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Raleigh, North Carolina
May 18, 2007
The legislature was bustling this week with members and lobbyists alike running rampant to try to get bills through committee or kill those bills that they never wanted to see again. The House began working for long hours early in the week to get through their lengthy calendar of bills. Senate Appropriations leaders seemed more focused on making their alterations to the freshly-received House budget.
More stormy weather ahead…
The bustle was silenced after hearing the Wednesday morning news that the State Board of Elections referred its findings from an investigation into Rep. Thomas Wright's campaign finances to Wake County District Attorney Colon Willoughby for a criminal investigation. Wright had been a political ally of Black and signed a letter in January praising his eight years as speaker, particularly for his efforts at placing minorities in leadership roles.
During a probe that began five months ago, the board has been looking into more than $119,000 that political committees reported giving to Wright's campaign since 1992 but that Wright's campaign didn't identify receiving. Wright refused to testify during the elections board hearing Monday -- citing his rights against self-incrimination. The Board testified that bank records indicated that Wright had spent roughly $240,000 in campaign contributions on personal expenses over the past six years. At least as damaging were testimony and records about a property transaction and charitable foundation involving Wright -- and implicating a top-level state bureaucrat -- in which the original property owners were promised a $150,000 state grant which was never delivered.
Wright replied, "Absolutely not" when asked if he had any plans to resign his legislative seat. However, the news has clearly had an effect on the feeling of his colleagues in the House. Speaker Joe Hackney (D-Orange) said, “Unless Representative Wright has some satisfactory explanation, which certainly didn't happen today, then he certainly can no longer be effective here.”
Despite the distraction of the breaking news, the legislature's work continued. With the altered and extended legislative committee meeting schedule and other demands on legislative staff in the midst of the crossover deadline scurry, the Energy Issues Working Group meeting scheduled for today was cancelled and the Solid Waste Issues Working Group meeting scheduled for Monday, May 21, was also cancelled. Therefore, we do not have updates on these issues this week in your Retail Week in Review but we will notify you once these meetings are rescheduled.
Read closely through these hot retail topics that hit the legislative fan this week offer your feedback.
Rebate Redemption Deadlines – passed Senate Commerce committee this week, up for a vote Monday night on Senate floor
Energy Star Tax Holiday – met with Senate staff again this week
Gift Card Fees – met with Senate staff this week, bill has been held back for now
Duty to Report Child Pornography –passed Senate Commerce Committee with our revised language on Tuesday
ORT/Amend Larceny Laws –heard in House Judiciary II Committee, subcommittee appointed, met with Senate sponsor
Prepaid Gas Purchase Ordinance – bill scheduled this week but pulled bill from calendar
WOTC – $6 million included in House budget; working with Senate on inclusion in Senate budget
Health Inspection Fees – heard in House Health Committee and sent to Finance “without” prejudice
Liability of Purveyors of Food for Obesity – scheduled for House Judiciary 1 on Tuesday, expect much debate
Collective Bargaining – heard again in House Judiciary II on Tuesday, did not revisit on Thursday
Statute of Repose – heard in Senate Judiciary I committee on Tuesday, no vote taken
Lose drivers license for aiding/abetting underage drinking – passed House on 2nd reading, final votes expected Monday night
Allowing Consumption by Employee or Agent – sitting in Senate Commerce
Pharmacy/Budget - successful in fighting back in the House, now we must hold the line in the Senate!
1: REBATES REDEMPTION DEADLINE
SB 1055 - Senator Richard Stevens (R-Wake)
http://www.ncga.state.nc.us/Sessions/2007/Bills/Senate/HTML/S1055v2.html
Above is the link to the most recent version of SB 1055. This bill was birthed after Senator Stevens received a complaint from a constituent that had purchased a product that did not allow the customer to apply for a rebate for four years. SB 1055 would have initially required persons offering rebates to mail the rebate within 30 days after the postmark date of the completed rebate form submitted by the consumer.
We have been working with Senator Steven over the past few weeks. Please note the following changes that were made to the original bill:
As requested by NCRMA, rebates must be paid within sixty days of the postmark of a completed rebate form. The original bill set the time period at thirty days.
As requested by NCRMA, the legislation does not apply to rebates of $5.00 or less (NCRMA request).
As requested by NCRMA, the legislation does not apply to a retailer for a rebate offered by a manufacturer and vice versa.
This bill was approved by the Senate Commerce Committee on Wednesday and now will head to the Senate Floor for a vote on Monday evening.
2: ENERGY STAR TAX HOLIDAY
We met again with Senator Basnight's staff this week on the possibility of implementing an Energy Star Sales Tax Holiday in North Carolina . Senator Basnight (D-Dare) sees great potential in this type of legislation as a way to push North Carolina consumers to become more energy efficient. We understand that Senator John Snow (D-Cherokee) will be working on the bill but staff is still working with the NC Department of Revenue to determine the obstacles set forth by the streamlined sales tax agreement.
3: PROHIBIT GIFT CARD MAINTENANCE FEES
SB 1517 - Senator Robert Atwater (D-Chatham)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S1517v1.html
SB 1517 prohibits the use of maintenance or dormancy fees on gift cards or gift certificates. A violation would be an unfair and deceptive trade practice and punishable by a $1,000 civil penalty. Monday morning, the NC Bankers Association (NCBA) joined NCRMA to meet with Senator Basnight's office about SB 1517.
We were asked a lot of pointed questions about the issue from both the retail and banking perspectives. Senate staff was under the impression that whatever legislation North Carolina put in place would not touch banks due to federal preemption. NCBA quickly corrected that and pointed to a number of North Carolina chartered banks affected by this legislation. When coaxed with an exemption for banks from the bill, NCBA held strong and stayed with us against the bill.
We also made the argument that gift cards are a service of convenience and the cost to print the cards; load and re-load card balances; and allow them to be used at a number of outlets, came with a cost -- just like when using an ATM or cashing a payroll check.
We concluded the meeting by telling staff that we could probably live with requiring the disclosure of fees if Senator Atwater agreed. At the time, the bill was set to be calendared for the Senate Commerce Committee yesterday. After a meeting with Senator Atwater, they came back proposing disclosure and no dormancy fees for the first year. While we were appreciative of the effort in compromise, NCBA and NCRMA stuck together in requesting disclosure only with no additional restrictions. For the time being, we seem to have stopped this train from moving forward. Thank you all for your input on this legislation and in helping hold this one off. We will continue to keep you posted should this one regain any energy.
4: FILM PROCESSING/REPORTING OF CHILD PORNOGRAPHY
SB 132 - Senator Walter Dalton (D-Rutherford)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S132v1.html
SB 132 was back in the Senate Judiciary II committee this week and after much debate passed the committee to its next stop in Senate Appropriations. The bill would require social networking Web sites like MySpace.com to get parental consent before allowing children younger than 16 to join or post personal information on the site. The bill would also require computer technicians and employees with photo development companies to report to law enforcement when they come across child pornography.
We worked diligently with bill sponsors and legislative staff on compromise language to address logistical concerns and employer immunity as most photo retailers already have a policy in place to address this concern. SB 132 incorporated our requested changes, including:
1) Computer techs and retailers have the option of filing a report with either the hot line or with local law enforcement;
2) Retailers are under a duty to report child pornography rather than facing criminal penalties for failure to report;
3) A person in your company who observes such child pornography may report the activity to a supervisor to report rather than having to call themselves;
4) A person or a third-person contractor who reports child pornography receives criminal and civil immunity if the report is made in good faith;
Our provisions were not mentioned amongst the lengthy debate that ensued in the committee on Tuesday. My Space and the Attorney General's office traded testimony but the bill eventually passed out of committee with the only amendment being to remove the Grand Jury provision from the bill.
SB 132 was scheduled for a meeting of the Appropriations Committee yesterday but it was determined by the House and Senate Rules Chairmen that this bill would not be subject to the crossover deadline and therefore the meeting was postponed.
5: ORGANIZED RETAIL THEFT (ORT)
HB 1379: Amend Larceny Laws, Representative Van Braxton (D-Lenoir)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1379v1.html
Representative Braxton presented HB 1379 to the House Judiciary II Committee on Thursday. The bill, requested by NCRMA makes the following a felony:
Receiving goods that are believed to be stolen, even if the goods are not stolen
Stealing goods in excess of $500 (current felony threshold is $1,000)
Stealing goods through an emergency exit door
Theft of infant formula in excess of $100
Removing or deactivating an anti-shoplifting device
Switching and scanning fraudulent UPC codes
The House JII committee, Chaired by Representative Dan Blue (D-Wake), is a very thorough and deliberative committee. Committee members spoke favorably of the bill but there were some technical drafting questions. Chairman Blue appointed a subcommittee, just as Senator Hartsell (R-Cabarrus) did in the Senate JII committee.
The House ORT subcommittee members are as follows: Representatives Rick Glazier (D-Cumberland), Alice Bordsen (D-Alamance), Earline Parmon (D-Forsyth), Joe Kiser (R-Lincoln), Tim Moore (R-Cleveland) and Karen Ray (R-Mecklenburg).
6: ALLOW PREPAID GAS PURCHASE ORDINANCE
HB 1704 - Representative Jimmy Love (D-Lee)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1704v1.html
This bill allows a county or city to require that all retail business establishments with gasoline, diesel, or any other motor fuel pumps located on the premises require full payment in advance for any quantity of motor fuel sold at any time. The bill defines payment to include: purchase by any legal means using cash, credit card, debit card, checks, or otherwise. The bill was scheduled to be heard in committee again this week but was yet again the bill from the calendar to our satisfaction.
7: WORK OPPORTUNITY TAX CREDIT (WOTC)
HB 1044/SB 1145: Representatives William Wainwright (D-Craven), Representative Garland Pierce (D-Scotland)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1044v1.html
HB 1044 and SB 1145 were filed at our request which would make North Carolina employers eligible for a tax credit of up to $2,000 of wages paid to employees meeting the criteria below and who are employed at least nine months:
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
5) Has a felony on their record.
Our WOTC initiative passed in the House budget at $6 million. Senator Hoyle sponsored the bill in the Senate and we have already been talking to him about including this provision in the Senate Budget as well. We will be dropping in to visit with Senate Appropriations and Finance Committee chairs next week on this initiative.
8: LOCAL BOARDS OF HEALTH/INSPECTION FEES
HB 1363 – Representative Melanie Goodwin (D-Richmond)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1363v1.html
HB 1363 , allowing local boards of health to charge fees for health inspections, was heard in the House Health Committee this week. Currently, we pay a $50 administrative fee to the state for health inspections but none to the counties. The state then reallocates a portion of that money back to the counties.
Rep. Goodwin filed the bill after her local board of health complained about the rising Medicaid costs to counties and the need for more funding. However, Goodwin's bill spreads well beyond Montgomery and Richmond Counties by allowing every one of the 100 North Carolina counties to set their own fees for health inspections. No specific dollar amounts or fee limitations were outlined in the legislation, which could instigate excessive county-by-county fees that could differentiate across the state.
The bill was put on the calendar at the last minute, so we worked with the NC Restaurant and Lodging Association Thursday morning to talk to some of the committee members about our concerns. Once in committee, Legislators raised many of our concerns in committee regarding the amount and consistency of the fees. After almost every committee member had raised their hand to voice concerns about the ramifications of the bill, Chairman Bobby England (D-Rutherford) asked for a motion to send the bill to the House Finance Committee “without prejudice.” Citing the number of questions raised -- the committee felt it was best to move Goodwin's bill to Finance where the financial implications could be explored but did not want to necessarily give a favorable report by the Health Committee.
9: LIABILITY OF PURVEYORS OF FOOD FOR OBESITY
HB 1835 - Representative Bill Daughtridge (R-Nash)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1835v1.html
After passing out of the House Commerce committee last week, this bill now heads to House Judiciary 1 where it could face more thorough debate. This bill would prohibit civil actions against food vendors arising out of weight gain, obesity, a health condition associated with weight gain or obesity, or any other known condition resulting from long-term consumption or food – unless the civil actions related to state or federal adulteration or misbranding laws or laws regarding the manufacturing, marketing, distribution, advertising, labeling, or sale of food.
NCRMA has been working with the NC Restaurant Association along with the NC Chamber of Commerce in support of this legislation. We understand that some concerns have already been expressed from JI committee members and will be mobilizing before the scheduled committee hearing on Tuesday morning.
10: COLLECTIVE BARGAINING FOR GOVERNMENT WORKERS
HB 1583: Representative Dan Blue (D-Wake)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1583v1.html
This bill would repeal GS 95-98 (which prohibits collective bargaining between state or local governments and employee associations or unions) and deletes authority to use payroll deductions for specified association membership contingent on the association's not engaging in collective bargaining. Representative Dan Blue (D-Wake) is the bill sponsor and also chairs the House Judiciary II Committee to which the bill was referred.
HB 1583 was discussed in committee last week and heard again on Tuesday. The NC League of Municipalities and the NC School Boards Association both spoke against the bill. Eddie Caldwell from the NC Sheriffs Association also spoke against the bill on behalf of the coalition opposing the bill, to which NCRMA is an active member. It looked as though the State Employees Association pushing the bill was going to push for a vote on Tuesday when the committee numbers looked favorable. However, more members continued to drift in and they ran the clock instead. The bill was scheduled to be heard again on Thursday but was not called up by Chairman Blue.
11: STATUTE OF REPOSE
SB 969, Senator Janet Cowell (D-Wake)
http://www.ncleg.net/Sessions/2007/Bills/Senate/HTML/S969v1.html
SB 969 was given a hearing in the Senate Judiciary I Committee on Tuesday. Chairman Martin Nesbitt (D-Buncombe) ended up pulling the bill back after both sides gave testimony, citing that this was too large of an issue to vote after only one committee hearing. We are continuing to work with the NC Chamber of Commerce and a coalition opposing this bill in an effort to ensure that this legislation does not pass. However, just by the articles in our weekly reports, you can see that the climate is much different in North Carolina this session with every issue seemingly getting its fair share of debate. Now more than ever, we are kept on our toes at all times.
Currently, NC law provides that all products liability actions must be brought within 6 years from the date of purchase, but now that legal standard is under attack. As a part of the growing national trend of increase in liability of employers - this bill would more than double the time period to 15 years, plus it would apply retroactively to cover purchases made since 1992.
SB 969 more than doubles the amount of time during which products liability actions can be brought against manufacturers, as well as distributors and everyone else along the product chain from manufacturer to consumer and would cause North Carolina become one of three states with the longest period for filing product liability claims. Such a dramatic and unnecessary change would not only deter businesses from staying here, but would also serve as a disincentive for new businesses in deciding whether to come to our state.
12: DRIVER'S LICENSE REVOCATION FOR ABC VIOLATION
HB 1277 - Representative Ty Harrell (D-Wake)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1277v1.html
HB 1277 states that those who provide alcohol for someone who is underage would face punishment for the current misdemeanor charge and also have their license revoked for a year. It's already a crime under state law for adults to serve or give alcohol to underage drinkers. But, under this measure, those who provide alcohol for someone who is underage would face punishment for the current misdemeanor charge and also have their license revoked for a year. The bill is effective Dec. 1, 2007.
Initially, the language in the bill could have easily been misinterpreted as written; it referred to a statute that also included “selling to an underage person.” We offered clarifying language to break up the statute of reference, which was incorporated into a proposed committee substitute.
Rep. Ty Harrell (D-Wake) filed his bill after Wake County suffered the loss of several high school students due to drinking and driving. The bill allows them to still drive to work, doctors' appointments or the grocery. The House voted 105-7 in favor of the measure and a final vote is expected next week.
13: Add Employee or Agent to the Individuals Who are Prohibited from Allowing Consumption of Malt Beverages and Unfortified Wine on the Premises of an Off-Premises Only ABC Permitted Location.
HB 1751, Introduced by: Representative Marilyn Avila (R-Wake)
http://www.ncleg.net/Sessions/2007/Bills/House/HTML/H1751v0.html
This bill adds employees or agents of an ABC permittee in the statute's prohibition against allowing consumption of the beverages on the permittee's premises, when the permit only authorizes the sale of beverages to be consumed off the permittee's premises (now, statute applies only to the permittee). This is effective Dec. 1, 2007, for offenses committed on and after that date.
This bill is sitting in the Senate Commerce committee after already having passed the House. We are scheduling meetings with Commerce Committee members next week to discuss the implications of this bill on a retail location and how “premises” is defined.
14: PHARMACY REIMBURSEMENT - BUDGET NEWS
NCRMA met with Senate Budget staff yesterday concerning their version of the Budget. While we are not expecting a disaster-like proposal that we received from the House, we may very well see a cut to pharmacy reimbursement proposed by the Senate. The Senate has about $350 million less to work with due to the elimination of a ¼ cent sale tax and a reduction in the personal income tax. The Senate Appropriations staff has focused in on Medicaid – not pharmacy specifically but all of Medicaid.
In our meeting with Senate Budget staff, we brought it to their attention that pharmacy was still taking it on the chin from the State MAC List and the DRA was looming, that the Medicaid prescription expenditures were flat and the cost of dispensing study reflected that pharmacy was being underpaid. We made progress in explaining our predicament but at the end of the day - we still may end up having to fight another Budget.
Thank you for allowing us to continue to represent the retail perspective before the North Carolina General Assembly since 1902.
Until next week...
Fran Preston (franp@ncrma.org)
Andy Ellen (andye@ncrma.org)
Elizabeth Dalton (elizabethd@ncrma.org)
Lindsey Kueffner (lindseyk@ncrma.org)
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