April 2015: ASAM Legislative Committee Update

Your ASAM Legislative Committee consists of Ken Misiewicz, Aileen Leipprandt, Mike Powers, Steve Alles, Jon Lunderberg, and Jack Austhof. We meet approximately six times per year to discuss State legislative issues that will affect you and the rest of the membership. Nationally, ASA has been quite successful in helping to pass legislation that has benefited the subcontractor community. For example, in New Mexico they have passed legislation that has reduced retainage on state funded projects to 5%. In Nebraska the state must pay their contractors within 45 days.

Here in Michigan we have been begun working to influence legislation that will affect P3 forms of contracting as well as retainage reform and prompt pay legislation. In regard to P3 projects, federal, state, and local governments are looking to fund public projects with the help of private money. Although not widely used in West Michigan, it is being done. These projects are called "P3" as an acronym for "private, public, partnerships."

Although not fundamentally opposed to the idea of P3 projects, ASAM is concerned that P3 projects may not provide the usual sources of payment protection we have become accustomed to. We all know we are unable to lien a public project. However, few public projects, if any, are ever built without a requirement for the general contractor or construction manager to purchase and maintain a PLM bond, thereby providing subcontractors and material suppliers with some assurance that we will get paid if the job goes south. On private projects, subs and suppliers are given lien rights. With P3 funding, lien rights and payment bonds are oftentimes a missing ingredient. Your legislative committee is working in Lansing to bring light to this problem and, hopefully, a legislative solution. We'll keep you posted.

Remember to vote on May 5:

Road repair funding proposal raising the State Income Tax from 6% to 7%.

Mike Powers
Allied Electric, Inc.