**USE TAX IMPACT ON LANDSCAPE ARCHITECTS**

Dear Michigan ASLA Members:

As most of you are probably aware, a number of “Select Discretionary Services” have been added to the Use Tax Act as part of state budget compromise reached in the early morning hours of October 1.  The services that were identified will now be responsible for a 6% tax on their services rendered in the State of Michigan beginning on December 1 of this year.

This new tax will affect our membership unevenly and at this time there are a number of questions that are still unanswered.  The details of how this tax will be implemented are being worked out by the Department of Treasury and new information becomes available on almost a daily basis.  The following is what we know right now, and some of our concerns.

The bill that identifies which services are to be taxed is based on the U.S. Census Bureau’s 2002 NAICS Industry Codes.  The Landscape Architecture Profession spans two of those codes.

Landscaping services, as described in NAICS industry code 56173 will be taxed:

This industry comprises (1) establishments primarily engaged in providing landscape care and maintenance services and/or installing trees, shrubs, plants, lawns, or gardens and (2) establishments primarily engaged in providing these services along with the design of landscape plans and/or the construction (i.e., installation) of walkways, retaining walls, decks, fences, ponds, and similar structures. (From the census website).

Landscape Architectural Services, as described in NAICS industry code 541320 will NOT be taxed:

This industry comprises establishments primarily engaged in planning and designing the development of land areas for projects, such as parks and other recreational areas; airports; highways; hospitals; schools; land subdivisions; and commercial, industrial, and residential areas, by applying knowledge of land characteristics, location of buildings and structures, use of land areas, and design of landscape projects.  (From the census website).

Our understanding is that the tax will be based on the location where the service was rendered.  If so, this means that if a Michigan company performs work out of state, their services would not be taxed and if an out of state company performs services in Michigan, their services will be taxed. 

Part of the confusion of exactly how this law will be implemented is that the current Use Tax is for tangible personal property that is purchased where sales tax is not paid to the seller.  For example, if a business purchases a product from an out-of-state vendor who does not charge sales tax, they must pay a 6% Use Tax to the state.  Currently, Use Taxes are due on the 20th day of the month following a transaction.  

Use Taxes are different than Sales Taxes.  A Use Tax is a business tax where the provider of the services is responsible for paying the tax.  This is in sharp contrast to a Sales Tax where the purchaser pays the tax.   This is especially a concern for providers of landscape services who have existing fixed price contracts with private entities that extend beyond December 1st (when the new tax becomes effective).  The contractor will either have to absorb the cost of the 6% tax or convince their client to pay the additional 6%.   

At this time everyone, including accountants and tax lawyers, are waiting for more information on how the law will be implemented.  We are drafting a letter to the Treasury outlining our concerns regarding long-term fixed fee landscape service contracts that were in place prior to the new tax law.

This budget compromise was difficult and we don’t expect that our legislators will go back and revisit the scope of the use taxes without a way to replace the projected revenue.  We will, though, advocate that the manner in which these taxes are implemented are not onerous to the landscape architecture business. 

Please understand that this is a very fluid process.  We will try to keep you posted as we learn more.  If you have a specific concern that you would like to see addressed by the Department of Treasury as they define how this tax law will be implemented please contact us.  Thank you.

Sincerely,

Norman D. Cox, ASLA

President, Michigan Chapter of the American Society of Landscape Architects

P.S.  For more information on the new taxes see the State Treasury website:  http://www.michigan.gov/treasury

**IMPORTANT UPDATE ON MICHIGAN'S LICENSURE AND EXECUTIVE ORDER 2007-23**

On June 6, Derek Dalling, our Executive Director/Lobbyist, and I met with Governor’s Granholm’s staff to discuss Executive Order 2007-23, which eliminated the Board of Landscape Architects.  View the Executive Order here.  Our meeting was very upbeat and positive.  It seemed that the many letters that were sent in by Michigan ASLA members made a difference.  Prior to our meeting we also had Representative Marie Donigan (D – Royal Oak), a former Michigan ASLA member, lobbying the Governor’s office on our behalf.  The Governor’s staff indicated that the elimination of the board was part of a larger response to the budget crisis and was not in any way intended to degrade the profession of landscape architecture.  We discussed the fact that the cost of operating our board is covered by our fees and the necessity of having a board as part of our pending licensure bills.   We left that meeting with the understanding that the Governor’s office recognized  the need for a landscape architecture board and that they supported our bid to transition our regulation status from that of a registered profession with a title act to that of a licensed profession with a practice act.  

In a follow-up conversation the following week, the Governor’s office reversed their position regarding the board.  While they will still support licensure for landscape architects, they will not support the re-creation of The Board of Landscape Architects.  In fact, we could expect a veto of any bill that includes a board.   The Board of Landscape Architects was seen as too inactive (meeting on average once a year) to be warranted.   There seems to be a perception in Lansing that professional boards are big government and should be trimmed whenever possible.   

The legislative route to override the executive order is a long shot.  We have only until July 1 to accomplish this task and successful overrides are few and far between.  We also risk alienating the Governor who very likely would veto our licensure bills.  So it appears that we have lost the battle for the Board of Landscape Architects.  While this was very disheartening news there is an upside.  It appears that our licensure bills have a green light from all key parties to proceed.  In fact, the Governor’s office has already had discussions with the Department of Labor and Economic Growth regarding moving our bills forward without a board.

Over the next month, we will be working with the Department of Labor and Economic Growth and Senator Wayne Kuipers (R-Holland) our bill’s sponsor, to amend our bills in respect to the fact that the Board of Landscape Architects no longer exists (it ceased to exist when the governor issued the executive order).  Once the revised bill is ready, Representative Marie Donigan (D – Royal Oak)  has agreed to introduce identical versions of the bills in the  House which will not only expedite the process but show the bill has bi-partisan support.  So we have never been positioned better to achieve licensure.  Even licensure without a board is a tremendous step forward for our profession and our ability to compete on a level playing field.

In the future, the issue of the Board of Landscape Architects may be revisited.  In its absence there will be a role for the Michigan Chapter of the American Society of Landscape Architects in advising the Department of Labor and Economic Growth on continuing education best practices and other issues.  My hope is that in time we can make the case to re-establish a Board with the full support of the Department of Labor and Economic Growth and the Governor.   

Looking back at how Michigan ASLA responded to this challenge, we ask ourselves what could have been done to create a different outcome.   All indications are that in light of the State’s budget crises this outcome was inevitable regardless of our efforts.  From outside accounts, our membership did an outstanding job.  Our law makers in Lansing have a much better understanding of the landscape architecture profession.  They also are more attuned to how important our work is to the state as it strives to be a better place to do business while simultaneously implementing sustainable practices.   In the end, the budget crisis and the perception of unnecessary government was just too much to surmount.  So thank you to everyone who contacted the Governor and your legislators.  We may not have gotten our board back, but we positioned ourselves well to proceed towards licensure.  At this point we can hold off on sending any more letters to governor on the subject.  We will keep you posted as the situation evolves.

Norman D. Cox, ASLA

President, Michigan Chapter of the American Society of Landscape Architects

P.S.  I know that many of our members have been involved in preserving our board and pushing for licensure stretching back some 25 years.  If you would like to talk to some of the members of the Government Affairs Committee to learn more about the situation we would be pleased to speak with you.  Please feel free to contact any of the following Government Affairs Committee (GAC) members:

Keith Cheli, GAC Chair,

989-732-3541 ext. 5021

Norm Cox, Executive Committee Immediate Past President, GAC Member,

734-668-8848

Derek Dalling,  Michigan ASLA Executive Director,

517-485-4116

Pam Blough, Executive Committee Trustee and GAC Member,

616 -847-2010

Scott Reinholt, GAC Member

Vanessa Warren, Executive Committee Secretary and GAC Member

Roger Sabine, GAC Member

Bill Sanders, GAC Member

Mark Heiber, GAC Member

**IMPORTANT MESSAGE FOR ALL LANDSCAPE ARCHITECTS IN MICHIGAN**

As many of you may be aware, May 2, 2007, Governor Granholm issued Executive Order 2007-23 which will eliminate the Michigan Board of Landscape Architect effective July 15, 2007.  View the Executive Order here.

In this time of trying to pass legislation for a practice act for all landscape architects of Michigan, know that the Michigan ASLA Executive Committee and our Lobbyist have been working hard on this particular matter (the EO 2007-23) for the past month.

So what does this mean to our current registration status and pending licensure legislation?  First off, eliminating the board does not eliminate registration for landscape architects.  The Department of Labor and Economic Growth will handle any issues that the Board of Landscape Architects would typically address.  Our board met infrequently, and this is part of the reason it was targeted for elimination.  We will continue to pay our yearly $40 registration fee.

The role of the Landscape Architect Board though is poised to change under our proposed legislation to make landscape architecture a licensed profession.  The Board is planned to have a substantial role in defining and administering continuing education.  Our registration fee will rise to $60 a year in recognition of the expanded role of the board and inflation (our fees have not increased in many years).

What are our options?  The preferred option is to convince the Governor to repeal her Executive Order.  While this would be a rare occurrence, it is not without precedence. Please use the talking points from President Norman Cox's letter and contact the Governor, your State Senator and State Representative and ask them to do the same.  Then our proposed licensure bill may proceed in its current form.  Last year our licensure bills passed unanimously out of the Senate, but we ran out of time to get addressed in the House.  This year our licensure bills have continued to be well received by both parties as we have lobbied for their passage.

The second option is to accept the elimination of the Board of Landscape Architects at this time and revise our pending legislation accordingly.  This would result in Michigan being the only state in the country without a Board of Landscape Architects or similar such board oversight.  If this route is chosen we would view the situation as a temporary measure and work towards reestablishing a Board of Landscape Architects once the state has emerged from the current budgetary crisis.

The bright spot in all of this is that our chapter is positioned better than ever to address such challenges.  We have an active Government Affairs Committee, a number of our members have gotten to know their representatives through MASLA’s lobby days and the chapter has been working with a respected lobbyist.  This has resulted in a higher profile for our profession at the Capitol and a greater awareness of the nature of the landscape architecture profession and our work in the state.  But this effort needs to extend beyond the handful of landscape architects currently involved in government affairs if we are to succeed.  Now is the time for action for all landscape architect to rise to the challenge at hand.

May 10th, President Norman Cox hand-delivered a letter requesting that the Governor rethink her decision on abolishing the Landscape Architecture Board.

Download Norm's Letter to the Governor(pdf).

At this time, we request that you do not send any additional letters to the Governor.

To contact your local legislators from the ASLA Advocacy Network, enter your zip code:

Write Your State Legislators enter zip code

Please check back here at michiganasla.org and look for e-news bulletins for continuing updates.

Practice Act -- How You Can Support the Effort

To:    All interested in the advancement of the Landscape Architecture Profession

From:  Government Affairs Committee of the Michigan Chapter of the ASLA

RE:    MASLA - Fund raising for Landscape Architects of Michigan Political Action Committee 

We need your support to complete our long-term goal to move from our current title act to a practice act for the landscape architecture profession in Michigan.  This is important as it would put us on par with architects and engineers and make it easier to seek work in other states with practice acts.  Right now we are better positioned to pass this bill than we have been in over twenty years:

*      We are only one of ten states in country who do not have a practice act for landscape architects
*       Our bill passed the Senate last year with bipartisan support
*       We have worked through all of the issues with our peer professions
*       Our bills are about to be reintroduced in the Senate and are expected to move quickly to the House 

We simply cannot afford to miss this opportunity to pass our practice act because we do not have the resources to shepherd the bill through the legislative process.

Please send your contribution to:

Landscape Architects of Michigan PAC
1000 W. St. Joseph Hwy., Suite 200
Lansing, MI  48915

Personal Checks Only.  No corporate checks.

Download the PAC contribution card

LICENSURE UPDATE

by Keith Cheli, ASLA

Historical Basics

The state licensure law was first enacted as a title act in 1965.  The state has no regular sunset review process, but the Governor initiated a review in 1980-81.  In 1989-90, the chapter worked unsuccessfully to upgrade the title act to a practice act.  The chapter has no regular legislative event.

In the 1989-90 campaign, six members of the chapter served on the strategy committee for the effort, with one person serving as chair.  In all, around 20 landscape architects volunteered for the campaign.  The chapter was able to get non-ASLA landscape architects involved through the state board.  A subcommittee of the chapter was formed with the state board participating on that subcommittee.  The chapter did not form a separate organization for advocacy.

Legislative Campaign

The message points that resonated in making the case for licensure with legislators was protection of public health, safety and welfare and economic parity with other design professions.

The main issues raised by opponents were the possibility that the practice act would encroach on their areas of practice/business.  ASLA attempted to neutralize this opposition by language modification without compromising public health, safety and welfare issues.

The chapter kept the membership active and involved throughout the campaign with a monthly newsletter.  The state board was active in the campaign through participation in the chapter legislative subcommittee.  The board utilized the Department of Commerce staff to draft the legislation.

FREQUENTLY ASKED QUESTIONS

Q:  What is the MASLA goal?

A:  Currently, landscape architects in Michigan are regulated under a title act that allows a qualified landscape architect to register with the state and have the title of a Registered Landscape Architect.  MASLA recommends legislation to upgrade the current title act to a practice act – the strongest form of regulation.

The practice act outlines a core group of services that licensed landscape architects are qualified to provide by virtue of their education, experience, and examination.  Defining the scope of landscape architectural practice is necessary when working with jurisdictions that require site, grading, stormwater, or erosion control plans to be stamped by specific licensed professionals.

Q:  Why does MASLA recommend a practice act?

A:   The practice of landscape architecture directly impacts public health, safety, and welfare, and a practice act is the strongest form of regulation to ensure that the public is adequately protected.  A title act will still allow anyone to perform landscape architectural services as long as they are not identified as a landscape architect.

Landscape architecture must be regulated such that untrained individuals are prevented from engaging in professional practice that impacts the public heath, safety, and welfare.  Licensed landscape architects fulfill educational training and examination requirements that prepare professionals to protect the public.

Q:  How does the MASLA goal compare to other states - more or less “turf”?

A:  Most other states already have Practice Acts in place.  In fact, 38 states have practice acts for landscape architecture.  With a practice act in place, Michigan will have similar standards as our neighboring states with licensure.  This will help Michigan based landscape architects compete for projects in other states.

Q:  What impact will the practice act for landscape architects have on other professions?

A:   Licensure for one profession and registration for the other may be perceived by the consumer as an endorsement of the skill and competence of one profession over the other.  Where professions overlap, it provides a state-sanctioned advantage for one profession that holds a practice act license over the Landscape Architect profession which currently has a title act license.  This destroys the competitive, free market in which design professionals compete.

The licensure of landscape architects is necessary to put the profession on an equal footing with those already licensed to perform tasks traditionally performed by landscape architects.  This equality can also facilitate the ability of landscape architects to lead projects, form certain business partnerships, and serve as principals in multidisciplinary firms.

In addition, a practice act will provided further professional incentives for retaining young professionals in the State of Michigan who may consider relocating to fully licensed states where a practice act exists.

Q:  What impact in terms of costs will the practice act for landscape architects have on the state of Michigan?

A:   Because Michigan landscape architects already have title act, license fee structure, rules and a State Board of Landscape Architects in place, the MASLA recommended legislation will not increase the state obligations or costs.  The recommended legislation includes a provision for continuing education for landscape architects.  The continuing education requirements, as proposed, would be structured by the Board of Landscape Architecture which is part of the Department of Labor and Economic Growth (DLEG) and will likely be cost neutral.  DLEG will have a significant role in determining the extensiveness of the continuing education and the related costs.

Q:  Where in the State law does it differentiate between an architect/professional engineer and a landscape architect in terms of pursuit of State of Michigan projects, sealing drawings, being the responsible party, etc.?

A:           This issue is in the process of being researched but the reality is that the true Landscape Architecture professional offices are limited in the type of State Government work that they are allowed to perform.  General limitations that exclude landscape architecture firms include projects that exceed $15,000 and require the preparation of construction documents that will be approved by the Department of Labor and Economic Growth (DLEG).  This does not exclude multi-disciplinary professional firms where landscape architecture departments exist from completing state projects.

The Department of Management and Budget (DMB) has been given broad legislative authority and oversight over all development on state land.  DMB has memorandums of understanding in place with several state departments that provides those departments limited discretion to manage or execute certain types of projects themselves.  These memorandums of understanding may allow for landscape architecture firms to complete planning related projects that do not require the preparation of DLEG approved contract documents.

Much of the exclusion of Landscape Architecture firms from state work requiring approved contract documents seems to be derived from interpretations of multiple public acts.  The general interpretation which has developed is that Landscape Architects are not “fully licensed” design professionals.  Comparison of other state public acts or interpretations of professional design license practice rights may not be applicable because of the opinion that much of these interpretations may be politically driven and thus not true comparisons from one state to another.

Public Acts that have been referenced that contribute to this current interpretation and provide the basis for the broad authority include:

Department of Management and Budget Act, Public Act 431 of 1984

Occupational Code Act, Public Act 299 of 1980

Michigan Construction Code Act, Public 230 Act of 1972         

Q:  Is there a difference between the insurance that an architect/professional engineer carries and what a landscape architect would carry? 

A:  Insurance requirements for projects are generally set by the client.  They do not make distinctions regarding professions; rather they address types of insurance and coverage requirements.  Any professional, wishing to secure a contract on a project needs to meet those requirements.  Various professionals participating in multi-disciplinary projects typically are required to carry the same level of insurance regardless of the services they offer.

The professional liability insurance purchased by landscape architects is often the same policy that is purchased by architects and engineers.  The insurance rates are determined by the type and volume of work done as well as a firm’s or individuals claim history, professional staff and business practices.

Professionals practicing outside of their field have two obstacles to overcome.  First, they must convince their clients that they are the most suitable person/entity for the project.  Second, they must secure the necessary insurance. 

Q:  How would the increase of licensed LA's be better to consumers?

A:   Landscape architects are called upon for complex services that require highly technical skills, making it difficult for prospective customers to evaluate the quality of the work.  Licensure as a measure of competence can assist consumers in identifying appropriate professionals for design services.

Costs for services may be higher to consumers and developers when a landscape architect must obtain a seal of another design professional before moving ahead with a project.

Q:  How will continuing education for landscape architects be beneficial to the state of Michigan?

A:   The MASLA effort will add a provision to allow the State Board of Landscape Architects to develop a continuing education requirement for the profession.  Continuing education would provide opportunities for landscape architects to remain abreast of innovations in the landscape architecture profession.  Continuing education would also provide opportunities for landscape architects to share and discuss ideas, techniques, and experiences.

Q:  What do I as a landscape architect stand to lose?

A:   The language as proposed is written very broadly and will not limit or exclude landscape architectural services that Landscape Architects currently provide in the State of Michigan.  In fact, MASLA recommends expanding services to include specific terms such and storm water control design and grading design.  With this additional language, qualified landscape architects will be able to provide these additional services.

Current Legislative Effort

During 2004 Michigan Chapter strategic planning sessions, state licensing issues and pursuit of ASLA's 50 by 2010 initiative were identified as leading priorities.

As a result, the Michigan Chapter created the Government Affairs Committee chaired by past-president Vanessa Harris, and designation of Keith Cheli as the National Licensure Representative.  The first and foremost goal of the committee is to identify and understand the positions of our members in order to connect with National for consideration of an upgrade from the existing title act to professional practice act.

An introductory article was published in the 2005 March Chapter newsletter acknowledging this action, providing a call for committee members, and to clearly state that this process must be membership driven.  The Chapter will be working to provide more information and educational opportunities for presentation to the membership throughout the coming year.  These efforts include providing for sessions and speakers on licensure upgrades at our fall chapter conference.

The chapter executive committee has budgeted funding to support licensing initiatives this fiscal year and, in addition, has submitted a chapter initiative grant to National for development of informative licensure documents for chapter distributions.

Chapter contact for licensure issues:

Vanessa Warren, ASLA

Government Affairs Committee Chair

Phone: 989.752.6500

Vanessa.Warren@wilcox.us

Keith Cheli, ASLA

National Licensure Representative

Phone: 989.732.3541 x 5021

chelik@michigan.gov

LICENSURE AND THE PUBLIC HEALTH, SAFETY, AND WELFARE

The practice of landscape architecture directly impacts public health, safety, and welfare. The work of landscape architects surrounds us, in the planning of sites such as office plazas, public squares and thoroughfares. The design of parks, highways, housing developments, urban plazas, zoos and campuses reflects the skill of landscape architects in planning and designing the construction of useful and enjoyable places. Landscape architects are trained to work on such diverse projects as community master plans, site planning, local road design, pedestrian walkways, wetland construction and mitigation, park and trail systems, erosion control, historic preservation, site stormwater management and more.  In all of these projects, there is the potential for serious harm to the public through incompetent practice.

A few examples:

• The design of a parking lot led to the death of a visitor who fell to his death when there was no barrier between the parking lot and the driveway below;
• Negligent lighting specification resulted in the electrocution of homeowner;
• The inadequate reinforcement of patio and related design flaws led the patio to come apart and slide downhill.

Landscape architecture must be regulated such that unqualified individuals are prevented from engaging in professional practice that impacts the public heath, safety, and welfare.  Landscape architectural education and experience under the supervision of a licensed professional prepares professionals for licensure.  The examination ensures that an individual is competent to protect the public.

FAIR COMPETITION AND ECONOMIC IMPACT

In several key areas, the scope of practice of landscape architecture overlaps with the practice of professions already regulated by the state.  The licensure of landscape architects is necessary to put the profession on an equal footing with these allied professions to ensure that landscape architects can practice all areas in which they are qualified by virtue of their education, experience and examination.    Further, licensure for one profession and registration for the other may be perceived by the consumer as an endorsement of the skill and competence of one profession over the other.  Where the professions overlap, it provides a state-sanctioned advantage for one profession over the other.  This destroys the competitive, free market in which design professionals compete. 

• Defining the scope of landscape architectural practice to include these overlapping functions is necessary when working with jurisdictions that require site, grading, stormwater, or erosion control plans to be stamped by specific licensed professionals.

Example - Current rules within the State of Michigan do not allow a landscape architect to be a lead on various State of Michigan projects because the state does not recognize the current Title Act as a licensed profession.

• Establishing this equality among the design professions can also facilitate the ability of landscape architects to lead projects, form certain business partnerships, and serve as principals in multidisciplinary firms.

Example – A landscape architect cannot be a partner with an architect and/or engineer or surveyor under Article 20 of Act 299 of 1980 without receiving an exemption from the Joint Board of Architects, Engineers, and Surveyors.

• Costs for services may be higher to consumers and developers when a landscape architect must obtain a seal of another design professional before moving ahead with a project.

• Without valid licensure, a landscape architect or firm seeking work outside their home state may find their efforts stymied, as proof of licensure is required before reciprocity is granted.  This gives the market advantage to out-of-state professionals.

Other Benefits

• Landscape architects are called upon for complex services that require highly technical skills, making it difficult for prospective customers to evaluate the quality of the work.  Licensure as a measure of competence can assist consumers in identifying appropriate professionals for design services.

• In terms of practical numbers, having a practice act will motivate more unlicensed professionals to become licensed.  Currently, many simply don’t bother because registration conveys a title only.

• Increased visibility and understanding of the profession will grow, and the number of licensed landscape architects increases.

• Most other states already have Practice Acts in place.  With a Practice Act in place, Michigan will have similar standards as our neighboring states with licensure.  This will help Michigan based landscape architects compete for projects in other states.

• The current practice act proposal promotes mandatory continuing education for the profession.  This recognizes that the profession is constantly evolving and adapting to new techniques and technologies and that it is vital that professionals continue their professional development throughout their careers.  There are 26 states that currently require landscape architects to complete MCE requirements with their license renewal. 

TITLE ACT vs. PRACTICE ACT

What is a Title Act? 

A title act allows a qualified landscape architect to register with the state and  use the title of “landscape architect.” However, one does not have to be registered to provide landscape architectural services and unqualified landscape architects may still perform the work of a landscape architect, though they must call themselves something other than ‘landscape architect’.

What is a Practice Act? 

A practice act prohibits unqualified individuals from practicing the profession.  This is the strongest form of regulation to ensure the protection of the public health, safety, and welfare.  All states that regulate the practice of landscape architecture also include the protection of a title act.