Wal-Mart Debates Amazon on State Sales-Tax Plan at ALEC
Aug. 5 (Bloomberg) -- In a windowless hotel ballroom, Utah State Senator Wayne Niederhauser presented his idea for a streamlined state sales tax to a task force subcommittee of the American Legislative Exchange Council.
The proposal would allow several states to impose the same sales tax rate on both brick-and-mortar retailers and online outlets. Seated around the table were representatives from Wal- Mart Stores Inc. and Amazon.com, along with other state legislators from Oregon and New Hampshire, which have no sales tax.
"The group was pretty polarized," said Niederhauser, a Republican. People argued back and forth for about 15 minutes in what he called an "animated debate" before the idea was tabled.
ALEC is a Washington-based non-profit group that brings state legislators, corporate lobbyists and policy experts together to write model state laws. Niederhauser was one of more than a thousand state lawmakers who traveled to New Orleans on Aug. 3 to attend the group's 38th annual meeting.
This week's conference included workshops on health care, energy and states' rights. To sit on a legislation-writing task force, Wal-Mart and Amazon would have had to pay a fee between $3,000 and $10,000, in addition to their membership dues which range from $7,000 to $25,000, according to ALEC's website.
ALEC has become a target for some activist groups who contend that corporations, which finance most of ALEC's operations and reimburse the travel costs for some elected officials who attend the meetings, shouldn't have a seat at the table when lawmakers are writing bills.
"Legislators are voting behind closed doors alongside corporations to change our rights," said Lisa Graves, executive director of the Center for Media and Democracy, a Washington- based group that tracks news sources, who traveled to New Orleans to provide a counterpoint to ALEC's messages.
Niederhauser, whose home is in Sandy, Utah, said the criticism is overblown. "I get lobbied much harder in my own state," he said. He and other elected officials attending this week's gathering said they come to ALEC meetings to network with colleagues from other states.
Corporations are "definitely here, but I've not been lobbied at all," said Kansas Representative Mike Burgess, a Republican who has served in the state legislature for nine years. "I've not been subjected to any arm twisting."
Wal-Mart and BP
Companies definitely were there. Officials from Wal-Mart, oil giant BP Plc, and drug-maker Allergan Inc. were among the hundreds of private sector members at the New Orleans meeting. Three boards more than six-feet tall listed the event sponsors, which included United Healthcare Inc., cigarette-maker Altria and pharmaceutical-maker Johnson & Johnson.
When Louisiana Governor Bobby Jindal, a Republican, spoke at the opening day luncheon, the logo for PhRMA, the lobbying arm of the pharmaceutical industry, was displayed on a screen behind him. Shell Oil Co.'s yellow shell logo hovered over the head of economist Arthur Laffer when he spoke at a breakfast.
Corporate sponsors of organizations' annual meetings aren't unusual. It is ALEC's task forces that are coming under most scrutiny.
The committees meet in sessions closed to reporters and the general public, during which they debate and vote on model bills. Legislators and private-sector task force members must vote to endorse any model legislation -- and each group must deliver a majority before it is officially adopted, said Raegan Weber, ALEC's spokeswoman.
Adoption doesn't mean it will automatically be considered for passage. It's up to the elected officials to bring the proposed bills to the state Capitol and usher them into law. Burgess of Kansas says he has gotten ideas at ALEC but has never brought a model bill home.
Representative Tim Brown, an emergency room physician who serves in the Indiana legislature, says last year he introduced a bill that would prevent Governor Mitch Daniels, a fellow Republican, from preparing to implement President Barack Obama's health-care law until a challenge to its constitutionality is settled. The bill died in the Senate.
To join ALEC, legislators pay $100 for a two-year membership. ALEC has task forces devoted to civil justice, energy and environment, commerce, education, international relations, public safety, taxes and telecommunications.
The Center for Media and Democracy created a website last month called ALEC Exposed where it posted about 800 model bills from ALEC's library that previously were available only to members. The bills include measures that have passed in dozens of states, including laws requiring voter identification; measures requiring states to pull out of cap-and-trade programs, which are designed to curb carbon emissions; and bills that prohibit states from implementing the national health-care law.
Common Cause, a Washington-based group that advocates for limits on money in politics, said companies affiliated with ALEC, along with their employees, spent more than $38 million electing state legislators and governors in 2009 and 2010.
The non-profit investigative reporting group ProPublica on Aug. 1 published on its website a guide for reporters to trace ALEC bills to their states.
The exposure doesn't appear to have hurt. More than 2,000 people signed up for the conference this week, about a 25 percent increase from last year's meeting, said Weber. The group has also attracted many more corporate sponsors, according to its program.
ALEC's mission is to promote free markets, limited government, federalism and individual freedom, according to its website. Legislators at the meeting said they joined because it represents their beliefs.
As for the corporate members, Brown said, "I'll take their money but I'm going to vote the way I want."
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