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House Research Bill Summary
File Number: H.F. 2800
Date:
Version: Fourth Engrossment
Authors: Lieder
Subject: Transportation finance package
Analyst:
Matt Burress (296-5045)
This publication can be made available in alternative formats upon request. Please call 651-296-6753 (voice); or the Minnesota State Relay Service at 1-800-627-3529 (TTY) for assistance. Summaries are also available on our website at: www.house.mn/hrd/hrd.htm.
This bill makes several changes to transportation finance, which include:
} Appropriating $284.4 million to the Department of Transportation (MnDOT) and the Department of Public Safety for transportation;
} Authorizing $1.8 billion in trunk highway bonds for fiscal years 2009 to 2018, $60 million in bonding for local roads and bridges, and funding several transportation projects;
} Phasing in a five cent gas tax increase (by two cents on the first day of the month after enactment, and three cents on October 1, 2008), and raising the tax on other motor fuels proportionally;
} Establishing a gas tax debt service surcharge of up to 3.5 cents, based on the amount needed to repay trunk highway bonds;
} Amending the motor vehicle registration tax to (1) eliminate the tax caps, and (2) accelerate the yearly decrease in a vehicle’s taxable value;
} Creating a $25 motor fuels tax credit, starting for calendar year 2009 tax returns;
} Allocating motor vehicle lease sales tax revenue starting in fiscal year 2010, so that in fiscal year 2012 (after a phase-in), the revenue will first go to the motor fuels tax credit, with the remainder allocated: 50 percent to greater Minnesota transit, and 50 percent to certain metropolitan counties based on population;
} Increasing a short term motor vehicle rental fee from 3 percent to 5 percent;
} Authorizing metropolitan counties to impose a metropolitan transportation sales tax of 0.25 percent and a motor vehicle sales excise tax of $20 under a joint powers agreement, and specifying powers and revenue uses;
}
Authorizing
counties in greater
} Establishing a new trunk highway bridge improvement program for repair and replacement of bridges, which is funded through trunk highway bonds;
} Amending the county state-aid highway fund allocation formula;
} Amending allocation requirements for funds in the flexible highway account;
} Creating a task force on transportation strategic management and operations; and
} Making other changes related to transportation finance.
Article 1: Transportation Appropriations
Overview
The article contains appropriations totaling $284.4 million for fiscal years 2008-2009 to the Department of Transportation (MnDOT) and the Department of Public Safety. |
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1
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Summary of appropriations.
Summarizes
the appropriations by fund. |
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2
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Transportation appropriations.
Establishes that appropriations are from the trunk highway fund,
unless another is named, for the agencies and purposes specified. |
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3
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Transportation.
Appropriates $148.4 million in fiscal year 2009 to the Minnesota
Department of Transportation (MnDOT).
Subd. 1. Total appropriation.
Summarizes MnDOT appropriations by fund.
Subd. 2.
Multimodal systems.
Appropriates money for greater
Subd. 3. State roads. Appropriates money in
fiscal year 2009 for the state trunk highway system:
}
$41.4 million
for operations and maintenance;
}
$34 million
infrastructure investment support (which includes $250,000 for a grant to the
Humphrey Institute); and
}
$7.2 million
for debt service on bonds. Subd. 4. Local roads. Appropriates $50.2 million in fiscal year 2009 for the county state-aid highway system, and $13.2 million in fiscal year 2009 for the municipal state-aid street system . Allows adjustments to the appropriations based on fund balance.
Subd.
5. Transfers.
Directs and allows transfer of money across certain funds. |
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4
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Public safety.
Appropriates $3.7 million in fiscal year 2009 to the Department of
Public Safety for additional State Patrol troopers. |
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5
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Appropriation; transportation emergency
relief.
Appropriates $55 million in fiscal year
2008 and $77 million in fiscal year 2009 for federal grants and aids related
to the I-35W bridge collapse. |
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6
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Value capture study; appropriation.
Appropriates $375,000 from the general fund to the Center for
Transportation Studies to evaluate financing transportation infrastructure
through capturing increased value related to the infrastructure, provide a
report to the legislature, and conduct informational workshops. |
Article 2:
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1
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Debt service surcharge.
Requires
that the Department of Revenue annually impose a surcharge on motor
fuels. Establishes a schedule of
surcharge amounts for fiscal years 2009 to 2012, and caps the surcharge after
that at the lower of 3.5 cents or an amount necessary to pay off the total debt
service on trunk highway bonds authorized under this section. The surcharge initially goes into effect
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2
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Trunk highway bond appropriations.
Summarizes
the appropriations by agency.
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3
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Department of Transportation.
Appropriates $1.84 billion in bond proceeds to MnDOT.
Subd. 1. Total appropriation.
Identifies the total MnDOT appropriation.
Subd. 2. State road construction.
$1.72 billion
for trunk highway construction, divided $417.7 million in fiscal year 2009,
$500 million in fiscal year 2010, and $100 million per year for fiscal years
2011 through 2018. Specifies that:
}
$40 million in
fiscal year 2009 is for construction involving interchanges;
}
In each of
fiscal years 2009 and 2010, $300 million is for the trunk highway bridge
improvement program (created in the bill); and
}
$50 million
is for accelerating transit facility improvements on trunk highways; and
}
Of the funds
allocated to District 7, projects meeting certain criteria must be performed
first.
Subd.
3.
Subd. 4. Urban Partnership Agreement.
$24.8 million for part of the
local match of the federal Urban Partnership Agreement.
Subd.
5.
Subd. 6. Chaska truck station.
$8.6 million for a new truck station in
Chaska, in partnership with
Subd.
7.
Subd. 8. Local bridge replacement and rehabilitation.
$50
million for replacement and rehabilitation of local bridges.
Subd.
9. Local road improvement program.
$10 million for rural road
safety projects on county state-aid highways. |
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4
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Metropolitan Council.
$400,000
for part of the local match of the federal Urban Partnership Agreement. |
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5
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Department of Administration.
$18.2
million for renovation of the MnDOT building exterior. |
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6
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Department of Finance.
$1.9
million for bond sales expenses.
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7
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Bond sale authorization.
Authorizes
the sale of trunk highway bonds and state transportation bonds.
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8
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Effective date.
Makes the article effective the day after
enactment. |
Article 3: Highway User Taxes
Overview
This article makes various changes to highway user taxes to: restructure the motor vehicle registration tax, eliminating the caps and changing the vehicle’s decreased valuation over time for tax purposes; establish a $25 tax credit for motor fuels; phase in a gas tax increase by five cents, with proportional increases in other types of motor fuel; increase a short term motor vehicle rental fee by 2 percent; and, allocate motor vehicle lease sales tax revenue to transportation starting in fiscal year 2010. |
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1
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Passenger automobile; hearse.
Restructures the motor vehicle registration tax, as follows:
}
Eliminates
the caps of $189 in the first registration renewal and $99 in subsequent
renewals;
}
Amends the
vehicle depreciation schedule, which is the basis for a vehicle’s valuation
in collecting the tax (it is a decreasing percentage of the vehicle’s
original value as the vehicle gets older);
}
Limits the
tax so that the amount owed does not increase for vehicles previously
registered in
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2
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Lower income motor fuels tax credit.
Establishes a refundable tax credit of $25, for filers meeting certain
criteria with a total taxable income (the amount taxed after deductions) that
is in the lowest income tax rate for that type of filer. The credit is $12.50 each for married
couples filing separately. The
provision is effective starting for calendar year 2009 tax returns. |
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3
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Rate of tax.
Raises the gas tax by a total of five cents
(including the transitional increase in the next section), with proportional
increases for other types of motor fuel.
It is effective
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4
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Gasoline excise tax; transition provision.
Raises the
gas tax by two cents, effective the first of the month after 21 days
following enactment, with proportional increases for other types of motor
fuel. |
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5
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Rate of tax.
Raises the tax on special fuels proportional to
the
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6
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Special fuel excise tax; transition provision.
Raises the
tax on special fuels proportional to the gas tax increase in section 4.
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7
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Fee imposed.
Increases the fee on rentals and short-term leases
of vehicles from three to five percent of the sale price. The fee first is used to reimburse the
rental agency for its motor vehicle registration fees, with the excess
revenues going to the highway user tax distribution fund.
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8
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Motor vehicle lease sales tax revenue.
Modifies the allocation
of motor vehicle lease sales tax revenues, which currently go to the general
fund. Starting in fiscal year 2013 (after
a phase-in), after deducting an amount that matches the estimated motor fuels
tax credit, the remainder (based on the previous year’s revenue) is
transferred as follows:
}
50 percent goes to greater
}
50 percent to metropolitan counties, excluding Hennepin and Ramsey, to
be distributed based on population. |
Article 4: Local Option Taxes
Overview
This article governs local option taxes. It authorizes counties in the metropolitan area as well as in Greater Minnesota to impose a 0.5 percent transportation sales and use tax, and establishes requirements governing the taxes. |
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1
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Authorization; scope.
Clarifies that local units of government are
authorized to impose a sales tax under the metropolitan and greater
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2
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Metropolitan transportation sales tax.
Authorizes
metropolitan and adjoining counties to form a joint powers board and impose a
0.25 percent transportation sales and use tax, and establishes requirements
on the board and use of revenue.
Subd. 1. Definitions.
Defines terms.
Subd. 2. Authorization; rates.
Authorizes participating counties to impose
a 0.25 percent sales tax, and a $20 excise tax on vehicles sold at retail,
that is in addition to any other local sales taxes. The provision is effective after formation
of the joint powers board.
Subd. 3. Joint powers agreement.
Requires that all eligible
counties seeking to participate must enter into a joint powers agreement that
creates the joint powers board. The
counties that can join are those in the seven-county metropolitan area. S
pecifies
requirements for the joint powers agreement.
Subd. 4.
Joint powers board.
Specifies powers, restrictions, and duties for the
joint powers board.
Subd. 5. Grant application and awards; Grant Evaluation
and Ranking System (GEARS) Committee.
Establishes requirements for the grant application and award process,
including establishing a timeline and procedures for award of grants,
Establishing criteria for grant awards creation of a grant evaluation
committee, identification of committee membership, and a provision governing
review by the Metropolitan Council.
Requires that $30.783 million go to the Metropolitan Council in fiscal
year 2009.
Subd. 6.
Allocation of grant awards.
Requires that grants be distributed
for transit purposes,
including capital improvements for transitways; park-and-ride facilities;
feasibility studies, engineering, and construction of transitways; and
transit operations. Up to 1.25 percent
of the total grants for bicycle and pedestrian programs.
Establishes a “minimum guarantee” provision. For each county that participates in the
joint powers board and contributes up to three percent of the total sales tax
revenue, the joint powers board must allocate an amount to that county that
is at least equal to that county’s sales tax contribution.
Subd.
7. Bonds.
Authorizes the joint powers board, a county
under the joint powers agreement, or a county regional rail authority in the
metropolitan transportation area to issue bonds that are backed by the sales
tax or a county’s other taxation powers.
Specifies requirements governing the bonds. Subd. 8. Allocation of revenues. Directs the Department of Revenue to remit sales tax proceeds, less collection costs, on a quarterly basis as directed by the board.
Subd. 9. Administration, collection, enforcement.
Applies the general local sales tax
administration, exemption, notification, and revenue collection requirements
to the metropolitan transportation sales and use taxes.
Subd. 10. Termination of taxes.
Requires that counties withdrawing from the
joint powers agreement must meet their share of outstanding obligations. Specifies that if the joint powers
agreement is ended, the taxes under this provision terminate when all
obligations are met.
Subd. 11.
Report.
Requires the joint powers board for the
metropolitan area report annually to the legislature by February 1 on the
grant allocations and expenditures associated with the tax.
Subd. 12. Grant awards to
Metropolitan Council.
Specifies that grants provided
to the Metropolitan Council cannot replace state operating assistance.
Effective date.
Makes the
provision is effective the day following enactment, but the tax is not
imposed until 90 days after the formation of the joint powers board and must
start on the first day of a calendar quarter (i.e., January 1, April 1, July
1, or October 1). The provision
expires on
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3
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Greater
Subd. 1.
Authorization; rates.
Authorizes
a county outside of the metropolitan
transportation area or more than one working under a joint powers agreement,
to impose a 0.5 percent sales tax and $20 excise tax on motor vehicles sold
at retail. This
is in addition to any
other local sales taxes. Imposition of
the tax is only allowed if it is approved by the majority of voters who vote
on that ballot question in a general election. Subd. 2.
Allocation; termination.
Requires that the tax must be for specific transportation projects,
and terminates once the project is completed.
Subd. 3.
Administration, collection, enforcement.
Applies
the general local sales tax administration, exemption, notification, and
revenue collection requirements to the transportation sales and use taxes.
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Article 5:
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1
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Accruals to county state-aid highway fund; accounts.
Clarifies
that funding for MnDOT administrative costs, a disaster account, research account,
and state park road account comes out of both the apportionment sum (“old
revenue”) and the excess sum (“new revenue”).
Makes technical changes.
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2
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Apportionment sum.
Identifies the formula for distribution of
the apportionment sum, which is the same as current CSAH apportionment
formula. |
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3
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Apportionment sum and excess sum.
Defines
the “excess sum” as the amount in the CSAH fund that comes from (1) new
revenue from the gas tax above 20 cents per gallon, (2) new revenue from
registration tax above the inflation-adjusted amount collected in fiscal year
2008, and (3) new revenue from motor vehicle sales tax above the percentage
collected in fiscal year 2007.
Defines the “apportionment sum” as the amount
available in the CSAH fund minus the excess sum. |
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4
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Excess sum.
Establishes the formula for distribution of
the excess sum, as follows:
}
40 percent is
based on each county’s proportion of motor vehicle registration; and
}
60 percent is
based on each county’s proportion of construction needs. |
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5
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Revisor instruction.
Instructs the Revisor to renumber a section. |
Article 6: Other Transportation Finance
Overview
This article contains various provisions related to transportation finance, including limiting toll roads and privatization, modifying the uses of flexible highway account revenue, establishing a trunk highway bridge improvement program, allowing installment payments on driver’s license reinstatement, limiting county regional railroad authority expenditures on transit projects, and directing the Metropolitan Council to start negotiations with the Federal Transit Administration on a comprehensive transit funding arrangement. |
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1
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Scope.
Expands the scope of certain terms defined
in relation to tolling provisions, to cover new provisions in the bill.
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2
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Restrictions on toll facility.
Restricts road authorities from imposing
tolls on streets, bridges, and highways, except for:
}
Tolling
facilities that were already in place
}
Any additional
lane added after
}
Any other
lane that adds capacity to a highway. |
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3
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Prohibition on road and bridge privatization.
Prohibits
road authorities from selling or leasing transportation infrastructure if it
will continue to be used for transportation purposes. |
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4
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Flexible highway account; turnback accounts.
Amends the
uses of the portion of five percent set-aside from the highway user tax
distribution fund that goes into the flexible highway account, to:
}
provide a
portion of the new revenue to metropolitan counties; and
}
exclude
funding for trunk highways (except for work done for a turnback) and to
include (1) safety improvements on local roads, and (2) routes of regional
significance. |
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5
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Trunk highway bridge improvement program.
Establishes a new program for
repair and replacement of trunk highway bridges.
Subd.
1. Definition. Defines terms.
Subd. 2. Program created.
Creates
the program.
Subd.
3. Program requirements.
Specifies requirements
governing the program, including an inventory of bridges that must include
all fracture-critical or structurally deficient ones, and may include other
priority projects identified by MnDOT.
Identifies information that must be collected on each bridge.
Subd. 4. Prioritization of bridge projects.
Establishes tier 1, tier 2, and tier 3 classifications for the
bridges, and requires that all bridge projects in a higher tier (starting
with tier 1) must be commenced before starting on bridges in a lower tier, if
feasible. Requires that repair or
replacement projects on all tier 1 and tier 2 bridges must be started by
}
Tier 1: bridges with an average daily traffic count above 1,000 and a sufficiency
rating at or below 50, or are a priority project;
}
Tier 2: bridges that have a sufficiency rating at or below 80 or is a
fracture-critical bridge not classified as tier 1; and
}
Tier 3: all
other bridges in the program.
Subd.
5. Statewide transportation planning report.
Requires a report on the program in
conjunction with each update to MnDOT’s Statewide Transportation Plan, and
specifies items to include.
Subd.
6. Annual report.
Requires an annual report to the legislature
by January 15 that summarizes the bridges in the program and assesses bridge
project prioritization. |
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6
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Reinstatement fees and surcharges allocated and appropriated.
A
llows a person whose
driver’s license was revoked under certain circumstances to pay the
reinstatement fee (at $250) and
surcharge (at $430) in two installments
, with other
requirements specified. This provision
is effective
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7
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Transit funding.
Limits county regional rail authority
expenditures for light rail or commuter rail projects, to be no more than ten
percent of capital costs, and none of the operating and maintenance costs. |
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8
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Funding for rail transitways.
Requires that the Metropolitan Council
start negotiations with the Federal Transit Administration to explore federal
funding for a comprehensive program of light rail transit and commuter rail
projects. |
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9
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Transportation strategic management and operations advisory task force.
Creates a task force to identify strategies
and make recommendations on improving efficiency, management, and operations
in construction and maintenance projects as well as transportation
infrastructure management. Specifies
membership appointment, staffing, administration, and reporting requirements. |