Honigman Capitol Report

Senate Votes to Repeal Prescription Drug Manufacturer Immunity

The Senate moved forward with legislation that would repeal a law that provides immunity for prescription drug manufacturers last week with a bipartisan 30-8 vote. Ten Republicans sided with all 20 Senate Democrats in favor of repealing the law which has been called the strictest immunity law in the country. Senator Jim Runestad was one of the Republicans to vote with Democrats stating that “currently, immunity says that if it's FDA approved no matter what the hell happened, that these pharmaceuticals are immune from any wrongdoing, so this reverses that and I support the bill.” Opponents contend that a repeal is not needed and that a narrower solution would work better, however, those in favor cite that the state has been locked out of obtaining millions, and possibly billions, of dollars in large settlements with pharmaceutical companies over the years with the existing law. SB 410 will now move to the House for further consideration.

Teacher Evaluation Reform Passes the Senate

Two bills regarding teacher evaluation reform also passed the Senate last week, which would undo policy established under former Governor Rick Snyder, requiring 40% of a public educator’s annual evaluation to be based on student growth and assessment data. SB 395 and SB 396 passed on party-line votes 20-18. The legislation would begin with the 2024-25 school year and would permit a public school district to collectively bargain to have up to 20% of teachers’ year-end evaluations determined by student testing growth. Additionally, the rating system would change from highly effective, effective, minimally effective or ineffective to effective, developing or needing support. Opposition to the legislation cites concerns that evaluations will move to being based primarily on classroom observations, which introduces more subjectivity and bias into the process.

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Auto No Fault Reform

The Senate also passed legislation altering the 2019 auto insurance reform package last week, 23-14. The package of bills includes SB 530, SB 531 and SB 575. The legislation sets new reimbursement rates based on changing costs of medical care and would be subject to annual adjustments. Both in-home occupational therapy and in-home physical therapy would see increased reimbursement rates under the bills. The group of bills passed despite strong opposition from the Michigan Department of Insurance and Financial Services (DIFS). DIFS Director Anita G. Fox expressed her opposition through a letter highlighting increased per-vehicle fees and the impact on drivers who opt for lower Personal Injury Protection (PIP) coverage types. Director Fox specifically cited concerns that PIP purchasers “would be disproportionately affected because the increased provider reimbursement rates will exhaust their PIP medical coverage limits much more quickly.” The intention of the legislation is to eliminate the 45% reduction in insurer-covered reimbursements following catastrophic car accidents. However, Senate Minority Leader Aric Nesbitt (Republican) decided not to cast his vote either way opining that the legislation would add fuel to the fire regarding the recent state Supreme Court ruling holding that the 45% reduction would not apply to drivers catastrophically injured before 2019.

Late Push for Transparency Laws

Proposal 1 of 2022 requires the legislature to pass legislation to establish disclosure requirements for Michigan public officials prior to the end of the year. However, until today, no such bills had been introduced. Following today’s introduction of Senate Bills 613-616, the bills have been referred to Senate Oversight Committee, where they are expected to see a hearing the next morning. The new disclosure report requires legislators, the governor, the attorney general and the secretary of state to report all positions held that pay them $1,000 or more in income as well as disclose the name of their spouse and spouse's occupation. Other disclosures include organization where they are an officer, director, trustee, partner, proprietor, representative, employee or consultant. This applies to any type of organization, corporation, firm, partnership or other business enterprise, nonprofit organization, labor organization, or educational or other institution other than this state. Officials would not have to disclose how much they make, such as what members of Congress must report. Requirements would mandate they list all assets, excluding a business asset, held for investment with fair market value of $1,000 or more and any sources of unearned income exceeding $200 as well as a list of all liabilities exceeding $10,000. Lastly, those covered by the introduced legislation must list stocks, bonds or other forms of securities held by the officer or jointly with their spouse and any real property the officer owns or has a financial interest in.

Looking Ahead

We are now barely more than two weeks away from the end of the legislative year. A hectic last month of legislative activity leaves many choices to be made in short order. For example, will legislative leadership choose to finish work on more controversial items, such as undoing Snyder era environmental permitting and policy review boards, removing local zoning oversight of renewable energy projects, and, of course, the Detroit-centric land value tax. These are only a few of the items the House and Senate have moved this fall. Others include reformulating teaching evaluation criteria, and ending Michigan’s immunity for FDA approved products in the pharmaceutical industry. There’s also the matter of about $300-400 million to potentially spend via supplemental appropriations. The sheer volume of issues left on the table, many of which having only seen committee action in their chamber of origin (House or Senate), complicates negotiations between the legislative and executive leadership teams. These are the same players who will hash out last minute spending decisions. In order to get remaining work over the finish line by an approximate, self-implemented completion deadline of November 9, legislative and executive leaders will need to agree which items move and which must wait until next year. Proponents have been busily pushing their priorities through introductory committee hearings and votes in their respective first chambers just to be in place for possible consideration, while leaders will have to make choices on which bills put the proverbial cart before the horse in a mid-cycle year where all unfinished legislation carries forward to the next year.