Utah Food Industry Newsletter

April, 2012

Thu, 26 Apr 2012 12:43:29 -0600

Ruling in South Carolina Temporarily Halts the NLRB’s New Posting Requirement

As the industry geared up to meet the April 30th deadline to post new labor relations posters mandated by the National Labor Relations Board (NLRB), a South Carolina court ruling stopped the mandate in its tracks. The NLRB had promulgated a rule that requires employers to post a notice of employee rights to organize a union among other things. The DC Circuit Court had upheld the board’s rulemaking authority and so it seemed as if employers were on a path to posting inevitability. Fortunately, the United States District Court for the District of South Carolina concluded that the Board exceeded its authority in promulgating the rule in violation of the Administrative Procedure Act, and granted summary judgment in favor of plaintiffs. In short, this means that as employers you will not be required to post the notices by April 30th and perhaps not at all once the issue is resolved. This is a great win for retailers across the country.

Going forward, your Association will provide two areas of continuing service on this issue. First, we will continue to monitor developments in the cases and inform you if there is any change in the posting requirement. Second, if posting becomes necessary we will make available to you a federal “all in one” notice poster that will contain the NLRB required notice. We would suggest that you purchase one of these “all in one” notice posters so that your union-organizing poster is not a stand-alone document that may draw additional attention from employees. If necessary, these “all in one” posters will be available to association members at a cost of just $10.00 per poster.

If you have questions about the court cases, or the NLRB posting requirements generally, please contact Dave Davis or Kate Bradshaw at 801-262-5001 or ddavis@utfood.com or kbradshaw@utfood.com. We will continue to keep you up to date as new information becomes available and provide you with “all in one” poster ordering information if it appears these will be necessary.

Grocers and Staff Storm the Hill In Washington D.C.

Your Association staff and several members made the trek back to Washington D.C. to meet with our Congressional delegation and discuss industry issues. Staff and members were able to personally meet with every Utah member of Congress (except for Sen. Hatch who was back in Utah campaigning). In the meetings the delegation discussed many tax issues including Main Street Fairness and estate taxes. Other key issues included health care mandates, credit card swipe fee reform and menu labeling. Our federal legislators were grateful for the visit and provided excellent feedback on attacking these issues on a federal level.

Your Association staff will typically lead a delegation back to D.C. once or twice a year and we would invite all members to join us on these important trips. Those who have attended in the past have found the trips to be very insightful and worth the time and expense involved. We would like to thank those members who made the trip back. Having a retailer frame an issue for a legislator through a personal experience or story is a powerful tool to help legislators really understand the depth of an issue.

Staff Continues to Work on Utah Benefits Card Implementation

In 2009, the State of Utah made the decision to partner with JP Morgan and roll out the UCard. The UCard is a multi purse State benefits card that will carry the Visa brand. The Association staff has conducted several meetings with the Utah Department of Workforce Services (DWS), the department that has been charged with the rollout. Most of the benefits that will be “housed” on the UCard are benefits that are currently loaded on to a Visa branded card. There are, however, two EBT benefits (SNAP and TANF) that will be loaded on to this card as well.

DWS has proposed a rollout of this card in Q4 of 2012. Staff and several members have met with DWS regarding this rollout schedule and indicated significant reservations regarding the roll out of a new product during the holiday season. We are working toward a solution that would provide for a delayed rollout schedule in order to be sensitive to the importance of Q4 sales to the industry. The good news regarding the UCard is the potential ability for retailers to move transactions that have historically be run across the commercial network and paid significant interchange fees, to a network (Quest) that would not require the payment of interchange fees.

The staff will continue to work on this issue for the benefit of the membership. Please feel free to call Dave or Kate with questions regarding the UCard and/or the rollout process.

Utah State Party Conventions: Recap
Both the Republican and Democratic parties held their annual state conventions last Saturday. Conventions are the process both parties use to select the party nominee for various political offices. If a candidate is able to secure 60% of the delegate votes, the candidate becomes the party nominee and can avoid a primary election. Many candidates at the federal, state and local levels were able to secure a party nomination through either the county or state convention process, but some notable races will be going to a primary. Look for some intense campaigning to take place in these races between now and June 26th!
Primary Election Races:
• U.S. Senate Republican Nomination: Dan Liljenquist vs. Orrin Hatch
• 1st Congressional District Democratic Nomination: Donna McAleer vs. Ryan Combe
• Attorney General Republican Nomination: Sean Reyes vs. John Swallow
• Salt Lake County Mayor Republican Nomination: Mike Winder vs. Mark Crockett

General Election Races:
• Governor: Peter Cooke (D) vs. Gary Herbert (R)
• 2nd Congressional District: Jay Seegmiller (D) vs. Chris Stewart (R)
• 3rd Congressional District: Soren Simonsen (D) vs. Jason Chaffetz (R)
• 4th Congressional District: Jim Matheson (D) vs. Mia Love (R)

Utah Food Industry Association’s Annual Conference and Celebration
Don’t Miss Out on Sponsorship Opportunities

It is that time of year again--time to start planning our annual conference. Based on feedback from member surveys, the Board of Directors decided to return to Deer Valley as our conference venue for the 2012 Conference. Both the food and lodging received high marks from attendees. This year our conference dates are September 24th & 25th. We will keep the 2-day format with the Bagging Contest taking place on Monday night and the Speakers, Annual Meeting & Awards Dinner taking place on Tuesday. The conference planning committee will be meeting soon to choose speakers, theme and nominate our industry award winners. Don’t miss your opportunity to get involved as a sponsor of the 2012 event. This is the only event that brings all food retailers, wholesalers, brokers and suppliers together in one venue. If you have suggestions or would like to be a part of the planning committee, please contact Kate Bradshaw at 801-262-5001 or kbradshaw@utfood.com

Association Members Have Afternoon Jell-O with Senator Mike Lee
Senator Mike Lee recently reached out to the retailer community for a roundtable on regulatory burdens facing the retail industry and for well- Jell-O snacks. It seems the Senator can’t get enough of the jiggly-wiggly food that is a favorite of Utahns everywhere. Retailers from the government relations committee had an opportunity to sit down with the Senator and his staff to discuss some of our regulatory concerns. Our chief topic of discussion was the issue of main street fairness and the leveling of the tax collection burden between online and brick and mortar retailers. Our thanks to the Senator for reaching out to our industry for our feedback and for the chance to enjoy some Jell-O!

Reason #4 to Belong to the Association…
Professional Insurance Consultations

Don’t forget the Association has a new Director of Insurance Services that can help you with all of your insurance needs. While Craig Cheney has only been with the Association for four months, he has over 17 years of experience in the insurance industry that can benefit your company. Craig is working with the Utah Department of Insurance to provide a limited med product that you can make available to your part-time employee with little or no cost to the company. If you would like a quote on personal lines, workers compensation, property & casualty or just have a question regarding your insurance policies, feel free to give Craig a call. These insurance consultations are offered free of charge and one of the many benefits of being a member of your trade Association.

Utah Taxpayer’s Association Hosting its Annual Taxes Now Conference
On of sister associations and partners, the Utah Taxpayers Association will host its 33rd annual “Utah Taxes Now” conference on Monday, May 23, 2011 at the Little America Hotel. Governor Gary Herbert, Attorney General Mark Shurtleff, Representative Jim Matheson and numerous other legislators, policy experts and community leaders will cover a broad range of tax issues, including the structure of Utah's income, sales and property taxes; transportation funding in a world of ever increasing mileage; and education reform.
Our Association members will be particularly interested in the discussion on how local option sales taxes are distributed, as well as what the long term implications of ever increasing mileage will and should be on state and local transportation funding.
In addition to the conference, there will also be a luncheon that will be held at noon in the Grand Ballroom of the Little America Hotel. With many members of the House and Senate leadership present and speaking, it should offer some insights as to what to expect in the coming session(s).
Registration is still open for the conference, which runs from 8:00 a.m. through 2:00 p.m. The Taxpayers Association is pleased to offer a discount registration rate of $100 to UFIA/URMA members. 4 hours of CPE and 3.5 hours of CLE credit are available. Click here for a Tentative Agenda.
If you wish to attend, go to www.utahtaxpayers.org, and click “Register for upcoming events.” You can also register by contacting the Taxpayers Association at 801.972.8814 or sophie@utahtaxpayers.org.

March, 2012

Sun, 1 Apr 2012 10:48:47 -0600

Senator Mike Lee Invites Retailers to Participate in Roundtable Discussion
Senator Mike Lee would like to invite all Utah retailers to his “Jello Forum” to discuss federal regulations that impact, limit or burden your ability to conduct business. The focus of this forum will be specifically on retail related issues and regulations. Any interested retailers are invited to attend on April, 25th @ 1:45 pm. Senator Lee’s office is located at 125 S. State Street, Suite 4225 in the Wallace F. Bennett Federal Building.
If you will be attending please RSVP to a member of the Association staff at 801-262-5001 or email Natalie Steed at nsteed@utfood.com .

Utah Food Industry Association
2012 Legislative Wrap Up

The 2012 Utah legislative session came to an end at midnight on March 8th. During each day of the legislative session, your association staff was on the hill protecting the interests of the industry. Association staff tracked or worked on over 100 bills during the session and the Utah Food Industry and Utah Retail Merchants joint Government Relations Committee met weekly during the session to take positions on bills and receive updates from staff. The following “wrap-up” is a summary of many of the key issues staff addressed during the session, but is not exhaustive. If your company has questions about any issue not contained in the summary please feel free to contact Dave Davis or Kate Bradshaw at the Association’s offices.

Vendor Discount

Financial / Operational Impact: Utah retailers receive over $22 million dollars annually in vendor compensation.

Staff and the industry were once again successful in defending the 1.31% vendor compensation that Utah retailers receive for acting as the State’s sales tax collector. As long as budget times remain tight industry and staff must be vigilant in knocking down efforts by legislators to reduce or repeal this compensation. Every year we are successful in retaining this allowance Utah retailers benefit to the tune of tens of millions of dollars.

Significant Bills that Passed

Sales and Use Tax Retailer Nexus Amendments (HB 384) – Passed

Financial / Operational Impact: Year one the bill will generate $5.8 million in additional sales tax collections by on-line retailers that have not been collecting.

HB 384 represented a substantial step along the path toward bringing sales tax fairness between on-line and brick & mortar retailers. This bill clearly defines nexus and indicates that if a company has distribution centers, manufacturing facilities or retail operations it cannot shield its online operations from nexus by placing those operations in a separate legal entity. While this is not the final solution it is an important step to place pressure on Congress to act and address this very important issue.

Pharmacy Audit Rights (HB 76) – Passed

Financial / Operational Impact: Pharmacies will save significant time during pharmacy audits because they will be better prepared and the scope of the audit will be limited. Pharmacies will improve cash flows as the PBM’s are no longer able to deduct clawbacks until all appeals are final.

HB 76, requires health benefit plans, the Public Employees' Benefits and Insurance Program and pharmacy benefit managers to implement certain pharmacy audit procedures when auditing pharmacy claims. The bill requires audits involving clinical or professional judgment to be conducted by or in consultation with a pharmacist, and with 10 days advanced written notice. In addition, the bill also limits the number of selected prescription claims to 200, and does not allow for the recoupment of funds for clerical errors. Furthermore auditing entities would no longer be allowed to take back funds until all appeals processes are complete.

Unemployment Insurance Modifications (SB 129) – Passed

Financial / Operational Impact: A tax cut for employers of over $9 million in FY 2012 and nearly $20 million in FY 2013

SB 129 modifies the Employment Security Act by reducing the maximum unemployment insurance contribution rate for an employer beginning in calendar year 2012 from 9% to 7% and capping the social unemployment insurance contribution rate for all employers for calendar year 2012 at .4%.

Amendments to Revenue and Taxation Title (SB 27) – Passed

Financial / Operational Impact: The tax commission will now be required to refund $6.8 million in sales tax returns that were erroneously overpaid by businesses. Businesses will be able to recover $2.5 million dollars in transactions that were improperly stated/invoiced.

SB 27 corrected the decision made by the Utah Supreme Court in Utah Tax Commission v. Ivory Homes. This bill requires the tax commission to provide refunds to businesses that erroneously overpaid taxes, even if there was no tax commission error. This bill also permits businesses to go back up to three years and restate transactions that were erroneously booked in an effort to have more accurate tax treatment of the transaction.

Theft Amendments (HB 44) – Passed

Financial / Operational Impact: Additional tool in addressing retail theft and organized retail crime. Financial savings will be dependent on how aggressive a retailers is with its loss prevention and trespassing program.

HB 44 provides an additional tool for retailers in the battle against retail theft and organized retail crime. The bill provides for a one-degree enhancement of penalty for an individual who returns and commits theft again at a property where the individual has previously been prohibited from returning.

Joint Resolution Urging Congress to Support Equity and Sales Tax Fairness (HJR 14) – Passed

Financial / Operational Impact: If on-line sellers were required to collect and remit sales tax it would generate $180 million dollars annually and more importantly level the playing field between on-line and brick & mortar retailers.

This joint resolution of the Legislature urges the United States Congress to pass legislation for the fair and constitutional collection of state sales tax by both in-state and remote / on-line sellers. This resolution has the potential to provide the Utah Congressional delegation with cover to vote in favor of a federal solution to this problem.

Retail Sale of Tobacco Products (HB 95) – Passed

Financial / Operational Impact: Prevent the proliferation of tobacco specialty shops and keep cigarette market share in convenience and grocery stores.

HB 95 highly regulates tobacco specialty store or “smoke shops”. These businesses would be treated like liquor stores and would have significant licensing requirements and would have substantial restrictions as to where these businesses could be built (e.g. not within 600 feet of a church or school).

Medicaid Cost Control Amendments (SB 85) – Passed

Financial / Operational Impact: Medicaid savings of over $77,000. If psychotropic drugs were subject to the PDL the savings would be nearly $10 million

SB 85 amends the Medicaid drug program to implement a limited pilot program to test a preferred drug list program for one type of psychotropic drug (sedative hypnotic). The association continues to advocate for expansion of the PDL as a preferable cost control measure as compared to reimbursement cuts.

Significant Bills that Failed

Health Care Mandates (HB 69, HB 211, HB 303) – Failed

Financial / Operational Impact: Passage of these bills would have increased employers’ health care costs by millions annually and would have included these benefits in the Essential Benefits Package as provided in the President’s National Health Care Program.

Many interest groups were pushing hard to require mandatory insurance coverage of their particular condition or ailment. Bills were introduced to mandate coverage for autism, hearing impairments, amino acid based formulas and athletic trainers. Your association and the business community worked to defeat each of these attempts saving the business community millions of dollars. Also holding these mandates back means that these coverages will not be a part of the State of Utah’s essential benefits package (minimum coverage) as required by the President’s National Health Care Program.

Employment and Verification Requirements (HB 477) – Failed

Financial / Operational Impact: This bill would have placed significant fines and penalties (including criminal penalties) on employers who did not use the E-verify system or hired illegal immigrants.

This bill was Representative Steve Sandstrom’s efforts to further address the illegal immigration issue. It would have placed significant burdens and penalties on employers and would have done very little to address the underlying problems associated with illegal immigration. This continues to be primarily a Federal issue and should be address in a National and comprehensive fashion.

Production and Sale of Food in Utah Revisions (SB 34) – Failed

Financial / Operational Impact: Could have cost local growers producers millions and would have caused retailers to revaluate their buy local programs.

SB 34 would have prohibited federal regulation of an agricultural product that remains in Utah after it is made, grown, or produced in Utah. The unintended consequence of the bill would have two fold. First, the Utah Department of Agriculture and Food would have seen a significant loss of federal funding for safety programs. Second, the bill would have created the perception that Utah grown products were somehow less safe that other products because they would not have the FDA stamp of approval. This bill would have been a significant setback for the food industry in Utah.

Mandatory Patient Counseling (HB 165) – Failed

Financial / Operational Impact: Could have potentially disrupted pharmacy workflows and placed mail order pharmacies at an additional competitive advantage over local brick & mortar pharmacies.

HB 165 would have mandated that every patient have face to face counseling with a pharmacist on every prescription. The bill was overly broad and burdensome as drafted. Association staff has committed work with the legislature, pharmacy board and interested parties to address the issue of patient counseling.

February, 2012

Sun, 26 Feb 2012 21:40:23 -0700

Call to Action: Support HB 384 – Sales Tax Fairness

HB 384 passed out of committee Wednesday and is now on the floor of the Utah House of Representatives. This bill attempts to level the playing field for all retailers by establishing physical nexus based on affiliate relationship and require online-only retailers to collect and remit sales tax.

Overstock, E-Bay and other online retailers are working aggressively to defeat the bill. Several of our members came to testify in committee and we greatly appreciate them giving up their time to fight for this important issue. However, the battle is still on going. We need letters, calls and emails from retailers to members of the House of Representatives urging support for HB384. Letters from retailers detailing the number of Utahns employed, tax contributions to the State, charitable donations or community involvement are particularly helpful. Please send the letters to Kate in .pdf format at kbradshaw@utfood.com or kbradshaw@utahretail.com. The letter should be addressed to “Members of the Utah State Legislature.” (click here for a sample letter)

For contact information for your Legislator, go to the either www.utfood.com or www.utahretail.com, click on the government link.

If you have questions about this bill, please contact Dave Davis 801-647-0013 or Kate Bradshaw at 801-599-9017. It is easiest to reach Dave and Kate by mobile phone or email during the legislative session.

Other Key Legislative Updates

Your association staff is currently tracking over 100 bills that are in various stages of the legislative process. During the session the associations Government Relations committee has been meeting on a weekly basis to take positions on bills that are of significance to the industry. A full list of the bills that the Government Relations Committee has considered and the positions taken can be downloaded by clicking here. The following are just a few of the Association’s priority bills:

SB 27 – Amendments to Revenue and Taxation Title
This is a must pass bill as it will undo a decision by the Utah Supreme Court (Ivory Homes v. Utah State Tax Commission) that held that sales tax refunds can only be provided to a remitter if there has been some form of tax commission error. This bill has a second part that would allow businesses, under certain circumstances, to correct transactions in order to receive a more favorable tax treatment. Both sections of this bill would benefit Utah businesses tremendously.

Status: Bill has passed the Senate and currently resides in the House Revenue and Taxation Standing Committee.

2nd Sub HB 76 – Pharmacy Audit Rights
This bill requires health benefit plans, the Public Employees' Benefits and Insurance Program, and pharmacy benefit managers (PBM) to implement certain pharmacy audit procedures when auditing pharmacy claims. This bill will finally place some guidelines on PBM audit practices. While there are many benefits for retail pharmacies a few include: mandatory notice of audits, blackout periods, a limit on the number of scripts that can be requested and prevents PBMs from deducting audit claw backs until the appeals process is complete.

Status: Bill has passed the House and has been introduced by the Senate

SB 129 – Unemployment Insurance Amendments
This bill was championed by the Association staff as a tax cut for business. This bill modifies the Employment Security Act by reducing the maximum unemployment insurance contribution rate for an employer beginning in calendar year 2012 from 9% to 7% and capping the social unemployment insurance contribution rate for all employers for calendar year 2012 only. In this economic environment to pass a tax cut is a significant win for retailers and business in general.

Status: Passed both chambers of the legislature and signed by the Governor

SB 34 – Production and Sale of Food In Utah
This bill prohibits federal regulation of an agricultural product that remains in Utah after it is made, grown, or produced in Utah, and addresses the designation of a Utah agricultural product. If passed this bill would place in jeopardy federal dollars that are sent to Utah for the purposes of bolstering food safety efforts. This would also create a perception that Utah agricultural products were in someway inferior because they would lack the FDA stamp of approval. Finally the bill would invite a constitutional challenge based upon its infringement upon interstate commerce. The Association staff has worked with the sponsor of this bill to explain the far reaching and unintended consequences of this bill.

Status: Bill currently resides in the Senate Rules Committee. It will likely not be heard in committee by Wednesday the 29th and will effectively be dead at that point.

If members have questions about these or any other issues please feel free to contact Dave Davis or Kate Bradshaw.

Novelty Lighters

The State Fire Marshal asked us to remind retailers that Utah law prohibits the sale, manufacturing, importing or distribution of novelty (toy like) lighters within the state of Utah. We are providing this information so you may take appropriate action to ensure you do not sell or have any inventory of novelty lighters.

A novelty (toy like) lighter looks like a toy and has audio or visual effects or a design that makes the lighter appealing to a child under the age of 10.

• Audio effects: includes music, animal sounds, whistles, buzzers, beepers or other noises not pertinent to the flame-producing function of the lighter.

• Visual effects: includes flashing lights, color changing lights and changing images.

Novelty lighters include lighters of misleading design that resemble or imitate:
Cartoon characters, Toys or Games, Musical Instruments, Vehicles, Animals, Human Body Parts, Weaponry, arrows, guns etc., Furniture, Sports & Fishing Equipment, Holiday decorations, Tools, Household products, Food or beverages, and Food or beverage packages

If you have questions about whether or not a product is acceptable, please contact Deputy Fire Marshall Oliver Moore at (801) 284-6349

Annual Conference Dates Announced

We are pleased to announce that the dates for our annual conference and celebration have been set. After the overwhelming positive feedback on the Deer Valley location in 2011, we have decided to return to the Chateaux at Silver Lake again for 2012. The conference will be Monday, September 24th & Tuesday, September 25th. The bagging contest will take place in the evening of September 24th and the main conference and awards dinner on September 25th. Event details, sponsorship opportunities will be release in the early spring. If you are interesting in being part of conference planning committee, contact Kate Bradshaw @ kbradshaw@utfood.com or 801-262-5001

Join Us for the Day in Washington Conference

NGA / FMI / FIAE will host the annual Day in Washington Conference on March 28th and March 29th. The Association staff will be leading a Utah delegation back to Washington D.C. to discuss important issues in the food industry with our Congressional representatives. We would invite members to come and participate in this important process. Time is short so click here to register and join us in Washington.