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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)


STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6337

January 22, 1986

APPROPRIATIONS:

Validity of provision requiring reduction in bids on state contracts of businesses with Michigan employees

CONSTITUTIONAL LAW:

Const 1963, art 4, Sec. 24

1985 PA 104, Sec. 105, construed to require bids made by businesses with Michigan employees to be reduced by 7% of the amount of the bid attributable to compensation for those contracts to be funded only from appropriations made in the Act, does not add a second purpose to the Act so as to violate Const 1963, art 4, Sec. 24.

Robert H. Naftaly

Director

Department of Management and Budget

Lewis Cass Building

Lansing, Michigan 48909

You have requested my opinion on the question whether the provisions of 1985 PA 104, Sec. 105, add a second distinct and unrelated object to the Act in violation of Const 1963, art 4, Sec. 24.

The title to 1985 PA 104 states that it is an act

'to make appropriations for the legislative, the library of Michigan, the judiciary and the executive branches, the departments of attorney general, civil service, civil rights, management and budget, state and treasury for the fiscal year ending September 30, 1986; . . . to prescribe requirements for bidding on state contracts; . . ..'

1985 PA 104, Sec. 105, provides:

'For purposes of determining the lowest bidder for a state contract, the purchasing division of the department shall reduce the amount of each bid for that contract submitted by a business by an amount equal to 7% of the amount of the bid attributable to compensation, as defined in section 4 of the single business tax act, Act No. 228 of the Public Acts of 1975, being section 208.4 of the Michigan Compiled Laws, and attributable to Michigan employees. The purchasing division of the department may call upon the budget division of the department or the department of treasury for any assistance needed to comply with this section.'

The Management and Budget Act, MCL 18.1261; MSA 3.516(251), provides:

'(1) The department shall provide for the purchase of, or the contracting for, the providing of supplies, materials, services, equipment, and printing as needed by state agencies. The department, in making purchases and entering into contracts, shall encourage and promote the competitive viability of the private sector in providing products and services to the public. In all purchases made by the department, all other things being equal, preferences shall be given to products manufactured or services offered by Michigan-based firms, where consistent with federal statutes.

'(2) The department shall issue directives for the procurement, receipt, inspection, and storage of supplies, materials, and equipment, and for printing and services needed by state agencies. The department shall provide standard specifications and standards of performance applicable to purchases.'

While MCL 18.1261; MSA 3.516(261), directs the Department to give a preference to products manufactured or services offered by Michigan-based firms, 'all other things being equal,' 1985 PA 104, Sec. 105, requires the Department to treat the bids of businesses with Michigan employees, who will perform all or any portion of the state contract being bid, differently from the bids of other businesses. The Department shall reduce the bids of businesses with Michigan employees and then award the contract to the lowest qualified bidder. Firms with a large number of employees in Michigan would have a competitive advantage over small Michigan-based firms. Const 1963, art 4, Sec. 24, provides:

'No law shall embrace more than one object, which shall be expressed in its title. No bill shall be altered or amended through either house so as to change its original purpose as determined by its total content and not alone by its title.'

In OAG, 1981-1982, No 5930, p 245 (July 1, 1981), a similar question was addressed and it was concluded:

'An act may deal with all matters which are relevant to its object. Advisory Opinion re Constitutionality of 1972 PA 294, 389 Mich 441; 208 NW2d 469 (19793). However, an act may not contain provisions which are clearly tangential and have a strained relationship to the principal object. 1980 PA 374 is a general appropriations act. Its principal object is to make appropriations for capital outlay for the 1980-1981 fiscal years. The Legislature may consistently with the purpose of appropriating funds limit or prohibit expenditures of the appropriated funds for specified purposes. Colombini v Department of Social Services, 93 Mich App 157; 286 NW2d 77 (1979). However, although the Legislature may prohibit or limit expenditures of appropriated funds within an appropriations act, the Legislature may not repeal statutes in such an appropriations act. Clearly, the repeal of statutes is not directly related to the principal object of the appropriations act--the appropriation of funds.' (Emphasis added.)

It is not entirely clear whether the Legislature intended 1985 PA 104, Sec. 105, to apply to all state contracts and not only those contracts for which the Act appropriates funds. If 1985 PA 104, Sec. 105 is read to require its provisions to apply to all state contracts, the same conclusion as ennunciated in OAG, 1981-1982, No 5930, is required in answer to your question. 1985 PA 104 was enacted as an appropriation act for the principal purpose of appropriating funds for the 1985-1986 fiscal year. The establishment of new requirements for the purchasing division of the Department of Management and Budget to follow in negotiating and awarding all state contracts is not directly related to the principal object of this appropriation act.

It is possible, however, to read 1985 PA 104, Sec. 105, to apply only to the contracts which will be funded with appropriations contained in the Act. Such a construction is a reasonable and permissible interpretation in the absence of legislative command that 1985 PA 104, Sec. 105, shall apply to all state contracts. Courts are obligated to save legislation from unconstitutionality wherever possible by observing a reasonable and permissible interpretion. Fritts v Krugh, 354 Mich 97, 114; 92 NW2d 604 (1958), Lichtman v Detroit, 75 Mich App 731; 255 NW2d 750 (1977), People v Gilliam, 108 Mich App 695; 310 NW2d 843 (1981).

In the event the Legislature desires to make such a requirement applicable to all state contracts, appropriate legislation will have to be enacted. Moreover, 1985 PA 104, Sec. 105 is effective only for the fiscal year ending September 30, 1986.

It is my opinion, therefore, that 1985 PA 104, Sec. 105, construed to apply only to those contracts funded by appropriations contained in 1985 PA 104, does not violate Const 1963, art 4, Sec. 24.

Frank J. Kelley

Attorney General

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