CAM's 8th Annual Legislative Breakfast Recap

In Case You Missed It: A Recap of CAM’s 8^th Annual Legislative Breakfast

By EMILLY DAVIS 

The Construction Association of Michigan’s 8th annual Legislative Breakfast, which took place at the Heathers Club of Bloomfield on October 13th, gave industry professionals insight as to how state legislators can support Michigan’s construction industry. Conversation mainly revolved around renewable energy resources, Prompt Pay legislation, and state incentives for the development of data centers.

CAM lobbyist Jason Wadaga of Kindsvatter, Dalling & Associates moderated the bipartisan event, welcoming Sen. Darrin Camilleri (D-Brownstown), Sen. Michael Webber (R-Rochester Hills), Rep. Jennifer Conlin (D-Ann Arbor), and Rep. Mark Tisdel (R-Rochester Hills) to the panel. 

The breakfast was sponsored at the event level by the Mechanical Contractors Association (MCA) Detroit; Bricklayers and Allied Craftworkers (BAC) Local 2; Michigan Regional Council of Carpenters; Novara Tesija Catenacci McDonald & Baas, PLLC; Operative Plasterers and Cement Masons International Union (OPCMIA) Local 514; Michigan Building & Construction Trades Council; and Operating Engineers Local 324.

Presenting sponsors included CAMComp; Construction Federal Credit Union; National Electrical Contractors Association - Southeastern Michigan Chapter; Laborers Local 1076 - LECET; J.J. Barney Construction, Inc.; Watkins, Pawlick, Calati & Prifti, PC; BeneSys, Inc.; and Solxsys Administrative Solutions. 

Legislators Disagree on Renewable Energy

In one of the more lively topics of conversation, the legislators weighed in on renewable energy and the effort toward carbon neutrality in the state of Michigan. That follows Gov. Gretchen Whitmer’s August “What’s Next Address,” outlining her goals for the fall, including renewable energy.

“I do think that we have a once-in-a-lifetime opportunity to draw down federal resources to expand renewable energy, which will not only create jobs, it is cheaper… and that’s something we’ve seen study after study,” said Sen. Camilleri. “We do know that fossil fuels are on the way out, and we’ve got to be leading the charge to build renewable energy opportunities right here in Michigan. The country’s moving in this direction as it is. For people to believe that fossil fuels will be here forever is just not realistic,” said Sen. Camilleri, who serves on the Senate Energy and Environment committee.

Rep. Conlin said this has been a popular topic among her constituents with the seemingly frequent recent power outages in southeastern Michigan. She added that many of them, from suburbanites to farmers, are supportive of the idea of solar energy. “There are a lot of discussions being had. It is actually one thing that I’m finding within my district that is quite nonpartisan; the environment can often be nonpartisan,” she said. “Environment is such a huge issue that we have now, a question that we have to come together on and face for the future.” 

Rep. Tisdel said that he thinks state leaders are focusing on the wrong type of renewable energy. He expressed that, while the conversation on renewable energy has focused on solar power, Michigan fares poorly nationwide in total state sunlight. He argued that solar and wind energy rely on fossil fuel backup 100% of the time, requiring multiple systems to be operating, which, he explained, can’t be cheaper than operating one system.

“It is not less expensive, it is not more reliable, and until we figure out what is less expensive and what is more reliable, chasing this dream of free solar energy is just that, a dream,” Rep. Tisdel said. “Solar is not the answer. It is not clean, and it is not cheap.” He added that, while nuclear energy has been “villainized,” he believes it is the way to go for clean, zero-emission electricity.

Sen. Camilleri explained that the package the Senate Energy Committee is working on includes $150 million to help restart the Palisades Nuclear Power Plant on the west side of the state. “Let's be very clear. We are not getting rid of nuclear in our Michigan package - we realize that it is something that is important for the entire energy grid - but we want to make sure this is balanced,” he said. “We’re not going to turn a switch and all of a sudden everything is going to be powered by solar. That’s not how this works. We are creating a package that is balanced, feasible, attainable, and pushing us more quickly toward our renewable energy goals.”

Sen. Webber said that he looks forward to seeing what comes out of the Energy Committee and what gets onto the Senate floor. “I think in general what people want is affordability, reliability, and if this plan can meet that, I’m certainly open to looking at it,” he said, “but I guess I’m skeptical at this point.” 

Legislators Appear United on Prompt Pay Bill 

Prompt Pay rules serve to expedite the process by which construction contractors are paid for public construction projects. Rep. Conlin introduced the Michigan Construction Payment Act (House Bill 4837) in the state House earlier this legislative session. Sen. Dan Lauwers (R-Brockway) authored a similar bill in the Senate. 

Wadaga opened the conversation on Prompt Pay by explaining how subcontractors often experience delays in pay when working on government projects. “We hear from our subcontractors at CAM oftentimes about delays in pay up to 180 days or longer,” Wadaga said. “And I think we’re in a great position to get something done.” 

One of Rep. Conlin’s current top priorities is passing the Prompt Pay bill, which she has sponsored. Previously a journalist, Rep. Conlin said that she often faced the struggle of not being paid promptly for her work and felt very passionate about the bill when she was introduced to it. “When I found out we were one of 16 states that doesn’t have Prompt Pay for private construction projects, I know exactly what that feels like,” she said. “So I’m really happy that I have that bill and can help get that through.”

The panelists were generally unfamiliar with the intricacies of the bill but expressed support for the measure in principle. Sen. Camilleri said that these types of financial issues have been addressed in multiple sectors and is something he is concerned with. “When you sign a contract to do a job, you should get paid for that contract,” he said. “We see this in the insurance industry right now as well, and so I do think that there are some very serious conversations that we need to have so that people uphold their ends of the bargain.”

“Ditto for me,” Sen. Webber said, adding that he’s very much looking forward to being able to look at and review the bill. 

Rep. Tisdel said one would hope that “simple contract law would prevail” on this issue. He added that if the primary or principle of the development hasn’t been paid by their customer, it’s difficult to have money flow to the subcontractors. “Contract law is really one of the more simple aspects of our judicial system, but if it’s so clogged up that people are taking advantage of that flow or trying to slow the process, they should be hammered,” he said.

Incentivizing Large Data Centers to Come to Michigan

On October 11th, there was a committee hearing on House bills 4905 and 4906, which would eliminate the sales tax and property tax for large data center projects. Wadaga explained that other states offer similar incentives to encourage investment in large data centers.

Rep. Tisdel, who is on the Tax Policy Committee, said that while he is in favor of anything that keeps money in the pockets of the private sector, he is very concerned about Michigan’s cost of electricity and the large amount of electricity the data centers would use. “Michigan right now is still among the top 10 outflow states for population. Our electricity cost compared to the average of the top 10 inflow population states is 40 percent higher,” he said. “So I don’t know that relieving or eliminating the sales tax or use tax on equipment coming into these large electricity users is going to offset that kind of cost disparity when it comes to what they’re actually drawing every day.”

Sen. Webber said that, while he agrees with Tisdel about his electricity concern, he sees the need for data centers and has no problem with trying to incentivize them. “Data centers, bringing them to Michigan, it’s great,” but he questioned how it could be done in the right way. 

Sen. Camilleri said that he’s open to these conversations, as long as there are very clear guidelines in place for the companies, such as ensuring that they will actually create the number of jobs promised when finalizing deals to build in Michigan. “I view all economic development with a critical eye. These are our taxpayer dollars we’d be giving out to large corporations that may deliver jobs, which I’m open to,” he explained, “in the event that they actually deliver on those promises.”

VIEW IMAGES FROM THIS EVENT