Governor gives legislature two victories, budget season begins
Legislators scored a major victory last week as the Gov. Snyder agreed to forgive $637.1 million in outstanding driver responsibility fees and raise the personal income tax exemption to $4,900 by 2021. Reforming driver responsibility fees and increasing the personal income tax exemption in response to federal tax reform changes were top priorities for the two chambers’ legislative leaders. The governor had expressed reservations over these proposals due to the $813 million total hit to the budget.
The governor released his executive budget recommendations in early February, signaling the start of the annual budgeting season. Over the past seven years, the Legislature has traditionally completed the budget by the beginning of June. The governor’s budget this year includes a 0.6 percent spending increase, which is lower than the 1.1 percent inflation rate. Of special interest to retailers, the recommendation includes $600 million in one-time funding investments for road funding and $20 million for broadband improvements around the state. It’s important to note that these discussions are just beginning and the house and senate may have very different ideas of how to use one-time funds available. After the victory this week, legislative leaders have signaled they will focus on finding more money for education and infrastructure.
Drone discussions take off
The House Communications and Technology Committee held a lengthy discussion last Tuesday on legislation that would codify several of the recommendations made by the Unmanned Aerial Taskforce last fall. HB 5494–5498 would clarify that a drone is an extension of self for purposes of any crimes committed, prohibit using them in a manner to interfere with key facilities (certain manufacturing facilities, refineries, utility facilities, water treatment facilities and others as defined under the Michigan Penal Code) and establish an aeronautics commission. Knowingly using a drone to interfere with the operations of a key facility would be a felony punishable by four years in jail and/or a $2,500 fine.
Legislators on the committee had lots of questions and concerns related to what actually would constitute interference and whether that definition was too broad. There was also some pushback from committee members on the taskforce’s recommendation to prohibit the use of drones at “unique locations” such as Mackinac Island. The committee is not currently considering legislation related to Mackinac Island. That bill, SB 715, was reported by the Senate Transportation Committee on Thursday and would allow Mackinac Island to regulate the use of drones since drones scare the horses that are the only form of transportation on the island. SB 715 was amended to allow FAA-certified UAS operators to conduct business for commercial infrastructure purposes or during emergencies.
House bill sponsors are willing to work with interested parties to further clarify the bills related to definitions of key facilities or interference if needed, and said that under current law, correctional facilities are not considered key facilities. Based on comments made by the committee chairwoman and one of the bill sponsors, Rep. Michele Hoitenga (R-Manton), there will be several weeks of discussion before the bills are reported. Next step: HB 5494-5498 House Communications and Technology Committee vote; SB 715 Senate floor. MRA Position: Monitoring HB 5494-5498; Support SB 715.
Other important items to note:
- Beer growlers: Legislation allowing SDM licensed-merchants to fill and sell beer growlers was approved by the Senate on Tuesday. HB 5175 extends the current law, which only applies to merchants with SDD licenses, to those with SDM licenses as well. License holders will be required to comply with food service regulations as they relate to keg draft lines. Next step: Governor’s signature. MRA position: Support.
- Education requirement for government assistance: A bill introduced as HB 5589 on Thursday would require that an individual earn a high school diploma or GED in addition to federal work requirements in order to be eligible for food assistance. The bill sponsor is running for Congress in a contested primary, which may have motivated him to introduce this bill. Next step: House Appropriations Committee. MRA position: Monitoring.
- Food/cash assistance card changes: HB 5560, introduced on Wednesday, would require food and cash assistance cards to include a photo of the individual on the card. In order to achieve this, the state would need to obtain a waiver from the federal government. Next step: House Families, Children and Seniors Committee. MRA position: Monitoring.
- Day of rest: A bill introduced on Thursday as SB 824 as the “Day of Rest Act” would mandate employers offer employees at least 24 consecutive hours of rest in each calendar week and a 20-minute break for meals within the first five hours of a seven-and-a-half-hour or longer shift. The new act would also require employers to keep detailed records of an employee’s hours and breaks. Based on the bill’s referral to the Senate Government Operations Committee and its inflexible nature, it’s highly unlikely this bill will be seriously considered. Next step: Senate Government Operations Committee. MRA Position: Oppose.
- Disability wages: HB 5587 would eliminate language that allows an employer to petition the state to establish a suitable scale of wage rates for persons with physical or mental disabilities. Next step: House Commerce and Trade Committee. MRA Position: Monitoring.
- Biosimilars: The senate passed the pending biosimilars bill on Thursday, sending it to the governor’s desk. Despite MRA’s best efforts to modify the language in the biosimilars bill, it moved without the changes we requested to modernize the statute regarding substitution pricing and contracts. Legislators have promised to swiftly work on making the changes we requested in a separate bill and MRA is meeting with committee members to ensure smooth and quick passage. Next step: Governor’s signature. MRA Position: Oppose.
- Drug price reporting: A bill introduced on Thursday as SB 825 would require drug manufacturers of prescriptions that have a wholesale acquisition cost of $40 or more during the course of treatment file a detailed annual report. The report would have to include the costs to produce the drug, profit received, future drug prices, and any tax benefits received. The bill would also create the Prescription Drug Transparency Workgroup to recommend the creation of a standardized form to report the required information. Next step: Senate Health Policy Committee. | MRA Position: Monitoring.
- Eliminate prior authorization for cancer drugs: Legislation introduced on Wednesday as SB 823 would remove the requirement for Medicaid patients to obtain prior authorization for cancer prescriptions. The change would only apply to cancer prescriptions that are used as part of a treatment plan set by a state contract. Next step: Senate Health Policy Committee. | MRA Position: Monitoring.
- Medical assistance work requirement: Legislation introduced as HB 5590 would require the state request a waiver from the U.S. Department of Health and Human Services to implement a work requirement for Medicaid beneficiaries. Work requirements are currently in place for recipients of food and cash assistance. Next step: House Appropriations Committee. | MRA Position: Monitoring.
- Opioid antagonists at libraries: SB 829, introduced on Thursday, would add public libraries to the list of entities that could request and fill a prescription for an opioid antagonist to store on-site. Next step: Senate Health Policy Committee. | MRA Position: Monitoring.
- Tianeptine sodium: SB 801, which would add tianeptine sodium as a Schedule II drug, was approved by the Senate Judiciary Committee last week. Tianeptine is used as an antidepressant with anxiety-reducing and mood elevating properties. The drug has been banned in some countries because of high levels of abuse and is not Food and Drug Administration-approved. It is not available for purchase in the United States but can be ordered online and imported. Next step: Senate floor. | MRA Position: Monitoring.
- Drone delivery of contraband: HB 5588 introduced recently would prohibit an individual from using a drone to deliver wireless communication devices into a correctional facility. Next step: House Communications and Technology Committee. MRA Position: Monitoring.
- Insurance company data security notice: The House Insurance Committee heard testimony Thursday on HB 5275. The bill would require insurance companies disclose any security breaches in their annual statement filed with the state. The bill received a hearing in the House Insurance Committee on Thursday. Next step: House Insurance Committee vote. MRA Position: Monitoring.
- Monthly payday wages: A bill making a technical fix to keep businesses that pay employees monthly in compliance was approved by the House on Thursday. HB 5235 modifies the statutory requirement for the date of the month by which employers must pay employees who receive a monthly wage. Instead of requiring payment be received on the first day of the month, the bill pushes that back to within 16 days after the end of a monthly pay period. Next step: Senate committee (not referred yet). | MRA Position: Support.
- Next generation 9-1-1: A bill that recommends increasing fees to pay for updates to the state’s 911 system was approved by the House and is on its way to the governor. SB 400 would increase the monthly 911 charge from 19 cents to 25 cents. Prepaid wireless 911 surcharges would increase from 1.92 percent to 4.19 percent per transaction. If approved, the Public Service Commission will be required to analyze how much the 911 system needs to implement updates and submit a report by Dec. 1, 2020. Next step: Governor’s signature. MRA Position: Oppose.
- Income tax reporting: Legislation that would modify the employer reporting deadline for income taxes to comply with federal deadlines was approved by the House on Thursday. The current deadline to report an employee’s income taxes to the Department of Treasury on an annual reconciliation return (MI-W3) in Michigan is Feb. 28. HB 5091 would move that deadline up to Jan. 31, which is the same as the federal deadline for employers. Next step: Senate Finance Committee. | MRA Position: Monitoring.
- PPT exemption clarification: The House approved legislation on Thursday that would modify the current process for filing the commercial Personal Property Tax (PPT) exemption for commercial personal property with a true cash value of less than $80,000. Under current law, taxpayers must file an exemption form with the local unit of government each year. HB 5261 would only require an exemption to be filed the first year and would not require any additional filings unless the property is no longer eligible for the exemption. Next step: Senate committee (not referred yet). | MRA Position: Support.
- TIFA roll-up: SB 393, legislation that would roll all of the state-allowed tax increment finance authorities (TIFA) into a single act, was approved by the House on Tuesday. The bill is an attempt to address the lack of compliance in the reporting process and set uniform reporting rules for all TIFAs. The Michigan Downtown Association is supportive of the legislation and considers this a thoughtful approach that does not place any additional burdens on DDAs. Next step: Governor’s signature. | MRA Position: Neutral.
