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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. 1 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. 2 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. 3 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.” HEs 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: ~ o The Revenue Sharing Trust Fund (HB 4274 and 4275) passed the House by votes of 106-4. These ::;:;.,~-::~~, (i bills would dedicate 8% of the 4% sales tax and place them in a trust fund specifically for statutory - ~ ~ 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 I = ~ 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 ~ C - 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 4 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. 5 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 HEs 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 ~ inequities and hardships throughout our community. ::;:;.,~-::~~, (i ~ EGLE awarded funding to 3 redevelopment projects drawing $355.4 million in investment to the city of Muskegon ~ The Michigan Department of Environment, GreatrLakes, ---- and Energy = ~ I (EGLE) is awarding a combined $3 million in brownfield redevelopment funding to 3 projects in the city of Muskegon. These projects are expected to draw Adelaide Point, 1204 West Western Avenue, Muskegon ~ -$L - $355.4 million in private investment and create more than 700 new housing units in the city. c, C 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 6 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 HEs redevelopment to create 154 new housing units, 250 new jobs, and draw $110 million in capital investment. The project is scheduled to be finished by 2029. ~ ::;:;.,~-::~~, (i ~ ~ r---- I = ~ c, -$L - ~ C 7
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