Legislative Update: Key Issues Impacting Michigan’s Engineering Industry

ACEC/Michigan continues to closely monitor and advocate for legislation that shapes Michigan’s engineering landscape. From the recently enacted state budget to evolving environmental regulations and professional licensure reforms, several policy areas are poised to influence how firms plan, design, and deliver infrastructure projects in the months ahead.

State Budget and Economic Outlook for FY 2025–2026

Governor Gretchen Whitmer signed the balanced, bipartisan FY 2026 budget into law on October 7, 2025, marking a major milestone in Michigan’s long-term fiscal planning. Alongside significant new investments in transportation, water, and environmental infrastructure, the budget includes one of the most consequential structural changes to transportation funding in more than a decade: the shift from a sales tax on gasoline to a cents-per-gallon fuel tax.

For years, Michigan’s sales tax on motor fuel—unlike the gas tax—did not support transportation infrastructure. Instead, those revenues flowed largely to the School Aid Fund, revenue sharing, and constitutional earmarks. As a result, increases in gas prices did not directly translate into additional funding for roads and bridges, leaving transportation investment vulnerable to consumption patterns and volatile market prices.

To address this, lawmakers approved a major restructuring that eliminates the sales tax on gasoline and replaces it with a dedicated per-gallon tax, ensuring that fuel purchases directly support transportation funding in a more consistent, predictable manner. This change realigns Michigan with the approach used by most states and creates a clearer, more transparent connection between fuel usage and infrastructure investment.

In combination with House Bill 4961, which redirects $688 million in Corporate Income Tax revenue to transportation beginning in FY 2026, the shift to a cents-per-gallon fuel tax creates a more stable and transparent long-term funding platform. The budget also establishes a major new revenue source through a wholesale excise tax on marijuana, projected to generate approximately $420 million annually, which is dedicated to transportation. Together, these structural changes reduce volatility in Michigan’s transportation revenue and create a more predictable funding environment—particularly important as vehicle fuel efficiency rises and the transition to electric vehicles accelerates.

For engineering firms, these combined changes deliver a funding environment that is more predictable, less susceptible to commodity swings, and better aligned with Michigan’s multiyear infrastructure planning goals. Nearly $2 billion in ongoing funding over the next four years remains targeted toward state and local roads, bridges, transit, rail grade separations, and aviation improvements, reinforcing the state’s commitment to sustained infrastructure investment.

Advancing QBS Legislation

One of ACEC/Michigan’s top priorities, House Bill 4774, continues moving through the legislative process. HB 4774 would require state agencies to use Qualifications-Based Selection (QBS) when procuring architectural, engineering, or surveying services, aligning Michigan with the federal Brooks Act and practices in most other states.

The bill was reported favorably by the House Regulatory Reform Committee on October 16, 2025, and now awaits consideration on the House floor. ACEC/Michigan continues coordinated engagement with the Kelley Cawthorne team and stands ready to pivot to Senate outreach as soon as the bill advances.

Land Division Act Reform

Two bills propose significant updates to Michigan’s land division framework:

• Senate Bill 23 – Increases allowable land splits from four to ten per ten acres.
• House Bill 4081 – Implements similar changes but phases them in over a one-year period.

SB 23 has passed the Senate and now sits in the House Regulatory Reform Committee, while HB 4081 remains pending in the Senate. ACEC/Michigan continues monitoring these proposals due to their potential impacts on water, sewer, and transportation infrastructure.

Road Construction Lane Closure Restrictions

House Bill 4656 would prohibit the complete closure of all lanes during most road construction projects, requiring at least one lane to remain open. While aimed at reducing traffic congestion, the bill may create challenges for project sequencing, safety, and delivery. HB 4656 remains under consideration in the House Transportation and Infrastructure Committee, and ACEC/Michigan is providing ongoing input to ensure mobility goals are balanced with engineering and construction realities.

Environmental and Water-Related Legislation

A wide array of environmental bills continue to move through the Legislature, many of them with significant relevance for engineering firms:

• Senate Bill 46 – Expands EGLE’s authority to issue emergency drinking water orders.
• Senate Bills 246–247 and House Bills 4389 & 4393 – Modernize hazardous waste regulations, definitions, oversight fees, and funding for remediation.
• House Bills 4352–4355 – Update governance and operations for municipal water and sewer authorities.
• House Bill 4427 – Establishes a “Brown Alert” system to notify the public of sewage or E. coli contamination events.
• Senate Bills 504–505 – Require testing for and regulation of microplastics in public drinking water systems.
• House Bill 4314, House Bill 4940, and House Bill 5115 – Address surface debris removal and updates to the underground storage tank corrective action fund.

Collectively, these proposals reflect an ongoing legislative push for transparency, modernization, and environmental protection—creating new compliance considerations for firms working in water, wastewater, environmental, and site development disciplines.

Stormwater Management and Utility Authority Bills

Stormwater infrastructure funding is a key topic this session. Senate Bill 441 would authorize local stormwater utilities and establish a user-fee structure to support long-term drainage infrastructure needs.

Two newly introduced House companion bills:

• House Bill 5171
• House Bill 5172

modernize water and stormwater authority structures, reporting requirements, and local management tools. If enacted, these bills could create significant opportunities for engineers assisting municipalities with stormwater planning and upgrades.

Regulatory Reform and Professional Licensure

Two professional licensure bills introduced in September 2025—House Bill 4913 and House Bill 4914—propose major changes to Michigan’s engineering and architectural practice statutes. ACEC/Michigan is strongly opposing both bills, as they present significant risks to public safety and undermine long-standing safeguards ensuring the competency and accountability of engineering and architectural leaders.

House Bill 4913 – Education Equivalency Bill
HB 4913 proposed new education and experience pathways that ACEC/Michigan believes weaken the rigor required for responsible charge. Although the bill failed in committee, ACEC/Michigan remains firmly opposed to the concepts it introduces and will continue monitoring to prevent future reintroduction.

House Bill 4914 – Licensed Principal Requirements
HB 4914 would eliminate the requirement that at least two-thirds of a firm’s principals be licensed architects or engineers. ACEC/Michigan strongly opposes this bill because it would allow firms to be controlled by unlicensed individuals, eroding professional standards, ethical obligations, and public protections.
ACEC/Michigan, working with Melissa McKinley and the Kelley Cawthorne team, is actively engaging legislators—including a scheduled early December meeting with Rep. Bill Schuette—to express firm opposition to the bill.

Federal Policy & Advocacy Update

Federal Government Reopens — But Infrastructure Action Delayed

The 43-day federal shutdown has ended, restoring agency operations and legislative activity. However:

• Surface transportation reauthorization is now delayed until early 2026
• Floor action is unlikely before spring
• Water infrastructure, NEPA updates, and other committee work have been pushed back
• FY 2026 appropriations must be finalized by January 30

Despite these delays, ACEC maintained strong engagement with congressional staff throughout the shutdown.

DBE Program Reform: ACEC Leads National Dialogue

DBE changes remain among the most discussed topics in the industry. ACEC has:

• Launched a dedicated DBE resource landing page
• Held a 600+ attendee national webinar on USDOT’s new DBE Rule
• Filed extensive comments seeking clarity on IFR transition requirements
• Led DBE discussions at the ACEC Fall Conference

Members can bookmark the new DBE hub for continuously updated guidance and resources.

Graduate Student Loan Policies: Protecting Engineering Programs

The U.S. Department of Education is drafting regulations under the One Big Beautiful Bill Act. Rumors—including coverage in Newsweek—suggest engineering might be excluded from “professional” degree status, limiting federal loan availability.

ACEC strongly opposes this possibility and is preparing a formal case to ensure engineering remains classified as a professional degree.

H-1B Visa System Changes: ACEC Sounds the Alarm

ACEC recently opposed a proposal to award H-1B visas based on highest salaries—a system previously attempted and blocked in 2020.

Current ACEC advocacy includes:

• Opposing the salary-based priority model
• Requesting an exemption from the new $100,000 H-1B petition fee
• Monitoring potential increases to prevailing wage requirements

With engineering degree production declining nationally, maintaining access to global engineering talent remains essential.

National Advocacy, Meetings & Coalition Engagement

In November, ACEC:

• Led a Transportation roundtable at the AASHTO Annual Meeting with 30+ state DOTs
• Presented on digital delivery at openBIM Roads & Bridges
• Participated in FIDIC North America with ACEC Canada & CNEC
• Engaged federal partners at the SAME Conference
• Joined Oklahoma’s Engineering & Public Works Roadshow panel
• Delivered workforce updates at the ACEC Illinois Fall Conference

ACEC/PAC: National Engagement & Fundraising Success

• $81,800 raised in November, totaling $1,393,018 in 2025
• Five states met their PAC goals: NY, SD, UT, ME, DE
• ACEC Residence hosted four Washington events, raising $64,000
  • Rep. Melanie Stansbury (D-NM)
  • Rep. Bruce Westerman (R-AR)
  • Rep. Nikki Budzinski (D-IL)
  • ACEC Georgia Fly-In delegation

ACEC Research Institute: Workforce, Data & Economic Insights

Highlights include:

• Release of updated State Economic Impact Fact Sheets
• Relaunch of the Community Building Roadmap (deadline: Dec. 31, 2025)
• A highly rated Future of Engineering roundtable with Joe Bates & Rodney Chester
• Continued work on Firm of the Future: Workforce of the Future
• A successful Research Institute Golf Classic with 90+ executives

Support the ACEC/Michigan State PAC & ACEC/PAC Before December 31

As 2025 concludes, ACEC/Michigan encourages all members to consider a year-end PAC contribution to strengthen advocacy efforts in Lansing and Washington, D.C.

All contributions must be made using a personal credit card.

👉 Contribute here: https://www.acecmi.org/pac-information/

Why Your Support Matters

State-Level Wins (ACEC/Michigan PAC)

Your contributions help:

• Secure historic infrastructure funding
• Protect QBS and professional licensure
• Advance workforce development
• Influence policy on work zone safety and environmental permitting

National-Level Wins (ACEC/PAC)

ACEC/PAC has helped:

• Pass the Infrastructure Investment & Jobs Act
• Protect key business tax provisions
• Improve federal procurement policies
• Shape national discussions on transportation, energy, environment, and technology

ACEC/PAC Last Chance Sweepstakes

Running October 8 – December 31, 2025
A fun, optional way to support the National PAC.

👉 Enter here:
https://www.acec.org/advocacy/advocacy-pac
(Scroll to “Last Chance Sweepstakes”)

Prizes:

• $2,000 – First
• $1,000 – Second
• $500 – Third

Limit one entry per day.
Winners announced January 17, 2026.

Looking Ahead

ACEC/Michigan will continue partnering with lawmakers, agencies, and member firms to advocate for policies that strengthen infrastructure investment, uphold professional standards, and support Michigan’s engineering workforce.

Members seeking assistance with legislation or bill tracking may reach out anytime.

Troy Hagon
Deputy Director, ACEC/Michigan
📧 thagon@acecmi.org
🌐 www.acecmi.org