Bill Text: MI HB4237 | 2019-2020 | 100th Legislature | Engrossed


Bill Title: Appropriations; zero budget; department of insurance and financial services; provide for fiscal year 2019-2020. Creates appropriation act.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed) 2019-06-13 - Referred To Committee Of The Whole [HB4237 Detail]

Download: Michigan-2019-HB4237-Engrossed.html

HB-4237, As Passed House, June 12, 2019

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4237

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to make appropriations for the department of insurance

 

and financial services for the fiscal year ending September 30,

 

2020; and to provide for the expenditure of the appropriations.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

PART 1

 

LINE-ITEM APPROPRIATIONS

 

     Sec. 101. There is appropriated for the department of

 

insurance and financial services for the fiscal year ending

 

September 30, 2020, from the following funds:

 

DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES

 

APPROPRIATION SUMMARY

 

   Full-time equated unclassified positions.......... 6.0

 

   Full-time equated classified positions.......... 346.5

 

GROSS APPROPRIATION.................................... $     68,889,800


   Interdepartmental grant revenues:

 

Total interdepartmental grants and intradepartmental

 

   transfers............................................           723,100

 

ADJUSTED GROSS APPROPRIATION........................... $     68,166,700

 

   Federal revenues:

 

Total federal revenues.................................         1,017,600

 

   Special revenue funds:

 

Total other state restricted revenues..................        67,099,100

 

State general fund/general purpose..................... $         50,000

 

   State general fund/general purpose schedule:

 

Ongoing state general fund/general

 

   purpose........................................ 50,000

 

One-time state general fund/general

 

   purpose............................................. 0

 

   Sec. 102.  DEPARTMENTAL ADMINISTRATION AND SUPPORT

 

   Full-time equated unclassified positions.......... 6.0

 

   Full-time equated classified positions........... 22.5

 

Unclassified salaries--6.0 FTE positions............... $        816,200

 

Administrative hearings................................           182,500

 

Department services--19.0 FTE positions................         3,823,300

 

Executive director programs--3.5 FTE positions.........         1,091,900

 

Property management....................................         1,283,500

 

Worker's compensation..................................             2,900

 

GROSS APPROPRIATION.................................... $      7,200,300

 

    Appropriated from:

 

   Special revenue funds:

 

Bank fees..............................................           523,600


Captive insurance regulatory and supervision fund......             3,000

 

Consumer finance fees..................................           207,700

 

Credit union fees......................................           877,100

 

Deferred presentment service transaction fees..........           279,000

 

Insurance bureau fund..................................         2,587,900

 

Insurance continuing education fees....................            65,700

 

Insurance licensing and regulation fees................         1,934,700

 

MBLSLA fund............................................           670,300

 

Multiple employer welfare arrangement..................             1,300

 

State general fund/general purpose..................... $         50,000

 

   Sec. 103.  INSURANCE AND FINANCIAL SERVICES REGULATION

 

   Full-time equated classified positions.......... 324.0

 

Consumer services and protection--70.0 FTE positions... $      9,402,600

 

Financial institutions evaluation--133.0 FTE positions.        24,993,600

 

Insurance evaluation--121.0 FTE positions..............        25,017,300

 

GROSS APPROPRIATION.................................... $     59,413,500

 

    Appropriated from:

 

   Interdepartmental grant revenues:

 

IDG from LARA, debt management.........................           723,100

 

   Federal revenues:

 

Federal revenues.......................................         1,017,600

 

   Special revenue funds:

 

Bank fees..............................................         5,811,100

 

Captive insurance regulatory and supervision fund......           491,200

 

Consumer finance fees..................................         2,870,200

 

Credit union fees......................................         8,986,000

 

Deferred presentment service transaction fees..........         2,432,900


Insurance bureau fund..................................        21,290,100

 

Insurance continuing education fees....................           863,700

 

Insurance licensing and regulation fees................         7,958,500

 

MBLSLA fund............................................         6,481,900

 

Multiple employer welfare arrangement..................           487,200

 

State general fund/general purpose..................... $              0

 

   Sec. 104.  INFORMATION TECHNOLOGY

 

Information technology services and projects........... $       2,276,000

 

GROSS APPROPRIATION.................................... $      2,276,000

 

    Appropriated from:

 

   Special revenue funds:

 

Bank fees..............................................           227,900

 

Consumer finance fees..................................            94,000

 

Credit union fees......................................           373,100

 

Deferred presentment service transaction fees..........           114,500

 

Insurance bureau fund..................................           445,400

 

Insurance continuing education fees....................            23,000

 

Insurance licensing and regulation fees................           735,400

 

MBLSLA fund............................................           262,700

 

State general fund/general purpose..................... $              0

 

 

 

 

 

PART 2

 

PROVISIONS CONCERNING APPROPRIATIONS

 

FOR FISCAL YEAR 2019-2020

 

GENERAL SECTIONS

 

     Sec. 201. Pursuant to section 30 of article IX of the state

 


constitution of 1963, total state spending from state sources under

 

part 1 for fiscal year 2019-2020 is $67,149,100.00 and state

 

spending from state sources to be paid to local units of government

 

for fiscal year 2019-2020 is $0.

 

     Sec. 202. The appropriations authorized under this part and

 

part 1 are subject to the management and budget act, 1984 PA 431,

 

MCL 18.1101 to 18.1594.

 

     Sec. 203. As used in this part and part 1:

 

     (a) "Department" means the department of insurance and

 

financial services.

 

     (b) "Director" means the director of the department.

 

     (c) "FTE" means full-time equated.

 

     (d) "IDG" means interdepartmental grant.

 

     (e) "LARA" means the department of licensing and regulatory

 

affairs.

 

     (f) "MBLSLA fund" means the restricted account established

 

under section 8 of the mortgage brokers, lenders, and servicers

 

licensing act, 1987 PA 173, MCL 445.1658.

 

     (g) "Subcommittees" means the subcommittees of the house of

 

representatives and senate appropriations committees with

 

jurisdiction over the budget for the department.

 

     Sec. 204. The department and agencies receiving appropriations

 

in this part and part 1 shall use the internet to fulfill the

 

reporting requirements of this part. This requirement may include

 

transmission of reports via electronic mail to the recipients

 

identified for each reporting requirement, or it may include

 

placement of reports on an internet or intranet site.


     Sec. 205. Funds appropriated in this part and part 1 must not

 

be used for the purchase of foreign goods or services, or both, if

 

competitively priced and of comparable quality American goods or

 

services, or both, are available. Preference must be given to goods

 

or services, or both, manufactured or provided by Michigan

 

businesses, if they are competitively priced and of comparable

 

quality. In addition, preference must be given to goods or

 

services, or both, that are manufactured or provided by Michigan

 

businesses owned and operated by veterans, if they are

 

competitively priced and of comparable quality.

 

     Sec. 206. The director shall take all reasonable steps to

 

ensure businesses in deprived and depressed communities compete for

 

and perform contracts to provide services or supplies, or both. The

 

director shall strongly encourage firms with which the department

 

contracts to subcontract with certified businesses in depressed and

 

deprived communities for services, supplies, or both.

 

     Sec. 207. (1) Out-of-state travel must be limited to

 

situations where the travel is approved by a departmental

 

employee's immediate supervisor and in which 1 or more of the

 

following conditions apply:

 

     (a) The travel is required by legal mandate or court order or

 

for law enforcement purposes.

 

     (b) The travel is necessary to protect the health or safety of

 

Michigan citizens or visitors or to assist other states in similar

 

circumstances.

 

     (c) The travel is necessary to produce budgetary savings or to

 

increase state revenues, including protecting existing federal


funds or securing additional federal funds.

 

     (d) The travel is necessary to comply with federal

 

requirements.

 

     (e) The travel is necessary to secure specialized training for

 

staff that is not available within this state.

 

     (f) The travel is financed entirely by federal or nonstate

 

funds.

 

     (2) The department shall not approve the travel of more than 1

 

departmental employee to a specific professional development

 

conference or training seminar that is located outside of this

 

state unless a professional development conference or training

 

seminar is funded by a federal or private funding source and

 

requires more than 1 individual from the department to attend, or

 

the conference or training seminar includes multiple issues in

 

which 1 employee from the department does not have expertise.

 

     (3) Not later than January 1, the department shall prepare a

 

travel report listing all travel by classified and unclassified

 

employees outside this state in the immediately preceding fiscal

 

year that was funded in whole or in part with funds appropriated in

 

the department's budget. The department shall submit the report to

 

the senate and house of representatives standing committees on

 

appropriations, the senate and house fiscal agencies, and the state

 

budget director. The report must include all of the following

 

information:

 

     (a) The name of each person receiving reimbursement for travel

 

outside this state or whose travel costs were paid by this state.

 

     (b) The destination of each travel occurrence.


     (c) The dates of each travel occurrence.

 

     (d) A brief statement of the reason for each travel

 

occurrence.

 

     (e) The transportation and related costs of each travel

 

occurrence, including the proportion funded with state general

 

fund/general purpose revenues, the proportion funded with state

 

restricted revenues, the proportion funded with federal revenues,

 

and the proportion funded with other revenues.

 

     (f) A total of all out-of-state travel funded for the

 

immediately preceding fiscal year.

 

     Sec. 208. Funds appropriated in this part and part 1 must not

 

be used by a principal executive department, state agency, or

 

authority to hire a person to provide legal services that are the

 

responsibility of the attorney general. This prohibition does not

 

apply to legal services for bonding activities and for those

 

outside services that the attorney general authorizes.

 

     Sec. 209. Not later than November 30, the state budget office

 

shall prepare and transmit a report that provides for estimates of

 

the total general fund/general purpose appropriation lapses at the

 

close of the prior fiscal year. This report must summarize the

 

projected year-end general fund/general purpose appropriation

 

lapses by major departmental program or program areas. The state

 

budget office shall transmit the report to the chairpersons of the

 

senate and house of representatives appropriations committees and

 

the senate and house fiscal agencies.

 

     Sec. 210. (1) In addition to the funds appropriated in part 1,

 

there is appropriated an amount not to exceed $1,000,000.00 for


federal contingency funds. These funds are not available for

 

expenditure until they have been transferred to another line item

 

in part 1 under section 393(2) of the management and budget act,

 

1984 PA 431, MCL 18.1393.

 

     (2) In addition to the funds appropriated in part 1, there is

 

appropriated an amount not to exceed $5,000,000.00 for state

 

restricted contingency funds. These funds are not available for

 

expenditure until they have been transferred to another line item

 

in part 1 under section 393(2) of the management and budget act,

 

1984 PA 431, MCL 18.1393.

 

     Sec. 211. The department shall cooperate with the department

 

of technology, management, and budget to maintain a searchable

 

website accessible by the public at no cost that includes, but is

 

not limited to, all of the following for the department or each

 

agency:

 

     (a) Fiscal-year-to-date expenditures by category.

 

     (b) Fiscal-year-to-date expenditures by appropriation unit.

 

     (c) Fiscal-year-to-date payments to a selected vendor,

 

including the vendor name, payment date, payment amount, and

 

payment description.

 

     (d) The number of active department employees by job

 

classification.

 

     (e) Job specifications and wage rates.

 

     Sec. 212. Within 14 days after the release of the executive

 

budget recommendation, the department shall cooperate with the

 

state budget office to provide the senate and house of

 

representatives appropriations committee chairs, the senate and


house appropriations subcommittees chairs, and the senate and house

 

fiscal agencies with an annual report on estimated state restricted

 

fund balances, state restricted fund projected revenues, and state

 

restricted fund expenditures for the fiscal years ending September

 

30, 2019 and September 30, 2020.

 

     Sec. 213. The department shall maintain, on a publicly

 

accessible website, a department scorecard that identifies, tracks,

 

and regularly updates key metrics that are used to monitor and

 

improve the department's performance.

 

     Sec. 214. Total authorized appropriations from all sources

 

under part 1 for legacy costs for the fiscal year ending September

 

30, 2020 are estimated at $9,068,100.00. From this amount, total

 

agency appropriations for pension-related legacy costs are

 

estimated at $4,408,200.00. Total agency appropriations for retiree

 

health care legacy costs are estimated at $4,659,900.00.

 

     Sec. 215. Unless prohibited by law, the department may accept

 

credit card or other electronic means of payment for licenses,

 

fees, or permits.

 

     Sec. 216. The department shall not take disciplinary action

 

against an employee for communicating with a member of the

 

legislature or his or her staff.

 

     Sec. 217. The department, in conjunction with the department

 

of health and human services, shall maintain an accounting

 

structure within this state's accounting system that will allow

 

expenditures associated with the administration of the Healthy

 

Michigan plan to be identified.

 

     Sec. 218. The amount appropriated from the general fund in


part 1 for executive director programs may only be expended to

 

comply with reporting requirements regarding the Healthy Michigan

 

plan under section 105d(9) of the social welfare act, 1939 PA 280,

 

MCL 400.105d.

 

     Sec. 219. From the funds appropriated in part 1 from the

 

insurance bureau fund, funds may be expended to support legislative

 

participation in insurance activities coordinated by insurance and

 

legislative associations, in accordance with section 225 of the

 

insurance code of 1956, 1956 PA 218, MCL 500.225.

 

 

 

INSURANCE AND FINANCIAL SERVICES REGULATION

 

     Sec. 301. The department shall provide a report to the

 

subcommittees, the senate and house fiscal agencies, and the state

 

budget director by September 30 based on the annual rate filings

 

from health insurance issuers that includes all of the following:

 

     (a) The number that are approved by the department.

 

     (b) The number that are denied by the department.

 

     (c) The percentage of rate filings processed within the

 

applicable statutory time frames.

 

     (d) The average number of calendar days to process rate

 

filings.

 

     Sec. 302. In addition to the funds appropriated in part 1, the

 

funds collected by the department in connection with a

 

conservatorship under section 32 of the mortgage brokers, lenders,

 

and servicers licensing act, 1987 PA 173, MCL 445.1682, and funds

 

collected by the department from corporations being liquidated

 

under the insurance code of 1956, 1956 PA 218, MCL 500.100 to

 


500.8302, must be appropriated for all expenses necessary to

 

provide for the required services. Funds are available for

 

expenditure when they are received by the department of treasury

 

and must not lapse to the general fund at the end of the fiscal

 

year.

 

     Sec. 303. The department may make available to interested

 

entities customized listings of nonconfidential information in its

 

possession. The department may establish and collect a reasonable

 

charge to provide this service. The revenue from this service is

 

appropriated when received and must be used to offset expenses to

 

provide the service. Any balance of this revenue collected and

 

unexpended at the end of the fiscal year must lapse to the

 

appropriate restricted fund.

 

     Sec. 304. (1) The department shall enhance the reporting

 

requirements of the 0850 report to better capture enrollment and

 

other appropriate data.

 

     (2) The department shall update the 0850 report to

 

differentiate the primary and specific claims functions of the

 

third party administrator that it governs. The claims processing

 

designations in the 0850 report must include all of the following:

 

     (a) Medical/surgical.

 

     (b) Dental.

 

     (c) Vision.

 

     (d) Pharmaceutical.

 

     (e) Disability.

 

     (f) Long-term care.

 

     (g) Cafeteria plans.


     (h) Worker's compensation.

 

     (i) Credit disability.

 

     (3) As used in this section, "0850 report" means the financial

 

statement for third party administrators report.

 

     Sec. 305. From the funds appropriated in part 1, the

 

department shall conduct a study to determine the feasibility of an

 

auto insurance marketplace including, but not limited to, the

 

ability to allow consumers to compare insurance rates, discounts,

 

and features from different insurance producers.

 

     Sec. 306. The department shall provide a report to the

 

subcommittees, the senate and house fiscal agencies, and the state

 

budget director by September 30 providing a total calculation of

 

cost savings that the anti-fraud unit within the department has

 

achieved for this state and consumers throughout the fiscal year.

 

If the necessary data is available, the report must include an

 

itemized listing and description of cost savings that the anti-

 

fraud unit has achieved. Any itemization must also state which of

 

the following industries the applicable savings were achieved in:

 

     (a) Financial services.

 

     (b) Auto insurance.

 

     (c) Health insurance.

 

     (d) Life insurance.

 

     (e) Any other category of insurance.

 

     Sec. 307. The department must produce a report and transmit

 

the report to the subcommittees, senate and house fiscal agencies,

 

and state budget director by December 31. The report must include

 

all of the following information for the prior fiscal year:


     (a) The number of complaints received by the office of

 

consumer services, with number of complaints specified for auto

 

insurers, health insurers, life insurers, other types of insurers,

 

banks, credit unions, deferred presentment service providers,

 

mortgage loan originators, and other consumer finance license

 

types.

 

     (b) A description of the process that the office of consumer

 

services uses to resolve complaints.

 

     (c) A description of the types of complaints received by the

 

office of consumer services pertaining to auto insurers, with

 

counts of the number of complaints of that type received.

 

     (d) The number of investigations that the office of consumer

 

services initiated and the number of investigations that the office

 

closed.

 

     (e) The number of recoveries that the office of consumer

 

services secured and the total value of those recoveries.

 

     (f) The number and type of enforcement actions taken against

 

licensees as a result of complaints received by the office of

 

consumer services.

 

     (g) A description of the staffing level and staff

 

responsibilities in the office of consumer services.

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