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Friday Fax – Legislative Update
We apologize for the delay on last week's Friday Fax. Much of our staff was in Myrtle Beach holding the first annual Carolinas Food Industry Council Convention. The first year attendance of this event approached 700 people from the grocery community making this debut meeting quite a success.
Prior to heading out of town we had a very busy week with much of our focus on methamphetamines, alcohol issues and the Budget. It is also nice to cross an item off our list which we were able to do this week with the passage of Senate Bill 776.
We did get a bad sign towards the end of the week that we may not be in the "short rows" of this legislative session. A resolution on the State Budget does not seem to be in sight and the movement of a new continuing resolution with an effective date of August 5, 2005 seems to solidify these thoughts.
July 15, 2005
1) Methamphetamine Bill Clears Subcommittee
2) Budget Talks Continue - An End in Sight?
3) Split Case Fee on Wine Reversal Clears Senate Commerce
4) Flashing Bill Approved - Sent to Governor
5) Sales Tax Holiday - Less Than Two Weeks Away
1) Methamphetamine Issue Clears Subcommittee -- The House Judiciary IV Methamphetamine Subcommittee held their two final meetings late last week to try and craft the House version of the methamphetamine bill. This subcommittee was trying to find a middle ground between Senate Bill 686 and House Bill 1345. Senate Bill 686, sponsored by Senators Walter Dalton (D-Rutherford) and John Snow (D-Cherokee) would reclassify cold medicine as a Schedule V Controlled Substance thereby allowing these products to be sold only in a pharmacy from behind a pharmacy counter by a pharmacist. Senate Bill 686 is essentially the Attorney General's bill. House Bill 1345, sponsored by Representatives Phil Haire (D-Jackson) and Lorene Coates (D-Rowan) is less stringent and would require certain products to be placed behind a counter or in a locked case and would place sales limits on products containing pseudoephedrine in combination with other active ingredients.
The Subcommittee's first stab at crafting a middle ground was not met with much approval from the Attorney General's staff, retailers or pharmaceutical manufacturers. The Attorney General's staff felt allowing all retailers to sell cold medicine containing pseudoephedrine was too weak while retailers felt placing all cold medicine - including gel caps, liquids and pediatrics - by January 1, 2006, combined with requirements for video cameras and increased penalties went too far. One NCRMA member commented "Senate Bill 686 legislates me out of business while the House proposal economically and criminally puts me out of this business." A number of retailers responded that based upon the proposed penalties and costs to comply the required security measures that they would stop selling the products. We provided these comments to the Subcommittee members and were able to see reduction in penalties.
The House Judiciary IV Committee will take the bill up on Tuesday at 10:00 a.m. and we will try and amend the bill to make it easier to swallow at this time. Legislator after legislators have told us that they must vote for whatever gets to the House Floor. The battle is going to be getting something reasonable to the floor.
2) Budget Talks Continue - An End in Sight? -- House and Senate Appropriations Chairs continued to meet behind closed doors to try and enact a State Budget and avoid a potential government shutdown on July 19, 2005. Most legislators, legislative staff, the press and lobbyists waited for white smoke to be released signaling a budget deal. The white smoke never materialized and instead a second continuing resolution allowing State Government to continue operating through August 5, 2005 began to move in the House and will be on the House Calendar Monday evening. There continues to be disagreement over availability - or how much the State has to spend - that is contingent on: 1) a $0.25 v. $0.35 cigarette tax; 2) whether the State enacts a Lottery; and 3) whether the House lowers their spending plan to meet the Governor's proposed spending cap. It appears that the corporate income tax, the higher tax bracket on those individuals earning in excess of $200,000 and the sales tax will not be lowered and will remain at their current rates. Most believe that much of the spending plan has been worked out and the Budget could fall quickly into place once the amount of money available is determined.
3) Split Case Fee on Wine Reversal Clears Senate Commerce -- Despite Senate President Pro Tem Marc Basnight's decision to cancel all Senate committees until Budget negotiations are resolved, there was a bit of movement last week on reversing the split case fee on wine. On Tuesday, the Senate Commerce Committee met around Senate Commerce Chairman R.C. Soles's desk in the Senate Chamber and approved House Bill 1429. This allows this time-sensitive bill to make its way to the Senate Finance Committee for a required hearing.
House Bill 1429, as introduced by Representative Pryor Gibson (D-Anson), includes a provision to reverse the opinion letter issued by the ABC Commission to require wine wholesalers to charge retailers a fee to split a case of wine. The ABC Commission's decision would have cost North Carolina retailers millions of dollars each year and would have had a detrimental effect on small wineries. The bill has been referred to the Senate Commerce Committee with a second referral to the Senate Finance Committee.
Without this legislation, North Carolina retailers could be forced to pay millions of dollars for a service that the retailer is prohibited from providing for themselves.
4) Flashing Bill Approved - Sent to Governor -- On Thursday, the House and the Senate approved Senate Bill 776 - Amend Indecent Exposure Law. The bill will now go to Governor Michael Easley for his signature.
As a review, Senate Bill 776 bill was introduced by Senator John Snow (D-Cherokee) at the request of NCRMA and would clarify North Carolina law to make it a crime to expose one's self in a public place to another regardless of the gender of the victim. Additionally, the bill would create a new Class H felony for someone over the age of 18 years of age to expose themselves to someone younger than 16 years of age in a public place for the purposes of sexual gratification. This bill is meant to address a series of incidents in Charlotte area stores where young boys were being flashed by men and district attorneys had no ability to prosecute due to a loophole in North Carolina law which only made it illegal to flash someone of the opposite sex.
NCRMA wishes to extend a big thank you to Senator Snow, Representative Jim Harrell (D-Surry) and Representative Deborah Ross (D-Wake) for their help with this legislation.
5) Sales Tax Holiday - Less Than Two Weeks Away -- North Carolina will again hold its Sales Tax Holiday. This year the dates are from August 5 th - 7 th , 2005. NCRMA has worked closely with the North Carolina Department of Revenue to prepare handy materials, including a poster containing a list of taxed and non-taxed items to place at your registers to help employees and customers identify tax-free items. Please call NCRMA at 1.800.662.7211 to obtain copies of these free-to-members posters to help ensure the weekend runs smoothly for your store, your employees and your customers. Visit our Sales Tax Holiday page for more information.
‘TIL NEXT WEEK
Fran Preston
Andy Ellen
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