Michigan Developments
Eric Rule,
Director of Governmental Affairs

New House leader chooses committee chairs

New House Speaker Craig DeRoche (R-Novi) has the critical task of appointing committee chairs, who determine much of the House legislative agenda.

DeRoche has announced two important appointments: the chairs of the Appropriations and Commerce committees.

Rep. Scott Hummel (R-DeWitt) was appointed chair of Appropriations, and Rep. Bill Huizenga (R-Zeeland) was named chair of Commerce.

Hummel had been set to become Speaker Pro Tem, but his appointment removed him from that position; Rep. Jerry Kooiman (R-Grand Rapids) will fill that role. As Appropriations chair, Hummel is the lead member of the House involved in budget negotiations.
Huizenga had been considered a likely contender for the Speaker role back in November, before bowing out to DeRoche. In December, he was considering the Speaker Pro Tem position as well. His appointment as chair of Commerce can be seen as a way to reward

Huizenga for stepping aside on these positions while keeping the talented caucus member in a key leadership role.

The appointments also reflect an effort to balance leadership roles between east and west. With both the new Speaker and the chair of Appropriations coming from districts in southeastern Michigan, the appointment of representatives from western Michigan (Kooiman and Huizenga) to other key roles creates geographic balance.

At press time, DeRoche had not named the remainder of his committee chairs. However, early speculation has produced a few likely candidates for other committee chairs.

Likely appointments include Rep. Mike Nofs (R-Marshall) as chair of Energy and Technology; Rep. Ed Gaffney (R-Gross Pointe) for Health Policy; Rep. Leon Drolet (R-Clinton Twp.) for Government Operations; and Rep. Phil LaJoy (R-Canton) for Transportation.

Current Taxation Committee Chair Lorence Wenke (R-Richland), who supports sales tax on services, may be replaced by Rep. Fulton Sheen (R-Plainwell), whose tax stances are more in line with those of Speaker DeRoche.

Gas tax increase floated by transportation groups

The Michigan Transportation Team (MTT), a coalition put together to advocate for Michigan’s fair share of road money from the federal government, is shifting its focus back to in-state advocacy. MTT has indicated that it will be seeking to increase the state’s current 19-cent per gallon gas tax by another 6-14 cents per gallon.

MTT is comprised of such groups as the Michigan Chamber of Commerce, the Road Builders Association of Michigan and union officials. MTT claims that the state is simply not collecting enough revenue currently to keep up with necessary road improvements.

Data suggest that if federal funding for Michigan roads remains at the current level, a 14-cent per gallon increase in the gas tax would be necessary to raise sufficient funds for road improvements in Michigan.

Although the group will propose the increase as a “user fee,” its prospects in the legislature are anything but certain. Senate Majority Leader Ken Sikkema’s office took exception to the terminology of a “user fee,” suggesting that people at the pump be asked how they liked the “user fee.” No word yet on Speaker DeRoche’s thoughts on this controversial issue.

Granholm's approval numbers drop

Midway through her first term as Michigan’s governor, Jennifer Granholm’s popularity index slid 11 percent from 63-percent favorable to 52-percent favorable. Some sources have attributed the slide to Granholm’s involvement with the two losing ballot proposals last November.

Up to this point, the governor has seemed untouchable, easily garnering popularity with her charismatic personality and charm.

The most recent numbers have given some Republicans hope that the governor may be more vulnerable to a challenge in 2006 than previously thought.

To date, only one Republican has announced he will challenge her in ’06. First-term Rep. Jack Hoogendyk (R-Kalamazoo) announced he is strongly considering jumping into the race.

While the governor’s numbers clearly are down, the GOP had better hope a candidate with much better name identification and experience steps up to the plate between now and November 2006.

Update from Washington
James Goldberg,
MRA Washington Counsel

Banking reforms may help retailers

A financial institution reform bill that may help MRA members and other retailers will have to be reintroduced and considered in the new Congress. It contains a provision authorizing wider use of interest-bearing checking accounts for small businesses.

And, in the wake of the new Check Clearing for the 21st Century Act, there will most certainly be a move to shorten “hold” times for bank deposits made by retailers and consumers. The so-called Check 21 law, which went into effect October 28, was designed to help banks clear checks more easily by using electronic images instead of returning the actual checks.

But the new law doesn’t shorten the time that banks can hold checks deposited into accounts before crediting them. Thus, money could move faster coming out of accounts, but no faster going in.

MRA’s Washington Office will continue to monitor these developments.

National sales tax high on MRA 'watch list'

MRA’s Washington Office is closely watching activity in the new Congress related to tax reform, concerned that the push for a national sales tax might gather steam.

Georgia Republicans Rep. John Linder and Sen. Saxby Chambliss introduced bills in the last Congress to replace the entire tax code with a national sales tax, abolish the Internal Revenue Service and let retailers collect and send the sales taxes to state revenue departments, to be forwarded to the U.S. Treasury. House Majority Leader Tom DeLay (R-TX) is a strong advocate of the plan, and his promise to continue to push it has caused heightened wariness in the retail industry.

Initially, the legislation called for a 23-percent national sales tax—to be added to state sales taxes—but advocates now admit that the rate may approach 30 percent. And some studies have suggested that a rate as high as 50-60 percent is possible depending on the types of sales that would be inevitably exempted.

IRS announce new mileage rate for 2005

The Internal Revenue Service has announced standard mileage rates for tax deductions in 2005: 40.5 cents per mile for business miles, 14 cents for charitable activities, 15 cents for medical reasons and 15 cents for deductible moving expenses.

The business mile increase of 3 cents is the sharpest rise in several years.

New product recall site operational

In an effort to make product recall information more widely available, a new “Recent Recalls” site at the www.recalls.gov web site is listing announcements made by the Consumer Product Safety Commission, the Food and Drug Administration, the National Highway Traffic Safety Administration, the Environmental Protection Agency and the U.S. Department of Agriculture.

SBA to revisit business size standards

The Small Business Administration is taking another look at the size standards it uses to determine whether a company qualifies as a small business for government purposes.

Last summer the agency withdrew a proposal to have the number of employees at a firm determine whether it is a small business. The maximum size limit would have ranged from 50 to 1,500 employees, depending on the industry, and the number of size categories would have been reduced from 37 to 10.

Current standards for retailers are $6 million or less in annual revenue.

SBA is seeking additional comment on issues raised during the controversy over its now-withdrawn proposal. Among the issues: whether part-time and temporary employees should be considered in a company’s employee count and whether the size standards for government contracts should be different than size standards for other programs, such as federal disaster and small business loans.

MRA’s Washington Office is currently studying the proposal and expects to file comments by the late February deadline. MRA members with thoughts on the issue are urged to contact MRA’s Washington Office by emailing jimcounsel@aol.com.

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