LANSING – The impact of the state’s prolonged economic recession has legislators moving forward on a hire/buy Michigan-first package of bills, which were sent to the full Senate on Tuesday by unanimous votes in the Commerce and Tourism Committee. The action came about a month after Senate Democrats failed to force almost all of the 12 House-passed bills dealing with contracting, grants, economic incentives and loans out of committee.
The 10-bill package that cleared the committee now includes a mix of five Senate bills and five of the House-passed bills which would set in law policies to give preferences to Michigan companies in state contracting and extending tax breaks.
The legislation provides a 10 percent preference for Michigan firms when bidding on contracts, something that South Carolina has and provides for the state to use its purchasing power to benefit Michigan firms.
Administration economic development officials support the concepts in the bills, but raised some concerns about penalties for violating the new policies, particularly if done without knowledge of the main contractor or if the violation is relatively minor. Jim McBryde of the Michigan Economic Development Corporation said the question is how much discretion boards should have and how severe the penalty should be, with an extreme level being revocation or repayment of tax breaks that were awarded for a project.
Some of the changes in the bills from the House versions allow companies to bid on portions of a state contract, opening up work for smaller companies which may not have the capacity to do all of the tasks, and allow businesses to include workers who are moving to the state when calculating the percentage of Michigan workers.
Also included are provisions allowing some discretion on hiring non-state workers by businesses in border counties.
Robert Burns of the Department of Management and Budget agreed that Michigan firms should be given preference and told the committee officials are improving systems to analyze the economic impact of awarding contracts to state-based companies and those with substantial levels of employees in the state. He said so far 90 percent of contract dollars have gone to Michigan firms, up from 88 percent through all of 2008, and that the new policies could push that higher.
Burns did urge some caution about unintended consequences of placing the preferences in law, such as retaliation from 27 other states which have reciprocal preference policies. He also said it is harder with the new Michigan Business Tax to determine the extent of a company’s stature as a state firm because payroll is no longer part of the tax base.
Todd Tennis of the International Brotherhood of Electrical Workers supported the legislation in concept, but said the House-passed versions were definitely better because of penalties provided for violations of the prevailing wage laws.
Committee Chair Sen. Jason Allen (R-Traverse City) said he has worked to resolve those kinds of issues, but also noted that legislators are feeling the pressure “to move the ball forward.” He disagreed with issues raised on the prevailing wage, saying those laws have their own enforcement mechanisms.
The bills (HB 4083 , HB 4089 , HB 4092 , HB 4093 , HB 4094 , SB 290 , SB 293 , SB 295 , SB 502 and SB 539 ) provide for an effective date of the new policies of July 1, the same as in the House version.
Not part of the package is a measure which increased to 100 percent, from 50 percent, the percentage of Michigan workers who would have to be hired for construction jobs under state contracts.
Added to the package was a bill including the film credits approved last year to the list of companies benefiting from state incentives which are obligated to use state workers in the construction of studios.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
The 10-bill package that cleared the committee now includes a mix of five Senate bills and five of the House-passed bills which would set in law policies to give preferences to Michigan companies in state contracting and extending tax breaks.
The legislation provides a 10 percent preference for Michigan firms when bidding on contracts, something that South Carolina has and provides for the state to use its purchasing power to benefit Michigan firms.
Administration economic development officials support the concepts in the bills, but raised some concerns about penalties for violating the new policies, particularly if done without knowledge of the main contractor or if the violation is relatively minor. Jim McBryde of the Michigan Economic Development Corporation said the question is how much discretion boards should have and how severe the penalty should be, with an extreme level being revocation or repayment of tax breaks that were awarded for a project.
Some of the changes in the bills from the House versions allow companies to bid on portions of a state contract, opening up work for smaller companies which may not have the capacity to do all of the tasks, and allow businesses to include workers who are moving to the state when calculating the percentage of Michigan workers.
Also included are provisions allowing some discretion on hiring non-state workers by businesses in border counties.
Robert Burns of the Department of Management and Budget agreed that Michigan firms should be given preference and told the committee officials are improving systems to analyze the economic impact of awarding contracts to state-based companies and those with substantial levels of employees in the state. He said so far 90 percent of contract dollars have gone to Michigan firms, up from 88 percent through all of 2008, and that the new policies could push that higher.
Burns did urge some caution about unintended consequences of placing the preferences in law, such as retaliation from 27 other states which have reciprocal preference policies. He also said it is harder with the new Michigan Business Tax to determine the extent of a company’s stature as a state firm because payroll is no longer part of the tax base.
Todd Tennis of the International Brotherhood of Electrical Workers supported the legislation in concept, but said the House-passed versions were definitely better because of penalties provided for violations of the prevailing wage laws.
Committee Chair Sen. Jason Allen (R-Traverse City) said he has worked to resolve those kinds of issues, but also noted that legislators are feeling the pressure “to move the ball forward.” He disagreed with issues raised on the prevailing wage, saying those laws have their own enforcement mechanisms.
The bills (HB 4083 , HB 4089 , HB 4092 , HB 4093 , HB 4094 , SB 290 , SB 293 , SB 295 , SB 502 and SB 539 ) provide for an effective date of the new policies of July 1, the same as in the House version.
Not part of the package is a measure which increased to 100 percent, from 50 percent, the percentage of Michigan workers who would have to be hired for construction jobs under state contracts.
Added to the package was a bill including the film credits approved last year to the list of companies benefiting from state incentives which are obligated to use state workers in the construction of studios.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
