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Friday Fax – Legislative Update
NCRMA has survived another marathon week at the NC legislature. After a very long and arduous week of budget negotiations, legislators finally came to an agreement on the state budget this morning. As recent as 11:30pm last night, it looked as though compromise was a lost cause as disagreements over special provisions, capital projects and tax cuts fueled more division amongst House and Senate negotiators. Since the general assembly fell short of passing their budget to meet the July 1 deadline, the legislature passed a continuing resolution to address certain needs during the week lapse. Legislators will return to Raleigh next Wednesday and Thursday to vote on the final conference report, giving members several days to look over the agreement. The bill will then be sent to Governor Mike Easley for his signature. We still anticipate that legislators will work vigilantly to complete their work for this year's session so that they may make their final departure from Raleigh within two to three weeks to reconvene in late January. NCRMA ran ragged this week working with legislators on Veteran ID Theft legislation, alcohol provisions and more hot topics. Plus, more detailed news on the final budget conference report.
June 30, 2006
1. Final Budget Deal Completed Today
2. Agreement Reached on Veteran Breach Legislation
3. Alcohol Coupons and Keg Regs
4. Pharmacy Issues
5. Price Gouging Not Getting Much Sunshine
6. Work Opportunity Tax Credit
1. Final Budget Deal Completed Today -- As of late last night, the House and Senate continued to disagree over several budget items including spending levels for several capital projects and special provisions. Negotiators returned to work this morning and were able to come to an agreement and are in the process of finalizing details on the plan this afternoon. The conference report will be printed over the weekend and distributed to members to allow time for their review before a vote is taken on Wednesday and Thursday of next week. The $18.9 billion budget includes 5.5 percent raises for state employees, 8 percent average raises for teachers, and calls for a quarter-penny rollback in both the sales and the higher-income taxes. The budget also calls for $27.4 million for Medicaid relief for counties and health insurance tax credit for small businesses. The proposed Senate budget initially called for a controversial moratorium on landfills in the eastern part of the state. House lawmakers would not agree to include it in the budget but agreed to take that issue up in a separate bill. And, Senate leaders agreed to take up a separate bill on a policy issue particularly significant to some House members, a minimum wage increase . NCRMA has continued conversations with legislators to voice our opposition due to the significant impact this policy change will have on retailers. As we are continually told that this train has left the station, we have emphasized the importance of a minimum January 1 start date so that retailers may budget an increase. The proposed House and Senate budget both won Republican votes though some Republican question the increase in spending and the level of tax cuts included in the budget plan. It will be interesting to see if the conference report receives the same level of crossover support. As we stated earlier, legislative leaders had hoped to reach a final agreement before today so that the bill could be sent to Governor Easley's desk for his before the current fiscal year ends. Since that is not the case and the state fiscal year starts tomorrow, legislators passed a stopgap spending measure today to keep state spending at current levels until next Friday, July 7. Speaker Jim Black and Senate President Pro Tem Marc Basnight said they will finalize the details of the agreement today and have legislators vote on Wednesday and Thursday of next week.
2. Agreement Reached on Veteran Breach Legislation -- The Senate Commerce Committee met on Wednesday to debate HB 2883, sponsored by Representative Bruce Goforth (D-Buncombe). The bill would exempt veterans from the $10 fee charged to place a freeze on a credit report. The bill was introduced in response to the news of a recent theft of a federal government database including the names, social security numbers and birthdates of 26.5 million veterans across the nation (approximately 800,000 living in North Carolina ). The bill gives North Carolina veterans until January 1, 2007 to sign up for a credit freeze and allows them to keep it at no charge for up to a year. Surviving spouses of military personnel can also get a credit freeze under the proposal, and family members can act on behalf of active-duty personnel overseas. NCRMA General Counsel, Andy Ellen, eloquently explained that the credit bureaus have come to the table to offer North Carolina a solution to a problem that they did not cause but are committed to helping the Veterans. He further emphasized that while NCRMA was okay with 99% of the bill, we requested legislators to consider an amendment that would relieve the credit bureaus of their responsibility if and when the Veteran's Administration implements a program of their own to provide and pay for protection to veterans. Representative from the Attorney General's office, the NC Veteran's and the NC Public Interest Research group all spoke in opposition to the idea of provided that relief to credit bureaus with an amendment and stated that, in their opinion, the bill did not go far enough. After NCRMA's testimony, Committee members from both sides of the isle understood NCRMA's position and expressed concerns about the state mandating that the credit bureaus as the innocent party be required to provide a service free of charge and were amenable to the idea that bureaus should be relieved once the VA acts. As a side note, a couple of legislators expressed further concern to the Attorney Generals office as to whether or not Veterans would be properly notified. The ID Theft law that passed last year exempts state and local government agencies from notifying consumers after data-security breaches, putting North Carolina out of sync with at least 20 other states that require governments as well as business to inform potential victims. North Carolina 's breach notification law was crafted by state Attorney General's office who offered no reason as to why they gave governments a free pass. According to a spokesperson, Attorney General Cooper has not decided if his office will develop legislation for next year's session requiring breach notifications from governments. Before the Commerce committee came to a close, Senator R.C. Soles, Chair, pulled the bill back and asked that we again try to reach a compromise. All stakeholders were more willing to work together after seeing the reaction of committee members. NCRMA was able to work out a compromise which will provide relief to credit bureaus once the VA implements their program, as long as it is not before the first 90 days that the bill is in place. If the VA does not act, the bill remains in effect until January 1. We expect HB 2883 to be taken up in Senate Commerce again next week when legislators return to Raleigh on Wednesday.
3. Pharmacy Issues -- NCRMA is pleased to report that a cut to pharmacy reimbursement has not shown itself this session. We have been hard at work trying to hold onto budget language requiring the Department of Health and Human Services to analyze the impact of Medicare Part D and the DRA and develop strategies to ensure access to prescription drugs into the conference committee discussions. NCRMA worked diligently to explain to legislators the drastic impact of Medicare Part D and potentially the DRA was and could have on access to prescription drugs and succeeded in keeping the budget provision.
NCRMA continues to emphasize the importance of including a "cost of dispensing study" in a studies bill before adjournment.
4. Alcohol Issues -- Keg Registrations: The Senate sent HB 1048, Governor's DWI Task Force Recommendations back to Senate Finance this week due to fees included in the bill. The bill passed out of committee on Thursday with no new changes to the provision on kegs. The bill heads back to the Senate floor for a vote and then will go to the House where a conference committee will be appointed and we will have to work hard to maintain the language currently included in the bill. It will be a difficult task to hold the language from the amendment as many legislators would rather have you comply with language that is much more onerous.
Alcohol Coupons: This legislation has been on quite a roller coaster ride this week. HB 1025, sponsored by Representative Paul Luebke (D-Durham), was heard in Senate Finance Committee again on Wednesday -- though not for long. The bill had become weighted down with a variety of alcohol issues, some which are causing heartburn for legislators in conservative districts. Senator Hoyle, who was chairing the committee, pulled the bill back to allow some differences to be ironed out. NCRMA has been working with Senator Kay Hagan (D-Guilford) on an amendment to HB 1025 which would 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. Reverend Mark Creech, representing the Christian Action League of NC, has been active in lobbying against our provision. NCRMA met with Reverend Creech earlier this week to explain and clarity the details of the legislation though we do not expect his opposition to change. With some Democrats fearful of voting for this legislation before the fall election, it will be imperative for this bill to receive bipartisan support. NCRMA talked with several legislators today and will continue to next week before what we hope to be a Wednesday vote in Senate Finance.
5. Price Gouging -- For the time being, the issue of altering current price gouging law seems to have taken the back burner. With the gas tax set to remain at its current level, there has not been as much emphasis on a gas tax cap or the issue of price gouging as a whole. We are still keeping our ear to the ground and maintaining communication with legislative members and staff should this issue resurface. HB 2384, sponsored by Representative Pryor Gibson, expands the times in which the Attorney General could examine whether a gas station was intentionally charging high prices but more closely mirrors changes to current law that NCRMA could live with going forward and actually provides 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.
6. Work Opportunity Tax Credit (WOTC) -- NCRMA met with legislators this week on the possibility of implementing the WOTC. We have reminded legislators of their desire to help business offset the cost of a minimum wage increase. Week to week, we have provided summaries for you of SB 1889, sponsored by Senator David Hoyle (D-Gaston) and HB 2844, sponsored by Representatives Pryor Gibson (D-Anson) and Nelson Cole (D-Rockingham). The bills 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. Many of the hires that could create this tax credit for an employer would be hired at or near the minimum wage. While most legislators we have spoken with find the WOTC very appealing, they consider this to be an issue for when they return in January. Other credits, such as the small business health insurance tax credit, took the lead in being considered in the budget process for the short session.
NCRMA is suggesting that legislators consider this item for a Revenue Laws study committee during the interim.
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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