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SB-0277, As Passed Senate, June 15, 2005

SUBSTITUTE FOR

SENATE BILL NO. 277

A bill to make appropriations for the department of military

and veterans affairs for the fiscal year ending September 30, 2006;

to provide for the expenditure of the appropriations; to provide

for certain powers and duties of the department of military and

veterans affairs, other state agencies, and local units of

government related to the appropriations; and to provide for the

preparation of certain reports related to the appropriations.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1

LINE-ITEM APPROPRIATIONS

Sec. 101. Subject to the conditions set forth in this act, the

amounts listed in this part are appropriated for the department of

military and veterans affairs for the fiscal year ending September

Senate Bill No. 277 as amended June 15, 2005

30, 2006, from the funds indicated in this part. The following is a

summary of the appropriations in this part:

DEPARTMENT OF MILITARY AND VETERANS AFFAIRS

APPROPRIATION SUMMARY:

Full-time equated unclassified positions ......... 7.0

Full-time equated classified positions........ 1,016.0

GROSS APPROPRIATION.................................... $ <<117,890,800>>

Interdepartmental grant revenues:

Total interdepartmental grants and intradepartmental

transfers............................................ 1,656,800

ADJUSTED GROSS APPROPRIATION........................... $ <<116,234,000>>

Federal revenues:

Total federal revenues................................. 49,537,200

Special revenue funds:

Total local revenues................................... 0

Total private revenues................................. 1,355,800

Total other state restricted revenues.................. 27,360,500

State general fund/general purpose..................... $ <<37,980,500>>

Sec. 102. HEADQUARTERS AND ARMORIES

Full-time equated unclassified positions ......... 7.0

Full-time equated classified positions.......... 124.0

Headquarters and armories--83.5 FTE positions.......... $ 9,972,700

Unclassified military personnel........................ 660,300

Military appeals tribunal.............................. 900

Michigan emergency volunteers.......................... 5,000

State active duty...................................... 85,100

Challenge program--40.5 FTE positions.................. 4,039,900

Homeland security...................................... 1,000,000

Human resources optimization user charge............... 29,500

Military family relief fund............................ 600,000

GROSS APPROPRIATION.................................... $ 16,393,400

Appropriated from:

IDG, challenge grant................................... 250,800

IDG, community health.................................. 100,000

IDG, state police...................................... 900,000

IDG, human services.................................... 406,000

Federal revenues:

DOD-DOA-NGB............................................ 4,356,300

Special revenue funds:

Rental fees............................................ 350,000

Mackinac Bridge authority.............................. 55,000

Private donations...................................... 790,800

Military family relief fund............................ 600,000

Parent pay revenue..................................... 100,000

State general fund/general purpose..................... $ 8,484,500

Sec. 103. MILITARY TRAINING SITES AND SUPPORT

FACILITIES

Full-time equated classified positions.......... 200.0

Military training sites and support

facilities--200.0 FTE positions...................... $ 20,129,700

Military training sites and support facilities test

projects............................................. 100,000

GROSS APPROPRIATION.................................... $ 20,229,700

Appropriated from:

Federal revenues:

DOD-DOA-NGB............................................ 17,471,400

Special revenue funds:

Test project fees...................................... 100,000

State general fund/general purpose..................... $ 2,658,300

Sec. 104. DEPARTMENTWIDE APPROPRIATIONS

Departmentwide accounts................................ $ 1,656,500

Special maintenance - state............................ 151,200

Special maintenance - federal.......................... 5,300,000

Military retirement.................................... 2,807,000

Counternarcotic operations............................. 50,000

Starbase grant......................................... 640,000

GROSS APPROPRIATION.................................... $ 10,604,700

Appropriated from:

Federal revenues:

DOD-DOA-NGB............................................ 7,206,100

Federal counternarcotic revenues....................... 50,000

State general fund/general purpose..................... $ 3,348,600

Sec. 105. VETERANS SERVICE ORGANIZATIONS

American legion........................................ $ 886,000

Disabled American veterans............................. 732,400

Marine corps league.................................... 336,300

American veterans of World War II and Korea............ 464,800

Veterans of foreign wars............................... 886,000

Michigan paralyzed veterans of America................. 165,700

Purple heart........................................... 157,900

Veterans of World War I................................ 100

Polish legion of American veterans..................... 41,200

Jewish veterans of America............................. 41,200

State of Michigan council - Vietnam veterans of

America.............................................. 159,500

Catholic war veterans.................................. 41,200

GROSS APPROPRIATION.................................... $ 3,912,300

Appropriated from:

State general fund/general purpose..................... $ 3,912,300

Sec. 106. GRAND RAPIDS VETERANS' HOME

Full-time equated classified positions.......... 517.0

Grand Rapids veterans' home--517.0 FTE positions....... $ 45,302,900

Board of managers...................................... 415,000

GROSS APPROPRIATION.................................... $ 45,717,900

Appropriated from:

Federal revenues:

DVA-VHA................................................ 14,191,900

HHS, Medicaid.......................................... 381,200

HHS, Medicare.......................................... 749,400

Special revenue funds:

Private - veterans' home post and posthumous funds..... 340,000

Income and assessments................................. 16,006,400

Military family relief fund............................ 75,000

Lease revenue.......................................... 35,000

State general fund/general purpose..................... $ 13,939,000

Sec. 107. D.J. JACOBETTI VETERANS' HOME

Full-time equated classified positions.......... 159.0

D.J. Jacobetti veterans' home--159.0 FTE positions..... $ 14,457,500

Senate Bill No. 277 as amended June 15, 2005

Board of managers...................................... 200,000

GROSS APPROPRIATION.................................... $ 14,657,500

Appropriated from:

Federal revenues:

DVA-VHA................................................ 4,262,100

HHS, Medicare.......................................... 367,100

HHS, Medicaid.......................................... 87,700

Special revenue funds:

Private - veterans' home post and posthumous funds..... 125,000

Military family relief fund............................ 75,000

Income and assessments................................. 4,840,400

State general fund/general purpose..................... $ 4,900,200

Sec. 108. VETERANS' AFFAIRS DIRECTORATE

Full-time equated classified positions........... 16.0

Veterans' affairs directorate administration---3.0

FTE positions........................................ $ 318,600

Veterans' trust fund administration---13.0 FTE

positions............................................ 1,141,100

Veterans' trust fund grants............................ 3,746,500

GROSS APPROPRIATION.................................... $ 5,206,200

Appropriated from:

Special revenue funds:

Michigan veterans' trust fund.......................... 4,887,600

State general fund/general purpose..................... $ 318,600

Sec. 109. INFORMATION TECHNOLOGY

Information technology services and projects........... $ <<1,169,100>>

GROSS APPROPRIATION.................................... $ <<1,169,100>>

Senate Bill No. 277 as amended June 15, 2005

Appropriated from:

Federal revenues:

DOD-DOA-NGB............................................ 109,100

DVA-VHA................................................ 296,300

HHS, Medicare.......................................... 8,600

Special revenue funds:

Income and assessments................................. 336,100

State general fund/general purpose..................... $ <<419,000>>

PART 2

PROVISIONS CONCERNING APPROPRIATIONS

GENERAL SECTIONS

Sec. 201. Pursuant to section 30 of article IX of the state

constitution of 1963, total state spending from state resources

under part 1 for fiscal year 2005-2006 is <<$65,341,100.00>> and state

spending from state resources to be paid to local units of

government for fiscal year 2005-2006 is $120,000.00. The itemized

statement below identifies appropriations from which spending to

local units of government will occur:

DEPARTMENT OF MILITARY AND VETERANS AFFAIRS

MILITARY TRAINING SITES AND SUPPORT FACILITIES

Payments in lieu of taxes.............................. $ 70,000

MICHIGAN VETERANS' TRUST FUND

County counselor travel expenses....................... $ 50,000

TOTAL.................................................. $ 120,000

Sec. 202. The appropriations authorized under this act are

subject to the management and budget act, 1984 PA 431, MCL 18.1101

to 18.1594.

Sec. 203. As used in this act:

(a) "Department" means the department of military and veterans

affairs.

(b) "Director" means the director of the department of

military and veterans affairs.

(d) "DOD-DOA-NGB" means the DOD department of the army,

national guard bureau.

(e) "DVA" means the United States department of veterans'

affairs.

(f) "DVA-VHA" means the DVA veterans' health administration.

(g) "FTE" means full-time equated.

(h) "HHS" means the United States department of health and

human services.

(i) "IDG" means interdepartmental grant.

Sec. 204. The department of civil service shall bill the

department at the end of the first fiscal quarter for the 1% charge

authorized by section 5 of article XI of the state constitution of

1963. Payments shall be made for the total amount of the billing by

the end of the second fiscal quarter.

Sec. 205. (1) Beginning October 1, a hiring freeze is imposed

on the state classified civil service. State departments and

agencies are prohibited from hiring any new full-time state

classified civil service employees and prohibited from filling any

vacant state classified civil service positions. This hiring freeze

does not apply to internal transfers of classified employees from 1

position to another within a department.

(2) The state budget director shall grant exceptions to this

hiring freeze when the state budget director believes that the

hiring freeze will result in rendering a state department or agency

unable to deliver basic services, cause loss of revenue to the

state, result in the inability of the state to receive federal

funds, or necessitate additional expenditures that exceed any

savings from maintaining a vacancy. The state budget director shall

report by the last business day of each month to the chairpersons

of the senate and house of representatives standing committees on

appropriations the number of exceptions to the hiring freeze

approved during the previous month and the justification for the

exception.

Sec. 207. Sixty days before beginning any effort to privatize,

the department shall submit a complete project plan to the

appropriate senate and house of representatives appropriations

subcommittees and the senate and house fiscal agencies. The plan

shall include the criteria under which the privatization initiative

will be evaluated. The evaluation shall be completed and submitted

to the appropriate senate and house of representatives

appropriations subcommittees and the senate and house fiscal

agencies within 30 months.

Sec. 208. Unless otherwise specified, the department shall use

the Internet to fulfill the reporting requirements of this act.

This requirement may include transmission of reports via electronic

mail to the recipients identified for each reporting requirement or

it may include placement of reports on an Internet or Intranet

site.

Sec. 209. Funds appropriated in part 1 shall not be used for

the purchase of foreign goods or services, or both, if

competitively priced and of comparable quality American goods or

services, or both, are available. Preference should be given to

goods or services, or both, manufactured or provided by Michigan

businesses, if they are competitively priced and of comparable

value.

Sec. 210. The director of each department receiving

appropriations in part 1 shall take all reasonable steps to ensure

businesses in deprived and depressed communities compete for and

perform contracts to provide services or supplies, or both. Each

director shall strongly encourage firms with which the department

contracts to subcontract with certified businesses in depressed and

deprived communities for services, supplies, or both.

Sec. 211. The departments and agencies receiving

appropriations in part 1 shall receive and retain copies of all

reports funded from appropriations in part 1. The department shall

follow all federal guidelines and state laws regarding short-term

and long-term retention of records.

Sec. 212. (1) Of the funds appropriated in section 103 for

military training sites and support facilities, there shall be

established a Michigan national guard education assistance program.

Disbursements to the educational assistance program shall not

exceed $1,100,000.00 without legislative approval. Under the

program, a member of the national guard who is in active service

and who enrolls as a full- or part-time student at a public or

private state college or university may be eligible to receive up

to an equivalent of 50% of the total cost of tuition not to exceed

$2,000.00, as education assistance, in any academic year.

(2) As used in this section, an eligible person means a member

of the Michigan national guard who is in active service, as defined

in section 105 of the Michigan military act, 1967 PA 150, MCL

32.505. An eligible person does not include a member of the

Michigan national guard or air national guard who is absent without

leave or who is under charges as described in the Michigan code of

military justice of 1980, 1980 PA 523, MCL 32.1001 to 32.1148.

(3) The department of military and veterans affairs, office of

the adjutant general shall administer the education assistance

program and prescribe forms and procedures to effectively carry out

the education assistance program.

(4) An eligible person shall apply to the department of

military and veterans affairs, office of the adjutant general for

education assistance and shall provide evidence of attendance and

completion of the course of study with a grade of at least 2.0 on a

4.0 scale, or its equivalent. The adjutant general shall approve

the application for reimbursement if the applicant meets the

definition of an eligible person under subsection (2) and other

criteria as established by the adjutant general.

(5) The education assistance program applies to any course of

instruction that is included in an associate, undergraduate, or

postgraduate degree program offered by a college or university of

this state.

(6) The education assistance program applies to an eligible

person notwithstanding any other educational incentive or benefit

received by the eligible person under any other educational

assistance program provided by any other state.

(7) An eligible person who successfully completes the course

of study with a grade of at least 2.0 on a 4.0 scale, or its

equivalent, shall be eligible for reimbursement.

(8) The department of military and veterans affairs may use

funds from the appropriated funds to administer the education

assistance program.

(9) Reimbursed members who do not complete their national

guard obligation shall pay the state for money received from the

state for tuition. Members who fail to repay the state within the

time limits established by the adjutant general shall be indebted

to the state. The department shall work in conjunction with the

department of treasury for inclusion in the tax intercept program

for amounts due the state.

(10) A portion of the funds for the Michigan national guard

education assistance program may be used by the department for the

purpose of promoting the program and for encouraging those persons

the department wishes to have enlist or reenlist in the Michigan

national guard.

Sec. 213. The department shall consult with the house and

senate appropriations subcommittees on military and veterans

affairs regarding the projected closing or consolidation of any

national guard armories.

Sec. 214. It is the intent of the legislature that, should the

necessary legislation be enacted and funding become available,

funds be appropriated for state military cemeteries in Crawford and

Dickinson Counties.

Sec. 221. From the funds appropriated in part 1 for

information technology, the department shall pay user fees to the

department of information technology for technology-related

services and projects. These user fees shall be subject to

provisions of an interagency agreement between the department and

the department of information technology.

Sec. 223. Amounts appropriated in part 1 for information

technology may be designated as work projects and carried forward

to support technology projects under the direction of the

department of information technology. Funds designated in this

manner are not available for expenditure until approved as work

projects under section 451a of the management and budget act, 1984

PA 431, MCL 18.1451a.

Sec. 225. (1) Due to the current budgetary problems in this

state, out-of-state travel for the fiscal year ending September 30,

2006 shall be limited to situations in which 1 or more of the

following conditions apply:

(a) The travel is required by legal mandate or court order or

for law enforcement purposes.

(b) The travel is necessary to protect the health or safety of

Michigan citizens or visitors or to assist other states in similar

circumstances.

increase state revenues, including protecting existing federal

funds or securing additional federal funds.

(d) The travel is necessary to comply with federal

requirements.

(e) The travel is necessary to secure specialized training for

staff that is not available within this state.

(f) The travel is financed entirely by federal or nonstate

funds.

(2) If out-of-state travel is necessary but does not meet 1 or

more of the conditions in subsection (1), the state budget director

may grant an exception to allow the travel. Any exceptions granted

by the state budget director shall be reported on a monthly basis

to the house and senate appropriations committees.

(3) Not later than January 1 of each year, each department

shall prepare a travel report listing all travel by classified and

unclassified employees outside this state in the immediately

preceding fiscal year that was funded in whole or in part with

funds appropriated in the department's budget. The report shall be

submitted to the chairs and members of the house and senate

appropriations committees, the fiscal agencies, and the state

budget director. The report shall include the following

information:

(a) The name of each person receiving reimbursement for travel

outside this state or whose travel costs were paid by this state.

(b) The destination of each travel occurrence.

(d) A brief statement of the reason for each travel

occurrence.

(e) The transportation and related costs of each travel

occurrence, including the proportion funded with state general

fund/general purpose revenues, the proportion funded with state

restricted revenues, the proportion funded with federal revenues,

and the proportion funded with other revenues.

(f) A total of all out-of-state travel funded for the

immediately preceding fiscal year.

Sec. 226. The department shall not take disciplinary action

against an employee for communicating with a member of the

legislature or his or her staff.

Sec. 227. Sixty days prior to the public announcement of the

intention to sell any department property, the department shall

submit notification of that intent to the appropriate senate and

house appropriations subcommittees and the senate and house fiscal

agencies.

HEADQUARTERS AND ARMORIES

Sec. 301. The department may charge reasonable rental and

equipment usage fees for renting an armory or using the distance

learning network. The fee shall include the cost of overtime

compensation, insurance coverage, and any maintenance required.

Sec. 302. (1) The funds appropriated in this act for private

donations to the challenge program shall be considered state

restricted revenue, and unexpended funds remaining at the close of

the fiscal year shall not lapse to the general fund but shall be

carried forward to the subsequent fiscal year.

(2) The department shall make every effort to identify

alternative sources of revenue to replace the general fund/general

purpose funding provided in this act for the challenge program.

(3) The department may charge a parent or guardian of a

participant in the challenge program a fee for participating in the

program if the participant is a member of a family with an income

that exceeds 200% of the federal poverty guidelines as published by

the United States department of health and human services. The

amount charged the parent or guardian shall not exceed the per

student state share cost of administering the program. The parent

or guardian shall be notified of any charge to be assessed under

this subsection prior to enrollment of the child in the program.

Sec. 304. The department will partner with the department of

human services to identify youth who may be eligible for the

challenge program from those youth served by department of human

services programs. These eligible youth shall be given priority for

enrollment in the program.

VETERANS SERVICE ORGANIZATIONS

Sec. 501. (1) The department shall work toward the goal of

providing the highest quality veterans' benefits counseling

possible to veterans in the state, ensuring that every veteran in

need is served. The department shall also make every effort to

improve the coordination of veterans' benefits counseling in the

state to maximize the effective and efficient use of taxpayer

dollars.

(2) To accomplish the goals of subsection (1), the department

and veterans service directors committee shall take steps to

increase its responsibility in the administration, management,

oversight, and outreach of the delivery of services to veterans.

The department shall involve county veterans counselors,

representatives from the Michigan veterans' trust fund, and

veterans service organizations receiving grants in section 105 to

work in concert to identify, implement, and evaluate steps to do

all of the following:

(a) Increase the role of the department of military and

veterans affairs in working directly with the United States

department of veterans' affairs to enhance the delivery of services

to Michigan veterans.

(b) Create geographic areas of responsibility for veterans

service organizations to provide representation for veterans filing

claims with the United States department of veterans' affairs.

United States department of veterans' affairs on behalf of veterans

for service-connected disability or pension benefits. The

department and the veterans service organizations may work toward

either an absolute increase of approved claims or an increase in

the percentage of Michigan veterans with approved claims.

(d) Develop methods to increase rates of recovery paid by the

United States department of veterans' affairs either by

compensation paid per approved claim or on a per capita basis.

(e) Expand training opportunities for veterans service

organization service officers.

(f) Increase the number or percentage of Michigan veterans

enrolled in the VA healthcare system.

(g) Publicize the availability, benefit, and value of burial

in the Fort Custer and Great Lakes national cemeteries.

(h) Review the performance of any grant recipient under the

program and require that performance to be a major consideration in

the future funding of any grant recipient.

(3) The department shall create a report of the efforts to

complete the goals outlined in this section and shall provide

suggestions on how a more effective and efficient veterans'

benefits counseling program may best be designed for implementation

for fiscal year 2006-2007. This report shall be delivered to the

house and senate appropriations subcommittees no later than March

15, 2006.

VETERANS' HOMES

Sec. 601. Appropriations in this act for the Grand Rapids

veterans' home and the D.J. Jacobetti veterans' home shall not be

used for any purpose other than for veterans and veterans'

families.

Sec. 602. The Grand Rapids veterans' home and the D.J.

Jacobetti veterans' home, together with the department and the

department of management and budget, shall produce and deliver to

the senate and house of representatives appropriations

subcommittees on state police and military affairs an annual

written report. The report shall include an accounting of member

populations and bed space available; a description and accounting

of services and activities provided to members; financial

information; current state nursing home licensure status; the steps

required for Medicaid certification, including a listing of any

personnel, equipment, supplies, or budgetary increases required;

and whether or not steps are being taken toward Medicaid

certification. The annual report shall be submitted to the senate

and house of representatives appropriations subcommittees on

military affairs no later than February 1, 2006.

Sec. 603. The money appropriated in this act for the boards of

managers may be expended for facility improvements, the purchase

and repair of equipment and furnishings, member services, and other

purposes that benefit the Grand Rapids veterans' home and the D.J.

Jacobetti veterans' home.

Sec. 604. In order to obtain operational efficiencies at the

Grand Rapids veterans' home and the D.J. Jacobetti veterans' home,

in addition to those already advocated by the auditor general as

detailed in the performance audit of the veterans affairs

directorate published in April 2005, the department shall obtain

bids for privatization of resident care aides' services at the

Grand Rapids veterans' home and the D.J. Jacobetti veterans' home.

Bids for resident care aides' services shall be solicited for terms

beginning immediately following the fiscal year 2004-2005

contracts' expiration dates. The department, upon examining the

bids, shall make a determination as to whether private contractors

can perform resident care aides' services at a cost that is less

expensive than that of current staff. Funds appropriated in part 1

for the Grand Rapids veterans' home reflect estimated savings for

the first year of privatization, which, due to a number of factors,

could be expected to be minimal. It is the intent of the

Senate Bill No. 277 as amended June 15, 2005

legislature that in subsequent fiscal years, savings from

privatization, estimated by the department to be approximately

$4,000,000.00 GF/GP compared to current appropriation levels, shall

not lapse to the general fund but shall be appropriated for the

Grand Rapids veterans' home and the D.J. Jacobetti veterans' home

for improvement projects and enhanced operational support. The

department shall provide a written report to the house and senate

state police and military and veterans affairs appropriations

subcommittees and the fiscal agencies no later than November 1,

2005 on the status of department and administration efforts to

comply with the requirements of this section. <<The department shall

document a savings of at least 5% over fiscal year 2004-05 year costs with any privatization proposal prior to any such plan being employed.>>

VETERANS' TRUST FUND

Sec. 703. (1) By April 1, 2006, the department shall submit to

the senate and house of representatives appropriations

subcommittees on military affairs and the state budget office a

detailed annual report of the Michigan veterans' trust fund for

fiscal year 2004-2005. The report shall include information on

grants provided from the emergency grant program and the veterans

survivor tuition program, including details concerning the

methodology of allocations, the selection of emergency grant

program authorized agents, and a detailed breakdown of trust fund

expenditures for that year. The report shall also provide an update

on the department's efforts to reduce program administrative costs.

(2) The annual report required under subsection (1) shall

contain information on the veterans survivors tuition program,

including the number of participants, where the participants

attended school, payments made to each school, the average grade

point and number of college credits earned by each participant, the

number of participants suspended by the program, and the number of

participants who earned a degree during fiscal year 2004-2005.

Sec. 704. The Michigan veterans affairs directorate

administration and the Michigan veterans' trust fund administration

shall take steps to assist the county veterans counselors of the

state to obtain training necessary for the execution of their

duties.

Sec. 705. (1) It is the intent of the legislature that prior

to the enactment of the fiscal year 2006-2007 appropriations bill

for the Michigan veterans' trust fund, there shall be legislation

enacted which shall provide a dedicated funding source for the cost

of the veterans' survivors tuition program which is a fund source

other than from revenue from the Michigan veterans' trust fund so

that annual interest earnings from the trust fund can be used

solely for its original intent of providing temporary emergency

financial assistance to wartime veterans in the state.

(2) Should the provisions of subsection (1) be enacted, it is

the intent of the legislature that the veterans' trust fund board

only expend interest earned by the Michigan veterans' trust fund as

provided in 1946 (1st Ex Sess) PA 9, MCL 35.601a to 35.610, and

that the board earmark funds each year from the interest earnings

to pay into the corpus of the fund until the corpus of the fund

reaches its original amount of $50,000,000.00.