KEY LEGISLATION:

DEPARTMENT DROPS PLAN FOR REDUCED DISPENSING FEE

The threat of a cut in pharmacies’ Medicaid dispensing fee lost steam as the
Department of Community Health recommended the fee remain at $3.77. Although
the department had talked about a 50-cent reduction in the fee, the budget
bill language it submitted to the House Appropriations Committee keeps the
fee at its current level.

The Michigan Retailers Association strongly opposed any cut and will remain
vigilant on the issue. Although the chances for an increase are slim in the
face of declining state revenues, MRA will continue to argue that the
current amount is inadequate.

HOUSE COMMITTEE APPROVES LIVING WAGE BAN

The House Employment Relations, Training and Safety Committee approved
legislation to abolish living wage measures. The controversial bill now
moves to the full House, where Speaker Rick Johnson has said he would like
to hold a vote by June.

Seven Michigan communities have adopted living wage laws. The measures
require those doing business with the community to pay wages above the
minimum wage, usually $8.50 per hour with benefits or $10 without.

EDISON CUTS RATES FOR BUSINESS CUSTOMERS

The Michigan Public Service Commission approved a 5-percent rate cut for
Detroit Edison commercial and industrial electric customers, effective this
month. The reduction matches the cut provided to residential customers since
last June. Both reductions are part of the state’s deregulation efforts.

The rate cut is funded through securitization of the utility’s stranded costs.
Detroit Edison is authorized to sell $1.75 billion in bonds to cover investments
made under regulation that it might not recover in a competitive market.

GOP FORMS SUBCOMMITTEE ON TAX SIMPLIFICATION

The House Tax Policy Committee will establish a subcommittee to explore
ways to simplify the state income tax form and filing processes, Republicans
announced. The panel will be chaired by Rep. Steve Vear (R-Hillsdale) and
conduct hearings throughout the state.

The panel is charged with completing its findings and recommendations
by October 1. The panel is studying primarily the income tax and is not
expected to tackle the issue of sales tax simplification.

HOUSE MINORITY LEADER EYES DETROIT MAYOR POST

Detroit Mayor Dennis Archer’s surprise announcement that he won’t
seek a third term this fall touched off a frenzy among potential mayoral
candidates. High on the list of hopefuls is State Rep. Kwame Kilpatrick,
the House Democratic leader, who appears to already have the backing of
kingmaker and Wayne County Executive Ed McNamara.

Meanwhile, U.S. Rep. David Bonior of Mount Clemens, the second-highest-ranking
Democrat in Congress, made it official he’s exploring a bid for governor in 2002.
Bonior announced the formation of an exploratory committee to raise funds. Also
announced or extremely interested on the Democratic side are former Gov. James Blanchard,
Attorney General Jennifer Granholm and state Sens. Gary Peters and Alma Wheeler Smith.

On the Republican side, state Sen. John Schwarz announced his intention to
run in what is considered an uphill contest against likely candidate Lt. Gov.
Dick Posthumus. Schwarz directed U.S. Sen. John McCain’s upset victory
in the state’s presidential primary last year.

LT. GOVERNOR CALLS ON SEN. JAYE TO RESIGN

Lieutenant Governor Dick Posthumus added his voice to the growing chorus
calling for state Sen. David Jaye (R-Washington Township) to consider
resigning after being arrested last week in Florida on a charge of domestic
battery against his fiancée. Jaye has denied wrongdoing, however, and said
his fiancée is trying to drop the charge.

Jaye’s Florida arrest came only weeks after his full committee rights were
restored. Those rights were stripped from him after he was arrested last
year for drunk driving and served more than a month in jail. If Jaye refuses
to resign, the Senate could decide whether to expel him or take lesser
disciplinary action.

GARCIA AND SCOTT SWORN IN AS NEW SENATORS

State Sens. Valde Garcia (R-St. Johns) and Martha Scott (D-Highland Park)
were officially sworn into the Senate this week, although they actually took
their oaths during spring recess and were already on the job. Both won
special elections to fill vacancies.

KEY BILL INTRODUCTIONS:

For back issues of Capitol F@cts on-line visit MRA's web site at http://www.retailers.com/capfax/capfax.html.

Specific comments or questions regarding this bulletin should be directed to:
Eric R. Rule, Director of Governmental Affairs at errule@retailers.com.
Michigan Retailers Association
603 South Washington Avenue
Lansing, MI 48933
Phone: 517.372.5656
Toll Free: 800.366.3699
Fax: 517.372.1303
govt_affairs@retailers.com
http://www.retailers.com
http://www.mallofmichigan.com

Click here to find more information about any of the bills referenced above.