February 2022 by Shelly Jonas

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Operator Volume 52 Issue 2 • February 2022

Love the Bus Month! Article by Lt. Brian Reu

With February being “Love the Bus” month, I thought I would acknowledge the continued efforts to increase school bus safety. First, I want to start by thanking MSBOA. Their effort in spearheading the stop arm awareness campaign during the 2020 legislative session laid the groundwork for the school bus stop arm camera grant program that passed through the 2021 session! I am excited to see the results of this effort and the assistance it will provide in identifying violators. I am hopeful it will ultimately reduce the number of illegal passing incidents and increase safety for kids during the most critical time at bus stops. As we gear up for the second round of requests for proposals (RFP’s) for the stop arm camera grant, I wanted to provide you with a brief overview of requests received during the first round. Sixty companies started the RFP process. However, only 34 of them completed the full process. One positive is the 34 full requests represented most regions of the state. There were six companies representing east-central MN, eight from the metro, seven from northeast, two from south-central, eight from southeast, three southwest and three from west-central Some of the submitters operate in multiple regions. We look forward to receiving our first full request from the northwestern region in the coming rounds. Another positive: the 34 requests for stop arm cameras would equip 1,795 school buses! However, the total amount requested totaled approximately 3.9 million dollars. The first round of requests had approximately 3.6 million dollars in available funding. This means we will be able to provide all of these entities funding towards their original requests with some adjustments. It is important to remember part of the expectation of receiving the funding is that recipients will report violations using our online stop arm violation report. Part of the legislative requirement in implementing this grant includes reporting on results. Violation reporting is a critical component of that report. We have expressed the importance of this with drivers and carriers, not only how it relates to the grant but the additional goals the Office of Pupil Transportation has for this tool. From August 1st, 2021, through January 10th, 2022, 81 different districts/contractors have reported 1,015 stop arm violations using this tool. This reported number is drastically different than the 600 violations typically reported using the one-day annual survey. The 1,015 stop arm violations reported align more closely with the actual number of stop arm charges filed through the court system. The drastic difference is concerning to the Office of Pupil Transportation. Having as accurate as possible data is paramount. Given that, we ask again that you please utilize this tracking tool so we have real and accurate data to use when exploring future legislative safety-related initiatives. I look forward to the wrapping up “Love the Bus” month by recognizing the most important safety feature on the school bus. That being the school bus drivers! School Bus Driver Appreciation Day is another initiative that started as an idea from MSBOA, and it has been a privilege and honor for me to be involved with it. It has certainly grown and evolved over the last several years, and I’m excited to see all the unique and exceptional ways districts and contractors honor their drivers again this year!

School Bus Safety Day is February 23rd

2 The Operator

From the President Garrett Regan, Faribault, MN I hope this newsletter finds each of you well! As we approach the end of January and move into February, it’s easy to let winter get the best of us. Although it’s been a relatively ‘good’ winter weather-wise, a few -0 degree days and a few inches of snow here or there can lead people to believe winter has dragged on ‘forever’! Due to this, I’ve always felt School Bus Driver Appreciation Day in late February comes at the perfect time! This year will be no exception as we all think of ways to make this a special event for our people. Even if it’s just an excuse to get together as a group, take advantage of what the day is about by providing a good meal to your team, giving employees a keepsake, or another way to thank them for all they’ve done and continue to do. It may not need to be anything bigger, more exciting, or new to make our drivers feel loved as appreciation can come in very simple forms.

MISSION STATEMENT: THE PURPOSE OF THE OPERATOR IS TO PROVIDE THE MEMBERSHIP OF THE MINNESOTA SCHOOL BUS OPERATORS ASSOCIATION WITH INFORMATION REGARDING CURRENT INDUSTRY ISSUES. THE OPERATOR IS PUBLISHED 11 TIMES A YEAR BY THE MSBOA, 10606 Hemlock St. NW • Annandale, MN 55302. FOR MORE INFORMATION CALL 320-274-8313. FAX: 320-274-8027. Website: www.msboa.com SUBSCRIPTIONS ARE FREE WITH MEMBERSHIP. Additional subscriptions are $24.00 a year. COPYRIGHT 2021 MEMBERS MAY MAKE PHOTOCOPIES OR USE ARTICLES AS NECESSARY PROVIDING THE SOURCE IS CITED. Co-Editors: Shelly Jonas: shellyj@msboa.com VIEWS PRESENTED IN THIS NEWSLETTER MAY NOT NECESSARILY REPRESENT THE OPINIONS OF THE ENTIRE MEMBERSHIP OR ITS BOARD OF DIRECTORS.

We all have many obstacles stacking up against us these days, enjoy the time together and remember…..there is plenty to celebrate!

Board of Directors PRESIDENT

Garrett Regan FIRST VICE PRESIDENT

Bethany Schubert SECOND VICE PRESIDENT

Jason Anderson TREASURER

Tom Hey Ex-Officio

Josh Schiffler

Jason Anderson, Big Lake

Tom Hey, Marshall

Garrett Regan, Faribault

Rayme Bernick, Delano

Shelly Jonas, Annandale

Josh Schiffler, Crosby

Eric Burrill, Jordan

Scott Kennedy, Zumbrota - Mazeppa Bethany Schubert, Saint Stephen

763.263.7900/Cell 612.251.8364 jason.anderson@visionmidwest.com

763.972.3991/Cell 612.702.8954 rayme@stahlkebus.com

952.492-2410/Cell eburrill@benjaminbus.com

Ann Casey, St. Louis Park

952.426.7114/Cell 952.797.4936 acasey@adamsvs.net

Connie Grisim, Stewartville 507.533.8775/Cell 507.254.3828 Connie.grisimbus@gmail.com

Doug Grisim, Lake City

651.345.4112/CELL 651.380.9063 douggrisim@gmail.com

507.532.4043 /CELL 507.829.7365 thomashey@iw.net

320.274.8313 / CELL 612.599.0431 shellyj@msboa.com

507.334.5121/ CELL 651.470.7948 gregan@minnesotacoaches.com

218.546.6156 / CELL 612.245.6579 jschiffler@citransportation.com

507.273.2819 skennedy379@aol.com

320.251.1202 / CELL 218.851.2061 bethany@trobecsbus.com

Steve Latour, St. Paul

Kathryn Forbord, Lakeville

651.251.8080 / CELL 651.587.6292 slatour@minnesotacoaches.com

Paul Meyer, Hutchinson

320.234-0888 / CELL 612.281.7375 paulm@hutchbus.com

Michael Putzke, Paynesville 320.243.4455 / FAX 243.4450 putmic@hotmail.com

952.985.7540/ CELL 952.484.6879 kforbord@schmittyandsons.com

Nathan Olander, Detroit Lakes 218.847.7533 njolander@gmail.com

Legislative Update By Scott MacMahon, Flaherty Hood Phone: 651-259-1908 • Email: shmcmahon@flaherty-hood.com

Monday, January 31 marked the start of the new legislative session. Three major items will dominate this session: the $7.7 billion budget surplus, divided government, and redistricting and the 2022 election. When we talk about a “$7.7 billion surplus” that is a projection for what the state will have for a surplus for FY2223, which runs from July 1, 2022 to June 30, 2023. This surplus comes from three different areas. First, when the legislature and the governor set the budgets for FY21-22 and FY22-23 last legislative session, there was $127 million in unallocated funds. Second, for the fiscal year that ends this June, it is projected that the state will generate $3.1 billion more in revenue than was previously expected, and for the next fiscal year (July 2022 through June 2023) that state revenues will outpace previous projections by $5.5 billion. You will notice that the numbers listed above exceed $7.7 billion. Revenues will actually be about a billion dollars higher, but $971 million will automatically be moved into the state’s reserve accounts, which are lower than is required under state law. The reason for this economic boon is two-fold. First, the state still maintains unspent funds from the federal Covid stimulant bill passed by congress a year ago. Second, Minnesota’s economy, and in particular its unemployment rate, is improving at a much faster rate than economists expected a year ago. This is a shared experience that many states are finding themselves in. Next, up until the November 2021 election, Minnesota held the honor of being the only state in the country where legislative control was split between he two parties, with each holding the gavel in one chamber. We are now joined by Virginia. What this means for Minnesota is that we will see drastically different proposals from the Senate and the House on what to do with the $7.7 billion surplus. The Senate will likely pass a proposal heavy on tax reform and light on new spending and the House will likely pass a proposal heavy on spending and light on tax reform. The key question will be can the two divided chambers come to an agreement on what to do with the surplus by the May 23 mandatory adjournment date. The safe bet is they do not, which would WE REALLY DO MEAN then push that surplus into the next legislative session, which is when the legisFULL SERVICE lature will set the next state biennial budget. With radiators, DPFs, EGRs and

Finally, following the 2020 Census, the state is required to redraw our legislative boundaries. Although typically done by state legislatures, in Minnesota we have had a judicially panel draw the state’s maps for the past few decades because our divided government has not been able to come to an agreement. So in February, we will get our first glimpse of the new boundaries. All 201 legislators will then reside in a district that is different than the one they currently represent, and all will be u for election in November. Many will decide to retire after this session. In fact, 16 have already announced their intention. Others will pursue different offices, such as those running for governor, or look to federal or county races. As I look at the start of the 2022 legislative session, I wonder whether our elected officials will be able to push these forces aside and come to agreements this session, and figure out how to address the $7.7 billion surplus—whether it be through tax reforms or appropriations. Or if the session will fall on cutting room floor as dealmaking produces no deals. Only time will tell, but there are only 16 weeks to make it happen.

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TRANSPORTATION INDUSTRY TAX SAVINGS TO REMEMBER Smith Schafer & Associates

BELOW ARE 6 CRUCIAL TAX DEDUCTIONS TO THE TRANSPORTATION INDUSTRY: 1. Per Diem Methods for Substantiating Meals & Lodging Expenses A transportation company owner must substantiate the amount, time, place, and business purpose of expenses paid or incurred while traveling away from home. The IRS has provided per diem allowances under which the amount of meals and incidental expenses (M&IE) may be deemed to be substantiated. The per diem allowances eliminate the need to verify actual costs. However, using the per diem allowances, the owner still needs to have adequate records for documenting time, place, and business purpose. Three per diem allowance methods: 1. Lodging plus M&IE - provides a per diem allowance to cover lodging, meals, and incidental expenses. 2. M&IE only - provides a per diem allowance for meals and incidental expenses only. 3. Incidental expenses only - used when no meal or lodging expenses are incurred. Any reimbursement exceeding the relevant federal per diem rates for the type of allowance must be included in the employee’s (or independent contractor’s) gross income and be reported on the employee’s form W-2, subject to withholding. A per diem allowance for M&IE may only be used to substantiate an employee’s or other payee’s M&IEs for purposes of the employer’s return. The amount deemed substantiated is equal to the lesser of the per diem allowance or the amount computed at the federal M&IE rate for the locality of travel for the period the employee is away from home. If M&IEs are substantiated using a per diem allowance, 60 percent of the payment is considered lodging, and 40 percent of the payment is considered food and beverage, subject to the 50 percent limitation on meals and entertainment Current year per diem rates can be found here: https://www.gsa.gov/travel/plan-book/per-diem-rates 2. Accelerated Deprecation Code Section 168(k) (bonus depreciation): with an asset life of 20 years or less, will qualify for 100 percent bonus depreciation. Code Section 179: Owners may expense up to $1.05 million of new or used business assets. This limit is phased out once more than $2.62 million worth of assets are placed in service during the year. Code Section 179 expenses cannot exceed the taxable income of the business. Bonus depreciation does not have this stipulation. One caveat to getting around a taxable loss and taking section 179 expenses is enough officer compensation to offset the loss. Still, this item should be discussed with a tax professional. Note: Based on the states an owner is filing in, the state may not conform to all or a portion of the above forms of accelerated depreciation. 3. Qualified Business Income Tax Deduction The Tax Cuts and Jobs Act (TCJA) created a new deduction for pass-through business owners. It is called the Qualified Business Income Deduction, also known as Code Section 199A deduction or QBI deduction. According to the IRS, QBI is the combined amounts of qualified items of income, gain, deduction, and loss from any qualified trade or business. Only items included in taxable income are counted. This deduction is eligible for a maximum of 20 percent tax deduction on qualified business income for eligible partnerships, S corporations, and sole proprietorships. For taxpayers with taxable income exceeding $329,800 (married filing joint) or $164,900 (all other taxpayers), the deduction is subject to limitations. Continued on next page

Continued from previous page

These limitations include: • Whether the business is classified as a service trade or business • Taxpayer’s taxable income • The amount of W-2 Wages of the business • Unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business As of October 2021, the QBI deduction is set to expire in 2025. 4. Vehicle & Travel Tax Deductions Automobile usage tax deductions are some of the most scrutinized deductions on business filings but may be worth it if you travel often for work. There are two ways to claim this deduction: • Standard Mileage Rate. Total all the miles driven for your business and multiply by the IRS’s standard deduction rate to figure out your deduction. For the tax year 2021, the standard mileage rate is 56 cents per mile. • Actual Car-related Expenses. This option may entail a little more work. If you keep very detailed records throughout the year, you can add up how much your car depreciated and what you spent on gas, repairs, tires, tune-ups, car insurance, and registration fees. That will be your deduction instead of the mileage. The option you choose depends on how economical your car is, how much it cost you to drive it throughout the year and how well you document car-related expenses. More often than not, a taxpayer will take the standard mileage rate due to ease of use and, in some cases, may result in a higher deduction. The most important part of taking this deduction is keeping a good record of receipts and mileage in case of an audit. 5. Home Office Tax Deduction You may deduct expenses for the business use of your home, which include utilities, mortgage interest, insurance, repairs, and depreciation. Office supplies are also deductible such as printer ink, pens, software, a new laptop, and much more. A taxpayer can either take the deduction as a percentage of your home office square footage divided by the total square footage and apply it to the actual expenses or use the simplified method approach. The simplified method approach allows business owners to deduct $5 for every square foot of your home office, up to a maximum of 300 square feet ($1,500). A home office must be any area in the home strictly used for business work and must be a situation where no other office space is available for work. 6. New for MN Taxpayers in 2021: SALT Cap Workaround Beginning in 2021, owners of pass-through entities (S Corporations and partnerships) can pay MN state income tax through their S Corporation or partnership and have the S corporation or partnership take the deduction. Owners will then receive credit when filing their MN tax returns. Currently, individuals are limited to a maximum of a $10,000 deduction for state and local taxes on their individual returns, Schedule A. The SALT Cap Workaround allows the owners of pass-through entities to deduct the taxes paid to the state of MN instead of losing that deduction. Additionally, the deduction is not a part of itemized deductions but is an ordinary business expense. Many other states have adopted similar provisions, including Wisconsin. The benefit to planning is not only for MN entities. Additionally, cash method taxpayers need to pay in the MN tax before year-end to receive the benefit of this deduction.

School Bus Stop-Signal Arm Camera Grant Request for Proposal Grant Overview The Minnesota Office of Traffic Safety, a Division of the Minnesota Department of Public Safety, seeks to provide funding to school districts, nonpublic schools, charter schools, and/or companies that provide school bus services to install and operate school bus stop-signal arm camera systems. Funding Funding Appropriation In 2021 Special Session the Minnesota State Legislators appropriated funding for this project to the Department of Public Safety. Funding Availability • A total of approximately $7,398,000 is available to be awarded in Fiscal Year 2022 and again in Fiscal Year 2023. • The number of grants awarded will depend on the number of buses covered under each grant application as well as the final costs to install and procure the equipment. • Funding will be allocated through a competitive process with review by a committee representing pupil transportation experts and the staff of the Department of Public Safety Office of Traffic Safety. Grant awards will be announced based on the timeline for applications submissions section below. • A grantee may only incur eligible expenditures once a grant contract agreement has been fully executed. Expenditures prior to the grant effective date are not eligible for reimbursement. • If awarded funding to purchase cameras, the expectation is the cameras are in use on a qualified bus for a minimum of 3 years. Priorities & Populations Served It is the policy of the State of Minnesota to ensure fairness, precision, equity and consistency in competitive grant awards. This includes implementing diversity and inclusion in grant-making. Policy 08-02 establishes the expectation that grant programs intentionally identify how the grant serves diverse populations, especially populations experiencing inequities and/or disparities. This grant will serve: • School age children who ride on school buses throughout the state of Minnesota by identifying drivers who fail to stop when these children are getting on and off school buses. Competitive Priority Priority will be given to applicants that propose to install cameras on regular route type A, B, C, and D buses; newer buses; and buses not currently equipped with a stop-signal arm or forward facing camera system. SWIFT Supplier Registration Instructions In order to receive a payment from the State of Minnesota, you must be a Registered Supplier in SWIFT. Please see Appendix C for details. Questions on registering as a Supplier should be emailed to the MMB Supplier Help Line at efthelpline.mmb@state.mn.us DPS e-grants Instructions Completed proposals must be received via the DPS Web-Based e-grants system by the close of the business day 4:30 p.m. Tuesday, March 15th, 2022. Late proposals will not be considered. If you are currently not an assigned user of the DPS e-grants system, click on “new user”. If you need assistance with e-grants, contact the OTS e-grants System Administrator, Kristen Oster. Applicants must be assigned a username and set up a password before they can apply to the RFP, which may take more than one business day to receive. Continued to page 11

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School Bus Driver Appreciation Day will be held on February 23, 2022 The committee met with Goff Public on December 6th. We know that this year has been a struggle for the industry. Our hope is to focus on a thank you to our people, especially those that have stepped up this past year. If you have a new school bus driver who has a great story – perhaps someone in your community who is community minded and responded to the need, please let us know. You can email shellyj@msboa.com and we will forward the story to Goff Public.

From the FMCSA Drug and Alcohol Random Testing Rates 2022: DOT Agency Federal Motor Carrier Safety Administration [FMCSA] •The random rates did not change for 2022. •Because the random rates did not change, FMCSA is not required to publish a notice in the Federal Register. •The rate last changed in 2020.

2022 Random Drug Testing Rate

2022 Random Alcohol Testing Rate

50%

10%

Legal Notes HOTLINE PHONE: (952) 921-4622

BY THOMAS REVNEW, ESQ., OF SEATON, PETERS & REVNEW COVID-19 Vaccine Mandates And OSHA’s Enforcement Opportunities On January 7, 2022, the Supreme Court heard oral arguments on whether to put a hold on the Occupational Safety and Health Administration (“OSHA”)’s Emergency Temporary Standard (“ETS”) COVID-19 Vaccine Mandate for employers with 100 or more employees. Almost a week later, the Court issued an opinion putting the OSHA ETS mandate on hold while the litigation continues in a lower court. Effectively, this decision puts an indefinite pause on the “vaccine or test” requirement for employers with 100 or employees. The Court determined OSHA had exceeded its authority and held: “Although Congress has indisputably given OSHA the power to regulate occupational dangers, it has not given that agency the power to regulate public health more broadly. Requiring the vaccination of 84 million Americans, selected simply because they work for employers with more than 100 employees, certainly falls in the latter category.” Similarly, MNOSHA, which had adopted the OSHA ETS mandate by reference on January 3, 2022, also announced that in light of the Court’s decision, it would suspend enforcement of the ETS pending future developments. These developments are good news for employers and it is unlikely the ETS will be revived. Nevertheless, employers should be aware that shortly after the Supreme Court’s decision, Marty Walsh, the United States Secretary of Labor announced, “Regardless of the ultimate outcome of the [court] proceedings, OSHA will do everything in its existing authority to hold businesses accountable for protecting workers, including under the COVID-10 National Emphasis Program and the General Duty Clause.” In other words, Mr. Walsh made it clear that although the ETS has been placed on hold, OSHA will take steps to aggressively hold employers accountable if they fail to adequately protect their employees against COVID. In other words, employers will still be accountable for determining the best approach to safe guarding their employees from COVID transmission in the workplace. Thus, employers who prepared or issued a policy as a result of the ETS should revisit that policy and determine what works best for their particular circumstances. Additionally, given OSHA’s announcement, employers with fewer than 100 employees should ensure that they are taking adequate steps to protect employees against workplace transmission of COVID-19. On a similar note, vaccine mandates do not appear to be going away any time soon. Shortly after the Supreme Court’s decision, both the City of St. Paul and the City of Minneapolis announced that effective January 19, 2022, they would require patrons at restaurants, bars and “other places” that serve food in drink in St. Paul and Minneapolis to show proof of vaccination or a negative test within 72 hours. Other places affected by the vaccine mandate include entertainment venues, catering halls, movie theaters and bowling alleys, but not schools, hospitals, churches and soup kitchens. On January 20, 2022, seven restaurant owners filed suit against the City of Minneapolis, seeking to enjoin the City’s mandate, claiming the mayor exceeded his constitutional authority of the City’s ordinances. Oral arguments will likely be scheduled in the near future concerning this case, but as of the date this article was submitted, the mandate remains in effect. If you have questions concerning COVID mandates or another labor and employment law matter, please feel free to reach out to Tom Revnew at (952) 921-4622 or trevnew@prkalaw.com

11 School Bus Stop-Signal Arm Camera Grant Request for Proposal Continued from page 6 Eligibility Eligible Applicants: • Minnesota School districts • Minnesota Nonpublic schools • Minnesota Charter schools • Company that provides school bus services in Minnesota Phase 2 • Application Deadline: March 15, 2022 • Awards Announced: June 2022 Phase 3 • Application Deadline: June 15, 2022 • Awards Announced: September 2022 To apply for the grant go to: https://app.dps.mn.gov/egrants/ Any questions or for more information contact: Rahya Geisler: Rahya.geisler@state.mn.us Or call: 651.201.7273

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