January 27, 2015
In this issue:
Want more info?
Call MADA: 651-291-2400
Scott Lambert
Executive Vice President

Amber Backhaus
Government Affairs

Contact Your Legislator:
MN Senate: 651-296-0504

MN House: 651-296-2146

Bills Allowing Sunday Liquor Sales Proliferate
Latest Introduction Adds Autos to the Mix
So far, 11 bills have been introduced allowing some version of Sunday liquor sales – from lifting the prohibition outright to limiting to specific communities to allowing sales of beer growlers only. The latest proposal, House File 347 introduced by Representative Tina Liebling (DFL-Rochester) yesterday, goes one step further and also removes the prohibition on Sunday auto sales.  Liebling, a long-time advocate of Sunday sales for alcohol, has no co-authors on her bill nor a Senator offering the companion.  MADA has reached out to Liebling to discuss her measure and will let her know of the significant dealer opposition and practical considerations that make lifting the ban ill-advised.
Dueling Approaches to Transportation Funding
Governor Dayton and the majority parties in the Legislature have affirmed their support for increased investment in transportation by unveiling new funding proposals.  Both the governor and Senate Democrats are looking at significant tax increases to provide an additional $11 billion dollars in transportation over the next ten years.  Their plans include:
  • levying a new 6.5% gross receipts tax on motor fuel sold in the state (which currently equates to a $0.16 per gallon increase);
  • raising the rate of motor vehicle registration taxes from 1.25% to 1.5%;        
  • increasing the metro area sales tax on transportation (by .5% for Dayton and .75% for Senate Dems); and
  • various combinations of bonding and efficiencies.
Meanwhile, House Republicans have taken a much more tempered approach, redirecting $200 million of the expected budget surplus and portions of MnDOT’s “unreserved balance” to highway construction and maintenance.  Along with increased efficiencies at the department, the House GOP anticipates infusing another $750 million in roads and bridges over the next four years.
Dayton has derided the GOP approach as “pure fantasy” while House Transportation Chair Tim Kelly (R-Red Wing) is concerned that DFLers are pouring money into a solution without knowing the scope of the problem. “It seems to me the proposals being (put forward) right now from the Senate and the governor simply increase revenue without first getting us all around the table to agree on the need," he said. 
MADA will continue to closely follow the debate and discourage legislators from enacting proposals that significantly increase the cost of a new car in Minnesota, as the proposed increase in the motor vehicle registration tax does.
Better for Business: Workforce Development Programs or Tax Breaks?
Senate Democrats and House Republicans have taken vastly different approaches to what they believe will improve the business climate for Minnesota companies.  In their initial bill introductions, senators focused on ways to better match the future workforce with employer needs.  To that end, they have put forward two bills to encourage worker training.  Senate File 2, authored by Senator LeRoy Stumpf (DFL-Plummer) would grant free tuition at the state’s community and technical colleges for recent high school graduates. The PIPELINE bill, Senate File 5 authored by Senator Terri Bonoff (DFL-Minnetonka), would allow students to receive credits for on-the-job training if they work in a field for which competency standards have been developed.  Employers who participate in the program would have access to grant dollars to assist in the education and training of employees.
House Republicans believe tax credits will spur job creation.  Their centerpiece legislation, House File 1 introduced by Representative Ron Kresha (R-Little Falls), includes a series of tax changes and reductions in regulatory barriers for businesses to stimulate the economy.  Among the new tax provisions are:
  • a “New Market Tax Credit” which creates special incentives for investment in the manufacturing, timber, mining and high-tech sectors;
  • an expansion of the research and development tax credit;
  • creation of a refundable credit on income taxes for people who earn their degrees and take jobs in science, technology, engineering or mathematics (STEM) or in long-term health care occupations; and
  • a 10% exclusion of S-corporation pass-through income from state income taxes.
MADA thinks these two approaches to encouraging job growth are not mutually-exclusive and will be weighing in on the provisions that best meet the needs of Minnesota’s dealers.
Dayton Unveils Biennial Budget
Today, Governor Mark Dayton announced his spending priorities for the upcoming biennium.  His top priorities include new investments in education and health and human services, where he is allocating 75% of the anticipated $1 billion budget surplus.  “Minnesota’s future success – the health of our families, the vitality of our communities, and the prosperity of our state – will depend upon our making excellent educations available to all Minnesotans,” said Governor Dayton. “That is exactly what my budget proposal aims to do.”  Specifically, Dayton is proposing:
  • a 1 percent increase in the K-12 education funding formula each of the next two years,
  • creation of a free, voluntary pre-Kindergarten learning program for all four-year-olds, and
  • child care tax credits.
Upon a cursory review, it does not appear that there are any recommendations that would impact the state’s auto dealers.  However, MADA staff will share more details as they become available.
Of course, MADA will keep you informed on all proposals affecting your dealership throughout the Legislative Session with weekly Legislative Bulletins emailed to you and found at www.mada.org
Minnesota Automobile Dealers Association Legislative Bulletin