Honigman Capitol Report

Flurry of Action Last Week Leading Up to the End of 2023 Legislature Schedule

Both the Senate and the House were in full swing last week, voting on numerous pieces of proposed legislation and moving bills closer to the Governor’s desk. Among them, SB 395 and SB 396 passed the House Wednesday and went back to the Senate Thursday to align the language that will now go to Governor Whitmer for her signature. The legislation would make teacher evaluations less reliant on how students perform, reducing the importance of student test scores to just 20 percent of the evaluation scores and allowing school districts to sub in teacher-created “student learning objections” to count towards the 20 percent. The changes would start during the next school year. The House also passed legislation late Wednesday night to repeal several abortion restrictions known collectively as “Targeted Regulations of Abortion Providers” or TRAP laws. The package of bills, or the Reproductive Health Act (RHA), passed along party lines without the original inclusion of eliminating the 24-hour waiting period due to a lack of support among Democratic caucus members.

Senate Passes Financial Disclosure Bills

The Senate also passed financial disclosure bills 36-2 last week requiring legislators, the state’s top executives and candidates pursuing those offices to file annual financial disclosure reports under voter-passed Proposal 1 of 2022. The package of legislation, altogether SB 613, SB 614, SB 615 and SB 616, would require elected officials and candidates to disclose non-state income streams of at least $1,000 annually and non-business assets held for investment or income generation worth at least $1,000 per year. Additionally, disclosure of any debt of $10,000 to a single creditor during the yearlong reporting period would be required. The bills have been criticized for not going far enough and House Democrats are expected to put forth amendments to increase disclosure requirements. Of all the issues before the legislature, this is the one measure left on the table that they must pass to satisfy requirements in Proposal 1.

Clean Energy Bill Heads to Governor

The House passed a package of bills last week that set statewide requirements for utilities to get all electricity from carbon-free sources by 2040 and invest in energy efficiency. Other highlights of the legislation include raising caps on distributed energy sources such as rooftop solar and increasing energy efficiency savings requirements and goals. SB 271, SB 273 and SB 502 cleared the Senate in late October. With Governor Whitmer’s signature, Michigan would join 11 other states with commitments to 100% clean or renewable energy. It was later determined that the chamber inadvertently passed an incorrect version of the energy efficiency bill. As such, we expect the House to request the Senate return the bill to them this week, allowing for House substitute language to be adopted and another vote to send that version back to the Senate. This legislation has moved through the process considerably more quickly than most recent previous energy reform measures (it took approximately two years leading up to passage in 2014 and 4 years in the 2008 bid, respectively).

Supplemental Spending Legislation Moves Forward

HB 4292 moved forward on a 56-52 party-line vote in the House and 21-17 vote in the Senate last week with one Republican, Senator Mark Huizenga, voting with Democrats. Highlights of the budget include $174 million towards building a new health and science laboratory in Lansing, a new state psychiatric hospital complex in Northville Township and projects at Michigan State University along with $114 million in debt relief for a handful of K-12 districts throughout the state. Also included is $10 million towards funding Honigman LLP backed HB 4084, which resolves problems with industrial personal property tax exemption filings during a 2021 period of pandemic remote work for many businesses and local governments. The funds will be distributed to local tax collecting agencies to refund taxes paid, or to redistribute unpaid 2021 property taxes to taxing units that would, otherwise, have expected a greater share of funds under the State Essential Services Assessment. We expect HB 4084 to move this week, which will eliminate an approximate $3/4 million cost that would have been levied on Honigman’s client.

Looking Ahead

The legislature is expected to complete work this week on the 2023 session year. We anticipate a motion to place the last day, “Sine Die”, on Tuesday, November 14. This will permit 90 days to pass prior to the target February 27 date for the democratic presidential primary. As we have discussed previously in these updates, this 90 wait was made necessary when the Senate Republicans did not join democrats in voting to provide “immediate effect” to the legislation setting a new primary date when it passed in spring 2023.

Any work left to do prior to sending bills to Governor Whitmer’s desk for her signature will need to be completed by Thursday (or early Friday), which likely means another set of long legislative days coming after a week where House session crept into the midnight hours on multiple days. Whoever uses the old phrase “nothing good happens after midnight” must not have been a lobbyist or stakeholder with unfinished business on those days. Just like the typical “lame duck” session in years past, where members are usually working in the December days after November elections have been decided, this year will undoubtedly witness a push to address as many priorities as possible before time runs out. As always, there will be stakeholder interests left behind, waiting until the following year for their chance.

A final interesting note: the mayoral campaigns in Warren and Westland Michigan will learn their fate after today’s local elections. In the balance this year is the slim 56-54 democratic majority in the House of Representatives, with two sitting members, Lori Stone and Kevin Coleman on local ballots in the respective communities. Depending on the outcomes, democrats may lose their functional majority until special elections can be held to replace victorious mayoral candidates. There is precedent for a tie in the history of the House, including a session of shared power that saw alternating speakerships. Were that to happen this time, democrats would likely look for the chamber to meet as infrequently in as possible in early 2024 prior to filling the lost seats with special elections.