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Posted on Thu, Dec 1, 2011 : 4:10 p.m.

Michigan House passes legislation allowing privatization of local building departments

By Ryan J. Stanton

The Michigan House today approved legislation that would amend state law to allow local governments to contract with private companies to operate their building departments.

The bill also would expand the definition of "building official" in the State Construction Code Act of 1970 to include employees of private companies.

House Bill 5011, sponsored by state Rep. Mark Ouimet, R-Scio Township, was approved by a 77-30 vote and now goes to the Senate for consideration.

Ouimet believes the change in law will foster new development by allowing Michigan businesses to receive local building permits more quickly and efficiently.

"This legislation gives local governments another tool in their toolbox to encourage economic development and help create jobs for local families," Ouimet said in a statement. "While our upcoming state tax reforms will give job creators the chance to expand and hire more workers, this legislation helps ensure that the process to do so is efficient and timely."


Mark Ouimet

Specifically, the bill would authorize local governments to contract with private companies for specific administrative and enforcement activities, including building inspections and plan reviews.

Private companies would not be able to issue orders, notices, certificates or permits, but could process and deliver documents pending the approval of a building official.

Under state law, a local government enforcing the State Construction Code must provide the services required by the act, including issuing permits and orders, conducting inspections, performing plan reviews and determining the safety of structures.

For a variety of reasons, many local governments already have opted to privatize those services by contracting with private companies.

"While this is a common practice, the act does not appear to be clear on what responsibilities can be delegated to the private organization," according to a House Fiscal Agency analysis released this week.

According to a 1975 attorney general's opinion, local governments can contract with private companies for inspection and technical services, but the designated enforcing agency must be a public official and all final determinations must be made by the enforcing agency.

"This bill is an attempt to provide clarity on the functions private organizations can legally perform and who is legally considered a building official," the analysis states.

Specifically, the bill would allow a local government to contract with a private company to do any of the following:

  • Receive applications for building permits.
  • Receive payments of fees and fines on behalf of the governmental subdivision.
  • Perform plan reviews using plan reviewers registered under the Building Officials and Inspectors Registration Act of 1986
  • Perform inspections using inspectors registered under the Building Officials and Inspectors Registration Act of 1986
  • Approve temporary service utilities.
  • Make determinations that structures or equipment are unsafe.
  • Process and deliver correction notices.
  • Issue orders to connect or disconnect utility service in emergency situations.
  • Issue orders to vacate premises in emergency situations.

Private companies also would be able to process and deliver any of the following after their issuance has been approved by a building official:

  • Orders to connect or disconnect utility service in a non-emergency situation.
  • Orders to vacate premises in non-emergency situations.
  • Building permits.
  • Temporary or permanent certificates of use and occupancy.
  • Orders to suspend, revoke, or cancel a building permit or certificate of occupancy.
  • Violation of notices.
  • Notices to appear or show cause.
  • Stop work orders.
  • Orders to remedy noncompliance.

Ouimet worked with lawmakers from both parties to build support for the bill, which is being co-sponsored by state Rep. David Rutledge, D-Superior Township, and 11 others.

As chairman of the House Local, Intergovernmental, and Regional Affairs Committee, Ouimet said he has made it a priority to streamline government and improve services.

He noted some municipalities already contract out for building permit services, and his bill will ensure the practice can continue while encouraging others to improve their permit processes.

Local municipalities still have the option to contract with county or state building officials for the same services under the proposed legislation.

Ryan J. Stanton covers government and politics for Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's e-mail newsletters.


hut hut

Thu, Dec 1, 2011 : 10:05 p.m.

Local control is meaningless for the so called party of states rights. This is a continuing loss of local control to the Republican controlled bureaucracy in Lansing. It's another layer of bureaucracy Private inspection services with a profit motive will disapprove for any reason so they can charge a re inspection fee. This setup is ready for corruption hidden in another layer of bureaucracy. Home owners and contractors will have little recourse. Appeals will be in Lansing and not at the local level. It's a further concentration of power in Lansing to give more money to businesses and less to locally elected municipal government for the same purpose. Disputes between enforcement personnel and contractors will be a headache for local municipalities and Lansing. Except for the favored contractors Businesses, contractors and associations who do the best lobbying in Lansing will be at the head of the line. it will allow more government intervention in local affairs a la Snyder's Emergency Managers. In other words it's yet another giveaway to businesses, loss of local control and revenue and a further concentration of power in Lansing.


Thu, Dec 1, 2011 : 9:22 p.m.

Doesn't this open the door for more favoritism, payoffs and kickbacks?


Thu, Dec 1, 2011 : 10:07 p.m.

@Billy Bob- so favoritism, payoffs and kickbacks are a good thing in goverment? Last I heard these are kind of the foundations of corruption. cor·rup·tion [ k? rúpsh'n ] 1.dishonesty for personal gain: dishonest exploitation of power for personal gain 2.depravity: extreme immorality or depravity 3.undesirable change: an undesirable change in meaning or another error introduced into a text during copying


Thu, Dec 1, 2011 : 10:01 p.m.

One could even speculate that this was by design. Just think what a developer could do with some of the items on the list: •Make determinations that structures or equipment are unsafe. •Orders to vacate premises in emergency and non-emergency situations. Let see, that old house your in is unsafe and you must vacate the premises . . . . . because the dozer I just called will be clearing the way for a 6-story building. Clearly an unsafe, emergency situation. Please understand the sarcasm, but how is this in the best interest of the citizens of that State of Michigan? Why can't I buy my own state rep or senator to do my bidding?

Billy Bob Schwartz

Thu, Dec 1, 2011 : 9:48 p.m.

...And your point is.........?

Alan Goldsmith

Thu, Dec 1, 2011 : 8:32 p.m.

Private companies enforcing the law? Wow...thanks Democrat Rep. David Rutledge, well known for his wine tasting skills on the public's dime while serving on the WCC Board, for buying into the myth that law enforcement can be sold off to the lowest bidder. Why did we elect you again?