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Friday Fax – Legislative Update
The majority of bills have now been filed in both the House and Senate and the frenzy has begun. The Crossover Deadline of May 19, when every bill – other than Appropriations and Finance bills – must be out of their house of origin, is fast-approaching and budget talks are heating up.
As always, NCRMA spent the week testifying in legislative committees and meeting independently with legislators to push the ball forward or stop the ball from rolling on a number of issues of great importance to retailers.
April 29, 2005
1) Methamphetamines
2) Streamlined Sales Tax Update
3) ABC Permit Bill Discussion
4) Violent Video Games
5) Wine Tasting Update
6) Budget Update
7) Working the Halls to Halt Cuts to Pharmacies
8) Filed Bills of Interest to Retailers
9) Retailers to Help Stop Tobacco Sales to Minors
1) Methamphetamines
On Thursday, by a 40-3 vote, the Senate gave final approval to Senate Bill 686 – Methamphetamine Prevention Act sponsored by Senators Walter Dalton (D-Rutherford) and John Snow (D-Cherokee). This legislation would reclassify cold medicine containing ephedrine and pseudoephedrine, other than gel caps and liquids, as Schedule V Controlled Substances meaning the medicines could only be sold in a pharmacy, from behind a pharmacy counter, by a pharmacist. We have been in constant contact with Senator Dalton and Senator Snow on this issue and believe that they will be amenable to making the bill much more reasonable in the House. It is going to be an uphill fight especially with legislators pointing to the number of retailers who are voluntarily taking steps to put these products behind a pharmacy counter.
One of the arguments we gained some traction on this week was the penalties that attach if this cold medicine becomes a Schedule V Controlled Substance. Under North Carolina 's law, if someone is sick in your office and you give them two tablets of Tylenol Cold and Sinus from your desk you have just committed a Class I felony. If you go to the pharmacy to buy the medicine for them and they pay you back you have committed a Class H felony. If you provide a Claritin to your 17 year old nephew you have committed a Class D felony.
If a pharmacist improperly sells under the circumstances above they would be subject to the same penalties and could lose their pharmacy permit.
Here is a link to the most current form of the bill: http://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/HTML/S686v3.html
NCRMA has started a grassroots campaign for grocery stores on the website of the Carolinas Food Industry Council ( http://www.cficweb.org/ ) and with its pharmacy members. We encourage you to call your Representative today and tell them that Senate Bill 686 goes too far and that you support reasonable restrictions on cold medicine products. These are products that are coming off your shelves – if you want to continue selling these products you need to tell your Representative. Be assured, your calls and letters are making some impact as legislators are stopping us in the hall to ask what they can do to help on this issue. Keep up the good work!
2) Streamlined Sales Tax Update
The Senate Finance Committee cancelled their Tuesday afternoon meeting to discuss the proposed Streamlined Sales Tax bill this week but not because there were problems with the bill. The bill was not discussed because the Senate was not ready to publicly roll this package out until other revenue issues needed to pass the Budget were resolved. (See Budget Update below). In fact, it appears that interest groups that are affected by this last set of changes required by the Streamlined Sales Tax Agreement may have been placated. As we said last week, passing this legislation allows North Carolina to continue down the path of leveling the playing field between brick and mortar stores and Internet vendors.
3) ABC Permit Discussion
On Tuesday, the House Alcoholic Beverage Control Committee held its second hearing on House Bill 1174. NCRMA has been working with Representative Ross for quite some time to help address the problem of bad actor alcohol permittees in Southeast Raleigh without hurting legitimate operators and put the issue of local alcohol control to rest. NCRMA was successful this week in removing language from the bill that would have required an automatic revocation of a permit for two violations of ABC law within a twelve month period. As approved in Committee, the legislation was amended to limit automatic revocation of an alcohol permit to circumstances where there are two or more convictions in a twelve month period of a retail permittee knowingly allowing prostitution, drugs, gambling or disorderly conduct on their premises.
As we told you last week, Representative Paul Miller (D-Durham) remained true to his word and tried to amend the bill in Committee to prevent an ABC permittee from being located within four blocks of another ABC permittee in one of North Carolina's 65 Economic Development Zones. NCRMA's willingness to work with Representative Ross paid off as she opposed Representative Miller's amendment resulting in the amendment failing by a 6-3 vote.
This bill remains a work in progress and Representative Ross has committed to working with NCRMA to make additional changes once the bill gets to the Senate. Representative is trying to get her bill out of the House to meet the Crossover Deadline and has requested that we not hold her bill up at this point.
4) Violent Video Games
On Monday, the House received Senate Bill 2 – No Violent Obscene Video Games Sold to Minors and sent the bill to the House Rules Committee.
5) Wine Tasting Update
We expect House Bill 1500 – Wine Tasting Changes – as introduced by Representatives Pryor Gibson (D-Montgomery) and Jim Harrell (D-Surry) to be heard in the House Alcoholic Beverage Control Committee on Tuesday. The language in House Bill 1500 has been agreed to by all three tiers of the alcohol distribution system – wineries, wine wholesalers and retailers – which should hopefully result in smooth sailing for the bill. The bill was necessary because of an opinion that was issued by the ABC Commission in October that essentially shut down all wine tastings held in retail stores in North Carolina . This legislation would allow these wine tastings to begin again with certain parameters around the tastings.
6) Budget Update
Senate Budget writers huddled all week in an effort to get their version of the estimated $17 Billion budget out of the Senate by next Friday. Senate Appropriations Chairs Walter Dalton (D-Rutherford), Linda Garrou (D-Forsyth) and Kay Hagan (D-Guilford) plus Senate Majority Leader Tony Rand (D-Cumberland) and Senate Finance Chairs David Hoyle (D-Gaston) and John Kerr (D-Wayne) continuously pulled the various Appropriations Subcommittee Chairs to Room 612 to discuss cuts to existing programs and proposed tax increases to patch North Carolina 's $1 Billion deficit. While over 85 legislators headed to Asheville for the weekend on the tab of the Asheville Chamber of Commerce, these Senators stayed behind to finish the Senate's budget proposal so they can present the proposed package to the Senate Democratic Caucus on Monday night.
Here is a run-down of what we understand will be included in the Senate Budget:
1) An extension of the half-cent sales tax that was set to expire on June 30. If the state allows this tax to expire, the state would lose $413 million in 2005-2006 and $459 million in 2006-2007.
2) A tobacco tax increase of $0.25 per pack. Some in the Senate want more and some want less and $0.25 seems to be an amount where the Senate will settle out. This increase would raise $172 million. This issue is complicated by the fact that Senator Garrou and Senator Hagan also have RJ Reynolds and Lorillard in their districts.
3) The “L” word – yes the Lottery. We anticipate that the Senate will fold some form of the Lottery into the Budget as a mechanism to pull the five Democrats who remain opposed to the Lottery back into the fold. The Senate held their second hearing this week to discuss the Lottery and a number of people spoke against the Lottery including NCRMA President Fran Preston who reminded Senators that every dollar spent on a Lottery ticket is one dollar that goes not get spent on an item in a retail store. Speaker of the House Jim Black (D-Mecklenberg) has already publicly stated that if the Senate puts the Lottery into the Budget it will kill the Lottery in the House.
4) A possible reduction in the personal income tax for individuals that make $120,000 and couples that make $200,000 per year and a possible reduction in the current corporate income tax of 6.9%.
5) $500 million in cuts sprinkled through various departments, with a heavy emphasis on the Medicaid program. Roughly 48% of the increased spending in Governor Easley's proposed budget was due to Medicaid and the Senate plans to slow this growth by reducing rates paid to providers and eliminating some services.
Senate leaders are holding out hope for improved revenue numbers that are to be released late today. Quietly, the General Assembly staff is saying that we should not hold our breath that the numbers will be any better than projected.
7) Working the Halls to Halt Cuts to Pharmacies
Speaking of the budget, NCRMA continued to work the halls this week trying to turn around the Health and Human Services Appropriations Subcommittee which has proposed reducing the reimbursement paid to pharmacies under Medicaid from AWP-10% to AWP-14%. This reduction would save the state $9.2 million in 2005-2006 and $15 million in 2006-2007. When federal matching dollars are added in it triples to $27 million in 2005-2006 and $45 million in 2006-2007. We continued to gain some traction this week and hope for better news when the budget is released early next week.
8) Filed Bills of Interest to Retailers
On Monday, you received a special edition of NCRMA's Friday Fax Legislative Update with a full run-down of all of the bills of interest filed last week in the House. We have attached this document one last time for your review. Please look over the bill summaries or utilize the link to read the text of a specific full bill and let us know if you have concern or questions by emailing to franp@ncrma.org or andye@ncrma.org.
9) Retailers To Help Stop Tobacco Sales to Minors
On Tuesday, NCRMA President Fran Preston participated in a press conference with Lt. Governor Beverly Perdue in an effort to reduce teen smoking in North Carolina by having retail clerks focus on the red border on North Carolina drivers' licenses for those under 18 years of age.
State officials have previously announced that they will target counties with the highest teen smoking rates in a new campaign to help stop sales of tobacco to minors. The campaign instructs store clerks to focus on the borders around the photo on customers' driver's licenses. A red border indicates that the driver is 15 to 17 - and cannot buy alcohol or tobacco under state law.
"If you see red, the sale is dead," said Mike Robertson, the director of the state Alcohol Law Enforcement Division, which enforces laws on tobacco sales. "Our retail clerks are our front line of defense."
The three-year campaign will get $500,000 a year from the Health and Wellness Trust Fund, which gets 25 percent of the state's tobacco settlement. It will provide brochures, posters and stickers to stores to remind clerks to check for the red border around driver's license photos. The campaign will focus first on 42 counties with the highest rates of sales to minors. Kurt Ribisl of the UNC School of Public Health said that the campaign identified "hot spots" for tobacco sales to teens based on a check of the percentage of stores that sold to minors. We will provide more information on this program including where your store can obtain posters in next week's Friday Fax.
(a portion of this section was borrowed from the Winston-Salem Journal )
‘TIL NEXT WEEK
Fran Preston
Andy Ellen
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