Summary: Executive Budget Recommendation

Summary: Conference Report

LABOR AND ECONOMIC GROWTH

FY 2005-06 Senate Bill 276

Analyst: Richard Child

	FY 2004-05 YTD (as of 2/10/05)			House
	FY 2004-05 YTD (as of 2/10/05)	Revised Executive	Senate	House	Conference
IDG/IDT	$515,200	$10,022,400	$10,022,400	$489,700	$10,822,400
Federal	836,502,100	842,527,600	842,527,600	852,527,600	842,527,600
Local	15,669,600	15,738,200	15,738,200	15,738,200	15,738,200
Private	4,140,100	3,990,600	3,990,600	3,990,600	3,990,600
Restricted	290,500,600	539,793,800	429,712,200	327,989,500	329,882,200
GF/GP	94,538,000	73,848,500	87,775,800	70,979,100	70,354,300
Gross	$1,241,865,600	$1,485,921,100	$1,389,766,800	$1,271,714,700	$1,273,315,300
FTEs	4,307.0	4,410.0	4,413.0	4,325.0	4,410.0

Overview

The Department of Labor and Economic Growth (DLEG) has primary responsibility for theregulatory functions that relate specifically to commercial, business, and workers’ issues. It also includes activities within the former Department of Career Development such as various employment training-related programs for displaced workers, adults, and youth, and employment services for the disabled as well as welfare recipients. The Department also houses the Michigan Strategic Fund, an autonomous agency which reports to the Director of DLEG. The fund’s programs are administered by the Michigan Economic Development Corporation, with the primary task of promoting economic development inMichigan.

Major Budget Changes from FY 2004-05 YTD Appropriations:	FY 2004-05 Year-to-Date	Conference Change
*1. Fire Protection Grants* Fire protection grants remain at current year funding level.	Gross Restricted GF/GP	$7,210,500 7,210,500 $0	$0 0 $0
*2. Office of Fire Safety Programs* Office of Fire Safety, which includes the Fire Fighters Training Council, Fire Marshall Program and Fire Safety Program, remains at current year funding level.	Gross Federal Restricted IDG GF/GP	$5,965,500 1,107,300 4,747,100 111,100 $0	$0 0 0 0 $0
*3. Transfer of State Office of Administrative Hearings and Rules (SOAHR) andMichigan* Child Protection Registry (MCPR)** Recognizes Executive Order 2005-1 for SOAHR and PA 241 of 2004 creating the Michigan Child Protection Registry transferring a total of $9.8 million gross and 85.0 FTEs to DLEG, $250,000 and 2.0 FTEs for MCPR, and the remainder for SOAHR.	Gross IDG Restricted GF/GP	$0 0 0 $0	$9,782,700 9,532,700 250,000 $0
*4. Contract and Employee Benefit Savings* Reduces contract, retirement and group life insurance appropriations in various lines by a total of $494,200.	Gross GF/GP	$0 $0	($494,200) ($494,200)
*5. IDG from State Police for Homeland Security* Adds $0.8 million gross for Homeland Security, 40% of which is allocated to the Fire Fighters Training Council.	Gross IDG	$0 0	$800,000 800,000
*6. MEDC Spending Reductions* Reduces spending by $3.0 million; $0.5 million from the Administration line and $2.5 million from the Job Creation Services line.	Gross Federal IDG Private Restricted GF/GP	$118,128,100 53,014,300 104,100 853,100 10,050,000 $54,106,60	($3,000,000) 0 0 0 0 ($3,000,000)

Major Budget Changes from FY 2004-05 YTD Appropriations:

FY 2004-05

Year-to-Date

Conference Change

1. Fire Protection Grants

Fire protection grants remain at current year funding level.

Gross

Restricted

GF/GP

$7,210,500

7,210,500

2. Office of Fire Safety Programs

Office of Fire Safety, which includes the Fire Fighters Training Council, Fire Marshall Program and Fire Safety Program, remains at current year funding level.

Gross

Federal

Restricted

IDG

GF/GP

$5,965,500

1,107,300

4,747,100

111,100

3. Transfer of State Office of Administrative Hearings and Rules (SOAHR) andMichigan Child Protection Registry (MCPR)

Recognizes Executive Order 2005-1 for SOAHR and PA 241 of 2004 creating the Michigan Child Protection Registry transferring a total of $9.8 million gross and 85.0 FTEs to DLEG, $250,000 and 2.0 FTEs for MCPR, and the remainder for SOAHR.

Gross

IDG

Restricted

GF/GP

$9,782,700

9,532,700

250,000

4. Contract and Employee Benefit Savings

Reduces contract, retirement and group life insurance appropriations in various lines by a total of $494,200.

Gross

GF/GP

($494,200)

($494,200)

5. IDG from State Police for Homeland Security

Adds $0.8 million gross for Homeland Security, 40% of which is allocated to the Fire Fighters Training Council.

Gross

IDG

$800,000

800,000

6. MEDC Spending Reductions

Reduces spending by $3.0 million; $0.5 million from the Administration line and $2.5 million from the Job Creation Services line.

Gross

Federal

IDG

Private

Restricted

GF/GP

$118,128,100

53,014,300

104,100

853,100

10,050,000

$54,106,60

($3,000,000)

($3,000,000)

Major Boilerplate Changes from FY 2004-05:
**Sec. 355. Prohibits Involuntary Ergonomics Rules– NEW** Prohibits the Department from development of mandatory ergonomic rules, but allows Federal voluntary ergonomic guidelines.
**Sec. 365. Grant for Aggregate Industry– NEW** Directs Department to allot no less than $40,000 of MIOSHA funds to nonprofit organizations representing the aggregate industry inMichigan.
**Sec. 368. Transfer of Office of Regulatory Reform Publication and Distribution Costs– NEW** Recognizes transfer of Office of Regulatory Reform to DLEG under Executive Order 2005-1, and provides for fees collected to be used for the cost of publication and distribution of regulations.
*Sec. 405. Work First Program* – NEW Retains current law, except Michigan Works! Agencies are named as Work First providers.
**Secs. 527. - 530. Legislative Oversight of MEDC– NEW** Requires MEDC to work with Office of Auditor General to audit grantee claims of job creation. Requires annual report of all MEDC staff paid more than $80,000 annually. Requires review of best practices of economic development agencies in 49 other states and report to Legislature. Requires report to Legislature within 60 days of $3.0 million reduction implementation plan, and impact of reduction on staffing and operations.

Major Boilerplate Changes from FY 2004-05:

Sec. 355. Prohibits Involuntary Ergonomics Rules– NEW

Prohibits the Department from development of mandatory ergonomic rules, but allows Federal voluntary ergonomic guidelines.

Sec. 365. Grant for Aggregate Industry– NEW

Directs Department to allot no less than $40,000 of MIOSHA funds to nonprofit organizations representing the aggregate industry inMichigan.

Sec. 368. Transfer of Office of Regulatory Reform Publication and Distribution Costs– NEW

Recognizes transfer of Office of Regulatory Reform to DLEG under Executive Order 2005-1, and provides for fees collected to be used for the cost of publication and distribution of regulations.

Sec. 405. Work First Program – NEW

Retains current law, except Michigan Works! Agencies are named as Work First providers.

Secs. 527. - 530. Legislative Oversight of MEDC– NEW

Requires MEDC to work with Office of Auditor General to audit grantee claims of job creation. Requires annual report of all MEDC staff paid more than $80,000 annually. Requires review of best practices of economic development agencies in 49 other states and report to Legislature. Requires report to Legislature within 60 days of $3.0 million reduction implementation plan, and impact of reduction on staffing and operations.