Sen. Melisa Franzen (SD49) Update: March 8, 2019 , CD3 DFL

Volume 5, Issue 9 March 8, 2019

Weekly Review Video

A weekly message from your Senator

Dear Constituents and Friends,

The ninth week of the 2019 session wraps up this week, with the legislature having only passed two bills so far. MNLARS funding and a small bonding bill for clean-up of a toxic closed landfill in Andover and technical fixes to construction bonds for Highway 14 and Highway 23 were both passed and signed into law by Governor Walz.

Committee highlights from this week include a number of bills addressing mental health issues in rural Minnesota, provisional ballots, an estate tax repeal, and a bill to cut social security taxes. Reinsurance was heard in Finance Committee, a bill to reimburse deputy registrars had a committee hearing, and a bill to punish those who drive too slow in the left lane was also debated.
To raise awareness of the high cost of insulin, this week I held an insulin Twitter Town Hall with Senator Melissa Halvorson Wiklund. The purpose was to engage citizens and highlight legislation to address this issue. Advocates also held a MN Insulin for All rally where speakers spoke out against the outrageous increases in the price of insulin in front of a crowd of hundreds.

There were a number of press conferences held this week including Restore the Vote, 100% clean energy initiatives, and cannabis support. Groups that rallied at the Capitol included Housing First, U of M Duluth Bulldogs, Insulin 4 All, the MN Historical Society, the Restore the Vote coalition, and ERA Minnesota in celebration of International Woman’s Day.

Sincerely,

Melisa

Governor Walz proposes 100% clean energy by 2050

A set of policy proposals introduced this week by Governor Tim Walz and Lt. Governor Peggy Flanagan will lead Minnesota to 100% clean energy in the state’s electricity sectors by 2050. This three-part plan — called the One Minnesota Path to Clean Energy — builds on the successes Minnesota has already had in reducing its dependence on fossil fuels and increasing its use of clean energy. Minnesota is already recognized as a national leader in addressing climate change, and this plan could put the state at the forefront of that work.

The first proposal of the One Minnesota Path to Clean Energy would require all electric utilities in Minnesota to use only carbon-free energy resources by 2050. Each utility would have the freedom to choose how and at what pace they will accomplish this. The second policy proposal would necessitate that utilities must prioritize energy efficiency and clean energy resources when replacing or adding a power generator. Finally, the third proposal would raise Minnesota’s Energy Efficiency Resource Standard and expand the Conservation Improvement Program.

Minnesota has already made great strides towards clean energy. In 2017, 25% of the electricity in the state was generated by renewable sources — a standard which was supposed to be met by 2025.

Insulin for all: creating pathways to practical care

DFL Senate and House members joined advocates, health care experts, and patients outside the Capitol and online for a Twitter town hall this week, to raise awareness around the critical need for improved access to insulin and other prescription drugs in Minnesota. Rapidly rising drug costs have had devastating effects across the nation. Between 2002 and 2013, the average price of insulin nearly tripled, forcing some people to risk their lives by needing to either cut back on or skip necessary doses completely.

One piece of legislation would provide stability to insulin-dependent consumers through the year with the type of insulin, equipment, and supplies their insurance will cover, while also requiring insurance companies to disclose what brands they cover upon request. The Alec Smith Emergency Insulin Act establishes an emergency insulin program for the state and allows for more emergency prescription refills (SF 472).

Other bills introduced would direct the Commissioner of Human Services to set up a program to make discounted prescription drugs re-imported from Canada available for purchase in the state, to increase Minnesotans’ access to cheaper prescription drugs prices, and prohibit the advertisement of prescription drugs in the state, which are often paid for by hiking drug costs. Additional legislation to require the Commissioner of Health to review insulin prices set by manufactures and establish a maximum reimbursement rate if the price has led or will lead to excessive costs in the state’s health care system has also been introduced (SF 365, SF 1184, SF 1182, SF 364).

Bill would increase access to medical marijuana programs for veterans

Members of Minnesota Veterans for Cannabis held a press conference this week in support of legislation which seeks to increase accessibility for veterans looking to benefit from the state’s medical marijuana program. Speakers promoted medical marijuana not only as a viable source of pain relief for the veterans who might choose to enroll, but also as a valuable alternative to opioids and other addictive forms of pain relief medication.

Under current U.S. Department of Veteran Affairs (VA) guidelines, VA health care providers may not recommend or assist veterans in obtaining medical marijuana or entering state medical marijuana programs, although veterans are not in danger of being barred from VA benefits due to cannabis use. According to speakers from Minnesota Veterans for Cannabis, however, the lack of VA support leaves costs prohibitively high for many veterans who are seeking an alternative to opioids or other VA recommended sources of medicinal pain relief. Speakers also emphasized the high prices and barriers to access in Minnesota compared to other states, although this bill does not address prescription costs or program prices.

The bill would set a clear definition of what falls under the Department of Veteran Affairs term “service connected injury,” which would include any injury or disease incurred or aggravated while on active duty. Service connected injuries would then form a core part of the veteran application process for the state’s medical marijuana program, which would allow qualifying veterans to avoid having to obtain an annual diagnosis certification from a health care practitioner.

There are approximately 330,000 veterans living in Minnesota, and over 30% of them currently rely on VA healthcare. (HF 1420)

MNLARS deficiency funding compromise signed by Governor Walz

A compromise to provide $11.2 million to ensure IT contractors continue to develop and improve the driver’s license and vehicle services software known as MNLARS and FAST was signed into law by Governor Walz this week. An additional $2 million will provide Driver and Vehicle Services (DVS) with temporary employees to increase customer service capacity. The bill also requires Governor Walz’s new Blue-Ribbon Council on IT to conduct a review of MNLARS and determine whether the project can be completed by the end of fiscal year 2021 as scheduled.

FAST and MNLARS IT systems will require ongoing funding to continue improving the software applications, including additional DVS staff to reduce waiting times for customers into the future. Governor Walz’s proposed transportation package to raise the gas tax, tab fees, and the motor vehicle sales tax would help pay for these ongoing improvements. (SF 1092)

Mileage-based user fee reconsidered

The Senate Transportation Committee again heard a bill this week that would establish a pilot program to identify and implement the steps necessary to develop a mileage-based user fee system (MBUF) to fund Minnesota’s transportation system that I chief authored. The pilot project must demonstrate and evaluate technical approaches to operating a MBUF system, analyze options and policy questions, and result in a near-term capacity to implement or phase-in a MBUF.

MBUF is an alternative to the gas tax, which is projected to raise less and less revenue as vehicles become more fuel efficient and fewer vehicles are dependent on fossil fuel. Since the gas tax revenue goes directly to road maintenance and construction, the state is facing a long-term deficiency in anticipated funding. MBUF would be a fair alternative because it would charge drivers based on their use of the road regardless of the type of fuel used. (SF 1122)

Social Security tax subtraction

The Legislature spent $246 million in 2017 on a significant new tax subtraction for Social Security benefits. For Tax Year 2018, married-joint filers may subtract up to $4,700 of Social Security benefits and single filers may subtract up to $3,660 of benefits from taxable income. The subtraction is phased out based on a taxpayer’s provisional income – adjusted gross income plus one-half of Social Security benefits – so it is focused on married taxpayers earning less than about $104,000 and single filers earning less than about $80,000.

The Senate Tax Committee considered a new proposal this week to allow the full value of Social Security benefits to be subtracted from Minnesotans’ taxable income. About 357,600 tax returns would see an average $1,000 tax cut as a result of this bill, but it would cost the state nearly $800 million in the next biennium and even more in the years following, as more Baby Boomers reach retirement age.

According to data from the Department of Revenue, there are about 746,000 Minnesota households with Social Security income. Of these, 54.4% (404,000) do not pay Minnesota taxes on these benefits because of existing exemptions and subtractions. About 90% of benefits that are taxed are concentrated in the top four highest-earning income brackets – which means that’s where the biggest share of tax relief would go if the state spent $800 million every two years to provide this exemption. Minnesota has a strong reputation of being a high-service state for retirees, providing quality health care and valuable resources to its senior citizens. Spending that much money on a tax subtraction that does not actually benefit all seniors would risk the stability of other programs that are important to Minnesota’s aging population, which is why a more targeted approach may be the better solution at the end of this legislative session. (SF 245)

I have a bill relating to this topic that would take a phased-in approach. (SF 1826)

Sports betting in Minnesota

The Senate Tax Committee considered a proposal this week to legalize sports wagering in Minnesota and collect taxes on the earnings. This is a new topic since last year’s U.S. Supreme Court decision in Murphy v. NCAA, which found a federal ban on the practice in all states but Nevada was unconstitutional. Since that ruling, seven additional states (DE, NJ, MS, WV, NM, PA, RI) have moved to legalize sports betting in some format.

The Senate bill would establish a Sports Wagering Commission that would be responsible for many rules and regulations surrounding the new form of gaming, including determining which sporting events could legally be bet upon. Federally recognized Native American tribes and racetracks that are licensed to conduct wagering would be eligible to apply for licenses. The tax rate in this bill – 6.75% – is the same that Nevada imposes on a casino’s take of the pool in that state. Supporters are aiming for a tax rate that generates adequate revenue but doesn’t discourage betters from engaging in legal betting and instead staying in the underground market.

Advocates for this bill say sports betting is already happening through unregulated forms. Providing for a legal structure in Minnesota would provide recourse for consumers who are cheated through the underground market and would provide regulation and tax revenue. Opponents include those against gambling, who see this as an expansion of a dangerous habit and something that could encourage a new generation of gamblers. Minnesota’s tribal communities also have expressed serious concerns. They fear rushing to legalize this could degrade Minnesota’s current legal gaming structures, including tribal casinos, charitable gaming operations, and the state lottery. They prefer a study that assesses other states’ experiences before moving toward full legalization in Minnesota. The bill was referred to the Committee on State Government. (SF 1894)

MNLARS deficiency funding compromise signed by Governor Walz

Additional investments to improve and test MNLARS will ensure Minnesotans will be able to receive the essential services they expect from Driver and Vehicle Services. The next steps will include reimbursement to deputy registrars that process driver’s licenses, tabs, and titles across the state but have lost revenue since the rollout of MNLARS due to reduced business and productivity. The House version included $10 million in reimbursement grants for deputy registrars but the Senate heard a separate bill this week with $4.6 million in additional funding.

Deputy registrar reimbursement funds pass

A bill passed through the Transportation Committee this week to appropriate $10 million for this fiscal year and $4.6 million in the next fiscal year for grants to reimburse private deputy registrars for costs incurred due to lost business from the unsuccessful rollout of Minnesota Licensing and Registration System (MNLARS). An amendment was added to specify the funds will come from the general fund and not the driver services operating account in the special revenue fund.

Deputy registrars, both public and private, have testified on the loss of business and revenue from the unsuccessful rollout of the MNLARS vehicle services software in 2017 and subsequent glitches in the system. A total of $10 million was requested by private deputy registrars as the amount of lost revenue from 2017 to now. Deputy registrars are requesting additional processing fees to mitigate longer transaction times and training costs, which would apply to tabs, driver’s license applications, and title transfers. (SF 621)

Mighty ducks ice rink grants approved

A bill was heard in the State Government Finance Committee this week to provide $2 million for grants to refurbish and renovate ice hockey rinks across the state, administered by the Amateur Sports Commission.

R-22 is a colorless gas commonly used as a refrigerant at many ice rinks that contributes to ozone depletion. The international community has agreed to eliminate the sale of HCFC compounds by 2020 but there are still some rinks in Minnesota that have not been converted to ammonia refrigeration.

Direct cooling systems are more expensive to renovate because the floor needs to be demolished and the piping needs to be replaced. There are a total of 134 rinks in Minnesota, with 45 rinks that have been converted, most from funds provided through the Mighty Ducks Program. (SF 894)