1.1                          A bill for an act 
  1.2             relating to transportation; providing for increase in 
  1.3             motor fuel taxes; establishing major highway project 
  1.4             account; authorizing bonding; exempting certain 
  1.5             contracts from moratorium on state contracts for 
  1.6             professional or technical services; appropriating 
  1.7             money; amending Minnesota Statutes 2000, sections 
  1.8             296A.07, by adding a subdivision; 296A.08, 
  1.9             subdivisions 2, 4, 6, by adding a subdivision; 
  1.10            Minnesota Statutes 2001 Supplement, sections 296A.07, 
  1.11            subdivision 4; 296A.08, subdivision 3; Laws 2002, 
  1.12            chapter 220, article 10, section 37; proposing coding 
  1.13            for new law in Minnesota Statutes, chapter 161. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  [161.042] [MAJOR PROJECT ACCOUNT.] 
  1.16     (a) A major project account is created in the trunk highway 
  1.17  fund, consisting of money credited to the account under section 
  1.18  10, and other money credited to the account by law.  Money in 
  1.19  the account is appropriated to the commissioner of 
  1.20  transportation for the construction, including acquisition of 
  1.21  real property therefor, of trunk highway projects that: 
  1.22     (1) have been identified by the commissioner as projects to 
  1.23  (i) remove a significant highway bottleneck within the 
  1.24  metropolitan area, (ii) improve a trunk highway in an at-risk 
  1.25  interregional corridor located primarily or entirely outside the 
  1.26  seven-county metropolitan area, (iii) provide a trunk 
  1.27  highway-related advantage to transit, or (iv) make highway 
  1.28  safety and capacity improvements including but not limited to 
  1.29  addition of lanes on trunk highway corridors with known safety 
  2.1   problems; and 
  2.2      (2) in the case of projects described in clause (1), items 
  2.3   (i), (ii), and (iii), have a construction cost, in the year that 
  2.4   construction is expected to begin, that exceeds 25 percent of 
  2.5   the estimated annual construction program of the department of 
  2.6   transportation division or construction district in which the 
  2.7   project is located. 
  2.8      (b) In fiscal year 2003, the commissioner shall spend money 
  2.9   from the account as follows: 
  2.10     (1) one-third must be spent for improvements to trunk 
  2.11  highways in at-risk interregional corridors located primarily or 
  2.12  entirely outside the seven-county metropolitan area; 
  2.13     (2) one-third must be spent for removal of significant 
  2.14  highway bottlenecks within the metropolitan area; and 
  2.15     (3) one-third must be spent for trunk highway safety and 
  2.16  capacity improvement projects including but not limited to the 
  2.17  addition of lanes on trunk highway corridors with known safety 
  2.18  problems.  In spending the amount under this clause, the 
  2.19  commissioner shall select from projects submitted by local units 
  2.20  of government.  All necessary additional right-of-way, 
  2.21  engineering costs, and local cost share for these projects are 
  2.22  the responsibility of local units of government. 
  2.23     (c) In fiscal year 2004 and subsequent years: 
  2.24     (1) 47.5 percent must be spent for trunk highways in 
  2.25  at-risk interregional corridors located primarily or entirely 
  2.26  outside the seven-county metropolitan area; 
  2.27     (2) 47.5 percent must be spent for removal of significant 
  2.28  highway bottlenecks within the metropolitan area; and 
  2.29     (3) five percent must be spent for trunk highway-related 
  2.30  advantages to transit. 
  2.31     (d) Notwithstanding any other provision of this section, 
  2.32  money made available to the commissioner under paragraph (b), 
  2.33  clause (3), in fiscal year 2003 may be spent in fiscal years 
  2.34  2003, 2004, and 2005. 
  2.35     Sec. 2.  Minnesota Statutes 2000, section 296A.07, is 
  2.36  amended by adding a subdivision to read: 
  3.1      Subd. 3a.  [ADDITIONAL TAX.] (a) A tax is imposed on 
  3.2   gasoline in addition to the taxes imposed under subdivision 3.  
  3.3      (b) On April 1 of each year, the commissioner of revenue 
  3.4   shall determine the amount of additional tax on gasoline needed 
  3.5   in the next fiscal year to provide an amount of revenue to the 
  3.6   major project account in the trunk highway fund that, when 
  3.7   combined with revenue from the additional tax on special fuel 
  3.8   under section 296A.08, subdivision 2a, will be equal to payments 
  3.9   to be made from the major project account in the trunk highway 
  3.10  fund for principal and interest on bonds issued under section 10 
  3.11  due in that fiscal year.  The additional tax determined under 
  3.12  this subdivision must be added to the taxes imposed under 
  3.13  subdivision 3.  The additional tax is effective on June 1 of 
  3.14  each year and applies to all gasoline in distributor storage on 
  3.15  that date. 
  3.16     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
  3.17  296A.07, subdivision 4, is amended to read: 
  3.18     Subd. 4.  [EXEMPTIONS.] The provisions of ~~subdivision~~ 
  3.19  subdivisions 1 and 3a do not apply to gasoline purchased by: 
  3.20     (1) a transit system or transit provider receiving 
  3.21  financial assistance or reimbursement under section 174.24, 
  3.22  256B.0625, subdivision 17, or 473.384; or 
  3.23     (2) an ambulance service licensed under chapter 144E. 
  3.24     Sec. 4.  Minnesota Statutes 2000, section 296A.08, 
  3.25  subdivision 2, is amended to read: 
  3.26     Subd. 2.  [RATE OF TAX.] The special fuel excise tax is 
  3.27  imposed at the following rates: 
  3.28     (1) Liquefied petroleum gas or propane is taxed at the rate 
  3.29  of 15 cents per gallon. 
  3.30     (2) Liquefied natural gas is taxed at the rate of 12 cents 
  3.31  per gallon. 
  3.32     (3) Compressed natural gas is taxed at the rate of $1.739 
  3.33  per thousand cubic feet; or 20 cents per gasoline equivalent, as 
  3.34  defined by the National Conference on Weights and Measures, 
  3.35  which is 5.66 pounds of natural gas. 
  3.36     (4) All other special fuel is taxed at the same rate as the 
  4.1   gasoline excise tax as specified in section 296A.07, ~~subdivision~~ 
  4.2   ~~2~~ subdivisions 3 and 3a.  The tax is payable in the form and 
  4.3   manner prescribed by the commissioner. 
  4.4      Sec. 5.  Minnesota Statutes 2000, section 296A.08, is 
  4.5   amended by adding a subdivision to read: 
  4.6      Subd. 2a.  [ADDITIONAL TAX.] (a) A tax is imposed on 
  4.7   special fuel in addition to the taxes imposed under subdivision 
  4.8   2. 
  4.9      (b) On April 1 of each year, the commissioner of revenue 
  4.10  shall determine the amount of additional tax on special fuel 
  4.11  needed in the next fiscal year to provide an amount of revenue 
  4.12  to the major project account in the trunk highway fund that, 
  4.13  when combined with revenue from the additional tax on gasoline 
  4.14  under section 296A.07, subdivision 3a, will be equal to payments 
  4.15  to be made from the major project account in the trunk highway 
  4.16  fund for principal and interest on bonds issued under section 10 
  4.17  due that fiscal year.  The additional tax determined under this 
  4.18  subdivision must be added to the taxes imposed under subdivision 
  4.19  2.  The additional tax is effective on June 1 of each year. 
  4.20     Sec. 6.  Minnesota Statutes 2001 Supplement, section 
  4.21  296A.08, subdivision 3, is amended to read: 
  4.22     Subd. 3.  [EXEMPTIONS.] The provisions of subdivisions 
  4.23  1 ~~and~~, 2, and 2a do not apply to special fuel or alternative 
  4.24  fuels purchased by: 
  4.25     (1) a transit system or transit provider receiving 
  4.26  financial assistance or reimbursement under section 174.24, 
  4.27  256B.0625, subdivision 17, or 473.384; or 
  4.28     (2) an ambulance service licensed under chapter 144E.  
  4.29     Sec. 7.  Minnesota Statutes 2000, section 296A.08, 
  4.30  subdivision 4, is amended to read: 
  4.31     Subd. 4.  [TAX IMPOSED ON USE.] If it is determined by the 
  4.32  commissioner from an examination of any records pertaining to 
  4.33  the operation of any licensed motor vehicle which uses special 
  4.34  fuel, that the special fuel tax on the special fuel used in this 
  4.35  state has not been paid to this state, or to any other state if 
  4.36  purchased in such other state, there is hereby imposed an excise 
  5.1   tax at the same rate per gallon as the gasoline tax, including 
  5.2   the additional tax under section 296A.07, subdivision 3a, on all 
  5.3   such special fuel.  All assessments of tax made under this 
  5.4   subdivision shall be paid by the user to the commissioner upon 
  5.5   demand.  For purposes of this subdivision, "special fuel" means 
  5.6   any fuel other than gasoline used in a licensed motor vehicle in 
  5.7   this state. 
  5.8      Sec. 8.  Minnesota Statutes 2000, section 296A.08, 
  5.9   subdivision 6, is amended to read: 
  5.10     Subd. 6.  [LIABILITY FOR FAILURE TO KEEP ADEQUATE RECORDS.] 
  5.11  If adequate records are not kept, or if the sales are not 
  5.12  adequately accounted for, then all sales of combustible gases 
  5.13  and liquid petroleum products, except gasoline, are deemed to be 
  5.14  sales of special fuel.  In such cases, there is imposed an 
  5.15  excise tax of the same rate per gallon as the gasoline excise 
  5.16  tax, including the additional tax under section 296A.07, 
  5.17  subdivision 3a, on all such products, and the vendor is liable 
  5.18  for the tax. 
  5.19     Sec. 9.  Laws 2002, chapter 220, article 10, section 37, is 
  5.20  amended to read: 
  5.21     Sec. 37.  [MORATORIUM ON CONSULTANT CONTRACTS.] 
  5.22     (a) An entity in the executive branch of state government, 
  5.23  including the Minnesota state colleges and universities, may not 
  5.24  enter into a new contract or renew an existing contract for 
  5.25  professional or technical services after the effective date of 
  5.26  this section and before July 1, 2003.  This section does not 
  5.27  apply to a contract: 
  5.28     (1) that relates to a threat to public health, welfare, or 
  5.29  safety that threatens the functioning of government, the 
  5.30  protection of property, or the health or safety of people; ~~or~~ 
  5.31     (2) that is paid for entirely with federal funds received 
  5.32  before the effective date of this section; or 
  5.33     (3) that is paid entirely with funds from the trunk highway 
  5.34  fund, county state-aid highway fund, or municipal state-aid 
  5.35  street fund.  
  5.36     (b) An entity in the executive branch may apply for a 
  6.1   waiver of the moratorium by sending a letter with reasons for 
  6.2   the request to the commissioner of administration for executive 
  6.3   branch entities.  Upon a finding that a consultant contract is 
  6.4   necessary, the commissioner may grant a waiver.  The decision of 
  6.5   the commissioner is final and not subject to appeal.  A monthly 
  6.6   report of all waivers granted must be filed by the entity 
  6.7   granting the waiver.  The report must be published on the 
  6.8   entity's Web site, and copies must be provided to the chairs of 
  6.9   the house ways and means and senate finance committees and to 
  6.10  the legislative reference library. 
  6.11     Sec. 10.  [BOND SALE AUTHORIZATION.] 
  6.12     The commissioner of finance shall sell and issue bonds of 
  6.13  the state in an amount up to $1,250,000,000 in the manner, upon 
  6.14  the terms, and with the effect prescribed by Minnesota Statutes, 
  6.15  sections 167.50 to 167.52, and by the Minnesota Constitution, 
  6.16  article XIV, section 11, at the times and in the amounts 
  6.17  requested by the commissioner of transportation.  The proceeds 
  6.18  of the bonds, except accrued interest and any premium received 
  6.19  on the sale of the bonds, must be credited to the major project 
  6.20  account in the trunk highway fund. 
  6.21     Sec. 11.  [ENCUMBRANCE LIMIT.] 
  6.22     Encumbrances by the commissioner of transportation of money 
  6.23  appropriated to the commissioner from the major projects account 
  6.24  in the trunk highway fund under section 1 may not exceed the 
  6.25  following limits: 
  6.26     (1) in fiscal year 2003, $150,000,000; 
  6.27     (2) in fiscal year 2004, $50,000,000; 
  6.28     (3) in fiscal year 2005, $150,000,000; 
  6.29     (4) in fiscal years 2006 and 2007, $200,000,000 each year; 
  6.30  and 
  6.31     (5) in fiscal years 2008 through 2012, $100,000,000 each 
  6.32  year. 
  6.33     Sec. 12.  [ADDITIONAL FUEL TAXES IN FISCAL YEAR 2003.] 
  6.34     The commissioner of finance shall, within 15 days of the 
  6.35  effective date of this section, determine the amount of 
  6.36  additional taxes on gasoline and special fuel needed in fiscal 
  7.1   year 2003 to equal payments to be made in that fiscal year from 
  7.2   the trunk highway fund for principal and interest on bonds 
  7.3   issued in that fiscal year under section 10.  The additional 
  7.4   taxes are effective on the first day of the second month after 
  7.5   the month in which the commissioner makes the determination.  
  7.6   All provisions of sections 2 and 5 relating to additional taxes 
  7.7   on gasoline and special fuel not inconsistent with this section 
  7.8   apply to the additional taxes imposed under this section. 
  7.9      Sec. 13.  [EFFECTIVE DATE.] 
  7.10     Sections 1 to 11 are effective July 1, 2002.  Section 12 is 
  7.11  effective the day following final enactment.