1.1.................... moves to amend H.F. No. 2807, the first engrossment, as follows:
1.2Page 15, after line 2, insert:

1.3    "Sec. 21. Minnesota Statutes 2008, section 174.22, is amended by adding a subdivision
1.4to read:
1.5    Subd. 14a. State sources of funds. "State sources of funds" means funding for the
1.6public transit participation program appropriated from (1) the general fund, and (2) the
1.7greater Minnesota transit account.

1.8    Sec. 22. Minnesota Statutes 2008, section 174.23, subdivision 1, is amended to read:
1.9    Subdivision 1. General. (a) The commissioner shall have all powers necessary and
1.10convenient to carry out the provisions of sections 174.21 to 174.27 including the power to:
1.11(1) review applications for financial assistance, execute contracts, and obligate
1.12and expend program funds, upon conditions and limitations as the commissioner deems
1.13necessary for purposes of program and project implementation, operation, and evaluation,;
1.14(2) accept and disburse federal funds available for the purposes of sections 174.21 to
1.15174.27 , and such funds are appropriated to the commissioner; and
1.16(3) act upon request as the designated agent of any eligible person for the receipt and
1.17disbursal of federal funds.
1.18(b) The commissioner shall perform the duties and exercise the powers under
1.19sections 174.21 to 174.27 in coordination with and in furtherance of statewide,
1.20regional, and local transportation plans and transportation development programs. The
1.21commissioner shall set guidelines for financial assistance under the public transit subsidy
1.22program. The commissioner shall present any proposed guidelines regarding public transit
1.23financial assistance to a legislative committee composed of equal numbers appointed by
1.24the house of representatives local and urban affairs and senate transportation committees.
1.25The commissioner shall not implement any new guidelines regarding public transit
2.1financial assistance, between the period January 1, 1981 to April 15, 1982, without the
2.2prior approval of that committee.

2.3    Sec. 23. Minnesota Statutes 2008, section 174.23, subdivision 2, is amended to read:
2.4    Subd. 2. Financial assistance; application, approval. (a) The commissioner
2.5shall seek out and select eligible recipients of financial assistance under sections 174.21
2.6to 174.27.
2.7(b) The commissioner shall establish by rule the procedures and standards for review
2.8and approval of applications for financial assistance submitted to the commissioner
2.9pursuant to sections 174.21 to 174.27. Any applicant shall provide to the commissioner
2.10any financial or other information required by the commissioner to carry out the
2.11commissioner's duties. The commissioner may require local contributions from applicants
2.12as a condition for receiving financial assistance.
2.13(c) Before the commissioner approves any grant, the application for the grant shall
2.14may be reviewed and approved by the appropriate regional development commission only
2.15for consistency with regional transportation plans and development guides. If an applicant
2.16proposes a project within the jurisdiction of a transit authority or commission or a transit
2.17system assisted or operated by a city or county, the application shall also be reviewed
2.18by that commission, authority, or political subdivision for consistency with its transit
2.19programs, policies, and plans. Any regional development commission that has not adopted
2.20a transportation plan may review but may not approve or disapprove of any application.

2.21    Sec. 24. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 1a, is
2.22amended to read:
2.23    Subd. 1a. Transit service needs implementation Greater Minnesota transit
2.24investment plan. (a) The commissioner shall develop a greater Minnesota transit service
2.25needs implementation investment plan that contains a goal of meeting at least 80 percent
2.26of unmet total transit service needs in greater Minnesota by July 1, 2015, and meeting at
2.27least 90 percent of unmet total transit service needs in greater Minnesota by July 1, 2025.
2.28(b) The plan must include, but is not limited to, the following:
2.29(1) an analysis of ridership and total transit service needs throughout greater
2.30Minnesota;
2.31(2) a calculation of unmet needs; an assessment of the level and type of service
2.32required to meet unmet total transit service needs, for the transit system classifications
2.33as provided under subdivision 3b, paragraph (c), of urbanized area, small urban area,
2.34rural area, and elderly and disabled service;
3.1(3) an analysis of costs and revenue options; and,
3.2(4) a plan to reduce unmet total transit service needs as specified in this subdivision;
3.3and
3.4(5) identification of the operating and capital costs necessary to meet 100 percent of
3.5the greater Minnesota transit targeted and projected bus service hours, as identified in the
3.6greater Minnesota transit plan, for 2010, 2015, 2020, 2025, and 2030.
3.7(c) The plan must specifically address special transportation service ridership and
3.8needs. The plan must also provide that recipients of operating assistance under this
3.9section provide fixed route public transit service without charge for disabled veterans in
3.10accordance with subdivision 7. The commissioner may amend the plan as necessary, and
3.11may use all or part of the 2001 greater Minnesota public transportation plan created by the
3.12Minnesota Department of Transportation.

3.13    Sec. 25. Minnesota Statutes 2008, section 174.24, subdivision 2, is amended to read:
3.14    Subd. 2. Eligibility; application. Any legislatively established public transit
3.15commission or authority, any county or statutory or home rule charter city providing
3.16financial assistance to or operating public transit, any private operator of public transit, or
3.17any combination thereof is eligible to receive financial assistance through the public transit
3.18participation program. Except as provided in subdivision 2b for assistance provided from
3.19federal funds, eligible recipients must be located outside of the metropolitan area.

3.20    Sec. 26. Minnesota Statutes 2008, section 174.24, is amended by adding a subdivision
3.21to read:
3.22    Subd. 2b. Federal aid. (a) The commissioner may accept and disburse federal funds
3.23received and appropriated under section 174.23, subdivision 1, as an additional source of
3.24funds for implementing the public transit participation program established in this section.
3.25This authority includes, but is not limited to:
3.26(1) adopting administrative rules to establish financial assistance allocation priorities,
3.27identify factors to consider in reviewing an applicant's management plan, evaluate a
3.28request for financial assistance, and determine the amount of financial assistance to be
3.29provided; and
3.30(2) establishing project selection criteria under the United States Code, title 49,
3.31section 5311, state management plan as approved by the Federal Transit Administration,
3.32United States Department of Transportation.
3.33(b) If the commissioner accepts and disburses federal funds as provided in paragraph
3.34(a), the commissioner shall:
4.1(1) maintain separate accounts for (i) state sources of funds, and (ii) federal sources
4.2of funding; and
4.3(2) ensure that all state sources of funds are only used for assistance to eligible
4.4recipients as provided in subdivision 2.

4.5    Sec. 27. Minnesota Statutes 2008, section 174.24, subdivision 3b, is amended to read:
4.6    Subd. 3b. Operating assistance; recipient classifications. (a) The commissioner
4.7shall determine the total operating cost of any public transit system receiving or applying
4.8for assistance in accordance with generally accepted accounting principles. To be eligible
4.9for financial assistance, an applicant or recipient shall provide to the commissioner
4.10all financial records and other information and shall permit any inspection reasonably
4.11necessary to determine total operating cost and correspondingly the amount of assistance
4.12that may be paid to the applicant or recipient. Where more than one county or municipality
4.13contributes assistance to the operation of a public transit system, the commissioner shall
4.14identify one as lead agency for the purpose of receiving money under this section.
4.15    (b) Prior to distributing operating assistance to eligible recipients for any contract
4.16period, the commissioner shall place all recipients into one of the following classifications:
4.17urbanized area service, small urban area service, rural area service, and elderly and
4.18disabled service.
4.19(c) The commissioner shall distribute funds under this section so that the percentage
4.20of total contracted operating cost paid by any recipient from local sources will not exceed
4.21the percentage for that recipient's classification, except as provided in an undue hardship
4.22case this subdivision. The percentages must be:
4.23(1) for urbanized area service and small urban area service, 20 percent;
4.24(2) for rural area service, 15 percent; and
4.25(3) for elderly and disabled service, 15 percent.
4.26Except as provided in a United States Department of Transportation program allowing
4.27or requiring a lower percentage to be paid from local sources, the remainder of the
4.28recipient's total contracted operating cost will be paid from state sources of funds less any
4.29assistance received by the recipient from any federal source the United States Department
4.30of Transportation.
4.31(d) For purposes of this subdivision, "local sources" means all local sources of funds
4.32and includes all operating revenue, tax levies, and contributions from public funds, except
4.33that the commissioner may exclude from the total assistance contract revenues derived
4.34from operations the cost of which is excluded from the computation of total operating
4.35cost. Total operating costs of the Duluth Transit Authority or a successor agency does
5.1not include costs related to the Superior, Wisconsin service contract and the Independent
5.2School District No. 709 service contract.
5.3    (c) (e) If a recipient informs the commissioner in writing after the establishment of
5.4these percentages but prior to the distribution of financial assistance for any year that
5.5paying its designated percentage of total operating cost from local sources will cause
5.6undue hardship, the commissioner may reduce the percentage to be paid from local
5.7sources by the recipient and increase the percentage to be paid from local sources by one
5.8or more other recipients inside or outside the classification. However, the commissioner
5.9may not reduce or increase any recipient's percentage under this paragraph for more than
5.10two years successively. If for any year the funds appropriated to the commissioner to carry
5.11out the purposes of this section are insufficient to allow the commissioner to pay the state
5.12share of total operating cost as provided in this paragraph, the commissioner shall reduce
5.13the state share in each classification to the extent necessary.

5.14    Sec. 28. Minnesota Statutes 2009 Supplement, section 174.24, subdivision 5, is
5.15amended to read:
5.16    Subd. 5. Method of payment, operating assistance. Payments for operating
5.17assistance under this section from state sources of funds must be made in the following
5.18manner:
5.19    (a) For payments made from the general fund:
5.20    (1) 50 percent of the total contract amount in or before the first month of operation;
5.21    (2) 40 percent of the total contract amount in or before the seventh month of
5.22operation;
5.23    (3) 9 percent of the total contract amount in or before the 12th month of operation;
5.24and
5.25    (4) 1 percent of the total contract amount after the final audit.
5.26    (b) For payments made from the greater Minnesota transit account:
5.27    (1) 50 percent of the total contract amount in or before the seventh month of
5.28operation; and
5.29    (2) 50 percent of the total contract amount in or before the 11th month of operation.

5.30    Sec. 29. Minnesota Statutes 2008, section 174.247, is amended to read:
5.31174.247 ANNUAL TRANSIT REPORT.
5.32    (a) By February 15 annually, the commissioner shall submit a report to the legislature
5.33on transit services outside the metropolitan area. The Metropolitan Council and any
6.1public transit system receiving assistance under section 174.24 shall provide assistance
6.2in creating the report, as requested by the commissioner.
6.3    (b) The report must include, at a minimum, the following:
6.4    (1) a descriptive overview of public transit in Minnesota;
6.5    (2) a descriptive summary of funding sources and assistance programs;
6.6    (3) a summary of each public transit system receiving assistance under section
6.7174.24 ;
6.8    (4) data that identifies use of volunteers in providing transit service;
6.9    (5) financial data that identifies operating and capital costs, and funding sources,
6.10for each public transit system and for each transit system classification under section
6.11174.24, subdivision 3b :
6.12(i) the operating and capital costs;
6.13(ii) each of the funding sources used to provide financial assistance; and
6.14(iii) for federal funds, the amount from each specific federal program under which
6.15funding is provided;
6.16    (6) a summary of the differences in program implementation requirements and aid
6.17recipient eligibility between federal aid and state sources of funds;
6.18(7) in each odd-numbered year, an analysis of public transit system needs and
6.19operating expenditures on an annual basis, which must include a methodology for
6.20identifying monetary needs, and calculations of:
6.21(i) the total monetary needs for all public transit systems, for the year of the report
6.22and the ensuing five years;
6.23(ii) the total expenditures from local sources for each transit system classification;
6.24(iii) the comprehensive transit assistance percentage for each transit system
6.25classification, which equals (A) the expenditures identified under clause (7), item (ii), for
6.26a transit system classification, divided by (B) the amounts identified under subitem (A),
6.27plus the sum of state sources of funds plus federal funds provided to all transit systems
6.28in that classification; and
6.29(iv) in each odd-numbered year, beginning in 2009, a calculation of the amounts the
6.30amount of surplus or insufficient funds available for (i) paying the state share of transit
6.31operating costs under section 174.24, subdivision 3b, and (ii) paying capital and operating
6.32costs to fully implement the transit service needs implementation greater Minnesota transit
6.33investment plan under section 174.24, subdivision 1a."
6.34Renumber the sections in sequence and correct the internal references
6.35Amend the title accordingly