Great Lakes Timber Professionals Association logo
Protecting a multiple use forest for future generations.

Request Info - Contact Us - About - Site Map

Sign-up for E-Announcements

Industry News, Meetings & Events

Michigan Legislative Update

Week of November 5, 2015

by Judy Augenstein

The Legislature has finally passed a road budget plan.  This week the Senate revised the House road budget plan sent to them last week and the House adopted the changes late last night. The plan would increases the gas tax to 26.3 cents per gallon on January 1, 2017, a 7.3 cents per gallon increase.  The amount paired with bringing the current 15 cent per gallon diesel fuel to the same level, is intended to generate $400 million in revenue inflationary increases would begin January 1, 2022. 

The registration fee increases, previously scheduled to be 40 percent across the board in the House plan, decreased to 20 percent for passenger vehicles and trucks, which would generate an estimated $200 million.  Both the gasoline tax increase bill and the vehicle registration bill will take effect on January 2017.  The Income Tax rollback would occur when General Fund growth exceeds the rate of inflation, then multiplied by 1.425.  The rollback could occur on January 1, 2023.

The lock box included in the Senate plan is back in the final deal.  Under the original Senate plan, the legislation would have locked up the last 7 cent increase on the gas tax annually until the lock box is opened via passage of a concurrent resolution.  Under the new plan, it would lock up the first $100 million of gas/diesel fuel tax increase until unlocked via the passage of a concurrent resolution.

The General Fund dedication in fiscal year 2019 is $150 million, then $325 million in fiscal year 2020.  In fiscal year 2021, the GF dedication would be $600 million. The plan keeps the House provision to expand the Homestead Property Tax Credit . The income multiplier is 3.2 percent in tax year 2018 and the maximum credit $1,500 that same year. It also increases the renter credit.  There is also an MDOT administrative cap of 8 percent, competitive bidding and warranty assurances and public transit flexibility.

The House Energy Policy Committee just reported out legislation which basically puts stricter requirements on alternative energy suppliers and their "choice" customers by locking the door on future applicants and mandating that choice customers wishing to return to a regulated utility live with that decision for 20 years.   Amendments passed tonight include a provision which includes a "goal" for utilities to reach 30 percent of production through renewable sources and energy efficiency by 2025.

Changes also include not requiring alternative energy suppliers to provide an outlook unless certain circumstances occurred.  Under an amendment there would be no changes to requirements on the alternative suppliers unless the Public Service Commission made certain determinations involving capacity.  Language was added to make changes to the renewable portfolio standard, removing what the federal government does not consider renewable energy.  Another amendment tightens up the definition of renewable energy, but expands the definition from the current law, including biomass, geothermal and paralysis.  New language would ensure pet coke, hazardous waste, coal waste and scrap tires were not included in the renewable energy definition.  Chairman Aric Nesbitt, R-Lawton promised Rep. Scott Dianda, D-Calumet that more work could be done on biomass once the bill starts debate by the full House.  

Utilities and state government called the shots on this fast track package of bills.  The bottom line is that the Utilities, the DEQ and other state agencies will have the power to create Michigan's renewable and energy efficiency standards through a collaborative process between them, as opposed to a set renewable standard, like the current one that requires 10 percent of the state's energy come from renewable energy starting this year.  The package will now go to the House for full consideration and then on to the Senate for more debate.

HB 4575 sponsored by Rep. Triston Cole, R-Mancelona was also reported out of the Energy Policy Committee.  The bill creates a seven member Michigan Electric Infrastructure board within the Department of Licensing and Regulatory Affairs and task it with ensuring that adequate resources be able to reach Michigan electric consumers through the construction of transmission infrastructure that will reduce congestion and energy prices, provide for additional transmission capacity, ensure reliable and efficient operation of the integrated electrical transmission system and support the state's energy policy goals.

The duties of the board is to identify counties in which transmission facilities have experienced constraints causing congestion in the preceding five years, leading to increased electricity prices.  A main priority is to increase the electrical connectivity between the Upper and Lower Peninsulas beyond the capability provided by the two circuits connecting the peninsulas on the bill's effective date by adding additional circuitry beyond the normal power carrying capacity of those circuits to enable the formation of one resource adequacy zone within the Midcontinent Independent System Operator (MISO) footprint in the state.  Initial priority would be given to proposals for a transmission line that accomplishes this goal.

Rep. Scott Dianda, D-Calumet proposed an amendment to clarify the purpose of a "study" to find if the transmission line program for the Lower Peninsula and Upper Peninsula is useful, feasible and affordable, the amendment was voted down with support from Rep. John Kivela, D-Marquette and Rep. Ed McBroom, R-Vulcan.  Dianda also offered an amendment that would allow a customer to only pay for what they use and not any more, but that was also voted down with support from Kivela and McBroom.

Three Senate bills to prevent unfunded mandates were debated by the Senate Government Operations Committee this week.  SB 388, SB 389 and SB 390 sponsored by Senator Tom Casperson, R-Escanaba, Senator Mike Kowall, R-White Lake, and Senator David Robertson, R-Grand Blanc.

The bills would revamp state law to be more in compliance with the Headlee Amendment, which bans the state from mandating a new program or requirement without providing adequate funding for it.  Creates the "Paul Harvey Transparency Act, which stipulates that no local government would be obligated to provide new or increased services unless a fiscal note had been prepared and sufficient funding has been appropriated and disbursed.  The last bill in the package allows a taxpayer or a local unit of government to bring an action in the Court of Appeals to seek monetary damages for failure to fund state required services.  If the courts find the state has not met its funding obligation, the Legislature would have to appropriate sufficient funding, eliminate or rescind the requirement or change the subject requirement in a manner that allows the state to provide sufficient funding.  The Senate Government Operations Committee plans to continue debate on the bills next week.

House Republicans are divided on how if to intervene in "Dark Store" tax losses.  Three bills have been introduced by Rep. John Kivela, D-Marquette, Rep. Scott Dianda, D-Calumet and Senator Tom Casperson, R- Escanaba.  House Tax Policy Chair Jeff Farrington, R-Utica agreed to general testimony this week on the issue, but not on specific legislation.   Chair Farrington commented "Whether we can resolve this issue is another issue." 

Local governments are begging the state to take action to rein in a strategy that big box stores are allegedly using more to slash their property taxes.  But Republican lawmakers stand divided on whether a policy change is warranted.  The name "dark stores" comes from the allegation that more and more open and operating big box retailers in Michigan, like Lowe's and Meijer, are using the market values of long closed stores to argue down their tax assessments. 

On top of using closed stores to argue down assessments, local government officials also allege the problem is complicated by strict deed restrictions on how retail properties can be used in the future.  Those restrictions, which come as part of purchase agreements, are helping to keep retail properties vacant and driving prices down, local government groups say.  The Michigan Municipal League calls the situation a "gaping tax loophole scheme exploited by big box stores", the Michigan Retailers Association disagrees saying the big box stores lose value the minute they're built.  They also contend that creating a special standard for assessing the value of one kind of property, big retailers, would be unconstitutional.  The Constitution requires that property be uniformly valued and uniformly assessed stated the attorney for MARA.  Legislators seem to be all over the map on this issue.

Top of Page