Legislative Report

July 2008

After completing their work on the 2008-09 budget during an extraordinarily long session which extended into early Friday morning, June 29, legislators took a summer break to allow them to hit the campaign trail. With many facing contested primaries, they were eager to get back into their districts to campaign. Gone were the tax fights of last year which made the task of finalizing the budget a little easier. Of course, a great incentive to finalize the budget was the desire to return to their districts to campaign for reelection or, for those term limited legislators, to help their party’s strongest candidate secure the nomination.

The final week of legislative activity was not without drama, however. With the help of Democratic senators, Senator Bruce Patterson, a Republican from Canton, pulled a coup d’etat by getting several bills discharged on procedural votes. One bill would change a 2004 Supreme Court decision defining personal injury while other bills, which were discharged, involved changing annexation procedures. Senator Patterson, along with his Democratic colleagues, was able to pull off the procedural vote because two Republican Senators were absent. The action was later reversed and the bills went to a committee. There was a price to pay for those involved in the mischief, however. The Senate Majority Leader, Mike Bishop, meted out the punishment by removing Senator Patterson from the Government Operations Committee. Senate Minority Leader, Mark Schauer, was removed from the Campaign, Elections and Oversight Committee and Senator Gretchen Whitmer was removed from the Judiciary Committee. In a surprise move, Senator James Barcia, a conservative Democrat, was appointed as chair of a newly established Committee on Hunting, Fishing and Outdoor Recreation. Some see this as an attempt to lure him to the Republican Party.

On another front, there were charges and counter-charges concerning a work group established to resolve differenced in the so called Blues Bills which are very controversial bills that passed the House but ran into problems in the Senate. The Senate passed a completely different set of bills, requiring a conference committee to work out the differences between the two versions. Allegations surfaced that Blue Cross officials basically were allowed to write the compromise bill for the Conference Committee. This angered some of the House Democrats who denied that Blue Cross was controlling the outcome of the Committee’s deliberations. Blue Cross officials also denied the allegations.

Finally, two bills recently passed by the legislature were quickly vetoed by Governor Granholm. One bill, SB 776, which would ban so called partial birth abortion procedures, was vetoed because it did not allow any exceptions to the ban in order to protect the health of the mother. The other bill which the Governor vetoed was HB 4749 which allowed motorcyclist to choose not to wear a helmet. She vetoed this bill because she believed the cost of treating closed-head injuries to those injured by not wearing helmets would far exceed the maximum payouts by insurance policies required under the non-helmet option.

The following are a few of the many bills which saw some activity during June and which may be of interest to seniors/retirees:

Gift card protection and regulation — Three bills which would protect consumers from losses resulting from businesses not honoring gift cards and discounting the value if not used within a certain time period, etc have now been passed by both chambers and are on their way to the Governor for signature. HB 4050 would prohibit retail sales organizations from refusing to accept a gift certificate unless the expiration date was five years after the purchase date, restricting the holder of a gift certificate from using it in a manner that was consistent with its terms and conditions, altering the terms and conditions of the certificate after it was issued, failing to disclose the terms and conditions or failing to disclose that terms and conditions applied, and refusing to accept a gift certificate and apply it to a purchase if its value was less than the purchase price. HB 4317 would prohibit a merchant from charging an inactivity fee or other service fees for the possession or use of a gift certificate. The bill further provides that unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce are unlawful, and contains a list of such practices including those pertaining to credit cards. HB 4680 would prohibit a merchant from selling a gift certificate that expired within a period of less than five years. All three bills clarify and define gift cards and gift certificates. The Governor is expected to sign the bills which will become effective in November.

Tax credit for value of food contributions to food banks — SB 150 would amend the Income Tax Act to include the value of donated food items in a credit allowed for cash donations to a food bank or homeless shelter, for the 2008 tax year and each subsequent year. Under the bill, a taxpayer could claim a credit equal to the 50% of the sum of the cash amount and of the value of the food items contributed, beginning with the 2008 tax year. The limit allowed under the bill is $100, or $200 for a husband and wife filing jointly for the cash contributions made and the value of the food items contributed. The bill has passed both the House and Senate and is on its way to the Governor for signature.

Protection of home loans from predatory lenders — These are a series of bills (HBs 5294-5297, HBs 5299 – 5303, and HBs 5307 5308) that are intended to protect home loans from predatory lending practices. In summary, the package of bills would do the following: (1) Rename the Consumer Mortgage Protection Act as the Home Loan Protection Act (HLPA) and include high-cost home loans, (2) Exempt depository institutions from regulation under the HLPA, (3) Prohibit a creditor from extending a home loan unless a borrower was reasonably determined to be able to repay the loan, (4) Prohibit the creditor from making a high-cost home loan without documentation that the borrower received counseling on the advisability of the loan, (5) Prohibit the charging of prepayment fees or penalties, (6) Prohibit certain conduct by a creditor,( 7) Prohibit class action suits by a creditor, (8) Subject purchasers of high-cost home loans on the secondary market to have the same liability, with some restrictions, as the original lender, (9) Require high-cost home loans sold on the secondary market to have a notice attached to the document warning that liability could attach to the purchaser for all claims and defenses of the borrower, (10) Provide a “good faith” exception to creditors and assignees of a home loan who failed to comply with the act’s provisions but who corrected the situation within certain timeframes, (11) Prohibit “bad faith” attempts to avoid application of the HLPA, (12) Revise civil fine penalties for violations of the HLPA, and (13) Create a criminal penalty for knowingly violating the HLPA, (14) Apply the HLPA to any home loan or other transaction governed by the act that concerned real property located within the state, (15) Apply requirements, as well as penalties and remedies, of the HLPA concerning home loans to persons licensed or registered under the Mortgage Brokers, Lenders and Servicers Licensing Act and Secondary Mortgage Loan Act. These bills have passed the House and gone to the Senate Committee on Judiciary.

Protection against identify theft — These are a series of bills (HBs 6096 – 6104) intended to address issues relating directly to identify theft. The bills address subjects such as making restitution to victims of identity theft for the cost of ameliorating the effects of identify theft on the victim, requiring the State Police to develop a model form for reporting identity theft and make it available to law enforcement agencies and victims of identify theft, permitting identify theft victims to file a civil action for damages and recover actual damages, reasonable attorney fees and court costs, reimbursement for notifying third parties of the identify theft, reporting identify theft to law enforcement, making it illegal to use the identity of another person or attempt to do so while engaged in illegal activity or to mislead a law enforcement agency concerning the identity of a person under criminal investigation, requiring certain financial institutions to establish a written identify theft prevention program and outlining the content of the program, requiring that certain data be destroyed in a timely fashion, and establishing an Identity Theft Protection Commission. Space considerations do not permit a detailed explanation of each bill, but overall, the series of bills heighten the awareness of identity theft and provide tools and means of reducing and controlling it as well as assisting victims of identity theft recover from it. The bills have passed the House and have gone to the Senate where they have been assigned to the Committee on Judiciary.

Jury pool selection and identity disclosure — HB 4859 would amend the current process of establishing a pool from which to select jurors by placing the jury board in each county under the control of the circuit court having jurisdiction over that county. The jury board would continue the current practice of ordering the first jury list so that names of persons residing in each postal zip code within the county would be represented in proportion to that postal zip code’s percentage of the county’s total population based on the latest census using driver’s license and state identification information. The lists of potential jurors would be expanded under the bill to include current voter registration lists or books and individuals who had filed a state income tax return. The jury board would have to keep applying the key number to any underrepresented geographical area to ensure geographical diversity is achieved. Geographical diversity is defined as the proportional representation of the population of each postal zip code within the county as a percentage of the total population of the county, as reflected in the most recent federal decennial census. HB 4934 would amend the state Revenue Act to allow the state treasurer to disclose the names and addresses to the extent required under HB 4859. Both bills have passed the House and gone to the Senate Committee on Judiciary.

Reduction in Driver Responsibility Fees — Public Act 165 of 2003 amended the Michigan Vehicle Code to establish “driver responsibility fees” for drivers who accumulate a certain number of points on their licenses and for drivers who commit certain specific offenses. These fees are in addition to the penalties for committing the offenses. HB 4665 would change the fee structure by reducing the amount of the fees as follows: Currently there is a $1000 driver responsibility fee assessed each year for a two years period for certain crimes (1. manslaughter, negligent homicide, or a felony resulting from the operation of a motor vehicle, off-road vehicle, or snowmobile. 2, a moving violation subject to criminal penalties that results in injury or death of those engaged in certain occupations, i.e. emergency personnel , highway workers, etc. 3. Operating a motor vehicle while intoxicated causing death. 4. failing to stop and disclose identity at the scene of an accident when required by law. 5.fleeing or eluding a police officer) This bill would change the current fee to a one time $1500 fee. Other violations carry a $500 fee assessed for each of two consecutive years. The bill would assess a one-time $1000 fee for the violations listed under this category of violations. Finally, driving with a suspended or revoked licensed or registration certificate is subject to a $500 fee for each of two consecutive years. Under this bill, the fee would be $500, but it would be a one-time fee. Other fees assessed under this bill for certain offenses would remain the same but be assessed for only one year instead of two. This bill has been reported out of the House Transportation Committee and is on second reading at the time of this writing.

Theft of catalytic converters from automobiles — Due to the valuable metals in catalytic converters, a pollution control device found on automobiles, they have become a popular item for thieves to steal. HB 6022 and SB 1193 would add catalytic converters to the list of automobile parts subject to enhanced punishment if unlawfully removed. They would be among other automobile parts (air bags , radio, clock, telephone, or other electronic devices) which when stolen from an automobile constitute the commission of a felony punishable by imprisonment for up to five years and/or a fine of not more than $10,000. The two bills have passed their respective chambers and gone to the Judiciary Committee of the opposite chamber.

Transfer of administration and design of state retiree plan — HB 5545 remains in the House awaiting consideration. This bill would transfer the administration of the state retiree health care plan from Civil Service to the Office of Retirement Systems, a move opposed by SERA. Members are encouraged to continue to contact their legislators and make them aware of our opposition. The reasons for such opposition have been outlined in previous reports and may be found on the SERA website.

Establishment of trust accounts for retiree health care cost — HB 5913 was reported out of the Health Care Reforms Committee on a party-line vote. This bill would establish five 115 Trust Accounts, one of which would be for funding state employees’ health care costs. The bill has language in it that suggests that health care is a contractual obligation of the state. All references to individual health reimbursement accounts have been eliminated from the bill. Funding the trust accounts is not addressed in this bill. The “115” number refers to a section of the Internal Revenue Code which allows such trusts.


Patient care quality initiative — The Michigan Health and Hospital Association has unveiled a new patient care quality initiative program which would allow care to be provided at no cost to the patient or insurance company for bad outcomes of treatment or surgery. Examples of such free treatment are infections stemming from a catheter or at the surgery site for coronary bypass surgery. This initiative is required to come into compliance with federal rules which would deny payment for certain errors beginning October 1, 2008.

Reform Michigan Government Now petition drive — Signatures are now being collected to get a multi-faceted measure on the November ballot as a constitutional amendment. Among the changes contained in the proposal are (1) reduce the number of Supreme Court Justices from 7 to 5, (2) eliminate 7 Court of Appeals judges, (3) reduce the number of House members from 110 to 82 and the number of Senate members from 38 to 28, and (4) roll back legislative pay to the level that existed in 2002. The measure also changes the apportionment rules and eliminates two unnamed state departments  from 20 to 18 and sets the pensions and health care costs for the state’s elected officials at the same level as the highest classified state employee. 380,126 signatures are needed by July 7 to get this measure on the ballot, which is a daunting task.

Attorney General sued for lack of control of Indian casino liquor licenses — An employee of the State Gaming Board has sued Attorney General Cox because the 19 American Indian casinos operated in Michigan are not subject to Michigan liquor laws in terms of fees, inspections and sanctions imposed on other retail establishments which sell alcohol. The lawsuit contends that the casinos get a “free pass” on the state’s liquor laws. Mr. Cox responded by saying the casino Compacts between the state and the casinos do not provide for such oversight.

People in the News

Elly Peterson, the first woman to run for the U.S Senate from Michigan and the first woman to serve as chair of a major state party, has died at the age of 94. Ms. Peterson was the GOP candidate against Phil Hart in 1964. She later served as chairperson of the Republican Party from 1965 to 1969.

Beverly Nettles-Nickerson — An Ingham County Circuit Judge, was removed from the bench by the Michigan Supreme Court after being on paid suspension from the bench for almost a year. Charges were filed by the Judicial Tenure Commission against Judge Nickerson for lying, improper intervention in a court case involving one of her employees’ friends, excessive tardiness, plus some additional charges such as playing the “race card.” The Court removed her from the bench and fined her $12,000. It did not follow recommendations to prospectively suspend her from the bench should she be elected in November or fine her some $128,000. She had already filed as a candidate for reelection.

Sharon Parks — has been named President of the League for Human Services succeeding Ann Marston, who retired. Ms. Parks previously held the position of the League’s vice president for policy and organization.

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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