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2002 House Bill 5883: End phase-out of SBT

Public Act 504 of 2002

Introduced by Rep. David Mead (R) on April 11, 2002
To require the state to rank architects, engineers, surveyors, and contractors bidding on construction projects on the basis of qualifications, and seek to “negotiate a satisfactory contract” first with the top ranked firm, then with the second, etc. “Satisfactory contract” is not defined. Under current law, contracts go to the lowest qualified bidder.   Official Text and Analysis.
Referred to the House Commerce Committee on April 11, 2002
Amendment offered by Rep. Joseph Rivet (D) on May 1, 2002
To extend the process outlined by the bill to subcontractors.
The amendment passed by voice vote in the House on May 1, 2002
Received in the Senate on May 2, 2002
Substitute offered in the Senate on June 5, 2002
To replace the previous version of the bill with one that would use the bill as a legislative "vehicle" to make withdrawals from the Budget Stabilization Fund (BSF, or “rainy day fund”) for purposes of closing a gap between state revenues, which are projected to be lower than expected, and appropriations for this year and next. An additional $180 million would be transferred to the general fund this year, on top of an earlier withdrawal of $155 million, for a total of $335 million. In Fiscal 2002-2003, another $207 million would be transferred to the general fund. For the current year, $350 million would be withdrawn for the School Aid Fund. The bill is tie-barred to Senate Bill 117, which would revise a provision in the 23-year Single Business Tax (SBT) phaseout that requires its suspension if the balance in the state BSF falls below $250 million, so that the annual one-tenth percent SBT tax rate cuts will not be suspended unless the fund balance falls below $1. The substitute was amended to suspend for two years the annual $35 million BSF withdrawals to pay bonds on the "Build Michigan III" road construction program. The BSF will have a balance of $33 million after these withdrawals.
The substitute passed by voice vote in the Senate on June 5, 2002
Amendment offered by Sen. Alma Smith (D) on June 5, 2002
To cut the tie-bar to Senate Bill 177, which would revise a provision in the 23-year Single Business Tax (SBT) phaseout that requires its suspension if the balance in the state BSF falls below $250 million, so that the annual one-tenth percent SBT tax rate cuts will not be suspended unless the fund balance falls below $1.
The amendment failed by voice vote in the Senate on June 5, 2002
Received in the House on June 5, 2002
To withdraw $892 million over two years from the Budget Stabilization Fund (BSF, or “rainy day fund”), for purposes of closing a budget deficit. The bill is tie-barred to Senate Bill 117, which requires that bill to become law before this one can. Without the tie-bar, passage of this bill will mean postponement of the 23-year phase out of the Single Business Tax (SBT). Under current law, the annual one-tenth percent SBT reductions are postponed if the BSF falls below $250 million. This bill will leave $33 million in the BSF. SB 117 lowers the SBT cut threshold to less than this amount. The bill would also suspend annual $35 million BSF withdrawals to pay bonds on the "Build Michigan III" road construction program. It also would require the state to rank contractors bidding on construction projects on the basis of qualifications, and seek to “negotiate a satisfactory contract” first with the top ranked firm, then with the second, etc. “Satisfactory contract” is not defined. Under current law, contracts go to the lowest qualified bidder.
Substitute offered by Rep. Charles LaSata (R) on July 3, 2002
To replace the previous version of the bill with one which deletes a tie-bar to Senate Bill 117. Without the tie-bar, unless Gov. Engler signs SB 117, which he has already promised to veto, passage of this bill will mean postponement of the 23-year phaseout of Single Business Tax (SBT). Under current law, the annual one-tenth percent SBT reductions are postponed if the balance in the state Budget Stabilization Fund (BSF, or "rainy day fund") falls below $250 million. SB 117 lowers that threshold. This bill will draw down the BSF balance below $250 million, but not below the threshold proposed by SB 117.
The substitute passed by voice vote in the House on July 3, 2002
Passed 88 to 6 in the House on July 3, 2002.
    See Who Voted "Yes" and Who Voted "No".
To withdraw $892 million over two years from the Budget Stabilization Fund (BSF, or "rainy day fund"), in order to close a budget deficit. This will leave $33 million in the BSF. Under current law, annual one-tenth percent rate cuts required under an ongoing phaseout of the Single Business Tax (SBT) are postponed if the BSF falls below $250 million. SB 117 would allow the SBT cuts to continue even if this bill becomes law by lowering the minimum BSF balance threshold which triggers an SBT phaseout halt. An earlier version of the bill was tie-barred to Senate Bill 117, which means that bill must become law before this one can. However, Gov. Engler has said he will veto SB 117, so passage of this bill after the tie-bar has been removed most likely means further SBT cuts will be postponed, notwithstanding a 'yes' vote on SB 117. The bill would also suspend annual $35 million BSF withdrawals to pay bonds on the "Build Michigan III" road construction program. It also would require the state to rank contractors bidding on construction projects on the basis of qualifications, and seek to "negotiate a satisfactory contract" first with the top ranked firm, then with the second, etc. "Satisfactory contract" is not defined. Under current law, contracts go to the lowest qualified bidder.
Received in the Senate on July 9, 2002
Signed by Gov. John Engler on July 19, 2002

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