August, 2022 | Fraser Blog

President Biden Announces Student Loan Forgiveness

On Wednesday, August 24, President Biden announced that the federal government will extend the current pause on monthly student loan payments, which means that borrowers will not have to resume making payments until at least January. President Biden also stated that the federal government plans to forgive up to $20,000 worth of student loan debt, for those who qualify.

First, in order to qualify for loan forgiveness, student loan debt must be through the federal government, meaning that individuals who have private loans will not be eligible. Second, unmarried individuals must earn less than $125,000 per year to be eligible for up to $10,000 in student loan forgiveness. If you are married and file joint tax returns, or are a head of household, you will qualify for up to $10,000 in student loan forgiveness if your annual income is less than $250,000. Finally, if you meet these income requirements, and received a Pell Grant while in school, you could be eligible for $20,000 in forgiveness.

President Biden is relying on the HEROES Act of 2003 [20USC 1098bb], in order to extend the pause on student payments as well as forgive certain amounts of student loans for qualifying individuals. There may be challenges to the President’s reliance on this statute in order to forgive student loan debt in the future. For more information, please go to https://studentaid.gov/manage-loans/forgiveness-cancellation.

Elizabeth M. Siefker is an attorney at Fraser Trebilcock in the trusts and estates practice group focusing on estate planning, elder law, and business planning. You can reach her at esiefker@fraserlawfirm.com, or at 517.377.0801.

Five Stories that Matter in Michigan This Week – August 26, 2022

Michigan Sees Unemployment Decrease as Jobs Increase

According to recent data released by the Michigan Department of Technology, Management, and Budget, the unemployment rate in the state dropped from 6.2% to 4.2% over a twelve-month period. Michigan also saw a bump in jobs last month, with 3,000 in July.

Why it Matters: Officials point to the increase in job growth and lower unemployment rates as a reflection of the hard work that the government, people, and businesses have put into the economy to shift to a more positive outlook.

———

Michigan to Deploy $72M in Federally Funded Small Business Loans and Investments

$72 million of funding Michigan received from the federal Small Business Credit Initiative 2.0 is being deployed for loans to small businesses through Michigan Economic Development Corporation capital and lending programs. The MEDC will also invest up to $75 million in early-stage, technology-based businesses in Michigan through the Small Business Venture Capital Program.

Why it Matters: Michigan’s venture capital and startup ecosystem continues to grow. The amount of venture capital invested in Michigan reached an all-time high in 2021. According to the Michigan Venture Capital Association’s 2022 Impact Report, a record $1.38 billion into 155 companies last year through 161 deals.

———

MDOT Seeks to Install Automated Cameras in Work Zones

Michigan HB 5750 would allow the Michigan Department of Transportation (MDOT) to install automated cameras in work zones to capture speeders. While the bill sits on the House floor, the road construction industry is getting behind the bill.

Why it Matters: If this bill passes, drivers will need to be aware of the resulting penalties for exceeding the posted speed by 10 mph or greater, which would range from a written warning to a $300 fine.

———

Gas Prices Continue to Decrease Since Record June 2022 Highs

The American Automobile Association (AAA) reports that the average Michigander is paying just under $4 for a gallon of gas, down from the record high average of $5.22 in June.

Why it Matters: While gas prices continue to decrease, Michiganders are still paying more per gallon when compared to 2021. Citizens and officials alike will look to continue seeing the downward trend. Spending less at the pump can increase spending in other areas of the economy.

———

U of M Study Finds that Wind and Solar Industries Could Fully Replace Jobs Lost at U.S. Coal-Fired Power Plants

A recent University of Michigan study found that the wind and solar industries could fully replace the number of lost jobs at U.S. coal-fired power plants that are expected to close to meet emission-reduction targets.

Why it Matters: The recently enacted Inflation Reduction Act includes substantial funding for wind and solar energy tax incentives. The bill is intended to spur growth and investment in clean energy projects across the country. Michigan has recently seen growth in jobs in the energy sector. In fact, the state ranked first in the nation for energy job growth in a recent U.S. Department of Energy report. Michigan added more than 35,000 energy-sector jobs from 2020 to 2021.

Related Practice Groups and Professionals

Business & Tax| Ed Castellani

Labor & Employment | Aaron Davis

Energy, Utilities & Telecommunication | Michael Ashton

Insurance Defense | Emily Vanderlaan

Citizens for Better Social Equality Ballot Initiative Struck Down by Detroit Election Commission

A ballot initiative aimed at replacing the City of Detroit’s current recreational marijuana ordinance was recently struck down by the Detroit Election Commission after a determination the initiative did not have enough signatures required to secure a ballot spot under the Michigan Regulation and Taxation of Marijuana Act.

The group behind the proposed initiative, Citizens for Better Equality, were fighting an uphill battle as the Detroit City Council vehemently opposed the initiative and the City’s Law Department had stated that the group does not have enough valid signatures.

This is the latest development in a turbulent time for the City’s marihuana licensing regime as it has yet to issue licenses to begin allowing retail sales of recreational cannabis. In June, following the City Council’s vote on the revised ordinance to allow adult-use recreational cannabis sales, multiple medical marijuana companies filed suit against the City over the licensing program, claiming that the new law would signal the end for existing medical marijuana facilities already in the area. The companies pointed to a provision in the revised ordinance that prevents existing medical facilities in the area from getting a recreational license until 2027.

Our attorneys are actively monitoring the situation and will provide updates. At Fraser Trebilcock, we have handled multiple lawsuits in the cannabis field and can assist you. Please contact Sean Gallagher or your Fraser Trebilcock attorney.

Sean P. Gallagher is an attorney at Fraser Trebilcock with experience in the highly regulated cannabis industry, working with local and state officials to advance client interests and to help mitigate risks involved and increase opportunities. You can reach him at 517.377.0820 or at sgallagher@fraserlawfirm.com.

Five Stories that Matter in Michigan This Week – August 19, 2022

Insurance Agents Who Make a Material Error on Policy Application Now May be Liable after Michigan Court of Appeals Ruling

On August 4, 2022, the Michigan Court of Appeals ruled in Holman v. Farm Bureau Gen. Ins. Co. of Michigan, No. 357473, that an insurance agent who makes a material error on a policy application may be liable.

Why it Matters: This case concerns the scope of an agent’s duty in preparing a policy application for a customer, and makes clear that an agent can be held liable for mistakes. While the court noted that a plaintiff’s duty to review the application could be taken into account when assessing fault, that does not bar a negligence claim against a defendant/agent.

———

Will Electric Vehicle Incentives Under Inflation Reduction Act Actually Hurt Sales?

The Inflation Reduction Act, which President Biden signed into law on Tuesday, August 16, includes billions in incentives for electric vehicle adoption, including $7,500 tax credits for EV purchases. However, many automotive manufacturers are not happy with the rules the bill imposes for vehicles to qualify for the credits.

Why it Matters: Opponents of the new guidelines argue that pricing, sourcing and manufacturing rules, which require significant domestic sourcing of raw materials and manufacturing, are too aggressive and could result in most EVs not qualifying for the federal incentives—therefore stifling sales for many manufacturers.

———

Court Ruling Prohibits Discrimination on the Basis of Sexual Orientation and Gender Identity Under Michigan Law

The Michigan Supreme Court recently ruled that discrimination on the basis of sexual orientation and gender identity is discrimination prohibited by the Michigan Elliott-Larsen Civil Rights Act (the “ELCRA”) in the case of Rouch World, LLC, v. Department of Civil Rights.

Why it Matters: Employers with 15 or more employees were already prohibited by federal law from discriminating on the basis of gender identity or sexual orientation under Title VII. However, small employers in Michigan are now also subject to the same rules.

———

Citizens for Better Social Equality Ballot Initiative Struck Down By Detroit Election Commission

A ballot initiative aimed at replacing the City of Detroit’s current marijuana ordinance was struck down by the Detroit Election Commission after it was determined the initiative did not have enough signatures required to secure a ballot spot under the Michigan Regulation and Taxation of Marijuana Act.

Why it Matters: The group behind the proposed initiative, Citizens for Better Equality, were fighting an uphill battle as the Detroit City Council vehemently opposed the initiative and the city’s Law Department had stated that the group does not have enough valid signatures. This is the latest development in a turbulent time for the city as they have yet to establish and begin selling recreational cannabis. Fraser Trebilcock cannabis attorneys will continue to monitor the situation for updates.

———

Michigan Job Growth Projected Through 2030

Earlier this week, the Michigan Department of Technology, Management & Budget projected that Michigan’s job growth through 2030 would be 8.8%, or an estimated 374,930 jobs.

Why it Matters: Officials looking at industries who are seeing the highest growth rates are ones that are the result of the recovery from the pandemic. While it is observed that leisure and hospitality industries will lead the pack in terms of growth, other industries such as farming, fishing, and forestry, are at projected to decline.

Related Practice Groups and Professionals

Insurance Law | Emily Vanderlaan

Energy, Utilities & Telecommunication | Michael Ashton

Labor & Employment | Aaron Davis

Cannabis Law | Sean Gallagher

Business & Tax | Ed Castellani

Five Stories that Matter in Michigan This Week – August 12, 2022

Court Ruling to Raise Minimum Wage, Paid Sick Leave Stayed Until February 2023

The recent Michigan Court of Claims ruling that the legislature’s “adopt and amend” strategy used in 2018 to limit the impact of ballot initiatives was unconstitutional has been stayed until February 2023.

Why it Matters: Had it not been stayed, the ruling would have required Michigan businesses to, within 21 days, significantly increase minimum wages and paid sick leave for employees. This would have posed a big challenge for many Michigan businesses, particularly in the hospitality industry.

———

Michigan Plans Statewide Electric Vehicle Charging Network

Michigan submitted a plan to deploy $110 million over the next five years to install quick-charging stations for electric vehicles across the state. The plan was required to receive funds under last year’s federal Infrastructure Investment and Jobs Act.

Why it Matters: Given the significant credits expected to be available for the purchase of electric vehicles under the federal Inflation Reduction Act (pending passage), there are likely to be even more electric vehicles on the road, and a new charging infrastructure will likely help Michigan attract more of those drivers to its roads for tourism and other purposes.

———

Inflation Reduction Act Includes New Minimum Corporate Tax

The U.S. Senate recently passed the Inflation Reduction Act of 2022 (the “IRA”). At present, the IRA is only a draft bill and has not been passed by the U.S. House of Representatives nor signed by the President (although its eventual passage and enactment is anticipated). One of the provisions in the proposed bill is a new 15% corporate alternative minimum tax that would be imposed on the adjusted financial statement income of certain large corporations for tax years beginning after December 31, 2022.

Why it Matters: The proposed corporate alternative minimum tax would apply only to certain very large corporations, like Amazon, that have, or are part of, certain related groups that have considerable financial statement income. The Congressional Research Service also indicates that the corporate alternative minimum tax would raise an additional $313 billion in corporate revenue over the 10-year budget window, about half of which would be collected from manufacturing businesses.

———

Citizens for Better Social Equality Initiative Heads to Detroit Election Commission

A ballot initiative aimed at replacing the City of Detroit’s current marijuana ordinance is heading to the Detroit Election Commission to determine whether or not there are enough valid signatures to place the issue on the upcoming November 2022 ballot.

Why it Matters: The group is facing an uphill battle, as the Detroit City Council vehemently opposes the initiative and the city’s Law Department has stated that the group does not have enough valid signatures. This is the latest development in a turbulent time for the city as they have yet to establish and begin selling recreational cannabis. Fraser Trebilcock cannabis attorneys will continue to monitor the situation for updates.

———

Michigan GDP Increases Slightly While Nation’s GDP Decreases

According to data from the U.S. Bureau of Economic Analysis, Michigan was one of a number of select states to have a positive increase to their overall GDP, compared to the nation’s GDP decrease of 1.6%.

Why it Matters: While federal officials have been in a deadlock over whether to declare that the country is in a recession, jobs available have declined by 1.5 million, and overall, the national unemployment rate has decreased to 3.5%. The upcoming November elections can be pivotal as voters will almost certainly be focused on electing candidates they perceive as best equipped to bolster economic growth.

Related Practice Groups and Professionals

Business & Tax | Paul McCord

Labor & Employment | Aaron Davis

Energy, Utilities & Telecommunication | Michael Ashton

Cannabis Law | Sean Gallagher

The Proposed New Corporate Minimum Tax

Recently the Senate reached an agreement on the Inflation Reduction Act of 2022 (the “IRA”). At present, the IRA is only a draft bill and has not been passed by Congress nor signed by the President (although its eventual passage and enactment is anticipated). One of the provisions in the proposed bill includes a new 15% corporate alternative minimum tax (Corporate AMT) that would be imposed on the “adjusted financial statement income” (AFSI) of certain large corporations (very generally, and described in greater detail below, corporations reporting at least $1 billion average adjusted pre-tax net income on their consolidated financial statements), for tax years beginning after December 31, 2022.

Many of our clients will be unaffected by this proposal. The proposed Corporate AMT would apply only to certain very large corporations, like Amazon, that have, or are part of, certain related groups that have considerable financial statement income. In a report released August 1, 2022, the Congressional Research Service (CRS), suggests that “[r]elatively few corporations would be affected by the tax.” According to the CRS, citing an analysis by the Joint Committee of Taxation, only about 150 taxpayers would be subject to the Corporate AMT each year. The CRS also indicates that the Corporate AMT would raise an additional $313 billion in corporate revenue over the 10-year budget window, about half of which would be collected from manufacturing businesses.

If you have any questions regarding this proposed bill, we will continue to monitor the situation. This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

Five Stories that Matter in Michigan This Week – August 5, 2022

August 2 Michigan Primary Election Results

The outcome of the August 2 Republican primary for Governor saw candidate Tudor Dixon prevail. In the November general election, she will face incumbent Governor Gretchen Whitmer who ran unopposed. In the newly drawn 3^rd congressional district, Republican John Gibbs defeated incumbent Peter Meijer.

Why it Matters: As November and the general election gets closer, stay tuned for more insights as Fraser Trebilcock’s election law team will be closely monitoring the action.

———

MEDC to Make $237 Million Available to Help Michigan Small Businesses

The Michigan Economic Development Corporation announced that Michigan has been approved for up to $237 million in State Small Business Credit Initiative (SSBCI) funding from the U.S. Department of Treasury.

Why it Matters: Small businesses impacted by the COVID-19 pandemic can apply for funds through private lenders and the MEDC would back the loans through the SSBCI program. Learn more on the topic here.

———

Ballot Initiative Aims to Increase Minimum Wage Targets 2024 Ballot

The Raise the Wage MI ballot initiative proposal aims to raise Michigan’s hourly minimum wage to $15 over the course of five years. The organizers behind the ballot initiative are reported to have secured more than 610,000 signatures and delivered them to Michigan officials last week.

Why it Matters: The issuance of a stay until February 19, 2023 follows the ruling by the Michigan Court of Claims stating that the state legislature’s adoption and alteration of a 2018 ballot initiative that would have raised minimum wage to $12 by 2022 was unconstitutional. This ruling has been appealed, but even if it gets overturned, Michigan may still see an increase to minimum wage if the Raise the Wage MI initiative is passed.

———

New Law Allows Non-Profit Corporation to be a Member of Limited Liability Company

Senate Bill 926 was recently signed into law by Governor Whitmer, which changes the definition of a person in the limited liability company act, allowing nonprofit corporations to be members of limited liability companies (“LLC”).

Why it Matters: Michigan now joins other states that allow nonprofits to create LLCs that do not involve any financial gain or profit to perform certain functions while still maintaining their nonprofit status.

———

Michigan Senate Judiciary Committee Approves Texting While Driving Bills

The Michigan Senate Judiciary Committee approved a package of bills expanding the scope of Michigan’s texting while driving laws, which would make requirements more stringent and penalties for violations more costly. The bills explicitly address social media use and live streaming.

Why it Matters: Distracted driving is dangerous. In 2020, according to the National Highway Traffic Safety Association, 3,142 people were killed in motor vehicle crashes involving distracted drivers. Distracted driving is also costly for drivers, as those who violate distracted driving laws tend to see their insurance rates shoot up.

Related Practice Groups and Professionals

Election Law | Garett Koger

Business & Tax | Robert D. Burgee

Business & Tax | Ed Castellani

Insurance Defense | Emily Vanderlaan