March 5, 2012

Politics & leadership Supreme Court blocks MT campaign spending law

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Budget & taxesStates diverting foreclosure settlement money

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GovernorsWalker won’t challenge WI recall signatures

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Bird’s eye view 2

Hot issues 12

Once around the statehouse lightly 17

The next issue of Capitol Journal will be available on March 12th.

Volume XX, No.7

The Obama administration is about to finalize rules

for another program designed to help millions

of struggling homeowners refinance into lower interest

mortgages. Whether it is more successful than previous efforts is yet to

be determined.

Feds bolster state efforts to help underwater homeowners

Barely a month into President Barack Obama’s presidency, his administration announced a major effort to help millions of underwater homeowners who owed more on their mortgages than their homes were

worth refinance into lower interest rate mortgages. But the Home Affordable Refinance Program, or HARP, fell short, in large part because it came with numerous limitations that stifled its effectiveness. With borrowers and lenders alike staying away in droves, the Obama administration is now set to finalize new rules on a more accessible plan, dubbed “HARP 2.0,” in the hope this will finally

Top Story SNCJ Spotlight

Home Stretch

©iStockphoto.com/alexsl

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give a jolt to the nation’s sluggish housing market.

Economists say doing so could also give a kick start to the economies in communities where the housing crash has been particularly rough.

“Any refinancing plan that frees up disposable income would in theory help the economy,” says Ryan Sharp, executive director of the Center for Strategic Economic Research in Sacramento, California. “If people are able to refinance and recycle that disposable income throughout the region, then it will help the overall economy.”

Making HARP 2.0 work begins with getting troubled borrowers to use the program. The initial HARP was introduced in 2009 to help homeowners with distressed loans backed by the Federal National Mortgage Association, Fannie Mae, or the Federal Home Mortgage Association, Freddie Mac, two government-secured enterprises that together hold about 60 percent of all the country’s mortgages. The idea was to help a specific group of Fannie- and Freddie-backed borrowers: those who were underwater with their loans and locked into high interest rates but who still had good credit and had consistently stayed current with their payments. These borrowers were thought to be the ones who would eventually be most likely to walk away from their homes.

But that plan also encountered difficulties. HARP was available only to homeowners whose loans did not exceed a 125 percent loan-to-value (LTV) ratio. Many who had purchased at the height of the housing bubble were well in excess of this limit. Lenders also balked at a requirement to guarantee that a borrower’s original loan met all of Fannie and Freddie’s standards, which could have resulted in them being forced to buy back refinanced loans that were later found to have some problem. And a HARP refinance was also not available to homeowners whose loans were not obtained by Fannie or Freddie before May 2009. Although the Obama

Bird’s eye view

Foreclosure rates picking upForeclosures were up 3 percent nationally in January, according to RealtyTrac Inc. A total of 210,941 homes either received default notices, were scheduled for auction or were repossessed over the course of the month, which translates to about one in every 624 households. Nevada, with 5,931 foreclosed properties, had the highest rate, 1 in 198 households. California had far more foreclosures, 51,584, but the second highest rate, at 1 in 265. North Dakota, with just five foreclosures, had the lowest rate, one in 63,500. RealtyTrac projects foreclosure rates will continue to rise as lenders restart foreclosure proceedings they temporarily suspended while the nation’s biggest lenders were negotiating last month’s $25 billion foreclosure settlement with the states’ attorneys general.

FL

RI

MA

ME

CT NJ

NHVT

DEMDKY

TX

IA

MT

AZ

WA

AK

CO

NM

ND

AL GASC

TN

MO

OH

VACA

OR

NVUT

WY SD

NE

HI

MN

NC

AR

LA

MS

IL

MI

IN

PA

NY

WV

OK

KS

States with highest January foreclosure rates States with lowest rates

WIID

Source: RealtyTrac, Huffington Post

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administration estimated that HARP would help refinance as many as 5 million loans, less than a million homeowners wound up using the program.

While HARP 2.0 still has the May 2009 purchase deadline, the new rules — which will be officially released on March 15 — toss out the 125 percent cap and the need for a new property appraisal. The administration has also indicated it will no longer force lenders to buy back bad loans.

Although most economic experts say anything that sparks the housing market will help the economy, perspectives vary on just how much the new rules will actually accomplish.

Rob Nunziata, co-CEO of FBC Mortgage in Orlando, believes HARP 2.0’s relaxed requirements will definitely help in Florida, one of the states hardest hit by the housing collapse.

“This is going to mean everything,” he says. “For the majority of distressed borrowers in Florida, the 125 percent LTV cap in the original HARP program simply did not offer any help. Just removing that cap will mean an awful lot.”

Tim Ross, president and CEO of Ross Mortgage Corporation in Royal Oaks, Michigan, also believes the plan could be quite successful. But he says that will depend on several factors, including how the secondary lending market reacts to the plan.

“Is the secondary market going to offer a refinance loan at a low 4 percent interest rate identical to that of a highly qualified original loan applicant with a large down payment?” he says. “Typically, that refinance loan will be priced to the risk involved, but if the premium to be paid on one of these HARP 2.0 loans — and there likely will be a premium — is too great, then a lot less people will be helped.”

Estimates of how many homeowners will take advantage of the new rules also vary. Freddie Mac has conservatively estimated HARP 2.0 refinances will “roughly double or more” the number done under the original program, while Moody’s Analytics predicts around 1.6 million new refinances. Meanwhile, another study released by San Diego-based Data Quick in February says the removal of the 125 percent loan-to-value cap alone will qualify up to 6.7 million more homeowners than under the old rules.

But even if the bulk of eligible homeowners take advantage of HARP 2.0, some observers question its overall economic potential. Core Logic’s Fleming predicts that while the program “constitutes a significant economic stimulus on the order of several billion dollars given to borrowers in many of the economically hardest hit areas,” it will have only “modest impact on consumption and the economy.”

Jeffrey Michael, director of the University of the Pacific Business Forecasting Center in Stockton, California — another of the communities hardest hit by the housing collapse, with mortgages averaging 175 percent loan-to-value — also questions how much HARP 2.0 will help his area’s fiscal health.

“Anything that helps to fend off foreclosures helps the region,” he says. “But I think it helps at the margins and not much else.”

One major reason for that, Michael says, is the sheer enormity of the problem. CoreLogic data indicates that more than 20 million homeowners nationwide “have

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In the hopperAt any given time, State Net tracks tens of thou-sands of bills in all 50 states, the US Congress and the District of Columbia. Here’s a snapshot of what’s in the legislative works:

Number of Prefiles last week: 600

Number of Intros last week: 4,460

Number of Enacted/Adopted last week: 1228

Number of 2012 Prefiles to date: 8,349

Number of 2012 Intros to date: 57,338

Number of 2012 Session Enacted/ Adopted overall to date: 5,049

Number of bills currently in State Net Database: 160,690

— Compiled By OWEN JARNIGAN(measures current as of 2/29/2012)

Source: State Net database

insufficient or negative equity positions in their homes,” with 4.7 million underwater by 25 percent or more. Nevada and Florida lead the nation in distressed mortgages, at 60 percent and 45 percent respectively, with states like Michigan and California close behind.

States, meanwhile, have not stood by idly. According to Heather Morton, who tracks banking issues for the National Conference of State Legislatures, states were addressing the foreclosure issue even before the Great Recession began.

“States have averaged about 300 bills a year since 2007,” she says, many of those aimed at helping bring distressed borrowers together with lenders so the parties can work out amicable solutions that fit each of their needs.

“No one solution is a fit for everyone,” she says. “What works in one state or neighborhood may not be a good fit in another.”

Many of those measures also have dealt with mortgage fraud and unscrupulous lending practices, something that recently garnered states a $26 billion settlement from the nation’s largest banks. Although those funds are supposed to be used to further help distressed homeowners, several states, including Missouri, Wisconsin, Pennsylvania, Vermont and Maryland, have already indicated they will put at least some of the windfall toward other budgetary problems (see Budget & taxes in this issue).

The latest HARP program is also only one of several the federal government has used in an attempt to quell the foreclosure crisis. The president has further advocated loosening the rules on HARP’s sister program, the Home Affordable Modification Program, or HAMP, which is for those borrowers who have crossed over into delinquency or are near doing so. In his State of the Union address in January, President Obama proposed opening HARP 2.0 up to distressed borrowers with loans not backed by Freddie Mac or Fannie Mae.

Jonathon Lederer, president of Lederer Private Wealth Management LLC in Sacramento, is a fan of the latter proposal. He believes allowing all underwater borrowers to refinance under HARP 2.0, regardless of being Fannie- or Freddie-backed, would definitely help the economy “get at least a short term boost.”

To pay for doing that, the president wants to tax big-ticket financial companies, those with $50 billion or more in assets. But Michael notes that such a fee would require Congressional approval, something far from certain in Washington’s hyper-partisan environment.

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“It really would have been good to see something like this sooner,” says Michael. “The president should have sent this to Congress when he had control of it.”

Other challenges abound as well. Gary Hurst, a senior loan consultant at Pacific National Lending in Gold River, California, notes that HARP 2.0 “does nothing directly to stimulate housing demand for new borrowers and investors or reduce the high inventories of distressed properties.”

Unemployment, while slowly improving, is also still a significant problem for many Americans, making refinance an unrealistic option. And even if everything goes smoothly for the bulk of loan applicants, Lederer says history doesn’t bode well for HARP’s economic potential.

“The question is whether people who get to refinance would return to their previous spending patterns,” he says. “Historically, for five to six years after a downturn people are much more cautious, much more likely to de-leverage rather than to spend, which is what grows the economy. Without that return, a short-term boost may be all we get.”

Even so, Michael says any effort to ward off foreclosures is worth investigating. “There is definitely a reason to address it,” he says. “Right now the real incentive

is for people to go to foreclosure, which is really harmful. Foreclosures are dragging down the economy and doing all sorts of damage to neighborhoods.”

— By RICH EHISEN

Budget & taxes

STATES DIVERTING FORECLOSURE SETTLEMENT MONEY: Last month, the nation’s five largest mortgage lenders signed a $25 billion settlement with the attorneys general of 49 states addressing loan servicing

abuses that contributed to the foreclosure crisis. But even before the ink was dry on that agreement, Missouri Gov. Jay Nixon (D) announced his state would use part of its share of the settlement money to fund higher education. Similar plans are being discussed in several other states struggling with budget shortfalls, including Pennsylvania, Vermont, Maryland and Wisconsin.

Although under the terms of the settlement, the bulk of the $25 billion will go directly to homeowners hurt by the mortgage crisis, $2.7 billion was set aside for states to use as they wish. But some consumer advocates say using any of the money for anything other than foreclosure relief is wrong.

“We shouldn’t be in the position of taking money that is intended to help consumers and their mortgage tribulations and putting that to another purpose,”

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said Joan Bray, a former Missouri state senator who is now the chairwoman of the Consumers Council of Missouri.

Some think that is particularly true given the amount of the settlement.“As insufficient as it is,” said Kathleen Day, spokeswoman for the Center for

Responsible Lending, “this money was intended to go directly to help struggling homeowners.”

The fear for some consumer advocates is that the same thing will happen with the foreclosure agreement as has happened with the 1998 multistate tobacco settlement. When that deal was reached, states initially said they would use the $206 billion that would come from it to curb tobacco use and improve public health, but funding for tobacco-prevention programs has fallen off considerably.

Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, the lead negotiator on the foreclosure settlement, however, said officials “have to acknowledge that there has been damage done to states and their budgets and their services because of this mortgage crisis.... So states will have some flexibility in how they spend” the settlement money. (ASSOCIATED PRESS, STATELINE.ORG, NATIONAL ASSOCIATION OF ATTORNEYS GENERAL, STATE NET)

BUDGET FALLS VICTIM TO POWER STRUGGLE IN VA SENATE: Budget stalemates are hardly unheard of in Virginia. But the state entered uncharted territory last week, when Senate Democrats rejected the chamber’s last active budget bill for the two-year budget cycle that starts July 1, leaving lawmakers with no spending plan to negotiate on.

“This is unprecedented, and it is unacceptable,” Gov. Robert McDonnell (R). “It is not the Virginia way.”

McDonnell and Republican lawmakers blame the situation on the Democrats, who they say are seeking more power in the Senate, which was split 20-20 between the two parties after the November election but which the GOP now controls because of the effective majority Lt. Gov. Bill Bolling’s (R) tiebreaking vote gives them.

Democrats say their opposition to the budget is about more than just politics. Among other things, they say the budget doesn’t provide enough funding for public schools and health and human services.

“The budget does not adequately address the needs of our children, the elderly, and the poor,” said Sen. Mamie Locke (D).

But Senate Republicans say they tried to appease Democrats by agreeing to increase funding for education and reverse cuts to social services programs. And Senate Majority Leader Tommy Norment (R), who has accused Democrats of attempting to “bend over the entire commonwealth of Virginia and disrupt the major policy decision over just raw, brutalized political will,” said a power-sharing deal is “not happening” while he is in charge. (VIRGINIAN-PILOT [NORFOLK])

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NY BORROWING FROM PETER TO PAY PETER: The state government of New York and municipalities statewide are borrowing $750 million this year, and probably over $1 billion next year, to pay their contributions to the state pension system. That governments are struggling to meet their pension obligations is no great surprise. But the source they are borrowing from is: the pension system itself.

A borrowing mechanism approved in 2010 under the administration of former Gov. David A. Paterson (D) and supported by public sector unions and the state comptroller’s office, which oversees the pension system, allows public employers to make lower payments now in exchange for making higher payments later.

Supporters say the plan is helping governments make it through a difficult time. But critics say it is simply kicking the state’s pension problems down the road.

“You’re undermining the long-term solvency of these funds and making the pension fund even more of a gamble than it already is,” said Josh Barro, a senior fellow at the conservative Manhattan Institute.

Barro said the state is betting the performance of its pension investments will improve over the next decade and bail out the system.

“If performance continues to be weak, then contribution rates will be even higher than the rates we’re trying to avoid now, and you’ll produce even more fiscal pain down the road,” he said. (NEW YORK TIMES)

BUDGETS IN BRIEF: Officials in Stockton, CALIFORNIA, a city of 290,000 near San Francisco, voted last week to enter into the 90-day mediation process established under a new state law designed to make it more difficult for municipalities to declare Chapter 9 bankruptcy. If mediation fails, the city will become the largest in America to go bankrupt (NEW YORK TIMES, STATELINE.ORG). • In brighter news, CALIFORNA’S top budget analyst reported last week that Facebook’s eagerly anticipated IPO could pump nearly $2.5 billion into the state’s coffers over the next five years (LOS ANGELES TIMES). • PENNSYLVANIA’s Department of General Services has raised $700,000 since 2004 from selling contraband seized by the federal Transportation Security Administration at airports, including New York City’s John F. Kennedy and LaGuardia. The most sought-after items have been pocket knives, scissors and corkscrews, which the state usually sells in boxes of 100 (USA TODAY). • NEBRASKA Governor Dave Heineman (R) has proposed lowering the rate and raising the income threshold for every state tax bracket. He also wants to cut the state’s corporate income tax and do away with the inheritance tax (STATELINE.ORG). • NEW JERSEY Gov. Chris Christie (R) proposed a $32 billion budget last month that includes about $2 billion of additional spending in several areas, including education (STAR-LEDGER [NEWARK]). • ALABAMA plans to shut down all but two of its mental health hospitals by the spring of 2013 to cut costs and change how the state treats psychiatric patients, state officials announced last month. The state has closed 10 mental health treatment centers since the 1990s and relocated patients to

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small group homes and private hospitals, which mental health advocates believe often provide patients better care (NEW YORK TIMES). • ILLINOIS is implementing new Medicaid enrollment restrictions, including electronic cross-checks on residency and income expected to cut thousands of current beneficiaries from the program and save more than $1 million, without federal approval. The state has been debating the changes with federal officials for nearly a year (STATELINE.ORG).

— Compiled by KOREY CLARK

Politics & leadership

SUPREME COURT BLOCKS MT CORPORATE CAMPAIGN SPENDING LAW: The U.S. Supreme Court has blocked a Montana Supreme Court ruling that appears to be at odds with the federal court’s 2010 decision

in Citizens United v. Federal Election Commission striking down the federal ban on corporate campaign spending.

Three Montana corporations, Western Tradition Partnership, Champion Painting and the Montana Shooting Sports Association, challenged Montana’s ban on corporate political spending — the 1912 Corrupt Practices Act — in 2010. And a lower state court ruled the law was unconstitutional in light of the Citizens United decision. But the state’s Supreme Court reversed that decision in December on the grounds that the law was a response to political corruption and doesn’t ban all corporate political spending.

The U.S. Supreme Court has suspended that ruling, however, while it considers whether to hear an appeal by Western Tradition Partnership — now American Tradition Partnership — et al.

American Tradition Partnership called the justices’ action a win for the First Amendment.

“Stripping people of their right to engage in political speech because you do not like the identity of the speaker is an assault on the republic’s founding principles,” it said.

Supreme Court Justice Ruth Bader Ginsburg, however, issued a brief statement indicating that campaign spending since the Citizens United decision makes “it exceedingly difficult to maintain that independent expenditures by corporations ‘do not give rise to corruption or the appearance of corruption’” as the court’s majority had ruled in that case. She was presumably referring to the unregulated super PACs that have poured millions of dollars into the GOP presidential race. She said the appeal would “give the court an opportunity to consider whether, in light of the huge sums currently deployed to buy candidates’ allegiance, Citizens United should continue to hold sway.”

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But the justices’ decision to consider whether to hear the appeal doesn’t necessarily mean they will. They may simply choose to reverse the state court’s ruling. A decision either way probably won’t come for several months. (GREAT FALLS TRIBUNE)

NEW REMAP ENTERS MIX IN TX: In the latest chapter of TEXAS’ ongoing redistricting saga a federal court in San Antonio has issued a new interim map for the 2012 election that could potentially hand Republicans as many as 25 of the state’s 36 congressional seats. The same court issued another interim map — one that was more Democrat-friendly — in November. But the U.S. Supreme Court threw out that map in January, arguing that it diverged too much from the redistricting plan approved last year by the state Legislature.

Meanwhile, a federal court in Washington, D.C. is weighing the legality of the Legislature’s plan — which the Justice Department and minority-rights groups argue doesn’t reflect the explosive growth of the state’s Hispanic population over the last decade — and negotiations continue on when the state’s congressional and presidential primaries will be held, with the date already having been moved from March to April (POLITICO).

POLITICS IN BRIEF: U.S. Sen. Olympia Snowe (R-MAINE) announced last month that after 33 years in Congress she will not be seeking re-election. Her decision — evidently spurred by the unyielding partisanship in Washington, D.C. — is likely to have ramifications not only on the congressional contests in the state but also on the fight for control of the U.S. Senate (BANGOR DAILY NEWS). • CALIFORNIA state Treasurer Bill Lockyer (D) has become involved in a scandal surrounding a romantic relationship between his wife, Alameda County Supervisor Nadia Lockyer, and a man she apparently met in rehab for alcohol abuse in 2010, which became public last month after an incident at a local hotel. Lockyer has reportedly received a sex tape of his wife and the man, Stephen Chikhani, who told a reporter at a court appearance on an unrelated drug charge last week that there was “a way bigger story than the sex tapes” (SAN JOSE MERCURY NEWS, SAN FRANCISCO CHRONICLE). • COLORADO Secretary of State Scott Gessler (R) adopted a full rewrite of the state’s campaign finance rules last month. Critics say that action was outside of his authority and will allow money to dominate the state’s elections, but Gessler said the changes were necessary to bring the state’s rules in line with recent court decisions (DENVER POST). • Former NEVADA state Sen. Bill Raggio, the longest-serving senator in the state’s history, died last month of a respiratory illness while traveling in Australia. The 85 year-old Republican served in the Senate for 38 years (LAS VEGAS SUN).

— Compiled by KOREY CLARK

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WALKER WON’T CHALLENGE WI RECALL SIGNATURES: Wisconsin Gov. Scott Walker (R) said he will not challenge any of the more than 1 million signatures from petitions seeking his recall.

Members of his staff said they did not have time to go through them all before the Feb. 27 deadline.

A Dane County judge had previously granted Walker a 20-day extension to review the signatures and file any challenges, but refused a request for another two-week extension. That, Walker spokesperson Ciara Mathews said, left them with “an impossible deadline” to meet. Walker’s people ultimately were able to go through only about 400,000 of the signatures.

That leaves it up to the Wisconsin Government Accountability Board to determine if the petitions contain at least 540,208 valid signatures, the minimum needed to qualify for a recall election. Walker’s camp requested that the GAB accept the findings of two other groups — Wisconsin GrandSons of Liberty and We the People of the Republic, two tea party groups which have jointly manned an effort called Verify the Recall — but so far the GAB has insisted there is no legal basis for them to accept any third party challenges. A Waukesha County judge has also ordered the GAB to verify signatures independently, giving it until March 19 to do so. GAB spokesman Reid Magney said the board would refer any fraud it encounters directly to state prosecutors.

Although Verify the Recall and True the Vote, another petition review group that backs Walker, say they have found thousands of invalid signatures, even the governor’s supporters are seemingly resigned to a recall election going forward. As of last week, the two groups say they had reviewed over 800,000 signatures, deeming just over 534,000 to be legitimate. Presuming the GAB does verify the necessary number, the focus will quickly turn to when the election will be held.

Under Badger State law, the election must be held within six weeks of verifying the signatures, meaning it would be held in April. But GAB officials are not in favor of that, noting the GOP presidential primary is already set for April 3. Multiple Democrats deciding to challenge Walker would also complicate matters. With more than one challenger, the April election would become a primary, with a general election to follow a month later. Whenever it is held, the ticket will be crowded. Five other Republicans, including Lt. Gov. Rebecca Kleefish (R) and four GOP senators, are facing recall votes as well.

If it goes forth, Walker would become only the third governor in U.S. history to face a recall election, joining North Dakota Gov. Lyn Frazier (R) in 1921 and California Gov. Gray Davis (D) in 2003. Walker would certainly hope for better

Governors

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results — both of them lost and were removed from office. (POST CRESCENT [APPLETON], WISCONSIN STATE JOURNAL [MADISON], MILWAUKEE JOURNAL-SENTINEL)

CHRISTIE RIPS NYPD OVER MUSLIM SPYING PROGRAM: New Jersey Gov. Chris Christie (R) last week angrily denounced the New York City Police Department for surreptitiously monitoring Muslim-owned businesses and houses of worship in New Jersey. Christie was responding to an Associated Press report than the NYPD has been monitoring the Newark residents since 2007.

“I don’t know if this NYPD action was born out of arrogance, or out of paranoia, or out of both,” he said, “but we’re taking a real good, strong hard look at it from a policy perspective at the governor’s office level.”

Christie was particularly angry that he and his staff were not briefed on the program when he came into office. He claimed the program ignored the lesson of the 9/11 terrorist attacks, which have been blamed in part on a lack of communication between various state and federal law enforcement and anti-terrorism organizations.

New Jersey Attorney General Jeff Chiesa is reviewing the NYPD actions to determine if any state civil rights laws were broken. (STAR-LEDGER [NEWARK], NBCNEWYORK.COM)

OBAMA PRODS GOVS TO BOOST EDUCATION SPENDING: President Obama urged governors last week to invest more state resources in education, saying “Nothing more clearly signals what you value as a state than the decisions you make about where to invest.” The president said better education will produce a more highly skilled workforce, something crucial for the U.S. to remain competitive with other countries. The president’s comments came at a dinner he hosted at the White House for governors in town for the National Governors Association winter meeting. (BOSTON GLOBE)

MALLOY ALTERS LIQUOR PROPOSAL: Connecticut Gov. Dannel P. Malloy (D) has revised his proposal to overhaul the Constitution State’s liquor laws, saying the latest version addresses concerns from the state’s liquor wholesalers and retailers. Under his original plan, the state would have introduced chain ownership, allowing single entities to hold as many as nine retail permits, up from two under current law. Malloy also originally suggested eliminating the current limit of one package store per 2,500 residents of any municipality. Last week, he proposed allowing ownership of up to six stores while still maintaining the limit of one store per 2,500 residents. Malloy admitted it was a concession to package stores, but said it would still limit competition among package stores. Malloy said the state’s

Upcoming storiesHere are some of the topics you may see covered in upcoming issues of the State Net Capitol Journal:

• CA redevelopment • Child protection• Election year politics

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current liquor price controls, which set minimum prices on all alcohol products sold, are “ghastly,” “unfair,” and causing businesses to leave the state. Lawmakers are currently holding public meetings on the proposal. (CONNECTICUT MIRROR, NORWICH BULLETIN)

GOVERNORS IN BRIEF: Lawmakers in OREGON reached an 11th hour agreement on two of Gov. John Kitzhaber’s (D) top legislative priorities: creating a state health insurance exchange (HB 4164) and consolidating the state’s early childhood education programs (HB 4165). Lawmakers were working to get the bills done before the session closed last week (OREGONIAN [PORTLAND], STATE NET). • ARIZONA Gov. Jan Brewer (R) rejected an invitation to appear before a U.S. Senate sub-committee to discuss SB 1070, the state’s landmark immigration law. Brewer spokesperson Mathew Benson said the governor will be in Washington D.C. that week, but to attend a hearing about SB 1070 before the U.S. Supreme Court. Benson called the invitation from U.S. Sen. Chuck Schumer (D-NEW YORK) “a publicity stunt” (EAST VALLEY TRIBUNE [MESA). • WYOMING Gov. Matt Mead (R) said he will ask the U.S. Supreme Court to review the Equality State’s challenge to a 2001 federal rule barring development on nearly 50 million acres of roadless areas in national forests. The rule enacted under former President Bill Clinton has been upheld by both the Denver-based 10th U.S. Circuit Court of Appeals and the San Francisco-based 9th U.S. Circuit in separate cases (ASSOCIATED PRESS). • NEW MEXICO Gov. Susana Martinez (R) signed SB 369, a measure that allows state National Guard and Reserve members who complete six years of service to be considered veterans and eligible for state benefits, such as a property tax break (SANTA FE NEW MEXICAN).

— Compiled by RICH EHISEN

Hot issues

BUSINESS: The ALABAMA Senate endorses SB 294, which would increase the maximum size of beer sold by Heart of Dixie retailers from 16 ounces to 25.4 ounces. The bill is now in the House (BIRMINGHAM NEWS,

STATE NET). • The UTAH House and Senate approve SB 41, which would bar minors from using indoor tanning beds without parental consent. It is now on its way to Gov. Gary Herbert (R) for review (STATE NET, DESERET NEWS [SALT LAKE CITY]). • The WEST VIRGINIA Senate approves SB 73, which would also, among several things, bar minors from using indoor tanning beds. The measure

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would also require tanning salons to warn customers of the dangers of overexposure to ultraviolet light. It is now in the House (STATE NET, CHARLESTON GAZETTE). • Still in WEST VIRGINIA, the Senate approves SB 406, which would bar dog breeders from owning more than 50 dogs at a time. The measure would also require owners of more than 11 unsterilized dogs to obtain a permit, establish minimum treatment standards for care of the dogs and make breeding facilities subject to inspection. The bill, which would exempt registered racing greyhounds, show dogs and herding dogs, is now in the House (CHARLESTON GAZETTE, STATE NET). • CALIFORNIA Attorney General Kamala Harris (D) reaches an agreement with the nation’s largest mobile computing providers that requires those companies to conspicuously post their privacy policies. The companies are Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion, which comprise the majority of the mobile applications market (USA TODAY, CALIFORNIA ATTORNEY GENERAL’S OFFICE). • The COLORADO House approves HB 1115, which would allow businesses and unions to comment on the fiscal impact of proposed bills on their organizations before those measures are heard. It is now in the Senate (STATE NET, DENVER BUSINESS JOURNAL). • The IOWA House and Senate give final approval to HF 589, which would make it a crime to obtain access to an agricultural facility under false pretenses or to lie on a job application to obtain that access. It moves to Gov. Terry Branstad (R) for review (DES MOINES REGISTER). • The OREGON House approves SB 1548, which would make it illegal for employers to bar the unemployed from applying for open positions. It moves to Gov. John Kitzhaber (D) for review (GAZETTE-TIMES [CORVALLIS]). • The ARIZONA Senate approves SB 1336, a bill that would bar companies in product liability suits from being assessed punitive damages if the product complied with state or federal regulations. It is now in the House (EAST VALLEY TRIBUNE [MESA]).

CRIME & PUNISHMENT: The WEST VIRGINIA House passes HB 4053, which would make it a felony to force or coerce people into forced labor or sex. Violators would face up to 10 years in prison. It has moved to the Senate (CHARLESTON GAZETTE, STATE NET). • SOUTH DAKOTA Gov. Dennis Daugaard (R) signs HB 1021, which adds clemency hearings to actions in which crime victims may provide written input (STATE NET). • Still in SOUTH DAKOTA, Gov. Daugaard signs SB 23, which makes it a felony to possess or sell

The week in sessionStates in Regular Session: AK, AL, AR, AZ, CA, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MS, NE, NH, NJ, NY, OH, OK, OR, PA, PR, SC, SD, TN, US, UT, VA, VT, WA, WI, WV, WY

States in Recess: DE, NC

Special Sessions in Recess: DE “b”

States Currently Prefiling or Drafting for 2012: LA

States Projected to Adjourn: OR, WA

States Adjourned in 2012: NM

Letters indicate special/extraordinary sessions

— Compiled By OWEN JARNAGIN(session information current as of 3/1/2012)

Source: State Net database

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Upcoming elections (3/01/2012 - 3/22/2012)

03/06/2012Georgia Special RunoffHouse District 107

Ohio Primary ElectionHouse (All)Senate (Even)US House (All)US Senate

03/13/2012Alabama Primary ElectionUS House (All)

Mississippi Primary ElectionUS House (All)US Senate 03/20/2012Illinois Primary ElectionHouse (All)Senate (All)US House (All)

New York Special ElectionAssembly Districts 93, 100, 103 and 145Senate District 27

synthetic drugs that mimic the effects of marijuana, cocaine and heroin. The chemicals are often sold as “incense” or “bath salts.” The law goes into effect immediately (STATE NET). • The NEVADA Pharmacy Board adds six more kinds of synthetic marijuana to its list of banned substances. The Silver State barred the sale of so-called incense products (NV 5238 2011) last year (RENO GAZETTE-JOURNAL). • The MINNESOTA House approves HB 1467, legislation that would broaden the Gopher State’s so-called “Castle Doctrine” law that allows residents to use deadly force to repel intruders from their home. Under the proposed law, residents could use deadly force anywhere they have a legal right to be. It has moved to Gov. Mark Dayton (D) for review (BRAINERD DISPATCH, STATE NET). • The IOWA House approves HF 2215, which would allow Hawkeye State residents to use deadly force if they reasonably believe it is necessary to avoid the risk of injury or death. The measure has moved to the Senate (STATE NET, DES MOINES REGISTER).

EDUCATION: The MINNESOTA Senate approves HB 1870, which would allow schools to make teacher layoffs based on student performance. The measure has returned to the House (BRAINERD DISPATCH, STATE NET). • Also in MINNESOTA, Gov. Mark Dayton (D) signs HB 1770, legislation that requires Gopher State teacher candidates to pass a basic skills exam in math, reading and writing in order to receive a teaching license (BRAINERD DISPATCH). • The ARIZONA House approves HB 2563, which would allow Grand Canyon State schools to teach elective courses on the influence of the Bible on Western culture and civilization. It is now in the Senate (EAST VALLEY TRIBUNE [MESA]). • The UTAH House and Senate approve HB 62, which clarifies that Beehive State elementary schools are allowed to request supplies from parents. Parents would not, however, be required to comply with the request. The measure is now with Gov. Gary Herbert (R) for review (SALT LAKE TRIBUNE). • Also in UTAH, the Senate approves SB 223, which would require high school and junior high students to say the Pledge of Allegiance each morning. The measure, which requires the Pledge to be conducted class by class and to be led by students, moves to the House (SALT LAKE TRIBUNE). • The MISSISSIPPI Senate approves SB 2401, which would allow students from anywhere in the Magnolia State to attend a

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charter school. The measure, which would also allow school boards in the 32 highest rated districts to block charter schools in their area, is now in the House (HATTIESBURG AMERICAN). • The IDAHO House approves HB 481, which would remove the Gem State’s cap on charter schools. It is now in the Senate (IDAHO STATESMAN [BOISE]). • The WYOMING Senate rejects SF 54, which would have required most Equality State college students to be vaccinated against meningitis (ASSOCIATED PRESS). • The SOUTH DAKOTA Senate approves SB 130, which would require school districts to adopt anti-bullying policies. The measure is now in Conference Committee (RAPID CITY JOURNAL).

ENERGY: The COLORADO House approves HB 1160, which would allow the capture of methane gas from coal mines to qualify as a renewable energy source. The measure is now in the Senate (STATE NET, PUEBLO CHIEFTAIN).

ENVIRONMENT: The U.S. Supreme Court rejected a request to order emergency measures aimed at preventing Asian carp from reaching the Great Lakes. Five Great Lakes states — MICHIGAN, MINNESOTA, PENNSYLVANIA, WISCONSIN and OHIO — requested the measures. The court issued the ruling without comment (WASHINGTON POST). • WISCONSIN Gov. Scott Walker (R) signs SB 368, legislation that eases the permitting process for development in Badger State wetlands, including allowing state officials and landowners more leeway to consider mitigation projects to replace wetlands destroyed by development (MILWAUKEE JOURNAL-SENTINEL, STATE NET).

HEALTH & SCIENCE: The UTAH House approves HB 245, a bill that would ban the smoking of hookah pipes and electronic cigarettes in public places. The measure is now in the Senate (DESERET NEWS [SALT LAKE CITY], STATE NET). • A federal judge rules that a U.S. Food and Drug Administration rule requiring large, graphic warnings on cigarette advertising is unconstitutional. U.S. District Judge Richard Leon said the rule violates the First Amendment. The FDA has not indicated if it will appeal the decision (REUTERS). • The WEST VIRGINIA Senate approves SB 437, a bill that would, among several things, limit the sale of pseudoephedrine products and require Mountain State pharmacies to track those sales. The measure is now in the House (CHARLESTON GAZETTE).

SOCIAL POLICY: MARYLAND Gov. Martin O’Malley (D) signs HB 438, which makes the Old Line State the eighth to legislatively endorse same-sex marriage. The law will go into effect in January, 2013. Opponents, meanwhile, have

In case you missed itDemocrats presently lead the presidential

contest while Republicans are ahead in the battles to control Congress and a majority of statehouses. If these trends continue, the na-tion faces four more years of divided — and divisive — government.

In case you missed it, the article can be found on our website athttp://www.statenet.com/capitol_journal/02-20-2012/html

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vowed to curtail the law via a ballot referendum (BALTIMORE SUN, STATE NET). • The VIRGINIA Senate approves HB 462, which would require women seeking an abortion to first have an external ultrasound. The measure has returned to the House (RICHMOND TIMES-DISPATCH). • Also in VIRGINIA, the Senate postpones HB 1, a bill that would grant personhood rights to human embryos. The Senate sent the measure back to the Senate Committee on Education and Health for consideration next year (CBSNEWS.COM). • NEW JERSEY Gov. Chris Christie (R) vetoes SB 1, which would have legalized same-sex marriage in the Garden State. Christie said he wants voters to decide the issue (TIMES OF TRENTON). • The WISCONSIN Senate approves SB 306, which would require doctors to be present when prescribing abortion-inducing drugs and further require physicians to inform a woman of her right to refuse or consent to an abortion. The bill is now in the Assembly (STATE NET, POST-CRESCENT [APPLETON]). • The GEORGIA House approves HB 954, a bill that would bar Peach State women from having abortions after the 20 weeks of pregnancy. The bill, which would make exceptions for cases where the woman’s health or life is endangered, moves to the Senate (LOS ANGELES TIMES). • The ARIZONA Senate approves SB 1365, which would bar governments from denying or removing someone’s professional license for refusing to do things that go against their “sincerely held religious beliefs.” The bill has moved to the House (EAST VALLEY TRIBUNE [MESA]). • The IOWA Senate approves SF 2247, which would replace the term “retarded” in Hawkeye State legal codes with the term “intellectual disability.” It has moved to the House (DES MOINES REGISTER).

POTPOURRI: VIRGINIA Gov. Robert McDonnell (R) signs HB 940, a bill that overturns the Old Dominion’s one-a-month cap on purchasing handguns. The new law goes into effect July 1 (RICHMOND TIMES-DISPATCH). • The ALABAMA House approves HB 2, legislation that would ban drivers from reading, writing or sending text messages while behind the wheel. It has moved to the Senate (STATE NET, MONTGOMERY ADVERTISER). • The SOUTH DAKOTA Legislature gives final approval to HB 1248, which would allow Coyote State residents to carry concealed handguns without a permit. The measure has moved to Gov. Dennis Daugaard (R) for review (RAPID CITY JOURNAL). • OHIO Gov. John Kasich (R) signs HB 14, which overturns a Buckeye State law that deems pit bulls to be inherently vicious dogs. The new law also creates three designations of dangerous dogs: “vicious,” “dangerous” and “nuisance.” The law goes into effect in May (CLEVELAND PLAIN DEALER).

— Compiled by RICH EHISEN

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BETTER NOT TRY THIS IN WISCONSIN: Public employee unions and pro-business forces are the lions and hyenas of the political realm, constantly snipping and snapping at one another in an effort to gain the upper hand. The

latest dust-up comes via California Assemblyman Roger Dickinson. Although California public workers are considered to already have some of the strongest job protections in the nation, Dickinson has nevertheless authored legislation to dramatically strengthen those protections even more. As the Sacramento Bee reports, the bill’s many tenets include virtually barring outsourcing contracts to private firms or requiring employees to work overtime to cover for co-workers who get laid off or, for that matter, who call in sick. State officials would also have drastically less time to investigate and act on employee misconduct, even for serious crimes like fraud and embezzlement. All of which makes one wonder if, given the state’s myriad real problems, Dickinson is shooting to take over Gov. Jerry Brown’s old “Moonbeam” moniker.

MOONBEAM V. MOONIE: Speaking of Gov. Edmund G. Brown, Jr., he is well known for not suffering fools gladly. That information, however, was apparently news to one East Coast reporter last week. As the Los Angeles Times reports, a reporter from the Washington Times approached Brown, who was in Washington D.C. for the winter meeting of the National Governors Association, with a pointed reference to California being bankrupt, followed by a claim that Ronald Reagan had served in the governor’s office after Brown. When Brown corrected her on both points — noting Reagan followed Brown’s father, Edmund Sr. — she shifted gears, insisting he had lost a bid for re-election after his first term. After Brown corrected her yet again, she returned to her claim that California is bankrupt, this time prompting Brown to ask her, “Are you a Moonie by any chance?” The Washington Times was started by Sun Myung Moon, the head of the Unification Church, whose followers are often called “Moonies.” End of interview.

A STYLISH ARGUMENT: While Maryland and Washington have recently endorsed same-sex nuptials, New Mexico Gov. Susana Martinez reiterated last week that she will fight any attempts to bring gay marriage to the Land of Enchantment. That has Santa Fe hair stylist Antonio Darden riled. As the Santa Fe New Mexican reports, Darden, who is gay and who has cut the gov’s hair in the past, recently left Martinez a message telling her that she was officially no longer welcome at his establishment. The news didn’t seem to bother Martinez, however. When questioned

Once around thestatehouse lightly

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about it by The Huffington Post, she said Darden wasn’t her regular hair stylist anyway. Oh, and by the way, “he talked too much” when he was on the job. Sounds like a match made in heaven, eh?

AND THEIR COOKIES ARE FATTENING TOO: Add the Girl Scouts of America to the list of subversive groups determined to destroy everything we hold dear. At least that is how Indiana Rep. Bob Morris sees it. As the Louisville Courier-Journal reports, Morris recently became the only House member to refuse to sign on to a resolution honoring the Girl Scouts on their 100th anniversary. In a letter he sent to fellow Republicans, Morris accused the Scouts of being an arm of Planned Parenthood and a “radicalized organization” that supports abortion and promotes the “homosexual lifestyle.” Morris’s colleagues weren’t convinced. House Speaker Brian Bosma, also a Republican, went out of his way to poke fun at Morris by handing out the Scouts’ famous Thin Mint cookies and telling lawmakers in session that the situation had inspired him to “purchase 278 cases of Girl Scout cookies in the last four hours.”

— By RICH EHISEN

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Editor: Rich Ehisen — capj@statenet.comAssociate Editor: Korey Clark — capj@statenet.comContributing Editors: Virginia Nelson, Art ZimmermanEditorial Advisor: Lou Cannon Correspondents: Richard Cox (CA), Steve Karas (CA), James Ross (CA), Lauren Davis (MA) and Ben Livingood (PA)Graphic Design: Vanessa PerezState Net ISSN: 1521-8449

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