March 16 - 2018

Well, amid all the bill hearings in both the House and Senate the most significant happening this week was the Governor's State of the State address. There was some movement on the MNLars fix as well, which may be significant. 

So, with the State of the State complete and with Dayton releasing his budget priorities today the stage is now set for the biggest debate of the 2018 session to ramp up at the Capitol; how to spend the surplus and how to conform our state tax system with the new federal system. 

State of the State
At 7:00pm on Wednesday, March 14, 2018, Governor Mark Dayton delivered his annual State of the State Address at the Minnesota State Capitol. In this, his final SOS speech, the Governor laid out his vision for how he would like to finish out his eight year tenure. Not surprisingly, he listed a number of accomplishments but also said there is still much to do. One of his primary concerns is the fiscal stability of the state. When he came into office the state was facing a significant deficit and 8 years later he aims to protect the state's current projected surplus. 

Here's the copy of the Governor's speech: 

Dayton Budget Proposal
Following his State of the State, Dayton released the overview of his budget proposal today. As expected, the most significant portions are related to federal tax conformity.  Dayton has also renewed his effort to roll back some of the tax provisions that he opposed in last year's tax bill, most specifically related to tobacco and business tax incentives.  

In addition to conformity, Dayton is proposing that some of the surplus be spent on pre-k programs and school readiness, broadband access in greater Minnesota, Opioid reduction efforts, pensions, and tuition relief.   

Budget & Tax Conformity
The debate over conformity has major implications but is extremely complex. The link below points to a good article to read if you'd like to gain a better understanding of the complexities that face the Governor and the Legislature in conforming the state's tax policies with federal tax policies. 

It should be noted that one of the state's most experienced non-partisan legislative staffers highlighted the need to begin this process sooner rather than later, in front of a house panel this week. The effort that will be required by agency staff, businesses and CPA's throughout MN - to implement and comply with the new changes - will be significant and these people/entities will need as much lead time as possible.

MNIT & MNLars Update
The Senate Transportation Finance and Policy Committee passed legislation to address the failure of Minnesota's new licensing and vehicle registration system known as MNLARS. The legislation, Senate File 3133, authored by Senator Scott Newman (R-Hutchinson), appropriates $7.3 million from existing funds for driver and vehicle services specifically for the immediate costs related to I.T. support. It also includes strict legislative oversight for its continued development.  The Minnesota Senate postponed a vote on legislation to provide $7.3 million for repairs to the troubled motor vehicle licensing and registration system, known as MNLARS.


The woman now in charge of fixing this issue and the man who was previously in charge both made the news this week, addressing the various issues surrounding this debate.

MNiT Looks to move past politics

Former agency head speaks out
The Preemption Debate has Returned
Last year the effort to prevent local municipalities from passing minimum wage and sick-leave standards that differ from state standards FAILED.  The Governor was largely silent on this issue for most of the 2017 session but in the end, vetoed the legislation. So, o n the first day of the 2018 legislative session Minnesota lawmakers reinstated a committee to discuss House File No. 600. This motion put the issue back one the table again for this session. It has been a top priority of the business community for the last two years.

Look ... No Hands!
The Minnesota State Patrol and families that have been directly affected by distracted driving accidents want lawmakers to turn Minnesota into the 16th hands-free driving state in the country . This bill was a focus last session and supporters are once again hopeful it will have enough bi-partisan support to get through the committee and floor process.

Other Noteworthy Bills
Here are a few of this week's more "interesting", but perhaps less publicized bill introductions:


Republican lawmakers revive effort to overhaul Met Council


These are this year's session deadlines:

1st deadline - March 22, 2018 at midnight
2nd deadline - March 29, 2018 at midnight
3rd deadline - April 20, 2017 at midnight 

This means that:
Bills must be out of all policy committees in ONE of the two bodies by 1st deadline.
Bills must be out of all policy committees in BOTH bodies by the 2nd deadline.
Bills must be passed out of finance divisions in both bodies by 3rd deadline.

The deadlines do not apply to the House committees on Capital Investment, Ways and Means, Finance, Taxes, or Rules and Legislative Administration, nor to the Senate committees on Capital Investment, Finance, Taxes, or Rules and Administration. Any bill that is in one of these committees - in both bodies - after 3rd deadline is then "still alive". 

It should be noted that a bill is never really dead until final adjournment. Any bill failing to meet deadlines can always be revived by the rules committee.

Combined Legislative Meeting Calendar

What's Next?

Now that Governor Dayton has set out his priorities for the surplus and tax conformity we can expect the House and Senate to begin holding hearings on his proposals, getting more specific about the details and the likely consequences of his proposal (especially on taxes). 

Tax conformity is VERY complicated and this debate will likely take a significant amount of time and effort by legislators to get this debate right. Due to it being an election year, as it is for House members, there is significant pressure to avoid unintended mistakes that could be costly in November. 

"1st deadline" is next week, which means that policy committees in both bodies will be rushing to get bills heard on time to meet the deadline so they can continue to move forward. 

"Here's to you and yours, And to mine and ours, And if mine and ours ever come across you and yours, I hope you and yours will do as much for mine and ours and mine and ours have done for you and yours!"


Cap O'Rourke

Cap O'Rourke
Lobbyist / President
O'Rourke Strategic Consulting

Cap O'Rourke | (612) 483-1863 | |
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