This bill amends Minnesota Statutes to repeal the indexed increases to the motor fuels tax, specifically removing provisions that required annual adjustments based on the Minnesota Highway Construction Cost Index. The amendments to sections 296A.07 and 296A.08 eliminate the requirement for the commissioner to determine and adjust tax rates for E85, M85, and other gasoline annually, thereby fixing the tax rates at 17.75 cents per gallon for E85, 14.25 cents per gallon for M85, and 25 cents per gallon for all other gasoline. Similar provisions for liquefied petroleum gas, liquefied natural gas, and compressed natural gas are also amended to remove the annual adjustment requirement.

Additionally, the bill introduces a new section regarding general fund transfers, which mandates the commissioner of management and budget to assess the revenue reduction resulting from the repeal of the indexed increases and to transfer the corresponding amounts from the general fund to the highway user tax distribution fund for fiscal years 2026 and 2027. This ensures that the highway user tax distribution fund is compensated for the anticipated revenue loss due to the changes in tax rates. The effective date for these changes is set for July 1, 2025.

Statutes affected:
Introduction: 296A.07, 296A.08