Legislative Update – The Legislature Returns – What’s Ahead

With less than a month remaining in fiscal year 2004-05, the legislature has plenty of work ahead to complete in the next three weeks. The State’s fiscal year 2005-06 budget bills are probably the number one priority, and most sources in Lansing indicate that a budget deal has been completed. However, there are plenty of other budget related pieces of legislation floating around the halls of the Capitol that will have a direct impact on the construction industry.

The Senate will be working on providing additional funding to the Secretary of State in the amount of approximately $10 million for this fiscal year and beyond. This action may still take place through House Bill 4082 sponsored by Representative John Gleason (D-Genesee) and through Senate Bill 548-550, all of which are sponsored by Senator Johnson (R-Oakland). SB 548-550 shifts all commercial look-up fees for personal ID cardholders, driver license holders and vehicle/water craft operators from the general fund to the Transportation Administration Collection (TAC) Fund, generating an estimated additional $5 million to the Secretary of State as opposed to lapsing this fund balance into the general fund. This general fund shift in conjunction with the $10 million Michigan Transportation Fund (MTF) shift proposed in HB 4082, should balance this fiscal year’s budget for the Secretary of State at the expense of the MTF recipients and the general fund.

The political reality is that the administration and the legislature want to help balance the Secretary of State’s budget this year, therefore, killing these bills in their current form is probably not an option. However, there is an opportunity for the Senate to lessen the loss of these revenues by capturing legislative intent, in that, registration transfer fees that are currently not being collected could generate approximately up to $24 million for the MTF. Both Senators Prusi, (D-Marquette) and Garcia (R-Livingston) are offering amendments to collect these omitted administration fees. This amendment would require the collection of pro-rata registration transfer fees that would be collected when a new car buyer transfers a registration from an older lesser-valued vehicle, to a newer higher- valued vehicle. By filling this hole in the registration process these additional revenues would then be collected for the MTF.

MITA will be aggressively lobbying in support of HB 4082 only if it includes the pro-rata registration fee language with the fees being deposited in the MTF.

MITA encourages all members to contact their Senators (see MITA Legislative web page for contact information) and let them know that you would like for them to support this change in the registration fee process.

Sales Tax on Fuel

Recently, HB 4204 began to see significant attention in the Michigan House of Representatives. This bill sponsored by Representative Gosselin (R-Oakland) would eliminate the sales tax on gasoline and diesel fuel if so determined by the Governor.

The impact of this bill does not affect the Michigan Transportation Fund, which receives revenues from the gas tax and not the sales tax. However, there could be an impact on local projects in that a portion of the sales tax does go to local units of government for their operations and thus, if that funding is reduced to these communities local projects, could in the end, then be impacted.

MITA will keep you updated on the status of this legislation.

Prompt Payment Legislation Introduced

House Bill 4509-10 was recently introduced by Representative Acciavatti (R-Chesterfield) that would put various requirements on both prime contractors as well as public owners to pay promptly on contracts that they have with both prime and sub- contractors.

MITA is in the process of reviewing this bill along with various other interested parties. At this time, MITA is neutral but upon further discussions will evaluate changing our position.

MITA will keep you informed on further updates on this legislation.

MITA Considers Supporting Term Limits Proposal

MITA has recently been approached by the Michigan Chamber of Commerce to consider supporting a change in the state’s term limit provisions to allow a lawmaker to serve his/her entire legislative tenure in either the House or Senate. Our current term limits law was adopted in 1992 and authorizes an elected official can only serve up to three terms (2 years each) in the Michigan House of Representatives and two terms (4 years each) in the Michigan Senate for a grand total of 14 years.

There are two reform proposals being considered. The first is to continue the current maximum of 14 years lifetime legislative service, but let a person serve the entire 14 years in the House or one term (2 years) in the House and three terms (4 years) in the Senate. The second proposal would reduce the years of service to 12 years total and allow a legislator to choose to serve his/her entire tenure in one chamber.

Other proposals may be included in this package, which would include greater financial disclosure among elected officials and limits on the so called “revolving door” of legislators going into lobbying immediately after leaving an elected office. If this effort does move forward, the plan is to put this proposal on the 2006 ballot.

Although these reforms do not extend the total amount of time allowed under our current term limits laws (14 years) the proposal would make sense in that it would allow for a legislator to develop expertise in subject areas and serve in a leadership position for a longer period of time after gaining some experience.

If you have any questions pertaining to any of the above legislative issues, please contact Mike Nystrom, Vice President of Government & Public Relations.