Month: June 2023

Five Stories That Matter in Michigan This Week – June 30, 2023

  1. Michigan’s New Distracted Driving Law Takes Effect June 30

In an effort to mitigate the risks associated with distracted driving, Michigan recently enacted legislation meant to deter and punish instances of distracted driving. Michigan is the 26th state in the United States to pass a hands-free driving law, signifying the growing national consensus around the importance of focused driving.

Why it Matters: The new law, which takes effect June 30, 2023, makes holding and using a mobile electronic device while operating a motor vehicle illegal. Learn more about the new law from your Fraser Trebilcock attorney.

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  1. Gain Peace of Mind Through Life’s Toughest Challenges

Family law involves deeply personal and often emotional issues – that can be as complicated as they are sensitive. A strong family law attorney understands the judicial processes and procedures, while also handling your case with care and compassion.

Why it Matters: Fraser Trebilcock attorney Paula C. Spicer has over a decade of experience assisting clients in family law matters. Paula compassionately and efficiently works with clients to help them understand their options and navigate the often challenging and emotional situations. Learn more how she may be able to assist.

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  1. 6th Circuit Decision Clarifies Rights of Schools to Discipline Students for Off-Campus Speech and Conduct

In a case that involved a student creating a fake Instagram account impersonating a teacher, and the student being suspended by his school, the U.S. Court of Appeals for the Sixth Circuit clarified that schools can regulate student speech—even off-campus speech—that causes or can reasonably be forecast to cause substantial disruption to the educational environment.

Why it Matters: As this case (Kutchinski v Freeland Community School District) demonstrates, off-campus speech can easily make its way onto school grounds given the widespread use of social networks and other digital means of communication by students. While every case of discipline for off-campus speech must be evaluated pursuant to its own unique facts and circumstances, the Sixth Circuit affirmed a school’s rights to take disciplinary action under appropriate circumstances.

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  1. Governor Whitmer Announces New Support Hubs for Small Businesses

On June 27, Governor Whitmer, along with the Michigan Economic Development Corporation, announced a new program aimed at supporting small businesses in the state by providing additional resources to them.

Why it Matters: The program is designed to allocate new and improved resources to small businesses through funding, direct support, and programming. Learn more about the new program.

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  1. City of Detroit Approves Second Round of Recreational Cannabis Applications

On June 27, the Detroit City Council approved a second of three rounds of recreational cannabis applications to open up for submission.

Why it Matters: The second round will see a maximum of 50 applications for cannabis operations, broken down into the following categories: 15 adult-use retailer licenses, 15 adult-use equity retailer licenses, five microbusiness licenses, five microbusiness equity licenses, five designated consumption establishment licenses, and five designated consumption establishment equity licenses.

Related Practice Groups and Professionals

Insurance Law | Gary Rogers
Family Law | Paula Spicer
Business & Tax | Ed Castellani
Cannabis Law | Sean Gallagher

Michigan’s New Distracted Driving Law Takes Effect June 30

In an effort to mitigate the risks associated with distracted driving, Michigan recently enacted legislation meant to deter and punish instances of distracted driving. The new law, which takes effect June 30, 2023, makes holding and using a mobile electronic device while operating a motor vehicle illegal. Michigan is the 26th state in the United States to pass a hands-free driving law, signifying the growing national consensus around the importance of focused driving.

Background

The journey to this legislation commenced in early May when the Michigan House and Senate passed House Bills 4250, 4251, and 4252. These bills sought to amend portions of the Michigan Vehicle Code, intending to curtail the surging number of distracted-driving mishaps and fatalities.

Texting while driving was already prohibited in Michigan. However, the no-texting law was instituted during an era when mobile phones were in their relatively nascent stage of adoption. With the current legislation, all mobile phone usage while driving is effectively deemed illegal, reflecting the pervasiveness of such devices and our current understanding of the risks of distracted driving. According to the National Highway Transportation Safety Administration (NHTSA), over 3,500 lives were lost due to distracted driving in 2021.

Understanding the New Law

At its core, the new law restructures Michigan’s Vehicle Code to make using a mobile electronic device for any task illegal, including, but not limited to, making or receiving telephone calls, sending, reading or receiving text messages, viewing, recording or transmitting videos, and accessing, reading, or posting to social networking sites.

Importantly, the law designates holding or using a cell phone while driving as a primary offense, allowing an officer to pull over and ticket someone solely for this violation. However, the legislation provides that police cannot search a driver based on this violation alone.

The Cost of Distracted Driving in Michigan

The legislation imposes penalties for distracted driving, ranging from monetary fines to community service.

    • For the first violation, drivers face a $100 fine or 16 hours of community service.
    • A second violation will result in a $250 fine or 24 hours of community service.
    • If three violations are committed within three years, the driver will be ordered to complete a driver-improvement course.

Stiffer penalties apply to commercial vehicle or school bus drivers, with the first violation attracting a $200 fine or 32 hours of community service, and subsequent violations drawing a $500 fine or 48 hours of community service. Notably, if an at-fault driver is found to be using a cell phone during a crash, any civil fines are doubled.

Potential Liability

A potential secondary cost is the fact that if a driver is involved in a crash causing injury or death while in any way in violation of the new law; the court at trial will instruct the jury that if the driver violated the new statute that the violation creates a prima facie case from which a jury may draw an inference of negligence. In other words, the burden will shift to the user of the mobile electronic device to show that he / she was not negligent. In a normal circumstance, without violation of a statute, the burden of proving negligence is on the Plaintiff, not the Defendant. Violation of the new statute will shift the burden of proof and make it easier for the Plaintiff to convince the Defendant driver was negligent.

Exceptions

The law includes several exceptions. Law enforcement, first responders, and other emergency workers are allowed to use a cell phone while performing their official duties. Similarly, anyone texting or calling 911 to report an emergency is exempted. All drivers, except those with a level 1 or 2 graduated license, may use their device in hands-free modes.

Drivers are allowed to utilize their GPS, provided it is hands-free. Mobile phones can serve as navigation systems if operated in a hands-free mode, for instance, by mounting it on the dashboard or using voice commands. Generally, using voice commands or hands-free modes to use mobile devices is allowed.

Conclusion

As we navigate the digital age, including on our roads, laws must keep pace with technological progress. Michigan’s new distracted driving law is an attempt to improve road safety in the era of smartphones. Get ready to go hands-free on June 30.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Fraser Trebilcock Shareholder Gary C. Rogers is recognized as one of the top civil defense attorneys in the area of automobile related cases, and he has co-written Michigan No-Fault Law-The Insurers’ Perspective, a handbook for handling claims under Michigan’s No-Fault Automobile legislation. Gary can be reached at grogers@fraserlawfirm.com or (517) 377-0828.

Five Stories That Matter in Michigan This Week – June 23, 2023

  1. Client Alert: PCORI Fees Due by July 31, 2023!

In Notice 2022-59 the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2022, and before October 1, 2023.

Why it Matters: Notice 2022-59 sets the adjusted applicable dollar amount used to calculate the fee at $3.00. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2022, and before October 1, 2023. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

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  1. Michigan Legislation Aims to Make it Easier to Hire Teachers and Counselors

On Thursday, the Michigan House passed legislation—which cleared the Michigan Senate in April—that aims to reduce barriers for out-of-state teachers and school counselors to work in Michigan’s schools. Senate Bill 161 would change Michigan’s teacher certification requirements, and Senate Bill 162 would similarly ease the way for out-of-state counselors to work with Michigan students.

Why it Matters: Michigan schools, like many in other parts of the country, have faced staffing shortages similar to those other employers have struggled with.

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  1. What You Need to Know About Pet Trusts

A pet trust is a legal document that allows you to provide for the care of your beloved pet if you become incapacitated and after you pass away. A pet trust can be created as a standalone document, or as part of a revocable (living) trust or will. In addition, a durable power of attorney can provide instructions to an agent for the care of a pet during your lifetime.

Why it Matters: Estate planning with pets in mind is an increasingly popular way for pet owners to ensure that their furry companions are taken care of, even when the owners can no longer care for themselves. Learn more about how to effectively care for your pets if you become incapacitated or pass away.

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  1. New Distracted Driving Law Goes into Effect June 30

Beginning June 30, Michigan motorists will be prohibited from using any mobile electronic device while operating a motor vehicle, even if at a stop sign or red light. This includes sending/receiving texts, accessing social media, or recording videos.

Why it Matters: First time offenders will face a $100 fine and/or 16 hours of community service, in addition to one point being added to the individual’s driving record. Penalties will increase for repeated violations, and on the third offense, individuals may be required to take a drivers improvement course.

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  1. Fraser Trebilcock Attorney Obtains Dismissal for Firm Client

Fraser Trebilcock attorney Jared Roberts recently obtained a dismissal in a circuit court case brought against a brokerage and salesperson.

Why it Matters: In this case, which involved interpretation of transaction documents, a county “Time of Sale” well and septic inspection ordinance and water quality issues, Mr. Roberts obtained dismissal in the first responsive document. Learn more about their practice and how they may be able to assist.

Related Practice Groups and Professionals

Employee Benefits | Bob Burgee
Employee Benefits
Trusts & Estates | Elizabeth Siefker
Real Estate | Jared Roberts

Client Alert: PCORI Fees Due by July 31, 2023!

In Notice 2022-59 the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2022, and before October 1, 2023.

Background

The Patient-Centered Outcomes Research Institute (PCORI) fee is used to partially fund the Patient-Centered Outcomes Research Institute which was implemented as part of the Patient Protection and Affordable Care Act.

The PCORI fees were originally set to expire for plan years ending before October 1, 2019. However, on December 20, 2019, the Further Consolidated Appropriations Act was enacted and extended the fee to plan years ending before October 1, 2029.

The fee is calculated by using the average number of lives covered under a plan and the applicable dollar amount for that plan year. Code section 4375 imposes the fee on issuers of specified health insurance policies. Code section 4376 imposed the fee on plan sponsors of applicable self-insured health plans. This Client Alert focuses on the latter.

Adjusted Applicable Dollar Amount

Notice 2022-59 sets the adjusted applicable dollar amount used to calculate the fee at $3.00. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2022, and before October 1, 2023. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method.

Deadline and How to Report

The PCORI fee is due by July 31, 2023, and must be reported on Form 720.

Instructions are found here (see Part II, pages 8-9).

The Form 720 itself is found here (see Part II, page 2).

Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.

As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. Insurers of specified health insurance policies are also responsible for this fee.

  • For plan years ending on or after October 1, 2018 and before October 1, 2019, the fee is $2.45 per covered life.
  • For plan years ending on or after October 1, 2019 and before October 1, 2020, the fee is $2.54 per covered life.
  • For plan years ending on or after October 1, 2020 and before October 1, 2021, the fee is $2.66 per covered life.
  • For plan years ending on or after October 1, 2021 and before October 1, 2022, the fee is $2.79 per covered life.
  • For plan years ending on or after October 1, 2022 and before October 1, 2023, the fee is $3.00 per covered life.

Again, the fee is due no later than July 31 of the year following the last day of the plan year.

As mentioned above, there are specific calculation methods used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. While generally all covered lives are counted, that is not the case for all plans. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participants and not the spouses and dependents. The Form 720 instructions do not outline all of these rules.

More information about calculating and reporting the fees can be found here.

Questions and answers about the PCORI fee and the extension may be found here.

As you are well aware, the law and guidance are continually evolving. Please check with your Fraser Trebilcock attorney for the most recent updates.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.

Five Stories That Matter in Michigan This Week – June 16, 2023

  1. Changes to Michigan’s Elliott-Larsen Civil Rights Act

Employers should be aware of recent actions taken by the Michigan legislature with respect to Michigan’s Elliott-Larsen Civil Rights Act (ELCRA). Governor Whitmer recently signed into law an amendment that extends the ELCRA’s prohibitions against discrimination to individuals who have terminated a pregnancy. On June 8, 2023, the Michigan House of Representatives voted to pass, which amends the definition of race within ELCRA to ban discrimination based on hair and other traits associated with racial or ethnic identity. Governor Whitmer is expected to sign this bill into law.

Why it Matters: Lawmakers who introduced the bills argue that the legislation will increase access to support services for domestic and sexual violence victims, and also will protect their privacy and shielding them from additional harassment.

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  1. CRA Publishes May 2023 Data, Average Price Hovers

Per data released by the Cannabis Regulatory Agency, the average retail price for adult-use sales of an ounce of cannabis is $90.64, a small increase from $87.76 in April. This is still a large decrease from May 2022, where the average price was $130.62.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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  1. Fraser Trebilcock Attorney Obtains Dismissal for Firm Client

Fraser Trebilcock attorney Jared Roberts recently obtained a dismissal in a circuit court case brought against a brokerage and salesperson.

Why it Matters: In this case, which involved interpretation of transaction documents, a county “Time of Sale” well and septic inspection ordinance and water quality issues, Mr. Roberts obtained dismissal in the first responsive document. Learn more about their practice and how they may be able to assist.

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  1. Detroit Mayor Unveils Land Value Tax Plan

At the Mackinac Policy Conference in May, Detroit Mayor Mike Duggan announced a proposal, called the Land Value Tax Plan, that if passed, would change property taxes while encouraging economic growth across Detroit.

Why it Matters: According to the plan laid out online, if enacted, would replace certain tax rates for homes and property structures with a higher rate of tax on land, with the purpose of targeting unused, unproductive, or vacant land while providing benefits to homeowners and businesses.

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  1. CRA Revokes License for Marijuana Business for Illicit Products

The Michigan Cannabis Regulatory Agency announced on June 15 that it was revoking the license for marijuana business Candid Labs, which operates as Layercake Farms 2, after they were found to have illicit and unlicensed marijuana, in addition to other license violations including an inoperable video surveillance system.

Why it Matters: A requirement that every marijuana business must adhere to is properly working video surveillance system that is in place 24 hours a day, seven days a week, at all licensee locations. Failure to comply will result in fines, possible license suspension and/or license being revoked. Contact our cannabis law attorneys if you have any questions.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Dave Houston
Cannabis Law | Sean Gallagher
Real Estate | Jared Roberts

What You Need to Know About Pet Trusts

A pet trust is a legal document that allows you to provide for the care of your beloved pet if you become incapacitated and after you pass away. A pet trust can be created as a standalone document, or as part of a revocable (living) trust or will. In addition, a durable power of attorney can provide instructions to an agent for the care of a pet during your lifetime.

These documents must be set up during your lifetime and allow you to:

  • designate a caretaker for your pet,
  • provide funds for their care and well-being,
  • designate a charity to receive funds remaining after your pet’s death,
  • give specific instructions for your pet’s care, dietary requirements, and medical treatments, and
  • provide for your pet to remain with you for as long as possible, at home, or at a facility.

Estate planning with pets in mind is an increasingly popular way for pet owners to ensure that their furry companions are taken care of, even when the owners can no longer care for themselves.

To learn more about how to effectively care for your pets if you become incapacitated or pass away, please contact us.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Attorney Elizabeth M. Siefker

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 – June 9, 2023

  1. Michigan House Approves Bills to Protect Domestic and Sexual Violence Victims

The Michigan House of Representatives, in bipartisan fashion, voted on June 7 to approve a series of bills that aims to increase support services and add privacy protections for victims and survivors of domestic and sexual assault. For example, House Bill 4421 would allow photos and videos of crime victims to be blurred if they are viewable in court proceedings that are made public.

Why it Matters: Lawmakers who introduced the bills argue that the legislation will increase access to support services for domestic and sexual violence victims, and also will protect their privacy and shielding them from additional harassment.

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  1. Michigan Cannabis Sales Exceed $245 Million in May

Cannabis sales surpassed $245 million in May, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $238,867,535.00, while medical sales came in at $7,051,723.96, altogether totaling $245,919,258.96.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market over-saturation that the industry is contending with.

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  1. Client Alert: IRS Announces 2024 Adjustments for HSAs & Excepted Benefit HRAs

The IRS has released its 2024 annual inflation adjustments for Health Savings Accounts (“HSAs”) as determined under Section 223 of the Internal Revenue Code. Specifically, IRS Revenue Procedure 2023-23 provides the adjusted limits for contributions to a HSA, as well as the high deductible health plan (“HDHP”) minimums and maximums for calendar year 2024.

Why it Matters: HSA contributions for an individual will increase in 2024 to $4,150 from $3,850 in 2023, and the minimum deductible on a HDHP for an individual will increase to $1,600 in 2024 from $1,500 in 2023. Read more from your Fraser Trebilcock attorney.

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  1. NLRB General Counsel Issues Memo on Non-Competes

On May 30, NLRB General Counsel Jennifer Abruzzo issued a memo that non-compete provisions in employment contracts and severance agreements violate the National Labor Relations Act except in limited circumstances.

Why it Matters: The memo details that non-compete agreements hinder the ability of the employee from exercising their rights to take collective action to improve their working conditions, making these non-competes unlawful under Section 7 of the National Labor Relations Act.

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  1. Anti-Distracted Driving Laws Enforced June 30

Beginning June 30, Michigan motorists will be prohibited from using any mobile electronic device while operating a motor vehicle, even if at a stop sign or red light. This includes sending/receiving texts, accessing social media, or recording videos.

Why it Matters: First time offenders will face a $100 fine and/or 16 hours of community service, in addition to one point being added to the individual’s driving record. Penalties will increase for repeated violations, and on the third offense, individuals may be required to take a drivers improvement course.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Employee Benefits | Robert Burgee
Labor, Employment & Civil Rights | Dave Houston

Five Stories That Matter in Michigan This Week – June 2, 2023

  1. Governor Whitmer Announces Initiative to Grow Michigan Population

Governor Whitmer made news at this week’s Mackinac Policy Conference by announcing a new initiative to grow Michigan’s population, which has remained relatively stagnant for the last few decades. The initiative will include the formation of a new “Growing Michigan Together Council,” which will develop a plan to attract new residents to the state and keep those currently in Michigan.

Why it Matters: A lack of population growth has inhibited Michigan’s economic growth, and hindered businesses’ efforts to find talented people to fill open jobs.

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  1. Assets of Marijuana Business Skymint to be Auctioned

As we reported earlier, Skymint Brands was placed into receivership on March 7. Now, almost three months later, the receiver has determined that the best course of action for the receivership estate and the creditors is to sell off the assets of the business.

Why it Matters: While Michigan has experienced strong sales of recreational marijuana, prices per ounce have fallen significantly, making it difficult for many dispensaries to generate profits. The fact that Skymint’s assets were put into receivership is also noteworthy, as state court receivership has become an alternative to bankruptcy for distressed cannabis companies. Because cannabis is still illegal at the federal level, companies can’t access federal bankruptcy to reorganize or liquidate.

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  1. Fiscal Responsibility Act of 2023 Passes

Earlier this week, the federal government passed the Fiscal Responsibility Act of 2023, which raised the debt ceiling and allowed the government to continue borrowing.

Why it Matters: With the passing of this act, the federal government avoids any possibility of default or shutdown, which can have sweeping effects at every level of government. This also allows the government to continue investing in infrastructure and economic development.

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  1. June 5 Business Education Series

During this two-presentation dynamic program, attendees will learn about the SBA 504 Loan from the MCDC (Michigan Certified Development Corporation), and Government Contracts from APEX (formerly known as PTAC Procurement Technical Assistance Centers).

Why it Matters: The SBA 504 Loan presentation you will learn the basics of SBA 504 loan, the benefits and how to qualify and apply. MCDC is a non-profit certified by the US SBA to administer the SBA 504 Loan Program in Michigan. The SBA 504 loan provides small businesses with low-rate, long-term loans for building purchases, construction, machinery and equipment. In addition, these loans require a smaller down payment than what traditional lenders can offer, allowing the business owner to preserve capital. Learn more and to register.

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  1. Client Alert: IRS Announces 2024 Adjustments for HSAs & Excepted Benefit HRAs

The IRS has released its 2024 annual inflation adjustments for Health Savings Accounts (“HSAs”) as determined under Section 223 of the Internal Revenue Code. Specifically, IRS Revenue Procedure 2023-23 provides the adjusted limits for contributions to a HSA, as well as the high deductible health plan (“HDHP”) minimums and maximums for calendar year 2024.

Why it Matters: HSA contributions for an individual will increase in 2024 to $4,150 from $3,850 in 2023, and the minimum deductible on a HDHP for an individual will increase to $1,600 in 2024 from $1,500 in 2023. Read more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Dave Houston
Cannabis Law | Sean Gallagher
Employee Benefits | Robert Burgee