revenue, tax levies, and contributions from public funds, except that the commissioner
may exclude from the total assistance contract revenues derived from operations the cost of which
is excluded from the computation of total operating cost. Total operating costs of the Duluth
Transit Authority or a successor agency does not include costs related to the Superior, Wisconsin
service contract and the Independent School District No. 709 service contract.
    (c) If a recipient informs the commissioner in writing after the establishment of these
percentages but prior to the distribution of financial assistance for any year that paying its
designated percentage of total operating cost from local sources will cause undue hardship, the
commissioner may reduce the percentage to be paid from local sources by the recipient and
increase the percentage to be paid from local sources by one or more other recipients inside or
outside the classification. However, the commissioner may not reduce or increase any recipient's
percentage under this paragraph for more than two years successively. If for any year the funds
appropriated to the commissioner to carry out the purposes of this section are insufficient to allow
the commissioner to pay the state share of total operating cost as provided in this paragraph, the
commissioner shall reduce the state share in each classification to the extent necessary.
    Subd. 3c. Nonoperating assistance. The commissioner shall determine the total cost of
any planning and engineering design, capital assistance, other capital expenditures, and other
assistance for public transit services that furthers the purposes of section 174.21 for any public
transit system receiving or applying for the assistance in accordance with generally accepted
accounting principles. To be eligible for non-operating-cost financial assistance, an applicant or
recipient shall provide to the commissioner all financial records and other information and shall
permit any inspection reasonably necessary to determine total cost and the amount of assistance
that may be paid to the applicant or recipient. When more than one county or municipality
contributes assistance to the operation of a public transit system, the commissioner shall identify
one as a lead agency for the purpose of receiving money under this section. The commissioner
has the sole discretion to determine the amount of state funds distributed to any recipient for
non-operating-cost assistance.
    Subd. 4.[Repealed, 1984 c 654 art 3 s 153 subd 1]
    Subd. 5. Method of payment, operating assistance. Payments for operating assistance
under this section must be made in the following manner:
    (a) For payments made from the general fund:
    (1) 50 percent of the total contract amount in the first month of operation;
    (2) 40 percent of the total contract amount in the seventh month of operation;
    (3) 9 percent of the total contract amount in the 12th month of operation; and
    (4) 1 percent of the total contract amount after the final audit.
    (b) For payments made from the greater Minnesota transit account:
    (1) 50 percent of the total contract amount in the seventh month of operation; and
    (2) 50 percent of the total contract amount in the 11th month of operation.
    Subd. 5a. Method of payment, nonoperating assistance. Payments for planning and
engineering design, eligible capital assistance, and other eligible assistance for public transit
services furthering the purposes of section 174.21, excluding operating assistance, shall be made
in an appropriate manner as determined by the commissioner.
    Subd. 6. Service contract. (a) Any legislatively established public transit commission or
authority, county, or statutory or home rule charter city that (1) is located outside the metropolitan
area, and (2) provides financial assistance to or operates public transit, may provide paratransit as
a complement to fixed route service as required in United States Code, title 42, section 12143, as
amended through December 31, 1994, outside its jurisdictional boundaries.
(b) Service described in paragraph (a) may be provided only if (1) the commission, authority,
county, or city enters into a contract for the service with a political subdivision, individual,
or private entity for the service, and (2) the contract requires full or partial payment to the
commission, authority, county, or city for the cost of the service.
History: 1977 c 454 s 21; Ex1979 c 1 s 19-21; 1981 c 363 s 42,43; 3Sp1981 c 2 art 1 s 17;
1982 c 424 s 130; 1982 c 586 s 5-8; 1983 c 293 s 75; 1984 c 654 art 3 s 69-72; 1991 c 233 s 62;
1992 c 394 s 1-4; 1995 c 101 s 1; 1999 c 238 art 2 s 30; 1Sp2001 c 5 art 3 s 9; 1Sp2001 c 8 art 2
s 51; 1Sp2003 c 19 art 2 s 42-44; 2004 c 228 art 1 s 76; 2005 c 56 s 1; 2007 c 143 art 2 s 2-4