The Legislature (finally) wrapped up action last week on the state budget and a few other policy items and recessed for the summer. While there are a few session days scheduled over the summer months, no action is expected until September. Both chambers are expected to meet throughout the month of September and then recess again until the election.
Overall, the budget results were positive with additional money flowing to local roads and revenue sharing being preserved at current levels. Fire protection grant increases, full funding for indigent defense plan grants and the new small city and village road grants were major pluses coming out of the final deal.
Following the heavy lifting on the budget and the discussions around the ballot initiatives related to prevailing wage elimination and recreational marijuana, few other items were tackled.
New Lead and Copper Rules
The Joint Committee on Administrative Rules (JCAR) elected not to take up the DEQ’s proposed Lead and Copper Rules. We aggressively lobbied the committee to bring up these rules for official legislative review but the committee declined, allowing the rules to take effect. These rules will impose new requirements on communities to create an inventory of their lead service lines and remove those lines over the next twenty years. The cost for both the public and private side must be paid for by the water supplier. We believe that the rule likely violates the Constitution and are aware of communities that are discussing a legal challenge. Look for further details on these new requirements from the League coming soon.
A package of bills (HB 5335, 5406 and 5408) dealing with asset management have been sent to the Governor for his signature. These bills create an overarching Michigan Infrastructure Council and coordinates a new water asset management council with the existing transportation asset management council. A number of the concerns that we expressed during the process were addressed and ultimately we supported the final version of the bills. The Governor is expected to sign these bills in the coming days.
Local Housing Incentive Option
There were a couple of significant League priorities that saw action prior to the recess, as well. Senate Bill 110 has been on our agenda throughout this term. The bill clarifies local authority to offer incentives to developers of housing projects in order to ensure that below market housing options are part of new projects in quickly rising market areas. While we succeeded in securing support from the MI Association of Home Builders for the bill, questions from MSHDA had stalled the bill until last week. The full Senate passed the bill 32-4 and sent it over to the House Local Government committee for consideration later this fall.
Personal Property Tax Funding, Clarification
On the Personal Property Tax front, both House Bills 5086 and 5908 were finalized and sent to the Governor for his expected signature. These two bills provide for the $13.6 million earmark that will fund fire protection grants into the future and clean up many of the confusing issues related to the annual reimbursement formula. Key changes to the PPT reimbursement process will eliminate the confusing annual tax base recalculation process, establishing one baseline for every community. The bill also cleans up formula errors within the statute, allows municipalities to utilize their lowest millages rates from 2014, as opposed to 2012, to base their eligible losses on, eliminates confusing data comparisons at the state level from data submitted by county treasurers that may have been different than equalization director submissions, provides for an error correction and reimbursement process for local units that discover and document reimbursement payment errors including any errors from 2016 or 2017 payments, provides for the normal October reimbursement payment to cover all losses up to 100% and a new, second payment in May for any remaining funds to be paid out on a pro-rated basis after correcting for any errors or adjustments, clears up any confusion related to expiring millages or name changes for eligible millages, and ensures that there is the opportunity for a local unit to plan for repayment of any over-payments as opposed to the following year’s reimbursement being reduced without any advance warning. The League worked closely with Treasury to craft many of these changes to improve the process and provide for consistency and predictability to local units. The bills are now on the Governor’s desk awaiting his expected signature.
League Legislative Team Still Busy
Over the summer months, SFAD staff will be busy attending multiple affiliated organization conferences to provide legislative updates and anticipate numerous legislative workgroups on issues that were brought forward this spring as we prepare for an expected lengthy lame duck session.