Michigan Developments
Eric Rule,
Director of Governmental Affairs

Minimum wage options explored
MRA is part of two new efforts underway to lessen the harmful impact of the recent increase in the minimum wage, scheduled to take effect in October.

The first is an effort to permit employers to pay current workers aged 16 or 17 the existing minimum wage of $5.15, to increase to the prevailing minimum wage when the employee turns 18. In addition, new hires aged 18-20 could be paid the existing minimum wage for a 90-day training period.

The second effort would address the unintended consequences caused by a conflict between language in the federal Fair Labor Standards Act (FLSA) and the new Michigan statute, which would cause some highly paid employees to lose their exemption from overtime. MRA is part of a broad-based coalition of business groups working on a remedy that would bring the statute in line with FLSA requirements.

Time is critical for both these efforts. Action would need to occur before summer break, and the measures themselves would need to have immediate effect. The coalitions are working with both sides of the aisle to get support.

MiPC program under microscope
MRA testified before the Senate Commerce & Labor Committee regarding retailers’ concerns about the administration’s MiPC program, which will put computers and Internet access into more Michigan households. The industry is concerned that the plan picks winners and losers among retailers by contracting only with a select few businesses for distribution of computers and services.

In addition, MRA is currently investigating the plan’s legality. Grounds for challenging it arise from regulations that limit the way the Department of Management and Budget funds programs at the Michigan Department of Information Technology.

Wal-Mart hit with record item-pricing fine
Under an agreement between the state and Wal-Mart announced by Attorney General Mike Cox, Wal-Mart will pay $780,000 in fines and penalties up front for its failure to follow the state’s item-pricing law. An additional $620,000 will be put into a separate account from which the state can draw money on a sliding scale based on the results of independent audits of Wal-Mart conducted over the next two years. $100,000 more is being donated to Michigan food banks.

The settlement is the largest on record for item-pricing violations in Michigan. Until now, the record holder was Home Depot, which paid $250,000 in fines during Jennifer Granholm’s term as attorney general.

MRA continues to push for modernization of the law through the increased use of technology and the utilization of shelf labels. The bill we support, HB 4636, sponsored by Rep. Dave Hildenbrand (R-Lowell), remains stalled due to Governor Granholm’s threat to veto any bill easing item-pricing restrictions.

Gas pricing issue provides political fodder
High gas prices in Michigan are creating a politically charged issue for Governor Granholm and candidate Dick DeVos to argue in the media.

With prices hovering around the $3 per gallon mark, Granholm is calling for President Bush to cap oil companies’ profits to provide relief to citizens. DeVos, on the other hand, is calling for the state sales tax on gas to be capped at $1.95 per gallon—that is, consumers would pay sales tax only on the first $1.95 per gallon purchased.

Granholm’s camp claims this would harm Michigan schoolchildren by taking away funding from the School Aid Fund (SAF), which is partially funded by gas taxes. DeVos’ camp responds by asserting that the SAF was never intended to tax gasoline at over the $2-per-gallon rate; anything above that amount is “gravy” anyway.

Black-market bills aimed at pharmacy employees
Sen. Bruce Patterson (R-Canton) wants to make it a felony for a pharmacy employee to steal drugs from inventory and sell them on the black market. His bills, SB 1212 and 1213, would classify prescription medications as controlled substances, which would move violations up to felony status.

Law enforcement brought the idea for the bills to Patterson’s attention. He agreed to sponsor the bills because thefts of these products hurt consumers through increased costs and the undermining of public health.

Update from Washington
James Goldberg,
MRA Washington Counsel

Visa expands ‘no signature needed‘
Visa has lifted its requirement that cardholders sign for purchases when paying for everyday transactions under $25 in some merchant categories.

New merchant categories that now qualify for Visa’s Small Ticket Payment Service include newsstands, laundries, copy and reproduction services, tollbooths and car washes.

The program also raised the maximum purchase amount for “no signature needed” from $15 to $25, benefiting those restaurants, gas stations, drug stores, parking lots, movie theaters and video rental stores that already qualified for the program.

Rep. Camp studies corporate tax reform
Got an idea for reforming the nation’s corporate tax structure? If you do, U.S. Rep. Dave Camp (R-Midland) wants to hear from you.

Camp, who chairs the Select Revenue Measures Subcommittee, has announced a public hearing on corporate tax reform, saying: “We need to reform business taxation in a way that increases fairness, decreases complexity and improves U.S. competitiveness on a global basis.”

The subcommittee will begin its review with a public hearing focusing on how tax-preference items within the corporate tax code reallocate the tax burden, and whether these shifts are beneficial or detrimental to the U.S. economy. Of specific interest, said Camp’s office, is to understand how the current system affects a company’s decision of where and how to invest in technology, equipment and people.

A few issues that are almost sure to be raised by those submitting comments are the tax benefits for the oil industry, enacted as part of last year’s energy bill, and proposals to allow retailers who rent their space to take faster depreciation write-offs on the fixtures they purchase.

House panel approves data security legislation
The House Energy and Commerce Committee has approved legislation to require anyone who electronically stores “personally identifiable information” on consumers to conduct a nationwide notification in the event the information was compromised.

The legislation, which still must be reconciled with a similar bill passed by the House Judiciary Committee, would impact not just so-called “data brokers,” but any businesses, including retailers, that store such information as names, addresses and telephone numbers. Even businesses that do not store Social Security numbers or credit card information in a database will fall under the bill’s requirements.

With the number of legislative days remaining in the current congressional session dwindling rapidly, chances for the legislation’s passage are unclear. However, approval of the bill would give lawmakers an area of consumer protection to tout during the campaign season.

Government plans telephone excise tax refund
The Treasury Department is reportedly working on a plan to stop collecting the 3-percent federal excise tax on long-distance telephone service and refund billions of dollars to consumers and businesses.

No one will go on record about the plan—which could cost the government $20 billion or more—but having lost several court cases that challenged the applicability of the tax, Treasury may be willing to concede defeat and return the illegally collected funds, at least for the last three years.

The tax was originally enacted in 1898 as a stopgap measure to help fund the Spanish-American War. It is applicable to long-distance charges based on time and mileage, but today everything is based on flat, per-minute rates or monthly rates for unlimited calls.

EEOC issues new guidance on discrimination
The Equal Employment Opportunity Commission has issued a new Compliance Manual section updating guidance on how Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race and color.

At the same time, the Commission issued a companion question-and-answer fact sheet that addresses such areas as providing equal access to jobs through the recruitment, hiring and promotion processes, dealing with racial harassment and handling complaints of workplace discrimination.

The new material can be found on the agency’s website, www.eeoc.gov, under the “Race” heading.

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