KEY LEGISLATION:

ENGLER BLAMES RETAILERS FOR FAILURE ON
STREAMLINED SALES TAX

Governor John Engler blamed retailers and other business groups for his
inability to get state lawmakers to take action on sales tax streamlining
legislation pushed hard by the Michigan Retailers Association. Lawmakers
broke for the summer Thursday afternoon after failing to take action on the
sales and use tax collection bill (SB 433) that is part of national efforts
to bring about fairness and equity for Main Street retailers by requiring
remote sellers - Internet, catalog and other direct-ship merchants - to collect
and remit sales and use taxes.

"The retailer organizations were asleep and didn't explain this issue to
members," Engler told reporters, according to Gongwer News Service.
"Some of those that represent the business community should do so."

While the governor's criticism is completely off-base in terms of MRA's
involvement on the issue, as evidenced by MRA's strong Capitol lobbying,
member communication and grassroots efforts on the bill, MRA is urging
members to take the governor's comments as a challenge to turn up the heat
even more on lawmakers during their summer break. The issue is expected to
come up again when the Legislature returns in September.

"Lawmakers heard retailers' voice loud and clear on this issue. That wasn't
the problem. The bill and the good public policy it represents were held
hostage by political horsetrading on other end-of-session bills," said MRA's
Eric Rule, director of governmental affairs. "Rather than pointing fingers,
however, we need to unite our forces and continue to let House members know
in no uncertain terms the importance of this bill to retailers, consumers,
schoolchildren and families."

This summer MRA will again spearhead the grassroots effort to pass the bill.

REDISTRICTING PASSES ON PARTISAN LINES

Plans for legislative redistricting of the House and Senate are on their way
to Gov. Engler after passing by the barest number of votes possible
Thursday. Democrats voted solidly against the bill, HB 4965, but said the
final plan is much better than what was originally offered by Republicans.

Senate Democrats noted that the final plan meant Democrats could at least
compete for a majority in future elections, but they held out the
possibility of a lawsuit. All along, Democrats have alleged that there was
no public input on the plan. They claim that because no statewide hearings
were held and because no adequate review time was given, as guaranteed under
the federal Voting Rights Act, it may be difficult for the proposal to hold
up in court.

Ultimately, the issue may make its way to the state Supreme Court, which is
currently controlled by the Republicans, making it more likely that the plan
as passed will eventually become law.

Senate Majority Leader Dan DeGrow said the plan should give Republicans a 50
percent or better Republican base in at least 24 of the 38 Senate seats.
Governor Engler has pledged to sign all the redistricting bills—legislative,
congressional and Court of Appeals.

HUMMEL WINS HOUSE SEAT

Scott Hummel (R-DeWitt) cruised to an easy victory Tuesday, July 10, in the
special election to succeed State Sen. Valde Garcia (R-St. Johns) in
Garcia's former House seat. Hummel won with 74 percent of the vote over
Democratic challenger Roger Sosebee. Hummel said one of his major issues
will be opposing any postponement of the phased-out repeal of the single
business tax, which many of his local constituent businesses indicated was
their primary concern.

STALLWORTH INDICTED BY FEDS

Rep. Keith Stallworth (D-Detroit) was indicted July 2 on federal charges of
money laundering and conspiracy to distribute illegal drugs. The charges
stem from his involvement in an adult-themed nightclub and are unrelated to
previous charges that he allegedly sought a driver license and voter
registration in his brother's name.

If convicted of these felonies, Stallworth will no doubt face expulsion from
the Michigan Legislature. Stallworth maintains his innocence, and House
leaders reportedly are waiting for more information before making any
decisions on Stallworth's fate.

KEY BILL INTRODUCTIONS:

SB 575, sponsored by Sen. Raymond Murphy, (D-Detroit), to provide "
qualified technology skills training" income tax credit.

SB 580, sponsored by Sen. Murphy, to expand health insurance prescription
coverage to include contraceptives.

SB 581, sponsored by Sen. Murphy, to prohibit children from being seated in
smoking section of restaurants.

SB 593, 594,595, sponsored by Sen. Bill Bullard, Jr., (R-Highland Twp.), to
repeal requirement to withhhlod issuance of certification of dissolution or
withdrawal for unpaid sales taxes/unpaid use taxes/unpaid income taxes.

HB 5011, sponsored by Rep. Nancy Quarles,(D-Highland), to expand Blue
Cross/Blue Scare prescription coverage to include contraceptives.

HB 5012, sponsored by Rep. Patricia Godchaux, (R-Birmingham), to expand
health insurance prescription coverage to include contraceptives.

HB 5031, sponsored by Rep. Robert Gosselin, (R-Troy), to require all
elections be held on a Tuesday.

HB 5034, sponsored by Rep. Jason Allen (R-Traverse City), to exempt
gratuities from income tax.

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

Specific comments or questions regarding this bulletin should be directed to:
Kathleen Wilson, Administrative Assistant to the Governmental Affairs Office at
kawilson@retailers.com.
Michigan Retailers Association
603 South Washington Avenue
Lansing, MI 48933
Phone: 517.372.5656
Toll Free: 800.366.3699
Fax: 517.372.1303
govt_affairs@retailers.com
http://www.retailers.com
http://www.mallofmichigan.com

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