Michigan Developments
Eric Rule,
Director of Governmental Affairs

Item pricing reform introduced in Senate
Sen. Joanne Emmons (R-Big Rapids) has introduced a bill seeking reform of Michigan’s Item Pricing Act. Senate Bill 1211 would remove the item pricing requirement for retailers who employ electronic shelf labels. The bill would apply to all products, including food and nonprescription medications.

Emmon’s office said the bill is not likely to receive immediate consideration. However, if item pricing reform gathers enough support to move later in the year, the proposal is likely to be included in some form in the final package.

A separate reform proposal has been introduced in the House to let retailers provide portable UPC scanners for customers to check prices instead of marking every item. Retailers would be required to demonstrate 98-percent scanner accuracy to be exempt from item pricing.

Security guard regulations pass committee
A package of bills increasing oversight and training of private security guards and firms won approval in the Senate Judiciary Committee.

While the bills (Senate Bills 420, 421, 425 and 426) do not affect store personnel employed in loss prevention, one of the committee members expressed his desire to explore that option. Sen. Gary Peters (D-Pontiac), who sponsored two of the bills in the package, stated that it has been his intent throughout this process to examine how proprietary security guards could be regulated in future legislation.

Senate Judiciary Committee Chairman Bill Van Regenmorter told MRA there may be some resistance in the Republican caucus to regulating proprietary security guards. Sen. Phil Hoffman (R-Jackson), the main sponsor of the legislation, has not yet indicated his stance. His office has been interested in and impressed by the training provided by some of the larger retailers in Michigan, however. If any changes are proposed, he may be open to exempting retailers who already exhibit adequate training methods.

Disputes delay unemployment benefits hike
The Legislature was unable to reach agreement on a bill raising the cap on unemployment insurance compensation prior to leaving for a two-week spring break on March 21. The issue has proved contentious, and members of the conference committee were not able to reach a consensus between the House- and Senate-passed versions of House Bill 5763.

Lawmakers disagree on several components of the proposal, including the addition of a waiting week before unemployed workers receive benefits. Republicans and business groups have argued that increasing the benefit to the $415 that Democrats have advocated is fiscally irresponsible and could jeopardize the solvency of the Unemployment Trust Fund. Democrats and union groups, however, argue that tying a minimal increase to a waiting week actually reduces the benefits to workers, especially if the benefits are based upon the number of dependents the out-of-work employee has.

The Republican caucus could not hold its members together in support of the waiting week, as many legislators felt the issue would be used against them in the upcoming election.

Granholm criticizes drug price discrepancies
Attorney General Jennifer Granholm issued a press release blasting the state’s pharmacies for price discrepancies. According to a study undertaken by Granholm’s office, the cash prices for six drugs largely utilized by seniors varied by more than 400 percent throughout the state.

MRA has obtained a copy of the study and raised questions about its results. For instance, one pharmacy chain had the same price for the same drug in four of its stores, but in another store the price was much higher. The timing of the calls could have been responsible for the difference in prices. The date when the drug was purchased from the distributor or wholesaler must be taken into account, as pharmaceutical manufacturers adjust their prices greatly from day to day.

While all the criticism in the press release was levied at retail pharmacies, the profit margins of pharmacies pale in comparison to those of manufacturers. While most pharmacies make a profit of only 2 to 3 percent, manufacturers usually make a profit of 20 to 25 percent.

Representatives of the retail side of the prescription drug trade are meeting with Granholm and will emphasize these facts.

Update from Washington
James Goldberg,
MRA Washington Counsel

MRA responds to "Do Not Call" proposal
MRA’s Washington Office helped the National Retail Federation formulate the retail industry’s response to a proposed national “Do Not Call” list that consumers could use to block all unsolicited telephone calls.

The retail response argued that the Federal Trade Commission’s proposal is overly broad, banning even calls from a business with whom the customer had a prior relationship. Under the plan, an MRA member could not call an out-of-state customer listed on the national “Do Not Call” list to offer an extended warranty or service contract to cover previously purchased products.

The response also said the cost of maintaining a national list would be prohibitive. If passed along to businesses, the cost could prevent small retailers who operate in a limited geographic area from contacting customers by telephone.

OSHA to issue nonbinding ergonomics guidelines
The Occupational Safety and Health Administration will replace its controversial ergonomics regulations with new “guidelines,” a move that has prompted backlash from workers’ rights supporters and some businesses.

Rules mandating tough workplace standards to prevent repetitive-motion injuries were issued by the Clinton administration after nearly seven years of consideration, but the regulations were rescinded by Congress under a seldom-used federal statute that lets lawmakers strike down specific agency rules.

The incoming Bush administration at first declared the ergonomics issue dead, but congressional pressure caused the White House to rethink its stance and produce guidelines.

Organized labor opposes the guidelines because they do not have the force of law, as regulations do. Some business interests also oppose the guidelines, saying that although guidelines are not binding, they are used in much the same way as regulations, without being subject to the notice and comment required of official agency rules.

Bill requires electronic devices to block copying
Sen. Ernest F. Hollings (D-SC), chairman of the Senate Commerce Committee, has introduced a bill that would turn consumer electronics manufacturers and software developers into copyright “police.”

The Consumer Broadband and Digital Television Promotion bill would require new hardware and software - from CD players to television sets to computers - to block unauthorized copying of copyrighted works.

Organizations such as the Recording Industry Association of America and the Motion Picture Association of America have been pushing for government intervention and lauded Hollings’ bill.

However, technology industry representatives and at least one consumer group attacked the measure. MRA’s Washington Office expressed concern that the bill might unduly push up the price of consumer electronics and make some products less available.

The Hollings bill would require movie studios and record labels to attach a digital tag to a movie, song or album that would encode rules about how it could be played, viewed or copied on devices such as computers or digital TV sets.

Manufacturers and content owners would have a year to agree on technology to enforce these rules. After that, the Federal Communications Commission would impose a standard. It would then be illegal to manufacture devices that didn’t implement it.

Hollings’ bill was referred to the Senate Judiciary Committee, which has been unenthusiastic about such legislation in the past.

Electronics retailers discuss TV set-top boxes
The Consumer Electronics Retailers Coalition held a series of meetings with Federal Communications Commission staff and key members of Congress to urge action promoting the wider availability of multiple-use TV “set-top boxes,” currently used for receiving digital cable TV.

MRA and its coalition allies have long campaigned for the FCC to mandate industry standards for set-top boxes so they can be sold by a wide variety of retail outlets. Currently, the boxes are distributed only by cable TV companies - generally on a lease basis - and their use is restricted to operating TV sets.

With the advent of new technologies, retailers and many manufacturers want to assure that the boxes have greater multi-function capability, such as operating CD players, high-speed Internet hookups and computers. Otherwise, consumers would need a different box for each piece of equipment.

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