Gaylord/Otsego County Chamber of Commerce

Government Relations Update

June 30, 2008

End of Spring Session Arrives with a Flurry

The House and Senate went into the very early hours of the morning last Saturday in an attempt to come to an agreement on departmental budgets and a number of major policy initiatives. 

On Thursday and Friday, when legislators were not bogged down in caucus meetings, voting was happening like it was going out of style.  Legislators also used the last week to stretch the boundaries of fashion as they broke out their seersucker and madras from the back of their closets (though they would claim their outfits never went out of style).

Here is a recap of the top issues:

            Budgets:  At the top over everyone’s list was finding agreement on the budget.  The legislature and the executive branch were able to agree on targets for each budget and adopt most of them.  There are a couple budgets yet outstanding, but could be voted on if final details are worked out and the legislature returns for a session day over the summer.  To view the status and final versions of the budgets, go to the Senate Fiscal appropriations page here.

            Water use:  Agreement was reached on the content of the Great Lakes Compact and accompanying implementation and regulation bills.  The legislation was adopted by both chambers and sent to the governor for signature.  The water legislation has been a top issue for the Chamber and the Alliance. 

The final negotiations centered around a number of issues that are very important to the business community and could have been detrimental to the operations and growth of northern Michigan businesses.  Highlights of the agreement include: 

·        Existing water users will continue to be grandfathered on current use

·        Seasonal water users, such as ski and golf resorts, will not be subject to new permitting requirements

·        Riparian rights remain in tact for water users

·        Scientific data will be a major component in determining new water permits

·        New users will be able operate under more manageable water withdrawal thresholds

Once a complete analysis of the legislation has been completed, it will be made available.  The Chamber and Alliance were supportive of the compromise.

            Individual Market Reform:  The bills were sent to a conference committee where a final version will be negotiated.   Any vote would likely occur in the fall.     

Electrical Choice:  One of the last major votes taken by the Senate Friday was to vote out the electric choice and RPS bills.  The Senate voted out HB 5524, the electric choice rewrite, with some changes, and took action on SB 213, a Senate version of the Renewable Portfolio Standards bills (House versions are HBs 5548-5549).  The main changes to the House passed RPS moves the 2015 deadline for renewable energy use down to 7% from 10%, and allows out state alternative energy, clean coal, and energy efficiencies savings to count in the calculations. 

Negotiations will likely continue over the summer.

            Downtown/City Redevelopment:  The majority of the bill package spearheaded by Sen. Allen aimed at adding additional tools for economic redevelopment of cities and downtowns passed their final hurdles and are on their way to the Governor.  Final bill language and analysis of SBs 970, 972, 974-976, 978, and 980 can be found at www.mileg.org. The Chamber and Alliance supported these bills. 

            MBT Calculation Fixes:    Exempting taxes, fees, and surcharges from the gross receipts calculation in the MBT has been one of the biggest complaints with the calculation of the tax.  The Senate bill that removes these taxes was passed out of House committee and the full House over a 24 hour period.  The Chamber and Alliance supported SB 1038 in House committee.   

Further negotiations will occur as whether additional bills will be tied to the legislation as part of the final agreement.  The biggest trade off proposal has been to ‘decouple’ Michigan from the accelerated federal depreciation schedules, which would offset much of the state revenue loss said to be created by SB 1038, thus negatively impacting those businesses that benefit from the federal schedules.  The Chamber and Alliance have not taken a position on the decoupling trade off.

The House passed version can be found at www.mileg.org.

New Government Relations Update Schedule

With the onset of summer recess, the stream of information flowing from Lansing and other governmental entities will slow to a trickle.  The Government Relations Division will adjust the frequency of the updates to every other week.