Honigman Capitol Report


Legislation Introduced to Transform SOAR

Democratic Senators introduced legislation last week to transform the Strategic Outreach and Attraction Reserve (SOAR) Fund into the Make it in Michigan Fund. The redefined fund would work to create partnerships between businesses and communities by combining traditional economic development tools with community investment. The proposed transformation includes three programs: Michigan 360, the Strategic Site Readiness Fund (SSRP) and the Critical Industry Program (CIP). The legislation is also intended to bring increased transparency to Michigan’s economic development process. The package includes SB 559, SB 560, SB 561 and SB 562.


Whitmer Announces $99M in Grants

Along with the Michigan Economic Development Corporation (MEDC), Governor Whitmer announced the approval of $99.2 million in grant funding for several projects through the Revitalization and Placemaking Program (RAP 2.0) last week. Whitmer stated in the announcement that the “grants underscore our commitment to the people, places, and projects that are integral to the growth of Michigan’s economy, these investments will help create vibrant places that attract and retain talent, add new housing options, enable business creation and attraction, and provide resources for Michiganders and our communities. I will work with anyone and do anything to continue getting things done for our state.” In September 2022, the original RAP program awarded $83.8 million in federal American Rescue Plan dollars, this second iteration received appropriations in February 2023.  


Prescription Drug Board Passes Senate

Legislation to establish a Prescription Drug Affordability Board (PDAB) passed in the Senate last week on a 20-17 party-line vote. The Board would consist of five Governor Appointees and receive counsel by industry stakeholders. The package includes SB 483, SB 484, and SB 485. All together, the legislation would be responsible for focusing on prescription drug products starting 18 months after the effective date. Notably, the Board would have the authority to establish an upper payment limit (UPL), basically capping how much a drug product can be purchased, reimbursed or billed for by a third-party payer or product purchaser. The UPL would have an impact throughout the supply chain and has been targeted in disputes related to the legislation. Organizations like the Michigan Chamber of Commerce claim the Board could hinder a company’s ability to raise capital for research and development. Currently, eight states have PDAB statutes with five of them containing provisions related to UPL price limit thresholds: Colorado, Maryland, Washington, Oregon and Minnesota. One of the sponsors of the legislation, Senator Kristen McDonald Rivet (Democrat), told the media after the vote “[t]he reality is we have to do something, and we would love for Congress to act in a very big way, but in that absence, it's incumbent upon the states to take action and this is our first best shot at trying to get our arms around this problem." House Republicans are not expected to welcome the legislation any more than their Senate counterparts. The second-ranking Republican member of the House Health Policy Committee, Representative Graham Filler, has stated he favors allowing the marketplace to set prices and stated that he “can’t imagine that most of [his] Democratic friends believe in this either.”


Looking Ahead

These updates have previously discussed the potential of a November end to the legislative schedule to accommodate enactment of legislation to move Michigan’s date for the Democrat’s presidential primary to February. Typically running through mid-December, such a shift means that October and November may see a swell of activity usually reserved for the weeks following Thanksgiving. House Democrats publically declared their fall priorities as the “land equity” property tax proposal for the City of Detroit, moving more provisions of the federal Affordable Care Act into state law, energy reforms and more reproductive healthcare reforms to laws related to abortion services. Much of this overlaps with the priorities in Governor Whitmer’s August address. Despite this alignment, legislative leadership and the Whitmer administration will be busy managing the votes required to achieve these targets. On top of all this, conversations related to a supplemental spending bill are heating up and always generate a complex trade off of priorities between all parties. The moderate to heavy pace of legislative activity over the last two weeks will continue as negotiations on the most challenging priorities will potentially escalate into the first weeks of November.

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