In March, testimony was given in front of the House Regulatory Reform Committee against House Bill 4575 introduced by State Representative Kate Ebli (D-Monroe) which would dismantle the Single State Construction Code Act in the name of mandatory green building requirements.
HB 4575 would allow local units of government to adopt their own construction code consisting of the National Green Building Standard (ICC-700) or the current versions of the Leadership in Energy Environmental Design (LEED) Green Building Rating system at a specified level. The locals would then be able to mandate every newly constructed building and home be a "green" building despite the owner’s desire.
In opposition to this bill were Associated Builders and Contractors of Michigan, the Michigan Association of Home Builders, AIA/Michigan, the Michigan Plumbing and Mechanical Contractors Association, the Sheet Metal and Air Conditioning Contractors National Association Michigan Chapter, the Mechanical Inspectors Association of Michigan, the Michigan Society of Professional Engineers, American Council of Engineering Companies, the Michigan Association of Realtors, the National Federation of Independent Business Michigan, Michigan Forest Products Council and the Michigan Department of Energy, Labor and Economic Growth.
During the debate, ABC stressed that although our organization and our membership strongly supports green building, HB 4575 is significantly flawed. To underscore the point, ABC offered the following letter in opposition:
Honorable Members of the House Regulatory Reform Committee:
Although Associated Builders and Contractors (ABC) members lead the industry in green and sustainable building practices, we are writing in opposition to House Bill 4575 (HB 4575).
Our membership consists of the most innovative and industrious green contractors anywhere in the world. In the United States nine of the top 10 green building contractors are ABC members and in Michigan two of the top three are members of ABC.
As green building leaders, ABC seeks to advance our members' ability to support their customers and thrive in the green building industry by:
- Providing education and resources to ABC members, their employees and ABC chapters
- Advocating for smart energy policy and legislation that supports ABC members' commitment to sustainability
- Establishing partnerships and working relationships with construction owners to champion green initiatives that are inclusive of ABC members
- Developing and communicating best practices to ABC members and chapters to demonstrate a commitment to sustainability and promote an eco-friendly culture throughout the association's programs, services and events.
Our commitment to sustainability and environmentally friendly construction practices is unmatched, yet we strongly oppose HB 4575.
It has long been the position of ABC that green building should not be mandated, but rather be a viable and incentivized option for construction owners. Moreover, we are very concerned that HB 4575 dismantles the Single State Construction Code, which was thoughtfully compiled after years of work and bipartisan agreement from units of government, contractors, professional organizations, lawmakers, inspectors and all industry stakeholders. We see no cause to unravel the code, including for green construction, even though sustainability is a top priority of our organization. Instead of pursuing an admittedly divisive bill, we instead encourage members of the committee and all interested parties to work on ways to champion green building in our state through incentives, education and cooperation. To this end we hope to work with the Legislature and other stakeholders to lessen the carbon footprint by promoting environmentally sustainable building practices in our state.
Thank you for your attention to this important matter.
ABC opposes unfair independent contractor proposal
Like all employer organizations, ABC of Michigan takes the issue of independent contractor misclassification seriously, in particular those in which an unscrupulous employer may seek to gain an unfair advantage against a competitor. However, legislation presently under consideration, which has been drafted by the State Workers' Compensation Agency consideration is flawed and lacks the input of key employer groups and industry stakeholders. ABC opposed the poorly drafted legislation, unless the following concerns are satisfactorily remedied.
- The penalties are nothing short of excessive and unjustifiably punitive for not only intentional offenses, but most alarmingly, for unintentional offenses as well.
For example, unintentional fines in Michigan would be higher than intentional fines in other states. In fact a fine for a mistaken or unknowing violation in Michigan would be DOUBLE the fine in nearby Illinois for a willful violation! (Note: Adopted in 2008, Illinois' Independent Contractor misclassification law is widely regarded as the strongest such law in the United States.)
Both the exorbitant fines and jail time need to be consistent with levels seen elsewhere.
- It inappropriately allows a single individual, in this case an agency director, to bring work on a construction project to an immediate halt resulting in project owners having their project disrupted for something that is not the fault of an owner. The rights of an owner who is paying for construction services needs to be taken into account.
-
Frivolous misclassification claims are another valid concern. The bill opens up the complaint process to third party organizations, such as labor unions, which can file claims with little or no merit. Such claims may result in business owners as potential targets of labor organizations being subjected to red tape, costly legal fees and other hassles to prove their compliance. Third party complaints are a non-starter.
-
In addition to the establishment of fines for violating the act itself, fines referred to as "administrative penalties" may be further assessed at a rate up to $2,500 to $5,000 per offense. The penalties are the same for intentional and unintentional violations. As it does elsewhere, state law and regulations should recognize the difference between a mistaken violation that is remedied and a willful violation that goes unaddressed by an unscrupulous employer.
-
If an employer dismisses an employee within three months of that employee filing a misclassification complaint, the act creates a "rebuttable presumption" that the employer automatically did so in retaliation for the complaint having been filed. The rebuttable presumption means that the employer is essentially considered guilty until proven innocent of the charge of unfair retaliation even if the worker was justly dismissed for a different valid reason. The inclusion of such language is entirely unreasonable.
Given the bills’s serious flaws ABC will oppose it and work with the state House and Senate to defeat it, unless the flaws are remedied. Please stay tuned for more information as the issue develops.
Reaction to Governor Jennifer Granholm's plan to extend Michigan's sales tax to consumer services and pair it with Michigan Business Tax relief ranged from opposition to the services tax – a $554 million overall tax increase in the coming year and criticism that tax relief and cost-cutting budget reforms don't go far enough – to skepticism whether promised tax cuts would materialize once enacted.
Granholm's tax proposal was unveiled in March and would lower Michigan's 6 percent sales tax to 5.5 percent, but extend the tax to consumer services (excluding construction), phasing out the 21.99 percent Michigan Business Tax surcharge and reducing the gross receipts tax in the MBT's base.
In a joint statement, ABC and 20 other leading business groups made the following statement:
Unfortunately, the Governor’s plan addresses only one third of the deficit through proposed reform and fills the rest with tax hikes and stimulus money. Once again, we have a short-term solution to a long-term problem that puts off necessary spending reforms for future policy makers to address. The business community has consistently called for enacting significant, cost-saving structural reforms. The plan is a net tax increase for 2011 that does not provide necessary immediate progress toward economic competitiveness. The plan does not meet the needs of either Michigan's residents or Michigan's job providers.
We are disappointed in the Governor's budget plan and we encourage all legislators to go further to enact meaningful cost-saving structural reforms before moving on to tax reform.
Since the beginning of 2010, members of Michigan's business community have met with more than 125 legislators from both parties and chambers to discuss the state’s structural deficit and the importance of enacting cost saving structural reforms to balance the budget. While we have already met with the vast majority in meetings, we will continue until we have met with all lawmakers. Members of our organizations have been enacting cost saving reforms for almost a decade and are unwilling to pay higher taxes to support status quo government spending.