Gov't Affairs News: potential tax increases, pre-Labor Day school start and more

Legislation to discourage property tax appeals reintroduced

Legislation creating an unfair property tax appeals system that would increase the cost and length of the appeals process was reintroduced on March 22. The bill, HB 4397, is the same version the Michigan House approved last term (HB 5578 H-2) that died in the Senate and is nothing more than a backhanded attempt to discourage taxpayers from appealing their property assessments.

House Bill 4397 would increase the cost and length of commercial property tax appeals by requiring additional detailed studies and use of experts. The appeal process also would be slanted against taxpayers by pushing the Michigan Tax Tribunal to disregard the concept of True Cash Value, which is defined in the General Property Tax Act as the usual selling price. Instead, the legislation includes so many restrictions against the use of “comparable sales” in determining a property’s value that it strongly favors use of the “replacement cost” valuation method. Replacement value can greatly overstate what a buyer would pay for a property.

The legislation says it would only apply to appeals that appear before the full Tax Tribunal, but in reality it must apply to all tax appeals, including small claims, since the Michigan Constitution’s uniformity clause requires all property to be valued using the same methods. Since property in Michigan is traditionally valued based on what it’s worth to the next buyer, a successful appeal by one taxpayer does not and cannot impact the taxes another property owner pays.

Proponents claim this legislation closes a “loophole,” but it simply changes the existing rules at the request of cash-strapped local governments. These local units are unhappy the courts have routinely agreed that taxpayers have been over-assessed. At this time, there are no indications the legislature will bring the bill up for discussion. MRA will continue fighting against legislation that would increase property taxes for retailers and make it more difficult for them to receive a fair appeal.

Pre-Labor Day school start clears committee

The Senate Education Committee reported out a bill by a 4-1 vote on Tuesday that would repeal the post-Labor Day school start date requirement. The bill, SB 271, was introduced on March 23 and would strike language that currently prohibits public schools and charter schools from beginning the school year before Labor Day. While school districts can currently apply for a waiver from the post-Labor Day school start date requirement, not every waiver is granted.

Under the bill, schools would not be required to start before Labor Day, but may start early. The bill would require school districts to honor a four-day weekend around the Labor Day holiday and would also prohibit schools from holding classes on Mondays or Fridays in August. The bill sponsor believes requiring the long weekends is a good compromise and that his bill gives districts flexibility to determine what is best for their community and students. At the hearing, he argued that concerned business owners should take their arguments directly to school superintendents.

MRA put in a card of opposition and was joined by many other tourism and business groups. The committee quickly reported out the bill, but the Senate does not appear poised to take action on it immediately. At the earliest, the Senate could consider the bill once lawmakers return from a break that begins this Friday and goes through April 18.

Retailers speak out against Border Adjustment Tax

MRA held a press conference last week to speak to the dangers of Congress approving a proposed Border Adjustment Tax (BAT). Federal tax reform plans put forward by U.S. House Republicans include the BAT, which would impose a 20 percent tax on imported goods, increasing the costs of everyday products such as food, medicine, clothing and gasoline by an estimated $1,700 per family. The BAT would be felt immediately in the pocketbooks of middle-class Americans, effectively amounting to a $1 trillion tax that would punish employers, consumers and the American economy.

For retailers, the 20 percent tax on imported goods leaves only bad options for their customers or employees – raise prices, downsize, or shutter their doors altogether. To help protect our state from the ill-conceived Border Adjustment Tax, MRA and other active trade associations have come together in an effort to make sure each and every state resident knows what this tax would do to our economy. MRA helped announce a new Michigan chapter of the national coalition, Americans for Affordable Products, which is strongly opposed to the tax.

To learn more or to join the coalition in speaking out against the BAT, visit www.keepamericaaffordable.com or contact MRA’s Amy Drumm at 517.372.5656 ext. 343 or adrumm@retailers.com.

New state effort to control opioid epidemic

Gov. Snyder and a bipartisan group of legislators held a press conference on March 23 to introduce new legislation designed to stop the opioid epidemic in Michigan. Leaders cautioned against the dangers of opioids, including heroin, which can be addictive and cause overdoses if not used properly. Michigan had 1,981 drug overdose deaths in 2015, continuing an upward trend in recent years. The governor noted that in 2007, 180 million units of opioid pain killers were prescribed in the state, while in 2016, that number rose to 690 million units.

New legislative proposals include:

Mandatory automated prescription system: SB 166–167 would require prescribers to use the new Michigan Automated Prescription System (MAPS), set to launch in April, before prescribing or dispensing Schedule 2 through 5 controlled substances. Penalties would be increased for physicians and pharmacists who wrongly prescribe, dispense, manufacture or distribute controlled substances (SB 171– 172).
Patient relationship: Prescribers would have to have a bona fide physician-patient relationship with a patient before prescribing a Schedule 2 through 5 controlled substance under SB 270.
Patient information: SB 272 would require patients sign a form indicating they’ve received information related to opioids before filling a prescription.
Substance abuse services: SB 273 would require physicians to provide information on substance abuse services to patients being treated for an opioid-related overdose.
Educational efforts: A series of bills, SB 236–237 and HB 4406–4407, would step up educational efforts to students about the dangers of opioid medications.
New limits: SB 274 would implement new prescribing limits on opioids for chronic and acute pain sufferers.
Consent for minors: Minors would need parental consent the first time they received a prescription for an opioid under HB 4408.
Covered medical services: HB 4403 would require acute treatment and clinical stabilization services for opioid addiction be offered as a covered medical service,
Licensed pain management facilities: HB 4404 would require pain management facilities be licensed.
Pharmacist refusals: HB 4405 would exempt pharmacists from civil liability when refusing to dispense a controlled substance prescription if they believe is was not written in good faith or is not being filled for a medical purpose.

Other important items to note:

PHARMACY

Biosimilars: Legislation introduced yesterday as HB 4472 is a reintroduction of legislation from last term (HB 4812) that would allow pharmacies to dispense a new category of drugs made with biologic components referred to as biologics, biosimilars and interchangeable biosimilars. The legislation would require the dispensing pharmacy to notify the prescriber within five business days when dispensing these new drugs. Notification may occur by making an entry in an interoperable electronic medical records system, through the use of electronic prescribing technology, through a pharmacy benefits management system, or through a pharmacy records system that is electronically accessible to the prescriber. If those options are not available, the pharmacy may notify the prescriber through a fax, phone call or electronic transmission. The prescriber receiving information must include the notification in the patient’s record if it is received via fax, phone call or electronic transmission.
PBM regulations: Legislation introduced yesterday as SB 287 would create the Pharmacy Benefit Manager Act to regulate Pharmacy Benefit Managers (PBMs) in Michigan. The bill requires a PBM to obtain a certificate of authority from the Department of Insurance and Financial Services in order to operate in Michigan, sets requirements for contracts entered into by the PBM and pharmacies, sets audit procedures and prohibits certain activities, including mandates to use a specific pharmacy or mail-order pharmacy. The bill is a reintroduction of SB 1151 from last term and was referred to the Senate Insurance Committee.
Prescription discount cards: HB 4445 would prohibit the sale of prescription discount cards unless they meet a number of new standards. The legislation seeks to clarify that prescription discount card programs are not insurance programs, and it requires a number of disclaimers about the program to consumers. The bill was introduced yesterday and referred to the House Health Policy Committee.
Telehealth: A bill that adds needed clarification to telehealth legislation from last year related to the prescribing of controlled substances moved quickly through the legislative process in an attempt to make necessary changes before the original act, PA 359 of 2016, took effect on March 29. The bill, SB 213, was presented to the governor on Monday and clarifies that a health professional may prescribe a controlled substance only if the prescriber meets the requirements under the Public Health Code and remains available to provide or provides a local referral option for follow-up care information.

REGULATIONS

Daylight Savings Time: The House Commerce Committee held a hearing March 21 on HB 4011, legislation that would no longer require Michiganders to switch their clocks twice a year. The legislation received much attention and debate. A proposed amendment that seeks to win favor with tourism industries and golf course operators would permanently put Michigan on Daylight Savings Time. Michigan would effectively operate on Eastern Standard Time part of the year and Atlantic Time the other part of the year. It’s uncertain if the bill will receive a vote. There are still a lot of questions over the five counties in the Upper Peninsula that are not in the Eastern Time Zone.
Postmark date: A bill to create the Postmark Acknowledgment Act was introduced as HB 4387 on March 21. The bill would clarify that all state agencies and departments must accept the postmark date as an indication of timely submission. The bill was introduced and referred to the House Regulatory Reform Committee.
Promotional cable rates: HB 4465, introduced yesterday, would require cable companies to notify customers if their rate promotion was about to end. The bill was referred to the House Communications and Technology Committee.
Security guards: The Senate unanimously approved legislation on Wednesday that was requested by the Security Guard Association to require on-the-job and classroom training for contract security guards. SB 186–192 include various training requirements for contract security guards before they can use a weapon or restraint device and increase the fees to allow the Department of Licensing and Regulatory Affairs to perform the necessary background checks and enforcement. Under the current bills, the training requirements would not apply to loss prevention or security individuals employed directly by a retailer. The bills were referred to the House Regulatory Reform Committee.

TAXES

Back-to-school tax exemption: Legislation providing a use-tax exemption for back-to-school clothing and supplies was introduced as HB 4439 yesterday. The bill was referred to the House Tax Policy Committee.
Feminine products: The Senate Finance Committee unanimously reported legislation on March 21that exempts feminine products from the state’s sales and use taxes. The bills, SB 91–92, now head to the full Senate for consideration.
Sales/Use Tax on the difference: SB 94–95 passed the Michigan Senate unanimously on Wednesday. The bills were referred to the House Tax Policy Committee.
Tribunal procedures: HB 4412, introduced on Tuesday, seeks to make various revisions to the Michigan Tax Tribunal. The bill would modify tribunal membership, current compensation for tribunal members, limit tribunal members’ other business activities, clarify the disqualification process from hearings, change deadlines, increase the taxable value that can be reviewed in the small claims division, and allow the tribunal to promulgate rules regarding ethical standards. The bill was referred to the House Tax Policy Committee.

OTHER

Automobile theft prevention fee: The Senate unanimously reported legislation, SB 168, that would expand the current $1/car Automobile Theft Prevention Authority (ATPA) fee charged on private, passenger vehicles to commercial vehicles, as well as vehicles insured for only part of the year. A 2015 Attorney General Opinion found that the ATPA could assess fees on all insured motor vehicles. The bill was referred to the House Insurance Committee, which reported the bill on Thursday. The full House will consider the legislation after it returns on April 18.
“Good Jobs for Michigan”: The Senate approved legislation on Wednesday that would create the “Good Jobs for Michigan” program. The bills, SB 242–243, would add $250 million in incentives for companies that create, at minimum, 250 jobs that pay above the regional average. The legislation would allow up to 15 awards per year. The Senate Economic Development and International Investment Committee had quickly reported the legislation on March 23 with a substitute bill that cleans up oversight language and clarifies that incentives can apply to both jobs created by new businesses coming into Michigan and jobs created by businesses that are already operating in Michigan. The bills were referred to the House Tax Policy Committee.
Internet gaming: The Senate approved SB 202 on March 21, legislation that would legalize and regulate Internet gaming. Legislators claim the bills, SB 203–205, are designed to stop illegal activity and to generate revenue for the state. SB 202 was referred to the House Regulatory Reform Committee, which held an initial hearing on the legislation on Wednesday.