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S.F. No. 3837 - Constitutionally Dedicating Motor Vehicle Taxes for Roads, Bridges, and Transportation Purposes (First Engrossment)
Author: Senator Scott J. Newman
Prepared By: Alexis C. Stangl, Senate Counsel (651/296-4397)
Date: April 2, 2018


Article 1 – Constitutional Amendment Implementation

Article 1 sets forth the proposed constitutional amendment language, ballot question, and title.

Section 1. Road and bridge fund. Establishes the new road and bridge fund that will consist of the tax proceeds identified in section 3. The fund is distributed as follows: four percent to small cities assistance account; 3.25 percent to the town road account; and 1.75 percent to the town bridge account. Of the remaining balance, 62 percent goes to the trunk highway construction fund (created in section 2), 29 percent to the county state-aid highway fund, and nine percent to the municipal state-aid street fund.

Section 2. Trunk highway construction fund. Establishes a new trunk highway construction fund that is to be used only for road and bridge construction and repair projects and repayment of bonds.

Section 3. Sales taxes; motor vehicle and trailer repair and replacement parts; rental vehicles. Identifies the tax proceeds that will be deposited into the road and bridge fund. The sales tax on the sale and purchase of repair and replacement parts for motor vehicles and trailers is deposited into the road and bridge fund. The proceeds are phased in over three years. The revenue from rental motor vehicle sales tax and the rental motor vehicle tax are also deposited into the road and bridge fund; these funds are currently statutorily dedicated. There is no phase-in for these proceeds.

Section 4. Motor vehicle lease sales tax revenue. Constitutionally dedicates the motor vehicle lease sales tax revenue, which is currently statutorily dedicated. These tax proceeds are distributed to the county state-aid highway fund; the greater Minnesota transit account; and for local bridges. The current allocation is in Minnesota Statutes, §297A.815, subdivision 3. The percentage to be allocated to each entity is set in statute and can only be changed every six years.

Section 5. Submission to voters. Requires the constitutional amendment to be placed on the 2018 general election ballot. The question and title are provided.

Article 2 – Constitutional Amendment Implementation

Article 2 provides statutory language to implement the constitutional amendment in article 1.

Section 1. Greater Minnesota transit account. Specifies that the greater Minnesota transit account will receive the funds allocated for public transit in greater Minnesota.

Section 2Trunk highway construction fund.  Establishes the trunk highway construction fund in statute and specifies that the fund will recieve funds from the road and bridge fund.  Money in the fund may be invested by the State Board of Investments.

Section 3. Distribution of five percent. Makes technical and conforming changes.

Section 4. Account created. Specifies that the town road account receives the funds distributed for construction and maintenance of town roads, in addition to other money as provided by law.

Section 5. Town bridge account. Moves the location of the town bridge account from the state treasury to the county-state-aid highway fund. The account receives the funds distributed for construction and maintenance of town bridges, in addition to other money as provided by law.

Section 6. Small cities assistance account. Specifies that the small cities assistance account will receive the funds allocated to cities that do not receive municipal state-aid street funds.

Section 7. Fund created. Specifies that the Minnesota transportation fund will receive the funds allocated for construction, replacement, and repair of local bridges.

Section 8. Deposit of revenues. Directs the commissioner of revenue to deposit monthly amounts into the road and bridge fund. The method for determining monthly deposits is provided. The commissioner must report to the legislature on the estimates and estimation methodology used.

Section 9. Effective date. If the constitutional amendment is adopted, this article is effective June 30, 2019.

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