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Raleigh, North Carolina
March 2, 2007
Your staff stayed on the go this week trying to catch legislators on the run to various committee meetings. The bill drafting deadline in approaching in the next couple of weeks and legislators and staff alike are frantic to get their language in the hands of the bill drafting division.
The House and Senate began initial budget hearings this week after receiving the Governor's budget late last week. Subcommittees divided up to meet for hours upon hours Tuesday - Thursday of this week. The House has also begun staying through Thursday afternoon to allow more time for legislative work.
House Speaker Joe Hackney (D-Orange) held a press conference to announce the new permanent House Rules that will take effect this session. The House will eliminate committee "floaters" -- at-large members of any committee who in the past have helped stack votes in favor of the majority -- and ban unrelated policy provisions from the budget bill under new rules legislation. The new rules would also prohibit blank bills and same-day consideration of conference reports. The changes were included in a bill filed by Rules Committee Chairman Bill Owens (D-Pasquotank).
ORGANIZED RETAIL THEFT (ORT) - Our staff has been busy this week meeting with House and Senate members to propose legislative solutions to help combat the problem of organized retail theft. As we have mentioned, Senator Fletcher Hartsell (R-Cabarrus) chairs the Senate Judiciary II committee and invited us to present the group of issues associated with ORT to the JII committee early in the session. We received word from Senator Hartsell on Monday night that he would like that presentation to occur next week and that it would be ideal for the committee to have bill draft(s) to consider.
Tuesday morning, the Senate Judiciary II committee is scheduled to meet at 10:00am. Many thanks are due to Moe McKnight with Lowe's Food Stores and Scott Mason and Bill Suthard with Lowe's Home Improvement for re-arranging their schedules on such short notice.
We also pulled together a package of ORT legislation this week which includes the issues of: retailer-provided property for sting operations, reducing the larceny threshold, switching of bar codes on products, utilizing exit doors, removal of security devices, and larceny of infant formula and the aggregation of theft amounts. Senator John Snow (D-Cherokee) is filing this package of ORT bills in the Senate and Representatives Bill Owens (D-Pasquotank) and Joe Tolson (D-Edgecombe) have already agreed to file the bill in the House and we have two additional meetings set up for additional House sponsors.
Bill drafting has received the requests from Senators Hartsell and Snow that they would like a draft available by the meeting on Tuesday.
FILM PROCESSING/REPORTING OF CHILD PORNOGRAPHY - On Tuesday, Attorney General Roy Cooper appeared before the Senate Judiciary II Committee to garner support for Senate Bill 132 - "Protect Children From Sexual Predators Act." Two of the three bill sponsors - Senators Walter Dalton (D-Rutherford) and John Snow (D-Cherokee) - also appeared before the Committee to explain why this legislation was necessary. Much of the bill concerns increasing the penalties for possession, production and dissemination of child pornography and regulation of web sites such as MySpace and Facebook. However, retailers that process film or repair computers are also impacted by a provision that would make it a criminal infraction and a $250 penalty for retailer or wholesaler to fail to report to police any sexual activity involving a minor. NCRMA has spent an significant amount of time working with the Attorney General's Office and bill sponsors 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. This work seems to be getting traction as Attorney General Cooper informed the Committee that his office had been working with NCRMA to craft a workable yet effective fix to this legislation. Cooper emphasized to NCRMA after the meeting that he welcomed a working partnership with NCRMA on this issue.
BOTTLE DEPOSIT BILL - Senator Doug Berger (D-Franklin) is working feverishly to garnish support for SB 215, "Liter Reduction Act of 2007." The 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.
VIOLENT VIDEO GAMES - NCRMA continued conversations with House and Senate members this week. In speaking with Representative Deborah Ross (D-Wake), Chair of House Judiciary 1 - she understands 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.
VIDEO GAME PRODUCER TAX CREDIT - House Bill 268, introduced by Representative Pryor Gibson (D-Anson), Video Game Producer Tax Credit - would allow a taxpayer that produces digital interactive media a 15% tax credit against the taxpayer's qualifying expenses. NBC 17 ran a story on Wednesday detailing the incentives the game developer industry is receiving from other states as well as other countries - forcing developers to contemplate leaving the state. The article can be accessed at: http://www.nbc17.com/midatlantic/ncn/news.apx.-content-articles-NCN-2007-02-28-0009.html . This just emphasizes what we have been saying to legislators all along - that North Carolina needs to work to keep this industry in our state rather than deter developers with legislation like SB 87.
WORK OPPORTUNITY TAX CREDIT (WOTC) - We have been meeting with House and Senate members this week in an effort to garner support for a North Carolina WOTC. Our conversations with legislative leaders last year led to the introduction of a WOTC bill during the short session which would have made North Carolina employers eligible for a tax credit of up to $2,000 of wages paid to employees meeting certain criteria and who are employed at least nine months. After business incurred the increase in the minimum wage which passed last session, we have explained to legislators that many of the hires that could create this tax credit for an employer would be hired at or near the minimum wage.
We met with Representatives William Wainwright (D-Craven) and Representative Garland Pierce (D-Scotland) this week about the benefits of the WOTC and tying it in with Wainwright's Working Families Initiative this session. Wainwright was very receptive and has sent a bill to be drafted. The bill will also roll in Representative Pierce's bill from last session to provide tax credits for hiring an individual with a felony on their record. Representative Pryor Gibson (D-Anson) and Nelson Cole (D-Rockingham) sponsored this bill in the House last year and will be working on this issue with us this year as well. We also met with Senator Clodfelter (D-Mecklenburg) this week who was agreeable to filing a companion bill in the Senate.
An employer could receive the credit for hiring workers who:
1) Receive Temporary Assistance to Needy Families
2) Are a veteran and a member of a family that has received benefits under the Food Stamp Program
3) Are between the ages of 18 and 24 years old when hired and a member of a family that has received benefits under the Food Stamp Program and
4) Received benefits from the Supplemental Security Income
5) Has a felony on their record.
RETAIL BILLS OF INTEREST INTRODUCED THIS WEEK
HB 446 - Study Contributory Negligence - Representative Bill Faison (D-Orange) - this legislation would require a study of whether North Carolina should continue to apply contributory negligence or move to comparative negligence. Under contributory negligence if a plaintiff is even 1% negligent the plaintiff is barred from recovering money. In comparative negligence states, the amount of damages a plaintiff receives is reduced by the percentage the plaintiff was negligent. Representative Faison is a trial lawyer specializing in medical malpractice.
HB 448 - Abolish Health Care Discovery Prohibitions - Representative Bill Faison (D-Orange) - this legislation would repeal protections from civil discovery for information provided by pharmacists to peer review substance abuse programs. The repeal of these protections would likely mean pharmacists with substance abuse problems likely would not seek treatment.
HB 462 - Modernize Corporate Income Tax Filing - Representative Paul Luebke - (D-Durham) - this legislation would require a company to file a combined corporate income tax return for all of its affiliated companies.
HB 477 - Sales Tax Holiday for the Post-Thanksgiving Weekend - Representative Tim Moore (D-Cleveland) this legislation would create a second sales tax holiday for the weekend after Thanksgiving. The items affected by this proposed sales tax holiday would be the same items affected by the current back-to-school sales tax holiday.
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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