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S.F. No. 891 - Transportation Finance and Tax Provisions Modifications (Delete-Everything Amendment)
 
Author: Senator D. Scott Dibble
 
Prepared By: Krista Boyd, Senate Fiscal Analyst (651/296-7681)
 
Date: April 4, 2013



 

Article I - Trunk Highway Bonds

Section 1 appropriates $800,800,000 from the bond proceeds account in the trunk highway fund.  $800 million is appropriated to MnDOT and $800,000 to the Department of Management and Budget.

Section 2 divides the $800 million MnDOT trunk highway bonding appropriation as follows:

  • $400 million for Corridor Investment Management Strategy (CIMS) Program, divided into annual appropriations of $100 million from 2014 to 2017.
  • $400 million for the Transportation Economic Development (TED) Program, divided into annual appropriations of $100 million from 2014 to 2017.

Section 3 appropriates $800,000 to the Department of Management and Budget for bond sale expenses.

Section 4 authorizes the sale of trunk highway bonds in the total amount up to $800,800,000.

Section 5 provides an immediate effective date for this article.

Article 2 - Highway User Taxes

Section 1 increases the vehicle registration tax from $10 to $20 and increases the additional tax from 1.25 to 1.375 percent of base value, as adjusted by the current depreciation schedule.  This section is effective the day after final enactment and applies to registration periods that start on or after July 1, 2013.

Section 2 creates a penalty for late payment of vehicle registration taxes.  If the registration tax is not fully paid within 30 days of the beginning of the registration period, the owner owes a penalty of five percent of the total registration tax.  This section is effective the day after final enactment and applies to registration periods that start on or after January 1, 2014.

Section 3 increases the gasoline tax a total of five cents, along with proportional increases on other fuels.  This section is effective October 1, 2013.

Section 4 increases proportionally the tax on special fuels effective October 1, 2013.

Section 5 increases the minimum motor fuels tax surcharge, beginning in fiscal year 2017, to the lesser of eight cents (currently 3.5 cents) or the amount needed for debt service through 2044.  This section is effective July 1, 2013.

Section 6 eliminates the $32 million annual allocation to the general fund from the motor vehicle lease sales tax, and splits the entire net revenue equally between greater Minnesota transit and the county state-aid highway (CSAH) fund.  The CSAH portion is allocated as follows:

  • First, each metropolitan area county receives an amount equal to the amount of lease sales tax it received in fiscal year 2013.  (Hennepin and Ramsey counties received 0.)
  • Second, the remainder of the CSAH portion is divided among the seven counties according to population.

This section is effective June 30, 2013.

Article 3 - General Sales Tax

Section 1 applies the general tax to the following:

  • repair and maintenance of motor vehicles, that are not covered by warranty, service contract, or recall; and
  • furnishing for consideration of a warranty or service contract for the repair or maintenance of a motor vehicle.

This section is effective for sales and purchases made after December 31, 2013.

Section 2 exempts from the sales tax parts and materials incorporated into a motor vehicle as part of automotive repair.  This section is effective for sales and purchases made after December 31, 2013.

Section 3 exempts from the general sales tax local governments that purchase goods and services for transit purposes, when those purchases are funded by revenue from the transit assistance fund.  This section is effective for sales and purchases made after June 30, 2013.

Section 4 exempts services from sales tax when sold to or used by these entities: 

  • MnDOT, funded by the trunk highway fund;
  • a county, funded by the county state-aid highway fund; or
  • a city, funded by the municipal state-aid street fund.

This section is effective for sales and purchases made after June 30, 2013.

Section 5 requires the Commissioner of Revenue to estimate, by the end of each fiscal year, the revenues on sales by and to auto repair and maintenance businesses, less refunds.  During the next fiscal year, the Commissioner of Management and Budget must transfer the estimated amount as follows:

  • 25 percent to the greater Minnesota transit account in the transit assistance fund;
  • 25 percent to the metropolitan area transit account in the transit assistance fund; and
  • 50 percent to the county state-aid highway fund.

This section is effective for revenues collected in fiscal year 2014 and thereafter.

Article 4 - Motor Vehicle Sales Tax

Section 1 conforms a cross-reference to a change made in section 2.

Section 2 provides that a transfer of a motor vehicle by way of gift between individuals is a sale, excluding a gift between spouses or between parent and child.

Section 3 increases the "in lieu tax" for a collector vehicle from $90 to $150.

Section 4 eliminates the motor vehicle sales tax exemption for a person who purchased and registered a vehicle in another state, and subsequently moved to Minnesota at least 60 days after the purchase.

Section 5 establishes an effective date of July 1, 2013, for this article, and provides that the article applies to title transfers that occur on or after that date.

Article 5 - Local Option Transportation Finance

Section 1 removes the $5 cap on wheelage taxes and allows any county in the state to impose a wheelage tax without a statutory cap.  The exemption from wheelage tax for electric-assisted bicycles is removed.  The registrar of motor vehicles, rather than the Commissioner of Management and Budget, must issue a monthly warrant to each county that levies the wheelage tax.  This section is effective August 1, 2013.

Section 2 increases the amount of the metropolitan area county sales tax for transit from one-quarter of one percent to three-fourths of one percent, effective July 1, 2013.

Section 3 changes the permissible uses of CTIB grant awards by limiting grants for transit purposes to two-thirds of the revenues (current law dedicates all grant awards to transit) and directing the use of the remaining one-third for county highways.  The 1.25 percent maximum that is available for bicycle and pedestrian grants is to be calculated  based on the two-thirds of the revenues available for transit purposes.  This section is effective July 1, 2013.

Section 4 requires a county board resolution following public hearing and removes the requirement of a referendum before a local sales tax may be imposed for transportation purposes in greater Minnesota.  This section is effective the day following final enactment.

Section 5 allows cities to establish street improvement districts to pay the costs of street improvements and maintenance.

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