1.1.................... moves to amend H.F. No. 3486 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2008, section 174.22, is amended by adding a
1.4subdivision to read:
1.5    Subd. 14a. State sources of funds. "State sources of funds" means funding for the
1.6public transit participation program appropriated from (1) the general fund, and (2) the
1.7greater Minnesota transit account.

1.8    Sec. 2. Minnesota Statutes 2008, section 174.23, subdivision 1, is amended to read:
1.9    Subdivision 1. General. (a) The commissioner shall have all powers necessary and
1.10convenient to carry out the provisions of sections 174.21 to 174.27 including the power to:
1.11(1) review applications for financial assistance, execute contracts, and obligate
1.12and expend program funds, upon conditions and limitations as the commissioner deems
1.13necessary for purposes of program and project implementation, operation, and evaluation,;
1.14(2) accept and disburse federal funds available for the purposes of sections 174.21 to
1.15174.27 , and such funds are appropriated to the commissioner; and
1.16(3) act upon request as the designated agent of any eligible person for the receipt and
1.17disbursal of federal funds.
1.18(b) The commissioner shall perform the duties and exercise the powers under
1.19sections 174.21 to 174.27 in coordination with and in furtherance of statewide,
1.20regional, and local transportation plans and transportation development programs. The
1.21commissioner shall set guidelines for financial assistance under the public transit subsidy
1.22program. The commissioner shall present any proposed guidelines regarding public transit
1.23financial assistance to a legislative committee composed of equal numbers appointed by
1.24the house of representatives local and urban affairs and senate transportation committees.
1.25The commissioner shall not implement any new guidelines regarding public transit
2.1financial assistance, between the period January 1, 1981 to April 15, 1982, without the
2.2prior approval of that committee.

2.3    Sec. 3. Minnesota Statutes 2008, section 174.23, subdivision 2, is amended to read:
2.4    Subd. 2. Financial assistance; application, approval. (a) The commissioner
2.5shall seek out and select eligible recipients of financial assistance under sections 174.21
2.6to 174.27.
2.7(b) The commissioner shall establish by rule the procedures and standards for review
2.8and approval of applications for financial assistance submitted to the commissioner
2.9pursuant to sections 174.21 to 174.27. Any applicant shall provide to the commissioner
2.10any financial or other information required by the commissioner to carry out the
2.11commissioner's duties. The commissioner may require local contributions from applicants
2.12as a condition for receiving financial assistance.
2.13(c) Before the commissioner approves any grant, the application for the grant shall
2.14may be reviewed and approved by the appropriate regional development commission only
2.15for consistency with regional transportation plans and development guides. If an applicant
2.16proposes a project within the jurisdiction of a transit authority or commission or a transit
2.17system assisted or operated by a city or county, the application shall also be reviewed
2.18by that commission, authority, or political subdivision for consistency with its transit
2.19programs, policies, and plans. Any regional development commission that has not adopted
2.20a transportation plan may review but may not approve or disapprove of any application.

2.21    Sec. 4. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 1a, is
2.22amended to read:
2.23    Subd. 1a. Transit service needs implementation plan. (a) The commissioner shall
2.24develop a transit service needs implementation plan that contains a goal of meeting at least
2.2580 percent of unmet total transit service needs in greater Minnesota by July 1, 2015, and
2.26meeting at least 90 percent of unmet total transit service needs in greater Minnesota by
2.27July 1, 2025. The plan must include, but is not limited to, the following: an analysis of
2.28ridership and transit service needs throughout greater Minnesota; a calculation of unmet
2.29needs; an assessment of the level and type of service required to meet unmet needs; an
2.30analysis of costs and revenue options; and, a plan to reduce unmet transit service needs as
2.31specified in this subdivision. The plan must specifically address special transportation
2.32service ridership and needs. The plan must also provide that recipients of operating
2.33assistance under this section provide fixed route public transit service without charge for
2.34disabled veterans in accordance with subdivision 7.
3.1(b) The commissioner may amend the plan as necessary, and may use all or part
3.2of the 2001 greater Minnesota public transportation plan created by the Minnesota
3.3Department of Transportation.

3.4    Sec. 5. Minnesota Statutes 2008, section 174.24, subdivision 2, is amended to read:
3.5    Subd. 2. Eligibility; application. Any legislatively established public transit
3.6commission or authority, any county or statutory or home rule charter city providing
3.7financial assistance to or operating public transit, any private operator of public transit, or
3.8any combination thereof is eligible to receive financial assistance through the public transit
3.9participation program. Except as provided in subdivision 2b for assistance provided from
3.10federal funds, eligible recipients must be located outside of the metropolitan area.

3.11    Sec. 6. Minnesota Statutes 2008, section 174.24, is amended by adding a subdivision
3.12to read:
3.13    Subd. 2b. Federal aid. (a) The commissioner may accept and disburse federal funds
3.14received and appropriated under section 174.23, subdivision 1, as an additional source of
3.15funds for implementing the public transit participation program established in this section.
3.16This authority includes, but is not limited to:
3.17(1) adopting administrative rules to establish financial assistance allocation priorities,
3.18identify factors to consider in reviewing an applicant's management plan, evaluate a
3.19request for financial assistance, and determine the amount of financial assistance to be
3.20provided; and
3.21(2) establishing project selection criteria under the section 5311 state management
3.22plan as approved by the Federal Transit Administration, United States Department of
3.24(b) If the commissioner accepts and disburses federal funds as provided in paragraph
3.25(a), the commissioner shall:
3.26(1) maintain separate accounts for (i) state sources of funds, and (ii) federal sources
3.27of funding; and
3.28(2) ensure that all state sources of funds are only used for assistance to eligible
3.29recipients as provided in subdivision 2.

3.30    Sec. 7. Minnesota Statutes 2008, section 174.24, subdivision 3b, is amended to read:
3.31    Subd. 3b. Operating assistance; recipient classifications. (a) The commissioner
3.32shall determine the total operating cost of any public transit system receiving or applying
3.33for assistance in accordance with generally accepted accounting principles. To be eligible
4.1for financial assistance, an applicant or recipient shall provide to the commissioner
4.2all financial records and other information and shall permit any inspection reasonably
4.3necessary to determine total operating cost and correspondingly the amount of assistance
4.4that may be paid to the applicant or recipient. Where more than one county or municipality
4.5contributes assistance to the operation of a public transit system, the commissioner shall
4.6identify one as lead agency for the purpose of receiving money under this section.
4.7    (b) Prior to distributing operating assistance to eligible recipients for any contract
4.8period, the commissioner shall place all recipients into one of the following classifications:
4.9urbanized area service, small urban area service, rural area service, and elderly and
4.10disabled service.
4.11(c) The commissioner shall distribute funds under this section so that the percentage
4.12of total operating cost paid by any recipient from local sources will not exceed the
4.13percentage for that recipient's classification, except as provided in an undue hardship case
4.14this subdivision. The percentages must be:
4.15(1) for urbanized area service and small urban area service, 20 percent;
4.16(2) for rural area service, 15 percent; and
4.17(3) for elderly and disabled service, 15 percent.
4.18Except as provided in a United States Department of Transportation program
4.19allowing or requiring a lower percentage to be paid from local sources, the remainder of
4.20the total operating cost will be paid from state sources of funds less any assistance received
4.21by the recipient from any federal source the United States Department of Transportation.
4.22(d) For purposes of this subdivision, "local sources" means all local sources of funds
4.23and includes all operating revenue, tax levies, and contributions from public funds, except
4.24that the commissioner may exclude from the total assistance contract revenues derived
4.25from operations the cost of which is excluded from the computation of total operating
4.26cost. Total operating costs of the Duluth Transit Authority or a successor agency does
4.27not include costs related to the Superior, Wisconsin service contract and the Independent
4.28School District No. 709 service contract.
4.29(e) A recipient of operating assistance under this subdivision may, in order to
4.30provide additional transit service, expend funds from local sources in excess of the funds
4.31required based on the percentage identified in paragraph (b). An expenditure under this
4.32paragraph does not increase the amount of operating cost paid from state source of funds
4.33or any federal funds.
4.34    (c) (f) If a recipient informs the commissioner in writing after the establishment of
4.35these percentages but prior to the distribution of financial assistance for any year that
4.36paying its designated percentage of total operating cost from local sources will cause
5.1undue hardship, the commissioner may reduce the percentage to be paid from local
5.2sources by the recipient and increase the percentage to be paid from local sources by one
5.3or more other recipients inside or outside the classification. However, the commissioner
5.4may not reduce or increase any recipient's percentage under this paragraph for more than
5.5two years successively. If for any year the funds appropriated to the commissioner to carry
5.6out the purposes of this section are insufficient to allow the commissioner to pay the state
5.7share of total operating cost as provided in this paragraph, the commissioner shall reduce
5.8the state share in each classification to the extent necessary.

5.9    Sec. 8. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 5, is
5.10amended to read:
5.11    Subd. 5. Method of payment, operating assistance. Payments for operating
5.12assistance under this section from state sources of funds must be made in the following
5.14    (a) For payments made from the general fund:
5.15    (1) 50 percent of the total contract amount in or before the first month of operation;
5.16    (2) 40 percent of the total contract amount in or before the seventh month of
5.18    (3) 9 percent of the total contract amount in or before the 12th month of operation;
5.20    (4) 1 percent of the total contract amount after the final audit.
5.21    (b) For payments made from the greater Minnesota transit account:
5.22    (1) 50 percent of the total contract amount in or before the seventh month of
5.23operation; and
5.24    (2) 50 percent of the total contract amount in or before the 11th month of operation.

5.25    Sec. 9. Minnesota Statutes 2008, section 174.247, is amended to read:
5.27    (a) By February 15 annually, the commissioner shall submit a report to the legislature
5.28on transit services outside the metropolitan area. The Metropolitan Council and any
5.29public transit system receiving assistance under section 174.24 shall provide assistance
5.30in creating the report, as requested by the commissioner.
5.31    (b) The report must include, at a minimum, the following:
5.32    (1) a descriptive overview of public transit in Minnesota;
5.33    (2) a descriptive summary of funding sources and assistance programs;
6.1    (3) a summary of each public transit system receiving assistance under section
6.2174.24 ;
6.3    (4) data that identifies use of volunteers in providing transit service;
6.4    (5) financial data that identifies operating and capital costs, and funding sources,
6.5for each public transit system and for each transit system classification under section
6.6174.24, subdivision 3b :
6.7(i) the operating and capital costs;
6.8(ii) each of the funding sources used to provide financial assistance; and
6.9(iii) for federal funds, the amount from each specific federal program under which
6.10funding is provided;
6.11    (6) a summary of the differences in program implementation requirements and aid
6.12recipient eligibility between federal aid and state sources of funds;
6.13(7) in each odd-numbered year, an analysis of public transit system needs and
6.14operating expenditures on an annual basis, which must include a methodology for
6.15identifying monetary needs, and calculations of:
6.16(i) the total monetary needs for all public transit systems, for the year of the report
6.17and the ensuing five years;
6.18(ii) the total expenditures from local sources for each transit system classification,
6.19including any expenditures under section 174.24, subdivision 3b, paragraph (e);
6.20(iii) the comprehensive transit assistance percentage for each transit system
6.21classification, which equals (A) the expenditures identified under clause (7), item (ii), for
6.22a transit system classification, divided by (B) the amounts identified under subitem (A),
6.23plus the sum of state sources of funds plus federal funds provided to all transit systems
6.24in that classification; and
6.25(iv) in each odd-numbered year, beginning in 2009, a calculation of the amounts
6.26the amount of surplus or insufficient funds available for (i) paying the state share of
6.27transit operating costs under section 174.24, subdivision 3b, and (ii) paying capital and
6.28operating costs to fully implement the transit service needs implementation plan under
6.29section 174.24, subdivision 1a."
6.30Amend the title accordingly