Legislative Policy Committee Packet 11-29-2023

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                        LEGISLATIVE POLICY COMMITTEE MEETING
                             WEDNESDAY, NOVEMBER 29, 2023
                                         5:30 P.M.
                                   MUSKEGON CITY HALL
                                  COMMISSION CHAMBERS
                                    933 TERRACE STREET
                                   MUSKEGON MI 49440

                                           AGENDA


I.     Call to Order

II.    Approval of Minutes for August 23, 2023

III.   Old Business

IV.    New Business

       1) Legislative Update – Pete Wills
       2) Water Fund Presentation and Discussion – Dan VanderHeide
       3) Charter Park Discussion – Commissioner Emory

V.     Adjourn
                              WATCH                                                    US                              GO
                                               State / Federal Report, November 2023

     STATE POLICY ISSUES
 Bill #     Sponsor       Detail                                                                                                     Status                   Position
HB 4002     Shannon       Increases the Earned Income Tax Credit (EITC) from 6% to 30%.                                              Senate Committee         NA
HB 4003     Hoskins       Elliott-Larsen Civil Rights Act; include sexual orientation & gender identity or expression as a           Senate Committee         NA
                          protected category.
HB 4274-     O’Neal,      Create Revenue Sharing Trust Fund; SB 182-183; the bills would dedicate 8% of the 4% sales tax and         Senate Committee, 11/2   MML support
 4275        Tisdel       place it in a trust fund specifically for statutory revenue sharing; within the Trust Fund it creates a
                          new funding category that would restore payments to 1091 townships and 44 villages currently not
                          receiving statutory revenue sharing at a rate of 1% of the total available funding; it distributes the
                          remaining balance to cities, villages, townships, and counties currently receiving statutory revenue
                          sharing payments in the same proportion as the FY23/24 budget.
  4273       O’Neal       Requires a municipality to notify the occupants of a multiple dwelling (e.g., an apartment building) of    Senate floor, 10/24      NA
                          a violation involving the property. Bill also updates the information that is required to be included in
                          the notice provided to the owner and occupants, as well as changing the kinds of violations the
                          DHHS must be notified about.
HB 4553 -   Fitzgerald,   Creation of a local government reimbursement fund to repay local units for lost revenue associated         Gov signed
  4554       Mentzer      with the expansion of the small tax payer exemption. This legislation will permanently set aside
                          $75M annually to cover any lost revenue.
HB 4605     Shannon       Provide for distribution of sales tax revenue into public safety and violence prevention fund; 1.5% of     Senate 11/8
                          the 4% of sales tax revenue collected.
HB 4606      Farhat       Create public safety and violence prevention fund                                                          Senate 11/8
HB 4688     Haadsma       Makes minimum staffing levels for all local units a mandatory topic of collective bargaining.              House floor, 11/2        MML
                                                                                                                                                              opposed
HB 4861      Snyder       Removes conditions on property previously conveyed to Muskegon Co & allows county to sell 97 E.            House Local Gov 9/6,
                          Apple Ave (former Health Dept) to Kids Food Basket. County used ARPA money to invest in former             10/11
                          Baker property thereby freeing up this property. Currently, there is a reverter clause in the deed
                          from the state to county that if not used for public purposes, then it could revert back to the state.

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HB 4878     Aiyash     Would create the Michigan Fair Chance Access to Housing Act to generally prohibit a landlord from              House Local Gov
                       using an individual’s criminal record when evaluating the individual’s rental application at any stage         10/5/23
                       in the application process, except as provided by the act or under federal or state law.
HB 4919   Dievendorf   Would create the Bill of Rights for the Homeless Act, which would provide that homeless individuals            House Local Gov
                       must be granted the same rights and privileges as any other citizen in MI and would prohibit the               10/5/23
                       denial of an individual’s rights, privileges, or access to public services solely because the individual is,
                       or is perceived to be, homeless.
HB 4931    Skaggs      Aquarium; adds aquariums as an eligible term from which to collect as part of an accommodations                House Tax Policy, 8/24
                       excise tax. Bill would apply to counties with a pop up to 785K and cities down to 35,000. Would allow
                       for excise tax rate to up to 10% of total charge for accommodations; limits imposition of excises tax
                       to a county; county can’t levy a new or increased excise tax unless passed by county voters.
HB 5048   Fitzgerald   Increases, from 5% to 8%, the maximum excise tax that a county that meets specified requirements               Awaiting Gov signing     MML support
                       may impose on individuals engaged in the business of providing rooms for dwelling, lodging, or
                       sleeping purposes to transient guests. Allows a local unit in a county with a pop of between 600,000-
                       775,000 to impose an excise tax of up to 2% on individuals engaged in the business of providing
                       rooms for dwelling, lodging, or sleeping purposes to transient guests, upon approval of a majority of
                       electors. Specifies that excise taxes levied by a local unit and excise taxes levied by a county under
                       the Act would be in addition to each other. The restricts the proposed ability for cities and villages to
                       levy the excise tax to only those located in Kent County.
HB 5074    Snyder      Would allow a local development finance authority (LDFA) to retroactively approve school tax                   Awaiting Gov signing
                       revenue captures for a period of five years for certified technology parks, generally referred to as
                       SmartZones. SmartZones provide geographic areas in which tech-based companies, entrepreneurs,
                       and researchers can work in proximity with community assets, such as colleges and universities. In
                       2015, the City filed to have its SmartZone, the status of which was scheduled to end in 2020,
                       renewed until 2025. The City believed its application had been approved and continued to collect tax
                       capture revenues; however, an administrative error prevented the extension from being officially
                       ratified. Accordingly, it has been suggested that an LDFA be allowed to retroactively approve school
                       tax revenue captures.

                       The City was designated a Smart Zone in 2005 and is located at the Innovation Hub which was once
                       the former site of the Teledyne Continental Motors factory. The Smart Zone was approved for a term
                       of 15 years (originally set to expire in 2020). The statute allowed for a 5-year extension beyond 2020.
                       In 2015, the City approved extending the TIF plan and development plan to 2025. However, both the
                       MEDC and Treasury needed to ratify the amended Agreement. In the absence of confirmation of the
                       concurrence approval from both agencies, the City continued capturing under the assumption that
                       our request was approved.



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HB 5088-               Create water rate affordability program; shutoff protection act, etc. Bill package would establish a     House Natural
   93                  low-income water residential affordability program; funds would be used to aid low-income                Resources, Env,
                       residents for expenses related to water and sewer service; would establish standards and criteria for    Tourism
                       when a water service provider can shut off water supply; would regulate rental agreements to allow
                       a tenant in a metered or sub-metered rental property to request that a copy of the water and sewer
                       bill be sent to both landlord and tenant.
HB 5120-               Solar siting - allows the Michigan Public Service Commission (MPSC) to certify large-scale wind, solar   Awaiting Gov signing
   21                  and energy storage developments – and simultaneously restricting local governments from
                       regulating developments stricter than state standards
 SB-205-    Cavanagh   Prohibit housing discrimination based on source of income                                                Senate floor
   207
 SB 271,               100% clean energy standard. SB 271 , SB 273 , SB 502 , and HB 4761.                                      Awaiting Gov signing
273, 502,
HB 4761
 SB 507                The bill would amend the City Income Tax Act to allow any city that levies a city income tax to enter    Governor signed
                       into agreements with Treasury to administer, enforce, and collect city income taxes; and modifies
                       city income tax collection procedures. Cities that levy a city income tax could experience a positive
                       fiscal impact from reduced tax collection costs combined with increased tax collection rates.




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STATE LEGISLATION


Legislature to adjourn November 14

The current two-year state legislative term is set to end earlier than in the typical month of December. The
Legislature is adjourning early, on November 14, several bills, including the Feb. 27 presidential primary and
several Proposal 2 election reform bills will go into effect by Feb. 27, 2024. The early adjournment is a result of a
constitutional requirement that a bill cannot become law until 90 days after the session adjourns unless it receives
support from two-thirds of the members of each chamber to give it “immediate effect.”
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Immediate effect was withheld from legislation setting next year’s presidential primary on Feb. 27. If the
Legislature had waited until after Christmas to adjourn, the presidential primary law would not have gone into
effect until late March.

Legislation not signed by the Governor have to be reintroduced in the new term which begins in January 2024.

The following issues were completed -

    -   Revenue Sharing Trust Fund:

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           o The Revenue Sharing Trust Fund (HB 4274 and 4275) passed the House by votes of 106-4. These
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              bills would dedicate 8% of the 4% sales tax and place them in a trust fund specifically for statutory


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              revenue sharing. These bills are now before the Senate.

        Public Safety and Violence Prevention Trust Fund:
           o Legislation that would create a Public
                                               r--   Safety
                                                        --  and Violence
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                                                                                                      =
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                                                                          prevention fund also passed the House.
                HB 4605 and 4606 would dedicate 1.5% of the 4% sales tax to cities, villages, townships, and

         c,     before the Senate.                -$L -
                counties to provided resources to help reduce violent crime across Michigan. These bills are also

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    -   Local Preemption of Renewable Siting:
            o The legislature completed final action on HB 5120 and 5121 and is expected to be signed.
            o While in the House, language was included that if city or village has a wind, solar, or energy
                storage facility that would normally be subject to the preemption in these bills, that if energy
                facility was located entirely within the city or village, the city or village they would be exempt
                from the provisions in the bill. The senate eliminated this provision. The final version does not
                provide meaningful local control over the siting of energy facilities in cities and villages.

    -   Minimum Staffing Requirements:
           o HB 4688, which would make minimum staffing levels for local government units a mandatory
              topic of collective bargaining, passed out of a House Committee despite opposition from MML.
           o If passed, HB 4688 could place local governments in a difficult situation to maintain sufficient fund
              balances because unions will argue in arbitration that funds can be spent to support increases to
              staffing levels because parks and rec programs, maintenance of roads, and other matters that
              create or maintain a sense of place can be cut to do so.

    -   Election Official Intimidation:
            o HB 4129 passed and is on its way to the Governor. This legislation criminalizes the actions of
                intimidating an election official and preventing an election official from performing their duties.
                Depending on the action, an individual could receive a misdemeanor or felony charge. The actions
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                include intimidating an official because of their status with the specific intent of interfering or
                preventing the performance of that election official's related duties. The bill does specify that this
                legislation does not apply to constitutionally protected activities.

House Bill 4292 - FY24 Budget Supplemental Spending Bill

Among other updates to this spending bill, language was added to clarify provisions in the original $15M state
grant received in 2021 for the environmental remediation at the former Sappi site. PFAS remediation activities
and non-PFAS environmental response activities are allowed and extends the use of these funds until the end of
2028.

Climate and Clean Energy Future Bill Package

The goal of the state of Michigan would be to initiate a 100% clean energy standard. SB 271 , SB 273 , SB 502 , and
HB 4761.

Goals of the state’s initiative - produce all our energy from clean sources like wind, solar, nuclear, or other
commonsense sources; improve energy efficiency programs to lower utility bills; empower the Michigan Public
Service Commission (MPSC), our state’s utility regulator, to incorporate climate and equity into regulatory
decisions as well as streamline the permitting of clean energy projects

Michigan must continue to be a destination for people seeking safe water and clean air. Facing climate change
and growing the economy; quality of life or cost of living; investing in the future or living in the present; should
not be tradeoffs. Protecting our natural resources and producing more affordable, reliable, and cleaner energy is
possible. Bringing home supply chains and lower costs for families is possible.

Senate Passes State-Run Solar, Wind Project Siting Bills, HB 5120 and 5121

Bills enabling the Governor-appointed Michigan Public Service Commission (MPSC) to certify large-scale solar,
wind and energy storage developments - and simultaneously barring local governments from regulating
developments stricter than state standards. Changes made by the Senate make it improbable that a city or village
will have any ability for oversight of placement of proposed utility scale projects within municipal limits. The MML
sought to be fully exempt from having this projects located in these jurisdictions.

Originally, the legislation aimed to completely preempt local governments from adopting zoning ordinances or
regulations on wind, solar and energy storage facilities. But following adoption of more than 20 amendments
amid a 12-plus-hour House session, the bills recommend developers first seek certification from a local
government with "compatible renewable energy ordinances" (CREOs) aligning with Michigan's Clean and
Renewable Energy and Energy Waste Reduction Act.

HB 5120 would add a new "Part 8" to the act for dealing with solar energy facilities with a nameplate capacity of
at least 50 megatts, wind energy facilities with an at-least 100-megawatt capacity and energy storage facilities
with a nameplate capacity of at least 100 megawatts and an energy discharge capability of at least 200 megawatt
hours.

Shifting municipal income tax collection to the state

Cities that levy an income tax would be able to shift collection responsibilities to the state under legislation
recently signed into law; Public Act 195 of 2023.


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The legislation would bring 23 cities that have local income taxes in line with the city of Detroit, which has relied
on the state since 2016 to enforce and collect its income tax revenue. The bill helps to implement a nearly $18
million line item included in the fiscal year budget for an expansion of the state Treasury's local income tax
collection operation.

Some cities levying a local income tax indicated they struggled with "the infrastructure and the capacity" needed
to implement the policy effectively.

The legislation also would allow an employer or taxpayer more time to dispute a notice of intent to assess,
extending the time to request an informal conference from 30 days to 60 days. It also would require a new appeal
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process for the final assessment, requiring an appeal to be filed within 35 days of receiving a final assessment and
requiring an appellant to have paid the uncontested portion and first participated in an informal conference.

The Department of Treasury, which would be the state entity collecting the tax, is able to capture enough city
income tax revenue to cover the cost of helping the cities where needed. The Legislature also included about
$17.9 million in the most recent state budget to cover the cost of expanding the department's operations to
accommodate the administration of city income taxes for additional municipalities.

Keeping all income tax functions local allowing communities, who choose not to shift collection responsibilities, to
continue providing the value and transparency residents expect. Offering direct local assistance serves to reduce

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inequities and hardships throughout our community.
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EGLE awarded funding to 3 redevelopment projects drawing $355.4 million in investment to the city of
Muskegon

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The Michigan Department of Environment, GreatrLakes,
                                                  ----
                                                        and Energy
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                                                                 I (EGLE) is awarding a combined $3 million in
brownfield redevelopment funding to 3 projects in the city of Muskegon. These projects are expected to draw


Adelaide Point, 1204 West Western Avenue, Muskegon
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$355.4 million in private investment and create more than 700 new housing units in the city.
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This site on the south shoreline of Muskegon Lake was home to a foundry from the early 1900s until 2015, leaving
it contaminated with PFAS, petroleum and solvent compounds, and metals. A $1 million EGLE Brownfield
Redevelopment Grant will pay for the treatment of contaminated groundwater and the demolition of a concrete
foundation. The concrete will be recycled to be used in a new road running through the area. Redevelopment
plans call for a four-story apartment building with 55 units, a three-story building with retail, office, and
restaurant space, and a 172-slip marina. The City says it will draw $82,400,000 in private investment and create
100 full-time jobs. The Michigan Economic Development Corporation, the Michigan Department of Natural
Resources, and the city of Muskegon are also providing financial incentives. The State Legislature provided a $1
million appropriation as well.

Former Shaw Walker, 965 West Western Avenue; 920 & 930 Washington Avenue, Muskegon
The historic former Shaw Walker Furniture Company is going to be turned into 552 units of new condos and
apartments, a parking ramp, and more than 17,000 square feet of a new commercial space. The 11-acre site is
contaminated with metals, petroleum compounds, solvents, and cyanide. The city of Muskegon says 85% of the
buildings on the property are vacant or blighted, have asbestos and lead paint, and are considered a public safety
hazard. A $1 million EGLE Brownfield Redevelopment Loan will be used for further investigations, the installation
of vapor mitigation systems, abatement of asbestos and lead paint, and removal of wood block flooring. The city
and the Muskegon Chamber of Commerce Foundation provided site assessment grants. Overall, the project is


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expected to draw $163 million in private investment. Work paid for by the EGLE loan is expected to be finished by
spring 2025.

Harbor 31, Viridian Drive & Terrace Street, Muskegon

A $1 million EGLE Brownfield Redevelopment Loan will help clear the way for new housing, a hotel, marina,
boardwalk, and commercial space on Lake Muskegon. Continental Motors and Teledyne built engines on the site
from the early 1900s until 1991. A $2.3 million state appropriation in 2021 paid for the removal of contaminated
soil and wetlands mitigation. The EGLE loan will pay for further site assessments and the installation of a vapor
mitigation system. The city has put $1 million into infrastructure improvements. The city expects the
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redevelopment to create 154 new housing units, 250 new jobs, and draw $110 million in capital investment. The
project is scheduled to be finished by 2029.




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