Utah Retail
Merchants Association
News Bulletin
March 2006
Welcome to the March 2006 edition of Utah
Retail Merchants Association's electronic News Bulletin.
If you are unable to read this page, have suggestions on how we can improve on
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email service please contact Jim Olsen at jolsen@utahretail.com
or by phone at (801) 973-9584.
2006 Legislative General Session's
Highlights
Master
Study Resolution Outlines Issues to Study Prior to the 2007 General Session
Federal Restrictions on PSE Sales Coming
in Early April; Retailers Must Prepare for the New Law
Federal Trade
Commission Says Gift Card Fees and Expiration Dates Must Be Disclosed
U.S. Department of Labor Revises USERRA Poster
Retailers Welcome Signing of Federal Organized Retail
Theft Bill
2006 Legislative
General Session's Highlights
The 2006
General Session of the Utah Legislature ended at midnight on March 1,
2006. Any bill that did not pass
died and must be reintroduced next year if the sponsor wishes to continue
pushing the issue. Bills that
passed the legislature, and are not vetoed by the Governor, either become law
on their effective date or on May 1, 2006, 60 days after the close of the legislative
session. The major issues for this
session were the removal of sales tax on food, state tax reform, the state
budget, transportation funding, and funding education.
Even though the
Association was involved in many other issues, listed below are the top bills
that passed and another list of the bills that didn't pass. Additional
information on these as well as the other bills the Association was involved
with including text and fiscal note is available at our website: http://www.utahretail.com.
Top List of Bills That Passed
#1 — Third Substitute H.B. 109, Sales and
Use Tax – Food and Food Ingredients, this bill will reduce the state portion of sales tax
on food from 4.75 percent to 2.75 percent beginning January 1, 2007. So whatever the tax rate is at your
location, it will reduce by two percent next year.
# 2 — First Substitute S.B. 58, Alcoholic
Beverage Amendments – Eliminating Alcohol Sales to Youth, the bill will set-up statewide requirements that
employees who sell beer for off-premise consumption and their supervisors will
be required to receive training from a program approved by the state this law
will become effective on July 1, 2006.
#3 — H.B. 51, Sales and Use Taxation of
Amusement Devices and Cleaning or Washing of Tangible Personal Property, this bill makes clear when an automatic car wash is
taxable and when it is exempt.
#4 — S.B. 66, Price Controls During
Emergencies, the bill makes clear that before price controls become
effective that the actual emergencies is a local one, last year the Governor
declared a “State of Emergency” to secure federal funding to help with refugees
from Hurricane Katrina and there was a question about price controls going into
effect.
#5 — Third S.B. 176, Contact Lens
Consumer Protection Act, the bill enacts the Contact Lens Consumer Protection
Act within the Utah Optometry Practice Act in relation to producing,
prescribing, marketing, selling, and distributing contact lenses.
#6 — H.B. 271, Petroleum Storage Tank Trust Fund Amendments, the bill requires a petroleum retail company to
totally insure their underground petroleum tanks in the State Trust Fund,
self-insured, or with a private insurance carrier. But, a company will no longer be able to put some tanks on the State Trust Fund and others with other insurance methods.
#7 — H.B. 291, State Tax Commission
Bonding and Licensing Amendments, the bill amends bonding requirements for petroleum
retail companies who collect and remit fuel taxes to the State Tax Commission.
#8 — First Substitute S.B. 233, Sales and
Use Tax Revisions, the bill repeals the provisions in the State Code that
would have changed the location of where to assess the sales tax rate from
point-of-sale to point-of-delivery.
The change was due to take effect July 1, 2006.
#9 — S.B. 89, Sales and Use Tax –
Attachment of Tangible Personal Property, the bill addresses the circumstances when certain
tangible personal property is or is not permanently attached to real property.
#10 — First Substitute S.B. 69,
Protection of Information in Consumer Credit Databases, the bill requires companies that maintain personal
information on individuals to implement procedures to protect the personal
information and requires the proper destruction of these records. It also requires disclosure of breaches
of databases containing personal information.
#11 — Third Substitute S.B. 71, Consumer
Credit Protection, allows a consumer to place a security freeze on the
consumer's credit report; prohibits the release of a credit report that is
subject to a security freeze, except in certain instances; allows certain fees
to be charged in connection with a security freeze; governs changes to a credit
report that is subject to a security freeze; and prohibits some uses of a
consumer's personal information such as a social security number.
#12 — S.B. 196, Revisions to Redevelopment Agency
Provisions, the bill modifies and reorganizes provisions relating
to redevelopment agencies.
#13 — S.B. 245, Redevelopment Agency
Amendments, the bill modifies provisions relating to redevelopment
agencies primarily dealing with “inactive industrial sites”.
#14 — H.B. 43, Sunset Review and
Reauthorizations, the bill extends the repeal date of the Utah Motor
Fuel Marketing Act for one additional year to July 1, 2007.
#15 — H.B. 114, Minimum Enforcement of
Food Sanitation Rules, the bill requires the Utah Department of Health to
establish minimum standards for the enforcement of food sanitation rules by
local health departments.
#16 — H.B. 150, Workers’ Compensation Revisions, the bill modifies provisions related to the Workers'
Compensation Act and the Utah Occupational Disease Act.
Top List of Bills That Did Not Pass
#1 — H.B. 313, Minimum Wage Revisions, the bill would have established a state minimum wage
rate of $7.00 per hour.
#2 — S.B. 43, Minimum Wage Amendments, similar to H.B. 313, the bill would have established a state minimum wage
rate of $7.00 per hour.
#3 — S.J.R. 8, Resolution Submitting
Minimum Wage Question to Voters, the resolution submits a nonbinding statewide opinion
question to the legal voters on whether or not the state minimum wage should be
raised to $7 per hour.
#4 — H.B. 429, Methamphetamine –
Restriction on Components, the bill would have reduced possess limits of certain
cough, cold and allergy over-the-counter medications, established transaction
limits and required retailers to place these products behind counters or in
locked cabinets similar to tobacco products.
#5 — H.B. 362, Enforcement of Controlled
Substance Laws, similar to H.B. 429, the bill would have reduced
possess limits of certain cough, cold and allergy over-the-counter medications,
established transaction limits and required retailers to place these products
behind counters or in locked cabinets similar to tobacco products. But this bill would have also required
retailers to be licensed with the Division of Occupational and Professional
Licensing, and retailers would have been required to keep a log of all
transactions of these products.
#6 — H.B. 324, Gift Certificates –
Limiting Expiration Date, the bill would have prohibited a gift certificate from
containing an expiration date within five years after the gift certificate is
issued.
#7 — First Substitute H.B. 257, Material
Harmful to Minors Amendments, the bill would have prohibited retailers from selling
or exhibiting interactive video and computer games containing violence to
minors under the age of 18.
#8 — First Substitute H.B. 432, Access to
Point-of-Sale Devices, the bill would have established access requirements
for certain point-of-sale devices for the visually impaired.
#9 — Second Substitute H.B. 463, Workers’
Compensation Amendments, the bill would have made it clear in Utah law that the
Workers’ Compensation Fund and its assets, belong to the policyholders.
#10 — S.B. 104, Prescribing Practices for
Schedule II Drugs, the bill changed the number of day’s supply of
certain Schedule II drugs that may be prescribed from a 30 to 90 day’s supply.
#11 — H.B. 69, Utah Dairy Act Amendments,
the original
bill would have allowed a producer to sell raw milk at a self-owned retail
store if certain requirements were met.
#12 — H.B. 413, Comparative Negligence
Amendments, the bill specified that an intentional tort and a
civil conspiracy are included in the definition of “fault”.
#13 — H.B. 179, Utah Employment Act, the bill would have required employers to participate
in the federal basic verification pilot program with private rights of
action. The bill would have also
overturned Utah “Employment at Will Doctrine”.
#14 — H.B. 126, “County Option Sales and
Use Tax for Agricultural Land and Open Land, the bill would have allowed certain counties to impose
a county option sales tax that would generate revenue to preserve open space.
#15 — First Substitute H.B. 321,
Organized Retail Theft, the bill would have added retail theft to the
definition of a pattern of unlawful activity, and provided that a person found
guilty of a pattern of unlawful activity may be ordered to pay restitution for
property obtained through the unlawful activity.
#16 — H.B.
353, Sales and Use Tax Amendments, the bill would have created one uniform sales and use
tax rate statewide rather than the current 97 rates retailers have to correctly
determine and administer.
Master
Study Resolution Outlines Issues to Study Prior to the 2006 General Session
The Master Study Resolution, S.J.R. 10,
gives the Legislative Management Committee items of study they may
assign to the appropriate interim committees, and directs the interim
committees to study and make recommendations for legislative action prior to the
2007 annual general session. Interim committees generally meet one day
each month starting in April to discuss various issues and begin drafting
legislation. There were 183 issues listed in the resolution. Items
of special interest to the Association include:
• Alcohol Laws – to study
issues related to state alcohol laws.
• Garnishment – to study garnishment
fees and notices.
• Minimum Wage – to study raising the
minimum wage (S.B. 43).
• Noncompetition Contracts – to study
issues related to employee noncompetition contracts (S.B. 197).
• Privatizing Workers’ Compensation – to study the
privatization of the Workers’ Compensation Fund.
• Right to Work – to study
right to work laws (H.B. 177).
• Authorization of Opinion Questions to Voters – to study
processes for submitting a nonbinding opinion question to the voters (S.B.
131).
• Signature Collection Procedures for Initiatives and Referendums – to study
whether the changes made to the process for collecting signatures for statewide
initiatives to conform to constitutional concerns should also be applied to
statewide referendums.
• Mandatory Mammography Coverage – to study
requiring health insurance providers to cover breast cancer screening (H.B.
332).
• Medicaid and Managed Care Processes – to study
whether Medicaid’s use of managed care organizations with exclusive
relationships and capitated payment methodologies is effective to address the
mental health needs of all the citizens of the state, including citizens in
rural areas, and whether managed care organizations’ contracting and auditing
processes are fair and impartial and subject to appropriate procedural
protections for both Medicaid subcontractors and beneficiaries.
• Small Businesses Health Insurance Coverage – to study
options to increase small business access and affordability of health insurance
coverage.
• Petroleum Storage Tank Fund Issues – to study
Petroleum Storage Tank Fund issues, including whether the Division of
Environmental Response and Remediation should both administer and regulate the
industry, whether the fund should be privatized, whether alternative tank
cleanup corrective action methods can be used to meet a tank owner’s or
operator’s financial responsibility requirement, and whether the division is
acting in an effective, efficient, and timely manner in auditing corrective
actions and regulating the industry generally.
• Petroleum Storage Tank Trust Fund – to study
ways to ensure the solvency of the Petroleum Storage Tank Trust Fund.
• Raw Milk Issues – to study raw
milk transportation and sales.
• Recycling Program Incentives – to study
glass bottle and container recycling programs and incentives.
• Waste from Electronic Products – to study
the environmentally sound management of waste from electronic products.
• Antitrust Exemption – to study an
antitrust exemption for political subdivisions.
• Utility Deregulation – to study the
deregulation of public utilities, including gas, electric, water, and cable
television.
• Collection of Use Tax on Remote Sales – to study
issues surrounding the collection of use taxes on remote sales, including
Internet sales, a review of trends in remote sales, effects on Utah businesses,
and the revenue effects on state and local governments and schools.
• Local Option Sales and Use Tax Statutes – to study
election provisions related to local option sales and use taxes to determine
the level of precision that should be used in statute.
• Streamlined Sales and Use Tax Sourcing Rules – to study
the sourcing requirements and rules required by the Streamlined Sales and Use
Tax Agreement.
• Uniform Sales and Use Tax Rate – to study
the development and implementation of a uniform statewide sales and use tax
rate.
• Health Savings Accounts – to study
issues related to long-term health savings accounts (H.B. 165).
• Covered At Work – to study the
Primary Care Network and the Covered At Work benefits and shortcomings.
• Horizon Card Fraud – to study
Horizon Card fraud and abuse.
• Limiting Unemployment Insurance Tax Rate Increases – to study
options to limit the amount of an employer’s Unemployment Insurance tax rate
increase and estimating the potential impact on the Unemployment Insurance
Trust Fund.
• Unemployment Contributions by Certain Corporations – to study
whether principals of small S corporations, which are not eligible for
unemployment benefits, should be required to contribute to the State
Unemployment Insurance Fund.
Federal Restrictions on PSE Sales Coming in Early
April; Retailers Must Prepare for the New Law
On March 9,
President Bush signed into law the Patriot Act that contains the “Combat
Methamphetamine Epidemic Act of 2005” placing retail sales restrictions on all
pseudoephedrine (PSE) containing products including liquids and liquid-filled
gel capsules. The language in the Patriot Act allows retailers without
pharmacies to continue selling products containing PSE if they are sold from a
locked display case or behind a service counter. The language imposes a daily
PSE sales limit of 3.6 grams per customer and a monthly PSE sales limit of 9
grams per customer. State laws that exceed the PSE sales restrictions contained
in the Patriot Act are not preempted.
The federal law has a two-step implementation process.
• April 8, 2006 - 30 days after the Patriot Act is signed into law; retailers
will be prohibited from selling more than 3.6 grams of PSE to any customer in a
given day.
• September 30, 2006 - retailers will be required to maintain a logbook of transactions, move PSE products behind the counter or place them in a locked display case and certify with DEA that they understand the requirements of the law and have trained clerks handling PSE products accordingly. Certifications are required for each individual retail location selling PSE. A limit of 9 grams of PSE per customer per 30-day period. The monthly limit is in addition to the 3.6 grams daily limit.
The
Association will have additional detailed information available in the near
future, but wanted to give as much notice as possible about the requirements
that will become effective next month.
Federal
Trade Commission Says Gift Card Fees and Expiration Dates Must Be Disclosed
The Federal Trade Commission (FTC) has
warned that failure to disclose dormancy fees, expiration dates and other
restrictions on gift cards could be considered an unfair or deceptive trade
practice. The FTC's opinion came in a February 14
letter to House Energy and Commerce Committee Chairman Joe Barton, R-Texas,
written after Barton asked the commission to examine gift card practices.
"I share your concern that companies fully
and clearly disclose all material terms and conditions of their gift
cards," FTC Chairwoman Deborah Platt Majoras said. "Consumers are
entitled to know all material terms relating to these cards." The existence of an expiration date or fee
on a gift card is a "material" fact that would influence a consumer's
decision whether to buy a card, and therefore is subject to Federal Trade
Commission Act prohibitions on omitting such information or being misleading,
Majoras said. Failure to "clearly and conspicuously" disclose such
information therefore "may constitute a deceptive act or practice"
under the law, she said.
Majoras' letter didn't criticize the use of
fees or expiration dates, only the non-disclosure of the terms.
The FTC also issued an alert urging
consumers to ask about terms and conditions when purchasing gift cards and
explaining how to file a complaint with the FTC or their state Attorney General
if disputes cannot be resolved with the store or financial institution that
issued the card.
Barton asked the FTC to examine gift cards
in December, alleging that "consumers are not being given all the
appropriate information about their use." Barton's demand for an investigation drew no
distinction between gift cards issued by retailers and those issued by banks
and shopping centers. The bank/shopping center cards are often confused with
traditional retail gift cards by consumers, but are far more likely to carry
the high fees and quick expiration dates that have drawn criticism. A number of states ban or restrict
expiration dates and dormancy fees, and federal legislation requiring the FTC
to issue regulations declaring expiration dates and dormancy fees
"unfair" or "deceptive" was introduced more than a year ago
by Representative Rodney Frelinghuysen, R-New Jersey. The bill was assigned to
Barton's committee but has seen no action.
Many retailers have moved away from dormancy fees and expiration dates, but state and national retail associations have argued against restrictions, saying decisions on fees and expiration dates should be left to the retailers who issue the cards. The associations have long urged consumers to shop carefully when buying gift cards and to ask about terms and conditions. They have urged consumers to purchase cards only from reputable retailers and not from online auction sites where cards are more likely to be counterfeit or obtained through fraudulent means.
U.S. Department of Labor
Revises USERRA Poster
On December 19, 2005, the U.S. Department of Labor finalized revisions to the Uniformed Services Employment and Reemployment Rights Act (USERRA) poster. One version was created for private sector and state government employers, and another for federal agency employers.
The version for state and private employers includes the Department of
Justice logo and specifies that USERRA's protections also apply to members of
the National Disaster Medical System. USERRA requires employers to provide
notice to employees of the law's rights, benefits, and obligations. This
requirement may be satisfied by placing the new poster where other notices to
employees are customarily placed (or through means such as handing out the
poster or distributing it by e-mail).
Employers need to use the appropriate version of the new poster. Obtain
a free copy at www.dol.gov/vets/welcome.html. (Source: Employers Council) .
Retailers Welcome Signing of
Federal Organized Retail Theft Bill
National retail
organizations welcomed the signing of legislation that would establish an
Organized Retail Theft Task Force at the Federal Bureau of Investigation (FBI)
and create an organized retail crime database. H.R. 3402, the Violence
Against Women and Department of Justice Reauthorization Act of 2005, sponsored
by House Judiciary Committee Chairman James Sensenbrenner, R-Wisconsin, was
signed into law by President Bush in January.
Among other provisions,
the bill requires the Attorney General to establish an Organized Retail Theft
Task Force within the FBI. The panel would be directed to work closely with the
retail community on creating a national database or clearinghouse operated in
the private sector to identify where organized retail crimes are being
committed. The information would help the FBI quickly identify hot spots of
organized retail crime activity across the country in order to deploy agents
and resources more efficiently. The bill also provides a
concise working definition of organized retail crime and authorizes $5 million
annually for law enforcement to participate in the database as well as for the
training of federal law enforcement agents to investigate and prosecute the
crimes.
The bill is a significant
win for retailers, who have been increasingly victimized by professional
shoplifting gangs in recent years. Federal law enforcement authorities estimate
that theft rings steal as much as $30 billion in merchandise from retail stores
each year.
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