Gov't Affairs News: “Tame duck” ends on an electric note

Tame lame-duck session ends

The 98th Michigan Legislature wrapped up its lame-duck session at a reasonable time yesterday evening, just after 7:00 p.m., after finally pinning down an elusive energy deal. The past several weeks were somewhat anticlimactic and excluded most of the drama typically associated with a lame-duck session. A lack of hot button issues led those around the Capitol to refer to this period as “tame duck” session.

After the House maintained its 63-member majority in the November election, the Republican controlled legislature did not have much of an appetite to wrestle with tough legislation. Another factor that may have tempered the debate on hot-button topics is that only one chamber will see turnover in January – members of the Senate have two more years to continue working on tough issues. This led the chambers to declare most of the heavy legislative lifts (municipal and school pension reform, no-fault auto insurance reform, and election reforms) dead in the first or second week, shifting the focus entirely to energy. No-fault auto reform was resurrected several times from the dead but never picked up any real momentum.

A recap of what was approved in the final week and what failed is below. All legislation that was not approved will formally die at Sine Die, which occurs on December 28. Any bills presented to the governor must be approved within two weeks of reaching his desk.

Last-minute energy deal wins approval

After several weeks and a few late nights, the Michigan legislature finally came to a compromise on how to reform energy policy. Around 4 p.m. yesterday, the House and Senate put up votes on SB 437 and 438, bills that make a number of significant changes to Michigan’s energy policy, ending what had become a no-holds barred, heels-dug-in fight between the utilities (primarily Consumers Energy and DTE Energy), customers and alternative energy suppliers.

The fight centered on two main issues: electric choice (allowing 10 percent of customers to choose an alternative supplier for electricity) and net metering (the process of compensation/fees for customers that generate their own energy and sell it back to the grid). A final compromise maintains the 10 percent cap on choice and gives the Public Service Commission strict guidelines on calculating the charge alternative electric suppliers would pay the state’s two main energy suppliers (Consumers Energy and DTE Energy) if they were unable to contract with another entity to supply energy to their customers. A previous version gave the Public Service Commission no real direction on how to calculate that charge.

Other changes included dropping language that would have required minimum or maximum lengths of time for those charges. If large quantities of choice customers switch back to Consumers or DTE, the 10 percent cap will be reduced by a subsequent amount for a six-year period if there are not customers in the queue to replace those that left. Customers generating their own power through the net metering program will not have to pay a charge to support the grid for the first 10 years, but a study will allow the commission to consider implementing a tariff in the future.

Additionally, the legislation requires the utilities to provide additional information when requesting approval to build or purchase power plants as well as integrated resource plans detailing 5, 10, and 15-year load projections. The amount generated from renewable sources increases from 10 to 15 percent by 2021. Utilities could also earn incentives for reducing energy waste. Gov. Snyder was a key force in brokering the deal and was visibly pleased the bills were approved yesterday.

Other bills MRA has been tracking:

APPROVED:

Auto parts (NO OFFICIAL POSITION): The Senate approved HB 5857, the revised auto parts bill, on Wednesday. The bill codifies current rules for auto repair shops. It does not contain language that would create a competitive disadvantage for auto parts stores and that caused the governor to veto the original bill, HB 4344. MRA opposed HB 4344 but did not take a position on HB 5857 after the competitive disadvantage language was removed. The bill now heads to the governor for approval.
Beer and wine quota system (NO OFFICIAL POSITION): Legislation that would remove the $250,000 inventory requirement and create a quota system for gas stations seeking to sell beer and wine was enrolled as SB 929 on Wednesday and includes a 60-day exemption from the license quota system.
Beer growlers (SUPPORT): Legislation allowing retailers to refill and sell beer growlers as long as following the state’s guidelines was approved by the House late Wednesday as SB 973 and now heads to the governor’s desk.
Drones (NEUTRAL): Legislation that would allow the use of drones – except to interfere with law enforcement or if used for stalking or surveillance – and creates a taskforce to make other future recommendations was approved by the House and enrolled on Tuesday. The bill, SB 992, does not attempt to strictly regulate drones. Instead it clarifies that current illegal activities (stalking, surveillance, violations of restraining orders, etc.) are also illegal if a drone is used to perform those activities.
Opioids (SUPPORT): HB 5326 and SB 805–806 won approval in the House and Senate this week. HB 5326 creates a standing order allowing pharmacies to dispense opioid antagonists to customers in need. The Senate bills will allow prescribers to prescribe and pharmacies to dispense opioid antagonists to school boards and provide for training and policies on the administration of opioid antagonists in public schools. The three bills now head to the governor’s desk for approval.
Patent reform (SUPPORT): SB 289, legislation aimed at stopping bad-faith patent infringement, or patent trolls, was approved by the House yesterday. The bill would require the courts to force a person who is found to have made a bad-faith assertion of patent infringement to post a bond in an amount equal to a good-faith estimate of the target’s costs to litigate the claim. The bill now heads to the governor for consideration.
TIF opt-out (NO OFFICIAL POSITION): SB 619–624, legislation exempting special library millages approved by voters after December 31, 2016, from tax capture districts used to fund DDAs and other entities was approved by the House on Wednesday and enrolled on Thursday.
Third party delivery of beer and wine (SUPPORT): The House Commerce and Trade Committee yesterday reported SB 1088, legislation that would allow a retailer located in Michigan with a Specialty Designated Merchant (SDM) license to use a third party to deliver beer and wine. The bill seeks to put Michigan retailers on level footing with those outside of Michigan that currently can ship beer and wine to customers. The bill goes farther and removes provisions in current law that allow the shipment of beer and wine by out-of-state retailers that have an equivalent license to a Michigan SDM to use a third party to deliver beer and wine.

FAILED:

Biosimilars (SUPPORT): Legislation that would allow pharmacists to dispense drugs made with biologic components known as biosimilars and to substitute similar drugs known as interchangeable biosimilars never received a vote by the Senate. The bill, HB 4812, saw several different forms regarding physician notification requirements. MRA supported the S-1 version the Senate Health Policy Committee reported that did not require pharmacists to notify the prescriber when substituting an interchangeable biosimilar – a process that adds time and cost to the pharmacy. The legislation will be debated again next session and may be introduced by a different sponsor.
“Dark stores” (OPPOSE): HB 5578, legislation that is nothing more than a backhanded attempt to discourage taxpayers from appealing their property assessments and would change the Tax Tribunal appeals process, making it more difficult and costly to file a property tax appeal, never received a hearing in the Senate Finance Committee. MRA fought hard against the bill, since it would slant the appeal process 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. The bill sponsor has already declared he will reintroduce the bill next session.
DDA (OPPOSE): HB 5851 was not taken up by the Senate Economic Development Committee this week. The bill sought to require additional transparency from DDAs and other tax capture districts. It would also have prohibited the ability to capture taxes for TIF districts from special millages approved by voters after December 31, 2016.
Income tax withholding (OPPOSE): Legislation that would have created an administrative nightmare for employers by requiring them to withhold income taxes from the 22 cities in Michigan that impose an income tax was never taken up by the Senate. SB 1127 would have created an expensive, time-consuming administrative burden with no benefit to the employer and dismantled the current nexus threshold. A similar bill, HB 4829, which would have required employers to collect only the Detroit City Income Tax, was never given a vote by the full House.
Pseudoephedrine limits (NEUTRAL): HB 5667, legislation that would set monthly and annual limits on the amount of pseudoephedrine an individual can purchase, died when it was not taken up by the Senate Health Policy Committee this week. The current monthly limit is 9 grams in a 30-day period and the bill would have reduced it to 7.2 grams per 30 days and 61.2 grams annually. MRA has learned that additional conversations will occur on pseudoephedrine limits next session.
Replacement workers (NO OFFICIAL POSITION): HB 4630 would have eliminated the requirement to notify a new employee hired to replace a striking worker that a labor dispute is occurring. The bill was never taken up by the Senate Commerce Committee but will likely be reintroduced next session.
Striking workers (NO OFFICIAL POSITION): HB 4643, a bill inspired by the $15 minimum wage issue picketers, would have created a new mass picketing violation for protestors who block business doors and traffic. The bill also included a $10,000 fine for groups that organize an illegal picket. The bill was never taken up by the Senate Commerce Committee but will likely be reintroduced next session.
Term limits (NO OFFICIAL POSITION): Three different proposals (HJR V, HJR W, HJR X) that would have repealed, allowed various combinations of the total years a future legislator could serve in either chamber, or allowed a legislator to serve nonconcurrent terms were never reported by the House Elections and Ethics Committee. The main supporters of these term limit reforms are term-limited legislators, but it is unlikely this will be the last time term limits reforms are discussed.
TIF roll-up (NO OFFICIAL POSITION): Legislation that would have rolled all of the state allowed tax increment finance authorities into a single act never received a vote by the House Local Government Committee. The bill, SB 1026, will likely be reintroduced next session.