1.1 	 A bill for an act
1.2 	relating to transportation; imposing a highway user fee on gasoline and special 
1.3 	fuel; creating accounts; authorizing issuance of $2,750,000,000 in state trunk 
1.4 	highway bonds; appropriating money; amending Minnesota Statutes 2004, 
1.5 	sections 161.04, by adding subdivisions; 296A.07, subdivision 4, by adding a 
1.6 	subdivision; 296A.08, subdivision 3, by adding a subdivision; proposing coding 
1.7 	for new law in Minnesota Statutes, chapters 161; 296A.
1.8 	 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.9 	Section 1. Minnesota Statutes 2004, section 161.04, is amended by adding a 
1.10 	subdivision to read:
1.11 		Subd. 5.Debt service account. (a) A debt service account is established in the 
1.12 	trunk highway fund, solely consisting of revenues from taxes collected under sections 
1.13 	168.013, 296A.07, 296A.08, and 297B.02. The account receives money distributed 
1.14 	under paragraph (b), and any other money as specified by law. Money in the account is 
1.15 	appropriated to the commissioner for payment of principal and interest on trunk highway 
1.16 	bonds issued under section 161.045. 
1.17 	(b) Upon any distribution of revenue into the highway user fee account under 
1.18 	sections 296A.07, subdivision 3a, and 296A.08, subdivision 2a, the commissioner of 
1.19 	finance shall transfer an amount equal to such distribution from the trunk highway fund to 
1.20 	the debt service account.

1.21 	Sec. 2. Minnesota Statutes 2004, section 161.04, is amended by adding a subdivision 
1.22 	to read:
2.1 		Subd. 6.Highway user fee account. A highway user fee account is established in 
2.2 	the trunk highway fund. The account receives money distributed under sections 296A.07, 
2.3 	subdivision 3a, and 296A.08, subdivision 2a, and any other money as specified by law.

2.4 	Sec. 3. [161.045] APPROPRIATION; BOND SALE AUTHORIZATION.
2.5 		Subdivision 1.Appropriation. $275,000,000 is appropriated on each September 1 
2.6 	of fiscal years 2007 through 2016 from the bond proceeds account in the trunk highway 
2.7 	fund to the commissioner of transportation for trunk highway improvements.
2.8 		Subd. 2.Bond sale. To provide the money appropriated from the bond proceeds 
2.9 	account under subdivision 1, the commissioner of finance shall sell and issue bonds of 
2.10 	the state in an amount up to $2,750,000,000 in the manner, upon the terms, and with 
2.11 	the effect prescribed by sections 167.50 to 167.52, and by the Minnesota Constitution, 
2.12 	article XIV, section 11, at the times and in the amounts requested by the commissioner 
2.13 	of transportation.  The proceeds of the bonds, except accrued interest and any premium 
2.14 	received on the sale of the bonds, must be credited to the bond proceeds account in the 
2.15 	trunk highway fund.

2.16 	Sec. 4. Minnesota Statutes 2004, section 296A.07, is amended by adding a subdivision 
2.17 	to read:
2.18 		 Subd. 3a.Highway user fee. (a) A highway user fee, determined as provided in 
2.19 	paragraph (b), is imposed on gasoline, E-85, and M-85, in addition to the taxes imposed 
2.20 	under subdivision 3.  The highway user fee imposed on E-85 and M-85 must be in the 
2.21 	same proportion to the fee on gasoline as the taxes on those fuels are in proportion to the 
2.22 	tax on gasoline under subdivision 3.  Proceeds from the fee must be deposited in the 
2.23 	highway user tax distribution fund, and those proceeds that are allocated to the trunk 
2.24 	highway fund must be deposited in the highway user fee account.
2.25 	 (b) On August 1 of each fiscal year the commissioner of revenue shall determine the 
2.26 	amount of highway user fees on gasoline, E-85, and M-85 so that the fees deposited in the 
2.27 	highway user fee account, when combined with highway user fees under section 296A.08, 
2.28 	subdivision 2a, will equal an amount needed to pay principal and interest in the next 12 
2.29 	months on bonds issued under section 161.045.  The amount of the fee so determined is 
2.30 	effective on September 1 of each year through August 31 of the following year.

2.31 	Sec. 5. Minnesota Statutes 2004, section 296A.07, subdivision 4, is amended to read:
2.32 		 Subd. 4.Exemptions.  The provisions of subdivision  subdivisions 1 and 3a do not 
2.33 	apply to gasoline purchased by:
3.1 	 (1) a transit system or transit provider receiving financial assistance or 
3.2 	reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; or
3.3 	 (2) an ambulance service licensed under chapter 144E.

3.4 	Sec. 6. Minnesota Statutes 2004, section 296A.08, is amended by adding a subdivision 
3.5 	to read:
3.6 		 Subd. 2a.Highway user fee. (a) A highway user fee is imposed on special fuel 
3.7 	in addition to the taxes imposed under subdivision 2.  The highway user fee imposed on 
3.8 	liquefied petroleum gas, liquefied natural gas, and compressed natural gas must be in 
3.9 	the same proportion to the fee on other special fuel as the taxes on those fuels are in 
3.10 	proportion to the tax on other special fuels under subdivision 2. Proceeds from the fee 
3.11 	must be deposited in the highway user tax distribution fund, and those proceeds that are 
3.12 	allocated to the trunk highway fund must be deposited in the highway user fee account.
3.13 	 (b) On August 1 of each fiscal year the commissioner of revenue shall determine 
3.14 	the amount of highway user fees on special fuel so that the fees deposited in the highway 
3.15 	user fee account, when combined with the highway user fees under section 296A.07, 
3.16 	subdivision 3a, will equal an amount needed to pay principal and interest in the next 12 
3.17 	months on bonds issued under section 161.045. The amount of fee so determined is 
3.18 	effective on September 1 of each year through August 31 of the following year.

3.19 	Sec. 7. Minnesota Statutes 2004, section 296A.08, subdivision 3, is amended to read:
3.20 		 Subd. 3.Exemptions.  The provisions of subdivisions 1 and, 2, and 2a do not apply 
3.21 	to special fuel or alternative fuels purchased by:
3.22 	 (1) a transit system or transit provider receiving financial assistance or 
3.23 	reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; or
3.24 	 (2) an ambulance service licensed under chapter 144E.

3.25 	Sec. 8. [296A.081] COLLECTION OF HIGHWAY USER FEE.
3.26 	 All provisions of this chapter that apply to the collection of taxes on gasoline 
3.27 	and special fuel apply to the collection of highway user fees established under sections 
3.28 	296A.07, subdivision 3a, and 296A.08, subdivision 2a.