Motor fuels tax indexed increases repealed.

Repeals the annual indexed increases to motor fuels tax rates, basically freezing tax rates for various types of fuel. Eliminates the previous mechanism that automatically adjusted fuel tax rates each August based on the Minnesota Highway Construction Cost Index, which allowed for up to a 3% annual increase. Maintains the current base tax rates for different fuel types, including E85 (17.75 cents per gallon), M85 (14.25 cents per gallon), gasoline (25 cents per gallon), liquefied petroleum gas (18.75 cents per gallon), liquefied natural gas (15 cents per gallon), and compressed natural gas ($1.974 per thousand cubic feet). To mitigate potential revenue losses from eliminating the automatic tax increases, the bill requires the commissioner of management and budget to transfer funds from the general fund to the highway user tax distribution fund for fiscal years 2026 and 2027, based on estimates of revenue reduction. The changes will take effect on July 1, 2025, providing a transition period and allowing for budget planning.

Pending Committee action. Same as SF 1747.

02/10/2025 Introduced and first reading. Referred to House Committee on Transportation Finance and Policy.