HF1798

Purpose

This bill changes where money collected from the sales tax on motor vehicle repair and replacement parts goes, and how that money is split among state programs. The goal is to allocate funds to transportation, parks and wildlife, zoos, pollinators, regional recreation, underserved communities, and public safety, while still supporting traditional funding needs.

Main Provisions

• Revenue allocation shift for motor vehicle repair and replacement parts:
  • A portion of the sales tax revenues from motor vehicle repair and replacement parts is designated for the Highway User Tax Distribution Fund (HUTDF) to support transportation-related needs.
  • A portion is allocated to the Transportation Advancement Account (TAA) with a defined schedule over multiple fiscal years, increasing over time.
  • The remaining share goes to the General Fund.
• Existing tax revenue streams:
  • Certain other tax revenues from motor vehicle taxes continue to be deposited into state funds with debt service or general fund implications, and transfers to the highway fund as appropriate.
  • Revenues related to the lease or rental of motor vehicles (up to 28 days) are estimated and deposited into the HUTDF.
• Dedicated environmental and recreational funding (via the 81.56% distribution rule):
  • A large share of revenues transmitted to the commissioner under a related section must be deposited into specific environmental and parks-related accounts:
  • Heritage Enhancement Account (Game and Fish Fund): funds conservation and wildlife-related activities.
  • Natural Resources Fund: funds state parks and trails, metropolitan park/trail grants, local trail grants, and zoos (Minnesota Zoo, Como Park Zoo and Conservatory, and the Duluth Zoo).
  • Pollinator Account: funds pollinator-related efforts.
  • An additional 1.5% is directed to the Regional Parks and Trails Account (outside the seven-county metro area) for regional park and trail projects.
  • An extra 1.5% is directed to an Outdoor Recreational Opportunities for Underserved Communities Account to expand access to outdoor activities for diverse and underserved Minnesotans.
• Supplement—not replace—existing funding:
  • The dedicated revenue cannot be used to replace traditional funding sources; it must supplement them.
• Public use and administration terms:
  • Land acquired with money from the Game and Fish Fund must be open to public hunting and fishing, with certain exceptions in aquatic management areas.
  • A minimum portion of funds for field operations must be used for improving wildlife and fisheries resources.
• Public safety and small-dedicated accounts:
  • A portion of revenues from certain regulated items (sold to adults 18+) is split into:
  • Volunteer Fire Assistance Grant Account
  • Fire Safety Account
  • The remainder goes to the General Fund.
• Adult-only item revenue reference:
  • The bill references a specific preexisting law to determine what share of certain item sales (adult-use items) is allocated, ensuring consistency with prior statutory language.
• Constitutional note:
  • Revenues that are not part of these allocations remain subject to constitutional requirements for how certain tax revenues are deposited.

Significant Changes to Existing Law

• The bill redefines how the sales tax collected on motor vehicle repair and replacement parts is distributed, shifting more of those funds toward transportation-related programs (HUTDF and TAC) and away from a pure General Fund deposit.
• It creates or expands dedicated allocations to environmental, parks, wildlife, zoos, pollinators, and outdoor recreation accounts, with specified percentages and time-based schedules.
• It codifies a blended funding approach that obligates a substantial portion of these revenues to be spent on field operations and public-access conservation activities, rather than solely broad General Fund uses.
• It establishes targeted funding streams for underserved communities and regional recreation initiatives to improve access to outdoor opportunities.
• It includes specific accountability and usage requirements, such as ensuring funds supplement rather than substitute traditional funding, and open-access requirements for land acquired with Game and Fish funds.

Relevant Terms highway user tax distribution fund Transportation Advancement Account General Fund Natural Resources Fund Game and Fish Fund Heritage Enhancement Account Pollinator Account Regional Parks and Trails Account Outdoor Recreational Opportunities for Underserved Communities Account motor vehicle repair and replacement parts sales tax section 297A.64 section 297A.62 July 1, 2017 lease or rental of motor vehicles (not more than 28 days) tire land open to public hunting and fishing public safety accounts (Volunteer Fire Assistance Grant Account, Fire Safety Account) adult-use items (as defined by related statute) public funds deposits and statutory transfers state park and trail funding metropolitan park and trail grants local trail grants

(Note: The terms listed above reflect key concepts, funds, and recipients referenced in the bill’s provisions.)