2018 Year-End
Legislative Report
Year in review Legislator of the Year Top issues Election recap
The U.S. Supreme Court’s decision to level the playing field for brick and mortar and online retailers was a 2018 highlight, reflecting the 21st Century economy.
Support Michigan Retailers PAC and protect YOUR interests. Contact Amy Drumm at 517.372.5656 800.366.3699 or make a contribution online at bit.ly/RetailPAC
Sponsor MRA’s 2019 Legislative Reception April 23, 2019 Become a sponsor of this year’s Legislative Reception. Contact MRA’s Amy Drumm at 517.372.5656, ext. 343 or adrumm@retailers.com
Thank you, 2018 Sponsors! Amway, Artic Glacier Premium Ice, Busch’s Fresh Food Market, Consumer Healthcare Products Association, Dykema, Kroger, Lipari, Meijer, Oleson’s Food Stores, National Confectioners Association, National Retail Federation, National Association of Chain Drug Stores, Prairie Farms Dairy, Retail Industry Leaders Association, Rite Aid, SpartanNash, Target and Walgreens
MRA Board of Directors: Becky Beauchine Kulka
Chair Becky Beauchine Kulka Diamonds and Fine Jewelry, Okemos
James P. Hallan
President and CEO Michigan Retailers Association
Bo Brines
Vice Chair Little Forks Outfitters, Midland
Table of contents Table of contents......................................................................................1 2018 in review..........................................................................................3 How to use this report / How a bill becomes law........................4
Peter R. Sobelton
Treasurer Mondial Properties, Birmingham
William J. Hallan
Legislator of the Year..............................................................................5
Executive Vice President, Chief Operating Officer and General Counsel Michigan Retailers Association
2018 Legislative recap....................................................................6-7
Orin Mazzoni, Jr.
2019 Legislative preview................................................................8-9
Bill Golden
2018 Legislation table.............................................................. 10-14
Ken Hayward
Drumm wins national award.............................................................14
Past Chair Orin Jewelers, Garden City Golden Shoes, Traverse City Grand Hotel, Mackinac Island
Dan Marshall
Marshall Music Company, Lansing
Election recap........................................................................................15
Joseph McCurry Credit Card Group
Bryan Neiman
2018 Legislative reception..............................................................16
Neiman’s Family Market, East China Township
Barb Stein
Government Affairs team...................................................................17
Great Northern Trading Co., Rockford
Joe Swanson
Big Springs Enterprises, Naubinway
Thomas Ungrodt
TDU Consulting, LLC, Ann Arbor
James Walsh
Meijer, Inc., Grand Rapids
D. Larry Sherman
Board Member Emeritus
Michigan Retailers Services, Inc. Board of Directors: James P. Hallan President and CEO
Chad Ayers
Allendale True Value, Allendale
John Leppink
Leppink’s Food Centers, Belding
Kimberly Mills Target Corp.
Sen. Majority Leader Mike Shirkey, R-Clarklake, is sworn in for his second term as senator for the 16th District during a ceremony at the state Capitol. Michigan Supreme Court Justice Stephen J. Markman administered the oath of office.
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
How to use this report This report should serve as a guide to the legislation impacting retailers that gained traction in 2018, the issues MRA served as your advocate on, and a few of the items we’ll continue watching in 2019. On pages 10-13 you’ll find a chart that lists 2018 bills that the legislature sent to the Governor. The chart is organized by general categories and subcategories and includes sections that tell you how the bills fared in the legislative process. 2018 was the end of Michigan’s two-year legislative cycle, meaning any bill that was not signed into law must be reintroduced and go through the entire process again in 2019-2020.
Steps for legislation to become law in Michigan:
We’ve highlighted several of the key issues we worked on in 2018 and those we anticipate coming up in 2019 on pages 6-9. An overview of the 2018 election and its impact is located on pages 14-15.
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1. Introduction 2. Approval by committee in house of origin (House or Senate) 3. Approval by house of origin 4. Approval by committee in second house 5. Approval by second house 6. **If amended by the second house, the bill must return to the house of origin for approval of the amendment(s) 7. ***If the amendment is not approved by the second house the bill goes to a conference committee made up of legislators from each chamber. The committee can resolve disputes between the two chambers and then each chamber must approve the conference report. 8. Governor’s signature 3
2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
2018 in review In the busiest lame duck session Michigan has ever seen, legislators sent 408 bills to Gov. Snyder. While lots of items MRA was tracking crossed the legislative finish line during those 4 weeks, each session is more of a marathon than a sprint. This is particularly evident in the slow but steady progress Michigan Retailers has made on a number of important issues – issues that often span several years and sometimes even decades, like item pricing reform. In the spring, MRA successfully revised outdated statutory language that left retailers open to possible litigation when substituting a generic drug for a name-brand drug. This was a major pharmacy battle that had roots back to a lawsuit filed in Michigan in 2014. Also on the pharmacy front we worked to finalize a draft bill requiring all prescriptions be sent electronically to the pharmacy to reduce fraud and opioid abuse. We began working with legislators to draft that bill in October 2017 and it was introduced in December 2018. It will be one of our priority issues in 2019. The U.S. Supreme Court handed retailers a huge win when it ruled in mid-June to uphold South Dakota’s law requiring out-of-state sellers collect South Dakota’s sales tax. This allowed states to require online, out-of-state sellers to collect sales tax the same as local stores. The ruling puts all retailers on a level playing field and brings commerce into the 21st century. Michigan’s Department of Treasury issued guidance adopting the South Dakota standards beginning Oct. 1. The Wayfair decision is estimated to bring in $183 million in sales tax – funds that legislators used, in part, to fund contaminated site cleanup, one of Gov. Snyder’s final priorities. The Wayfair decision and the state’s action is only possible thanks to the Michigan legislature’s passage of 2014 Main Street Fairness legislation. In 2019, we’ll advocate to take it a step further to address the final missing piece of the sales tax collection puzzle: platform or marketplace sellers. Most of the legislative activity occurred in the spring and after the election, during lame duck. This kind of legislative bookending is typical in an election year. That’s not to say MRA sat back and relaxed during the summer and fall. Election season is always busy as we vet candidates and monitor proposals. 2018 was particularly busy as we reviewed several concerning ballot proposals. The proposals to increase the minimum wage and require employers provide paid leave were found to be nearly impossible mandates on employers. We worked to have the proposals adopted by the legislature and amendments added to make them more palatable.
Continued on page 5
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2018 Quick stats 2018 QUICK STATS MRA studied 1,762 new bills
House Senate
introduced in 2018: 1,237 House Bills 525 Senate Bills
Tracked 308 bills impacting retail (shown below in tens)
90 of the 308 tracked bills
[
became law
162 were carried over from 2017
Met with legislators
47 times
Attended
45 committee meetings
Participated in
6 workgroups or coalitions
Sent 12
Government Affairs News Updates and three special news updates
129 attended the annual Legislative Reception
]
2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
Mike Shirkey: 2018 MRA Legislator of the Year State Senator Mike Shirkey (R-Clarklake) is in his second and final term in the Michigan Senate, where he was recently elected Senate Majority Leader by his Republican colleagues for the next four years. In his new role, he will also serve as Chair of the Senate Government Operations Committee. He represents Branch, Hillsdale and Jackson counties. He was first elected in November 2010 to a partial term representing Michigan’s 65th House District, also winning election at that time as representative from 2011-2012. Shirkey served two terms in the House and was elected to Michigan’s 16th Senate District in November 2014. He has been named a Friend of Retail in all three of his elections (2012, 2014 and 2018) since MRA began the designation in 2012. Last year he sponsored legislation (SB 1175, Public Act 369 of 2018) that successfully amended the onerous paid sick leave requirements. SB 1175 made the requirements in the adopted ballot proposal far more palatable for retailers and employers. His leadership role helped secure the necessary votes to win approval of the changes and he created a system to ensure all parties worked together to draft the new language in a seamless fashion. In addition, as chairman of the Senate Health Policy Committee last term he was a tremendous advocate for retail pharmacies. Sen. Shirkey was instrumental in
brokering a legislative victory to modernize language around pharmacy drug substitution pricing. This was a long-desired outcome to update archaic language and remove potential liability from retail pharmacies after a 2014 Michigan Supreme Court decision highlighted the need for changes.
Senator Mike Shirkey
Shirkey is the founder and owner of Orbitform, which provides world-class prototype engineering services for assembly of parts and specialized forming and fastening. He has also worked for General Motors, holding various management and engineering roles over 13 years. Shirkey served on the Columbia Central School Board in the 1980s and ’90s and is the past board chair of Allegiance Health System. He holds a bachelor’s degree from General Motors Institute (GMI) and a master’s of science in mechanical engineering from the University of Wisconsin at Madison. Shirkey and his wife Sue live in Clarklake. They have three children and several grandchildren. He is an active member of the Jackson Free Methodist Church, where he leads major construction/expansion projects. He enjoys hunting, fishing, golfing, working out and woodworking.
2018 in review Continued from page 4
To limit this type of out-of-state funded ballot proposal activity in the future, we supported reforms requiring equal geographic representation for future signatures collected. These reforms brought Michigan in line with the rest of the country and also provide clarity and transparency throughout the ballot proposal process. We held off efforts to increase property taxes, implement burdensome data breach notification requirements, limit free market competition, set lower limits for the amount of pseudoephedrine an individual can purchase, reduce revenue to Downtown Development Authorities and Principal Shopping Districts, and changes to the school schedule that would hurt tourism. Gov. Snyder and legislators joined retailers in celebrating Family Meals Month in September and Buy Nearby Weekend on Oct. 5-7. Once again, MRA found time to weigh in on federal legislation. Amy Drumm, MRA’s VP of government affairs, traveled to Washington D.C. in April
with grocer members Martin’s Supermarket, Meijer and Kroger to receive the Food Marketing Institute’s Donald H. McManus Award and advocate for reauthorization of the Farm Bill. In September, she was joined by Becky Beauchine Kulka (Becky Beauchine Kulka Fine Diamonds and Jewelry in Okemos) and Barb Stein (Great Northern Trading Co. in Rockford) to meet with Michigan’s Congressional delegation on important issues like technical corrections to tax reform and encouraging Congress to take up debit swipe-fee reforms. 2019 brings a lot of new dynamics and potential challenges: Michigan’s Democratic governor and the Republican-controlled legislature will have to learn to work together, marijuana is now legal, only 8 members of the 38-member Senate are returning and overall 36 percent of the legislature is brand new. That’s 53 new faces we’ll need to bring up to speed on retail issues. We have our work cut out for us but we’re up to the challenge.
www.retailers.com
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
In 2018 MRA focused on… Making minimum wage and paid medical leave mandates more palatable SB 1171 and SB 1175, Public Acts 368-369 of 2018
MRA spent several months working on two ballot proposals that would have increased Michigan’s minimum wage to $12 an hour by 2022 and required employers comply with a more generous paid sick leave policy than even California has adopted. The result of those efforts were changes making the two laws more palatable to employers. SB 1171 revised Michigan’s minimum wage law to increase the minimum wage to $12.05 over 12 years while also eliminating an automatic inflationary increase each year after. SB 1175 modified the paid leave act to reflect the federal, Family Medical Leave Act (FMLA) definitions, which only cover employers with more than 50 employees and reduce the number of hours earned from 1 hour for every 30 hours of work to 1 hour earned per 35 hours worked. The bill also reduced the number of paid time off hours each year from 72 hours to 40. Seasonal workers, parttime workers and variable-hour workers will not be covered by the requirement. While Michigan will be the only Midwest state with a mandated medical leave law, these changes brought our law in line with the 10 other states that also have medical leave laws and is still more generous than even California’s law. The new minimum wage of $9.45 an hour and paid medical leave requirements take effect on March 29, 2019. While this is a big win, we do expect these changes will be challenged in court and there may be another ballot proposal attempt in 2020 by the same group.
Modernizing substitution pricing language HB 5805, Public Act 246 of 2018
After several years, MRA won approval of legislation that modernizes outdated statutory language that left retailers open to possible litigation when substituting a generic for a name-brand drug. MRA’s requested changes removed a rigid savings calculation that is not currently utilized but presented an opportunity for lawsuits. The language was modernized to reflect the current contractual payments system while ensuring that when a substitution is made, cash-paying customers receive the generic at the usual retail price for the generic.
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
Not penalizing retailers for calling the police SB 1235, Public Act 484 of 2018
After members were forced to pay more for public safety based on the number of calls a business makes or has made from its location, legislation was introduced to prevent that practice. This became an issue in West Michigan where local units of government created special assessment districts to raise fees on certain businesses that had more calls to police made from their location. It did not take into account whether the call was made by the business or by someone using the business’ parking lot to investigate an accident or other matter. The new law instead requires city councils and township boards obtain voter approval for special assessments and requires those assessments be levied on all properties within a special assessment district and based on the taxable value of the property assessed for the special benefit provided. The special assessment cannot be based on police and fire protection provided to the property in a previous year.
Protecting retailers from troubling data security regulations MRA spent many months building a large coalition of concerned trade associations and successfully fending off near-impossible data breach notification requirements proposed by Sen. Darwin Booher (R-Evart), then-chairman of the Senate Banking and Financial Institutions Committee. His legislation sought to require that breached entities provide a special notice to financial institutions within three days of a data breach and would have allowed a financial institution to bring a civil suit against the breached entity to cover their costs. The House took a different approach in the fall, introducing and moving more carefully crafted legislation that made mostly reasonable updates to Michigan’s notification requirements in the event residents’ information is compromised as a result of a data breach. After weeks of negotiations, MRA had successfully added several amendments to the legislation that would have allowed greater flexibility in investigations, preempted local regulations, offered businesses flexibility in who provides the notice if a third party is at fault, allowed alternative notice if the number of individuals impacted exceeds 500,000, and other small tweaks. The addition of the amendments got MRA and nearly all other stakeholders to be supportive of HB 6405-6406, but the bill sponsor objected to the changes and the bills died. We suspect this conversation will return in 2019 and we hope to find a bill sponsor who is open to the version of the bill all the stakeholders agreed to in late 2018.
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
Defining what is and is not a pyramid scheme HB 5726-5729, Public Acts 186-189 of 2018
Michigan joined 22 states in approving legislation that clarifies what is and what is not considered a pyramid scheme and establishes penalties for operating a pyramid scheme. Public Acts 186-189 of 2018 strengthen state law to stop bad actors and will help clear up public confusion over which direct selling companies are legitimate. Under the legislation, a pyramid scheme is defined as any plan or operation in which compensation is based primarily on the recruitment of others. Since pyramid schemes often masquerade as legitimate direct selling companies, the legislation gives law enforcement tools to identify and prosecute illegal pyramid schemes. It also offers guidelines to legitimate direct selling companies on acceptable and ethical business practices.
In 2019 MRA will fight to: Codify the Wayfair decision and close the sales-tax marketplace loophole In June 2018 the U.S. Supreme Court upheld South Dakota’s law requiring out-of-state sellers collect South Dakota’s sales tax the same as local stores. The decision puts nearly all retailers on a level playing field. The Michigan Treasury adopted guidance that follows the South Dakota standards, which should be put in statute to prevent any confusion by out-of-state sellers. There is also one missing piece of the sales tax collection puzzle: platform or marketplace sellers. Several states have approved marketplace legislation that allows the marketplace operator to collect and remit one return on sellers’ behalf without unreasonable burden or liability on the marketplace operator or marketplace sellers. MRA will be pursuing state legislation that puts the Wayfair decision standards in Michigan law and adopts model legislation allowing the marketplace operator to collect and remit sales taxes for its sellers.
Reduce prescription fraud and errors Following a lengthy drafting process, MRA has a bill ready to go that will reduce prescription fraud and errors by requiring all prescriptions be sent electronically to the pharmacy. The bill comes in light of the opioid crisis and was one of the action items the Michigan Prescription Drug and Opioid Abuse Task Force considered to protect Michigan residents. By requiring electronic prescriptions, we can almost entirely eliminate fraud and errors. It can also be used to track when and where a patient has filled a prescription. This solution is gaining popularity – 12 states have adopted similar legislation and federal legislation was signed into law last fall requiring all Medicare Part D controlled substances prescriptions be sent electronically. Prescription errors, fake prescriptions, and opioid abuse have dropped in states where the law includes penalties that ensure a majority of physicians are using the 8
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
system. MRA’s careful drafting seems to have eliminated most concerns from physician groups. A number of other industries and trade groups have already expressed interest in joining MRA in supporting the legislation.
Reevaluate the onerous bottle deposit law A long-sought goal to repeal the bottle deposit law or at least eliminate the burden on retailers to take back carbonated and alcoholic beverages bottles and cans will be at the forefront of our efforts in 2019. Michigan’s bottle deposit law is 40 years old and is long overdue for a review to see if it is as effective today as it was in 1976 when first approved by voters. We know it hasn’t helped Michigan’s recycling market since Michigan’s overall recycling rate of 15 percent is dismal compared to neighboring states and desperately needs to be increased. This can be accomplished, in part, by revamping and streamlining Michigan’s current process and improving access and convenience. Retailers face a number of challenges under the current two-pronged system and we think the state is long overdue to reevaluate how we can efficiently and effectively recycle and divert trash from landfills. Any changes to a voter-approved initiative requires careful thought and creative solutions, which we’re prepared to dive into and welcome member input. At worst, a serious discussion on the topic will help give legislators pause before considering any attempts to expand the law to other containers.
Prevent attempts to change property tax appeals The fight continues in 2019. For several years MRA has been fighting back various bills that seek to increase property taxes by making the appeals process far more difficult. The legislative efforts are in response to local governments’ frustration with retailers who were over-assessed and have successfully appealed their property taxes, resulting in hits to local budgets. While legislation did not receive a hearing last term, with 53 new legislators and new legislative leaders and a new Governor, those factors could impact the likelihood of this tax increase becoming a reality. MRA will closely monitor this issue in 2019 and watch other states’ actions to prevent retailers from being hit with a large property tax increase to fill local government coffers.
www.retailers.com
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2018 2018 Retail Legislation Acts and Vetoes RETAIL LEGISLATION--Public PUBLIC ACTS & VETOES 2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
ACTION IN ACTION IN HOUSE OF SECOND ORIGIN HOUSE
PUBLIC ACT (EFFECTIVE DATE)
Alcohol reforms: Makes several changes to tasting room SB 1154operations and allows retail sales at multiple tasting rooms 1168 operated by manufacturers.
Amended, passed Senate 37-0
Passed House 105-2
P.A. 403417 (12/19/18)
Alcohol distribution: Allows a beer and wine wholesaler to HB 5768 skip the required hold period for products in high demand, getting products on the shelves for retailers quickly.
Amended, passed House 103-4
Passed Senate 35-1
P.A. 178 (6/11/18)
Beer growlers: Would expand and clarify a 2016 law that allows retailers with a SDD (liquor) license to fill and sell beer HB 5175 growlers. This would allow retailers with an SDM license (beer and wine) to fill and sell as well.
Amended, passed House 109-1
Passed Senate 36-0
P.A. 40 (5/29/18)
Amended, passed Senate 37-0
Amended, passed House 103-6
P. A. 426 (12/20/18)
Amended, passed House 103-5
Passed Senate 37-0
P.A. 386 (12/19/18)
Varies
Varies
P.A. 154155 (10/1/18)
SB 304
Cigar tax cap: Would have removed the current sunset on the 50-cent per cigar tax cap that is set to expire after Oct. 31, 2021.
Amended, passed Senate 25-11
Passed House 65-44
Vetoed
SB 752
Benefit eligibility: Allows an individual to continue receiving government assistance benefits for 18 months after getting married.
Amended, passed Senate 33-3
Amended, passed House 102-6
P.A. 574 (1/1/20)
No position
SB 660
“Cage free” eggs: Would have pushed back the date by which all eggs sold in Michigan must be produced at farms with larger cages and added new penalties for grocers who knowingly sell eggs that don’t meet the standards.
Amended, passed Senate 32-5
Passed House 79-29
Vetoed
No position
HR 385 SR 187
Family Meals Month: The House and Senate adopted resolutions declaring September 2018 as Family Meals Month.
Adopted
NA
NA
SB 1171
Minimum wage changes: Revised the earlier adopted minimum wage ballot proposal to increase the minimum wage to $12.05 by 2030 instead of by 2022.
Amended, passed Senate 26-12
Amended, passed House 60-48
P.A. 368 (3/29/19)
SB 1175
Paid medical leave changes: Modified the paid leave act to only cover employers with more than 50 employees. Eligible employees earn 1 hour paid medical leave for every 35 hours worked up to 40 hours a year. Seasonal workers, part time workers and variable hour workers are not eligible.
Amended, passed Senate 26-12
Amended, passed House 60-48
P.A. 369 (3/29/19)
Amended, passed House 70-39
Amended, passed Senate 37-0
P.A. 170 (9/2/18)
BILL #
BILL SUBJECT/DESCRIPTION
MRA POSITION
ALCOHOL
GROCERY/CONVENIENCE
SB 1181
Instant-rebate coupons: Prohibits cooperative advertising and allows a retailer to offer instant rebate coupons on purchases of beer, wine and liquor.
Rural licenses: Corrects an oversight in current law, to allow HB 5719 for one SDM (beer and wine license) in cities, villages and townships with less than 1,000 residents.
OTHER
TOBACCO
Craft beverage council: Would expand membership on the HB 4667 Michigan Craft Beverage Council and its duties. It would add a & SB 440 new nonvoting position for a retailer with an SDM license.
OTHER
BENEFITS
HUMAN RESOURCES
Monthly payday wages: Changes the date of the month by HB 5235 which employers must pay employees who receive a monthly wage to help keep businesses in compliance with the law. 10
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2018 RETAIL LEGISLATION- -Public PUBLIC ACTS 2018 Retail Legislation Acts& VETOES and Vetoes 2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
BILL #
BILL SUBJECT/DESCRIPTION
ACTION IN ACTION IN HOUSE OF SECOND ORIGIN HOUSE
PUBLIC ACT (EFFECTIVE DATE)
MRA POSITION
OTHER
HUMAN RESOURCES CONTINUED Prohibit local rules on the interview process: Would add the interview process to the list of labor and benefit issues that local governments cannot regulate.
Passed Senate 27-9
Passed House 62-46
P.A. 84 (6/24/18)
Amended, passed House 104-2
Amended, passed Senate 34-0
P.A. 101 (4/2/18)
No position
Passed Senate 34-0
Passed House 102-6
P.A. 107 (7/4/18)
No position
Amended, passed House 105-1
Passed Senate 34-0
P.A. 41 (5/29/18)
Neutral
Passed House 105-3
Passed Senate 36-0
P.A. 246 (9/26/18)
Passed Senate 34-0
Passed House 108-0
P.A. 85 (6/24/18)
No position
Varies
Varies
P.A. 301, 305-308, 289, 291 & 293 (Varies)
No position
Amended, passed Senate 36-0
Amended, passed House 107-2
P.A. 573 (3/28/19)
Passed House (58-50)
Amended, passed Senate 25-12
P.A. 493502 (12/27/18)
Prohibit stricter state rules: Prohibits state agencies HB 4205 and departments from adopting rules stricter than federal regulations.
Amended, passed House 57-52
Amended, passed Senate 24-13
P.A. 602 (1/1/19)
Fireworks: Adds new requirements and licensing fees firework sellers while lowering the penalty for failing to report fireworks HB 5939- safety fees. Modified the days and hours local ordinances can 5941 limit fireworks usage, prohibits the use of sky lanterns, and allows the governor to place weather-related bans on the use of fireworks.
Amended, passed House 92-17
Amended, passed Senate 38-0
P.A. 634636 (12/28/18)
Neutral
Passed House 104-3
Passed Senate 36-0
P.A. 136137 (8/8/18)
Neutral
SB 353
OTHER
CONTROLLED DRUGS
PHARMACY Hospice patient MAPS exemption: Exempts hospice patients from the requirement that a Michigan Automated Prescription HB 5678 System (MAPS) must be run prior to a Schedule 2-5 controlled substance being dispensed. SB 801
Tianeptine sodium: Added tianeptine sodium, used as an antidepressant with anxiety-reducing and mood elevating properties, as a Schedule II drug.
Biosimilars/generic pass through: Would allow pharmacies to dispense biologic, biosimilar and interchangeable biosimilar HB 4472 drugs if an entry is made into an electronic pharmacy records system. Modernizing substitution pricing: Modernized archaic HB 5805 statutory language related to prescription pricing when a substitution occurs.
SALES
GOVT REFORMS/REQS
REGULATIONS SB 442
Business licensing updates: Would make various reforms to modernize the Business Corporation Act which sets regulations on business licenses.
HB 59966003, SB 1003, SB 1005, SB 1007
Department reporting requirements: Repealed various reports required of state departments on fireworks inspections, food law and fuel licenses and food stamps that no longer providing valuable or important information.
SB 729
Gift cards: Clarified that third-party gift cards sold often on kiosks near checkout lanes are not subject to the regulations under the Money Transmission Services Act.
Local occupational licensing requirements: Limits local enforcement or imposition of occupational licensing fees HB 5955- or licensing requirements. Existing requirements were 5965 grandfathered in and limitations do not apply to elevator maintenance, security alarms, electricians, and other skilled trades licensed under the Skilled Trades Regulation Act.
Nitrous oxide containers: Prohibits the sale or delivery of HB 5463nitrous oxide canisters to minors. Teens use “whip-its� to get 5464 high. www.retailers.com
No position
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2018 RETAIL LEGISLATION - PUBLIC ACTS & VETOES 2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
2018 Retail Legislation - Public Acts and Vetoes BILL #
ACTION IN ACTION IN HOUSE OF SECOND ORIGIN HOUSE
BILL SUBJECT/DESCRIPTION
PUBLIC ACT (EFFECTIVE DATE)
MRA POSITION
SALES
REGULATIONS CONTINUED Amended, passed House 57-52
Passed Senate 23-14
Vetoed
No position
Water sales at wineries: Clarified that beer/wine/spirits tasting HB 5606 rooms can sell pop or water to customers who choose not to drink alcohol.
Amended, passed House 107-0
Amended, passed Senate 38-0
P.A. 560 (12/28/18)
No position
911 fees: Increased the monthly 911 charge by six cents and allows county commissions to increase their fee by 6 cents. The bill would also increase the prepaid wireless 911 fee retailers collect from 1.92 percent to 5 percent per transaction.
Amended, passed Senate 30-6
Amended, passed House 99-10
P.A. 51 (3/6/18)
Varies
P.A. 97 (7/1/18) & P.A 450 (3/21/19)
Varies
Varies
P.A. 444446 & 468-469 (Varies)
Neutral
Electronic skateboards: Allows the use of electric skateboards HB 5391 on Michigan roads with speed limits under 25 mph for kids age 12 and over. Kids between ages 12-18 must wear a helmet.
Amended, passed House 96-13
Passed Senate 37-0
P.A. 204 (9/18/18)
No position
Ransomware: Prohibits the unauthorized possession or use of HB 5257- ransomware and adds penalties for anyone who possesses and 5258 intends to use ransomware to harm, steal or prevent access to another person’s electronic data.
Amended, passed House 103-3
Amended, passed Senate 34-0
P.A. 95-96 (7/1/18)
Pyramid schemes/direct selling entities: Strengthens state HB 5726law to stop bad actors and help clear up public confusion over 5729 which direct selling companies are legitimate.
Amended, passed House 88-19
Passed Senate 37-0
P.A. 186189 (9/11/18)
Secondhand dealer hold process: Creates a formal process HB 4887 for law enforcement to request an additional 90-day hold before secondhand items are sold.
Passed House 107-1
Amended, passed Senate 35-1
P.A. 345 (1/14/19)
No position
Income tax reporting: Modifies the deadline to report an HB 5091 employee’s income taxes to the Department of Treasury to match the federal deadline of Jan. 31.
Amended, passed House 109-0
Passed Senate 37-0
P.A. 118 (4/26/18)
No position
Voluntary city income tax collection: Outlines a voluntary city HB 4618 income tax collection process for employers. If the employer & volunteers to remit, employees cannot opt-out. It only applies HB 5025 to the City of Detroit’s income tax.
Amended, passed House 88-21
Passed Senate 30-7
P.A. 456 (12/21/18) & P.A. 553 (12/28/18)
Neutral
59165918
OTHER
TECH
SB 400
Dog sales from breeders: Would have set stricter standards for pet shops selling dogs while prohibiting local bans on the sale of dogs that drive pet sales underground.
Broadband access and permitting fees: Allows and regulates HB 5097 public highway rights-of-way access to broadband companies. & Limits the fees county road commissions can charge for SB 1050 access. Drones: Codifies Unmanned Aerial Task force HB 5495recommendations that a drone is an extension of self for 5496, purposes of any crimes committed, prohibit using them in SB 917 & a manner to interfere with key facilities and establish an SB 922 aeronautics commission.
Varies
INCOME TAX
TAXES
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2018 RETAIL LEGISLATION- -Public PUBLIC ACTS 2018 Retail Legislation Acts& VETOES and Vetoes 2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
ACTION IN ACTION IN HOUSE OF SECOND ORIGIN HOUSE
PUBLIC ACT (EFFECTIVE DATE)
MRA POSITION
Amended, passed House 109-0
Passed Senate 38-0
P.A. 660 (12/28/18)
Neutral
Passed House 82-25
Amended, passed Senate 37-1
P.A. 438 (10/1/19)
Neutral
Amended, passed Senate 37-0
Passed House 107-1
P.A. 201 (6/20/18)
Amended, passed House 96-10
Amended, passed Senate 38-0
P.A. 530 (3/28/19)
Passed Senate 27-11
Passed House 62-45
Vetoed
PPT exemption filing clarification: Only requires property HB 5261 owners file a commercial PPT exemption form once rather than filing the form annually.
Amended, passed House 106-3
Passed Senate 37-0
P.A. 132 (5/3/18)
Prohibits extra charges based on public safety call volume: Prevents local governments from making businesses pay more for public safety based on the number of calls a business makes or has made from its location.
Amended, passed Senate 32-4
Amended, passed House 107-2
P.A. 484 (11/1/19)
Adopted
NA
NA
Principal shopping district assessment areas: Would HB 5325 have included residential real property located in a Principal & Shopping District (PSD) in special assessments that benefit the HB 5720 PSD and those properties.
Amended, passed House 76-32
Passed Senate 34-4
Vetoed
TIFA roll-up: Would roll all of the state allowed tax increment finance authorities (TIFA) into a single act to create consistency and address the lack of compliance in the reporting process.
Amended, passed Senate 38-0
Amended, passed House 106-2
P.A. 57 (1/1/19)
Neutral
HB 4185 Bicycle passing distance: Requires drivers to pass cyclists at a & distance of at least three feet when possible. HB 4265
Amended, passed House 102-6
Passed Senate 36-0
P.A. 279280 (9/27/18 & 10/16/18)
No position
Passed House 107-2
Passed Senate 35-1
P.A. 76 (6-17-18)
No position
SALES/USE TAX
PROCEDURES
BILL #
Property assessing practices: Allows contiguous cities or HB 6049 townships to form a single board of review and requires audits to ensure assessments meet certain requirements. Tax Tribunal procedures: Revises the Michigan Tax Tribunal HB 4412 procedures and membership qualifications to attract better judges and ensure positions are filled.
SB 887
Use tax responsibility: Clarifies that the tax liability for tangible property purchased by another person and provided to a contractor for installation is the responsibility of the purchaser, not the contractor.
Veterans sales tax exemption: Includes veterans’ HB 5913 organizations (501c19 organizations) among those eligible for a sales tax exemption.
SB 1097
OTHER
BILL SUBJECT/DESCRIPTION
SB 1235
Federal tax decoupling: Would have modified the state’s Income Tax Act to exclude the IRS limits on business interest expense deductions that came into effect after the Federal Tax Cuts and Jobs Act.
Neutral
OTHER
TOURISM
HR 410, SR 186
OTHER
SB 393
HB 5094
Buy Nearby Weekend: The House and Senate adopted resolutions declaring Oct. 5-7 as Buy Nearby Weekend.
Credit freeze: Would prohibit a consumer reporting agency from assessing fees to place or remove a credit freeze.
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
2018 Election Recap
Current political landscape
Approved Ballot Proposals
Governor: Democrat (Gretchen Whitmer) Attorney General: Democrat (Dana Nessel) Secretary of State: Democrat (Jocelyn Benson) Supreme Court: Republican majority (4-3, Democratic Chief Justice) U.S. Senate: Both Democrats U.S. Congress: 14 members (7-7 split between Republicans and Democrats) House: 110 members (58-52 Republican majority) • Subject to three 2-year terms • Speaker of the House Lee Chatfield (R-Levering) Senate: 38 members (22-16 Republican majority) • Subject to two 4-year terms • Senate Majority Leader Mike Shirkey (R-Clarklake)
Prop 1: Legalize marijuana Type: Legislative initiative proposal Vote results: 56% YES, 44% NO Effective: It became legal to possess marijuana beginning Dec. 6, 2018. The licensing for business operations must begin within 12 months. Once licensing begins, for the first two years, the state will only accept applications for marijuana retailers from individuals who have a current medical marijuana facilities license. Content: Individuals over age 21 can now legally possess up to 2.5 ounces of marijuana and cultivate or grow up to 12 plants at home. Businesses wishing to sell recreational marijuana must obtain a state marijuana retailer license. Products containing marijuana will be subject to a 10 percent excise tax. Impact: The language approved by voters specifically allows employers to continue enforcing workplace drug policies prohibiting usage of substances including marijuana. Employers may also continue to make hiring and firing decisions based on drug tests and compliance with workplace drug usage policies. For a sample workplace drug policy prepared by Retailers Insurance Company, contact Amy Drumm at adrumm@retailers.com.
Narrative Democrats won big in statewide races but failed to flip control of the legislature. While Republicans lost seats in both the Michigan House and Senate, they held on to majorities and legislative control. Gretchen Whitmer won the early-called Governor’s race, handily defeating Republican Bill Schuette. Democrat Dana Nessel narrowly picked up the Attorney General seat and Democrat Jocelyn Benson is the new Secretary of State. Democrats also picked up one spot on the Michigan Supreme Court, making for a 4-3 Republican majority. In a surprising twist, in early January the Republican-majority court elected Democrat Bridget McCormack as its chief justice. What does this mean for retailers? Divided government has traditionally meant legislative gridlock on contentious issues. That said, the majority of the bills the legislature passes in a given year are largely bipartisan and often nearly unanimous. Big ticket policy items will be tougher to find common ground on, despite the unilateral calls for bipartisanship and compromise invoked by Gov. Whitmer and legislative leaders at the start of the year. The biggest potential challenge for retailers will be from administrative changes, particularly how Attorney General Dana Nessel handles the consumer protection division. Many retailers also sell items – food, alcohol, tobacco and prescription drugs - that are highly regulated and subject to state department rules and regulations.
Prop 2: Nonpartisan redistricting Type: Constitutional amendment Vote results: 61% YES, 39% NO Effective: Dec. 22, 2018 Content: Every 10 years, legislative and congressional districts will be mapped out by an independent redistricting commission rather than the legislature. The 13-member redistricting commission will be composed of four Democrats, four Republicans and five independent members all selected by the Secretary of State. The commission will be responsible for drawing districts following the 2020 census. These new districts will be used for elections in 2022. Impact: For the first time in Michigan’s history, the legislative and executive branch will play no role in drawing district lines. There are certain parameters districts must meet including a requirement districts “reflect the state’s diverse population and communities of interest” and that “districts shall not provide a disproportionate advantage to any political party.” It is yet to be seen how the yet-to-be appointed commissioners will handle the various conflicts and challenges that arise based on these requirements. Continued on page 15
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
MRA’s Amy Drumm nationally recognized WASHINGTON, D.C. – Food Marketing Institute (FMI) recognized in 2018 the extraordinary leadership in public affairs, industry relations and community relations of Amy Drumm, vice president of government affairs for the Michigan Retailers Association. Drumm received FMI’s Donald H. MacManus Award at the industry’s Capitol Hill fly-in event, Day in Washington. FMI President and CEO Leslie G. Sarasin commented on Drumm’s commitment saying, “Amy’s ‘just-knuckle-down-and-do-it’ attitude helped her state become a national leader, by passing our country’s first-ever law preempting local excise taxes or fees on the manufacturing, distribution, or sale of all food and beverages – both for immediate and non-immediate consumption. Public Act 135 of 2017 went into effect in October.” Sarasin continued, “Because of her strong work ethic, she successfully lobbied to preempt local wage and benefit ordinances as well as plastic bag bans and taxes. And that same strong work ethic helped her play a pivotal role in the 2014 passage of Main Street Fairness legislation, elimination of the Personal Property Tax for retailers with $80,000 or less in personal property; proposed sales tax increases, adoption of anti-competitive measures, and limitations on Supplemental Nutrition Assistance Program food purchases.” Among her industry advocacy efforts, Drumm oversees the Michigan Retail Association’s Political Action Committee; serves as Treasurer for Retailers Insurance Company; and serves as the current chairwoman of
FMI President and CEO Leslie Sarasin presents MRA’s Amy Drumm with the Donald H. MacManus Award.
the Michigan Recycling Partnership, an industry group formed to identify comprehensive recycling solutions. Sarasin said, “Amy is a staunch FMI supporter and a trusted voice in our industry. In fact, she worked with her legislature to pass House Resolution 148, which declares September as Family Meals Month – an FMI Foundation initiative to encourage more meals eaten together at home.” Prior to joining MRA in 2012, Amy worked in the Michigan House of Representatives and for the House Republican Campaign Committee. She is a graduate of the University of Michigan.
MRA’s Private Insurance Exchange
Approved Ballot Proposals Continued from page 14
Prop 3: Elections reforms Type: Constitutional amendment Vote results: 67% YES, 33% NO Effective: Dec. 22, 2018 Content: Allows for election-day voter registration, no-reason absentee voting, requires a straight party voting option on general election ballots, provides for automatic voter registration, and allows for postelection audits for accuracy. Impact: All residents will be registered voters, and more residents will have more options and methods to vote than before, perhaps increasing the number of votes cast in future Michigan elections. www.retailers.com
Let us show you how the MRA private exchange takes the hassle out of group health insurance. Get a quote at bit.ly/MRAexchange Questions? Call 800.366.3699 ext. 681 Fewer than two or more than 50 full-time employees, please call the above number.
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
2018 Legislative reception Revamped legislative reception a hit Top, MRA’s Bill Hallan, Rep. Frank Liberati (D-Allen Park), Rep. Daire Rendon (R-Lake City), and Rep. Sue Allor (R-Wolverine). Middle, state Treasurer Nick Khouri, MRA’s Jim Hallan, Sen. Jim Marleau (R-Lake Orion), retired MRA CEO Larry Meyer, and John Leppink, Michigan Retailers Services board member and President of Leppink’s Incorporated. Bottom, Dave Biswas (Sen. Mike Kowall’s Chief of Staff), MRA’s Amy Drumm, Rep. Brandt Iden (R-Oshtemo Township), Samantha Zandee (Rep. Iden’s staff) and Bryan Harrison (Amway).
Michigan Retailers Association held its annual legislative reception on April 24 and had excellent attendance: nearly 130 attendees overall. The event was a combined retailers and grocers’ reception, following the Michigan Grocers Association becoming a division of Michigan Retailers Association in January. MRA continued the grocers’ tradition of showcasing their members by having grocery stores cater the event. Using grocers as our caterers allowed us to further tie in the event with our Buy Nearby program, focusing on locally purchased and prepared food and beverages. The event was a great success and wouldn’t have been possible without our sponsors’ continued support. Thank you to: Amway, Artic Glacier Premium Ice, Busch’s Fresh Food Market, Consumer Healthcare Products Association, Dykema, Kroger, Lipari, Meijer, Oleson’s Food Stores, National Confectioners Association, National Retail Federation, National Association of Chain Drug Stores, Prairie Farms Dairy, Retail Industry Leaders Association, Rite Aid, SpartanNash, Target and Walgreens.
An overview of the reception, held at Dykema Gossett’s law offices in Lansing, with food catered by members of the Michigan Grocers division of MRA.
Save the date
MRA’s 2019 legislative reception will be held
Tuesday, April 23. 16
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2018 YEAR-END LEGISLATIVE REPORT MICHIGAN RETAILERS ASSOCIATION
Government Affairs team James P. Hallan
Amy Drumm
Jim Hallan became president and CEO of Michigan Retailers Association in 2008 after serving as president and chief operating officer since 1989. He also serves as president and CEO of Retailers Insurance Company. He joined Michigan Retailers as general counsel in 1985. He is current chair of the Delta Dental Foundation Board. He is past chair of the national Council of State Retail Associations, past chair of the Delta Dental Plan of Michigan, Ohio and Indiana, past president of the state YMCA board and a former member of the board of Fremont Insurance Company. Previously an assistant county prosecutor, he is a graduate of Ohio Wesleyan University and the Detroit College of Law. Email: jhallan@retailers.com Toll Free: 800.366.3699
Amy Drumm is vice president, government affairs for MRA. Her responsibilities include day-to-day advocacy in the state Capitol, as well as analysis of all legislation and public policy. She serves as liaison to retail industry government affairs professionals and oversees the MRA Political Action Committee. In 2018, she was recognized by the Food Marketing Institute (FMI) for her work on Michigan’s ban on local excise taxes or fees on food and beverages. A University of Michigan graduate, she previously was legislative director for then-State Rep. Sharon Tyler. Email: adrumm@retailers.com Toll Free: 800.366.3699 ext. 343
President and Chief Executive Officer
Vice President, Government Affairs
William J. Hallan
Executive Vice President, Chief Operating Officer and General Counsel
Among Bill Hallan’s many responsibilities is overseeing the association’s legislative advocacy efforts. Prior to joining Michigan Retailers in 2011, Hallan was a litigator in the Dykema law firm’s Bloomfield Hills office. He was instrumental in the creation of the state Organized Retail Crime statute and was twice appointed by Gov. Rick Snyder to the Organized Retail Crime Board. He is a magna cum laude graduate of the University of Toledo School of Law and a graduate of Denison University. Email: whallan@retailers.com Toll Free: 800.366.3699 ext. 306
Meegan Holland
Vice President, Communications and Marketing
Meegan Holland oversees member engagement and the association’s branding and marketing efforts. Holland came to the association in June 2017 from the State of Michigan, where she worked at the Secretary of State’s and Governor’s offices, and most recently the Michigan Veterans Affairs Agency as a senior policy advisor. She was a journalist for many years, most recently statewide/ capital editor in Lansing for MLive Media Group. She is a graduate of Kalamazoo College. Email: mholland@retailers.com Toll Free: 800.366.3699 ext. 340
www.retailers.com
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603 South Washington Avenue Lansing, MI 48933 Phone: 517.372.5656 Toll-free: 800.366.3699 Fax: 517.372.1303 Retailers.com RetailersInsurance.com BuyNearbyMI.com