April 22, 2008

Intergovernmental Services Weekly Legislative Update

Week of Monday, April 21, 2008

Transportation

Governor appoints new MNDOT commissioner

On April 21, at an 11:00 A.M. press conference, Gov. Pawlenty named Tom Sorel, the Midwest Division Director for Federal Highway Administration (FHWA) as the new Commissioner for the Minnesota Department of Transportation.  Sorel, 51,  is a civil engineer with 30 years of transportation experience.  He served as Major Project Team Leader at the FHWA’s Washington, DC, office and the Director of Planning and Program Development and Chief of Technology Services in Albany, New York.  Sorel also served as the USDOT liaison for federal transportation issues during the 2002 Winter Olympic Games in Salt Lake City, Utah.  He has been at his post here in Minnesota for the past three years and led the federal response to the I-35W bridge collapse.

Sorel declared that his main priority will be to restore the public’s trust and confidence in the Department.  He stated that he plans to work in partnership and collectively with stakeholders especially in the areas of innovation and technology.

As far as existing staff, he stated that he will be interviewing top management at the Department and wants to gain more knowledge about the agency before making any staff changes.

House passes 2007 conference committee report on transportation policy bill

During the 2007 legislative session, HF 1351, the transportation policy bill, passed both the House and Senate and was approved by a conference committee on the last day of the session.  However, the legislature adjourned before the conference report was considered.

New conferee committee members were appointed in 2008 and the committee met a couple weeks ago to update the bill.  Early last week the House passed the conference committee report (88-44).  The Senate has delayed its vote on the report because of the provisions in the bill dealing with REAL ID.  REAL ID is the controversial federal program proposed to improve the security of state-issued driver’s licenses and ID cards.  Issues around federal funding and data privacy have raised concerns with legislators and with the governor’s office.  Negotiations are continuing in hopes of resolving the differences.

Provisions in the House bill include:

·          Modifying county regional rail authority transit funding limits, to change language already enacted.

·          Adding an exception for commitments made as part of an application for federal funds and making other technical changes.

·          Modifying the rail transit feasibility study on the I-394 corridor to be discretionary.

·          Adding a repeal of a prohibition of light rail transit facility construction until construction is started on the Central Corridor.

·          Allowing political subdivisions to enter properties for purposes of performing geotechnical investigations.

·          Requiring acquiring authorities to cooperate to the fullest extent possible with federal departments and agencies during the acquisition process.

·          Requiring acquiring authorities to pay a maximum relocation benefit of $50,000 for non-residential moves.

·          Allowing MNDOT to advertise for bids on the Internet and removes the requirement that they must publish bids in the newspaper or other periodicals.

·          Allowing MNDOT to enter into privatization contracts for trunk highway maintenance after assessing cost effectiveness.

·          Allowing bridge inspections not to exceed two years for bridges and four years for culverts.

·          Repealing an outdated statute that limited weight on nine ton roads to 73,280 lbs and allows the current federal weight of 80,000 lbs. on nine ton paved routes.

·          Expanding the definition of unfinished forest products related to gross weight limitations and allows up to 99,000 lbs during the time seasonal increase are authorized.

·          Removing weight restrictions for tow trucks when towing a damaged vehicle during an emergency.

·          Authorizing road authorities to issue annual permits ($300.00) for six axle vehicles hauling agricultural products up to a gross weight of 90,000 lbs or 99,000 lbs during the time when seasonal increases are authorized.

·          Authorizing road authorities to issue annual permits ($500.00) for seven axle vehicles hauling agricultural products up to a gross weight of 97,000 lbs and 99,000 during the time when seasonal increases are authorized.

·          Repealing the sunset date applied to milk haulers for hauling milk from the point of production to the point of first processing.

·          Requiring MNDOT to develop, conduct and administer highway construction training.

·          Requiring MNDOT to sanction each contractor who does not meet the established project disadvantaged business enterprise goal and report to the House and Senate Transportation Committees by February 1^st of each odd-numbered year.

·          Requiring MNDOT to perform life-cycle cost analysis on each project in the reconditioning, resurfacing and road repair funding categories beginning in August of 2011 and report annual to chairs of the House and Senate Transportation committees and ranking minority members.

·          Requiring MNDOT to submit an annual major projects report.

·          Prohibiting a county regional rail authority from contributing more than ten percent of the capital costs on a transit project.

·          Prohibiting a county regional rail authority from contributing any funds to pay for the operating and maintenance costs on a transit project.

·          Requiring the Metropolitan Council to carry out a performance evaluation of the metropolitan area’s transportation system as a whole and update the evaluation every two years.

·          Allowing the use of the design-build method for the project development and construction of light rail transit.

·          Requiring the Department of Public Safety to submit a proposal on establishing a system that would allow credit card and debit card payments for vehicle registration taxes, motor vehicle certificates of title, motor vehicle sales taxes, driver’s licenses, and MN ID cards.

·          Requiring MNDOT to conduct a study on the speed limit on local roads.

·          Requiring MNDOT and the Metropolitan council to conduct a study on transportation services for persons with disabilities.

MNDOT shares implementation plan for the transportation funding bill

On Tuesday, April 15, Acting MNDOT Commissioner Bob McFarlin presented an implementation plan for HF 2800 to a joint meeting of the House and Senate Transportation Committees.

Estimated new revenues to the trunk highway fund provided for in the new legislation will increase from $90 million in FY 2009 to $1.5 billion by FY 2018.  Trunk highway bonding provides an additional $1.78 billion over 10 years.  Most of the focus for this revenue will be on transit advantages, interchanges, and bridges, especially in the early years.

McFarlin also discussed MNDOT’s investment principals, which include:

·          Honoring current investment priorities - preservation and cost effective safety and mobility improvements.

·          Complying with draft MNDOT financial policies.

·          Identifying advantages for transit in trunk highway corridors statewide together with Metropolitan Council and other partners.

·          Ensuring accelerated projects have a completed scoping document and scoping level cost estimate

·          Meeting commitments in the FY08-FY11 State Transportation Improvement Plan

·          Investing bridge bonds in bridge structures and limited approach costs.

McFarlin reported that the new revenue in the bill would restore the Department’s 2008/2009 budget authority shortfall and allow for $115 million of early lettings for 2008.  The new revenue will also provide for the advancement of 30 road and bridge projects for 2008-2010 totaling $645 million.  Three of those projects include the Highway 23 Desoto Bridge in St. Cloud, the Highway 169/County Road 81 “devil’s triangle” project and the Interstate 90 in Olmsted and Mower Counties.  He also reported that the Hastings Bridge would be advanced to 2010.

He committed the Department to continued work with the legislature, local partners, and other stakeholders to complete the long-term plan of advancing more road and bride projects through 2011-2018, developing and delivering a bridge repair and replacement program and then focusing on improving quality highways and pavement throughout the state.

For more information, contact:  Carol Lovro, AMC Policy Analyst

Health and Human Services

There was little action in health and human services last week.  The supplemental budget committee held several meetings but their primary business was to explain the fiscal spreadsheets for the entire bill, which contains health and human services items as well as all the other budget provisions.  No other conference committees met last week.

This week:

County-based purchasing

The House Finance Committee heard and approved HF 3380 (Liebling) on Tuesday, April 22, which would expand Stedfast county-based purchasing (Olmsted, Fillmore, Houston, and Winona) by allowing them to serve as the ‘default plan’ for clients who do not select a health program.  Stedfast seeks to serve as the health plan for individuals and families who receive health insurance through publicly funded health care programs.  This provision would allow these counties to better manage their financial risk.  This provision is more limited than provisions sought by AMC and others that would expand county-based purchasing through the ‘single plan’ approach, but would still assist counties who are preparing to expand county-based purchasing.  AMC supports this bill as a “foot in the door” to expand county-based purchasing and test the model in a limited competitive environment.

Omnibus supplemental budget committee (HF1812/SF3813)

The Committee met Monday afternoon and evening to hear testimony from state agency heads.  They also identified many of the policy provisions that will be moved out of this budget and into other bills.  Formal and informal working groups have been formed to sort out differences on some of the budget division items; however, no working group has been formed on health and human services.

Health reform

The conference committee on health reform (SF3099 Berglin/HF3391 Huntley) met Monday evening and will be meeting throughout the week to reconcile differences between the House and Senate bills and try to find agreement on a proposal that can be signed by the governor.  In a meeting between the governor and conferees Monday, the governor expressed concern that too much of the bill was focused on expanding coverage and not enough on cost containment.

Conferees:

Senate:

Berglin (DFL)  - Minneapolis

Lynch   (DFL)  - Olmsted and Wabasha Counties

Sheran (DFL)  - Blue Earth, Nicollet and Sibley Counties

Lourey (DFL)  - Carlton, Isanti, Kanabec, Pine, St. Louis Counties

Rosen  (R)      - Blue Earth, Faribault, Martin, Waseca, Watonwan Counties

House:

Huntley  (DFL) – St. Louis County

Thissen  (DFL) – Minneapolis and Richfield

Norton   (DFL) – Olmsted

Loeffler  (DFL) - Minneapolis

Abeler    (R)     - Anoka

AMC supports several provisions in the bill, including funding for the statewide health improvement plan and expansion of MinnesotaCare.  AMC has also expressed to the legislature the need for significant health reform to reduce overall costs to counties and other employers.

For more information contact:  Patricia Coldwell, AMC Policy Analyst

Public Safety

The major piece of public safety policy legislation that is still alive at the legislature is the language that provides remedies to the high cost of hold orders for sex offenders referred for civil commitment.  That language had been included in the House version of the omnibus budget bill and has now been added to HF 2996, the so-called re-entry bill, so that it can progress even if all policy is removed from the budget bill as expected.

For more information contact:  Ryan Erdmann, AMC Policy Analyst

General Government and Taxes

House Unveils Property Tax Reduction Plan

On Monday, April 21,  the House held an informational hearing on HF 1222, the Property Tax and Local Sales Tax Division report.  The bill in its current form is a mixture of increased aids and credits along with several policy provisions intended to add clarity to the tax system and further engage the public in the property tax process.  Highlights for counties include:

·          $20 million in increased program aid;

·          $10 million for need based aid and $10 million for tax-base equalization aid; and

·          a change in the class rate for utilities.

·          Individual taxpayers would see a phase-out of the homestead market value credit, which would be replaced with an income sensitive property tax refund program.  Counties that received transition aid in 2007 would see that aid restored and made permanent.

Several changes are proposed for agricultural properties, including a more expansive definition of agricultural lands, and the creation of a rural vacant land classification.  The net effect will be to allow more properties in the southern part of the state to qualify for green acres and in the future allow fewer properties in northern Minnesota to qualify.  Currently the proposal allows all properties that receive green acres to remain in the program until a sale or transfer of ownership takes place.  At that time the property must be re-evaluated to determine whether or not it is still eligible for green acres.

The bill also contains policy provisions that are of interest to counties including:

·          Requiring the Department of Revenue to review appraisal procedures at the request of 1% of a taxing jurisdiction or 5 people whichever is greater;

·          Directing assessors to take into account the market value effect of foreclosed properties on all properties in the vicinity;

·          Creating a limit on taxable market value for homes that sustained at least $5,000 in damages in a disaster if they are repaired or replaced within 18 months;

·          Require the property valuation notice to include the location of data used by the assessor, times the data is available to the public and the county’s website

·          Elimination of the 10 acre minimum requirement for a property  to be classified as agricultural;

·          Allow county boards of review to conduct meetings on Saturdays and require at least one meeting to extend to 7pm;

·          Advancing the timeframe for counties to propose their levies by one month;

·          Clarifying that if a taxing authority fails to certify its proposed levy by the due date the county auditor shall use the previous year’s final levy;

·          Advance the date for counties to send out TnT notices by one-month;

·          Require an additional Notice to taxpayers when a levy increases by more than 1% plus growth in population, the notice must contain a description of why the levy is increasing;

·          Increase economic development abatement limits to 10% of net tax capacity rather than 10% of levy; and

·          Repeal of the green acres minimum income requirement.

Several of these provisions were opposed by AMC in 2007 and it is likely that the committee will remove some of them on April 23 when the bill is amended in committee. 

If counties have specific questions or concerns please contact AMC policy Analyst Joe Mathews.

For more information contact:  Joe Mathews, AMC Policy Analyst

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Association of Minnesota Counties

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Saint Paul, MN 55103-2108

Phone: 651.224.3344, Fax: 651.224.6540

www.mncounties.org