Michigan Developments
Eric Rule,
Director of Governmental Affairs

Item-pricing bill clears committee
An item-pricing modernization bill, sponsored by Rep. Dave Hildenbrand (R-Lowell), was approved 14-4 by the House Commerce Committee on June 21. HB 4636 represents years of hard work by MRA and its members to modernize the current requirement that all items sold at retail have a price sticker affixed to them.

Under the bill, retailers would have the option of continuing to price items individually or seek an exemption for all items except food and non-prescription drugs if they meet several criteria. To qualify for the exemption, the retailer would be required to:
• Meet a minimum 98-percent scanner accuracy rate, as determined by regular audits conducted by an independent firm;
• Clearly display (adjacent, above or below) prices with a readable, detailed description of the item;
• Provide remote, receipt-printing UPC scanners for every 10,000 square feet of retail floor selling space, or non-printing scanners every 5,000 square feet. In place of the remote scanners, a retailer could choose to install at each exit a price verification system to allow a customer to scan the receipt and compare it to the database used by the retailer for printing the display signs for prices.

In addition, the measure doubles the fines for retailers to 20 times the amount (up to $10) for a price-scan error.

Governor Granholm has met with the bill’s proponents on numerous occasions. She has not indicated if she will oppose the legislation, but the measure should satisfy all of her requirements for an audit trail.

Violent video game legislation on hold
It appears the House will not deal prior to the summer legislative recess with Senate bills that would make it illegal to sell or rent extremely violent video games to minors.

House Judiciary Committee Chairman Bill Van Regenmorter (R-Hudsonville) is reportedly occupied with other committee agenda items at this time. Van Regenmorter has indicated, however, that he would prefer to bring the bills before his committee for debate at some point.

The Senate version of the bill passed with overwhelming support. Michigan Retailers Association contends that the legislation is not necessary, as retailers already do a good job of restricting the sale of these games to minors. Data show that the vast majority of these games are purchased either by the parent for a child or by an adult for personal use.

Fair Tax viewed as SBT alternative
Republicans in the House and Senate have hinted that they may propose an alternative to the governor’s SBT restructuring for consideration before the summer recess.

To date, no formal plan has surfaced, and they have been content to hold town-hall meetings on the issue across the state. One proposal beginning to make the rounds is a so-called Fair Tax plan.

Essentially, the Fair Tax would broaden the state’s sales tax base to make up the revenue of the SBT, the income tax and business-to-business taxes.

In a letter to all state legislators and the governor, Roger Buchholtz, chair of an organization called Michigan Fair Tax, claims that the lost revenue from eliminating Michigan’s SBT, business-to-business sales tax and personal income tax could be replaced by a 7-percent retail sales tax expanded to include services.

The concept of the Fair Tax is also being debated at the federal level, where advocates seek to replace the current complex federal tax systems—including personal and corporate income taxes, Social Security, Medicare, gift and estate taxes—with a simple retail sales tax.

They claim a federal Fair Tax would lower prices an average of 23 percent by removing the cost of business income and payroll taxes now included in prices. For more detail on the Fair Tax concept, see www.fairtaxmi.org or www.fairtax.org.

House Tax Policy Chair Rep. Fulton Sheen (R-Plainwell) is considering the plan and will offer it as one of several potential plans before the committee when the issue arises again. He claims the Speaker of the House and others have discussed the Fair Tax issue, and it is gaining support around the Capitol, including his personal support.

No word yet on when his committee will take up this issue for consideration.

Update from Washington
James Goldberg,
MRA Washington Counsel

Panelists dislike national retail sales tax
Panelists at a recent Washington symposium criticized the prospect of a national retail sales tax, but given what they said was the small influence states have on the federal tax reform debate, they suggested their complaints likely would fall on deaf ears.

States should form a united front with one solid message to stand a better chance of getting a larger role in cooperation with President Bush’s tax advisory panel, said Bruce Bartlett, senior fellow for the National Center for Policy Analysis.

With or without a united front, however, it’s unlikely the tax panel will pay the states much more heed, added another panelist. “I can’t imagine the states gaining more influence,” said David Brunori, a contributing editor of State Tax Notes. “The people who are having the debate do not care about the state fiscal systems.

But while Bartlett and Brunori offered a bleak assessment of the states’ role in shaping the tax reform debate, both agreed that a national retail sales tax is the least plausible and least attractive option being discussed in the debate.

“It’s ludicrous. It’s idiotic. It’s moronic. It’ll never happen,” said Bartlett.

This “mixed bag” assessment is one reason MRA’s Washington Office, working in conjunction with the National Retail Federation and other retail groups, continues to convey the message on Capitol Hill that a national retail sales tax is a bad idea that would devastate retail sales and hurt many consumers.

The president’s tax reform advisory committee is expected to make public its recommendations for restructuring the federal income tax system sometime this summer.

Additional H-2B visa filings being accepted
The U.S. Citizenship and Immigration Services (USCIS) has begun accepting additional petitions for H-2B workers, as required by MRA-supported legislation recently signed by President Bush.

The Save Our Small and Seasonal Businesses Act of 2005 was included in an $81-billion appropriations bill to fund the war in Iraq after Sen. Barbara Mikulski (D-MD) successfully added the measure as an amendment during Senate floor debate. Rep. Bart Stupak (D-MI) had sponsored a House version of the legislation.

For the current fiscal year, USCIS will admit approximately 35,000 workers who are new H-2B workers or who are not certified as so-called “returning workers,” seeking work with start dates before October 1.

And for fiscal years 2005 and 2006, the new law allows all “returning workers”—those who counted against the annual H-2B visa limit of 66,000 during any one of the three fiscal years preceding the fiscal year of the requested start date.

The new law also divides up the annual 66,000 visa limit into two half-yearly segments of 33,000 each, in an effort to assure that space for summer workers is available.

The H-2B visa system is widely used by seasonal businesses such as family farms and tourism and hospitality operations to provide a pool of foreign workers to augment the domestic labor supply. Northern Michigan retailers also feel the impact of fewer workers in the area’s tourism industry.

MRA’s Washington Office will continue to monitor the implementation of the new law and is ready to help MRA members with any problems. Additional information can be obtained at www.uscis.gov.

Business community asking, 'what about us?'
Stories have begun to surface in Washington that some business community representatives are starting to wonder when—or if—the Bush Administration will start pushing more issues of importance to business.

These business representatives have felt particularly uncomfortable being pressured in the recent Senate fight over judicial filibusters, arguing that the issue and such social “hot buttons” like stem cell research have little impact on business operations.

The White House, according to these representatives, should also use its congressional muscle to push through employment law reforms to go along with class-action reform and bankruptcy reform bills enacted earlier this year.

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