KEY LEGISLATION:

Streamlined Sales Tax Bill to Become Law

HB 5080, legislation entering Michigan into a multi-state compact setting up
a streamlined process for remote sellers to collect and remit sales tax,
passed the Michigan Senate. The legislation now goes to Governor Engler, who
made passage of the bill a priority.

Approved 29 to 7, HB 5080 proved to be a far more difficult bill to pass
than originally expected. (For a breakdown on voting in the House and
Senate, go to www.retailers.com.) Misinformation and distrust were spread on
the issue by certain lawmakers and interest groups. MRA, however, worked
with a coalition of business and education interests to craft a winning
lobbying strategy to ensure passage of the bill.

An aide to the governor confirmed that Gov. Engler will sign the bill right
away. Upon his return from Germany, there will be an unofficial signing,
bringing together those groups involved in the bill’s passage. Thanks to all
MRA members who helped with the grassroots campaign on this important issue.

Bills Introduced on Shoplifting, Rebate Advertising

At MRA’s request, bills were introduced to deal with two loss prevention
issues facing retail. HBs 5125 and 5126 were introduced by Rep. Mike Bishop
(R-Rochester), vice chair of the House Commerce Committee to make it a
low-level felony to possess, manufacture, sell, offer to sell or distribute
materials aimed at shielding merchandise from detection by an electronic or
magnetic theft detection device. The bills also give retailers and their
employees the ability to detain a person suspected of such activity under
certain circumstances. The bills were introduced as a result of
sophisticated gangs of criminals traveling from location to location
utilizing these devices for wholesale shoplifting activity.

In addition, HB 5135 was introduced by Rep. Jason Allen (R-Traverse City),
chair of the House Commerce Committee. HB 5135 seeks to clarify provisions
in the Consumer Protection Act related to use of the wording "free after
rebate" in retail advertisements. Currently, the Attorney General’s office
is interpreting the requirements to require the printing fonts to be of
equal size and prominence when this terminology is used. The bill would
change this requirement while still requiring that it be conspicuously
disclosed.

Revenue Problems Will Impact Budgets

The Senate acted quickly to offset sagging education revenues, voting
unanimously to take $300 million from the Budget Stabilization Fund to
supplement the education budget. This move was one of many that will be
necessary, according to state officials, as the budget situation continues
to deteriorate.

The situation is looking so bleak that a special revenue estimating
conference has been called for October 23, rather than the usual January
date. Gov. Engler called the special conference to ascertain how much must
be trimmed from the current budget, which began on October 1. When budget
debates begin in February for the next fiscal year, the emphasis will be on
preserving existing funding rather than pushing for increases.

One area that is also being discussed is the phase-out of the Single
Business Tax. With the current budget crunch, many lawmakers and policy
staff are broaching the possibility of at least temporarily discontinuing
the scheduled phase-out.

Democrats Introduce Bill Capping Interest on Credit

A bill introduced and cosponsored by a group of Democrats would cap the
level of interest a regulated lender may charge on credit card transactions
at 18 percent per annum. No change was made to the section of the statute
that limits a finance charge for an extension of credit to no more than 25
percent per annum.

Tire Purchase Surcharge Proposed

Sen. Joe Young Jr.(D-Detroit) has introduced a bill calling for a surcharge
on tires sold at retail. The surcharge, which would be set according to
class of tire, would go into the Scrap Tire Economic Development Fund to pay
scrap tire haulers and processing centers.

Set at $1.95 per tire for a car tire and $5.00 for a farm tractor tire, the
rates are larger for vehicles such as commercial trucks. MRA is concerned
about this legislation, as it would seem to incentivize businesses to
relocate just outside the Michigan border and sell tires without the
surcharges. A meeting with the bill’s sponsor is set for next week.

KEY BILL INTRODUCTIONS:

SB 679, 680, sponsored by Sen. Dale Shugars (R-Portage), to establish use
tax and sales tax on the difference between trade-in value and purchase
price of certain vehicles and heavy equipment.

HB 5104, sponsored by Rep. Chris Kolb (D-Ann Arbor), to allow customers to
connect supplemental energy generators in parallel with utility supplied
power and deduct its contribution from their overall energy usage for
billing purposes.

HB 5105, sponsored by Rep. Raymond Basham (D-Taylor), to limit credit card
annual interest rates to 18 percent.

HB 5106, sponsored by Rep. Doug Spade (D-Adrian ), to prohibit sale of
cigarettes in packs of less than 20.

HB 5115, sponsored by Rep. Wm. Callahan (D-St. Clair Shores), to reduce age
requirement for licensure qualification of a security alarm system
contractor or private security guard to 21 from 25.

HB 5123, sponsored by Rep. Susan Tabor (R-Delta Twp), to prohibit Blue
Cross/blue shield coverage for mental health treatment from being more
restrictive than coverage for medical treatment.

HB 5125. 5126, sponsored by Rep. Michael Bishop(R-Rochester), to prohibit
manufacture, distribution or possession of a device to shield shoplifted
merchandise from detection or tool designed to deactivate or remove a theft
detection device and enact sentencing guidelines for them.

HB 5133, sponsored by Rep. Artina Lipsey Hardman (D-Detroit), to increase
penalty for selling alcohol to a minor.

HB 5135, sponsored by Rep. Jason Allen (R-Traverse City), to eliminates
requirement that disclosure of conditions for receipt of consumer goods or
services "free" or "without charge" be of equal prominence and in
conjunction with those words.

SB 687, sponsored by Sen. Shirley Johnson (R-Royal Oak), to allow notion of
prescribed drugs upon patient death.

SB 689, sponsored by Sen. Joe Young, Jr. (D-Detroit), to remove prohibition
on employing the mail to sell distribute or deliver a prescription drug when
the prescription is received by mail.

HB 5141, sponsored by Rep. Jerry Vander Roest (R-Galesburg), to require local
policies prohibiting school personnel from recommending psychotropic drugs
for children.

HB 5142, sponsored by Rep. Dale Sheltrown (D-West Branch), to provide
development rights and easement.

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

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

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