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Friday Fax – Legislative Update
March 11, 2005
What is Bath and Basketball? - If you were a contestant on Jeopardy this week that would have been the correct question to the Final Jeopardy statement of "The Reason No Work Got Done at the General Assembly this week?"
The General Assembly came to town on Monday evening and then headed out on buses at 8:00 a.m. to the small town of Bath to celebrate the town's 300th anniversary. Some did not make the celebration, including Speaker Black, whose plane could not leave the Raleigh-Durham Airport due to severe weather. Governor Easley was also a no show.
Beginning Wednesday afternoon and continuing into Thursday, a number of legislators began the trek to Washington D.C. for the ACC Basketball Tournament.
However, many of the issues NCRMA had began working on began to bubble this week as you will see below.
1) Methamphetamines
2) Streamlined Sales Tax
3) ABC Permits
4) Violent Video Games
5) Wine-Tastings, Coupons and Split Case Fees
6) Credit File Freezing
7) Lottery
8) Cigarette Tax?
9) Keg Regulation
1) Methamphetamines
Attorney General Roy Cooper threw NCRMA for a loop this week. Despite the fact that the NCRMA lobby team and the Senate Leadership offered compromise language over two weeks ago to the Attorney General's staff, the Attorney General is continuing down his path of removing all products containing pseduoephedrine (approximately 4,000) from the shelves of all retailers and requiring that these items be only sold behind the counter of a pharmacy. Consumer access to cold medicine is thrown-out the window under the Attorney General's package.
The Attorney General is off in Colorado at an Attorney General's Conference and we expect him to come back with a media attack on Tuesday prior to the introduction of the bill on Wednesday.
Immediately after we were alerted that the Attorney General had put the squeeze on legislators to introduce his form of the bill, NCRMA went to work to gain allies in both the House and the Senate. We have learned that Senators Walter Dalton (D-Rutherford) and John Snow (D-Haywood) will introduce the legislation in the Senate but both have agreed to continue to work with us to find some middle ground. Representatives Wilma Sherrill (R- Buncombe) and Phil Haire (D-Jackson) were also asked to introduce the Attorney General's bill in the House but refused saying that the Attorney General's proposal is unreasonable. We had long conversations with Haire on Thursday and Sherrill on Wednesday concerning methamphetamines. Sherrill and Haire are now pushing the Attorney General's staff to get together with us and work out a compromise. If the Attorney General is not open to some form of a reasonable compromise this will be an issue to go-to-the-mat on this session.
We expect a lengthy article on this issue from the Associated Press on Saturday. Please scroll to the bottom of this update to see Scott Mooneyham's column that is negative of the Attorney General's proposal, often called the Oklahoma Bill.
2) Streamlined Sales Tax
NCRMA's number one issue in 2005 in to again pass legislation to stay in compliance with the Streamlined Sales Tax Agreement. On Monday along with representatives from the League of Municipalities and the County Commissioners Association, we met with the Chiefs of Staff for Speaker Black and President Pro Tem Basnight. In these meetings, we emphasized the amount of lost revenue to the State and local governments and the need to level the playing field between brick and mortar retailers and Internet retailers. We received good signals, especially from the Senate. There is more politics swirling around this issue in the House because some of the SSTP issues were used to defeat candidates in the 2003 elections.
On Wednesday, we had breakfast with a group of twenty business lobbyists to explain the importance of North Carolina staying in compliance with the SSTP Agreement. This meeting will begin a number of follow-up meetings with individual lobbyists and interest groups. The first of these meetings was held this morning with lobbyists of the Cable and Broadcasting Industry.
3) ABC Permits
NCRMA has been continuing discussions with Representatives Deborah Ross (D-Wake) and Rick Eddins (R-Wake) about proposed legislation that would give the ABC Commission additional authority to revoke alcohol permits of bad actors. Numerous "shot houses" have sprung up in debilitated areas of Raleigh that serve as a host for drugs, violence and prostitution. NCRMA has been very careful about extending this authority to the ABC Commission to make sure that good actors are not caught in the net as well. NCRMA has also been successful in removing a provision transferring some authority to determine suitable sites for alcohol permits to local governments. We expect continued discussions on this legislation through next Friday when Representatives Ross and Eddins will decide whether to proceed with their bill or just drop it in its entirety.
4) Violent Video Games
After a rash of articles concerning Senate Bill 2 - "No Violent/Obscene Video Games Sold to Minors" appeared in media outlets including "60 Minutes" last weekend, NCRMA went on the offensive and did a number of follow-up meetings with members of the Senate Commerce Committee to remind them that the bill was unconstitutional. We are also reminding Senators that retailers have implemented a voluntary rating system and are carding purchasers before selling games rated "M" for Mature Audiences and that this legislation would just result in purchasers heading to eBay where there are not voluntary safeguards.
This continues to be a very sensitive subject matter, with many Republicans recognizing the bill as pure politics and trying to figure out a way to explain a "No" vote to their constituents and many Democrats putting aside their normal civil libertarian leanings for the good of Senate Leadership. We anticipate a hearing on this legislation in the next three weeks.
5) Wine-Tastings and Split Case Fees
NCRMA took the lead in organizing the coalition made up of the North Carolina Association of Convenience Stores, the North Carolina Restaurant Association, the North Carolina Independent Wine Retailers Association and a number of wineries against a request from a wine wholesaler that the North Carolina Alcoholic Beverage Control Commission mandate wine wholesalers charge a fee to split a case of wine. NCRMA organized the submission of written comments to the Commission and the opposing counsel as well as oral arguments for today's Commission hearing. However, we received a call late Thursday afternoon informing us that the issue had been dropped from the Commission's agenda.
NCRMA has worked out final language with the North Carolina Beer and Wine Wholesalers to be introduced next week to allow wine tastings to resume. In October, the ABC Commission issued an interpretative document that essentially shut down these tastings. We anticipate Representatives Jim Harrelll (D-Surry) and Pryor Gibson (D-Montgomery) to introduce the bill.
6) Credit File Freezing
Representatives Tim Moore (R-Cleveland), Stephen LaRoque (R-Greene) and Bill McGee (R-Forsyth) introduced legislation on Thursday which would allow individuals to "freeze" their credit reports. Under House Bill 608, it would then take up to three business days to "unfreeze" their report and be granted credit. NCRMA has serious concerns about this legislation as it will hinder instant credit. For example, if someone's credit file is frozen and they try and open an account on Saturday to buy merchandise they would be unable to make the purchase until the following Wednesday. Additionally, there is a concern that individuals will utilize this legislation to hide their bad credit. NCRMA has been in close contact with others that could be affected by this legislation such as credit card companies and the various automobile associations.
We anticipate Senator Dan Clodfelter (D-Mecklenb u rg) to introduce a much more comprehensive Identity Theft bill next week at the request of the Attorney General - notice a pattern here?
Identity Theft continues to be a sensitive issue in the North Carolina General Assembly as well as in Washington due to some recent events. There is a lot of pressure mounting to address the issue and we need to make sure that remedial measures are good public policy rather than knee-jerk reactions.
7) Lottery
In a number of interviews this week and behind closed doors with us, Speaker Black made bold statements to the effect that an "up or down" vote on the Lottery would happen in the next couple of weeks. Speaker Black wants to get the issue out of the way one way or another so that Appropriations Committees are able to have definite target numbers to meet in writing the State Budget.
Lottery proponents are pushing for a vote to allow for a lottery referendum by the voting public. Speaker Black basically said such a measure was unconstitutional this week and that people elected their officials to make a decision. Depending on who you talk to, a straight-up vote for a Lottery would receive 45 to 50 votes and go down in flames while a referendum vote could go either way. NCRMA continues to oppose the Lottery as it takes disposable income away from our retail members.
8) Cigarette Tax?
Kentucky raised their tobacco tax this week leaving North Carolina ($0.05) with the lowest tax rate per pack of cigarettes in the country just ahead of South Carolina ($0.07). With a June adjournment date for the South Carolina General Assembly, many are watching to see if South Carolina will raise their tobacco tax by the proposed $0.93 or some lesser amount. Some observers expect North Carolina to watch what South Carolina does and follow closely behind to prevent North Carolina residents from going across the border and make sure those traveling down I-95 stop to buy their cigarettes here rather than in South Carolina . Various tax increases, anywhere from $0.25 to $1.20 per pack, are being proposed in the North Carolina General Assembly.
9) Keg Regulation
On Thursday, Senator Malcolm Graham (D-Mecklenburg) introduced Senate Bill 476 -
Regulate Sale of Malt Beverage Kegs. This bill is aimed at reducing underage drinking but
since less than 2% of malt beverages are sold through kegs, it is unlikely this legislation
would have any impact on solving this problem. Senator Graham's bill would require that all
kegs be marked with a coded tag and that each purchaser complete a form with identifying
information. Retailers would be required to maintain this information and report to the
Alcohol Law Enforcement Division and to its local law enforcement agency any of the
following occurrences:
1. The failure of a retail buyer to return a keg.
2. The defacing of a coded tag attached to a returned keg.
3. The removal of a coded tag from a returned keg.
If a retailer fails to obtain, record, maintain, or report the required information, the ABC Commission is required to revoke their alcohol permit. NCRMA has serious concerns about this legislation and will meet with Senator Graham next week to discuss this issue.
'TIL NEXT WEEK
Fran Preston
Andy Ellen
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