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Senate Counsel, Research and Fiscal Analysis

G-17 State Capitol 75 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1606 (651) 296-4791 Fax: (651) 296-7747 Tom Bottern Director

Senate
State of Minnesota

S.F. No. 927 - Transit Finance Modifications


Author: Prepared By: Senator Bobby Joe Champion Bonnie Berezovsky, Senate Counsel (651/296-9191) Krista Boyd, Senate Fiscal Analyst (651/296-7681) March 20, 2013

Date:

Section 1 changes the distribution of motor vehicle lease sales tax revenue. Under the current distribution, $32 million is deposited annually into the general fund, and the remainder is divided equally between the greater Minnesota transit account and the county state-aid highway fund for metropolitan counties excluding Hennepin and Ramsey. Under this section, $9 million is deposited annually into the county state-aid highway fund for metropolitan counties excluding Hennepin and Ramsey, and the remainder is deposited in the greater Minnesota transit account. Section 2 imposes the metropolitan area transit sales and use tax in the seven counties. Subdivision 1 imposes:

a sales tax of 0.75 percent on sales and uses in the metropolitan area; and an excise tax of $20 on each motor vehicle sale in the metropolitan area.

The tax is exempt from statutory requirements of a local resolution, voter approval, and limitation to a specific improvement. The tax is subject to provisions relating to imposition, administration, collection, and enforcement of the tax by the commissioner of revenue. Subdivision 2 provides that the Commissioner of Revenue, after deducting costs of collection, must remit tax proceeds monthly as follows:

41.5 percent to the Metropolitan Council for bus transit, including suburban transit

systems; 41.5 percent to Counties Transit Improvement Board (CTIB); seven percent to cities in the metropolitan area; seven percent to counties in the metropolitan area; and three percent to the Metropolitan Council for bicycle and pedestrian infrastructure and maintenance. Subdivision 3 requires revenues to the Metropolitan Council to be used to expand bus service, ensure affordable fares, and support public transit capital and operations. These funds must supplement state assistance to the Metropolitan Council for these purposes. The Metropolitan Council must report annually, beginning in 2015, to the legislative Transportation Committees concerning uses of the sales tax revenues. Subdivision 4 requires revenues to CTIB to be used according to current statutes governing CTIB (debt service, transit way capital and operations, park-and-ride facilities, and bicycle programs and pathways). Sales taxes collected in the counties that are not members of CTIB must be transferred back to the counties to be used for transit way planning, capital costs and operating expenses. These counties must report back to CTIB concerning their use of the funds. Subdivision 5 allocates the city and county funds among cities and counties according to their population. The money may be used for specified purposes, including transit, pedestrian and bicycle facilities, safe routes to school, and projects to enhance accessibility. Each city and county that receives funds must report to the Metropolitan Council annually concerning use of the funds.

Section 3 allows CTIB to utilize up to 0.75 percent of the proceeds of both the current metropolitan area sales tax and the CTIB share of the new sales tax proceeds for administrative costs. Section 4 appropriates $8 million in general obligation bond proceeds to the Commissioner of Transportation for greater Minnesota transit capital. Section 5 appropriates $95million in general obligation bond proceeds to the Metropolitan Council for development of specified transit way corridors. Section 6 authorizes sale of general obligation bonds in a total amount up to $103 million to fund the appropriations in sections 4 and 5. Section 7 makes the motor vehicle lease sales tax changes and new transit tax effective January 1, 2014. The appropriations and bond sale authorization are effective the day following final enactment. BB/KB:rer

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