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Friday Fax – Legislative Update
A hectic week at the General Assembly resulted in much debate on several issues affecting retail in North Carolina and House members scurrying to finalize their spending plan. House budget leaders spent this week finalizing funding levels in order for the budget to be printed this weekend.House Appropriations Chairs have scrutinized any budget item that could appear to be "pork" and have stripped those items from the spending plan. The House is expected to begin debate on the bill in committee on Tuesday morning with final passage by the full House later in the week. Once the House approves their spending plan, any differences will be ironed out in a conference committee with the goal of passing a final budget before July 1.
In addition to tracking budget progress, NCRMA stayed on the go chasing down committees and members on advanced disposal fees, pharmacy provisions, veterans, alcohol legislation and more which are all highlighted for you below.
June 9, 2006
1. Electronics Recycling Tax on Hold
2. Pharmacy Issues
3. Alcohol Coupons and Keg Regs
4. Price Gouging Still in Negotiations
5. Veteran Security Breech Legislation
6. Methamphetamine Issue
7. Work Opportunity Tax Credit
1) Electronics Recycling Tax -- Senate Bill 1030, which would impose a $4 tax on computers and televisions at the register, was debated on Tuesday in the Senate committee on Agriculture/Environment/Natural Resources. In advance of Tuesday's meeting, NCRMA worked to explain the negative impact this bill will have on brick and mortar retailers to committee members. While many understand that this bill gives remote retailers an advantage over our North Carolina retailers, there are also many committee members that feel this is a viable solution to removing electronic waste from basements and storage rooms around the state. The Tuesday committee meeting fell shortly after Senator Cowell, the bill sponsor, held her electronics recycling "take back" day. The committee room was packed with advocates for the bill including the Sierra Club, County Commissioners , City of Greensboro, Recycling Companies, Panasonic and IBM, solid waste management association and others. Representatives from all of the aforementioned advocacy groups testified in favor of the legislation before NCRMA General Council, Andy Ellen, effectively explained the negative impacts of SB 1030. The committee adjourned without taking a vote on Tuesday. To our concern, another committee meeting was scheduled for Thursday with the potential of voting the bill out of committee. NCRMA continued conversations with committee members and Senate leadership Tuesday and Wednesday. Thursday's committee meeting eventually was cancelled leading us to believe that the bill may not move forward. Thank you to those of you who coordinated and made calls to committee members. We especially want to recognize the efforts of NCRMA Chairman of the Board, Hank Johnson and fellow board members, Harry Coleman and Larry Tinney, for helping coordinate phone calls to legislators in opposition of this legislation.
2) Pharmacy Issues -- It was quite an up and down roller coaster ride this week with regard to a few pharmacy initiatives. As always in North Carolina, NCRMA was working hand-in-hand with the Independent Pharmacists in our efforts. First, all indications are that the North Carolina General Assembly has no intention in cutting pharmacy reimbursement under the Medicaid program. Secondly, NCRMA was pleased that the House included language from HB 2370, sponsored by Representative Edd Nye (D-Bladen), to instruct the Department to establish and implement a program that pays pharmacies for servicing Medicaid recipients enrolled in Medicare Part D. Finally, NCRMA worked with co-chairs of the House Health and Human Services Appropriations Committee this week to include the language from HB 2853 in the House budget. HB 2853 , sponsored by Representative Bobby England (D-Rutherford) requires the Department of Health and Human Services to look at the new federally-created Average Manufacturers' Price figures prior to January 1, 2007 and adjust the dispensing fee accordingly to keep reimbursement for generic drugs dispensed under Medicaid revenue neutral. The bill also allows for a cost of dispensing study which is expected to be included in a House Studies Bill. As stated earlier, House leaders scrutinized any budget items that they thought could be construed as a policy decision. While this bill is truly a hold harmless provision that merely provides flexibility to the Department, the provision was excluded from the DHHS budget that was released in committee on Thursday. After much due diligence on the part of NCRMA and NCRMA Executive Committee Chairman Mike James as well as an amendment by Representative England, language is now included within the DHHS budget to charge the Department with developing a strategy to address the effects of the Federal Deficit Reduction Act. This was extremely important for NCRMA and community retail pharmacy so that these issues will be items discussed once the budget bill goes to conference committee. With this issue still in play, we will have the opportunity to continue to work with the Full Appropriations Chairs and the Senate on the importance of including this language in the final budget.
Link to HB 2853: http://www.ncga.state.nc.us/Sessions/2005/Bills/House/HTML/H2853v1.html
3) Alcohol Issues -- NCRMA was successful in preventing the passage of keg regulations in 2005 and is fighting again to keep this legislation at bay. The House Judiciary I committee heard the Governor's DWI Task Force recommendations this week which included a provision to require transportation permits (rather than the traditional keg regulations) for retailers. NCRMA continues to fight the implementation of such a requirement and is working with legislators and staff to adjust the most onerous language in the bill to make it more retail friendly. NCRMA is also working with Senator Kay Hagan (D-Guilford) on a bill to allow retailers to provide alcohol coupons for their customers. Currently, North Carolina does not allow alcohol coupons, meaning that retail stores that provide consumer discount or membership cards must exclusively exempt alcohol as a benefit of that membership. Stay tuned for more on these issues.
4) Price Gouging -- The House Finance Committee met this week and was expected to hear HB 2384, sponsored by Representative Pryor Gibson, which would expand the times in which the Attorney General could examine whether a gas station was intentionally charging high prices. NCRMA has been working closely with the bill sponsors, legislative staff as well as the Attorney General's office to ensure that this legislation will not adversely impact retailers. House Bill 2384 more closely mirrors changes to the price-gouging legislation that NCRMA could live with going forward and would actually provide some improvement to this well-intended law. Senate Bill 1576 and Senate Bill 1581 contain the Attorney General's proposals which NCRMA has some serious concerns with - especially the removal of the requirement that a retailer have knowledge and intent to charge an unreasonably excessive price to be guilty of price gouging. We have passed those concerns on to House and Senate leadership and will continue to do so as this issue moves forward.
Link to Senate Bill 1576:http://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/HTML/S1576v1.html
Link to HB 2384: http://www.ncga.state.nc.us/Sessions/2005/Bills/House/HTML/H2384v1.html
5) Veterans and Identity Theft -- As we mentioned last week, Rep. Bruce Goforth (D-Buncombe) filed a bill to exempt veterans from the $10 fee charged to place a freeze on a credit report. This was in response to the news of a recent theft of a federal government database that included the names, social security numbers and birthdates of 26.5 million veterans across the nation (approximately 800,000 living in North Carolina ). A similar bill has also been filed in the Senate. There are questions as to the logistical implementation of such an exemption and the costs that would be incurred by credit bureaus in setting up this additional service for veterans in North Carolina. Free fraud monitoring is already available and would provide the service of catching unusual activity on an account. NCRMA continues to work with bill sponsors and Senate and House leadership to resolve this issue in the best way for all parties involved. NCRMA worked with the General Assembly last year when they passed the Identity Theft Protection Act, which gave consumers the right to place a fraud monitor on their account free of charge as well as the ability to place a security "freeze" on their credit report for a fee of $10. Placing a security freeze on your report would prohibit credit reporting agencies from releasing any information about you to new creditors without your approval, making it difficult for an identity thief to open an account or obtain credit in your name.
6) Methamphetamine Issue -- NCRMA continues to work with the NC Attorney General's office and legislative leaders to attempt to resolve the differences between the recently enacted state and federal Meth legislation. There are discrepancies among the requirements set forth by the two laws and one is not directed to preempt the other. NCRMA's preference is that NC adopts legislation to comply with Federal Law so that the compliance requirements are set forth in a clear manner to North Carolina retailers. According to statistics released this week, state authorities have found the fewest number of meth labs since December 2003 and attribute the drop to the NC legislation passed last year that requires anyone who buys cold tablets containing pseudoephedrine and ephedrine, such as Sudafed, to show a photo ID at a store counter and sign a log. Attorney General Roy Cooper encouraged law enforcement to remain diligent in ensuring that retailers are in compliance with the law. This reinforces the need for clarification among the state and federal law.
7) Work Opportunity Tax Credit -- NCRMA continues to express concerns about the minimum wage to House and Senate leadership and the need for the General Assembly to find some mechanism to help offset this increase in the cost of doing business that ranges from $95 million to $200 million (depending on the source). Such a measure has been introduced in both the House and Senate. SB 1889, sponsored by Senator David Hoyle (D-Gaston) and HB 2844, sponsored by Representatives Pryor Gibson (D-Anson) and Nelson Cole (D-Rockingham) make 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.
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
We continue to oppose an increase in the minimum wage, but it is a possibility that this type of tax credit could find its way into a package along with the minimum wage which might somewhat offset the employer expense since many of the hires that create a tax credit for an employer would be hired at or near the minimum wage. The NC WOTC concept is well received in both the House and the Senate but the legislative staff is developing the fiscal note and legislators are curious to find out the dollar figure that will be attached.
Link to House Bill 2844:http://www.ncleg.net/Sessions/2005/Bills/House/HTML/H2844v1.html
Link to Senate Bill 1889: http://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/HTML/S1889v1.html
As always, we value the working relationship we have with you, our member companies. 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.
'Til Next Week
Fran Preston
Andy Ellen
Elizabeth Dalton
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