LEGISLATIVE/REGULATORY SUMMARY OF ACTIONS IN JULY 2006

HIGHLIGHTS:

“Inertness” Rules On Hold Pending Environmental Advisory Panel Examination

Proposed revisions to rules regulating designations of inertness under the Solid Waste Management Act are on hold as the subject is now under consideration by the MDEQ’s Environmental Advisory Council (EAC). In the past, there have been conflicting rules providing for the land application of bio solids under the Waste Management and Surface Water Quality Divisions of the MDEQ. The inherent conflict has been recognized and now the matter has been brought before the EAC for review. The review process is expected to take about six months.

ENVIRONMENTAL ISSUES:

Democrat/Republican Candidates Stump On Out-of-State/Canadian Trash Issue

Both Democrat and Republican candidates are using the out of state/Canadian trash issue in their campaign materials while Democrats accuse Republicans of trying to steal one of their key issues. Democrats have been pushing for a $6-$7.50 per ton surcharge on waste while Republicans have been waiting for Congress to act on the issue before taking action. Mailings from both Democrat and Republican candidates on the East side of the state cite the “Canadian Trash” issue in their campaign materials.

ENERGY:

Governor Signs Alternative Fuels Package (SB 1074,5,8,9HB 5751,2,4)

A package of bills to boost research and use of ethanol, biodiesel and other alternative fuels has been signed into law by Governor Granholm. The package includes: HB 5181 which would create “Fuels of the Future” commission in the Department of Agriculture to investigate and recommend strategies for encouraging the use of alternative fuels, SB 1074 which would reduce the motor fuel tax(from 19 cents to 12 cents per gallon) for alternative fuels, HB 5752 and SB 1078 would create alternative energy “renaissance zones” specifically for renewable energy facilities, SB 1075 which would require the state Department of Management & Budget to install necessary infrastructure for E-85 and bio-diesel at all state motor transport facilities by January 1, 2007, HB 5754 which would allow the Michigan Strategic Fund to provide matching grants for helping service stations become capable of delivering alternative fuels (bio diesel and E-85), and SB 1079 which would apply the Motor Fuels Quality Act to alternative fuels. Also added to the package is a bill (HB4971) to provide a tax credit for the establishment of a “Hybrid Development Center” in Troy, Michigan---a joint venture with BMW, GM, and Daimler Chrysler.

TAXES & ECONOMIC DEVELOPMENT:

Fiscal Agency Directors Provide Insight On Business Tax Alternatives

A joint House/Senate committee has been charged with exploring alternatives for the replacement of the Michigan Single Business Tax (SBT) and recently added the task of looking at replacing Michigan’s burdensome personal property tax. On July 25th, the directors of the House and Senate Fiscal agencies testified before the committee sharing their insights. They commented that the “best tax” for Michigan would have a broad base and low rate, be simple to administer, fair, have a low compliance cost, provide stable revenue and promote economic growth. It was generally agreed that the current SBT is largely paid by a few businesses and is difficult to administer. At the next scheduled meeting on August 16th, the committee will examine a summary of all the incentives and credits programs under the current SBT and their effect. The legislature has already enacted legislation to preserve the value of previously awarded tax credits to businesses. The committee has set a December 1st deadline to submit recommendations to the Legislature. Republicans and Democrats differ on the issue as to whether all of the revenue needs to be replaced.

Crunch Time For Minimum Wage “Fix” Legislation (HB 6213)

A bill (HB 6213) to fix one of two problems created by a hastily enacted increase in the state’s minimum wage law has resulted in a clear partisan split between Republicans and Democrats with business interests pleading to get the issue resolved prior to October 1, 2006. HB 6213 passed the House and Senate on a party line vote after Democratic sponsors backed away from the bill. The Governor has indicated her hesitancy to sign the bill. Further complicating matters is the fact that without a 2/3rds vote in both chambers, the proposed fix would not go into effect until after the October 1, 2006 minimum wage change. Of the two problems resulting from the hastily-enacted legislation the first---addressed by HB 6213--- is that the new minimum wage law extends overtime to some (but not all) workers who have previously been exempt. A second problem relates to the level of wages to be paid high school students and a desire to provide for a sub-minimum wage for these “youth” employees. Legislation to address the second issue is expected to be introduced shortly. In the meantime, employers are wondering whether the issue will get fixed in time for them to program their computers for any mandated changes.

LANSING POLITICS:

Separate Polls Show DeVos/Granholm Ahead/Record Spending Expected

In separate polls released in late July, incumbent Governor Granholm and Republican challenger Dick DeVos were each shown leading in the Michigan governor’s race. In an EPIC/MRA survey, Governor Granholm is shown back in the lead by a 47-44 advantage. In a subsequent poll by Strategic Vision, DeVos was shown to lead by a 48-44 margin. With Republican gubernatorial candidate Dick DeVos having spent nearly $15 million (including $12.8 million of his personal fortune) to date, it is assured that spending for the November 2007 gubernatorial election will break all previous records.

Opposition Mounts Against K-16 School Funding Proposal

Opposition is mounting against a ballot proposal to mandate inflation adjusted spending for K-16 Education programs. The Michigan Chamber of Commerce has come out in opposition to the proposal, along with several other business groups.

Michigan Civil Right Initiative Proposal Survives Court Challenge

A proposal to eliminate racial preference in education admissions and other state programs has survived a challenge in court by opponents who allege the signatures for the petition were procured through fraudulent means.

SBT Elimination Proposal Gets Signatures/Legislature May Act Sooner

A ballot proposal to eliminate the Michigan Single Business Tax (SBT) by the end of 2007 has garnered sufficient signatures to appear on the November ballot. In the meantime, the Legislature, which has 40 days to act on the proposal once certified, is poised to approve the proposal prior to November.

Ballot Proposal To Protect Property Rights (SJR E) Gets Signatures

An effort to place on the November ballot a proposal that would prohibit the use of eminent domain for economic development projects has secured sufficient signatures.

SOS Spending Limit Proposal Still In Limbo

A proposal to Constitutionally limit state spending increases (Stop Over Spending) may still make the November ballot pending a review by the Bureau of Elections. Opponents cite disastrous consequences of a similar proposal adopted in Colorado.

NATIONAL INDUSTRY NEWS:

OSHA Crystalline Silica Update:

The following update is taken from material provided by AFS’s Washington, D.C. Office

• OSHA updated its Peer Review Agenda late last week (the last update was in December 2005) and the proposed Crystalline Silica Standard remains on their list.
• Peer review of the Health Effects Analysis and Quantitative Risk Assessment for Crystalline Silica now has an anticipated completion date of November 2006 (mirroring what the latest Regulatory Agenda showed).
• According to OSHA, a request for written public comment on the draft report is anticipated this summer, followed by a public meeting.
• Significant public comments (presumably including those of the Silica Panel) will be provided to the peer reviewers before they conduct their review.
• Scheduling of peer review of the Preliminary Economic Analysis (and decisions as to what the process will look like) are yet to be determined. However, this will not get underway until next year.

I will notify you as soon as OSHA issues the dates for the public meeting and due dates for comments on the draft report.

Stephanie

Stephanie Salmon
AFS Washington Office
202/842-4864