1.1                          A bill for an act 
  1.2             relating to highways; authorizing issuance of 
  1.3             $1,250,000,000 in trunk highway bonds over ten years 
  1.4             for major projects on the trunk highway system; 
  1.5             imposing an additional tax on gasoline and special 
  1.6             fuel for repayment of the bonds; amending Minnesota 
  1.7             Statutes 2000, sections 296A.07, by adding a 
  1.8             subdivision; 296A.08, subdivisions 2, 4, 6, by adding 
  1.9             a subdivision; Minnesota Statutes 2001 Supplement, 
  1.10            sections 296A.07, subdivision 4; 296A.08, subdivision 
  1.11            3; proposing coding for new law in Minnesota Statutes, 
  1.12            chapter 161. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  [161.042] [MAJOR PROJECT ACCOUNT.] 
  1.15     (a) A major project account is created in the trunk highway 
  1.16  fund, consisting of money credited to the account under sections 
  1.17  296A.07, subdivision 3a, and 296A.08, subdivision 2a, and other 
  1.18  money credited to the account by law. 
  1.19     (b) Money in the account is appropriated to the 
  1.20  commissioner of transportation for the construction, including 
  1.21  acquisition of real property therefor, of trunk highway projects 
  1.22  that: 
  1.23     (1) have been identified by the commissioner as projects to 
  1.24  (i) improve a trunk highway in an interregional corridor located 
  1.25  primarily or entirely outside the seven-county metropolitan 
  1.26  area, (ii) remove a significant highway bottleneck within the 
  1.27  metropolitan area, or (iii) provide an advantage to transit; and 
  1.28     (2) have a construction cost, in the year that construction 
  1.29  is expected to begin, that exceeds 25 percent of the estimated 
  2.1   annual construction program of the department of transportation 
  2.2   division or construction district in which the project is 
  2.3   located. 
  2.4      Sec. 2.  Minnesota Statutes 2000, section 296A.07, is 
  2.5   amended by adding a subdivision to read: 
  2.6      Subd. 3a.  [ADDITIONAL TAX.] (a) A tax is imposed on 
  2.7   gasoline in addition to the taxes imposed under subdivision 3.  
  2.8   Proceeds from the additional tax deposited in the trunk highway 
  2.9   fund must be credited to the major project account. 
  2.10     (b) On April 1 of each year the commissioner of revenue 
  2.11  shall determine the amount of additional tax on gasoline needed 
  2.12  in the next fiscal year to provide an amount of revenue to the 
  2.13  major project account in the trunk highway fund that, when 
  2.14  combined with revenue from the additional tax on special fuel 
  2.15  under section 296A.08, subdivision 2a, will be equal to payments 
  2.16  to be made from the major project account in the trunk highway 
  2.17  fund for principal and interest on bonds issued under section 9 
  2.18  due in that fiscal year.  The additional tax determined under 
  2.19  this subdivision shall be added to the taxes imposed under 
  2.20  subdivision 3.  The additional tax is effective on June 1 of 
  2.21  each year and applies to all gasoline in distributor storage on 
  2.22  that date. 
  2.23     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
  2.24  296A.07, subdivision 4, is amended to read: 
  2.25     Subd. 4.  [EXEMPTIONS.] The provisions of subdivision 
  2.26  subdivisions 1 and 3a do not apply to gasoline purchased by: 
  2.27     (1) a transit system or transit provider receiving 
  2.28  financial assistance or reimbursement under section 174.24, 
  2.29  256B.0625, subdivision 17, or 473.384; or 
  2.30     (2) an ambulance service licensed under chapter 144E. 
  2.31     Sec. 4.  Minnesota Statutes 2000, section 296A.08, 
  2.32  subdivision 2, is amended to read: 
  2.33     Subd. 2.  [RATE OF TAX.] The special fuel excise tax is 
  2.34  imposed at the following rates: 
  2.35     (1) Liquefied petroleum gas or propane is taxed at the rate 
  2.36  of 15 cents per gallon. 
  3.1      (2) Liquefied natural gas is taxed at the rate of 12 cents 
  3.2   per gallon. 
  3.3      (3) Compressed natural gas is taxed at the rate of $1.739 
  3.4   per thousand cubic feet; or 20 cents per gasoline equivalent, as 
  3.5   defined by the National Conference on Weights and Measures, 
  3.6   which is 5.66 pounds of natural gas. 
  3.7      (4) All other special fuel is taxed at the same rate as the 
  3.8   gasoline excise tax as specified in section 296A.07, subdivision 
  3.9   2 subdivisions 3 and 3a.  The tax is payable in the form and 
  3.10  manner prescribed by the commissioner. 
  3.11     Sec. 5.  Minnesota Statutes 2000, section 296A.08, is 
  3.12  amended by adding a subdivision to read: 
  3.13     Subd. 2a.  [ADDITIONAL TAX.] (a) A tax is imposed on 
  3.14  special fuel in addition to the taxes imposed under subdivision 
  3.15  2.  Proceeds from the additional tax deposited in the trunk 
  3.16  highway fund must be credited to the major project account. 
  3.17     (b) On April 1 of each year the commissioner of revenue 
  3.18  shall determine the amount of additional tax on special fuel 
  3.19  needed in the next fiscal year to provide an amount of revenue 
  3.20  to the major project account in the trunk highway fund that, 
  3.21  when combined with revenue from the additional tax on gasoline 
  3.22  under section 296A.07, subdivision 3a, will be equal to payments 
  3.23  to be made from the major project account in the trunk highway 
  3.24  fund for principal and interest on bonds issued under section 9 
  3.25  due that fiscal year.  The additional tax determined under this 
  3.26  subdivision shall be added to the taxes imposed under 
  3.27  subdivision 2.  The additional tax is effective on June 1 of 
  3.28  each year. 
  3.29     Sec. 6.  Minnesota Statutes 2001 Supplement, section 
  3.30  296A.08, subdivision 3, is amended to read: 
  3.31     Subd. 3.  [EXEMPTIONS.] The provisions of subdivisions 
  3.32  1 and, 2, and 2a do not apply to special fuel or alternative 
  3.33  fuels purchased by: 
  3.34     (1) a transit system or transit provider receiving 
  3.35  financial assistance or reimbursement under section 174.24, 
  3.36  256B.0625, subdivision 17, or 473.384; or 
  4.1      (2) an ambulance service licensed under chapter 144E.  
  4.2      Sec. 7.  Minnesota Statutes 2000, section 296A.08, 
  4.3   subdivision 4, is amended to read: 
  4.4      Subd. 4.  [TAX IMPOSED ON USE.] If it is determined by the 
  4.5   commissioner from an examination of any records pertaining to 
  4.6   the operation of any licensed motor vehicle which uses special 
  4.7   fuel, that the special fuel tax on the special fuel used in this 
  4.8   state has not been paid to this state, or to any other state if 
  4.9   purchased in such other state, there is hereby imposed an excise 
  4.10  tax at the same rate per gallon as the gasoline tax, including 
  4.11  the additional tax under section 296A.07, subdivision 3a, on all 
  4.12  such special fuel.  All assessments of tax made under this 
  4.13  subdivision shall be paid by the user to the commissioner upon 
  4.14  demand.  For purposes of this subdivision, "special fuel" means 
  4.15  any fuel other than gasoline used in a licensed motor vehicle in 
  4.16  this state. 
  4.17     Sec. 8.  Minnesota Statutes 2000, section 296A.08, 
  4.18  subdivision 6, is amended to read: 
  4.19     Subd. 6.  [LIABILITY FOR FAILURE TO KEEP ADEQUATE RECORDS.] 
  4.20  If adequate records are not kept, or if the sales are not 
  4.21  adequately accounted for, then all sales of combustible gases 
  4.22  and liquid petroleum products, except gasoline, are deemed to be 
  4.23  sales of special fuel.  In such cases, there is imposed an 
  4.24  excise tax of the same rate per gallon as the gasoline excise 
  4.25  tax, including the additional tax under section 296A.07, 
  4.26  subdivision 3a, on all such products, and the vendor is liable 
  4.27  for the tax. 
  4.28     Sec. 9.  [BOND SALE AUTHORIZATION.] 
  4.29     The commissioner of finance shall sell and issue bonds of 
  4.30  the state in an amount up to $1,250,000,000 in the manner, upon 
  4.31  the terms, and with the effect prescribed by Minnesota Statutes, 
  4.32  sections 167.50 to 167.52, and by the Minnesota Constitution, 
  4.33  article XIV, section 11, at the times and in the amounts 
  4.34  requested by the commissioner of transportation.  The proceeds 
  4.35  of the bonds, except accrued interest and any premium received 
  4.36  on the sale of the bonds, must be credited to the major project 
  5.1   account in the trunk highway fund.  Issuance of the bonds is 
  5.2   subject to the following maximum limits: 
  5.3      (1) in each of fiscal years 2003 and 2004, not more than 
  5.4   $50,000,000 in bonds may be issued; 
  5.5      (2) in fiscal year 2005, not more than $250,000,000 in 
  5.6   bonds may be issued; 
  5.7      (3) in each of fiscal years 2006 and 2007, not more than 
  5.8   $200,000,000 in bonds may be issued; and 
  5.9      (4) in each of fiscal years 2008 through 2012, not more 
  5.10  than $100,000,000 in bonds may be issued.