HF1798 (Legislative Session 94 (2025-2026))
Vehicle repair and replacement parts distribution of sales tax proceeds modified.
Related bill: SF2081
AI Generated Summary
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.)
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 03, 2025 | House | Action | Introduction and first reading, referred to | Transportation Finance and Policy |
Citations
[
{
"analysis": {
"added": [
"Reallocates revenue distributions among funds and accounts, including highway user tax distribution fund, general fund, and dedicated transportation and natural resources accounts, with scheduled percentages."
],
"removed": [],
"summary": "Amends the deposit of revenues from the sales tax on vehicle repair and replacement parts.",
"modified": [
"Provides a new framework for depositing and distributing revenues from the motor vehicle repair and replacement parts tax."
]
},
"citation": "297A.94",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References revenue from the sales and purchases taxed under 297A.62 and directs its allocation.",
"modified": [
"Allocates revenues from the sales and purchases taxed under 297A.62 to debt service and then to the general fund, as part of the broader 297A.94 deposit framework."
]
},
"citation": "297A.61",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Used to determine the debt service requirement for general obligation special tax bond debt service accounts.",
"modified": [
"Incorporates debt service account requirements into the revenue distribution scheme under 297A.94."
]
},
"citation": "16A.661",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Transportation advancement account referenced for a portion of revenue allocations.",
"modified": [
"Directs a portion of revenue to the transportation advancement account as part of the distribution schedule."
]
},
"citation": "174.49",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Imposes the tax on sale and purchase of motor vehicle repair and replacement parts that is redistributed in the bill.",
"modified": [
"Allocates the tax revenue from 297A.62(1) to the highway user tax distribution fund and to the transportation advancement account according to a specified schedule."
]
},
"citation": "297A.62",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Deposits revenues under 297A.64 to the highway user tax distribution fund; establishes distribution to other funds.",
"modified": [
"Revises deposit and distribution of revenues under 297A.64 to the highway user tax distribution fund and related accounts."
]
},
"citation": "297A.64",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Requires transfers related to 297A.64 to the general fund after other allocations.",
"modified": [
"Adds a transfer mechanism for excess revenues from 297A.64 subdivision 5 to the general fund."
]
},
"citation": "297A.64",
"subdivision": "5"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Describes distributions transmitted to various accounts including fire-related funds.",
"modified": [
"Allocates a portion of revenues to the volunteer fire assistance grant account and the fire safety account; remainder to the general fund."
]
},
"citation": "297A.65",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Identifies items regulated under 624.20(1) related to age restrictions on sales when deposited for other purposes.",
"modified": [
"References sale of items regulated under 624.20(1) for revenue distribution purposes, including sales to persons 18 years or older."
]
},
"citation": "624.20",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Provisions related to restrictions on use by the general public.",
"modified": [
"Noted in context of revenue allocations; clarifies restrictions associated with items regulated under 624.20."
]
},
"citation": "624.21",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Volunteer fire assistance grant account is referenced as a recipient of funds.",
"modified": [
"Allocates 25 percent of certain revenues to the volunteer fire assistance grant account."
]
},
"citation": "88.068",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Fire safety account is identified as a recipient of funds.",
"modified": [
"Allocates 25 percent of certain revenues to the fire safety account (section 297I.06, subdivision 3)."
]
},
"citation": "297I.06",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Pollinator account is mentioned within natural resources allocations.",
"modified": [
"Allocates funds to the pollinator account established in 103B.101, subdivision 19."
]
},
"citation": "103B.101",
"subdivision": "19"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Greater Minnesota Regional Parks and Trails Commission referenced in distribution plan.",
"modified": [
"Revenue allocations support parks and trails outside the seven-county metro area as recommended by the Greater Minnesota Regional Parks and Trails Commission under section 85.536."
]
},
"citation": "85.535",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Greater Minnesota Regional Parks and Trails Commission recommendations.",
"modified": [
"Supports regional parks and trails outside the metro area per Commission recommendations."
]
},
"citation": "85.536",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to the loan guaranty program and conditional commitment for projects.",
"modified": [
"Cites 41A.04, subdivision 3 in the context of conditional commitments for loans tied to projects referenced in the bill."
]
},
"citation": "41A.04",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Defines motor vehicle terms, including tires for highway use, within the bill’s context.",
"modified": [
"References 297B.01(11) definitions relevant to the scope of motor vehicles and tires for highway use."
]
},
"citation": "297B.01",
"subdivision": "11"
}
]Progress through the legislative process
In Committee