State Legislatures Magazine: January 2001

Editor's Note: This article appeared in the January 2001 issue of NCSL's magazine, State Legislatures. To order copies or to subscribe, contact the marketing department at (303) 364-7700.

Walking the 2001 Political Tightrope

Streamlined Sales Tax Project
DNA Testing and the Death Penalty
Genetic Testing
Growth Management
The Cost of Prescription Drugs
Children's Health
Traffic Safety
RU 486
Insurance Regulation
Redistricting
Compromise or Gridlock Ahead?

Walking the 2001 Political Tightrope

State legislatures will be tackling some tough issues in a new, very balanced, political environment.

By Gene Rose
The 2000 elections have put state legislatures on a political tightrope.

Never before has the political landscape been so balanced. Republicans control 17 state legislatures, Democrats 16, and the remaining 16 bicameral legislatures are split. As for the number of state legislators by party, Democrats hold only a 4 percent lead over the GOP.

This doesn't mean a middle-of-the-road agenda, though. As leaders of innovative public policy over the last quarter century, state legislatures still are poised to take daring steps to reach their goals.

Here is our annual look at some of the key issues state legislatures are likely to address in 2001.

Streamlined Sales Tax Project
A discussion about tax reform typically generates passionate discourse in America. The latest movement sweeping the country, while historic in nature, is noted, however, for its public ambivalence.

For the first time since the Bellas Hess and Quill decisions-where the U.S. Supreme Court prohibited states from requiring out-of-state retailers to collect sales and use tax-states are serious about bringing substantial uniformity and simplicity to this complex and burdensome tax collection system. For example, at present a retailer doing business across the country would have to know the sales and use tax rules in as many as 7,500 jurisdictions. To date, at least 29 states have agreed to take an active role in the Streamlined Sales Tax Project (SSTP), an effort to simplify sales and use tax collection and administration. Another dozen states are participating as observers.

"The fact that 29 states are actively participating in discussions in trying to agree on the standard definitions and approaches shows the high degree of commitment of the executive and legislative branches of government," says Illinois Senator Steve Rasuchenberger, co-chair of NCSL's Task Force on State and Local Taxation of Telecommunications and Electronic Commerce.

Tennessee Representative Matt Kisber, co-chair of the task force says now is the time for states to take action. "The revenue pressures facing state governments in many ways reflect policy embodied in the economy of yesterday. The streamlined sales tax project is an effort to use the new technologies, along with a cooperative effort among the states to bring the sales tax into the 21st century. It makes common sense if we can find a way to reduce the burden of compliance on taxpayers and make it easier to administer for state governments. It will ultimately prove to be a winner for everyone."

States are working quickly to find a solution as more and more sales have shifted from traditional Main Street retail outlets to remote sales over the Internet.

Forty-five states and the District of Columbia depend on sales tax as a revenue source, and there is growing concern that those tax bases will erode as consumer preference for e-commerce grows. Additionally, Congress-in its efforts to extend the moratorium on state and local taxes on Internet access-has signaled that it may be interested in addressing the states' sales and use tax collections systems. Some congressional proposals would go so far as to define state tax policy and place onerous mandates on states before requiring out-of-state vendors to collect a sales tax.

As a result, states are recognizing that the best solution to the problem is developing a simplified sales and use tax system. They currently have multiple and confusing definitions of common items of food, clothing and others. For example, a Twix bar with chocolate and caramel may be considered a candy in one state and a cookie in another. For the manufacturer and the retailer, the distinction is significant in its tax implications.

NCSL's task force, which has been working on the issue for the past two years, is providing advice and oversight to the SSTP in drafting an interstate agreement that will be incorporated in model legislation several states are expected to consider in 2001. In addition, Kansas, Michigan, North Carolina and Wisconsin have agreed to undertake a pilot project to test technology-based models for implementing the system. Testing of an on-line tax calculation and remittance system began in October.

This past November, the SSTP approved the National Sales and Use Tax Agreement and accompanying model legislation, Uniform Sales and Use Tax Administration Act, for legislatures to consider in their 2001 legislative sessions. NCSL's task force will meet in late January to give final consideration to the interstate agreement and model legislation. It is anticipated that the Streamlined Sales Tax Project will continue to meet throughout 2001 to work on unresolved issues. The SSTP will develop a second model bill for consideration in 2002.

DNA Testing and the Death Penalty
To scientists, it's deoxyribonucleic acid. To the general public, it's DNA. To law enforcement officers, defendants and jurists, it's a vehicle that is causing the re-examination of cases closed years ago.

The use of DNA initially was hailed as a tool to convict offenders. As a result of highly publicized cases that have proved wrongful conviction, several states have adopted laws that allow for post-conviction DNA testing. The motions allowed and the processes being created under these new laws give judges broader authority to order or admit DNA evidence.

In most states, the rules of criminal procedure require new evidence to be brought before the court within six months of the conviction. This potentially excludes offenders who were convicted before DNA testing was available, but for whom such testing may now provide important evidence relevant to their case.

A Gallup Poll released in March indicates that while the general public overwhelmingly supports the death penalty, 92 percent of all Americans say those convicted before the technology was available should be given the opportunity to submit to new DNA tests. More than 90 percent believe DNA tests are more reliable than fingerprint evidence.

Arizona, California, Delaware, Oklahoma, Tennessee and Washington are among the states that approved legislation regarding post-conviction testing in the 2000 sessions. The other states are expected to follow this year.

Legislatures are expected to address other DNA issues, especially in death penalty cases. Illinois Governor George Ryan issued a moratorium in his state last year after death row inmates were released following investigations that revealed their innocence. A Chicago Tribune series highlighted many other problems with the death penalty system, including defendants being represented at trial by attorneys who had been disbarred or suspended.

Genetic Testing
Scientists in June released a working draft of the human genome, which guaranteed that state legislative interest in genetics policy will remain strong. Emerging technologies will soon transform biomedicine by allowing doctors to better identify, treat, prevent and-ultimately-cure genetic ailments. The great promise the technology brings is countered by the fear that people will be more open to discrimination and privacy violations by those with financial incentives to misuse the technology.

In 2000, two states passed groundbreaking genetics legislation. Michigan enacted a conservative, cautious reform package narrowly banning genetic discrimination in employment and health insurance and requiring informed consent of the individual to conduct genetic tests.

Massachusetts became the first state to forbid discrimination in housing and financial services, as well as health insurance and employment, all based on a broader definition of genetic information. The state also enacted specific privacy protections that require informed consent in order to conduct a genetic test or disclose genetic information. It instituted specific penalties for genetic privacy violations.

In 2001, debates on genetic policy already are set in Maryland, Missouri, Nebraska, Oregon, Rhode Island, Utah and Washington.

Genetic privacy and nondiscrimination will be the focus of debate in most states, but new issues could include licensing of genetic counselors, availability of genetic services, and the regulation of assisted reproductive technologies and pre-implantation genetic diagnosis, sometimes referred to as "designer baby" services.

Growth Management
Legislatures across the country are taking a bipartisan approach to this issue, addressing key components of the problems associated with unmanaged growth. As Maine Senator Sharon Treat said, growth management legislation "is something that you really have to lay the groundwork for."

Maine found success last year by bringing key committees together to craft legislation addressing tax, land use and transportation issues. A bill also created ongoing legislative oversight to ensure that the critical issues associated with growth would be met. Treat expects that more legislative pieces of the growth puzzle will be approved this year.

"On so many fronts, a lot of the attention is being focused on urban sprawl and the pressures on infrastructure, such as traffic and overcrowded schools, in rapidly growing areas," Treat said. "But we're also seeing a lot of impact on older downtowns and central business districts."

Pennsylvania Representative David Steil agrees. "Growth used to be limited to certain sections of the country. With a strong economy, it is becoming a problem in many more areas, and a larger number of people are seeing the results of poor planning."

Legislation approved in Pennsylvania last year was the first major change in 30 years in the municipalities planning code, Steil said. "What Pennsylvania has done, although very important, is no more than a foundation. Having made that start will make it easier to move forward."

State legislatures this year will attempt to address growth concerns through bills that encourage greater county and municipal collaboration in land use planning, revenue sharing among cities to diminish competition for malls and other projects that raise a lot of sales tax revenue, and financial incentives to finance open space acquisition. Failing an effective legislative response, citizen groups will not be reluctant to go to the polls with ballot measures to require more stringent action.

Both Treat and Steil agree that building coalitions were important to approval of the historic growth bills. "My advice to other legislators," said Steil, "is that this is such a contentious and complex issue, that unless you build those coalitions, meaningful legislation is unlikely."

The Cost of Prescription Drugs
Prescription drug costs will remain a hot issue in the 2001 sessions, after a flurry of state activity in the past year when more than half the legislatures grappled with it. At least 22 states have already passed some type of pharmacy assistance law to help low-income seniors or others with disabilities. A relatively new trend focuses on statewide programs aimed at achieving substantially lower pharmaceutical prices for broader categories of consumers. (See article on page 20 for more details.)

Children's Health
Although HMO reform, prescription drugs and rising health care costs dominate health story headlines, a growing number of state legislatures are targeting children in their major health care policy decisions. Much of that concern is focusing on the child's environment.

Even though state and federal health regulatory agencies set standards that protect public health, most use adult humans or adult animals to set maximum exposure levels. As differences between adult and child responses to environmental hazards become more apparent, government agencies are realizing that testing and standard setting should accommodate the sensitivities of developing children.

"Bad environment creates health problems," said Maryland Delegate Jim Hubbard. "We have a 400 percent increase in asthma, and the problems with lead paint and asbestos are well documented. A lot of this can be prevented by how we think in the long term as opposed to trying to quick fix a problem."

Research indicates that children's rapid development and growth make them more vulnerable to environmental pollutants. Developing organs and other physiological differences often cause children to absorb a higher percentage of the toxins to which they are exposed. A child's liver and kidneys may not be as efficient as an adult's when it comes to removing toxic substances, while differences in skin and the gastrointestinal tract also can increase absorption. Due to physiological differences, children absorb nearly five times more of the lead they ingest than adults.

The Food Quality Protection Act requires federal agencies to re-examine their standards to ensure products and pollutants do not harm children. The law places burdens on states to revise their health and environmental standards to protect children.

Hubbard says Maryland was able to put together an advisory council to look at asthma, leukemia, cancer and other health concerns where a direct relationship between children's health and the environment could be found. The council includes a pediatrician, researchers, elected officials, a parent and a representative from the chemical industry.

Hubbard says the role of states is important in this issue since the federal government is unlikely to address it. "I don't see anything like this happening at the federal level," Hubbard said. "The states are going to have take the lead since they are able to adopt more progressive policy."

Traffic Safety
According to the Cellular Telecommunications Industry Association, more than 100 million Americans now subscribe to wireless telephone services, and 85 percent of those subscribers use their phones while driving to conduct business, report emergencies and stay in touch with family and friends.

Distractions in the car won't end there, though. Auto manufacturers and telecommunications companies are rushing to place televisions, fax machines, navigation systems and computers in cars. Drivers can now surf the Web, check e-mail, use concierge services, project maps on the windshield and watch movies in the comfort of their fast moving automobiles.

All these new driver distractions have some state legislators concerned about the implications for traffic safety. Only three states-California, Florida and Massachusetts-impose minor restrictions on cell phones and driving. However, since 1995, at least 37 states have considered measures addressing telecommunications on the road. In 2000 alone, 27 states considered bills compared with 15 states in 1999. Although nearly everything proposed so far has failed, bills in Massachusetts and Pennsylvania came close to passing this year.

In 2001, state legislatures may face additional pressure to address telecommunications on the road from local, as well as the federal, government. Nine local jurisdictions in Massachusetts, New York, New Jersey, Ohio and Pennsylvania now require drivers to use hands-free phones while driving. As many as 300 local jurisdictions may be considering similar proposals. Cities and municipalities in California, Illinois, Michigan, New Jersey, New York and Pennsylvania have all urged their state legislatures to address the issue to limit piecemeal local regulation.

RU 486
In September, the Food and Drug Administration (FDA) approved the use of RU 486, a drug which taken soon after conception induces a nonsurgical abortion.

How the FDA's approval will play in state legislatures is uncertain at this point, but there is little doubt that the subject will enter into the abortion debate. In 2000, more than 400 abortion-related bills were introduced, with at least 70 of those enacted into law-a high percentage for any legislative subject.

Since state legislatures cannot ban the use or sale of an FDA-approved prescription drug, legislators are likely to review the language of their abortion statutes to reflect its use. Over the past two years, a handful of states have introduced bills that would have given pharmacists the right to refuse distribution of the pill. South Dakota has an existing law to this effect. Currently, RU 486 is distributed to patients in a doctor's office, so these types of law would not immediately affect access to the drug.

As of mid-November, at least two legislative bills on the subject are on the table. A prefiled bill in Kentucky amends the definition of abortion to include mifepristone, the RU 486 drug. It also prohibits prescribing mifepristone to a minor without parental consent and prohibits prescriptions to anyone 16 or younger. A bill in New Jersey would ban the use of state medical assistance funds for a nonsurgical abortion unless necessary to preserve a woman's life.

Insurance Regulation
States will have just two years to enact a national system to license and register insurance agents and brokers or face the loss of hundreds of millions of dollars in state producer-licensing revenues. At issue are the requirements of the federal Financial Modernization Act of 1999, which tore down Depression-era barriers for insurance, banks and securities firms to affiliate with one another. The federal law came about due to problems created by the patchwork of state insurance laws and regulations on the $824 billion insurance industry.

The National Association of Insurance Commissioners has produced model legislation for states to meet the requirements of the federal bill. Insurance commissioners from 31 states have gone on record to seek enactment of the model act from their legislatures in 2001. Kentucky, Missouri, New Hampshire and North Carolina passed bills last year to comply with the federal law.

Redistricting
How Americans are represented at the state and federal level is at stake when legislators begin dissecting information from the U.S. Census Bureau this year. Every 10 years, most state legislatures are responsible for redrawing state and congressional boundary lines to ensure districts represent as similar a number of constituents as possible.

Republicans are in a considerably better position for redistricting going into this round than they were in 1990 when they controlled only six state legislatures. Republicans now hold both chambers of the legislature in 17 states. Thirteen Republican-controlled legislatures share the same political party as their governor while only seven of the Democrat-controlled legislatures work with governors of their own party. The GOP will have the upper hand in Pennsylvania redistricting and potentially gain a seat at the table in the Missouri redrawing. Democrats kept alive their input in Texas by retaining control of the House and earned a greater say in Colorado's redistricting by taking over the Senate. Perhaps the biggest redistricting story of the election was the passage of an initiative in Arizona that will shift the critical line-drawing process from the Legislature to an independent commission. Including Arizona, six states will use a commission for congressional redistricting in 2001. State legislative redistricting in 12 states will be conducted by a board or commission. In the rest of the states, legislatures are charged with the task.

Compromise or Gridlock Ahead?
While the 2000 elections brought political balance, state legislatures won't avoid risk in seeking innovative solutions to the critical issues facing America's citizens. Observers will be watching the high-wire act to see if the new balance results in more compromise or greater gridlock.

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