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Raleigh, North Carolina
February 23, 2007
News of former House Speaker Jim Black's (D-Mecklenburg) resignation from the House and guilty plea in federal court last week had consumed the air at the General Assembly. With those thoughts still fresh on everyone's mind, the fog continued to roll in as Black entered a Wake County court room on Tuesday to plead guilty to two state felonies - offering a bribe and obstruction of justice.
Last week's federal guilty plea was to one count of accepting illegal gratuities. In state court this week, Black's entered what is known as an "Alford's plea," in which the defendant doesn't acknowledge actual guilt but agrees that there is enough evidence that he or she may be found guilty by a jury. However, Black did read a statement in which he admitted taking cash from chiropractors in violation of a federal illegal gratuity law and state campaign finance laws. Black pleaded guilty to receiving a total of $29,000 in cash from chiropractors over three separate occasions in exchange for pushing legislation sought by chiropractors.
Wake County Superior Court Judge Donald Stephens has delayed sentencing pending the outcome of the federal case against Black. Black faces federal sentencing on May 14th 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.
While many legislators and lobbyists alike speculate if and when another shoe might fall, the General Assembly is attempting to conduct business as usual. Some committees began meeting this week and the Governor joined the House and Senate on Monday to give the state of the state address.
GOVERNOR EASLEY: STATE OF THE STATE & BUDGET RELEASED -
After outlining priorities for this legislative biennium at Monday's State of the State address, Governor Mike Easley released his $20.1 billion dollar budget proposal on Thursday. The plan is heavy on education and 6.4 percent larger than last year's $18.9 billion budget. Easley also wants legislators to approve $1.4 billion in bond referenda for the statewide ballot in November, most of which would be used for university buildings, prison expansions and water and sewer improvements.
Easley's budget calls for keeping the state portion of the sales tax at 4.25 percent and the upper income tax bracket at 8.0 percent. Last year, the two taxes were lowered in what was supposed to be a two-year phase-out of increases adopted five years earlier.
But instead of allowing the phase-out to proceed, Easley wants lawmakers to keep the taxes in place and eliminate or cut in half state income taxes for the 1.1 million individuals earning $12,500 or less, heads of household earning $20,000 or less, and married couples earning $25,000 or less.
Easley defended his tax proposals by saying that to allow the expiration of the taxes would probably create a budget hole for the next governor in 2009. The income tax cut for the working poor would total $63 million once totally implemented, while the remaining portion of the temporary sales and income tax hikes would bring in $380 million.
Despite officials predicting a shortfall of $1 billion one year ago, Governor Easley's proposed budget is balanced. However, tax collections were better than expected, by about $825 million; state agencies had about $125 million left over unspent; and, two taxes that were set to expire now won't under Easley's plan which gave him another $300 million.
One item not contained in Governor Easley's Budget was a reduction in Medicaid reimbursement paid to community pharmacies.
VIOLENT VIDEO GAMES - NCRMA continued individual meetings 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.
On Thursday evening, NCRMA staff attended the Triangle Chapter of the International Game Developers Association to speak to the 125 attendees about contacting their legislator about this bad piece of legislation.
VIDEO GAME PRODUCER TAX CREDIT - On a positive note with regard to video games, Representative Pryor Gibson (D-Anson) has again filed a bill which would allow for a tax credit for this growing industry. House Bill 268 - Video Game Producer Tax Credit - would allow a taxpayer that produces digital interactive media a 15% tax credit against the taxpayer's qualifying expenses. We spoke with Representative Gibson this week on this piece of legislation as well as Senator Boseman's bill.
FILM PROCESSING/REPORTING OF CHILD PORNOGRAPHY - Last Monday, Attorney General Roy Cooper held a press conference last week detailing a legislative package to combat internet predators and child pornography. His proposal made it a criminal infraction and a $250 penalty for retailer or wholesaler to fail to report to police any sexual activity involving a minor. Last week, 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 is currently working on draft amendment language to send to the Attorney General's Office.
BOTTLE DEPOSIT BILL FILED - Senator Doug Berger (D-Franklin) filed SB 215, "Liter Reduction Act of 2007" this week. Berger's legislation is based on the California-model but has many moving parts and is fairly complex as far as bottle bills go. His bill imposes a $0.10 deposit per container. Berger is very optimistic regarding the potential for this bill to pass with new House leadership and a House member, Representative Lucy Allen (D-Franklin), chairing the House Environment committee. 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.
RETAIL BILLS OF INTEREST INTRODUCED THIS WEEK
House Bill 257 - Streamline Sales Tax Changes - Representative Dewey Hill (D-Columbus) - This bill would amend the sales tax definitions to comply with the Streamlined Sales Tax Agreement and to make other sales tax changes.
House Bill 259 - Prohibit Smoking in Public Places - Representative Hugh Holliman (D-Davidson) and Larry Hall (D-Durham)
House Bill 267 - Alcohol Inhalers Illegal - Representative Pryor Gibson (D-Anson) - This bill would add ethyl alcohol as a substance specifically named as a toxic vapor and make illegal any instrument that can be used to atomize or introduce a toxic vapor into the body unless it is a device used to deliver a prescription medication or an approved over-the-counter medication.
House Bill 268 - Video Game Producer Tax Credit - Representative Pryor Gibson (D-Anson) - This bill would allow a taxpayer that produces digital interactive media a 15% tax credit against the taxpayer's qualifying expenses.
House Bill 265 - Establish High Risk Pool - Representatives Verla Insko (D-Orange), Hugh Holliman (D-Davidson), Bobby England (D-Rutherford) and Alice Underhill (D-Craven) - This piece of legislation would establish a health insurance risk pool for North Carolina.
House Bill 284 - Garnish Wages to Satisfy Judgements - Representatives Tim Moore (D-Cleveland), Bill Daughtridge (R-Nash), Bill McGee (R-Forsyth), Thom Tillis (R-Mecklenburg) - This bill would authorize the garnishment of the judgment debtor's wages as an additional means of enforcing a judgment.
Senate Bill 215 - Litter Reduction Act of 2007 - Senator Doug Berger (D-Franklin) - This bill would require a 10 cent deposit on beverage containers and require redemption centers to accept returned beverage containers and refund the deposits.
Senate Bill 232 - Modify Counterfeit Sales Prosecutions - Senator Ellie Kinnaird (D-Orange) - This bill would require law enforcement to send a letter to someone accused of counterfeiting goods a cease and desist letter before arresting the person.
Senate Bill 237 - Pitt County Local Option Sales Tax - Senator John Kerr (D-Wayne) - This bill would authorize Pitt County to levy a one-cent local sales and use tax for public school capital outlay purposes or community college plant fund purposes, if approved by the voters of the county.
Senate Bill 239 - Streamlined Sales Tax Changes - Senators John Kerr (D-Wayne), Dan Clodfelter (D-Mecklenburg), Walter Dalton (D-Rutherford), Fletcher Hartsell (R-Cabarrus), David Hoyle (D-Gaston) - This bill would amend the sales tax definitions to comply with the Streamlined Sales Tax Agreement and to make other sales tax changes.
Senate Bill 244 - Modernize Corporate Income Tax Filing - Senators David Hoyle (D-Gaston) - This bill would require corporations to file a combined income tax report.
Senate Bill 259 - Restaurant Buffett/Sanitation Requirements - Senator Katie Dorsett (D-Guilford) - This bill would require food service establishments that offer buffet-style service or customer self-service to post a sign pertaining to sanitation.
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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