Bill Text: MN HF2395 | 2013-2014 | 88th Legislature | Engrossed

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Bill Title: Omnibus transportation finance bill.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2014-03-24 - Committee report, to adopt as amended and re-refer to Taxes [HF2395 Detail]

Download: Minnesota-2013-HF2395-Engrossed.html

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A bill for an act

relating to transportation; capital investment; taxes; amending provisions
governing transportation finance; modifying the gasoline excise tax; establishing
gross receipts motor fuels tax; amending metropolitan area transit sales tax;
requiring the Metropolitan Council to set a goal to accelerate the purchase of
hybrid and alternative fuel vehicles; authorizing sale and issuance of trunk
highway bonds; requiring reports; appropriating money;amending Minnesota
Statutes 2012, sections 162.07, subdivision 1a; 174.56, subdivision 1, by
adding a subdivision; 296A.061; 296A.07, subdivision 3; 296A.08, subdivision
2; 296A.11; 296A.12; 296A.16; 297A.992; 473.167; 473.3925; 473.915;
Minnesota Statutes 2013 Supplement, sections 174.42, subdivision 2, by adding
a subdivision; 297A.815, subdivision 3; proposing coding for new law in
Minnesota Statutes, chapters 161; 174; 296A; 297A; 473.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

TRUNK HIGHWAY

Section 1. BOND APPROPRIATIONS.

The sums shown in the column under "Appropriations" are appropriated from the
bond proceeds account in the trunk highway fund to the state agencies or officials indicated,
to be spent for public purposes. Appropriations of bond proceeds must be spent as
authorized by the Minnesota Constitution, articles XI and XIV. Unless otherwise specified,
money appropriated in this article for a capital program or project may be used to pay state
agency staff costs that are attributed directly to the capital program or project in accordance
with accounting policies adopted by the commissioner of management and budget.

	SUMMARY
	Department of Transportation	$	1,000,000,000
	Department of Management and Budget	$	1,000,000
	TOTAL	$	1,001,000,000

APPROPRIATIONS

Sec. 2. DEPARTMENT OF TRANSPORTATION CORRIDORS OF COMMERCE

$

800,000,000

(a) The appropriation in this section is
to the commissioner of transportation for
the corridors of commerce program under
Minnesota Statutes, section 161.088, and is
available in the amounts of $200,000,000 in
each fiscal year for fiscal years 2015 to 2018.
(b) The appropriation in this subdivision
cancels as specified under Minnesota
Statutes, section 16A.642, except that the
commissioner of management and budget
shall count the start of authorization for
issuance of state bonds as the first day
of the fiscal year during which the bonds
are available to be issued as specified
under paragraph (a), and not as the date of
enactment of this subdivision.

Sec. 3. TRANSPORTATION ECONOMIC DEVELOPMENT PROGRAM

$

200,000,000

(a) This appropriation is for the transportation
economic development program under
Minnesota Statutes, section 174.12, and is
available in the amounts of $50,000,000 in
each fiscal year for fiscal years 2015 to 2018.
(b) The appropriation in this subdivision
cancels as specified under Minnesota
Statutes, section 16A.642, except that the
commissioner of management and budget
shall count the start of authorization for
issuance of state bonds as the first day
of the fiscal year during which the bonds
are available to be issued as specified
under paragraph (a), and not as the date of
enactment of this subdivision.

Sec. 4. BOND SALE EXPENSES

$

1,000,000

This appropriation is to the commissioner
of management and budget for bond sale
expenses under Minnesota Statutes, sections
16A.641, subdivision 8; and 167.50,
subdivision 4.

    Sec. 5. BOND SALE AUTHORIZATION.
To provide the money appropriated in this article from the bond proceeds account in
the trunk highway fund, the commissioner of management and budget shall sell and issue
bonds of the state in an amount up to $1,001,000,000 in the manner, upon the terms, and
with the effect prescribed by Minnesota Statutes, sections 167.50 to 167.52, and by the
Minnesota Constitution, article XIV, section 11, at the times and in the amounts requested
by the commissioner of transportation. The proceeds of the bonds, except accrued interest
and any premium received from the sale of the bonds, must be deposited in the bond
proceeds account in the trunk highway fund.

    Sec. 6. EFFECTIVE DATE.
This article is effective July 1, 2014.

ARTICLE 2

GROSS RECEIPTS TAX

    Section 1. Minnesota Statutes 2012, section 296A.061, is amended to read:
296A.061 CANCELLATION OR NONRENEWAL OF LICENSES.
The commissioner may cancel a license or not renew a license if one of the following
conditions occurs:
(1) the license holder has not filed a petroleum tax return or report for at least one year;
(2) the license holder has not filed a gross receipts tax return for at least one year;
(3) the license holder has not reported any petroleum tax liability or gross receipts
tax liability on the license holder's returns or reports for at least one year; or
(3) (4) the license holder requests cancellation of the license.

    Sec. 2. Minnesota Statutes 2012, section 296A.07, subdivision 3, is amended to read:
    Subd. 3. Rate of tax. (a) The gasoline excise tax is imposed at the following rates:
    (1) E85 is taxed at the rate of 17.75 cents per gallon;
    (2) M85 is taxed at the rate of 14.25 cents per gallon; and
    (3) all other gasoline is taxed at the rate of 25 cents per gallon.
(b) Notwithstanding the provisions of paragraph (a), the gasoline excise tax is
imposed at the following rates beginning on the date the tax under section 296A.085
takes effect:
    (1) E85 is taxed at the rate of 14.2 cents per gallon;
    (2) M85 is taxed at the rate of 11.4 cents per gallon; and
    (3) all other gasoline is taxed at the rate of 20 cents per gallon.

    Sec. 3. Minnesota Statutes 2012, section 296A.08, subdivision 2, is amended to read:
    Subd. 2. Rate of tax. The special fuel excise tax is imposed at the following rates:
    (a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.
    (b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.
    (c) Compressed natural gas is taxed at the rate of $2.174 per thousand cubic feet; or
25 cents per gasoline equivalent. For purposes of this paragraph, "gasoline equivalent," as
defined by the National Conference on Weights and Measures, is 5.66 pounds of natural gas.
    (d) All other special fuel is taxed at the same rate as the gasoline excise tax as
specified in section 296A.07, subdivision 2. The tax is payable in the form and manner
prescribed by the commissioner.
(e) Notwithstanding the provisions of paragraphs (a) to (c), the following rates apply
beginning on the date the tax under section 296A.085 takes effect:
    (1) liquefied petroleum gas or propane is taxed at the rate of 15 cents per gallon;
    (2) liquefied natural gas is taxed at the rate of 12 cents per gallon; and
    (3) compressed natural gas is taxed at the rate of $1.74 per thousand cubic feet; or 20
cents per gasoline equivalent. For purposes of this paragraph, "gasoline equivalent," as
defined by the National Conference on Weights and Measures, is 5.66 pounds of natural gas.

    Sec. 4. [296A.085] MOTOR FUELS GROSS RECEIPTS TAX.
    Subdivision 1. Imposition. A tax is imposed on the wholesale business of selling
the means or substance used for propelling vehicles on the highways of this state. The
tax is imposed at the rate of five percent of gross receipts derived by a distributor from
the first sale at wholesale of gasoline, gasoline blended with ethanol, agricultural alcohol
gasoline, and special fuels within this state for use in motor vehicles.
    Subd. 2. Exemptions. Subdivision 1 does not apply to gasoline, denatured ethanol,
special fuel, or alternative fuel purchased by an entity described in section 296A.07,
subdivision 4, or 296A.08, subdivision 3.
    Subd. 3. Conversion of tax rate. Annually on or before August 1, the commissioner
shall determine the applicable gross receipts motor fuels tax rate per gallon, which shall be
the greater of either: ten cents per gallon; or five percent of the annual Minnesota total (all
grades) wholesale gasoline price by refiners for the previous fiscal year, as published by
the United States Energy Information Administration, and rounded to the nearest tenth of
a cent per gallon. The announced rate is effective for a 12-month period from the next
October 1 to September 30. The commissioner shall publish on the department's Web site
the total of the gross receipts tax and the excise tax.
    Subd. 4. Administrative provisions. Except as otherwise provided in this chapter,
the relevant audit, assessment, refund, penalty, interest, enforcement, collection remedies,
appeal, and administrative provisions of chapter 289A apply to taxes imposed under
this section.
    Subd. 5. Deposit of revenues. The commissioner shall deposit the revenues from
the gross receipts tax into the highway user tax distribution fund.
EFFECTIVE DATE.This section is effective October 1, 2014, and applies to
gross receipts attributable to the described products and derived by a distribution on
and after that day.

    Sec. 5. Minnesota Statutes 2012, section 296A.11, is amended to read:
296A.11 SELLER MAY COLLECT TAX.
A person who directly or indirectly pays a gasoline or special fuel tax or motor fuels
gross receipts tax as provided in this chapter and who does not in fact use the gasoline or
special fuel in motor vehicles in this state or receive, store, or withdraw it from storage
to be used personally for the purpose of producing or generating power for propelling
aircraft, but sells or otherwise disposes of the same, except as provided in section 296A.16,
subdivision 3 , is hereby authorized to collect, from the person to whom the gasoline or
special fuel is so sold or disposed of, the tax so paid, and is hereby required, upon request,
to make, sign, and deliver to such person an invoice of such sale or disposition. The sums
collected must be held as a special fund in trust for the state of Minnesota.

    Sec. 6. Minnesota Statutes 2012, section 296A.12, is amended to read:
296A.12 GASOLINE AND SPECIAL FUEL TAX AND MOTOR FUELS
GROSS RECEIPTS TAX IN LIEU OF OTHER TAXES.
Gasoline and special fuel excise taxes and motor fuels gross receipts tax shall be
in lieu of all other taxes imposed upon the business of selling or dealing in gasoline or
special fuel, whether imposed by the state or by any of its political subdivisions, but are in
addition to all ad valorem taxes now imposed by law. Nothing in this chapter is construed
as prohibiting the governing body of any city of this state from licensing and regulating
such a business where its authority is conferred by state law or city charter.

    Sec. 7. Minnesota Statutes 2012, section 296A.16, is amended to read:
296A.16 REFUND OR CREDIT.
    Subdivision 1. Credit or refund of gasoline or special fuel tax paid. The
commissioner shall allow the distributor credit or refund of the tax paid on gasoline and
special fuel and of the motor fuels gross receipts tax attributed to fuel:
(1) exported or sold for export from the state, other than in the supply tank of a
motor vehicle or of an aircraft;
(2) sold to the United States government to be used exclusively in performing its
governmental functions and activities or to any "cost plus a fixed fee" contractor employed
by the United States government on any national defense project;
(3) if the fuel is placed in a tank used exclusively for residential heating;
(4) destroyed by accident while in the possession of the distributor;
(5) in error;
(6) in the case of gasoline only, sold for storage in an on-farm bulk storage tank, if
the tax was not collected on the sale; and
(7) in such other cases as the commissioner may permit, consistent with the provisions
of this chapter and other laws relating to the gasoline and special fuel excise taxes.
    Subd. 2. Fuel used in other vehicle; claim for refund. Any person who buys and
uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose
other than use in licensed motor vehicles, and who paid the excise or gross receipts tax
directly or indirectly through the amount of the tax being included in the price of the
gasoline or special fuel, or otherwise, shall be reimbursed and repaid the amount of the
tax paid upon filing with the commissioner a claim for refund in the form and manner
prescribed by the commissioner, and containing the information the commissioner shall
require. By signing any such claim which is false or fraudulent, the applicant shall be
subject to the penalties provided in this chapter for knowingly making a false claim.
The claim shall set forth the total amount of the gasoline so purchased and used by the
applicant other than in motor vehicles, or special fuel purchased and used by the applicant
other than in licensed motor vehicles, and shall state when and for what purpose it was
used. When a claim contains an error in computation or preparation, the commissioner
is authorized to adjust the claim in accordance with the evidence shown on the claim or
other information available to the commissioner. The commissioner, on being satisfied
that the claimant is entitled to the payments, shall approve the claim and transmit it to the
commissioner of management and budget. The words "gasoline" or "special fuel" as used
in this subdivision do not include aviation gasoline or special fuel for aircraft. Gasoline or
special fuel bought and used for a "qualifying purpose" means:
    (1) Gasoline or special fuel used in carrying on a trade or business, used on a farm
situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose"
have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue
Code as defined in section 289A.02, subdivision 7.
    (2) Gasoline or special fuel used for off-highway business use.
    (i) "Off-highway business use" means any use off the public highway by a person in
that person's trade, business, or activity for the production of income.
    (ii) Off-highway business use includes use of a passenger snowmobile off the public
highways as part of the operations of a resort as defined in section 157.15, subdivision 11;
and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not
including fuel consumed during idling time.
    (iii) Off-highway business use does not include use as a fuel in a motor vehicle
which, at the time of use, is registered or is required to be registered for highway use under
the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu
of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in
this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the
fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.
    (3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles,
manufactured in Minnesota, and shipped by interstate carrier to destinations in other
states or foreign countries.
    Subd. 3. Destruction by accident; refund to dealer. Notwithstanding the
provisions of subdivision 1, the commissioner shall allow a dealer a refund of:
(1) the tax paid by the distributor on, or gross receipts from the sale of, gasoline,
undyed diesel fuel, or undyed kerosene destroyed by accident while in the possession of
the dealer; or
(2) the tax paid by a distributor or special fuels dealer on, or gross receipts from the
sale of, other special fuels destroyed by accident while in the possession of the dealer.
    Subd. 4. Refrigerator units; refunds. Notwithstanding the provisions of
subdivision 1, the commissioner shall allow a special fuel dealer a refund of the tax paid
on, or gross receipts from the sale of, fuel sold directly into a supply tank of a refrigeration
unit with a separate engine and used exclusively by that refrigeration unit. A claim for
refund may be filed as provided in this section.
    Subd. 4a. Undyed kerosene; refunds. Notwithstanding subdivision 1, the
commissioner shall allow a refund of the tax paid on, or gross receipts from the sale of,
undyed kerosene used exclusively for a purpose other than as fuel for a motor vehicle
using the streets and highways. To obtain a refund, the person making the sale to an end
user must meet the Internal Revenue Service requirements for sales from a blocked pump.
A claim for a refund may be filed as provided in this section.
    Subd. 4b. Racing gasoline; refunds. Notwithstanding subdivision 1, the
commissioner shall allow a licensed distributor a refund of the tax paid on, or gross
receipts from the sale of, leaded gasoline of 110 octane or more that does not meet ASTM
specification D4814 for gasoline and that is sold in bulk for use in nonregistered motor
vehicles. A claim for a refund may be filed as provided for in this section.
    Subd. 5. Qualifying service station credit. Notwithstanding any other provision of
law to the contrary, the tax imposed on gasoline, undyed diesel fuel, or undyed kerosene,
together with the amount attributable to gross receipts tax on these fuels, delivered to a
qualified service station may not exceed, or must be reduced to, a rate not more than
three cents per gallon above the state tax rate imposed on such products sold by a service
station in a contiguous state located within the distance indicated in this subdivision. A
distributor shall be allowed a credit or refund for the amount of reduction computed in
accordance with this subdivision. For purposes of this subdivision, a "qualifying service
station" means a service station located within 7.5 miles, measured by the shortest route
by public road, from a service station selling like product in the contiguous state.
    Subd. 7. Civil penalty for filing false claim. A person who violates section
296A.23, subdivision 1 , shall forfeit the full amount of the claim. In addition, a person who
is convicted under section 296A.23 for filing a false statement or claim shall, in addition
to any criminal penalties imposed, be prohibited from filing with the commissioner any
claim for refund upon gasoline purchased within six months after such conviction.
    Subd. 8. Appropriation. There is appropriated to the persons entitled to refund or
credit under this section, from the fund or account in the state treasury to which the money
was credited, an amount sufficient to make the credit or refund.

    Sec. 8. REVISOR'S INSTRUCTION.
In Minnesota Statutes, the revisor of statutes shall rename Minnesota Statutes,
chapter 296A, to be "Tax on Petroleum and Other Fuels and Gross Receipts Tax."

ARTICLE 3

METROPOLITAN AREA SALES TAX FOR TRANSIT

    Section 1. Minnesota Statutes 2012, section 297A.992, is amended to read:
297A.992 METROPOLITAN TRANSPORTATION AREA TRANSIT SALES
TAX; JOINT POWERS BOARD.
    Subdivision 1. Definitions. For purposes of this section, the following terms have
the meanings given them:
    (1) "baseline sales tax proceeds" means (i) the proceeds from the sales and use taxes
imposed under subdivision 2, plus (ii) one quarter of one percent of the total proceeds
from the sales and use taxes imposed under subdivision 2a and collected in Scott or
Carver County;
    (2) "metropolitan transportation area" means the counties participating in the joint
powers agreement under subdivision 3;
    (2) "eligible county" means the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or and Washington;
    (3) "committee" means the Grant Evaluation and Ranking System (GEARS)
Committee;
    (4) "minimum guarantee county" means any metropolitan county or eligible county
that is participating in the joint powers agreement under subdivision 3, whose proportion
of the annual sales tax revenue under this section collected within that county is less
than or equal to three percent; and
    (4) "net transit sales tax proceeds" means the total proceeds from the sales and use
taxes imposed under this section, less (i) the baseline sales tax proceeds, and (ii) the
deductions identified under subdivision 8; and
    (5) "population" means the population, as defined in section 477A.011, subdivision
3 , estimated or established by July 15 of the year prior to the calendar year in which
the representatives will serve on the Grant Evaluation and Ranking System Committee
established under subdivision 5.
    Subd. 2. Authorization; rates. (a) Notwithstanding section 297A.99, subdivisions
1, 2, and 3, or 477A.016, or any other law, the board of a county participating in a
joint powers agreement as specified in this section shall impose by resolution (1) a
transportation transit sales and use tax at a rate of one-quarter of one percent on retail
sales and uses taxable under this chapter, and (2) an excise tax of $20 per motor vehicle,
as defined in section 297B.01, subdivision 11, purchased or acquired from any person
engaged in the business of selling motor vehicles at retail, occurring within the jurisdiction
of the taxing authority. The taxes authorized are to fund transportation improvements as
specified in this section, including debt service on obligations issued to finance such
improvements pursuant to subdivision 7.
    (b) The tax imposed under this section is not included in determining if the total tax
on lodging in the city of Minneapolis exceeds the maximum allowed tax under Laws 1986,
chapter 396, section 5, as amended by Laws 2001, First Special Session chapter 5, article
12, section 87, or in determining a tax that may be imposed under any other limitations.
    Subd. 2a. Additional tax; rates. (a) A local sales tax is imposed in the metropolitan
counties, as defined in section 473.121, subdivision 4. In order to maintain the same rate
across the region, the tax is imposed in each county as follows:
    (1) effective for sales and purchases made after June 30, 2014, a sales and use tax on
retail sales and uses taxable under this chapter, at a rate equal to one percent minus the
tax rate imposed by each county under subdivision 2; and
    (2) effective for vehicles acquired after June 30, 2014, if not imposed by a county
under subdivision 2, an excise tax of $20 per motor vehicle, as defined in section 297B.01,
subdivision 11, purchased or acquired from any person engaged in the business of selling
motor vehicles at retail, occurring within the jurisdiction of the county.
    (b) The taxes imposed under this subdivision are not included in determining if the
total tax on lodging in the city of Minneapolis exceeds the maximum allowed tax under
Laws 1986, chapter 396, section 5, as amended by Laws 2001, First Special Session
chapter 5, article 12, section 87, and Laws 2012, chapter 299, article 3, section 3, or in
determining a tax that may be imposed under any other limitations.
    Subd. 3. Joint powers agreement. (a) Before imposing the taxes authorized in
subdivision 2, an eligible a county must declare by resolution of its county board to be part
of the metropolitan transportation area and must enter into a joint powers agreement. The
joint powers agreement:
    (1) must form a joint powers board, as specified in subdivision 4;
    (2) must provide a process that allows any eligible a county in the metropolitan
area, by resolution of its county board, to join the joint powers board and impose the
taxes authorized in subdivision 2;
    (3) may provide for withdrawal of a participating county before final termination of
the agreement; and
    (4) may provide for a weighted voting system for joint powers board decisions.
    (b) All counties in the metropolitan area shall enter into an amended joint powers
agreement that conforms to the provisions of this section.
    Subd. 4. Joint powers board. (a) The joint powers board must consist of one
or more commissioners of each county that is in the metropolitan transportation area,
appointed by its county board, and the chair of the Metropolitan Council, who must have
voting rights, subject to subdivision 3, clause (4). The joint powers board has the powers
and duties provided in this section and section 471.59.
    (b) The joint powers board may utilize (1) no more than three-fourths of one
percent of the baseline transit sales tax proceeds of the taxes imposed under this section
for ordinary administrative expenses incurred in carrying out the provisions of this
section, and (2) an amount as provided in subdivision 5a, paragraph (f). Any additional
administrative expenses must be paid by the participating counties.
    (c) The joint powers board may establish a technical advisory group that is separate
from the GEARS Committee. The group must consist of representatives of cities, counties,
or public agencies, including the Metropolitan Council. The technical advisory group
must be used solely for technical consultation purposes.
    (d) The chair of the joint powers board must be a county commissioner who is
elected by the board.
    Subd. 5. Grant application and awards; Grant Evaluation and Ranking System
(GEARS) Committee process, general requirements. (a) The joint powers board shall
establish a grant application process and identify the amount of available funding for grant
awards. Grant applications must be submitted in a form prescribed by the joint powers
board. An applicant must provide, in addition to all other information required by the joint
powers board, the estimated cost of the project, the amount of the grant sought, possible
sources of funding in addition to the grant sought, and identification of any federal funds
that will be utilized if the grant is awarded. A grant application seeking transit capital
funding must identify the source of money necessary to operate the transit improvement.
    (b) The joint powers board shall establish a timeline and procedures for the award of
grants, and may award grants only to the state and political subdivisions. The board shall
define objective criteria for the award of grants, which must include, but not be limited to,
consistency with the most recent version of the transportation policy plan adopted by the
Metropolitan Council under section 473.146. The joint powers board shall maximize the
availability and use of federal funds in projects funded under this section.
    (c) Grants must be funded by the proceeds of the taxes imposed under this section, or
by bonds, notes, or other obligations issued by the joint powers board under subdivision 7.
    Subd. 5a. Grant awards; Grant Evaluation and Ranking System (GEARS)
Committee. (a) The joint powers board shall establish a GEARS Committee, which
must consist of:
    (1) one county commissioner from each county that is in the metropolitan
transportation area, appointed by its county board;
    (2) one elected city representative from each county that is in the metropolitan
transportation area;
    (3) one additional elected city representative from each county for every additional
400,000 in population, or fraction of 400,000, in the county that is above 400,000 in
population; and
    (4) the chair of the Metropolitan Council Transportation Committee.
    (d) (b) Each city representative must be elected at a meeting of cities in the
metropolitan transportation area, which must be convened for that purpose by the
Association of Metropolitan Municipalities.
    (e) (c) The committee shall:
     (1) evaluate grant applications following objective criteria established by the joint
powers board, and must;
    (2) provide to the joint powers board a selection list of transportation projects that
includes a priority ranking;
    (3) annually evaluate and award grants to local units of government, including
park districts for construction and maintenance of regional bicycle, trail, and pedestrian
infrastructure, and for safe routes to school infrastructure; and
    (4) annually evaluate and award grants to cities for planning activities related to
land use and transportation linkages, streetcar development, or bicycle and pedestrian
connections.
    (d) Grants awarded by the committee under paragraph (c), clauses (3) and (4), are
not subject to approval by the board. Annually, the committee shall award grants under
those clauses in a total amount that equals no less than ten percent of the net transit sales
tax proceeds.
    (e) The committee may award a grant under paragraph (c), clause (3), only if the
project being funded is in compliance with:
    (1) a regional nonmotorized transportation system plan developed by the
Metropolitan Council; or
    (2) a municipal nonmotorized transportation plan, which must provide coordinated
development of transportation facilities located in adjacent communities, including
connections between facilities in each community.
    (f) The board may utilize no more than an amount equal to three-fourths of one
percent of the total grant awards under paragraph (c) for ordinary administrative expenses
incurred in carrying out the provisions of this subdivision.
    Subd. 5b. Grant awards; consistency with transportation plans. (f) A grant
award for a transit project located within the metropolitan area, as defined in section
473.121, subdivision 2 , may be funded only after the Metropolitan Council reviews the
project for consistency with the transit portion of the Metropolitan Council policy plan
and one of the following occurs:
    (1) the Metropolitan Council finds the project to be consistent;
    (2) the Metropolitan Council initially finds the project to be inconsistent, but after a
good faith effort to resolve the inconsistency through negotiations with the joint powers
board, agrees that the grant award may be funded; or
    (3) the Metropolitan Council finds the project to be inconsistent, and submits the
consistency issue for final determination to a panel, which determines the project to be
consistent. The panel is composed of a member appointed by the chair of the Metropolitan
Council, a member appointed by the joint powers board, and a member agreed upon by
both the chair and the joint powers board.
    (g) Grants must be funded by the proceeds of the taxes imposed under this section,
bonds, notes, or other obligations issued by the joint powers board under subdivision 7.
    (h) Notwithstanding the provisions of this section except subdivision 6a, of
the revenue collected under this section, the joint powers board shall allocate to the
Metropolitan Council, in fiscal years 2012 and 2013, an amount not less than 75 percent of
the net cost of operations for those transitways that were receiving metropolitan sales tax
funds through an operating grant agreement on June 30, 2011.
    (i) The Metropolitan Council shall expend any funds allocated under paragraph (h)
for the operations of the specified transitways solely within those counties that are in the
metropolitan transportation area.
    (j) Nothing in paragraph (h) or (i) prevents grant awards to the Metropolitan Council
for capital and operating assistance for transitways and park-and-ride facilities.
    Subd. 6. Allocation of Grant awards; eligible uses. (a) The board must allocate
grant awards only for the following transit purposes transitway development, consisting of:
    (i) capital improvements to transitways, including, but not limited to, commuter rail
rolling stock, light rail vehicles, and transitway buses;
    (ii) capital costs for park-and-ride facilities, as defined in section 174.256,
subdivision 2; and
    (iii) feasibility studies, planning, alternatives analyses, environmental studies,
engineering, property acquisition for transitway purposes, and construction of transitways;
and.
    (iv) operating assistance for transitways.
    (b) The joint powers board must annually award grants to each minimum guarantee
county in an amount no less than the amount of sales tax revenue collected within that
county as follows:
    (1) to Scott County and Carver County, 55 percent of the net sales tax proceeds
generated by one-quarter of one percent collected in each county respectively for calendar
years 2015 to 2019;
    (2) to the Metropolitan Council for development and construction of the Southwest
light rail transit project and the Bottineau Boulevard, Cedar Avenue, Riverview, Robert
Street, Red Rock, Gateway, I-35W South, I-394 Commuter Corridor, and Rush Line
transitways; and
    (3) to the counties for transit and transportation purposes in an amount that equals no
less than one-sixth of the net transit sales tax proceeds, to be distributed to each county
proportionally based on the sales and use tax proceeds under this section generated in
that county divided by the total sales and use taxes generated in the metropolitan area.
Hennepin County shall use its entire grant award under this section for transit purposes.
    (c) No more than 1.25 percent of the total awards may be annually allocated for
planning, studies, design, construction, maintenance, and operation of pedestrian programs
and bicycle programs and pathways.
    Subd. 6a. Priority of fund uses. The joint powers board shall allocate all revenues
from the taxes imposed under this section in conformance with the following priority order:
    (1) payment of debt service necessary for the fiscal year on bonds or other
obligations issued prior to January 1, 2011, under subdivision 7; and
    (2) as otherwise authorized under this section.
    Subd. 7. Bonds. (a) The joint powers board or any county, acting under a joint
powers agreement as specified in this section, may, by resolution, authorize, issue, and sell
its bonds, notes, or other obligations for the purpose of funding grants under subdivision
6. The joint powers board or county may also, by resolution, issue bonds to refund the
bonds issued pursuant to this subdivision.
    (b) The bonds of the joint powers board must be limited obligations, payable solely
from or secured by taxes levied under this section.
    (c) The bonds of any county may be limited obligations, payable solely from or
secured by taxes levied under this section. A county may also pledge its full faith, credit,
and taxing power as additional security for the bonds.
    (d) Bonds may be issued in one or more series and sold without an election. The bonds
shall be secured, bear the interest rate or rates or a variable rate, have the rank or priority,
be executed in the manner, be payable in the manner, mature, and be subject to the defaults,
redemptions, repurchases, tender options, or other terms, and shall be sold in such manner
as the joint powers board, the regional railroad authority, or the county may determine.
    (e) The joint powers board or any regional railroad authority or any county may
enter into and perform all contracts deemed necessary or desirable by it to issue and secure
the bonds, including an indenture of trust with a trustee within or without the state.
    (f) Except as otherwise provided in this subdivision, the bonds must be issued and
sold in the manner provided under chapter 475.
    (g) The joint powers board or any regional railroad authority wholly within the
metropolitan transportation area also may authorize, issue, and sell its bonds, notes, or
other obligations for the purposes, and in accordance with the procedures, set forth in
section 398A.07 to fund grants as provided in subdivision 6. The bonds of any regional
railroad authority may be limited obligations, payable solely from or secured by taxes
levied under this section. A regional railroad authority may also pledge its taxing powers
as additional security for the bonds.
    Subd. 8. Allocation Remittance of revenues. After the deductions allowed in
section 297A.99, subdivision 11, the commissioner of revenue shall remit the proceeds of
the taxes imposed under this section: (1) the baseline sales tax proceeds, on a monthly basis,
as directed by the joint powers board under this section; and (2) the remaining proceeds of
the sales and use taxes imposed under this section, as provided under section 297A.9925.
    Subd. 9. Administration, collection, enforcement. Except as otherwise provided
in this section, the provisions of section 297A.99, subdivisions 4 and 6 to 12a, govern the
administration, collection, and enforcement of the tax authorized under this section.
    Subd. 10. Termination of local option taxes. (a) The taxes imposed under section
297A.99, subdivision 1, subdivision 2 by a county that withdraws from the joint powers
agreement pursuant to subdivision 3, clause (3), shall terminate when the county has
satisfied its portion, as defined in the joint powers agreement, of all outstanding bonds or
obligations entered into while the county was a member of the agreement.
    (b) If the joint powers agreement under subdivision 3 is terminated, the taxes
imposed under section 297A.99, subdivision 1, subdivision 2 at the time of the agreement
termination will terminate when all outstanding bonds or obligations are satisfied. The
auditors of the counties in which the taxes are imposed shall see to the administration of
this paragraph.
    Subd. 11. Report. The joint powers board shall report annually by February 1 to the
house of representatives and senate chairs and ranking minority members of the legislative
committees having jurisdiction over transportation policy and finance concerning the:
    (1) board activities and actions;
    (2) bonds authorized or issued under subdivision 7;
    (3) revenues received; and
    (4) grants awarded.
    Subd. 12. Grant awards to Metropolitan Council. Any grant award under this
section made to the Metropolitan Council must supplement, and must not supplant,
operating and capital assistance provided by the state.
EFFECTIVE DATE.This section is effective July 1, 2014, for sales and purchases
made after June 30, 2014, except that the imposition of the tax under subdivision 2a is
effective on the first day of the calendar quarter beginning at least 60 days after the date of
final enactment. This section applies in the counties of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, and Washington.

    Sec. 2. [297A.9925] METROPOLITAN AREA TRANSIT SALES TAX;
ALLOCATION OF JOINT CERTIFICATION FUNDS.
    Subdivision 1. Definitions. For purposes of this section, the following terms have
the meanings given them:
    (1) "board" means the joint powers board established under section 297A.992; and
    (2) "net transit sales tax proceeds" has the meaning given in section 297A.992,
subdivision 1.
    Subd. 2. Allocation purposes. In the manner specified under subdivision 6, the
net transit sales tax proceeds must be allocated under subdivision 3 by the board and the
Metropolitan Council for all of the following purposes:
    (1) payment of debt service on bonds or other obligations, except for debt service on
bonds or other obligations issued under section 297A.992, subdivision 7;
    (2) Metropolitan Council transit operations;
    (3) 100 percent of the net operating subsidies for transitways and arterial bus rapid
transit;
    (4) development and construction of transitways;
    (5) grants awarded by the GEARS committee under section 297A.992, subdivision
5a;
(6) grants awarded by the board under section 297A.992, subdivision 6, paragraph
(b), clause (3);
    (7) expansion and operation of regular route and commuter bus service provided
by metro transit and suburban transit providers with expansion of service by an annual
average rate of four percent;
    (8) $500,000 annually for a grant to the Center for Transportation Studies at the
University of Minnesota; and
    (9) following allocations under clauses (1) to (8), as otherwise specified in the joint
certification under subdivision 3.
    Subd. 3. Joint certification. (a) The board and the Metropolitan Council shall
annually develop a joint certification as provided in this subdivision. The joint certification
must include, at a minimum, allocations for the purposes stated in subdivision 2 and must
be separately adopted by the board and by the council no later than August 31 of each year.
    (b) By July 1, 2014, and by March 15 of each subsequent year, the commissioner
of management and budget shall provide to the board and council an estimate of the net
transit sales tax proceeds for the subsequent calendar year.
    (c) If, on October 1 of any year, the board and the Metropolitan Council have not
reached agreement as to the contents of the joint certification, they shall submit the issue
to a panel for dispute resolution. The panel must be composed of a member appointed by
the chair of the Metropolitan Council, a member appointed by the board, and a member
agreed upon by both the chair and the board. The panel shall mediate discussion of areas
of disagreement and shall issue advisory recommendations.
    (d) If the commissioner does not receive a joint certification by December 1, the
commissioner may not remit the net transit sales tax proceeds except as provided by a
legislatively enacted appropriation.
    (e) The joint certification must specify the use of sales tax proceeds and account for
deposit of the remainder after allocations.
    (f) A joint certification may not exceed the estimated net transit sales tax proceeds.
    (g) By December 15 annually, the board shall electronically submit a copy of any
joint certification to the chairs and ranking minority members of the legislative committees
with jurisdiction over transportation policy and finance.
    Subd. 4. Uses and priorities; Metropolitan Council. The Metropolitan Council
shall use funds remitted to the council under this section in the following priority order:
    (1) continuation of bus and rail transit operations, including but not limited to
operations of providers under section 473.388, and operations and maintenance of all
transitways under revenue operations; and
    (2) transit expansion in accordance with the transit portion of the council's policy
transit plan, including but not limited to expansion and upgrades of bus service and related
amenities, including transit provided under section 473.388; development of arterial bus
rapid transit, transitways, and streetcars as appropriate; and maintenance of affordable
transit fares.
    Subd. 5. Uses and priorities; joint powers board. The board shall use all funds
remitted to the board under this section as provided in section 297A.992.
    Subd. 6. Remittance schedule. The commissioner of revenue shall remit the net
transit sales tax proceeds on a monthly basis to a fiscal agent selected by the board and
council. The fiscal agent shall maintain three separate accounts: a council account, a
board account, and an escrow account. Proceeds shall be deposited first into the board and
council accounts based on the amounts determined pursuant to subdivision 3, then into
the escrow account. The rate of deposit for all or any portion of the proceeds into any
account may be modified by mutual agreement of the parties to reflect bond covenants
or cash flow needs. Proceeds deposited into the board and council accounts shall be
transferred to the board and council, respectively, within five business days of receipt.
Unless otherwise directed herein, money held in the escrow account is subject to the joint
certification process under subdivision 3.
EFFECTIVE DATE.This section is effective July 1, 2014, and applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.

ARTICLE 4

OTHER TAXES

    Section 1. Minnesota Statutes 2012, section 162.07, subdivision 1a, is amended to read:
    Subd. 1a. Apportionment sum and excess sum. (a) For purposes of this
subdivision, "distribution amount" means the amount identified in section 162.06,
subdivision 1, after the deductions provided for in section 162.06 for administrative costs,
disaster account, research account, and state park road account.
    (b) The apportionment sum is calculated by subtracting the excess sum, as calculated
in paragraph (c), from as 68 percent of the distribution amount.
    (c) The excess sum is calculated as the sum of revenue within 32 percent of the
distribution amount:.
    (1) attributed to that portion of the gasoline excise tax rate under section 296A.07,
subdivision 3, in excess of 20 cents per gallon, and to that portion of the excise tax rates
in excess of the energy equivalent of a gasoline excise tax rate of 20 cents per gallon
for E85 and M85 under section 296A.07, subdivision 3, and special fuel under section
296A.08, subdivision 2;
    (2) attributed to a change in the passenger vehicle registration tax under section
168.013, imposed on or after July 1, 2008, that exceeds (i) the amount collected in fiscal
year 2008, multiplied by (ii) the annual average United States Consumer Price Index for
the calendar year previous to the current calendar year, divided by the annual average
United States Consumer Price Index for calendar year 2007; and
    (3) attributed to that portion of the motor vehicle sales tax revenue in excess of the
percentage allocated to the county state-aid highway fund in fiscal year 2007.
    (d) For purposes of this subdivision, the United States Consumer Price Index
identified in paragraph (c) is for all urban consumers, United States city average, as
determined by the United States Department of Labor.
EFFECTIVE DATE.This section is effective October 1, 2014.

    Sec. 2. Minnesota Statutes 2013 Supplement, section 297A.815, subdivision 3, is
amended to read:
    Subd. 3. Motor vehicle lease sales tax revenue. (a) For purposes of this
subdivision, "net revenue" means an amount equal to:
    (1) the revenues, including interest and penalties, collected under this section, during
the fiscal year; less
    (2) in fiscal year 2011, $30,100,000; in fiscal year 2012, $31,100,000; and in fiscal
year 2013 and following fiscal years, $32,000,000.
    (b) On or before June 30 of each fiscal year, the commissioner of revenue shall
estimate the amount of the revenues and subtraction under paragraph (a) for the current
fiscal year, including interest and penalties, collected under this section during the fiscal
year.
    (c) (b) On or after July 1 of the subsequent fiscal year, the commissioner of
management and budget shall transfer the net revenue revenues as estimated in paragraph
(b) (a) from the general fund, as follows:
    (1) $9,000,000 annually until January 1, 2016, and 50 40 percent annually thereafter
to the county state-aid highway fund. Notwithstanding any other law to the contrary,
the commissioner of transportation shall allocate the funds transferred under this clause
to the counties in the metropolitan area, as defined in section 473.121, subdivision 4,
excluding the counties of Hennepin and Ramsey, so that each county shall receive of such
amount the percentage that its population, as defined in section 477A.011, subdivision 3,
estimated or established by July 15 of the year prior to the current calendar year, bears
to the total population of the counties receiving funds under this clause. For purposes of
this subdivision, in determining the population of Hennepin and Ramsey Counties, the
population base is adjusted to 50 percent of actual population; and
    (2) the remainder 60 percent to the greater Minnesota transit account.
EFFECTIVE DATE.This section is effective January 1, 2016.

ARTICLE 5

EFFICIENCY MEASURES

    Section 1. [161.225] LOANS FOR LAND ACQUISITION FOR HIGHWAY
PROJECTS.
    Subdivision 1. Account established. The state right-of-way acquisition loan
account is created in the trunk highway fund for the purposes specified in this section.
Money in the account is annually appropriated to the commissioner and does not lapse.
Interest from the investment of money in this account must be deposited in the state
right-of-way acquisition loan account.
    Subd. 2. Loans. (a) The commissioner may make loans to counties, towns, and
statutory and home rule charter cities for the purchase of property within the right-of-way
of a state trunk highway shown on an official map adopted pursuant to section 394.361 or
462.359, or for the purchase of property within the proposed right-of-way of a principal
or intermediate arterial highway. The loans shall be made from the fund established
pursuant to this subdivision for purchases approved by the commissioner. The loans
shall bear no interest.
(b) The commissioner shall make loans only:
(1) to accelerate the acquisition of primarily undeveloped property when there
is a reasonable probability that the property will increase in value before highway
construction, and to update an expired environmental impact statement on a project for
which the right-of-way is being purchased;
(2) to avert the imminent conversion or the granting of approvals which would allow
the conversion of property to uses which would jeopardize its availability for highway
construction;
(3) to advance planning and environmental activities on highest priority major
metropolitan river crossing projects under the transportation development guide chapter
policy plan; or
(4) to take advantage of open market opportunities when developed properties
become available for sale, provided all parties involved are agreeable to the sale and
funds are available.
(c) The commissioner shall not make loans for the purchase of property at a price
which exceeds the fair market value of the property or which includes the costs of
relocating or moving persons or property. The eminent domain process may be used to
settle differences of opinion as to fair market value, provided all parties agree to the process.
(d) A private property owner may elect to receive the purchase price either
in a lump sum or in not more than four annual installments without interest on the
deferred installments. If the purchase agreement provides for installment payments,
the commissioner shall make the loan in installments corresponding to those in the
purchase agreement. The recipient of an acquisition loan shall convey the property for the
construction of the highway at the same price which the recipient paid for the property. The
price may include the costs of preparing environmental documents that were required for
the acquisition and that were paid for with money that the recipient received from the loan
fund. Upon notification by the commissioner that the plan to construct the highway has been
abandoned or the anticipated location of the highway has changed, the recipient shall sell
the property at market value in accordance with the procedures required for the disposition
of the property. All rents and other money received because of the recipient's ownership
of the property and all proceeds from the conveyance or sale of the property shall be paid
to the commissioner. If a recipient is not permitted to include in the conveyance price the
cost of preparing environmental documents that were required for the acquisition, then the
recipient is not required to repay the commissioner an amount equal to 40 percent of the
money received from the loan fund and spent in preparing the environmental documents.
(e) For administration of the loan program, the commissioner may expend from the
fund each year an amount no greater than three percent of the amount of the proceeds for
that year.
    Subd. 3. Loans for acquisition and relocation. (a) The commissioner may
make loans to acquiring authorities within the metropolitan area to purchase homestead
property located in a proposed state trunk highway right-of-way or project, and to provide
relocation assistance. Acquiring authorities are authorized to accept the loans and to
acquire the property. Except as provided in this subdivision, the loans shall be made as
provided in subdivision 2. Loans shall be in the amount of the fair market value of the
homestead property plus relocation costs and less salvage value. Before construction of
the highway begins, the acquiring authority shall convey the property to the commissioner
at the same price it paid, plus relocation costs and less its salvage value. Acquisition and
assistance under this subdivision must conform to sections 117.50 to 117.56.
(b) The commissioner may make loans only when:
(1) the owner of affected homestead property requests acquisition and relocation
assistance from an acquiring authority;
(2) federal or state financial participation is not available;
(3) the owner is unable to sell the homestead property at its appraised market value
because the property is located in a proposed state trunk highway right-of-way or project as
indicated on an official map or plat adopted under section 160.085, 394.361, or 462.359; and
(4) the commissioner agrees to and approves the fair market value of the homestead
property, which approval shall not be unreasonably withheld.
(c) For purposes of this subdivision, the following terms have the meanings given
them.
(1) "Acquiring authority" means counties, towns, and statutory and home rule
charter cities.
(2) "Homestead property" means: (i) a single-family dwelling occupied by the
owner, and the surrounding land, not exceeding a total of ten acres; or (ii) a manufactured
home, as defined in section 327B.01, subdivision 13.
(3) "Salvage value" means the probable sale price of the dwelling and other property
that is severable from the land if offered for sale on the condition that it be removed from
the land at the buyer's expense, allowing a reasonable time to find a buyer with knowledge
of the possible uses of the property, including separate use of serviceable components and
scrap when there is no other reasonable prospect of sale.
EFFECTIVE DATE.This section is effective January 1, 2015.

    Sec. 2. [174.53] FEDERAL FUND FLEXIBILITY PROGRAM.
The commissioner shall establish a program to allow greater flexibility and
efficiency in the allocation of federal funds for state-aid transportation projects. The
commissioner shall:
(1) establish and administer selection criteria and a process under which a local unit
of government that would otherwise receive federal funds for a local transportation project
would be able to finance the project with state funds instead of federal funds;
(2) redirect the unused federal funds to transportation projects for which federal
funds could be utilized by the state more efficiently and productively;
(3) achieve a reasonable degree of equity among the department districts in
distributing funds under the program;
(4) ensure that the state's receipt of federal funds for transportation projects is not
jeopardized by the program; and
(5) exchange funds for 25 projects annually.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 3. Minnesota Statutes 2012, section 174.56, subdivision 1, is amended to read:
    Subdivision 1. Report required. (a) The commissioner of transportation shall
submit a report by December 15 of each year on (1) the status of major highway projects
completed during the previous two years or under construction or planned during the year
of the report and for the ensuing 15 years, and (2) trunk highway fund expenditures, and
(3) efficiency measures.
(b) For purposes of this section, a "major highway project" is a highway project that
has a total cost for all segments that the commissioner estimates at the time of the report
to be at least (1) $15,000,000 in the metropolitan highway construction district, or (2)
$5,000,000 in any nonmetropolitan highway construction district.

    Sec. 4. Minnesota Statutes 2012, section 174.56, is amended by adding a subdivision
to read:
    Subd. 2b. Report contents; efficiency measures. The commissioner shall include
in the report information on efficiencies implemented in the previous year with an
explanation of measures used to calculate efficiency-related savings. The calculation must
include the impact of the state right-of-way acquisition loan account in the trunk highway
fund, the use of the right-of-way acquisition loan fund in the seven-county metropolitan
area, and the allocation of federal funds for state-aid projects. The report must calculate
the value of the savings achieved and report on the planned uses of the dollars saved.

    Sec. 5. Minnesota Statutes 2012, section 473.167, is amended to read:
473.167 HIGHWAY AND TRANSIT PROJECTS.
    Subd. 2. Loans for acquisition. (a) The council may make loans to counties, towns,
and statutory and home rule charter cities within the metropolitan area for the purchase of
property within the right-of-way of a state trunk highway shown on an official map adopted
pursuant to section 394.361 or 462.359 or, for the purchase of property within the proposed
right-of-way of a principal or intermediate arterial highway designated by the council as a
part of the metropolitan highway system plan and approved by the council pursuant to
section 473.166, or for the purchase of property needed for proposed transit-related capital
improvements, including transitways designated in the council's most recent transportation
policy plan. The loans shall be made by the council, from the fund established pursuant to
this subdivision, for purchases approved by the council. The loans shall bear no interest.
(b) The council shall make loans only:
(1) to accelerate the acquisition of primarily undeveloped property when there
is a reasonable probability that the property will increase in value before highway or
transit-related construction, and to update an expired environmental impact statement on
a project for which the right-of-way is being purchased;
(2) to avert the imminent conversion or the granting of approvals which would allow
the conversion of property to uses which would jeopardize its availability for highway or
transit-related construction;
(3) to advance planning and environmental activities on highest priority major
metropolitan river crossing projects, under the transportation development guide
chapter/policy plan; or
(4) to take advantage of open market opportunities when developed properties
become available for sale, provided all parties involved are agreeable to the sale and
funds are available.
(c) The council shall not make loans for the purchase of property at a price which
exceeds the fair market value of the property or which includes the costs of relocating or
moving persons or property. The eminent domain process may be used to settle differences
of opinion as to fair market value, provided all parties agree to the process.
(d) A private property owner may elect to receive the purchase price either in a
lump sum or in not more than four annual installments without interest on the deferred
installments. If the purchase agreement provides for installment payments, the council
shall make the loan in installments corresponding to those in the purchase agreement. The
recipient of an acquisition loan shall convey the property for the construction of the highway
at the same price which the recipient paid for the property. The price may include the costs
of preparing environmental documents that were required for the acquisition and that were
paid for with money that the recipient received from the loan fund. Upon notification by
the council that the plan to construct the highway or transit project has been abandoned or
the anticipated location of the highway or transit project changed, the recipient shall sell
the property at market value in accordance with the procedures required for the disposition
of the property. All rents and other money received because of the recipient's ownership
of the property and all proceeds from the conveyance or sale of the property shall be paid
to the council. If a recipient is not permitted to include in the conveyance price the cost
of preparing environmental documents that were required for the acquisition, then the
recipient is not required to repay the council an amount equal to 40 percent of the money
received from the loan fund and spent in preparing the environmental documents.
(e) The proceeds of the tax authorized by subdivision 3, all money paid to the
council by recipients of loans, and all interest on the proceeds and payments shall be
maintained as a separate fund. For administration of the loan program, the council may
expend from the fund each year an amount no greater than three percent of the amount of
the proceeds for that year.
    Subd. 2a. Loans for acquisition and relocation. (a) The council may make loans
to acquiring authorities within the metropolitan area to purchase homestead property
located in a proposed state trunk highway right-of-way or project or transit-related project,
and to provide relocation assistance. Acquiring authorities are authorized to accept the
loans and to acquire the property. Except as provided in this subdivision, the loans shall
be made as provided in subdivision 2. Loans shall be in the amount of the fair market
value of the homestead property plus relocation costs and less salvage value. Before
construction of the highway or transit-related project begins, the acquiring authority shall
convey the property to the commissioner of transportation or council at the same price it
paid, plus relocation costs and less its salvage value. Acquisition and assistance under this
subdivision must conform to sections 117.50 to 117.56.
(b) The council may make loans only when:
(1) the owner of affected homestead property requests acquisition and relocation
assistance from an acquiring authority;
(2) federal or state financial participation is not available;
(3) the owner is unable to sell the homestead property at its appraised market
value because the property is located in a proposed state trunk highway right-of-way or
project as indicated on an official map or plat adopted under section 160.085, 394.361,
or 462.359, or transit-related project; and
(4) the council agrees to and approves the fair market value of the homestead
property, which approval shall not be unreasonably withheld.
(c) For purposes of this subdivision, the following terms have the meanings given
them.
(1) "Acquiring authority" means counties, towns, and statutory and home rule
charter cities in the metropolitan area.
(2) "Homestead property" means: (i) a single-family dwelling occupied by the
owner, and the surrounding land, not exceeding a total of ten acres; or (ii) a manufactured
home, as defined in section 327B.01, subdivision 13.
(3) "Salvage value" means the probable sale price of the dwelling and other property
that is severable from the land if offered for sale on the condition that it be removed from
the land at the buyer's expense, allowing a reasonable time to find a buyer with knowledge
of the possible uses of the property, including separate use of serviceable components and
scrap when there is no other reasonable prospect of sale.
    Subd. 3. Tax. The council may levy a tax on all taxable property in the metropolitan
area, as defined in section 473.121, to provide funds for loans made pursuant to
subdivisions 2 and 2a. This tax for the right-of-way acquisition loan fund shall be certified
by the council, levied, and collected in the manner provided by section 473.13. The tax
shall be in addition to that authorized by section 473.249 and any other law and shall not
affect the amount or rate of taxes which may be levied by the council or any metropolitan
agency or local governmental unit. The amount of the levy shall be as determined and
certified by the council, provided that the tax levied by the Metropolitan Council for the
right-of-way acquisition loan fund shall not exceed $2,828,379 for taxes payable in 2004
and $2,828,379 for taxes payable in 2005. The amount of the levy for taxes payable in
2006 and subsequent years shall not exceed the product of (1) the Metropolitan Council's
property tax levy limitation under this subdivision for the previous year, multiplied by
(2) one plus a percentage equal to the growth in the implicit price deflator as defined
in section 275.70, subdivision 2.
    Subd. 4. State review. The commissioner of revenue shall certify the council's levy
limitation under this section to the council by August 1 of the levy year. The council must
certify its proposed property tax levy to the commissioner of revenue by September 1 of
the levy year. The commissioner of revenue shall annually determine whether the property
tax for the right-of-way acquisition loan fund certified by the Metropolitan Council for
levy following the adoption of its proposed budget is within the levy limitation imposed
by this section. The determination must be completed prior to September 10 of each year.
If current information regarding market valuation in any county is not transmitted to the
commissioner in a timely manner, the commissioner may estimate the current market
valuation within that county for purposes of making the calculation.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 6. Minnesota Statutes 2012, section 473.3925, is amended to read:
473.3925 BUS AND VEHICLE PURCHASES.
(a) The Metropolitan Council, in preparing bid specifications for bus purchases, shall
ensure that the specifications conform, to the greatest extent practicable, with products
that are manufactured in this state.
(b) The Metropolitan Council shall set a goal for accelerating the purchase of hybrid
and alternative fuel vehicles that will provide a cost savings on fuel purchases of at least
five percent in calendar year 2015 and each calendar year thereafter.

    Sec. 7. LEGISLATIVE REPORT ON TRANSIT EFFICIENCIES.
The Metropolitan Council shall submit a report to the chairs and ranking minority
members of the legislative committees with jurisdiction over transportation policy and
finance describing efficiencies and revenue enhancements implemented and the resulting
savings. The report must include details concerning the application of savings to the
expansion of the metropolitan transit system.

    Sec. 8. APPROPRIATION.
$....... is appropriated from the trunk highway fund to the commissioner of
transportation for deposit in the state right-of-way acquisition loan account under
Minnesota Statutes, section 161.225.
EFFECTIVE DATE.This section is effective January 1, 2015.

ARTICLE 6

TRANSPORTATION POLICY

    Section 1. Minnesota Statutes 2013 Supplement, section 174.42, subdivision 2, is
amended to read:
    Subd. 2. Funding requirement. In each federal fiscal year, the commissioner
shall obtain a total amount in federal authorizations for reimbursement on transportation
alternatives projects that is equal to or greater than the annual average of federal
authorizations on transportation alternatives projects calculated over the preceding four
federal fiscal years 2009 to 2012.
EFFECTIVE DATE.This section is effective the day following final enactment and
applies to authorizations for federal fiscal year 2015 and subsequent federal fiscal years.

    Sec. 2. Minnesota Statutes 2013 Supplement, section 174.42, is amended by adding a
subdivision to read:
    Subd. 3. Funding requirement for greater Minnesota. (a) In each federal fiscal
year, the commissioner shall spend a total amount in federal transportation funds for
an active transportation competitive grant program in greater Minnesota that totals a
minimum of $16,000,000 in excess of the average annual spending on greater Minnesota
transportation alternatives projects in federal fiscal years between October 2009 and
September 2012. This requirement must not reduce the amount of federal transportation
funding for metropolitan projects.
(b) Grant funds will be made available to cities, counties, and townships for safe
routes to school infrastructure, bicycle and pedestrian elements of a main streets program,
and planning activities and construction and maintenance of bicycle, trail, and pedestrian
infrastructure. The commissioner shall establish criteria for the competitive grant program
and a transparent process for soliciting proposals and awarding grants.
EFFECTIVE DATE.This section is effective October 1, 2014.

    Sec. 3. [473.41] TRANSIT SHELTERS AND STOPS.
    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
have the meanings given.
(b) "Transit authority" means:
(1) a statutory or home rule charter city, with respect to rights-of-way at bus stop and
train stop locations, transit shelters, and transit passenger seating facilities owned by the
city or established pursuant to a vendor contract with the city;
(2) the Metropolitan Council, with respect to transit shelters and transit passenger
seating facilities owned by the council or established pursuant to a vendor contract with
the council; or
(3) a replacement service provider under section 473.388, with respect to
rights-of-way at bus stop and train stop locations, transit shelters, and transit passenger
seating facilities owned by the provider or established pursuant to a vendor contract
with the provider.
(c) "Transit shelter" means a wholly or partially enclosed structure provided for
public use as a waiting area in conjunction with light rail transit, bus rapid transit, or
regular route transit.
    Subd. 2. Design. (a) A transit authority shall establish design specifications for
establishment and replacement of its transit shelters, which must include:
(1) engineering standards, as appropriate;
(2) maximization of protection from the wind, snow, and other elements, including
but not limited to: (i) entrances that are equivalently sized to regular doorways; and (ii)
other than entrances, a fully enclosed facility;
(3) to the extent feasible, inclusion of warming capability at each shelter in which
there is a proportionally high number of transit service passenger boardings; and
(4) full accessibility for the elderly and persons with disabilities.
(b) The council shall consult with the Transportation Accessibility Advisory
Committee.
    Subd. 3. Maintenance. A transit authority shall ensure that bus stops and transit
shelters are maintained in good working order and are accessible to all users of the transit
system. This requirement includes but is not limited to:
(1) keeping transit shelters reasonably clean and free from graffiti; and
(2) removing snow and ice in a manner that provides accessibility for the elderly and
persons with disabilities to be able to enter and exit transit shelters, and board and exit
transit buses and trains at the regular boarding and exit points at each stop.
EFFECTIVE DATE.This section is effective the day following final enactment.

    Sec. 4. Minnesota Statutes 2012, section 473.915, is amended to read:
473.915 PROCUREMENTS.
    Subdivision 1. Review by Legislative Advisory Commission. All proposed
Metropolitan Council procurements over $125,000,000 must be reviewed by the
members of the Legislative Advisory Commission under section 3.30 and the ranking
minority members of the house of representatives and senate committees or divisions
responsible for overseeing the items subject to the proposed procurement. The chair
of the Metropolitan Council shall give notice to the Legislative Advisory Commission
secretary when a procurement over $125,000,000 is being considered. The commission
shall take testimony on the procurements.
    Subd. 2. Review by Transportation Accessibility Advisory Committee.
The council shall consult with the Transportation Accessibility Advisory Committee
concerning all proposed Metropolitan Council procurements of transit vehicles and shall
consider the committee's input before ordering vehicles.
EFFECTIVE DATE.This section is effective the day following final enactment
and applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and
Washington.