1.1 	A bill for an act
1.2 	relating to transportation; adjusting county state-aid highway fund distribution 
1.3 	formula; modifying registration taxes for passenger automobiles; increasing 
1.4 	motor fuel taxes; authorizing imposition of metropolitan transportation tax for 
1.5 	transit purposes; creating a surcharge on motor vehicle purchases; authorizing 
1.6 	issuance of state trunk highway bonds; appropriating money; amending 
1.7 	Minnesota Statutes 2004, sections 161.04, by adding a subdivision; 162.07, 
1.8 	subdivision 1, by adding subdivisions; 168.013, subdivision 1a; 296A.07, 
1.9 	subdivision 3; 296A.08, subdivision 2; 297B.02, by adding a subdivision; 
1.10 	297B.09, subdivision 1; proposing coding for new law in Minnesota Statutes, 
1.11 	chapter 297A.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	Section 1. Minnesota Statutes 2004, section 161.04, is amended by adding a 
1.14 	subdivision to read:
1.15 		Subd. 5.Trunk highway spending in metropolitan transportation area. (a) In 
1.16 	any year during which taxes authorized in section 297A.992 are imposed, and exclusive of 
1.17 	the expenditure of these revenues, the percentage of total trunk highway fund expenditures 
1.18 	attributable to projects in the metropolitan transportation area may not vary more than 
1.19 	two percentage points from the average of the previous five years of trunk highway fund 
1.20 	expenditures in the metropolitan transportation area.
1.21 	(b) For purposes of this subdivision, "metropolitan transportation area" has the 
1.22 	meaning given to it under section 297A.992, subdivision 1.

1.23 	Sec. 2. Minnesota Statutes 2004, section 162.07, subdivision 1, is amended to read:
1.24 		Subdivision 1.Formula. (a) After deducting for administrative costs and for the 
1.25 	disaster account and research account and state park roads as ~~heretofore~~ provided in 
1.26 	section 162.06, subdivisions 2 through 5, the remainder of the total sum provided for in 
2.1 	section  162.06, subdivision 1, ~~shall be~~ is identified as the apportionment sum and ~~shall be~~ 
2.2 	~~apportioned by the commissioner to the several counties on the basis of the needs of the~~ 
2.3 	~~counties as determined in accordance with the following formula:~~ the excess sum.
2.4 	~~(a) An amount equal to ten percent of the apportionment sum shall be apportioned~~ 
2.5 	~~equally among the 87 counties.~~
2.6 	~~(b) An amount equal to ten percent of the apportionment sum shall be apportioned~~ 
2.7 	~~among the several counties so that each county shall receive of such amount the~~ 
2.8 	~~percentage that its motor vehicle registration for the calendar year preceding the one last~~ 
2.9 	~~past, determined by residence of registrants, bears to the total statewide motor vehicle~~ 
2.10 	~~registration.~~
2.11 	~~(c) An amount equal to 30 percent of the apportionment sum shall be apportioned~~ 
2.12 	~~among the several counties so that each county shall receive of such amount the percentage~~ 
2.13 	~~that its total lane-miles of approved county state-aid highways bears to the total lane-miles~~ 
2.14 	~~of approved statewide county state-aid highways. In 1997 and subsequent years no county~~ 
2.15 	~~may receive, as a result of an apportionment under this clause based on lane-miles rather~~ 
2.16 	~~than miles of approved county state-aid highways, an apportionment that is less than its~~ 
2.17 	~~apportionment in 1996.~~
2.18 	~~(d) An amount equal to 50 percent of the apportionment sum shall be apportioned~~ 
2.19 	~~among the several counties so that each county shall receive of such amount the percentage~~ 
2.20 	~~that its money needs bears to the sum of the money needs of all of the individual counties;~~ 
2.21 	~~provided, that the percentage of such amount that each county is to receive shall be~~ 
2.22 	~~adjusted so that each county shall receive in 1958 a total apportionment at least ten~~ 
2.23 	~~percent greater than its total 1956 apportionments from the state road and bridge fund;~~ 
2.24 	~~and provided further that those counties whose money needs are thus adjusted shall~~ 
2.25 	~~never receive a percentage of the apportionment sum less than the percentage that such~~ 
2.26 	~~county received in 1958.~~
2.27 	For purposes of this section:
2.28 	(1) the "apportionment sum" is the total amount apportioned to the counties from the 
2.29 	county state-aid highway fund less revenue to that fund described in clause (2); and
2.30 	 (2)  the "excess sum" is the total amount apportioned to the counties from the county 
2.31 	state-aid highway fund from revenues attributable to increases in motor fuel tax rates 
2.32 	above the rates in effect on May 31, 2006.

2.33 	EFFECTIVE DATE. This section is effective January 1, 2007, for apportionments 
2.34 	made on and after that date.

3.1 	Sec. 3. Minnesota Statutes 2004, section 162.07, is amended by adding a subdivision 
3.2 	to read:
3.3 		Subd. 1a.Apportionment sum. The commissioner shall apportion the 
3.4 	apportionment sum to the several counties on the basis of the following formula:
3.5 	(1) An amount equal to ten percent of the apportionment sum shall be apportioned 
3.6 	equally among the 87 counties.
3.7 	(2) An amount equal to ten percent of the apportionment sum shall be apportioned 
3.8 	among the several counties so that each county shall receive of such amount the 
3.9 	percentage that its motor vehicle registration for the calendar year preceding the one last 
3.10 	past, determined by residence of registrants, bears to the total statewide motor vehicle 
3.11 	registration.
3.12 	(3) An amount equal to 30 percent of the apportionment sum shall be apportioned 
3.13 	among the several counties so that each county shall receive of such amount the percentage 
3.14 	that its total lane-miles of approved county state-aid highways bears to the total lane-miles 
3.15 	of approved statewide county state-aid highways.  In 1997 and subsequent years no county 
3.16 	may receive, as a result of an apportionment under this clause based on lane-miles rather 
3.17 	than miles of approved county state-aid highways, an apportionment that is less than its 
3.18 	apportionment in 1996.
3.19 	(4) An amount equal to 50 percent of the apportionment sum shall be apportioned 
3.20 	among the several counties so that each county shall receive of such amount the percentage 
3.21 	that its money needs bears to the sum of the money needs of all of the individual counties; 
3.22 	provided, that the percentage of such amount that each county is to receive shall be 
3.23 	adjusted so that each county shall receive in 1958 a total apportionment at least ten 
3.24 	percent greater than its total 1956 apportionments from the state road and bridge fund; 
3.25 	and provided further that those counties whose money needs are thus adjusted shall 
3.26 	never receive a percentage of the apportionment sum less than the percentage that such 
3.27 	county received in 1958.

3.28 	EFFECTIVE DATE. This section is effective January 1, 2007, for apportionments 
3.29 	made on and after that date.

3.30 	Sec. 4. Minnesota Statutes 2004, section 162.07, is amended by adding a subdivision 
3.31 	to read:
3.32 		Subd. 1b.Excess sum. The commissioner shall apportion the excess sum to the 
3.33 	counties on the basis of the following formula:
3.34 	(1) An amount equal to 40 percent of the excess sum shall be apportioned among 
3.35 	the several counties so that each county receives of that amount the percentage that its 
4.1 	motor vehicle registration for the calendar year preceding the one last past, determined by 
4.2 	residence of registrants, bears to the total statewide motor vehicle registration.
4.3 	(2) An amount equal to 60 percent of the excess sum shall be apportioned among the 
4.4 	several counties so that each county shall receive of such amount the percentage that its 
4.5 	money needs bears to the sum of the money needs of all of the individual counties.

4.6 	EFFECTIVE DATE. This section is effective January 1, 2007, for apportionments 
4.7 	made on and after that date.

4.8 	Sec. 5. Minnesota Statutes 2004, section 168.013, subdivision 1a, is amended to read:
4.9 		Subd. 1a.Passenger automobile; hearse. (a) On passenger automobiles as defined 
4.10 	in section   168.011, subdivision 7, and hearses, except as otherwise provided, the tax shall 
4.11 	be $10 plus an additional tax equal to   1.25 percent of the base value. 
4.12 	(b) Subject to the classification provisions herein, "base value" means the 
4.13 	manufacturer's suggested retail price of the vehicle including destination charge using 
4.14 	list price information published by the manufacturer or determined by the registrar if no 
4.15 	suggested retail price exists, and shall not include the cost of each accessory or item of 
4.16 	optional equipment separately added to the vehicle and the suggested retail price.
4.17 	(c) If the manufacturer's list price information contains a single vehicle identification 
4.18 	number followed by various descriptions and suggested retail prices, the registrar shall 
4.19 	select from those listings only the lowest price for determining base value.
4.20 	(d)  If unable to determine the base value because the vehicle is specially constructed, 
4.21 	or for any other reason, the registrar may establish such value upon the cost price to the 
4.22 	purchaser or owner as evidenced by a certificate of cost but not including Minnesota sales 
4.23 	or use tax or any local sales or other local tax.
4.24 	(e) The registrar shall classify every vehicle in its proper base value class as follows:

4.25 | | FROM | | TO
4.26

4.27

$ ........0

$ 
........199.99

4.28 | | 200 | | 399.99
4.29 	and thereafter a series of classes successively set in brackets having a spread of $200 
4.30 	consisting of such number of classes as will permit classification of all vehicles.
4.31 	(f) The base value for purposes of this section shall be the middle point between 
4.32 	the extremes of its class.
5.1 	(g) The registrar shall establish the base value, when new, of every passenger 
5.2 	automobile and hearse registered prior to the effective date of Extra Session Laws 1971, 
5.3 	chapter 31, using list price information published by the manufacturer or any nationally 
5.4 	recognized firm or association compiling such data for the automotive industry. If unable 
5.5 	to ascertain the base value of any registered vehicle in the foregoing manner, the registrar 
5.6 	may use any other available source or method. The registrar shall calculate tax using base 
5.7 	value information available to dealers and deputy registrars at the time the application for 
5.8 	registration is submitted. The tax on all previously registered vehicles shall be computed 
5.9 	upon the base value thus determined taking into account the depreciation provisions of 
5.10 	paragraph (h).
5.11 	(h) The annual additional tax computed upon the base value as provided herein, 
5.12 	during the first ~~and second years~~ year of vehicle life shall be computed upon 100 percent 
5.13 	of the base value; for the second year, 80 percent of base value; for the third ~~and fourth~~ 
5.14 	~~years~~ year, ~~90~~ 70 percent of ~~such~~ base value; for the fourth year, 60 percent of base value; 
5.15 	for the fifth ~~and sixth years~~ year, ~~75~~ 50 percent of ~~such~~ base value; for the sixth year, 40 
5.16 	percent of base value; for the seventh year, ~~60~~ 35 percent of ~~such~~ base value; for the eighth 
5.17 	year, ~~40~~ 30 percent of ~~such~~ base value; for the ninth year, ~~30~~ 20 percent of ~~such~~ base
5.18 	value; for the tenth year, ten percent of ~~such~~ base value; for the 11th and each succeeding 
5.19 	year, the sum of ~~$25~~ $39.
5.20 	In  no event shall the annual additional tax be less than ~~$25~~ $39. In the third and subsequent 
5.21 	years of vehicle life, the total tax under this subdivision shall not exceed $189 ~~for the first~~ 
5.22 	~~renewal period and shall not exceed $99 for subsequent renewal periods~~. The total tax 
5.23 	under this subdivision on any vehicle filing its initial registration in Minnesota in the 
5.24 	~~second year~~ third and subsequent years of vehicle life shall not exceed $189 ~~and shall not~~ 
5.25 	~~exceed $99 for subsequent renewal periods~~. ~~The total tax under this subdivision on any~~ 
5.26 	~~vehicle filing its initial registration in Minnesota in the third or subsequent year of vehicle~~ 
5.27 	~~life shall not exceed $99 and shall not exceed $99 in any subsequent renewal period.~~
5.28 	(i) As used in this subdivision and section   168.017, the following terms have the 
5.29 	meanings given: "initial registration" means the 12 consecutive months calendar period 
5.30 	from the day of first registration of a vehicle in Minnesota; and "renewal periods" means 
5.31 	the 12 consecutive calendar months periods following the initial registration period. 
5.32 	(j) The annual additional tax under paragraph (h) in any registration year on a 
5.33 	passenger automobile on which the first annual tax was paid before November 15, 2006, 
5.34 	must not exceed the tax that was paid on that vehicle in the previous registration year.

6.1 	EFFECTIVE DATE. This section is effective for first registrations on registration 
6.2 	periods in which the tax is first due on November 15, 2006, or later.  This section is 
6.3 	effective for renewals of registration on those vehicles assigned registration periods of 
6.4 	December 1, 2006, through November 30, 2007, or later.

6.5 	Sec. 6. Minnesota Statutes 2004, section 296A.07, subdivision 3, is amended to read:
6.6 		Subd. 3.Rate of tax. The gasoline excise tax is imposed at the following rates:
6.7 	(1) E85 is taxed at the rate of ~~14.2~~ 16.4 cents per gallon until May 31, 2007, and 
6.8 	18.6 cents per gallon thereafter;
6.9 	(2) M85 is taxed at the rate of ~~11.4~~ 13.1 cents per gallon until May 31, 2007, and 
6.10 	14.8 cents per gallon thereafter; and
6.11 	(3) all other gasoline is taxed at the rate of ~~20~~ 23 cents per gallon until May 31, 
6.12 	2007, and 26 cents per gallon thereafter.

6.13 	EFFECTIVE DATE. This section is effective July 1, 2006. 

6.14 	Sec. 7. Minnesota Statutes 2004, section 296A.08, subdivision 2, is amended to read:
6.15 		Subd. 2.Rate of tax. The special fuel excise tax is imposed at the following rates:
6.16 	(a) Liquefied petroleum gas or propane is taxed at the rate of ~~15~~ 17.3 cents per 
6.17 	gallon until May 31, 2007, and 19.5 cents per gallon thereafter.
6.18 	(b) Liquefied natural gas is taxed at the rate of ~~12~~ 13.8 cents per gallon until May 31, 
6.19 	2007, and 15.6 cents per gallon thereafter.
6.20 	(c) Compressed natural gas is taxed at the rate of ~~$1.739~~ $2 per thousand cubic feet; 
6.21 	or ~~20~~ 23 cents per gasoline equivalent, as defined by the National Conference on Weights 
6.22 	and Measures, which is  5.66 pounds of natural gas until May 31, 2007, and $2.435 cents 
6.23 	per thousand cubic feet, or 26 cents per gasoline equivalent thereafter. 
6.24 	(d) All other special fuel is taxed at the same rate as the gasoline excise tax as 
6.25 	specified in section  296A.07, subdivision 2. The tax is payable in the form and manner 
6.26 	prescribed by the commissioner. 

6.27 	EFFECTIVE DATE. This section is effective July 1, 2006. 

6.28 	Sec. 8. [297A.992] METROPOLITAN TRANSPORTATION SALES AND 
6.29 	EXCISE TAX.
6.30 		Subdivision 1.Definitions. For purposes of this section "metropolitan transportation 
6.31 	area" means the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and 
6.32 	Washington.
7.1 		Subd. 2.Authorization; rates. Notwithstanding sections 297A.99, subdivisions 1, 
7.2 	2, 3, 5, and 13; and 477A.016; or any other law, a metropolitan transportation sales and 
7.3 	use tax is imposed at a rate of one-fourth of one percent on retail sales and uses taxable 
7.4 	under chapter 297A, and an excise tax is imposed on the sale of new motor vehicles, at the 
7.5 	rate of $20 per vehicle, for those retail sales and motor vehicle sales occurring within the 
7.6 	metropolitan transportation area. 
7.7 		Subd. 3.Fund created; appropriations. A metropolitan transportation area fund is 
7.8 	created in the state treasury. After the deductions allowed in section 297A.99, subdivision 
7.9 	11, the commissioner of revenue shall deposit all revenue from taxes imposed under this 
7.10 	section in the fund. Money in the fund is appropriated to the Metropolitan Council for 
7.11 	capital improvements and operation of public transit operated or assisted by the council.
7.12 		Subd. 4.Administration, collection, enforcement. The  administration, collection, 
7.13 	and enforcement provisions in section 297A.99, subdivisions 4 and 6 to 12, apply to the 
7.14 	tax imposed under this section.

7.15 	EFFECTIVE DATE. The taxes imposed under subdivision 2 are effective for 
7.16 	sales made after December 31, 2006, and the remainder of the section is effective the 
7.17 	day following final enactment.

7.18 	Sec. 9. Minnesota Statutes 2004, section 297B.02, is amended by adding a subdivision 
7.19 	to read:
7.20 		Subd. 1a.Surcharge. (a) A surcharge is imposed on the purchase price of any 
7.21 	motor vehicle taxed as a passenger automobile under section 168.013, as follows:
7.22 	(1) $125 for a motor vehicle purchased during its first year of vehicle life; and
7.23 	(2) $75 for a motor vehicle purchased during a second or later year of vehicle life.
7.24 	(b) The proceeds of the surcharge collected under this subdivision must be deposited 
7.25 	in the highway user tax distribution fund.
7.26 	(c) The surcharge imposed under this subdivision does not apply to vehicles 
7.27 	exempted from the provisions of this chapter under section 297B.03.

7.28 	Sec. 10. Minnesota Statutes 2004, section 297B.09, subdivision 1, is amended to read:
7.29 		Subdivision 1.Deposit of revenues. (a) Except as otherwise provided in section 
7.30 	297B.02, subdivision 1a, money collected and received under this chapter must be 
7.31 	deposited as provided in this subdivision.
7.32 	~~(b) From July 1, 2002, to June 30, 2003, 32 percent of the money collected and~~ 
7.33 	~~received must be deposited in the highway user tax distribution fund, 20.5 percent must be~~ 
7.34 	~~deposited in the metropolitan area transit fund under section  16A.88, and  1.25 percent~~ 
8.1 	~~must be deposited in the greater Minnesota transit fund under section  16A.88. The~~ 
8.2 	~~remaining money must be deposited in the general fund.~~
8.3 	~~(c)~~(b) From July 1, 2003, ~~to~~ through June 30, 2007, 30 percent of the money 
8.4 	collected and received must be deposited in the highway user tax distribution fund, 21.5 
8.5 	percent must be deposited in the metropolitan area transit fund under section  16A.88,  1.43
8.6 	percent must be deposited in the greater Minnesota transit fund under section  16A.88, 
8.7 	0.65 percent must be deposited in the county state-aid highway fund, and 0.17 percent 
8.8 	must be deposited in the municipal state-aid street fund. The remaining money must 
8.9 	be deposited in the general fund. 
8.10 	~~(d)~~(c) On and after July 1, 2007, 32 percent of the money collected and received 
8.11 	must be deposited in the highway user tax distribution fund, 20.5 percent must be 
8.12 	deposited in the metropolitan area transit fund under section  16A.88, and  1.25 percent 
8.13 	must be deposited in the greater Minnesota transit fund under section  16A.88. The 
8.14 	remaining money must be deposited in the general fund. 

8.15 	EFFECTIVE DATE. This section is effective July 1, 2006, for purchases made 
8.16 	on or after that date.

8.17 	Sec. 11. APPROPRIATIONS; DEBT SERVICE.
 8.18 	(a) $100,000,000 is appropriated on the first day of fiscal years 2007 through 2016 
8.19 	from the bond proceeds account in the trunk highway fund. These appropriations are in 
8.20 	addition to any other appropriations for this purpose. 
8.21 	(b) $10,660,000 in fiscal year 2007 is appropriated from the trunk highway fund 
8.22 	to the commissioner of transportation for highway debt service.  This appropriation is in 
8.23 	addition to any other appropriations for this purpose. 

8.24 	Sec. 12. BOND SALE AUTHORIZATIONS.
 8.25 	To provide the money appropriated in section 11, paragraph (a), from the bond 
8.26 	proceeds account in the trunk highway fund, the commissioner of finance shall sell and 
8.27 	issue bonds of the state in an amount up to  $1,000,000,000 in the manner, upon the terms, 
8.28 	and with the effect  prescribed by Minnesota Statutes, sections 167.50 to 167.52, and 
8.29 	by the Minnesota Constitution, article XIV, section 11, at the times and in the amounts 
8.30 	requested by the commissioner of transportation. The proceeds of the bonds, except 
8.31 	accrued interest and any premium received on the sale of the bonds, must be credited to 
8.32 	the bond proceeds account in the trunk highway fund.