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MADA Legislative Bulletin
Policy Deadlines Pass, Focus Turns to Dollars
Last Friday, April 8, marked the second committee deadline, by which time all policy committees needed to have acted favorably on bills or companion bills that met the first deadline (April 1) in the other body. Beyond MADA's export bill, HF 2954/SF 2769, no other major policy initiatives specific to Minnesota's auto dealers are still in play. Legislative attention will now shift to fiscal matters, as Thursday, April 21, is the third deadline by which the House Ways and Means Committee and Senate Finance Committee must act favorably on major appropriation and finance bills. Despite the fact this is not a "budget" year at the Capitol, a nearly $1 billion budget surplus has legislators in a frenzy about how to divvy up the dollars.

Governor Mark Dayton released his supplementary budget proposal in mid-March.  He is recommending spending $698 million of the surplus
to expand early learning programs, workforce programs to address racial disparities, high-speed Internet access in rural Minnesota, mental health programs, and college affordability. He also provides $117 million to expand tax credits for child care, education expenses, and working families.

House Republicans have taken a vastly different approach to the surplus.  When they released their budget targets last week, they reaffirmed their commitment to using the surplus to make investments in transportation and provide tax reform. They are proposing a transportation package that invests $7 billion in roads and bridges over the next ten years without raising taxes by using revenues currently allocated to the general fund, such as the sales tax collected on auto parts, for transportation.  The only other new spending the House Republicans are proposing is for investments in rural broadband.

Senate Democrats have aligned their budget more closely with Governor Dayton's.  They, too, prioritize transportation, but instead of using any surplus dollars, they are relying on instituting a new 6.5% wholesale fuel tax, as well as increasing tab fees and raising the metro area sales tax to fund new transportation investments.  Beyond transportation, they spend $789 million of the surplus on a number of programs with the largest portions going for tax relief ($300 million), addressing racial inequities ($91 million) and rural broadband ($85 million.)  When releasing their targets today, Majority Leader Tom Bakk (DFL-Tower) indicated that he'd be willing to spend surplus dollars on either taxes or transportation, and admonished House Speaker Kurt Daudt (R-Crown) that he shouldn't expect to do both.

Legislators have five weeks to figure out how to reconcile these differences, or adjourn the session with these dollars left on the state's bottom line.
DVS Seeks Continued Funding for MNLARS 
Since 2008, the Driver and Vehicles Services (DVS) Division of the Department of Public Safety has been working to construct the Minnesota Licensing and Registration System (MNLARS), its new software program to replace the agency's 30-year old legacy information technology system. To fund the upgrade, DVS has instituted a "technology surcharge" on agency transactions as well as dedicated a portion of the filing fee on motor vehicle transactions to the technology account.

With the $1 technology surcharge set to expire June 30, 2016, the agency is requesting it be extended through 2019, not to fund development of the system (which has already collected $90 million) but to transition from and decommission the legacy system as well as pay for ongoing operating costs. Legislators will decide whether to comply with DVS's request as they assemble their supplemental budgets.
Look to future editions of the MADA Legislative Bulletin for updates from the Capitol.  In the meantime, if you have questions about legislative activity, don't hesitate to contact MADA Director Government Affairs Amber Backhaus at

April 13, 2016

In this edition:
Policy Deadlines Pass, Focus Turns to Dollars
DVS Seeks Continued Funding for MNLARS
Copyright © 2016 Minnesota Automobile Dealers Association, All rights reserved.

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