Gov’t Affairs News – plastic bags, patio permits, and more

Plastic bag/container pre-emption bill introduced

Legislation to pre-empt local ordinances related to plastic bags and containers was introduced on March 15 as SB 853 and referred to the Senate Commerce Committee. The bill would prevent a county, city, township, or village from adopting ordinances banning the use of, sale of, or requiring a fee on auxiliary containers. As defined in the bill, “auxiliary container,” means a bag, cup, bottle, or other packaging, whether reusable or single-use, that is made of cloth, paper, plastic, cardboard, corrugated material, aluminum, glass, post consumer recycled material, or similar material and is designed for transporting, consuming, or protecting merchandise, food, or beverages.

The bill follows the lead of other states that have taken action to prevent a patchwork of local rules on containers that place a burden on retailers and consumers. Among the numerous plastic bag/container ordinances across the country few have been successful in changing consumer behavior. Outright bans on single-use plastic bags have often seen consumers switch to using thicker plastic bags or paper bags. Both thicker plastic bags and paper bags are more expensive for retailers, require more energy and water to produce and emit more global warming gasses, more acid rain emissions, and result in more solid wastes than single-use plastic bags.

Retailers support efforts to promote recycling and reduce bag litter and have adopted policies to encourage consumers to make choices to protect the environment. Our members offer bins to collect used plastic bags near store entrances and sell reusable bags at or near cost, near the point of sale. Grocers train employees to efficiently fill bags, due to their costs, and to ask customers if they need a bag for larger items. These recycling efforts mirror a national trend of increased plastic bag and film recovery over the last decade.

It’s important to note that the bill would allow retailers to continue voluntary recycling efforts while allowing customers a choice on how to transport their purchases. Retailers will remain able to choose what kind or kinds of bags to offer to consumers. There are two counties currently considering the adoption of a plastic bag ordinance, making this a timely issue for Michigan retailers. MRA plans to support SB 853 and apply our previous experience with local pre-emption of wage and benefit legislation to this new effort.

House approves secondary beer and wine sale permits

Yesterday, the House approved a substitute version of HB 4895 by a 68-41 vote. The bill would allow retailers that also have fuel pumps on or adjacent to a main retail location to sell beer and wine in the gas station as well as at the main store by creating a secondary permit. A retailer would be able to use inventory at the primary licensed location toward the $250,000 minimum inventory requirement for beer and wine sales at the secondary location. The bills also reduce the 50-foot distance requirement between fuel pumps and cash register to five feet and eliminate the requirement for retailers in a neighborhood shopping center to have five private, off-street parking spaces for every 1,000 square feet of retail space. The substitute bill would allow a retailer located in a township to apply if it is the only entity with a gas station on the date of the application. The bill now heads to the Senate for consideration.

Department acknowledges changes needed in pharmacy reimbursement

At a Pharmacy Provider Liaison meeting yesterday afternoon, the Michigan Department of Health and Human Services (MDHHS) acknowledged that it will need to make changes to the current methodology used to calculate pharmacy reimbursement for Medicaid fee-for-service prescriptions. The changes come following the February 1 publication of the federal Centers for Medicare and Medicaid Services (CMS) Final Rule on Medicaid Covered Outpatient Drugs. Under the Final Rule, states must use the actual acquisition costs of drug products combined with a professional dispensing fee rather than the estimated costs used now. The state will likely switch to a different methodology to determine product costs and a professional dispensing fee to cover the pharmacy’s cost of dispensing the medication.

Based on comments made by MDHHS, we believe the state is considering adopting state-based Average Acquisition Cost (AAC) or utilizing the National Average Drug Acquisition Cost (NADAC) as published by CMS. Michigan’s dispensing fee, currently set in budget boilerplate language at $2.75 for a standard outpatient pharmacy or $3.00 for a long term care facility is far below the actual cost of dispensing. Depending on the methodology the state chooses, pharmacies could see reimbursement rates decrease if the product cost reimbursement is lowered and the professional dispensing fee is not properly adjusted. The Final Rule does require states to readjust the dispensing fee and submit both the product cost methodology and dispensing fee for approval by CMS.

However, since the dispensing fee language is included in the budget, that language must be removed or changed before the Fiscal Year 2017 budget is approved by the legislature in early June. With the budget process already underway, it is important to act quickly to ensure appropriate changes are made to protect pharmacy reimbursement levels.

Other important items to note: