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February 24, 2017

Minnesota Weekly Legislative Update: Legislators Weigh Transit Plans, Met Council Structure

With two weeks before the first deadline, legislators are scrambling to get their bills heard and passed through policy committees. The Legislature also met in a joint floor session to elect four new members to the University of Minnesota Board of Regents. The new appointees are former Speaker of the House Steve Sviggum, Darrin Rosha, David McMillan and Ken Powell.

The Legislature also considered four bipartisan bills addressing prescription painkiller abuse in Minnesota. Tuesday was “Opioid Awareness Day on the Hill,” and all four bills were heard in the House Health and Human Services Reform Committee.

Minnesotans are one step closer to being able to purchase liquor on Sundays. On Monday, the House passed HF 30, which authorizes liquor sales on Sunday from 10:00 a.m. to 6:00 p.m., with a bipartisan 85-45 vote. The companion bill, SF 1086, authored by Sen. Jeremy Miller (R-Winona), was heard and passed, 7-4, by the Senate Commerce Committee on Wednesday. It was then referred to the Senate floor.

Metropolitan Council Reforms Proposed

The Met Council—a regional policy-making body, planning agency and provider of transit, water and wastewater services—has received significant criticism over the past few years. Metropolitan areas with a population of 50,000 or more are required under federal law to have a Metropolitan Planning Organization (MPO). The Met Council is the MPO for the Twin Cities. The Met Council ‘s two primary roles are regional planning and transit operations, including producing a rolling, 20-year transportation plan for the Twin Cities region. While the Met Council is beginning to expand past the seven-county metro, its current jurisdiction remains within those counties. The Met Council is the only MPO in the country whose members are appointed—all 16 members are appointed to four-year terms by the Governor.

Criticisms of the Met Council include the argument that, because it is an unelected board, it is not accountable or transparent to local constituencies for which it plans and provides transit services, especially with respect to light rail projects. On Monday, the House Transportation and Regional Governance Committee heard multiple proposals responding to these criticisms by changing the structure of the Met Council’s governing board and restricting the Council’s ability to expand light rail transit. The most comprehensive proposal, HF 828, authored by Rep. Tony Albright (R-Prior Lake), would restructure the Met Council to consist of members of each of the seven county boards in the metro area, a local elected official from each of 16 Met Council districts, the Commissioner of Transportation and three other persons appointed by the Commissioner to represent different modes of transportation. Other provisions of HF 828 would:

  • Provide for Council members to be paid $20,000 per year instead of the current $40,000 (except for the Transportation Commissioner, who would receive no compensation);
  • Eliminate the Transportation Advisory Board; and,
  • Direct the city councils in each Metropolitan Council district to serve on the municipal committee for the council district, which would then appoint one of its members to the Met Council.

Proponents emphasized that the Met Council is currently accountable only to the Governor, who appoints them, and that there is no accountability to local constituencies and little oversight from the Legislature. By changing the Council’s make-up to include elected local officials and increasing the number of districts , the Council would better represent the composition of the Twin Cities, be more accountable to local constituencies, allow for better local input on transit and other projects, and better foster a regional approach to governance. This proposal would also provide better continuity than other approaches, since local elected officials are more likely to be aware of and involved in projects of regional significance through their prior, elected positions. Proponents argued that conflicts of interest would be unlikely, comparing local officials serving on the Met Council to legislators, who are able to balance the interests of their district and the state, and local officials, who currently sit on boards and joint powers entities with regional responsibilities—with no reported conflict issues.

Opponents expressed concerns about the increased size of the Council and the proposed Council structure diluting representation from larger counties. They also disputed the argument that possible conflicts of interest between local and regional responsibilities of officials on the Met Council could be managed.

Other proposals impacting the Met Council’s governance and restricting its ability to expand light rail transit were:

  • HF 829, authored by Rep. Frank Hornstein (DFL-Minneapolis), providing staggered terms for Met Council members and making changes to the nominating committee and process. HF 829 also requires the Met Council to convene a stakeholder group, including those who are subjected to the charge, to review and make recommendations on sewer availability charges for new or outdoor seating at eating or drinking establishments. This report must be submitted to the House and Senate by January, 2018.
  • HF 1150, authored by Rep. Mark Uglem (R-Champlin), establishing a farebox recovery objective for the Twin Cities metropolitan area to obtain 60 percent recovery by 2022.
  • HF 418, authored by Rep. Linda Runbeck (R-Circle Pines), prohibiting the Met Council from undertaking a light rail project without legislative authority. This would prohibit local governments from spending money for planning or construction of new lines or expansion of current lines; and
  • HF 800, authored by Rep. Jim Nash (R-Waconia), prohibiting the state for paying the operating costs for any project it did not authorize or approve of.

The transit related proposals were a direct response to the Met Council moving forward with SWLRT line without state authorization. Legislative change proponents argued the Met Council is building the most expensive modes of transit, especially light rail, leaving Minnesota taxpayers to cover operating costs. The farebox recovery rate proposal would help to make light rail pay for itself and is only a goal, not a mandate. Opponents argued the light rail related proposals were selective and punitive, since they didn’t address all modes of transit, and transportation proposals were focused only on the metro area. They also argued that increasing farebox recovery will lower the number of light rail riders, put them back on the road, and disproportionately affect lower income individuals.

All the bills were laid over for possible inclusion in the Committee’s omnibus bill, except for HF 800, which was referred to the House Transportation Finance Committee. Companion bills in the Senate have been introduced, but no hearings have been scheduled thus far.

Transportation Funding Alternatives Debated

Transportation funding has been one of the most controversial issues debated at the Capitol over the last few years. There has been widespread, bipartisan agreement that about $600 million in new revenue is needed annually to address Minnesota’s transportation infrastructure needs. The battle has been whether that revenue should be generated by increased taxes, which has been advocated by DFLers, or by general fund revenue and bonding proceeds, which has been advocated by Republicans. In the past, both parties have proposed making changes to the depreciation schedule to license tab fees to increase revenues. On Thursday, the House Transportation Finance Committee met and heard the following proposals adopting the latter approach (redirecting general fund revenue for transportation purposes):

  • HF 460, authored by Rep. Chris Swedzinski (R-Ghent), dedicating the rental motor vehicle tax to Minnesota’s corridors of commerce program.
  • HF 502, authored by Rep. Dale Lueck (R-Aitkin), allocating the motor vehicle tires sales tax revenue to the highway user tax distribution fund.
  • HF 638, authored by Rep. Jeff Howe (R-Rockville), allocating the motor vehicle parts sale revenue to the highway user tax distribution fund; and
  • HF 901, authored by Rep. Jon Koznick (R-Lakeville), modifying allocation of the leased motor vehicle sales tax by removing the requirement that the first $32 million go to the general fund and allocating this amount consistent with how the remainder is allocated – 50 percent for Greater Minnesota Transit and 50 percent to the five counties surrounding the metropolitan area in proportion to their population.

Proponents of these proposals, primarily Republicans, contend that redirecting general fund revenue to address Minnesota’s transportation needs makes sense during a time of surplus. Minnesota is currently one of a minority of states that does not use general fund revenue for transportation purposes. Proponents also argued that these revenue streams are better sources of funding transportation infrastructure improvements as, unlike the gas tax that is a decreasing revenue stream, these funds will continue to grow with inflation.

DFLers argued these proposals are not “new” revenues, but shifts from other priorities such as health care, education and tax relief. There was some support from members to use some general fund dollars, but they also argued that new revenue streams need to be incorporated into any comprehensive transportation funding package.

The bills passed and were referred to the House Tax committee on a partisan voice vote. The Senate companions are SF 556, authored by Sen. Gary Dahms (R-Red Falls), SF 754, authored by Sen. Carrie Rudd (R-Breezy Point), SF990, authored by Sen. Michelle Fischbach (R-Paynesville), SF 932, authored by Sen. Dan Hall (R-Burnsville), respectively. All are awaiting a hearing in the Senate Transportation Finance and Policy Committee.

Status Updates

Below are status updates on legislation of interest summarized in previous weekly updates:

  • Real ID. HF 3, legislation bringing Minnesota in line with federal rules for drivers’ licenses, passed of the House floor 72-58. Without it, Minnesotans might have trouble getting past security checkpoints at airports and military installations starting in February, 2018. The Legislature has argued over the Real ID issue since 2005, when the U.S. Congress passed the Real ID Act. For more information on this legislation please view our January 13 update.
  • Israel Discrimination Legislation. HF 400 prohibiting the State from contracting with vendors who discriminate against Israel passed off the House floor on a 98-28 vote. For more information on this legislation please view last week's update.

Upcoming Important Dates

February Budget Forecast Released Next Week. The February Budget & Economic Forecast will be released this Tuesday, February 28. This forecast is used by the Governor and Legislature to set the FY 2018-2019 budget and ensure that the FY 2016-2017 budget remains on track and in balance.

Committee Deadlines have been announced by legislative leadership. They are:

  • First Deadline - Friday, March 10, 2017: All policy committees must act favorably on a bill in the House of origin.

  • Second Deadline - Friday, March 17, 2017: All policy committees must act favorably on bills or companions of bills that met the first deadline in the other chamber.

  • Third Deadline - Friday, March 31, 2017: Committees to act favorably on major appropriation and finance bills.

The deadlines do not apply to the House Committees on Capital Investment, Ways and Means, Taxes, or Rules and Legislative Administration, nor to the Senate committees on Capital Investment, Finance, Taxes, or Rules and Administration.

Legislative Break

The House and Senate will be in recess starting Saturday, April 8 through Monday, April 17. No Committee, floor or other action will take place in either body that week.

Social Media Updates

Stay connected with legislative updates by following us on Twitter @FaegreBD_MNGov.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

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