Michigan Developments
Eric Rule,
Director of Governmental Affairs

Governor appoints Clark as CIS director
Governor John Engler announced the appointment of Noelle A. Clark as director of the Michigan Department of Consumer and Industry Services. Her appointment to succeed Kathy Wilbur was effective August 13. Wilbur left the department to become an administrator at Central Michigan University.

Clark, of Lansing, was vice president of the Hasselbring-Clark Company, one of Michigan’s largest distributors of Canon office equipment. Clark is also on the Workforce Investment Board and serves on the National Board of Directors for the National Federation of Independent Business. Active in the business community, Clark was named “Entrepreneur of the Year” by the Greater Lansing Business Monthly.

Legislators adjourn until November
Michigan legislators have adjourned for the autumn campaign season. The House will return to session November 7 and the Senate will reconvene November 12.

With the House adjourning on September 19 and the Senate soon after on the 26th, this break will allow a 49-day recess for state representatives and a 47-day recess for senators.

With 53 House seats and 38 Senate seats available this year, current lawmakers and new candidates will most likely use all of those days campaigning.

House approves patient-privacy bill
A bill to provide additional safeguards to pharmacy-patient information passed the full House and moved to the Senate, where it appears to be going nowhere.

The House approved HB 4001, which is similar to legislation introduced by Rep. Judith Scranton (R-Brighton) back in 1999 after an incident in which the lawmaker’s prescription information was read over a loudspeaker at the pharmacy.

The federal law known as the Health Insurance Portability and Accountability Act (HIPAA) is much more far-reaching than HB 4001. This has been explained to Sen. Dale Shugars (R-Portage), who chairs the Senate Health Policy Committee where the bill has now been referred. Sen. Shugars indicated that he is in no hurry to act on the bill, especially if HIPAA addresses the concerns of HB 4001.

Security guard bills complete for year
A package of Senate bills requiring additional training standards and licensing fees for private security guards has been signed by Governor Engler.

It appears, however, that additional bills that could affect retailers’ proprietary personnel engaged in loss-prevention will not move before the end of the legislative session.

The principal bill in the additional package is HB 4693, sponsored by Rep. Larry Julian (R-Owosso). Julian’s bill references those engaged in security aspects but not covered by current statute. Julian’s aides indicated that there is no intent to move the bill prior to the end of the legislative session.

Action on telemarketing bills remains unclear
Lawmakers are sending mixed signals over whether they’ll take action on telemarketing “do not call” legislation before the end of the year. Although the package appeared to be dead, the latest version could be acceptable to opponents and finally move through both chambers.

Prior to adjournment, State Rep. Ken Bradstreet (R-Gaylord) distributed the latest version of the conference report, indicating action was likely. But days later, MRA had learned that the governor and Senate and House leaders all favored taking no action before the end of the year.

The delay would effectively kill the legislation, and new bills would need to be introduced in the new Legislature after it convenes in January.

But delay is far from certain, because the latest version of the package appears to satisfy many previous opponents.

The main change involves how a business may contact existing customers. The new package allows businesses to contact a consumer if that person has been a customer within the past 12 months. This prior-business-relationship clause was in the House-passed version but stripped out in the Senate.

Update from Washington
James Goldberg,
MRA Washington Counsel

FCC requires digital tuners by 2007
The Federal Communications Commission has voted to require TV manufacturers to have digital tuners in all sets by July 2007.

In a 3-1 vote, the agency mandated that manufacturers add digital tuners to all TV sets with screens of 36 inches or larger by July 2004, with the requirement for smaller sets phased in over the following three years.

Many manufacturers opposed the mandate, which they said would drive up the price of an average TV set by more than $250. TV broadcasters countered that the actual additional cost would be more like $15 per set.

The FCC requirement is seen as a way to “jump start” the transition to digital television broadcasting. Since broadcasters are required to eventually send out only digital signals, the FCC move is seen as a way to ensure the largest possible digital-TV audience as soon as possible.

In another move, the FCC declined to adopt labeling requirements for TV receivers that are not able to receive any over-the-air broadcast signals. The FCC took no action since the commissioners said it is unclear when, or if, such products will become commercially available or how they will be marketed. The FCC said it would continue to monitor the state of the marketplace and take additional steps if necessary to protect consumers’ interests.

Prior to the FCC’s action on digital tuners, Consumer Electronics Association called the move “nonsensical on its face” and said that manufacturers would fight the move. However, Zenith supports the move, since it has a patent for the tuners and would receive royalties from their use. And Thomson Multimedia also reportedly supports the move.

MRA to review digital broadcast copy-protection rules
The FCC has launched a rulemaking proceeding to determine whether it can and should mandate the use of a copy protection mechanism for digital broadcast television, and what impact such regulation would have on consumers.

Without a digital copy protection scheme that prevents the unauthorized copying and redistribution of digital media, programming content providers claim that they will not permit the digital broadcast of high-quality programming. And without such programming, consumers may be reluctant to by DTV receivers and equipment.

The Consumer Electronics Retailers Coalition, of which MRA is a member, will be reviewing the FCC proposal and will determine whether it’s appropriate for the retail industry to file comments.

Sales tax project nears completion
State officials working on a simplified sales tax collection plan have told MRA’s Washington counsel that they expect to finish their project by November.

Sales tax simplification is viewed by Congress as being an essential trade off for federal legislation that would authorize states to require out-of-state sellers to collect sales taxes, a goal that is a major priority in MRA’s legislative program.

As the simplified sales tax system is now envisioned, there would be uniform definitions of such taxable items as food and clothing. States would then be free to determine whether to tax sales of these products or exempt them. Under current law, categories like food and clothing have different meanings in different states, making it difficult for Internet and other remote sellers to determine whether tax should be collected.

The e-Fairness Coalition, of which MRA is a founding member, is planning a series of Capitol Hill briefings this fall to update key congressional staff members on the simplification project’s progress and to begin to lay the groundwork for a new legislative effort when the 108th Congress convenes next January.

Regulators raise Internet antitrust concerns
The Federal Trade Commission (FTC) has announced it will hold a workshop in early October to discuss possible anti-competitive efforts to restrict competition on the Internet. The three-day event will focus on how certain state regulation may have anti-competitive effects, and how certain business practices may raise antitrust concerns, in the context of business-to-consumer e-commerce.

Among the specific topics to be covered at the FTC workshop is a discussion of how and why manufacturers limit their distributors’ sales of certain products over the Internet and whether such limitations have an adverse cost impact on consumers.

The agency will also look into whether retailers pressure their suppliers to limit sales over the Internet and, if so, how this is done.