Committee okays legislation to exempt some from UI taxes
The Senate Reforms, Restructuring, and Reinventing Committee reported out legislation (HB 4958) that would exempt employers from paying unemployment insurance taxes on H2B workers and J1 workers who are not eligible for unemployment benefits. Employers use H2B workers and J1 workers to fill temporary positions if they are unable to fulfill their hiring needs using the local workforce.
In an interesting twist, the committee chairman offered a substitute that would have required employers to qualify by having a positive unemployment fund balance, meaning they pay in as much or more than is drawn out by former employees requesting benefits. Maintaining a positive fund balance is nearly impossible for seasonal employers. After much discussion the substitute failed to receive support from the sponsor, other groups or committee members, and the bill was reported out of committee in its original format. Michigan Retailers supports the legislation.
Legislature passes funding bill favoring roads over HICA shortfall
The legislature passed a supplemental appropriation bill (SB 608) on Wednesday that includes $215 million for winter and spring road maintenance, and a backup plan for Health Insurance Claims Assessment funding. The original appropriation bill included $115 million direct funding for HICA, but legislators, under pressure from local officials and residents in this election year, decided to instead focus funds on the more immediate problem of road repairs. As a compromise, lawmakers included a provision in the bill that will use money set aside for the Roads, Risks and Reserve Fund if an alternative HICA solution is not found by September 30 (the end of the state’s 2013-14 fiscal year).
The HICA funding gap was caused in part by an underperforming revenue source and the expansion of Medicaid to 300,000 to 500,000 low-income Michigan citizens. While each chamber has a few different proposals on how to fill the gap, so far there is no clear winner. One of the main priorities for the House is reforming no-fault auto insurance, and the possibility of including a $25 fee to help fund HICA has been tossed around. The Senate would prefer to address the HICA shortfall on its own.
PPT reform closing in on finish line
The Personal Property Tax phase-out funding reform we reported on two weeks ago has moved very quickly through the process and is nearing its final steps. Last week, the Senate bill package (SB 821–830) passed the Senate on a 36-2 vote and was sent to the House Tax Policy Committee for review. The House committee took two days of testimony this week and plans to vote on the bills next week.
Organized Retail Crime Board plans tracking database
The Organized Retail Crime Board met Wednesday and discussed the development of an interactive database designed to track organized retail crimes. The Board, appointed by Gov. Snyder following passage of legislation last year, is tasked with creating the database and measuring the effectiveness of the new law in reducing organized retail crime.
Retailers and law enforcement both would have access to the database, which would allow the parties to share information more efficiently. The board also focused on increasing educational outreach to law enforcement, prosecutors and the public. Although the legislation was effective March 31, 2013, there is still some reluctance to charge under the statute, and prosecutors often knock charges down to lesser offenses.
The Board meets again in June, and Michigan Retailers will send out more information regarding the database once it’s live.
Committee asks if e-cigarettes are tobacco products
The House Regulatory Reform Committee heard testimony this week on legislation that would regulate the sale and use of e-cigarettes by minors (SB 667–668 and HB 4997). While opponents of the bills in the Senate focused on waiting for FDA regulations before acting, in the House the arguments changed. Opponents called for lawmakers to use existing statutes and classify e-cigarettes as tobacco products.
A tobacco product classification would mean e-cigarettes would be subject to the smoking ban and open the debate on additional taxes. Bill sponsors pushed back by insisting this legislation would take the first step to limit access by minors while the FDA makes its determination whether e-cigarettes should be classified as tobacco products. Once the FDA issues a rule on the matter it will supersede Michigan law.
Committee members seemed reluctant to classify e-cigarettes as tobacco after health department officials could not say whether or not the nicotine used in e-cigarettes is always derived from tobacco. The committee is scheduled to meet again next week and will likely take a vote on the bills at that time.
Department of Community Health officials testified that they prefer a recently introduced bill, HB 5393, sponsored by Rep. Gail Haines (R-Waterford), which redefines “tobacco product” to include “a product that contains or is made or derived from tobacco, nicotine or another similar substance and that is intended for human consumption whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means.” It also would include “a component part of a tobacco product regardless of whether the component is sold separately.” Rep. Haines’ bill was referred to the committee she chairs, House Health Policy.
Other important items to note:
- Legislation to exempt over-the-counter medication from the state’s Use Tax (HB 5342) passed the House 107-1 on March 12 and was referred to the Senate Finance Committee.
- House and Senate legislation was introduced that would allow prescribers to prescribe and pharmacists to dispense opioid antagonists, used to treat overdoses of pain medication, to friends and family of individuals who may suffer an overdose. The package of bills (HB 5404–5407 and SB 856–860) was referred to the House and Senate Judiciary Committees and would require that procedures be developed for use by emergency response personnel.
