Governmental Affairs: March 28, 2014

Youth e-cigarette ban moves forward in House

Despite concerns by the Department of Community Health, the House Regulatory Reform Committee on March 18 reported out HB 4997 and SB 667668, which would prevent the sale of e-cigarettes to minors. The bills are the legislature’s first step in protecting Michigan’s youth while waiting on the FDA to issue guidelines on whether or not e-cigarettes should be considered tobacco products.

Under the legislation, the products could not be sold to minors, and notices must include e-cigarettes. E-cigarettes would fall under a new, separate category considered vapor products or alternative nicotine products, which would not be classified as tobacco products. Since the products would not be considered tobacco, they would not be subject to other state tobacco laws. The Department of Community Health believes the bills create a different standard for e-cigarettes and prefers HB 5393, which modifies the definition of tobacco products to include “a product that contains or is made or derived from tobacco, nicotine or another similar substance.”

Another sales tax increase proposal pops up

Senators introduced a new constitutional amendment proposal this week that would increase the state sales tax rate by 1 percent and earmark the additional funds for road repairs. SJR FF, sponsored by Sen. Bruce Caswell (R-Hillsdale) and co-sponsored by Sen. Rick Jones (R-Grand Ledge), would increase the sales tax to 7 percent beginning October 1, 2014.

Constitutional amendments are subject to voter approval and must receive a two-thirds affirmative vote in each chamber by June 5 in order to be placed on the August 5 ballot. MRA strongly opposed similar proposals that cropped up last year.

Most legislators are hesitant to support a sales tax increase, since the sales tax is a regressive tax that affects low-income consumers more than other residents. Retailers instead support a road funding solution that focuses on user-fees, similar to the governor’s proposal to increase vehicle registration fees and transition to a wholesale gas tax.

Personal Property Tax reforms completed

A package of bills that includes full reimbursement to local government units for revenue lost as the Personal Property Tax phase-out begins (SB 821830) passed the House Thursday, completing its quick sprint through the legislature. The governor is expected to sign the bills, putting the revised funding plan language on the August ballot for voter approval. MRA supports the changes and is part of a coalition of groups working on gaining voter approval of the measure in August.

Energy issues receive lots of debate

The House Energy and Technology Committee took extensive testimony over the last two weeks on legislation that would lift or remove the existing 10 percent cap on electric choice. Expanding electric choice would give businesses and residents the ability to choose their energy provider, be it an existing utility company or an aggregator. After nearly 15 hours of testimony, it does not appear committee members are any closer to making a decision on the issue or taking a vote on HB 5184.

Not to be outdone, the Senate Energy and Technology Committee heard testimony on a Public Service Commission report that suggests Michigan could expand its renewable energy standard to as high as 30 percent of electricity provided. The report found Michigan is on track to meet the current Renewable Portfolio Standard (RPS) of 10 percent by 2015. The expansion into renewable sources has also brought the production price down, most notably in the case of wind energy.

Federal balanced budget amendment passes

Michigan became the 23rd state to join the call for an Article V convention of the states to discuss a federal balanced budget amendment. The House passed a resolution last week calling for a convention of the states to draft a federal balanced budget amendment (SJR V) and a bill prescribing how the state’s delegates for the convention would be selected (HB 5380).

Thirty-four states must adopt resolutions calling for the Article V convention of the states for it to occur. Similar resolutions have been introduced in the current legislative session in Arizona, Idaho, Kentucky, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wisconsin.

Other important items to note:

  • The MAC pricing reconsideration process for generic drugs (SB 656) cleared the House Health Policy committee on March 25.
  • The House Commerce Committee reported legislation on March 26 that would allow the Department of Corrections to provide a certificate of employability to prisoners for use after release as evidence of a person’s readiness to be hired. HB 52165218 will now be considered by the full House.
  • Legislation to prohibit employment or workplace discrimination on the basis of reproductive health decisions (HB 5416) was introduced and referred to the House Judiciary Committee. The bill is unlikely to receive a hearing.
  • Retail fraud cost-recovery legislation (SB 729) received a hearing in the House Committee on Criminal Justice on March 26. MRA supports the legislation, which would give law enforcement the tools necessary to apprehend shoplifters while balancing other public safety concerns.
  • The legislature approved a year-round school pilot program this week. The provision is contained in a school aid supplemental bill, HB 4982, that allocates $2 million in funds (a max of $750,000 per district) that can be used for building modifications, personnel contract modifications or other nonrecurring costs associated with implementing year-round schooling.
  • A resolution encouraging Michigan pharmacies to stop selling tobacco products was introduced by Rep. Alberta Tinsley-Talabi (D-Detroit) and referred to the House Health Policy Committee. HR 320 cites the recent decision by CVS Caremark to stop selling tobacco items and, if passed, would be sent to the Chain Drug Marketing Association, the National Association of Chain Drug Stores, the National Community Pharmacists Association and the Michigan Pharmacists Association.
  • Rep. David Knezek (D-Dearborn Heights), a former U.S. Marine, introduced HB 5418, which would allow private employers to adopt a voluntary veteran’s preference employment policy to hire, promote or retain workers. Special rights for veterans are not subject to Title VII of The Civil Rights Act of 1964. The bill has bipartisan support and was referred to the Committee on Military and Veterans Affairs.
  • A motion to discharge SR 112, a resolution asking Congress to raise the national minimum wage and set it to annually increase according to the Consumer Price Index, from the Senate Reforms, Restructuring, and Reinventing Committee was defeated on March 25. It is unlikely the resolution will receive a vote in committee; however, we are likely to see a ballot measure on minimum wage appear in the November election.