LANSING (AP) – Gov. Jennifer Granholm signed an executive order yesterday creating a new state department intended to promote economic development and job growth.

The new Department of Labor and Economic Growth was created by renaming the Department of Consumer and Industry Services and transferring the functions of the Department of Career Development to the new department. Career Development as a separate department will no longer exist.

Programs from some other state departments also will be shifted.

“You now have a single, one-stop place for answers,” David Hollister, head of the new department, told the state House Commerce Committee during a hearing about the changes on yesterday.

Hollister said the executive order solidifies changes officials have made gradually since Granholm took office in January. Businesses that need state licenses and unemployed workers receiving state benefits shouldn’t see big changes under the order, state officials said.

The reorganization will take effect unless the executive order is rejected by the state Legislature within 60 days.

Senate Majority Leader Ken Sikkema, R-Wyoming, said the GOP-controlled Senate may reject it because of concerns about changes to the way worker’s compensation appeals are handled by the state.

The reorganization would eliminate the seven-member Worker’s Compensation Appellate Commission board and transfer its powers to a two-member panel of appellate magistrates. If the two magistrates don’t agree on a case, the chairman of the Board of Magistrates, who is appointed by the governor, is the tie-breaker.

Tricia Kinley, director of tax policy and economic development for the Michigan Chamber of Commerce, said leaving difficult appeals decisions to an appointee of the Democratic governor will favor labor. “We don’t think this is going to be a fair shake for employers,” Kinley said.

Hollister said the new worker’s compensation appellate process will save about $1.2 million a year. The new system also is more flexible because it will be reviewed annually to adjust the number of magistrates based on the caseload of appeals.

House Commerce Committee Chairman Clark Bisbee, R-Jackson, said it’s too early to tell how the Republican-controlled House will respond to the executive order.

Officials from the Granholm administration said they haven’t been able to find a departmental reorganization order that has been rejected by the Legislature. Former Gov. John Engler issued 138 similar orders, and only had a hearing on one, officials said.

Hollister said the 52-page order took eight months to complete. He called it the most comprehensive executive order in the history of Michigan government.

The new 4,500-employee department isn’t expected to result in job losses.

Hollister said he didn’t know how much the reorganization would cost the state, but ultimately the new streamlined system would save money.

The new department will handle most regulatory functions relating to commercial, business and worker issues, including the Bureau of Commercial Services, the state Public Service Commission, the Unemployment Insurance Agency, the Michigan Tax Tribunal and the Liquor Control Commission.

The duties of the Bureau of Workers’ and Unemployment Compensation will remain in the new department, but services will be split into three areas to make it easier for people to understand where to get information.

Granholm, who talked about creating the new department in her State of the State address, said it will let Michigan be more aggressive in creating jobs and will make it easier for businesses to get information.

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