Legislative Report

December 2007

It appears that nothing comes easy in the Michigan Legislature. Once again at the eleventh hour, an agreement was reached to apparently settle, once and for all, the major funding sources for the 2008 budget. The recently enacted service tax which was severely flawed and scheduled to take effect on December 1, was, instead, repealed on its effective date. The repeal was necessitated by the business community expressing dislike for the tax and the public’s outcry because of the uneven application of the tax to various services. The partisan legislative battle came over the replacement of the service tax.

The business community generally accepted the fact that a surcharge to the Michigan Business Tax would be superior to the Service Tax. The issue became the amount of the surcharge and whether the surcharge would be permanent. The Democratic controlled House wanted a larger surcharge percentage that the Republican controlled Senate. The two chambers could not agree on the permanency of the surcharge. The Senate passed a bill and sent it to the House at 4:51 a.m. on Saturday, December 1 but the House members had left for the weekend. The House did return to concur in the Senate version at 3:30 on Saturday, December 1. Deal done!

The service tax is gone. There is a 21.99% surcharge, capped at $6 million per business entity, to the Michigan Business Tax. The percentage is more than the Republicans wanted and less than the Democrats were seeking. The surcharge will expire in 2017. A hard fought compromise was reached. Businesses which did not collect the Service Tax during the partial day it was in effect are being granted amnesty. Those businesses which did collect the tax must remit it to the Department of Treasury.

I would imagine that the collective public’s New Year’s wish is that the partisanship and rancor that exists between members of the legislature will cease and that in 2008, members of the legislature will work to effectively take care of the people’s business in a timely manner.

The following is a summary of some of bills which saw legislative action during the month of November which may be of interest to retirees/seniors:

HB 387 & 388 and SB 4050, 4317 and 4680 are all consumer protection bills addressing the purchase and use of gift cards. HB 4050 would prohibit (1) a retailer from refusing to accept a gift card/certificate for personal, family, or household purposes, including goods or services that are on sale, (2)a merchant from placing restrictions on the gift card/certificate holder not consistent with the terms and conditions, (3) a merchant from altering any term or conditions of the gift card, (4)a merchant from failing to disclose terms and conditions at the time it is sold, (5) a merchant from failing to disclose in any advertisement or promotion that the certificate has terms or conditions, (6)a merchant from refusing to apply the unused balance of a gift card/certificate to goods or services which cost more that the card/certificate value. HB4317 would prohibit charging an inactivity fee or other service fee for use of a gift card/certificate. This bill also lists all of the prohibited activities in the bills in the general list of unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade. HB 4680 would prohibit selling a gift card/certificate which expires within a period of less than five years. The bills provide monetary sanctions for a merchant’s violation of the bills’ provisions. HB 4050 is tie-barred to SB 388 which addresses when a gift card is considered abandoned property for escheats purposes. All of the bills have passed their house of origin and are in the opposite chamber for consideration with the exception of SB 388 which has passed both chambers.

HB 4553 would amend the Michigan Election Law to allow, but not require, a clerk of a city, township, or village to forward an absent voter ballot application to all qualified and registered electors who are 60 years of age or older, even if the elector has not requested an absent voter ballot application. A recent court decision prohibits this from occurring under current law (see Miscellany regarding the Secretary of State’s implementation of the court decision). This bill has passed the House and gone to the Senate Committee on Campaign and Election Oversight.

SB 924 is a recently introduced bill which would require a lender who approves an application for a mortgage loan to complete two identical originals of an agreement, the format of which is outlined in the bill, sign each document and obtain the signature of the borrower or borrowers on both documents and deliver one document to the borrower(s). The format of the documents provide the basic facts of the loan in such detail that it would be practically impossible for a borrower(s) not to fully understand all financial aspects of the obligation. The document includes such statements as the type of loan, the interest rate (and whether and how much it will change, the amount of income on which the loan is based, the number of years the loan is for, etc. The purpose is to clarify in simple terms the nature of the obligation the borrower(s) is undertaking. It is intended to prevent individuals from claiming, for example, that they were told they have a fixed rate mortgage when in actuality they have a variable rate mortgage instead. The bill has been assigned to the Committee on Banking and Financial institutions.

SB 866 is a recently introduced bill which makes it an unfair method of competition and an unfair or deceptive act or practice in the insurance industry for an insurer to unreasonably deny a claim for coverage or payment of benefits to a policy holder’s claim. If the policy holder’s claim is denied, the policy holder may bring an action in circuit court for actual damages sustained plus reasonable attorney fees and litigation costs. The initial action by the insured person shall be to provide written notice explaining the basis of the claim to the insurer and the Insurance Commissioner. If the insurer then fails to resolve the issue within 20 days, the insured party may bring action in circuit court. The bill does not pertain to health plans offered by an insurance company. The bill has been referred to the Senate Committee on Economic Development and Regulatory Reform.

HBs 5442-47 are bills intended to address the issue of foreclosures on homes in Michigan. The bills would amend various sections of the Housing Development Authority Act to allow for home refinancing among the purposes for which Housing Development Authority’s funds could be used. Generally, the bills would give new and greater flexibility for the Michigan Housing Development Authority to assist in the home foreclosure crisis. The newly introduced bills have been assigned to the Committee on Banking and Financial Services.


SOS Interpretation of Absentee Ballot Court Decision — The Secretary of State’s Election’s Bureau has issued directives to local clerks implementing the recent decision of the Court of Appeals that municipal clerks cannot send absent voter ballots to senior citizens unless they are specifically requested by the senior citizen. The directive allows those municipalities which have a list of voters who have permanent requests from seniors for absent voter ballots on file to use the list for one final time. The seniors must be instructed that they will have to reapply for a permanent absent voter ballot. Those municipalities which had a list of voters to whom they sent unsolicited absentee ballots cannot use that list any more. The directive further states that there can be no political advertisement or anything construed as propaganda accompanying an absentee ballot.

Office of Financial and Insurance Services Insurance Buyer’s Guide — OFIS has issued it 2007 Buyers Guide to Homeowners and Renters Insurance. The guide includes rate information and recommendations for shopping for an insurance policy. The Guide can be obtained on the OFIS website or by calling 877-999-6442.

Medical Use of Marijuana Ballot Initiative — The Michigan Coalition for Compassionate Care has filed 496,000 signatures to get the issue of legalized marijuana on the ballot in November, 2008. 304,101 valid signatures are needed to get the issue on the ballot. If approved by the voters, doctors could prescribe marijuana for seriously ill patients. Twelve states already have legalized marijuana for medical purposes, as have the cities of Ann Arbor, Detroit, Ferndale, Flint, and Traverse City. It is still a federal offense to possess or use marijuana for any purpose, however.

Grant to Retiree Health Care Reforms Committee — The Committee studying how to solve Michigan state government’s $23 billion unfunded liability for health care costs of retirees of the four Retirement Systems administered by the Office of Retirement Systems has been awarded a grant in the amount of $14,000 from the Washington-based Center for State and Local Government Excellence. The grant was applied for by the Committee and the MSU Institute for Public Policy and Social Research. The funds will be used to form a research team to develop a long term structural solution relating to retiree health care programs. The team will look at what other states have done, compile a record of the work of the Committee, conduct interviews with stakeholders, and study strategies being used by other states.

Legislative Recall Efforts Underway — Recall efforts have been initiated against nine legislators for their votes for tax increase measures: two Republican and seven Democrats. The Republicans are: Senator Gerald Van Woerkom (Norton Shores)and Representative Ed Gaffney (Grosse Pointe). The Democrats are: Representatives Steve Bieda (Warren), Marc Corriveau (Northville), Andy Dillon (Redford Township), Mary Valentine (Muskegon), Robert Dean (Grand Rapids), Joel Sheltrown(West Branch) and Mary Donigon (Royal Oak). The wording of the recall petitions is being challenged on the issue of clarity. Only the wording of Representative Dean’s petition has been approved. The wording on the other’s petitions is in various stages of appeal by the targeted legislators. Once approved, the signature collection process must be initiated within 180 days, but must be completed within a ninety day window.

People in the News

Dan Krichbaum has been appointed as Governor Granholm’s Chief Operating Officer with responsibility for guiding the administration toward boosting the Governor’s economic plan. He also is replacing Mary Lannoye as Chief of Staff, but will not have that title. He is leaving his position of President and CEO of the Detroit-based Michigan Rountable for Diversity and Inclusion.

John Woodford, the longest serving Director of the Department of Transportation, died recently at the age of 84. Mr. Woodford served as head of the MDOT from 1972 to 1983.

Al Short, a prominent Lansing lobbyist died recently at the age of 69. Mr. Short was Director of Public Affairs for the Michigan Education Association and served as its Chief Lobbyist. He had been with MEA since 1971.

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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