SF3988

Purpose

This bill updates Minnesota transportation policy by boosting rail service improvements, strengthening railroad crossing safety, increasing transparency on highway project costs, clarifying airport funding and zoning rules, and removing an historic highway name designation. It also makes technical corrections to several statutes.

Main Provisions

• Highway project reporting

  • The commissioner of transportation must annually report by December 15 on:
  • the status of major highway projects (completed in the previous two years, under construction, or planned for the year and the next 15 years);
  • expenditures from the trunk highway fund; and
  • efficiencies gained in the previous two fiscal years.
  • Defines a “major highway project” by cost thresholds that vary by district:
  • In metropolitan highway construction districts: total project cost at least $15 million to $30 million.
  • In nonmetropolitan districts: total project cost at least $5 million to $15 million.

• Railroad crossing bells

  • Prohibits silencing crossing bells at railroad crossings that have an active warning system, overriding any contrary law or rule.

• Rail Service Improvement Program (RSIP)

  • Creates a state RSIP to help improve rail service in Minnesota.
  • Requires the commissioner to identify deteriorating rail lines and to set priorities for funding, establish eligibility criteria, and assess anticipated economic and social benefits and the line’s economic viability.
  • The commissioner can negotiate contracts for rail line rehabilitation or other rail service improvements, may use federal funds, and may involve railroads, rail users, the department, and local or federal subdivisions. Participation is voluntary.
  • Contractual terms may require:
  • minimum operating standards for rail lines,
  • a portion of the assistance to be provided as a loan from rail users to the railroad, with repayment based on line use and revenue when the improvement is in place,
  • repayment terms for state funds, with reimbursements deposited into appropriate RSIP accounts (bond proceeds fund if bond-funded, otherwise the special revenue fund),
  • use of reimbursements to finance other rail rehabilitation projects,
  • when upgrades are contracted, the railroad must hire locally and pay workers at least the railroad’s usual rate for similar work, but not less than twice the state minimum wage.
  • RSIP may grant funds for freight rail improvements that support economic development.
  • Eligible RSIP expenditures may cover:
  • transfers to pay interest adjustments on loans,
  • capital improvements and rehabilitation costs,
  • acquisition/maintenance/disposal of railroad right-of-way,
  • aerial surveys of proposed/abandoned tracks,
  • marking and routing of rail lines,
  • rail planning studies,
  • matching funds for federal grants for rail-highway crossings and freight rail projects,
  • and related capital projects to improve capacity or safety at rail yards.
  • Money obtained from the disposition of railroad right-of-way or other property under RSIP rules must go into the RSIP accounts.

• Airport funding and zoning

  • The commissioner has authority to acquire land and establish restricted landing areas and other air navigation facilities, and to maintain, operate, regulate, and police airports (within or outside the state).
  • Airports may be funded and managed to serve air travelers, with services and facilities as needed.
  • The commissioner may not acquire additional state airports without proper process and must not spend money on land or facilities for airports unless the relevant local zoning authority is in place or actively pursuing zoning ordinances.
  • The commissioner may fund airport safety projects to maintain existing infrastructure even if zoning efforts are not complete; funding can be withheld from an airport subject to a zoning ordinance proposal.
  • The bill preserves funding and ongoing maintenance for the state-owned Pine Creek airport (in Roseau County), while applying the zoning funding rules to other airports.

• Repeals and technical corrections

  • Repeals Minnesota Statutes 2024 section 161.14, subdivisions 12 and 12a, removing the statutory designation of the Hiawatha Pioneer Trail as a named highway route.
  • The repealed material described the Hiawatha Pioneer Trail route and its alternate routes.

Notable Changes to Existing Law

• Adds a formal annual highway project reporting requirement with explicit cost thresholds for “major highway projects.”
• Requires crossing bells at crossings with active warning systems not to be silenced.
• Establishes a comprehensive Rail Service Improvement Program with defined eligibility, funding, and wage/worker-localization protections for contractors.
• Expands and clarifies the RSIP funding structure, including how reimbursements are handled and used.
• Clarifies airport funding eligibility tied to local zoning oversight, while guaranteeing continued support for the Pine Creek state airport.
• Repeals the official designation of the Hiawatha Pioneer Trail in state statutes, removing that named highway designation.

Potential Impacts

• Rail contractors and rail customers may gain access to a new, structured funding program for rehabilitation and improvements, with wage requirements and local hiring expectations.
• Communities along rail lines could see prioritized improvements and potential economic benefits from rail investments.
• Public safety at railroad crossings is strengthened by preventing silencing of warning bells.
• Local governments and airport authorities must pursue zoning obligations to access state funding for airports, though existing state-owned airports like Pine Creek may receive continued support.
• The removal of the Hiawatha Pioneer Trail designation may affect historical designations and signage, though physical routes remain the same.

Relevant Terms - commissioner of transportation - major highway project - metropolitan highway construction district - nonmetropolitan highway construction district - crossing bells - active warning system - rail service improvement program (RSIP) - rail line rehabilitation - rail users - railroads - rail service improvement account - bond proceeds fund - special revenue fund - federal grants - regional railroad authority - rail-highway grade crossing improvements - airport zoning ordinance - restricted landing areas - air navigation facilities - Pine Creek airport - Pine Creek (state-owned airport) - Hiawatha Pioneer Trail - 161.14 (repealed sections)