KEY LEGISLATION:

ENGLER CUTS STATE BUDGETS

On Tuesday, Governor Engler released his much-anticipated executive order
slashing $540 million from the state budget. Amidst a huge crowd of
lobbyists and legislators, the executive order was explained by State Budget
Director Don Gilmer and passed the same afternoon. By state law, executive
orders only need the approval of the House and Senate Appropriations
committees, and the document cannot be revised in the approval process.

Executive Order 2001-9 impacts all state departments but makes minimal
reductions to the education budget. The largest state agencies took the
biggest hit, with the Department of Community Health budget losing $100.7
million. None of the cuts to that budget appear to impact pharmacy
dispensing fees, however.

In the same week, legislation was signed into law authorizing the state to
withdraw $550 million from the Budget Stabilization Fund to cover shortfalls
in state revenue for the fiscal year. There is still talk, however, of
delaying the Single Business Tax reduction through legislation. Some
lawmakers have even advocated drawing down the Budget Stabilization Fund
below $250 million, at which point the SBT rollbacks would automatically be
postponed. It is hoped that neither strategy will be necessary.

HOUSE MINORITY LEADER WINS MAYORAL RACE

Rep. Kwame Kilpatrick (D-Detroit) won a fiercely fought battle Tuesday to
succeed Detroit Mayor Dennis Archer. Kilpatrick will remain House minority
leader until just before officially becoming mayor in January. The 31-year-old
legislator is the youngest person ever to be elected Detroit’s mayor.

All eyes now shift to who will replace Kilpatrick as minority leader. Among
those seeking the position are Reps. Doug Bovin (D-Gladstone), Julie Dennis
(D-Muskegon), Jack Minore (D-Flint), Nancy Quarles (D-Southfield), Joseph
Rivet (D-Bay City) and Samuel "Buzz" Thomas (D-Detroit). Minore, Thomas and
Rivet are the front-runners at this point.

SANBORN BECOMES NEWEST SENATOR

In other election news, Rep. Alan Sanborn (R-Richmond) was elected with
nearly 70 percent of the vote to replace former Sen. David Jaye, who was
expelled from the Senate earlier this year. Sanborn will take the oath of
office November 14, creating a vacancy in his 32nd House District.

Attention now turns to Jaye, who is rumored to be considering another bid
for the House. If he decides to run, a court challenge based on term limits
is sure to follow. The term limit language in Michigan statute says a person
may only be "elected three times" to the House. Jaye was elected to the
House three times but only served a partial third term.

SENATE NIXES STRAIGHT TICKET VOTING

Legislation attempting to put an end to straight party voting passed the
Senate Thursday on party lines. Democrats argue that the bill is aimed at
hurting their chances in the 2002 elections, as Democrats are thought to
vote straight ticket more often than Republicans.

Republicans argue that the bill still allows voters to choose candidates
from only one party, but merely requires them to individually vote for each
candidate. They say the bill would increase the number of voters who vote
the bottom of the ticket, which straight party voting doesn’t cover.

MRA HALTS SCRAP TIRE BILL

MRA successfully stalled a proposal that would have put Michigan tire
dealers at a competitive disadvantage.

Senate Bill 637, introduced by Sen. Joe Young, Jr. (D-Detroit), would
bolster the Scrap Tire Recycling Fund by assessing fees on consumers who
purchase tires in Michigan. While increasing the fund and cleaning up scrap
tires is a laudable goal, the bill would be disastrous to Michigan tire
retailers. Consumers living along state borders could simply purchase their
tires in other states, thus avoiding these fees.

MRA explained this scenario to Sen. Young at a recent meeting. MRA also
noted that a better approach to increasing the fund is already making its
way through the legislature. SB 27, introduced by Sen. Beverly Hammerstrom
(R-Temperance), raises the fee from $5.00 to $15.00, but charges automobile
owners the fee when they register their car at the Secretary of State’s
office. This approach does not put retail tire centers in Michigan at a
competitive disadvantage.

When Sen. Young was made aware of Hammerstrom’s bill, he agreed it was a
better approach and will not pursue his bill.

KEY BILL INTRODUCTIONS:

HB 5013, sponsored by Rep. Gene DeRossett (R-Manchester), to provide
programs for implementation of conservation practices.

SB 692, sponsored by Sen. Beverly Hammerstrom (R-Temperance), to provide
that entry into agricultural conservation easement or purchase of
development rights automatically terminates development rights agreement
without lien and entitles landowner to tax credit.

SB 824, sponsored by Sen. Joanne Emmons (R-Big Rapids), to allow use tax
sourcing on mobile telecommunication.

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

Specific comments or questions regarding this bulletin should be directed to:
Kathleen Wilson, Administrative Assistant to the Governmental Affairs Office at
kawilson@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
www.retailers.com
www.mallofmichigan.com

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