Last week, Mike Nystrom and Keith Ledbetter testified before the House Appropriations Subcommittee on Transportation to provide feedback on the proposed 2009 Transportation budget.
Billed as a “continuation budget”, Nystrom and Ledbetter sent a clear message of what the state was “continuing” by not addressing the need for a major new investment in infrastructure dollars.
MITA provided pictures of numerous menacing craters from around the state that were entered as part of the Michigan Transportation Team’s online pothole contest. The committee also heard testimony that under the current funding formula, the state could expect to lose over 12,255 jobs by 2009.
MITA challenged the Legislature to not wait another 8 months for a task force report before beginning to take action.
MBT Fix Moves Forward
A few weeks ago MITA announced efforts to fix the new Michigan Business Tax. According to a recent interpretation by bureaucrats at the Department of Treasury, the materials deduction fought so hard for by MITA only a few months earlier did not allow for a deduction of most construction materials like cement, steel or aggregate.
MITA has worked with various construction industry groups to create legislative language to address this issue. Leaders in both the House and Senate are sympathetic to these concerns and are working on getting the legislation introduced soon. Due to quarterly tax filings, MITA is asking the Legislature for a quick fix. MITA has also asked the Legislature to consider granting grandfather language to the MBT for contracts signed prior to January 1, 2008. To help expedite the materials deduction fix, these two issues will likely be dealt with separately.
Look for legislation to be moving shortly.
Water Diversion Bills Get Reported from Committee
Legislation which would put new restrictions on large-scale water use have been reported from both House and Senate committees. MITA has been monitoring the legislation in a few key areas including a proposal to lower the thresholds for reporting. MITA is also working to preserve the exemption for the dewatering process and a special construction exemption at temporary work locations.
As of now, the lobbying effort appears to have been successful. Bills pending in both the House and the Senate would preserve the current status for the heavy construction industry.
False Claims Act Introduced at State Level
The federal False Claims Act is making its way to various legislatures across the country. The proposal was introduced recently in Michigan (HB 4773), which would require a contractor to pay three times the damages if they were found to have submitted a false claim for work done for the state.
Billed as a way to crack down on fraud against government, the legislation would also allow penalties to be enforced even if there was no intent to defraud. MITA expressed concerns that estimates often done in the construction process are later adjusted to reflect actual quantities. The initial estimate could be considered a false claim under the act and subject to strong penalties due to the legislation including “unintentional” claims as part of the language.
The bill has passed the House and is now pending in Senate committee.
Enhanced Powers for County Drain Commissioners Appear on Hold
Several months ago, MITA reported details of legislation passing the House (HB 4644) which would have enhanced county Drain Commissioner powers and would require an additional level of approval for various construction permits. MITA was concerned that such new regulations would slow the permit process and require an additional layer of unnecessary bureaucracy during the construction process.
The industry met with Sen. Van Woerkom, who chairs the Senate committee with jurisdiction over the bills. It appears that MITA’s concerns have been taken to heart, as there are no plans to hold further hearings on the legislation at this point.