1.1 A bill for an act
1.2 relating to transportation; modifying distribution of proceeds from the sales tax
1.3 on vehicle repair and replacement parts; amending Minnesota Statutes 2024, section
1.4 297A.94.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. Minnesota Statutes 2024, section 297A.94, is amended to read:
1.7 297A.94 DEPOSIT OF REVENUES.
1.8 (a) Except as provided in this section, the commissioner shall deposit the revenues,
1.9including interest and penalties, derived from the taxes imposed by this chapter in the state
1.10treasury and credit them to the general fund.
1.11 (b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
1.12account in the special revenue fund if:
1.13 (1) the taxes are derived from sales and use of property and services purchased for the
1.14construction and operation of an agricultural resource project; and
1.15 (2) the purchase was made on or after the date on which a conditional commitment was
1.16made for a loan guaranty for the project under section 41A.04, subdivision 3.
1.17The commissioner of management and budget shall certify to the commissioner the date on
1.18which the project received the conditional commitment. The amount deposited in the loan
1.19guaranty account must be reduced by any refunds and by the costs incurred by the Department
1.20of Revenue to administer and enforce the assessment and collection of the taxes.
1Section 1.
REVISOR KRB/MI 25-0376402/11/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 1798
NINETY-FOURTH SESSION
Authored by Koegel03/03/2025
The bill was read for the first time and referred to the Committee on Transportation Finance and Policy 2.1 (c) The commissioner shall deposit the revenues, including interest and penalties, derived
2.2from the taxes imposed on sales and purchases included in section 297A.61, subdivision 3,
2.3paragraph (g), clauses (1) and (4), in the state treasury, and credit them as follows:
2.4 (1) first to the general obligation special tax bond debt service account in each fiscal
2.5year the amount required by section 16A.661, subdivision 3, paragraph (b); and
2.6 (2) after the requirements of clause (1) have been met, the balance to the general fund.
2.7 (d) Beginning with sales taxes remitted after July 1, 2017, the commissioner shall deposit
2.8in the state treasury the revenues collected under section 297A.64, subdivision 1, including
2.9interest and penalties and minus refunds, and credit them to the highway user tax distribution
2.10fund.
2.11 (e) The commissioner shall deposit the revenues, including interest and penalties,
2.12collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
2.13general fund. By July 15 of each year the commissioner shall transfer to the highway user
2.14tax distribution fund an amount equal to the excess fees collected under section 297A.64,
2.15subdivision 5, for the previous calendar year.
2.16 (f) Beginning with sales taxes remitted after July 1, 2017, in conjunction with the deposit
2.17of revenues under paragraph (d), the commissioner shall deposit into the state treasury and
2.18credit to the highway user tax distribution fund an amount equal to the estimated revenues
2.19derived from the tax rate imposed under section 297A.62, subdivision 1, on the lease or
2.20rental for not more than 28 days of rental motor vehicles subject to section 297A.64. The
2.21commissioner shall estimate the amount of sales tax revenue deposited under this paragraph
2.22based on the amount of revenue deposited under paragraph (d).
2.23 (g) The commissioner must deposit the revenues derived from the taxes imposed under
2.24section 297A.62, subdivision 1, on the sale and purchase of motor vehicle repair and
2.25replacement parts in the state treasury and credit:
2.26 (1) 43.5 percent in each fiscal year to the highway user tax distribution fund;
2.27 (2) a percentage to the transportation advancement account under section 174.49 as
2.28follows:
2.29 (i) 3.5 percent in fiscal year 2024;
2.30 (ii) 4.5 percent in fiscal year 2025;
2.31 (iii) 5.5 percent in fiscal year 2026;
2.32 (iv) 7.5 7.6 percent in fiscal year 2027;
2Section 1.
REVISOR KRB/MI 25-0376402/11/25 3.1 (v) 14.5 14.75 percent in fiscal year 2028;
3.2 (vi) 21.5 22 percent in fiscal year 2029; and
3.3 (vii) 28.5 56.5 percent in fiscal year 2030 and thereafter; and
3.4 (viii) 36.5 percent in fiscal year 2031;
3.5 (ix) 44.5 percent in fiscal year 2032; and
3.6 (x) 56.5 percent in fiscal year 2033 and thereafter; and
3.7 (3) the remainder in each fiscal year to the general fund.
3.8For purposes of this paragraph, "motor vehicle" has the meaning given in section 297B.01,
3.9subdivision 11, and "motor vehicle repair and replacement parts" includes (i) all parts, tires,
3.10accessories, and equipment incorporated into or affixed to the motor vehicle as part of the
3.11motor vehicle maintenance and repair, and (ii) paint, oil, and other fluids that remain on or
3.12in the motor vehicle as part of the motor vehicle maintenance or repair. For purposes of this
3.13paragraph, "tire" means any tire of the type used on highway vehicles, if wholly or partially
3.14made of rubber and if marked according to federal regulations for highway use.
3.15 (h) 81.56 percent of the revenues, including interest and penalties, transmitted to the
3.16commissioner under section 297A.65, must be deposited by the commissioner in the state
3.17treasury as follows:
3.18 (1) 47.5 percent of the receipts must be deposited in the heritage enhancement account
3.19in the game and fish fund, and may be spent only on activities that improve, enhance, or
3.20protect fish and wildlife resources, including conservation, restoration, and enhancement
3.21of land, water, and other natural resources of the state;
3.22 (2) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
3.23be spent only for state parks and trails;
3.24 (3) 22.5 percent of the receipts must be deposited in the natural resources fund, and may
3.25be spent only on metropolitan park and trail grants;
3.26 (4) three percent of the receipts must be deposited in the natural resources fund, and
3.27may be spent only on local trail grants;
3.28 (5) two percent of the receipts must be deposited in the natural resources fund, and may
3.29be spent only for the Minnesota Zoological Garden, the Como Park Zoo and Conservatory,
3.30and the Duluth Zoo; and
3Section 1.
REVISOR KRB/MI 25-0376402/11/25 4.1 (6) 2.5 percent of the receipts must be deposited in the pollinator account established in
4.2section 103B.101, subdivision 19.
4.3 (i) 1.5 percent of the revenues, including interest and penalties, transmitted to the
4.4commissioner under section 297A.65 must be deposited in a regional parks and trails account
4.5in the natural resources fund and may only be spent for parks and trails of regional
4.6significance outside of the seven-county metropolitan area under section 85.535, based on
4.7recommendations from the Greater Minnesota Regional Parks and Trails Commission under
4.8section 85.536.
4.9 (j) 1.5 percent of the revenues, including interest and penalties, transmitted to the
4.10commissioner under section 297A.65 must be deposited in an outdoor recreational
4.11opportunities for underserved communities account in the natural resources fund and may
4.12only be spent on projects and activities that connect diverse and underserved Minnesotans
4.13through expanding cultural environmental experiences, exploration of their environment,
4.14and outdoor recreational activities.
4.15 (k) The revenue dedicated under paragraph (h) may not be used as a substitute for
4.16traditional sources of funding for the purposes specified, but the dedicated revenue shall
4.17supplement traditional sources of funding for those purposes. Land acquired with money
4.18deposited in the game and fish fund under paragraph (h) must be open to public hunting
4.19and fishing during the open season, except that in aquatic management areas or on lands
4.20where angling easements have been acquired, fishing may be prohibited during certain times
4.21of the year and hunting may be prohibited. At least 87 percent of the money deposited in
4.22the game and fish fund for improvement, enhancement, or protection of fish and wildlife
4.23resources under paragraph (h) must be allocated for field operations.
4.24 (l) The commissioner must deposit the revenues, including interest and penalties minus
4.25any refunds, derived from the sale of items regulated under section 624.20, subdivision 1,
4.26that may be sold to persons 18 years old or older and that are not prohibited from use by
4.27the general public under section 624.21, in the state treasury and credit:
4.28 (1) 25 percent to the volunteer fire assistance grant account established under section
4.2988.068;
4.30 (2) 25 percent to the fire safety account established under section 297I.06, subdivision
4.313; and
4.32 (3) the remainder to the general fund.
4Section 1.
REVISOR KRB/MI 25-0376402/11/25 5.1 For purposes of this paragraph, the percentage of total sales and use tax revenue derived
5.2from the sale of items regulated under section 624.20, subdivision 1, that are allowed to be
5.3sold to persons 18 years old or older and are not prohibited from use by the general public
5.4under section 624.21, is a set percentage of the total sales and use tax revenues collected in
5.5the state, with the percentage determined under Laws 2017, First Special Session chapter
5.61, article 3, section 39.
5.7 (m) The revenues deposited under paragraphs (a) to (l) do not include the revenues,
5.8including interest and penalties, generated by the sales tax imposed under section 297A.62,
5.9subdivision 1a, which must be deposited as provided under the Minnesota Constitution,
5.10article XI, section 15.
5Section 1.
REVISOR KRB/MI 25-0376402/11/25