Food Donation Immunity
Governor Snyder signed HB 4017 on June 3, which provides immunity from criminal and civil liability to certain persons donating food to non-profit organizations which then distribute the food. The legislation, introduced by Jeff Farrington (R-Utica), amends the Michigan Food Law of 2000.
Under the bill, a retail food establishment, farmer, wholesaler, wholesale processor, distributor, or other person who donates food for use or distribution by a non-profit organization would not be subject to any criminal or civil liability resulting from the nature, age, condition, or packing of the food. The exception would be if the donor knew, or reasonably should have known, when the food wad donated that it was adulterated or not fit for human consumption.
A special thank you to MRA member Sue LaTour, owner of Passport Pizza in Macomb County, who lead the charge on this legislation.
Retention of "Tip Credit"/Reasonable Minimum Wage
When a potential ballot initiative to eliminate the tipped minimum wage and increase the minimum wage to $10.10 per hour was proposed in 2014, the Michigan Restaurant Association lead a broad-based coalition to avert the job-killing initiative. Through a legislative preemption bill signed by Governor Snyder in May, the MRA was able to prevent the ballot proposal from moving forward, retain the “tip credit” so critical to the success of the restaurant industry and enact a more reasonable wage increase implemented over several years to give businesses ample time to prepare.
Public Act 23 of 2013 permits an eligible on-premises establishment to fill and sell growlers with beer for off-premises consumption, under the following conditions:
- The place of filling complied with food service establishment requirements under the Food Law.
- The merchant or his or her agent or employee did not fill a growler before a sale.
- The merchant, agent, or employee only used containers with a capacity of five gallons or more to fill a growler.
- The Liquor Control Commission had given the beer a registration number and had approved the beer for sale.
- The merchant complied with all applicable rules promulgated by the Commission.
Sodium Discharge Reform
Public Act 180 of 2013 reforms how Michigan regulates sodium discharge into groundwater. The bill arose after several restaurateurs (and other businesses) in Oakland and Livingston Counties were fined for exceeding strict sodium discharge limits, set upon the municipality by the Department of Environmental Quality (DEQ). The bill as enacted dramatically raises sodium discharge limits, easing the regulatory burden on restaurant owners in the region.
Public Act 235 of 2013 would allow a patron to bring a properly sealed bottle of wine into a restaurant that already possessed an on premises liquor license was signed by Governor Rick Snyder on December 21, 2013. As passed, the licensed restaurant would have total control over whether to allow patrons to bring their own wine into the establishment and also provides flexibility for how a restaurateur would choose to implement the program. The bill also allows for a corkage fee per bottle, but does not establish a floor or ceiling for how much a restaurant may charge. While this legislation did not originate with the MRA, we were able to dramatically reshape the legislation to create a new revenue generating option for restaurateurs that accommodates maximum flexibility while not increasing liability.
Unemployment Insurance Reform for Seasonal Employers
Seasonal employers utilizing certain temporary work visas to supplement their labor force will no longer have to pay into the Unemployment Insurance Trust Fund for those employees thanks to Public 241 of 2014, which was signed by the Governor on June 24. For those familiar with the necessary, but expensive and particularly arduous process of acquiring an H-2B or J-1 temporary visa employee to meet the demands of a busy summer or winter season, the legislation provides much-deserved relief.
Employers have long argued that the short work periods and tenets of the employees’ visa itself already disqualify them from receiving unemployment benefits, leaving an unfair burden on the employer. As any employer knows, the Unemployment Insurance Trust Fund is funded entirely through employer contributions so it is hard to justify forcing them to pay into the system for an entire class of employee that never has, nor ever could claim those benefits.
Merit Curriculum Reform
Another top MRA priority in 2014, Public Acts 208-209 of 2014 were signed by the Governor on June 25, 2014. The legislation increases flexibility for high school students enrolled in career and technical education (CTE) coursework through an expanded personal curriculum and more opportunity to attribute CTE curriculum to already existing standards.
As the administrator of ProStart, a two-year culinary arts training program that unites the classroom and industry to develop the best and brightest talent into tomorrow’s restaurant and foodservice leaders, the MRA has a vested interest in supporting the success of those students. To meet the academic standards, students must complete a checklist of competencies and participate in at least 400 hours of a mentored work experience. Once completed, the students are awarded the industry-recognized ProStart National Certificate of Achievement. In Michigan, the program has been wildly successful, expanding to educate 5,000 students in over 60 schools across the state in 2013.
Self-Insured Security Funds
Public Acts 228-239 were designed to finally provide compensation to former Delphi employees that had filed worker’s compensation claims, but never received them due to the ensuing bankruptcy of the company. The package of bills were signed by the Governor on June 21, 2014. The bankruptcy highlighted vulnerabilities in the system, most notably holding more reliable self-insured group funds like the Restaurant and Lodging Fund equally responsible for bailing out the failures of single-payer funds like Delphi.
While the package of bills will require a small assessment over the next five years to finance the unpaid Delphi claims, the legislation also creates the Private Employer Group Self-Insurers Security Fund (PEGSISF), effective January 1, 2020. The creation of the PEGSIF formally separates group funds from single-payer funds going forward, ensuring that future failures of single-payer funds (like Delphi) will not negatively impact the substantially more reliable group funds like the Michigan Restaurant and Lodging (MRL) Fund. The legislation, therefore, leaves the MRL Fund in a much stronger and more stable position going forward.
Conditional Liquor Licenses
Public Act 236 of 2013 – long a top MRA priority creates an expedited temporary or “conditional” liquor license while the Michigan Liquor Control Commission conducts its customary background check. A conditional license could be issued to an applicant seeking to transfer ownership of or an interest in an existing license at the same location, or to an applicant for an initial license. Other aspects of the reform include:
- The Liquor Control Commission would have to issue an approved conditional license within 20 business days of receiving a completed application and required documentation for a single location, or 30 business days for multiple locations.
- A conditional license would expire when the Commission approved or denied the license that was the basis for the conditional license; one year after it was issued; or when the initial application was canceled, whichever occurred first.
- The fee for a conditional license would be $300.
- Upon issuing a conditional license and until it expired, the Commission would have to place an existing license in escrow.
Logoed Barware Items
A fight waged for years between retail establishments consisting primarily of restaurants and bars and the wholesalers that distribute the beer and wine to those establishments finally came to resolution in 2014. Public Act 47 of 2014 allowed, for the first time, restaurants and bars to use several logoed barware items in their establishments that had previously been prohibited. The compromise established that retailers can purchase specific logoed barware items (list below) from “barware retailers”, which are essentially third party vendors with no direct ties to the three-tier system. If the item or items purchased are specifically spirits related, they are not required to come from a third party vendor. A restaurant or bar who chooses to purchase logoed barware items will keep receipts for three years and will acknowledge to MLCC that they made such purchases on their annual license renewal form. While retailers do not experience any new penalties under the compromise legislation, a wholesaler or other illegal provider of logoed barware to a retailer is subject to a fine of up to $2,500.
MBT Repeal and Replacement
In a huge victory, after months of discussion and debate, legislation that repeals the Michigan Business Tax (MBT) and its 22 percent surcharge and replaces it with a six percent corporate income tax was signed into law on Wednesday, May 25 by Gov. Rick Snyder.
The legislation, strongly supported by the MRA, introduced by state Rep. Jud Gilbert (R-Algonac), chairman of the state House Tax Policy Committee, was signed into law and is now Public Act 38 of 2011. The new law incorporates Gov. Rick Snyder’s plan to scrap the MBT and the surcharge, and replaces them with a new corporate income tax, which is a six percent levy on the adjusted federal business income of a subchapter C corporation.
The adjusted federal business of a subchapter S corporation flows through to the owners or officers of the corporation, where it will be taxed under the individual income tax, which is set at 4.35 percent. There will be no more double-taxation of S corporations. The MBT will be repealed and the new corporate income tax implemented effective January 1, 2012.
Repeal of the MBT and replacing it with a fair, simple, low-rate tax that ends the double-taxation in the MBT and doesn’t pick winners and losers among industries was a top priority for MRA. MRA lobbied strenuously for its passage and applauds Gov. Snyder, Lt. Gov. Brian Calley, state House Speaker Jase Bolger (R-Marshall), state Senate Majority Leader Randy Richardville (R-Monroe), state Rep. Jud Gilbert (R-Algonac), who sponsored the legislation, and all the state representatives and senators who voted for this critical legislation for their strong support of Michigan’s food and beverage service industry.
“Pure Michigan” Funding
A bill to fully fund the “Pure Michigan” campaign in the current fiscal year is now law. The MRA is grateful to Gov. Rick Snyder and legislators who made it happen. MRA strongly supported the legislation.
Public Act 3 of 2011, which was introduced by state Rep. Wayne Schmidt (R-Traverse City), draws the money from the 21st Century Jobs Fund and changes the statute to make tourism funding a legal use of the fund. Prior to the bill becoming law, $15.4 million for Pure Michigan was appropriated for the current fiscal year. With the additional funding, there is now a total of $25.4 million.
Gov. Snyder called for a $25 million per year commitment for the popular advertising campaign in his State of the State Address in January. He signed the bill into law on Thursday, March 10. The MRA applauds Gov. Snyder for his leadership on this issue and calling for this legislation. The MRA also offers thanks to the bi-partisan group of legislators who supported this legislation in the state House and Senate.
Prohibition on Workplace Regulations Governing Ergonomics
A bill which prohibits new mandatory workplace regulations on ergonomics – repetitive employee movement – is now law with the signature of Gov. Rick Snyder. He signed the bill into law Tuesday, March 22. Veteran Capitol Day attendees will remember this issue from past years. The MRA supported the legislation. Public Act 10 of 2011, introduced by state Sen. Rick Jones (R-Grand Ledge), passed both the state Senate and the state House and became the law of the state upon its signature. Gov. Snyder called for this in his State of the State Address in January.
These rules had been in the development stage for several years in the Granholm Administration. Gov. Snyder asked for the legislation so that a future governor could not re-open the process.
The MRA strongly supported the bill and applauds the state Legislature for their quick passage of the bill and Gov. Snyder for signing it into law.
Unemployment Insurance System Reform – Part I
The MRA, working with other business groups, was successful in getting a bill through both the state Senate and state House of Representatives right before their two-week spring legislative break that achieves important reforms to the unemployment insurance system in Michigan. The state’s unemployment insurance trust fund is broke. The fund, which is entirely financed by taxes paid by employers, has had to borrow almost $4 billion from the federal government in order to pay claims. The fund will have to be made whole and the debt paid back.
Public Act 14 of 2011, which was sponsored by MRA member and state Rep. Jim Stamas (R-Midland), cuts the current 26 weeks of unemployment insurance benefits to 20 weeks for claims filed on or after January 1, 2012. The bill was signed into law by Gov. Rick Snyder on Monday, March 28.
What does this mean? It means it will save about $1 billion in unemployment taxes for employers over the next three years. The bill also implements strong anti-fraud and anti-waste measures into the unemployment system that is badly in need of modernization. According to data from the U.S. Department of Labor, 7.21 percent of the $6.59 billion in benefits paid out in 2009 was waste and fraud. That comes to $475.6 million, money which will be much easier to protect for employers because of this new law.
It also extends federal payments for 20 more weeks for some claimants that exhausted their benefits. MRA is working to address other challenges in the system to help control costs and save employers money, such as the problems with “underemployment.”
A bill initiated allowing liquor licensed restaurants to provide alcohol at off-site catered events was signed into Tuesday, April 19 by Gov. Rick Snyder.
Public Act 20 of 2011, sponsored by state Sen. John Pappageorge (R-Troy), is now law. The MRA has been advocating for this legislation for many years. The new law allows liquor licensed restaurants to sell beer, wine and distilled spirits in the original sealed containers to the host of an off-site catered event, provided that the restaurant also provides the service of the alcohol at the event. The establishment must apply for a permit from the Michigan Liquor Control Commission first.
The bill had passed the state Senate on a vote of 37-1, and the state House of Representatives 107-3.
Youth Employment Reform
After six long years and three vetoes from the previous governor, legislation reforming the employment of minors became law on October 19, 2011. The legislation passed both chambers unanimously. House Bill 4732 (now Public Act 197 of 2011) was sponsored by Representative Jim Stamas (R – Midland), brother of former state Senator Tony Stamas. Senator Stamas was the bill’s original sponsor back in 2005. The legislation amends the Youth Employment Standards Act to establish that 16- and 17-year-olds can work up to 24 hours per week during any week that school is in session, and up to an average of 8 hours per day in one week.
Worker’s Compensation Reform
HB 5002 sponsored by Rep. Bradford Jacobsen (R – Oxford) codified many court rulings on the worker’s compensation system into statute. The changes will limit the instance, payment and duration of claims while expanding a claimant’s scope of acceptable replacement work.
Unemployment Insurance System Reform, Part II
An unprecedented series of reforms to the UI system passed into law in December as the necessary sweetener for the business community to accept the proposed bonding remedy to the state’s UI Trust Fund debt service to the federal government. Significant reforms to the definition of “seasonal employment and underemployment are highlights for MRA members.
MRA fought for changes to restaurant inspection terminology recommended in the 2009 federal Food Code update. The terms “Priority, Priority Foundation and Core Items” replace “Critical and non-Critical”, which should prove to be a substantial improvement to perception by the general public. MRA was also successful in its efforts to include language clarifying that a violation of the smoking ban law (Public Act 188 of 2009) is not a critical violation (or Priority Item) and shall not be classified as such by an inspector.
Legislative history was made in December when Senate Bill 116 sponsored by Senator Arlan Meekhof (R-Olive Township) and House Bill 4003 sponsored by Representative Paul Opsommer (R – DeWitt) were signed into law. As passed, the bills prohibit unions from requiring membership or any fees to work in a given job and would make it a crime to force or coerce an individual to join a union. The measures will not apply to first responders in recognition of their dangerous work and a constitutional provision covering State Police. A $1 million appropriation was added to the bill to help the Department of Labor and Regulatory Affairs to implement and enforce the legislation. The appropriation also precludes the legislation from being subject to referendum, meaning it cannot be put on the ballot and possibly overturned by voters.
Personal Property Tax (P.P.T.) Elimination
A top Michigan Restaurant Association (MRA) priority over the past two years, the elimination of the Personal Property Tax made it across the finish line on the last night of lame duck, but not without a period of chaos and upheaval. The primary goal of the plan is to phase out the industrial portion of the tax from 2016-22 with local governments receiving replacement of 80 percent of the revenue they would lose, provided the lost revenue equals at least 2.3 percent of a local government's total property tax revenues. That 2.3 percent threshold was lowered from the previous level of 2.5 percent. Local governments would be granted the authority to use a special assessment on industrial property to replace 100 percent of lost revenue for police, fire, ambulance and jail operations.
Some restaurant owners, mostly smaller operators, however, will also see a tax break. Starting in the 2013-14 fiscal year, businesses with less than $40,000 in total commercial or industrial personal property in any one jurisdiction would not have to pay personal property tax to that jurisdiction.
The replacement funds will come largely from the use tax, which requires voter approval in the August 2014 primary election to change its current distribution among state funds. If voters approve the change, approximately 20 percent of use tax resources will be diverted to a new statewide authority known as the Metropolitan Area, which will be responsible for distributing replacement funds to qualifying communities.