The rollout of the state’s new web-based Minnesota License and Registration System (MnLARS) information system used to manage the Department of Driver and Vehicle Services (DVS) transactions has been a controversial topic during interim. The system has been plagued with issues since going live in late July. There have been multiple hearings where private citizens, auto dealers, deputy registrars, and others have expressed their frustrations with the inadequacies of the system.

There will likely be more hearings regarding the MnLARS system to ensure the departments are on track to making the system work for businesses and consumers. There have also been some bill ideas proposed during the hearings to ensure users who may have received citations for expired tabs do not have to pay a fine or have the infraction on their records. Other proposals have hoped to hold businesses, including auto dealers and deputy registrars, harmless as they have testified they have incurred costs due to the system’s faults.

Constitutional amendment to dedicate auto parts, repairs, and car rental taxes to Highway User Tax Distribution Fund

The 2017 Transportation Finance Omnibus Bill appropriated a portion of the sales tax on auto parts and auto repairs ($300 million in FY 2018-19, increasing to $447 million in FY 2020-21), and all of the 9.2% short term car lease tax ($52.3M in FY2018-19; $59.2M in FY2020-21) and 6.5% car rental sales tax ($36.9M in FY2018-19; $41.8M in 2020-21) to pay for roads and bridges. These dollars were previously allocated to the general fund. The House and Senate Transportation Committees heard a bill last session to propose an amendment to constitutionally dedicate these funds to the Highway User Tax Distribution Fund, just as we currently dedicate gas tax, auto sales tax, and vehicle registration tax to pay for roads and bridges. This bill did not become law.

This is a key component of the Republican transportation funding plan, and is likely to be discussed again this year. This proposal is essentially a shift of money masked as a solution to the transportation funding problem. This would add significant revenues to roads and bridges, but it would cause a structural budget imbalance in the general fund, likely necessitating cuts to other vital programs such as education, taking care of our most vulnerable, incarcerating our most dangerous criminals, reducing investments into our higher education systems, or any other programs funded through the state’s general fund.

Metro Transit deficit

The Met Council is estimating there will be a funding gap in 2020-2021 of around $123 million. The projected budget hole increased from the end of last session due to lower than expected revenues from motor vehicle sales taxes, continued structural deficits, increased use of Metro Mobility, and inflationary pressures. The funding gap has grown significantly since the close of the 2017 Legislative Session, when it was projected to be $110 million.

While the Legislature passed a transportation funding bill in 2017, the bill insufficiently funded transit services provided by the Met Council. The council had an $85 million shortfall for FY2018-2019, but the omnibus transportation bill only allocated $70 million to fill the hole. This remaining $15 million shortfall led to the council increasing transit fares during the summer of 2017. The council also used some onetime funds.

This funding gap could renew Republican interest in raising the price to ride Metro transit buses and trains, and others have indicated this could be another reason to stop construction on the SWLRT line. The gap could also prompt calls to reduce transit service, despite growing demand.

Hands-free cellphone law

A bipartisan bill moved through Senate in 2017 that would prohibit the use of cellphones while driving except for the use of a hands-free device. However, after passing the Transportation Committee and briefly being included in the omnibus transportation bill, the bill ended up being left to the 2018 session.

The bill makes this a primary offense, so if a law enforcement officer sees someone breaking this law they can pull the driver over. DFL senators attempted to amend the language into the omnibus transportation bill.

According to the Minnesota Office of Traffic Safety, each year in Minnesota, distracted or inattentive driving is a factor in one in four crashes, resulting in at least 70 deaths and 350 serious injuries. Bill supporters are hoping to promote safer driving habits and reduce avoidable injuries and deaths.

Minnesota would join 14 other states and the District of Columbia in banning hand-held cellphone use while driving. Minnesota is already one of 46 states to ban texting while driving.

Corridors of Commerce

The omnibus transportation bill passed in 2017 contained a provision forcing MnDOT to change its project selection criteria for the Corridors of Commerce program to make it more transparent. The department took public input until Dec. 20, 2017. The final selection process was solidified at the end of 2017 and projects will be evaluated and eventually awarded by March 2018. Since the announcement of the proposed selection process in December 2017, many rural legislators have been worried the new proposed criteria will end up benefiting the metro instead of rural areas. Some legislators have written letters to the MnDOT Commissioner and others have indicated there may be legislation in the coming session to ensure there is regional balance in how the projects are awarded.

The 2017 Transportation Bill contained $300 million in bonding for the Corridors of Commerce program and an additional $50 million in cash slated for FY2018-2019, and $50 million for FY2020-2021.


In 2017, the Legislature passed the final legislation enabling the Department of Public Safety (DPS) to implement REAL ID and become compliant with the federal regulations. The bill required Minnesota to become compliant by October 2018. This was later accompanied with news that the Department of Homeland Security granted the state an extension until Oct. 10, 2018 to become compliant.

The department is continuing to develop the driver’s license side of the MnLARS system that will issue the REAL ID compliant licenses and IDs. In late 2017, DPS announced that it entered a $26 million contract with a private vendor, Fast Enterprises, to develop and implement the driver’s license system. The contract also includes five years of support and maintenance.