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Friday Fax – Legislative Update
February 18, 2005
Hurricane Relief and House Committees were the main topics of discussion this week. Many were resigned to the fact that until House Committees were named and legislators assigned their permanent offices, there was little work that could be done to begin rolling the boulder that is the 2005 Legislative Session up the steep mountain.
The topic of methamphetamines was also prevalent on the minds of many walking Jones Street, as was a proposed 75¢ increase in the tax on a pack of cigarettes.
1) House Committees Named With Few Surprises
2) Methamphetamines and Cold Medicine
3) Streamlined Sales Tax Bill Introduced
4) Violent Video Games
5) State of the State Monday Night (2/21) – Cigarette Taxes and Lottery
6) Train Wreck between Legislature and Governor Easley?
7) Solution to Alcohol Permit Issue Might Be In the Works
8) Shellfish/Country of Origin Update
9) Split Case Fee on Wine Update
10) Employ a Felon and get a tax break
1) House Committees Named With Few Surprises
Many of us missed a golden investment opportunity on Tuesday by not having invested in the company that manufactures gavels as Speaker Jim Black (D) handed out eighty-one gavels to committee Chairman on Tuesday. If in doubt you could say “Congratulations on your Chairmanship” to any Representative and have a pretty good shot of being correct.
Representative Bill Culpepper (D-Chowan) remained sole Chair of the powerful Rules Committee and will continue to be the gatekeeper of legislation as it moves through the House.
Appropriations Co-Chairs had some repeats in Jim Crawford (D-Granville), Bill Owens (D-Pasquotank), Beverly Earle (D-Mecklenberg), Wilma Sherrill (R-Buncombe) and Debbie Clary (R-Cleveland). The one change in the Appropriations Committee Chairs was the promotion of long-serving Representative Edd Nye (D-Bladen) to replace Thomas Wright (D-New Hanover). Wright went back to chairing the Health Committee and will serve on the Health and Human Services Appropriations Sub-Committee. Speaking of the HHS Subcommittee, Jeff Barnhart (R-Cabarrus) will again serve as a Co-Chair along with Verla Insko (D-Orange) who replaces Nye in this role.
The House Finance Committee will see two new Chairman in Pryor Gibson (D-Montgomery) and Martha Alexander (D-Mecklenberg) to go along with Incumbent Chairs William Wainwright (D-Craven), Paul Luebke (D-Durham), Danny McComas (R-New Hanover) and Julia Howard (R-Davie).
NCRMA and Carolinas Food Industry Council board member Dewey Hill will again chair the House Agriculture Committee.
Every House Democrat who had served at least one term was rewarded with a chairmanship of some committee. With the exception of Mitch Gillespie (R-McDowell), every Republican in Speaker Pro Tem Richard Morgan’s camp who had served at least one term was also awarded a chairmanship or the right to serve as an ad hoc member on every committee. Gillespie, the Republican Whip, had evidently angered Speaker Black by shooting down the Speaker’s Hurricane Relief Package in the first week of session. Those Republicans not in Morgan’s camp did not receive chairmanships and many did not receive plum committee assignments.
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2) Methamphetamines and Cold Medicine
Attorney General Roy Cooper (D) began the week with a press conference announcing that he would push for tighter restrictions on the sale of cold medicine. Cooper has specifically referenced the Oklahoma law as a path he might like to go down. The Oklahoma law prohibits anyone other than a pharmacy from selling cold medicine containing psuedoephedrine. It also requires the pharmacy to keep these products behind the counter and maintain a log of purchases. Supposedly, these efforts have reduced methamphetamine labs by 80%.
NCRMA was popular on Jones Street this week with the representatives of the pharmaceutical manufacturers as they continuously pulled us aside to ask if their products were slated to go behind the counter and what our stance was. The stance of legislators was very clear regardless of party and geography – Something is going to be done on methamphetamines this session, including the sale of cold medicine, and we need to determine what we can live with.
We did see some positive comments by members of the legislature, such as Mitch Gillespie, who we have met with several times. After lengthy conversations with Gillespie, we were happy to see his comment in the Winston-Salem Journal “I support strengthening the law, but we have to make sure that we don’t damage the retail merchants with any unforeseen consequences.”
We are having good dialogue with members of the General Assembly on this issue but they are clearly looking for some resolution of the problem. An example of this was the filing of the first methamphetamine bill – Senate Bill 160 – by Senator Phil Berger (R-Rockingham). Senate Bill 160 requires retailers to place products containing pseudoephedrine as the sole active ingredients (approximately 6 to 10 products including Sudafed) behind the counter or in a locked case and limits sales of all products containing at least nine grams of pseudoephedrine to three packages. We have had numerous conversations with Senator Berger on this issue and he had told us this bill was coming and that we need to work on what we can live with to cut off access to these products for meth cooks.
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3) Streamlined Sales Tax Bill Introduced
Senator John Kerr (D-Wayne) introduced a placeholder bill for North Carolina implementing the Streamlined Sales Tax Project. Senate Bill 145 contains the non-controversial provisions North Carolina will need to enact into law in order to come in compliance with the Streamlined Sales Tax Agreement by January 1, 2006. NCRMA, the North Carolina League of Municipalities and the North Carolina Association of County Commissioners are currently in the process of meeting with stakeholders of those affected by the more controversial provisions before these issues are addressed in legislation.
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4) Violent Video Games
NCRMA continues to work hard on defeating Senate Bill 2 introduced by Senators Julia Boseman (D-New Hanover) and Tony Rand (D-Cumberland). This legislation would make it a crime for a retailer to sell a violent video game – whatever that might be – to a minor. Similar bills have been ruled unconstitutional in three US Federal Courts. We expect a hearing on this legislation in approximately three weeks. We have met with members of the Senate Commerce Committee in both parties and seem to be gaining some ground.
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5) State of the State Monday Night (2/21) – Cigarette Taxes and Lottery
Governor Mike Easley will give his State of the State Address on Monday evening – after you read below you may be surprised that the General Assembly issued the invitation. Look for a few things in his speech – another push for a lottery, continued expansion of pre-school education programs, methamphetamines and the former taboo topic of a an increased cigarette tax. Yes - that is right – an increased cigarette tax in North Carolina. On the heels of a press conference yesterday by health advocates and some legislators pushing for an increase in the tax per pack of cigarettes from $0.05 to $0.80, Governor Easley will push for a $0.50 tax increase on a pack of cigarettes.
Governor Easley’s budget will be released on Wednesday with an expected reduction of 1% to 2 % in some departments. We expect to see a proposed reduction in prescription drug expenditures in the Medicaid program but no stated recommendation that cuts in reimbursements paid to pharmacies be the path to achieve this savings.
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6) Train Wreck between Legislature and Governor Easley?
On Monday evening, the Senate passed legislation by a vote of 43-0 to transfer property surrounding the Currituck County Airport to Currituck County for $1. Last week, a Wake County Superior Court Judge had ruled that a provision inserted in last year’s State Budget by Senate President Pro Tem had only transferred a portion of this property. After the State Budget had passed, Governor Easley had refused to transfer all of the property and instead requested $1 million for such a transfer and Currituck County sued the Governor demanding the transfer. The ruling had led Basnight to comment that he knew what the provision transferred because he wrote the provision. It is likely that the House will pass this legislation next week setting up a potential veto and a potential veto override.
Earlier this week, the Senate unanimously passed a $214.5 million Hurricane Relief Package to pay for damage in the North Carolina mountains that occurred last fall. Also included in this package is $8 million to repair the Hyde County Courthouse (Senator Basnight’s district) that was damaged in 2003 by another storm. Yesterday, the House Appropriations Committee took up a committee substitute that would increase the Hurricane Relief Package to $247.5 million. The Governor’s Office continues to question legislators' estimates of the amount needed for relief and may set up a second veto and potential veto override. In response to the Governor’s skepticism of the figures contained in the House legislation, Representative Bruce Goforth (D-Bumcombe) replied "We need to get the money on the ground. We have people still walking on foot logs to get to their homes because the creek washed the bridge out.... And I'll give you their names."
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7) Alcohol Permit Issue Solution Might Be In the Works
Yesterday, at the request of Representative Deborah Ross (D-Wake), NCRMA met with
General Assembly attorneys to discuss a proposal to revamp the alcohol permitting process and allow the ABC Commission and local governments to shut-down “shot houses” that are plaguing poor sections of many North Carolina communities. NCRMA is reviewing this proposal to ensure that the net Representative Ross wants to cast does not also catch good actors who may have a single violation. NCRMA continues to oppose the transfer of authority from the North Carolina Alcoholic Beverage Commission to local governments to issue alcohol permits.
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8) Shellfish/Country of Origin Update
NCRMA was successful in removing the requirement of Country of Origin Labeling for cooked crustacean meat in rules proposed by the Department of Natural and Environmental Resources. On Wednesday, NCRMA appeared at a hearing on these rules to request that retailers still be allowed to utilize ice as the sole method of cooling shellfish consistent with federal regulations. This request was rejected as we anticipated and we are now re-evaluating this issue as to how to proceed.
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9) Split Case Fee on Wine Update
The request of an individual wine wholesaler that the North Carolina Alcoholic Beverage Commission mandate that a wholesaler charge a fee to split a case of wine will be heard by the Commission on March 11, 2005. NCRMA has taken the lead in organizing a coalition of interested parties to file written comments and speak against the split case fees at this hearing. NCRMA did take as a compliment the statement from the lawyer who requested the Commission investigate this issue on behalf of his anonymous client when he stated “I represent clients who must remain anonymous for fear of retaliation from a large retail association…”
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10) Employ a Felon and Get a Tax Break
One bill that got a lot of attention this week when it was introduced was House Bill 283 which would create a tax credit for employing a felon. The bill, as introduced by Freshman Representative Garland Pierce (D-Scotland), would provide a sliding scale on the amount of tax credit depending on how severe the crime committed. Employing a person who commits a low level Class I felony would result in a tax credit of $250 while employing a convicted mass murderer could get an employer a tax credit of $1,000. We do give Representative Pierce, a Baptist Minister, credit for creatively shaking the ball up and trying to rehabilitate criminals.
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‘TIL NEXT WEEK
Fran Preston
Andy Ellen
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