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Friday Fax – Legislative Update
Gentlemen, start your engines! After Governor Mike Easley nearly crashed his second NASCAR race car into a Mercedes the week before, the House and the Senate began their race towards crossover when every bill (except Appropriations and Finance bills) must be out of its chamber of origin to remain eligible. Because of a backlog of bills, the Senate and the House delayed the crossover (which was to have been May 19 th ) by two weeks to June 2.
The work involving legislators trying to meet the crossover deadline has resulted in long days of committee hearings followed by even longer days of session. Crossover can be either a blessing or a curse. It is a blessing if the bill you are trying to defeat does not meet crossover and a curse if the bill you are trying to get passed does not get out of either the House or Senate in time.
NCRMA will continue working hard in the next two weeks to make sure we get lots of blessings and hopefully few curses.
May 20, 2005
1) Minimum Wage
2) Keg Registration
3) Electronic Recycling Tax
4) Identity Theft Still in Limbo
5) Quality Assurance Bill Gets Bumped Back a Week
6) House Budget Plans
1) Minimum Wage
On Wednesday, NCRMA President Fran Preston testified in the House Commerce Committee against House Bill 330 introduced by Representative Alma Adams (D-Guilford). The bill would raise North Carolina's minimum wage from $5.15 to $6.15 on September 1, 2005, to $7.15 on Labor Day 2006 and $8.50 on Labor Day 2007. Preston argued that such an increase would not only affect employees that make minimum wage but also those employees who make well-above minimum wage and would believe they too are entitled to an equal increase in pay. Additionally, these increases do not take into account the increased costs to retailers for workers' compensation and FICA taxes that are tied to payroll. Retailers are often in the position of employing a number of part-time employees and increasing the minimum wage could result in a loss of these jobs.
There is a push throughout the country to increase the minimum wage either through ballot initiatives in those states that allow such measures or through legislation. Because North Carolina does not provide for ballot initiatives, NCRMA's efforts along with other in the business community at this hearing will hopefully squash any chance of the movement to increase the minimum wage.
2) Keg Registration
The House Commerce Committee also took up House Bill 892 – Keg Registration - introduced by Representative Martha Alexander (D-Mecklenberg). This legislation is an attempt to reduce underage drinking by requiring retailers to obtain and maintain personal information on the purchaser of a keg and record a number specific to the keg so that law enforcement can trace kegs back to the purchaser. At the hearing, NCRMA General Counsel Andy Ellen argued that this measure would do little to reduce underage drinking because underage drinkers would merely switch to drinking cans or bottles and that the legislation would place an administrative burden on retailers and put them at risk of losing their valuable alcohol permit. The Commerce Committee will take up House Bill 892 again on Monday evening.
3) Electronic Recycling Tax
NCRMA and representatives of computers and televisions met Friday, May 20, with Representative Joe Hackney (D-Orange) and Senator Janet Cowell (D-Wake) to discuss their proposals to address the recycling of electronic devices such as televisions and computers. This has been an ongoing issue for Representative Hackney, the House Majority Leader, and is a brand new issue to freshman Senator Cowell.
NCRMA remains opposed to Senator Cowell's proposal that would require retailers to pay a 1% privilege license tax on the sale of these items in addition to the sales tax already placed on these items. Senator Cowell's proposal would place North Carolina retailers at a competitive disadvantage with retailers in nearby states and internet retailers.
We are still evaluating Representative Hackney's proposal which would place an excise tax on manufacturers of these products that is computed on the retail price. At this time, we are unsure if retailers would have to report their retail price to a governmental agency to determine the applicable manufacturer excise tax.
4) Identity Theft Still in Limbo
On Thursday, both the Senate and the House passed their versions of the Attorney General's Identity Theft Package out of Judiciary Committees. Senate Bill 1048 as introduced by Senator Dan Clodfelter (D-Mecklenberg) and House Bill 1248 as introduced by Representative Bruce Goforth (D-Buncombe) are headed to their respective chamber's floor with the House bill slated for a vote as early as Monday evening.
While earnestly wanting to reduce identity theft in North Carolina, NCRMA and the Consumer Data Industry Association remain concerned about two provisions in each of these two bills that could severely hamper retailers' access to necessary information.
5) Quality Assurance Bill Gets Bumped Back a Week
House Bill 1493 as introduced by Representative Nelson Cole (D-Rockingham) was initially scheduled to be heard early this week but was bumped to next Tuesday due to some scheduling issues in the House Health Committee. This legislation would require pharmacies to implement a quality assurance program within their pharmacies to reduce medication errors, but would also shield information used by a quality assurance program from discovery in a civil or administrative action.
6) House Budget Plans
House Appropriations Subcommittees met fast and furious this week trying to make sense of the Senate's Budget (Senate Bill 622) and trying to craft their own spending plan. Appropriations Co-Chair Beverly Earle (D-Mecklenberg) who also chairs the Legislative Black Caucus emphatically stated this week that if the sales tax was to remain at 7% (7.5% in Mecklenberg) that the corporate income tax would not be reduced from 6.9% to 6.4% as passed by the Senate. Speaker Jim Black has a much smaller vote margin to deal with (63D-57R) and must carefully craft a budget that does not cut too many government services and raise too many taxes if he is to garner the 61 votes necessary to pass the budget. In a press conference this week, Governor Easley suggested that he would veto the Budget if the Budget contains cuts in services to Medicaid recipients similar to those in the bill passed earlier this month by the Senate.
Look for the House budget by June 9th with a Conference Committee soon to follow. There will be immense pressure on the House and the Senate to finalize the Budget by the end of the State fiscal year of June 30, 2005. The half-cent sales tax passed in 2001 will sunset on this date as will the increase in personal income tax. Most legislators do not want to have to take a vote to extend these taxes for fear of numerous votes to increase taxes.
‘TIL NEXT WEEK
Fran Preston
Andy Ellen
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