Legislative Report

July 2004

I am sure you are as tired of my starting my monthly column with a story about the state’s budget problems as I am. However, if I try to capture the aura of the Lansing scene, it must focus on the budget. The Governor and the legislature are trying to come to agreement to solve a projected $150 million deficit for the current fiscal year and a $1 billion deficit projected for the 2004-5 fiscal year which begins October 1.

Inasmuch as there seems to be no comprehensive solution, the problem is solved in bits and pieces. Agreement was reached toward partially reducing the deficit in both fiscal years when the legislature approved $0.75 per pack increase in the cigarette tax which makes the total tax $2.00 per pack. This increase will generate some $90 million for this fiscal year and $250 million for next fiscal year. The funds generated from the seventy-five cents per pack increase will go to the Medicaid Benefits Trust Fund for the last three months of this fiscal year and the entire next fiscal year. In the 2005-6, seventy-five percent of the funds generated via the tax increase will go to the Medicaid Trust account with the other 25% going to the General Fund. The Governor’s proposal for additional tax increases included a so-called “sin tax” on alcohol products which failed to receive legislative approval.

Other non-budgetary matters were considered by the legislature. Some of those bills are reported in this column as being of possible interest to retirees/seniors.

The following bills were signed into law by the Governor:

SB’s 912-13 — Public Act 126 of 2002 increased the penalties for forging, counterfeiting, or altering a driver’s license in any manner and for using, selling, or possessing a falsified license. The change was made because driver’s license were being used to commit identical theft and hide one’s true identity. Because official state identification cards are regulated under a different statute from driver’s license, Public Act 126 did not apply to official state identification cards. SB’s 912 & 13 were introduced to correct this problem and increase the sanctions for misusing state issued ill cards. The legislation basically mirrors the sanctions for misusing a driver’s license and applying them to official state identification cards. The Governor has signed the bills and they are now Public Acts 149 (SB 913) and 150 (SB 912).

HB 5500 — This bill was reported on in last month’s column. It would permit the four westem- most counties in the Upper Peninsula to serve alcohol at 11 a.m. Central Standard Time which is 12 noon Eastern Standard Time for all other Michigan counties. The bill has been signed by the Governor and is now Public Act 134 of 2004.

HB’s 5502-5 — These are bills which would amend the Use Tax Act and authorize Michigan to participate in the Streamlined Sales Tax Project, a multi-state effort to simplify and modernize sales and use tax collection and administration. The impact of the bills is twofold: Adoption of uniform definitions would cause Michigan to lose $18 million in tax collection. The changes in definition primarily relate to some food items. Secondly, the bills are designed to encourage e- commerce (telephone and Internet sales) businesses to collect Michigan’s sales and use taxes. It is believed the increased collection of taxes through this voluntary effort by businesses would offset the losses due to definition changes. It is estimated that Michigan loses some $250 million in sales and use taxes from e-commerce transactions. The intent of this legislation is to reduce some of this loss. The bills have been signed by the Governor and are now Public Acts 172 thorough 175, respectively.

HB 5029 — This bill would allow the Department of Natural Resources to designate the mourning dove as a game bird and establish a limited season and area for hunting them. The Governor has signed this bill into law, despite accusations that she broke a campaign promise not to sign such legislation. She expended some political capital and signed the bill into law. It is now Public Act 160 of 2004.

Other bills of interest which had activity are:

HB 4062 — This bill would establish a toll-free consumer complaint line which is accessible 24 hours per day for the registering of complaints regarding nursing home violations. The bill provides a system for handling complaints with time frames for responding. The Department of Community Health shall provide the complainant with written documentation regarding the complaint within 30 days after the complaint is filed. If the complainant is not satisfied with the disposition of the complaint, a hearing may be requested. The bill has gone to the Governor for signature and she is expected to sign it.

SB 727 — This is the grandparent visitation bill which has been in Conference Committee for some three months. The three conferees from the House and three from the Senate are unable to agree on which version of the bill should be adopted. The House version of the bill has a threshold for allowing grandparent visits as being more beneficial than harmful. The Senate version has a much higher standard of clear and convincing evidence which opponents say makes grandparent visitation illusory .The Conference Committee will continue to seek a compromise between the two versions.

HB 4987 — This is the anti-mail order pharmacy bill which has several related bills. It remains in committee as the two opposing sides attempt to line up support. It appears that many legislators would rather not have to vote on the bills, especially during an election year. There have been no recent hearings on the bills. The Health Purchasers Coalition, which SERA is a member, continues to strongly oppose the bills.

SB 1114 — This recently introduced bill is aimed at prohibiting deceptive advertising of sweepstakes. It is known as the Prize and Sweepstakes Regulation Act. It prohibits most of the deceptive practices of companies which sponsor sweepstakes. Among the measures which would be put into place are (1) the requirement that the solicitor provide the official rules to individuals being solicited; (2) prohibits suggesting that the person being solicited has already won a prize; (3) require that the “prize notice” disclose certain information very clearly and conspicuously; (4) prohibit the suggestion that the prize originated from a government organization; (5) provides for legal and civil sanction for violation of the act. The bill has passed the Senate and is now in the House Committee on Commerce.


A citizens initiated petition has resulted in the passage of a bill to ban so-called partial birth abortions. The bill defines when a birth takes place. Enough signatures were obtained to force the legislature to pass the bill, one which the Governor cannot veto. Inasmuch as the bill was not given immediate effect, it will not become law until 90 days after the legislature adjourns for the year. The effective date will be late March or early April, 2005. Opponents of the bill promise to challenge the bill in court before it become effective.

OFIS to Ban Credit Scoring — The director of the Office of Financial and Insurance Services has announced she will promulgate a rule banning the use of credit scoring by insurance companies in establishing rates for consumer home and automobile insurance. This is being done while the legislature is considering a bill dealing with this subject. The chairperson of the committee holding hearings on the bill indicated that the Commissioner is doing “a great disservice to the legislative process.” Hearings will be held on the proposed rule change as follows: July 19-Lansing; July 21 -Grand Rapids; July 26-Detroit; July 28-Flint. It is anticipated that the rule change will become effective January 1,2005.

Income Tax Reduction Complete — Effective July 1, 2004, the Michigan income tax was reduced from 4.0% to 3.9%. This completes the five year reduction plan which began in 1999. Efforts were made to “pause” the last reduction due to the state’s budget problems, but failed because of partisan politics. Thus, we will pay one-tenth percent less tax as of July I.

Electronic Collection of Bridge Fees — The electronic age has reached the Mackinac Bridge Authority. Individuals can now obtain a device (at a cost of $25) which attaches to their automobile windshield and permits the automatic recording of the Bridge crossings and charges to the individual’s account. Obviously, this is much faster and efficient than having to stop and pay. Information regarding this technological advancement may be obtained by calling the Authority’s office: (906) 643-7600

Buyers Guide to Automobile Insurance — The Office of Financial and Insurance Services announced the availability of the Buyers Guide to Auto Insurance. It includes potential discounts available and the rates of different insurance companies. The guide may be obtained on the Web site: www.michigan.gov/ofis. Hard copies may be obtained by calling (877) 999-6442.

Anti Affirmative Action Amendment — An amendment to the college and university appropriation bill which passed because four House Democrats broke ranks and voted for it has caused a huge controversy. The bill would cause universities to lose funding if they provided preferential treatment in its admission process based on race. Some Democrats believed the Democratic leadership in the House was not aggressive enough in keeping the Democrat Caucus together on this amendment. Representative Tupac Hunter approached Representative Diane Byrum, House Minority Leader, about the matter on the House Floor and became embroiled in a scuffle with Byrum’ s aide, Alan Canady. Representative Morris Hood ill tried to intercede and the Sergeant at Arms had to break up the skirmish. Representative Hunter later wrote Representative Byrum and demanded that she fire Mr .Canady. She instead suspended him without pay for 30 days. Some Democrats have called for a “no confidence” vote for Representative Byrum and House Floor leader, Representative Mary Waters. No such vote took place.

People in the News

John Engler, Michigan’s former Governor, is leaving his position as head of governmental sales at EDS, the computer company. He has accepted a position of President and Chief Executive Officer of the National Manufacturers Association.

Russell “Rusty” Hellman, a former legislator from Dollar Bay in the UP , died at the age of 86. He was one of the more colorful legislators ofhis day having served for many years as a member of the Appropriations Committee. There are many, many Rusty Hellman stories. He is remembered for his omnipresent tie clasp which depicted a huge Upper Peninsula and a very small lower peninsula.

John Schwarz, former State Senator, has announced his candidacy for the 7th Congressional District and is considered the top candidate for the highly Republican District now represented by Nick Smith. Schwarz is from Battle Creek and the 7th District covers several counties including Eaton County. He is the least conservative of a large field of conservative candidates.

Robert Teeter, a nationally known and highly respected Republican pollster from Ann Arbor died at the age of 65. He was respected by both Republicans and Democrats. An associate called Teeter “the Joe DiMaggio of the political world.” He described him as classy, graceful, and a fiercely competitive guy.

Lou Ann Simon, the current Provost and long time official of Michigan State University has been selected as President-elect of MSU. She will succeed Peter McPherson, current President, when he leaves December 31. Simon served as Acting President for several months while McPherson was in Iraq developing that country’s monetary system last year.

Patrick Cannon, Director for the Commission for the Blind, has added a new title to his current one. He was named the State’s Americans with Disabilities Act Coordinator and will be responsible for coordinating ADA activities between state departments. His appointment results from Executive Order 2004-31.

Editor’s note: Alvin Whitfield is former President of the Lansing SERA Chapter and former Chairperson of the Michigan SERA Council and current Legislative Representative for both the Council and the Lansing Chapter. He may be contacted at 1241 Runaway Bay Drive, C-3, Lansing, Michigan 48917; phone 517/703-9666; e-mail: alwhit@worldnet.att.net.

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