District 16B Rep. Paul Torkelson of Hanska, who serves as Republican lead on the House transportation finance committee, recently said he will author legislation next session to make Minnesota Licensing and Registration System (MNLARS) reimbursement payments to deputy registrars tax exempt.

A recent media report indicated that the payments, set to be distributed in July, were not specifically designated as tax exempt under law, meaning they would likely be subject to state and federal taxes.

This session, lawmakers set aside $13 million to reimburse Minnesota’s deputy registrars for costs that were incurred as a result of the failed software rollout. 

“Every dollar of this relief funding should go to the local DMV offices who have suffered from the failures of MNLARS,” Torkelson said. “There are Minnesotans who sacrificed their retirement savings and put their own financial situation at risk to keep their doors open and continue providing these services we all rely on. Making these payments tax exempt allows the funding to stretch further and provide as much relief as possible. If needed, I will author legislation to fix this oversight next year and will push to have this included in the event the governor decides to call a special session.”

The report also indicated deputy registrars have indicated the payments represent only a fraction of the total cost these offices have incurred because of the MNLARS failures.

“If $13 million proves to be insufficient, we should also look at providing additional relief funding, so our deputy registrars can stay afloat until the new system is ready to go,” Torkelson added.

A contractor to build the MNLARS replacement system, which will be known as the Vehicle and Title Registration system or VTRS, is expected to be selected next month.