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Raleigh, North Carolina
February 16, 2007
The dark cloud that had covered Raleigh for better part of a year turned even darker this week and engulfed the activity of North Carolina General Assembly. Late Tuesday evening, word leaked that embattled former Speaker of the House Jim Black (D-Mecklenburg) would resign his seat from the House and plead guilty to one count of accepting illegal gratuities in federal court on Thursday. Wednesday and Thursday were a media circus and the halls and offices were full of whispers among staff, lobbyists and legislators about the sadness for Black and his family. Many reasoned that Black, the 71 year-old optometrist, was simply doing what was best for his family by pleading guilty rather than spending another million dollars in legal fees and dragging his family through a lengthy and potentially ugly trial. Legislators and lobbyists alike reasoned that unlike other public corruption cases, Black did not use his position for personal financial gain, but rather was simply trying to maintain power.
On Thursday, we learned the "rest of the story." Most of the year-long federal grand jury investigation had focused on Black's ties to fellow optometrists, video poker and lottery vendors. Yet when Black entered his guilty plea in the 48 minute long hearing on Thursday, these groups were not involved. Instead, Black plead ed guilty to receiving a total of $29,000 in cash from chiropractors over three separate occasions in exchange for pushing legislation sought by chiropractors. The U.S. Attorney also alleged that Black sought to influence one of the unnamed chiropractors prior to the chiropractor testifying before the Grand Jury. Black faces sentencing on May 14 and could spend up to 10 years in federal prison and a fine of up to $250,000. Many think that his time served will be much less - in the six months to two year range - because of Black's further cooperation with the U.S. Attorney's Office. With yesterday's bombshell, many are left to wonder what shoe will fall next. Regardless, Thursday was likely the darkest day in the history of North Carolina politics.
HOUSE COMMITTEES NAMED - On Monday evening, Speaker Joe Hackney (D-Orange) handed out plenty of gavels and Chairmanships to members of the House. In sticking with his stance that he has moved to the middle and will govern based on the will and make-up of the House Democratic Caucus, Hackney tried to delicately balance rewarding those legislators who had propelled him to the role of Speaker while ensuring that there was adequate representation of conservative Democrats. Representative Bill Owens (D-Pasquotank) takes the reins as the sole Chairman of the powerful Rules Committee. Hackney named a diverse group of eight to be Co-Chairs of the House Appropriations Committee with Representatives Mickey Michaux (D-Durham), Martha Alexander (D-Mecklenburg), Alma Adams (D-Guilford), Maggie Jeffus (D-Guilford), Phil Haire (D-Haywood), Joe Tolson (D-Edgecombe), Doug Yongue (D-Hoke) and Jim Crawford (D-Granville) leading the House as they begin the Budget writing process. Representatives Pryor Gibson (D-Anson), Paul Luebke (D-Durham), Jennifer Weiss (D-Wake) and William Wainwright (Craven) will Co-Chair the Finance Committee.
Hackney also named Representative Deborah Ross (D-Wake) to take Hackney's place as the Chair of the Judiciary I Committee, with former Speaker Dan Blue (D-Wake) and Representative Ronnie Sutton (D-Robeson) chairing Judiciary II and III respectfully. Representative Thomas Wright (D-New Hanover) continues to head the Health Committee while Representative Marvin Lucas takes over as the Chairman of the Alcohol Committee. NCRMA and CFIC member Dewey Hill will again serve as Chair of the House Agriculture Committee. Finally , Representatives Bobby England (D-Rutherford), Beverly Earle (D-Mecklenburg) and Verla Insko (D-Orange) will lead the Health and Human Services Appropriations Subcommittee.
Of note was the fact that Representative Julia Howard (R-Davie) is the only Republican to receive some form of a Chairmanship. Representative Howard will serve as the Co-Chair of the House Ethics Committee. Additionally, it appears that that House Committees will now work into the afternoon on Thursdays with the House Floor Session being moved from 10:00 a.m. to 2:00 p.m. This is a change from years past and may allow for more committee work and hopefully a quicker session.
VIOLENT VIDEO GAMES - NCRMA began meeting individually with members of the Senate Judiciary I Committee, including Chairman Martin Nesbitt (D-Buncombe) to explain the constitutional and practical issues with Senate Bill 87 - No Violent/Obscene Video Games Sold to Minors. Senate Bill 87, as introduced by Senator Julia Boseman (D-New Hanover) would make it a crime for a retailer to sell a "violent" video game to a minor and would require a retailer to construct a separate area of their store to display "violent" video games. Nine states have passed similar measures and all nine states have seen these laws struck down as unconstitutional by federal courts. In fact, the State of Illinois just paid merchants and video game manufacturers in excess of $500,000 in legal fees. While most Senators generally recognized the constitutional problems with the bill, they also recognize that a vote against the bill would be difficult to explain to constituents. On top of the constitutional issues with the legislation, no one has yet to explain how a retail clerk is supposed to determine which games are "violent" and which games are not "violent" without playing the game in its entirety and then making a subjective decision. What one retail clerk may deem "violent" in a game another may not find it "violent" at all.
FILM PROCESSING/REPORTING OF CHILD PORNOGRAPHY - On Monday, Attorney General Roy Cooper held a press conference to detail his efforts to halt internet predators and stop child pornography. While Cooper publicly expressed the need to control MySpace and YouTube, he also said that it should be a criminal infraction and a $250 penalty for retailer or wholesaler to fail to report to police any sexual activity involving a minor. On Tuesday, Senators Walter Dalton (D-Rutherford), John Snow (D-Cherokee) and Julia Boseman (D-New Hanover) introduced this omnibus legislation as Senate Bill 132. NCRMA had already met with the sponsors of two similar bills (House Bill 27 - Representatives Karen Ray (R-Iredell), Rick Glazier (D-Cumberland), Bruce Goforth (D-Buncombe) and Tim Spear (D-Chowan) and Senate Bill 69, Senator Steve Goss (D-Watauga)) to request some changes be made to address some store operations issues with their bill, to ensure criminal and civil immunity for reporting extended to the retailer as well as the employee and to emphasize that reporting of this activity should be a duty but that failure to report should not result in a criminal penalty. NCRMA circled back with Senators Dalton, Snow and Boseman and had a good conversation with a representative of the Attorney General's Office about removing the criminal penalty. NCRMA will provide draft amendment language to the Attorney General's Office next week.
BOTTLE DEPOSIT BILL TO BE FILED NEXT WEEK - In a meeting on Thursday, Senator Doug Berger (D-Franklin) confirmed that he will file the "Liter Reduction Act of 2007" as early as Monday. Berger has a renewed sense of optimism about what he referred to as a "Don Quixote-like effort." It appears that Berger's legislation will be based on the California-model and will impose a $0.10 deposit per container. Berger also stated that he was close to garnering the support of a well-respected family-owned North Carolina retailer. NCRMA continues to work in an organized coalition of affected groups such as the Convenience Store Association, the North Carolina Beverage Association, the Petroleum Marketers, Anheuser-Busch, Miller Brewing, and the Beer and Wine Wholesalers Association. We will provide a copy of Berger's legislation as soon as it becomes available.
GIFT CARD LEGISLATION ON ITS WAY AS WELL - On Wednesday, Representative Rick Glazier (D-Cumberland) shared a draft copy of legislation that would prohibit the use of expiration dates and dormancy fees on gift cards. No amount of the gift card would have to be turned over to the State as unclaimed property under Representative Glazier's proposed legislation. Issuing a gift card containing an expiration date or imposing a dormancy fee would constitute an unfair and deceptive trade practice subjecting the issuer to civil penalties of $5,000 per day, attorneys' fees and treble damages. NCRMA informed Representative Glazier that we may have some concern with this legislation and it would distribute his draft to interested members and report back to him. One issue of concern for retailers may be differential treatment that may result for gift cards issued by federally regulated banks that are not subject to some state laws. If you would like a copy of the draft legislation, please email me at franp@ncrma.org .
MANDATORY ELECTRONIC PSEUDOEPHEDRINE LOGS HALTED - It appears that NCRMA has halted the introduction of legislation mandating electronic pseudoephedrine logs so that a common database could be constructed to track purchases. NCRMA happened to meeting with a Senator about another subject when this issue arose. NCRMA explained the cost factors for both independent and chain pharmacies and how many pharmacies would see this as being a cost-inhibitive measure to continuing to sell these products. The Senator said in light of these factors he had not considered that he would not be introducing the bill.
COLLECTIVE BARGAINING/RIGHT TO WORK - The North Carolina Academy of Trial Lawyers and Organized Labor are so excited they can hardly stand it and plan to begin shooting across the bow at the business community. At the top of their agenda is repealing North Carolina 's Right to Work Law and allowing public employees (teachers, firemen, police, and state employees) to collective bargain and strike if their demands are not met.
North Carolina is one of 30 states that ban or restrict public employee collective bargaining rights, and one of twelve states that do not allow any form of collective bargaining with state and local governments. Collective bargaining rights for public employees would increase costs to the taxpayers from staffing inflexibility, further restrictions on employee performance standards, reward mediocrity, add layers of grievances and hearings, and open us up to potential union strikes. It would also increase the influence of labor unions in this state at a time when their influence and relevance in the private marketplace is on the decline.
In the past two years there has been a dramatic increase in the political involvement of unions in local and state races with both campaign contributions and issue advocacy campaigns. This increased activity coincides with additional efforts to organize unions among both public and private employees.
A coalition of organizations that would be impacted directly or indirectly is being formed and research is currently being compiled to share the economic impact on the local governments and the potential cost of jobs to North Carolina .
REPLACING CONTRIBUTORY NEGLIGENCE WITH COMPARATIVE FAULT - North Carolina currently applies contributory negligence in determining liability in civil action lawsuits. Under contributory negligence, the current law in North Carolina, if a person is even 1% negligent in an accident they are barred from recovering damages in a lawsuit. The North Carolina Academy of Trial Lawyers plans to introduce legislation that would repeal contributory negligence and instead replace it with comparative fault. Comparative fault allows a person to recover damages minus whatever the percentage of fault was caused by their own negligence.
For example, a customer is hurt in a store by product falling when he steps on a bottom shelf to reach an elevated product. Under contributory negligence, if the jury finds the customer was 1% negligent the customer would not be awarded any damages. Under comparative fault, if the jury determined the customer was 40% negligent and the store was 60% negligent, the jury would award the customer a set amount of damages and subtract 40% out of this amount to account for the customer's negligence. NCRMA will strongly oppose any attempt to repeal contributory negligence in North Carolina.
GOVERNOR EASLEY TO DELIVER STATE OF THE STATE ADDRESS ON MONDAY - Governor Michael F. Easley will deliver his final State of the State address to the North Carolina General Assembly on Monday evening. We also hear that Governor Easley's recommended Budget will be presented to the General Assembly as early as Tuesday.
BILL REQUESTS UP - North Carolina legislative staff have received 1,399 substantive bill drafting requests by the end of the fourth week of the 2007 Regular Session today, up 40% compared with the same point in the 2005 Regular Session. At the end of 3 weeks, the increase had been 35%. Blank bill requests are down 85% from 2005, dropping from 279 requests in 2005 to 43 in 2007. Senators are limited to two blank bill filings for the biennium, while the House does not allow blank bills. In 2005, there were no blank bill limits for the long session. With the House naming their Committees this week, we expect to see an avalanche of introduced bills in the next couple of weeks.
RETAIL BILLS OF INTEREST INTRODUCED THIS WEEK
House Bill 153 - Local Option Tax Menu - Representative Mickey Michaux (D-Durham) - This legislation would allow counties to chose a form of taxation to implement within their county if approved by a referendum of the people. Included as options are sales tax increases, transfer taxes and impact fees.
House Bill 155 - Conscience Protection for Pharmacists - Representative Mark Hilton (R-Catawba) - This legislation would extend the ability to refuse to provide health care to pharmacists for measures leading to lawful abortions.
Senate Bill 125 - Alcohol Inhalers Illegal - Senator Steve Goss (D-Watauga) - Would make apparatuses used to inhale alcohol fumes illegal.
Senate Bill 132 - Protect Children From Sexual Predators - Senators Walter Dalton (D-Rurtherford), John Snow (D-Cherokee) and Julia Boseman (D-New Hanover) - See Description listed above in FILM PROCESSING/REPORTING OF CHILD PORNOGRAPHY.
Senate Bill 159 - Prescription Drug Data Confidential - Senator Jim Forrester (R-Gaston) - Prohibits the sale, transfer, license or use of prescription information of patients.
Senate Bill 160 - Country of Origin Labeling for Prescriptions - Senator Jim Forrester (R-Gaston) - Requires pharmacies to include the country of origin on all prescription labels.
Senate Bill 162 - Prevent Prescription Drug Fraud - Senator Doug Berger (D-Franklin) - Requires that all prescriptions written for controlled substance be written on a state-provided fraud proof prescription pad.
Senate Bill 163 - Establish High-Risk Health Insurance Pool - Senator Doug Berger (D-Franklin) - Creates a state-operated High Risk Health Insurance Pool which would be financed by insurer assessments.
Senate Bill 177 - Establish High-Risk Health Insurance Pool - Senator Tony Rand (D-Cumberland) - See Description Listed in Senate Bill 163.
It is our pleasure to work on your behalf. Thank you for allowing us to continue to represent the retail perspective before the North Carolina General Assembly since 1902.
Until next week.
Fran Preston (franp@ncrma.org)
Andy Ellen (andye@ncrma.org)
Elizabeth Dalton (elizabethd@ncrma.org)
Lindsey Kueffner (lindseyk@ncrma.org)
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