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Friday Fax – Legislative Update
The adjournment of the 2005 Session of the North Carolina General Assembly was like running a race only to see the finish line keep moving away. The House convened today for its 125 legislative day while the Senate finished up day number 126. It has been quite exhausting as this session has been full of controversial issues, some which have dragged on since January all the way up until just this week. It appears that the House and the Senate will come back for one more day on the Tuesday after Labor Day to adjourn until May 9, 2006 . For most legislators, legislative staff, lobbyists and their families this is a conclusion that could not come fast enough.
Around Jones Street most of the above-listed have been saying for over a month "I just wish they would leave because the longer we stay here the more trouble they cause." Many lobbyists view legislators as only passing legislation that is detrimental to their industry and, unfortunately, often lose sight of the good that they are able to do. While some viewed NCRMA as being opposed to everything this session, we were also successful in pushing forward and passing a number of pieces of legislation - making retail toy sections safe again by clarifying the law on indecent exposure, complying with the Streamlined Sales Tax Project Agreement, implementing a pharmacy quality assurance law, maintaining current Medicaid reimbursement for pharmacists, allowing wine tasting events to again be held in retail stores and reversing the ABC Commission's Split Case Fee Decision. That being said, we are as happy as anyone to see the General Assembly call it quits for the year.
September 2, 2005
1) North Carolina Enacts Lottery
2) Methamphetamine Issue Resolved
3) Violent Video Game Bill Stalls until May
4) Local Option Sales Tax Stalls with Lottery Passage
5) Last Friday Fax
1) North Carolina Enacts Lottery--Tuesday was a historical day in the North Carolina General Assembly with the State Senate enacting a statewide lottery courtesy of a tie-breaking vote cast by
Lt. Governor Beverly Perdue.
Just last Wednesday morning at 7:00 a.m. , after a marathon all-night session, Senate President
Pro Tem Marc Basnight (D-Dare) had announced that the Senate had completed its work for the year and would be adjourning until May 9, 2006 . At that time, the Senate was two votes short of the necessary votes to enact a lottery due to the coalition of 21 Republicans and 5 Democrats opposed to state endorsed gambling. In a procedural move, the House refused to let the Senate go home and despite the Senate threats to do no more business, Senator Basnight sent an email announcement late Friday evening that the Senate would return to Raleigh for one day on Tuesday.
The Senate returned with speculation that two Republicans Senators would not be present for the vote. Senator Harry Brown (R-Onslow) was off on his honeymoon and could not be contacted while Senator John Garwood (R-Wilkes) was lying in his bed with his leg elevated due to a staph infection. Both Senators requested excused absences but neither elected to "pair" their vote with another Senator who planned to vote "yes." Evidently Garwood struggled mightily with whether or not to seek a "pair" and bounced both ways Tuesday morning before finally electing not to seek such a measure. The floor debate was full of accusations of dirty politics and procedural maneuvering. When the vote was finally taken, the vote was 23 in favor and 24 in opposition until long-time Senate lottery proponent Tony Rand (D-Cumberland) stood and asked to be counted as voting "aye" making the vote 24-24. Lt. Governor Beverly Perdue then elected to break the tie and propel herself squarely in the lead for the Democratic nominee for Governor in 2008.
Governor Easley held a bill-signing ceremony yesterday at the State Capital to enact the number one item on his campaign platform in 2000 and 2004. In signing this legislation, North Carolina became the last state on the East Coast to implement a lottery.
NCRMA had a long-standing position against a statewide lottery in North Carolina due to the fact that disposable income would be used to purchase lottery tickets rather than the goods sold by merchants. We have continually told reporters over the past two days that retailers will comply with the law and may or may not choose to participate just as when any law is enacted in this State. NCRMA staff will be meeting with those in charge of appointing the Lottery Commission and ultimately the Lottery Commission to help facilitate the implementation of the lottery going forward.
House Bill 1203 establishes the new N.C. State Lottery Commission, which will hire an executive director and approve a contractor to operate the games the commission decides to offer. With the commission's OK, the director can also enter the North Carolina lottery into multistate agreements such as Powerball or Mega Millions.
Advertising spending is capped at 1 percent of annual revenues. At least 50 percent of total annual revenues would be paid out as prizes with at least 35 percent used for education initiatives. Small slices of the remaining revenue would be used for administrative expenses and compensation to the retailers who will actually sell the tickets, with $1 million set aside annually for gambling education and treatment programs. Retailers will be compensated at the rate of $0.07 for every ticket $1.00 sold.
Winners of less than $600 may redeem their prizes at lottery retail outlets. The Lottery Commission will redeem prizes of $600 or more.
When the lottery will actually be up and running is anyone's guess at the moment but it appears that "scratch-off" tickets may be available as early as the first of the year with tickets for larger drawings sometime away.
Link to Lottery Bill (HB 1023): http://www.ncga.state.nc.us/sessions/2005/lottery/fulllotterybill.pdf
2) Methamphetamine Issue - One of the Last Issues Standing--The methamphetamine issue remained at the center of controversy until the bitter end of the session. In the last two weeks, there have been three versions of the bill floating around. House Bill 248 was the last bill passed by the Senate last Wednesday morning when they thought they were going home for good. Then on Tuesday, the House approved a conference report for the original meth bill - SB 686 - which would have placed all cold medicines containing pseudoephedrine, including gel caps, liquids and pediatric medicines behind a designated counter with a requirement that the pharmacy must be the designated counter if the retail store contained a pharmacy. However, due to potential criminal and civil penalties, required training, sales restrictions and other logistical concerns this version of the bill became unworkable. NCRMA had been working hard for two to three weeks to get the House to accept the restrictions that ended up in House Bill 248 as a compromise.
NCRMA's efforts appeared to be futile as the House stated on Wednesday that instead of adjourning this week that they would stay in town until next week to give the Senate time to vote on what the House deemed to be the "most comprehensive methamphetamine bill in the country. However, Senator Basnight made a call to Speaker Black during the session and informed Speaker Black that the Senate was done for the year and would not be voting on anymore substantive legislation. Based on this conversation, the House then approved the much more reasonable Senate Committee Substitute for House Bill 248. The language contained in HB 248 is much less restrictive than the language contained in the Conference Report passed by the House last evening. Although we are far from satisfied with the end product, many in the press and in the legislature are viewing this as a victory for the retail industry rather than a victory for the Attorney General due to the media attention of this issue.
Therefore, effective January 15, 2006 :
1) Cold medicine containing pseudoephedrine as the single active ingredient or in combination with other ingredients in a tablet and caplet has the following restrictions:
a) Can only be sold behind the pharmacy counter
b) Are subject to a two-package/6 gram limit per transaction
c) Customers must sign a log and show an ID to purchase - the log may be in an electronic format
d) A purchaser must be at least 18 years of age
e) Customers may not purchase more than three packages or nine grams in a 30-day period
f) Pharmacies must train employees involved directly in the sale of these products
g) Pharmacies are subject to criminal and civil penalties when the pharmacy knowingly and willfully violates the law
h) Pharmacies must post a sign notifying consumers of North Carolina 's law
2) Gel caps, liquids and pediatric products will remain on the shelves of all retailers without restriction just as these products are currently sold. The Commission on Mental Health, Substance Abuse and Controlled Substances has the authority to place restrictions on these products in the event there is substantial evidence that these products would be used in the production of methamphetamine in North Carolina.
3) Wholesalers of cold medicine containing pseudoephedrine must provide electronic reports of their sales to retailers.
4) Those charged with manufacturing methamphetamines can be denied bail.
5) Products containing pseudoephedrine and other OTC products can no longer be sold at flea markets.
6) There are increased penalties for manufacturing methamphetamines in a multi-person dwelling.
The methamphetamine issue has been an exhaustive battle for NCRMA this legislative session. The Attorney General, law enforcement, fire fighters and child advocacy groups had been very aggressive in pushing their agenda. The media has gravitated to this issue and at times provided the issue more hype than the issue deserves when compared to other drug issues. The fact that retailers voluntarily implemented efforts to restrict access was used by the Attorney General and a few legislators as a reason NCRMA was being unreasonable in fighting restrictions on these products. Just as with anything else on Jones Street , there was also some politics involved along the way. Yesterday, one member of the House Leadership exited the House Chamber and said "Well, you guys won again." Our response was that there are no winners on this issue as methamphetamines will continue to plague North Carolina 's communities until the products are reformulated regardless of what restrictions are placed on cold medicine.
Link to HB 248: http://www.ncga.state.nc.us/Sessions/2005/Bills/House/HTML/H248v3.html
3) Violent Video Game Bill Stalls until May--Last Tuesday, when the House Rules unexpectedly took up and passed SB 2 - No Obscene/Violent Video Game Sales sponsored by
Senator Julia Boseman (D-New Hanover) it looked for certain that the bill was headed to the House Floor and was likely to be enacted. As we told you last week, NCRMA worked fast and furious and got this bill sent back to the House Judiciary II Committee. On Monday evening, we had inquired to House Judiciary II Chairman Mickey Michaux (D-Durham) about the status of SB 2. His response was
"I'll see you next year."
Due to the November elections being just around the corner, we will be in another legislative battle next year but at least we are still in the game.
4) Local Option Sales Tax--On Monday evening the House gave final approval to House Bill 947 to give 48 counties the ability to raise sales taxes. The bill would require a favorable vote in an advisory referendum before allowing county commissioners to raise the sales tax another half penny. The money generated could only be spent on school and community college construction. House Speaker Jim Black, D-Mecklenburg, said the legislation would be voted on before the House adjourns.
On Tuesday, when the Senate approved the Lottery with a portion of the proceeds going to school construction, the Senate decided there was no reason to take up this legislation leaving this issue on the table until next May.
5) Last Friday Fax--Although you will be receiving a full legislative wrap-up in the coming weeks, this is the last edition of NCRMA's 2005 Friday Fax Legislative Update. As always, you will continue to receive updates as: 1) Governor Easley signs bills into law; 2) new laws become effective; 3) to how you can comply with new laws and 4) news breaks on political events that affect your business.
As most of you know, NCRMA was created in 1902 to represent the retail perspective before the North Carolina General Assembly. We continue to value the working relationship we have with our member companies and it is our pleasure to be working on your behalf. 2005 has been a year of change within NCRMA with the addition of Carolinas Food Industry Council and greater participation within NCRMA of the grocery industry, as well as a year of challenges due to some of the legislative battles we have been in the middle of on Jones Street . When you reflect back on NCRMA's work we hope you will deem it to be a successful year. Thanks for allowing us to continue to represent you.
‘TIL NEXT YEAR
Fran Preston
Andy Ellen
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