• by

Last session, the committee passed a small supplemental finance bill that included one-time funding for roads and bridges, along with several earmarked projects. A well-publicized effort to put a constitutional amendment to dedicate sales taxes from car rentals, auto repair and auto parts stalled after it was not granted a hearing in the Tax Committee.

Aside from revenue concerns, the Transportation Committee also discussed MNLARS funding and development at length. A lights-on bill passed in March enabled staff to continue working on the troubled system. The Republican Legislature also passed bills that would have ordered DPS to prioritize changes to MNLARS that were desired by auto dealers and deputy registrars over necessary functionality improvements, and would have reimbursed deputy registrars for business losses using funds from the rapidly depleted Driver and Vehicles Services special revenue account. Governor Dayton vetoed both the bills.

A bill to prohibit use of cell phones without a hands-free device stalled, despite overwhelming public support.


What has happened in this issue area since last session?

The MNLARS Steering Committee has met several times to receive updates on system development and funding. The committee approved a $93,000 transfer between driver and vehicle services accounts to keep the Driver Services components of MNLARS (which are entirely separate from the ill-functioning Vehicle Services program) on track for on-time release.

The federal government approved an extension for the state of Minnesota to come into full compliance with the REAL ID law. Driver and Vehicles Services began issuing REAL ID compliant driver’s licenses in October. Although offering REAL ID licenses has lengthened wait times to receive all types of identification cards, no major problems with issuing REAL IDs have been reported in the media.


What is expected to happen this session?

Further scrutiny of MNLARS funding and development should be expected, as well as ongoing clash over use of general fund dollars versus increased revenue for road and bridge funding. Transit funding—especially in lieu of a pending deficit due to increased use of Metro Mobility services and a driver shortage—will also be a topic of discussion. Differences in opinion on how to handle cell phone use while driving have already emerged, with Sen. Osmek announcing his intent to offer a bill to increase criminal penalties for drivers who text and cause crashes.


The Legislature passed only a temporary funding fix for the vehicle services components of the Minnesota Licensing and Registration System (MNLARS) last March. The Legislature will need to approve further funding in order to keep the vehicle services side of MNLARS functioning—let alone being further developed. This will be a strong point of contention in the coming session, as the MNLARS Steering Committee reviewed requests for information to have a private developer work on MNLARS, as opposed to keeping development within the Driver and Vehicle Services and MN.IT. Without further funding, most current project staff will be laid off on February 28, 2019. A small contingent of state staff will remain on to keep MNLARS operational until the end of FY 2019, when funding will completely run out.

The driver services component of MNLARS are being developed under contract with FAST Enterprises, and at the present time, are on schedule for an on-time release in 2020. Expect continued scrutiny of the driver services contract during the legislative session.

The deputy registrars will likely continue to push for reimbursements for business losses due to complications from the MNLARS rollout, and for system improvements. Governor Dayton vetoed a deputy registrar reimbursements bill in 2018 due to its funding source. The bill took money from the swiftly-diminishing Driver and Vehicle Services account, so the Governor vetoed the bill to avoid risk to the daily operations of Driver and Vehicle Services. Improvements to MNLARS requested by the deputy registrars and auto dealers have also been a point of contention.

Tangential to MNLARS—REAL ID issuance will remain a topic of interest, but is unlikely to need any legislative fixes. The federal Department of Homeland Security recently issued another extension for Minnesota to come into full compliance with the REAL ID law, so Minnesotans will remain able to board commercial aircraft with their current Minnesota issued IDs. Driver and Vehicle Services began issuing REAL ID compliant cards in early October 2018.


General fund revenue for roads and bridges
The 2017 Transportation Finance Omnibus Bill appropriated a portion of the sales tax on auto parts and auto repairs 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 the state currently dedicates gas tax, auto sales tax, and vehicle registration tax to pay for roads and bridges. This bill did not become law—it was not given a hearing after being referred to the Senate Tax Committee, although it passed the House floor.

This is a key component of the Republican transportation funding plan, and is likely to be discussed again this year, as Republicans spoke in opposition to a gas tax increase following the announcement of the November 2018 forecast. This proposal is a shift of money masked as a solution to the transportation funding problem. It would cause a structural budget imbalance in the general fund, likely necessitating cuts to other vital programs such as education, taking care of the state’s most vulnerable, incarcerating the state’s most dangerous criminals, reducing investments into the state’s higher education systems, or any other programs funded through the state’s general fund.


Gas tax and new revenue

In contrast to the Republicans’ push to dedicate general fund revenue to transportation, Governor-elect Walz has expressed support for an increase in the gas tax to supplement funding for roads and bridges. It’s likely that additional funding sources—including an increase to the vehicle registration tax—will be suggested, as House Republicans expressed some support for a modest increase in tab fees in 2015. Transit funding—especially in lieu of a looming deficit due to increased use of Metro Mobility services, combined with a driver shortage—will also be a topic of discussion. It’s likely a sales tax in the Metro area will be a proposal, but how the tax would be assessed, who would pay it, and how much revenue the tax will generate will be topics of discussion.

One area where agreement could be had is in bicycle and pedestrian infrastructure. In 2017, Sen. Dibble successfully added an amendment to the transportation finance bill that created an active transportation account, allocated funding for the program, and ensured a placeholder for active transportation funding, even if federal funds dried up. How to pay for the infrastructure, be it from the general fund, or a transit sales tax—will be a larger controversy.


Hands free cell phone law

A bipartisan bill moved through the Legislature in 2018 that would prohibit the use of cell phones while driving, except for the use of a hands-free device. However, despite enormous public pressure and impassioned pleas from the advocates, Sen. Gazelka declined to take up the bill in Rules Committee after it passed the Judiciary and Transportation Committees as a late bill. The House did not take up the bill on the floor after it passed all committees of jurisdiction. Minnesota would join 16 other states and the District of Columbia in banning hand-held cellphone use while driving. Minnesota is already one of 47 states to ban texting while driving.

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.

Sen. Osmek has already said he will introduce a bill to increase penalties for texting drivers who cause traffic accidents. Previous law enforcement testimony has indicated that increased penalties are insufficient to target distracted drivers.


Climate change and transportation
With Minnesota’s ambitious pollution reduction goals for energy production being on track for completion, expect legislative discussion on ways to reduce transportation-related sources of pollution leading to climate change. Topics to consider include setting goals for carbon emissions from transportation, supporting and creating infrastructure for electric vehicles, and considering land use improvements for transportation projects. Metro Transit’s decision to transition their bus fleet to all electric buses will be a starting point for discussion.


Connected and autonomous vehicles
By executive order, Governor Dayton convened an Advisory Council on Connected and Automated Vehicles in March 2018. The Council will issue recommendations at the end of 2018. There is interest among Council members to continue meeting, which may require legislative authority. Expect to hear discussions on considerations for making emerging connected and autonomous vehicle operation successful in Minnesota: land use considerations, equity concerns, compatibility with current transit and paratransit programs, infrastructure development, testing of vehicles, and safety.

See the Commerce section for more information on this topic.