Bill > SF1747

This bill eliminates the annual automatic indexing of motor fuels tax rates in Minnesota, effectively freezing the current tax rates for gasoline (E85, M85, and other gasoline) and special fuels (liquefied petroleum gas, natural gas, and compressed natural gas) instead of allowing them to increase based on the Minnesota Highway Construction Cost Index. Currently, the law allows for an annual adjustment on August 1st that could increase tax rates up to 3%, but this bill removes that mechanism. To ensure that the highway funding is not negatively impacted by this change, the bill requires the commissioner of management and budget to transfer funds from the general fund to the highway user tax distribution fund to make up for the lost revenue in fiscal years 2026 and 2027. The tax rates will remain at their current levels: 25 cents per gallon for most gasoline, 17.75 cents for E85, 14.25 cents for M85, and similar rates for special fuels. The bill will take effect on July 1, 2025, providing time for administrative preparation and financial planning.

Transportation and Infrastructure

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF1747&ssn=0&y=2025