Around the Dome

by Del Chenault, Senior Vice President, Government Affairs
Scofes & Associates Consulting, Inc. (S&A)

August, 2003

ALTERNATIVE GAS LICENSE ISSUED FOR THE FIRST TIME BY THE PSC
Customers will now have one official choice for their natural gas fuel provider. The Public Service Commission (PSC) approved the first license for an alternative gas supplier in Michigan.

Cornerstone Energy Marketing became the first to receive an alternative gas license. New legislation last year (PA 634 of 2002) required the alternative suppliers to be licensed.

The PSC also approved DTE Energy's request to increase its gas cost recovery factor to $5.75 per thousand cubic feet of gas.

GOVERNOR GRANHOLM SIGNS RATE BAND BILL
Governor Jennifer Granholm signed into law Senate Bill 460, saying it will bring predictability and stability to health insurance costs for small businesses. This new law means that small businesses can comparison shop and better predict costs.

Michigan has joined 37 other states that have adopted similar legislation to regulate charges to businesses with 50 or fewer employees. The legislation sets band rates, which limit charges by Blue Cross Blue Shield (BCBS) and commercial insurers. The band limits vary according to 10 geographic regions in Michigan.

By including age as a factor in rate bands, the legislation also limits the ability of commercial insurers the option of insuring younger, healthier employees at better rates while imposing much higher costs for older employees or those with chronic illnesses.

The legislation was one of the most-debated issues of the legislative session to date with two competitive approaches devised by leading legislators in the Senate and House.

Those opposing the legislation said it would only enhance BCBS's position in the industry and some legislators said the package would lead to higher costs and less availability because more small businesses will drop health care benefits.

Those supporting the legislation said that it will not solve every problem in health care, but it will help stabilize the small business industry.

The legislation signed by Governor Granholm did not include a stipulation sought by commercial health insurers for an exemption from the rate band requirement if they began to lose market share.

The rate band requirement will not apply to small employers unless 100% of the employees participate in a company with less than 10 employees, 75% for those with 11-26 employees, and 50% for those with up to 50 employees.

SEVERAL FEE INCREASE BILLS SIGNED INTO LAW
Several bills that are a part of this year's budget resolution were signed into law. They include:

• Senate Bill 359, PA 81: FILING FEES-This bill amends the Limited Liability Company Act to raise filing fees for registered agents from $15 to $25, raising an estimated $1.1 million;
• Senate Bill 360, PA 82: PESTICIDE FEE-This bill increases state pesticide applicator fees for private farms from $10 to $50;
• Senate Bill 361, PA 83: PET SHOP LICENSE FEE-This bill increases pet shop licensing fees from $150 to $200 and creates an annual $100 renewal fee;
• Senate Bill 370, PA 84: SECURITY CONTINGENCY FUND-This bill transfers $10 million from the employment security contingency fund to general funds;
• Senate Bill 386, PA 85: LIVESTOCK DEALER FEES-This bill increases livestock dealer licensing fees to $50 and sets license fees at $800 for livestock auction facilities, $500 for buying station facilities, and $300 at horse auction facilities;
• Senate Bill 390, PA 86: HORSE RIDING STABLE FEES-This bill increases horse riding stable licensing fees from $25 to $100 for application and from $25 to $50 for renewal of license;
• Senate Bill 431, PA 87: OCCUPATIONAL LICENSE FEES-This bill increases a wide variety of licensing fees through the Michigan Department of Consumer and Industry Services ranging from $15 for an individual accountant registration to $75 for barber college application processing raising an estimated $2.87 million;
• Senate Bill 230, PA 80: VACANT HOME REMOVAL-This bill provides for a building to be removed if a structure remains boarded or vacant for a period of 24 consecutive months.

SPEAKER NAMES NEWELL TO CHAIR HRCC
House Speaker Rick Johnson appointed Rep. Gary Newell Chair of the House Republican Campaign Committee (HRCC).

This could mean that Rep. Newell is interested in running for Speaker of the House for the 2005-06 term. In the past, being involved in the HRCC has been a step toward becoming the Speaker. Former Speaker Chuck Perricone and Speaker Johnson have both been HRCC Finance Chairs prior to them becoming Speaker.

Rep. Newell's name has not come up amongst the others interested in the leadership race.

Rep. Newell said he would not rule out the possibility of running for a leadership position.

Most Republicans expect the next Speaker to come from the 2002 freshmen legislators because they make up the majority of the caucus. Rep. Newell is in the considerably smaller 2000 class. However, he surprised a number of Republicans when he ran for Floor Leader in 2002. He had strong support despite losing to Rep. Randy Richardville.

If Rep. Newell decides against running for Speaker, there are two other Republicans, Rep. Craig DeRoche and Rep. Bill Huizenga who are expected to run for Speaker. Both have key positions on the HRCC. Speaker Johnson named them finance co-chairs earlier this year.

REPRESENTATIVE RANDY RICHARDVILLE HONORED
House Majority Floor Leader Randy Richardville will be awarded the 2003 Legislator of the Year by the National Republican Legislators Association. Rep. Richardville said he was pleased to be selected. Rep. Richardville has always felt that public service is dignified work. He said helping constituents improve their quality of life has been a privilege.

MCBRYDE SELECTED TO LOBBY FOR MEDC
The Michigan Economic Development Corporation (MEDC) has selected former Rep. Jim McBryde as the new Vice President for Legislative Relations.

Rep. McBryde served in the House from 1991 to 1998 and was the Administrative Commissioner for the Liquor Control Commission. He will lobby the Legislature on issues that are important to the MEDC. He will also act as a liaison to trade organizations.

Scofes, Kindsvatter & Associates, Inc., will continue to keep BOMA abreast of its most important issues on a weekly basis, which include the following:

Service Taxes—BOMA strongly opposes ANY type of new service taxes in Michigan. This would have a harmful ripple effect on the building and real estate industries, and we vehemently oppose efforts to raise state revenues through any new Service Taxes.

Single Business Tax Cuts—We support efforts to further reduce the SBT in Michigan or maintain the tax at its current level. We understand the state's requirement to balance its budget but this must be balanced against the need for job creation sparked by lower business taxes.

Mold—BOMA promotes high standards to protect the health and safety of building occupants. To that end, BOMA supports additional research to examine potential health effects of mold in indoor environments. BOMA opposes state initiatives to write model building codes and standards regulating mold and moisture. Building codes and standards designed to address mold and moisture should be developed through the industry standards consensus processes.

Utility Deregulation—BOMA fully supports the transition towards a competitive marketplace for electricity through the unbundling of generation, transmission and distribution. The generation of electricity must become competitive as soon as possible so that all Michigan consumers may realize the benefits of lower prices and enhanced services.

Urban Sprawl/Smart Growth—We encourage the use of the Brownfield's law for redevelopment of urban areas and adaptive reuse of obsolete buildings. We feel the restrictions of local zoning boards and planning commissions are adequate to deal with urban sprawl issues; and while we do not oppose state efforts at a cohesive plan for Smart Growth, we feel the best government in this case is the local government.

MEDC Funding Cuts—While sympathetic to the tough decisions that must be made during today's budget crunch, BOMA Michigan is opposed to efforts to reduce or eliminate funding for the Michigan Economic Development Corporation. We view any such moves as shortsighted and contrary to the steps Michigan needs to make to keep our state attractive to the development or relocation of businesses to our area.

Brownfield Tax Extension—We applaud the Michigan Legislature for extending the Brownfield's Tax Credit in December through 2008. This is the type of tax law that will spark urban development and curtail suburban sprawl. We encourage the state to invest more in Brownfield Development as future funding allows.

Read previous Around the Dome reports

The "Around the Dome" newsletter is written monthly by BOMA's Michigan lobbying firm Scofes-Kindsvatter & Associates (SKA) for BOMA members to be aware of key issues in Lansing. In addition, SKA is monitoring top issues identified by the Government Affairs Committee. If you have comments on the newsletter or BOMA issues, please direct them to GAC Chair Bruce Babiarz at bruce.babiarz@bartonmalow.com or Cynthia Andary of BOMA staff. We welcome your comments and questions on BOMA advocacy issues.