Michigan Developments
Eric Rule,
Director of Governmental Affairs

Item-pricing modernization bill introduced
After much behind-the-scenes crafting and drafting, Rep. Dave Hildenbrand (R-Lowell), MRA and other interested groups agreed the time was right to introduce legislation modernizing Michigan’s item-pricing law.

Hildenbrand’s bill, HB 4636, was referred to the House Commerce Committee for discussion.
MRA and its allies have put significant work into this proposal to enable retailers who meet strict pricing accuracy standards to be exempt from duplicative pricing on general merchandise.

Much progress has been made, including positive discussions with unions that have traditionally opposed item-pricing reform. Work to enact the legislation will continue in high gear.

Republicans to propose alternate tax plan?
Since the governor revealed her proposal to restructure the Single Business Tax (SBT), most of the action has been behind the scenes to get business groups to sign on.

Many in the Republican Party have claimed the plan picks winners and losers and presents an incomplete solution. To date, however, no alternative proposal has surfaced. But that may change soon, according to talk within the Capitol that suggests Republicans are considering a substitute.

What isn’t yet known is the approach Republicans might take. One idea being floated is to scrap the SBT entirely, replace it with a 1-cent reduction in the sales tax and extend the sales tax to certain services.

National group joins minimum-wage fight
An organization that convinced Florida voters to approve a $1 increase in the minimum wage is trying to do the same in Michigan. The Association of Community Organizations for Reform Now (ACORN) describes itself as a nonpartisan community group working for the nation’s working class and poor.

In March, ACORN sent a letter to all 148 legislators, trying to get them on record as supporting or opposing an increase in the minimum wage. All but four of the legislature’s 68 Democrats pledged to support the increase to $7.15. In contrast, only a few Republicans even responded and none pledged support.

Republicans have historically been less inclined to raise the minimum wage. ACORN, with its perceived link to unions and the Democratic Party, plays on this perception.

ACORN’s efforts and those of the Democratic lawmakers to gain legislative traction on this issue have not made headway with Republican legislators. Democrats warn that they might attempt to put the issue on the ballot in the critical 2006 elections.

Panel studies restricting violent video games
The Senate Judiciary Committee heard testimony from those who think legislation is needed to prevent minors from purchasing video games containing violence and sexually explicit themes. The committee is considering legislation to regulate how retailers display such material and to whom they sell or rent it.

Numerous other states have tried such legislation and, for the most part, it has not survived constitutional scrutiny with regard to free speech and censorship issues. 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.

Potential compromise legislation may include requiring retailers to post signage indicating the industry rating system to further educate parents and consumers about these products.

Municipal competition legislation discussed
MRA has begun drafting legislation to put restrictions on municipally owned business ventures, such as golf courses, to prevent them from competing with privately owned businesses. Several legislators have shown interest in sponsoring our proposal.

Placing restrictions on municipalities will no doubt bring a negative response from the powerful Michigan Municipal League and other local government groups. While all legislators like to talk about private enterprise being important in Michigan, passing this bill will require a huge effort from members.

Update from Washington
James Goldberg,
MRA Washington Counsel

Will Congress kill the death tax?
The House of Representatives has sent a permanent repeal of the federal estate tax on to the Senate, where the outlook for total repeal is murky.

President Bush’s 10-year, $1.35 trillion tax cut plan included a slow phase-out of the estate tax by 2010. But because of congressional budget rules, the tax would reappear at its 2001 levels in 2011.

As the reinstatement approaches, some family-owned businesses and wealthy heirs have appealed to members of Congress for a deal that would provide estate-planning certainty, even if it means setting aside full repeal.

Another factor that may tilt a solution away from total repeal is the current status of federal budget deficits, which are at record levels.

The Senate Republican leadership has given Sen. John Kyl (R-AZ) the authority to strike virtually any deal that he can muster that will garner the 60 votes necessary to block any Democratic attempt at a filibuster on the Senate floor.

A Senate compromise might not be easy, however. Lobbyists for affluent heirs, including the Mars candy fortune, are pushing for a low rate, while small-business lobbyists want the highest exemption they can get.

Tax code restructuring due this summer
Former Senator John B. Breaux (D-LA), co-chair of President Bush’s advisory panel on tax reform, predicts that the group will propose major changes in the tax code by mid-summer.

Breaux recently told a group of reporters that the panel is “absolutely intent” on recommending a restructuring of the income tax system rather than modest simplification or what he called “tinkering around the edges.”

The recommended options could include a restructuring similar to the sweeping legislation passed in 1986 that reduced rates and eliminated many deductions, or a totally new tax system likely featuring a consumption tax (similar to a national sales tax) or a flat tax in which all income is taxed at one rate.

The retail industry strongly opposes any effort to impose a national sales tax.

Some truckers to undergo background checks
Truck drivers who haul cargo labeled flammable, combustible, radioactive or poisonous will soon be scrutinized as closely as the hazardous materials they carry.

Approximately three million drivers across the nation will be fingerprinted and put through FBI criminal background checks. Their names will also be cross-referenced with federal databases related to terrorist activity.

The federal Transportation Security Administration—the same agency that conducts passenger screenings at the nation’s airports—and the FBI will conduct the “security threat assessments” as drivers renew the credentials that allow them to haul hazardous materials.

After a criminal records search, TSA could either recertify the drivers or classify them as threats and prevent them from transporting hazardous materials. The state where a driver is licensed would be notified of the TSA’s findings. Drivers could appeal the decision.

Each driver subject to the background checks will have to pay $94 for the fingerprinting.

'Real ID' legislation under consideration
The Senate is considering House-passed legislation that would impose new standards on state-issued drivers’ licenses that could cost states up to $700 million in the first five years after enactment.

Under the legislation, states would be required to create licenses with tamper-free features such as digital photos, watermarks, bar codes and possibly magnetic stripes. They would also be required to buy equipment to read the licenses and to allow communication with law enforcement agencies in other states, as well as to find space to warehouse drivers’ documents.

Residents of states that decline to participate in the program could not use driver’s licenses as identification to board airplanes, apply for Social Security or veterans’ benefits or complete tax documents for employers.

The legislation would require that individuals applying for or renewing driver’s licenses would have to document their legal status in the U.S. with proof of citizenship, a valid visa or pending application for asylum.

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