Legislative Corner: California, Kentucky, Minnesota, New York & Pennsylvania

NATIONAL REPORT — Convenience stores face legislative and regulatory challenges from all levels on a daily basis. Convenience Store News canvasses local trade associations and news sources to cover the latest issues affecting the channel.

CALIFORNIA

Hero Pay — According to the California Fuels & Convenience Alliance (CFCA), recent "Hero Pay" proposals from localities across the state will ultimately bring greater harm to more employees than it helps. "One needs only to look at the state $15-per-hour minimum wage increase to realize that this proposal is not rational, especially in the midst of a pandemic," CFCA said. 

When the state legislature increased California's minimum wage from $10 to $15 per hour, it set a gradual increase over the course of six years to allow businesses to make necessary accommodations.

"An additional surge right now is simply not tenable," the association said. "Ultimately, this mandate will consume any of the remaining assistance businesses have received since the impacts of COVID first took hold. If it is the intention of lawmakers to provide assistance to frontline workers, it should be they who provide it, without further endangering businesses reeling through this pandemic."

KENTUCKY

Tobacco — Two bills have been introduced that would give cities and counties the ability to regulate tobacco sales, potentially creating a patchwork of rules that could vary across city and county lines.

The Kentucky Grocers and Convenience Store Association (KGCSA) is watching House Bill 147. The bill, which could be heard in the Local Government Committee when lawmakers return this month, repeals pre-emption of local regulation of tobacco and would allow local governments to regulate the use, sale, distribution, and display of tobacco. Senate Bill 81 contains the same language as the House bill.

These measures could potentially allow more than 400 cities and 120 counties to set their own regulations on tobacco sales, display and distribution. In addition to trying to navigate varying regulations across city and county boundaries, the legislation would also create competitive disadvantages as consumers could cross state, county and local lines in search of the cheapest tobacco products available, according to KGCSA.

KGCSA opposes the bills. The association convened a coalition of groups opposing such legislation and sharing their concerns with the bills' sponsors.

COVID-19 Liability Protections — Kentucky lawmakers are discussing a pair of bills that would provide protection to retailers from lawsuits that could arise as a result of the COVID-19 pandemic.

Senate Bill 5 would cover the current global pandemic as well as any emergency declared in the future by the governor or by a local city or county. It would provide legal liability to any entity operating during an emergency unless it was grossly negligent or blatantly defying the executive orders or guidelines related to the emergency. If a business was deemed essential as part of the declared emergency, it would be extended sovereign immunity, KGCSA explained.

House Bill 10, as introduced, would only provide this protection for the declared COVID-19 emergency. It states that a business acting in good faith or as a reasonable person would during the emergency has a defense against ordinary negligence. Retail businesses would have rebuttable presumption from claims if they followed the state Department of Public Health guidance in place at the time of the alleged injury. The House Judiciary Committee adopted a committee substitute that would change the Department for Public Health Guidance to The Centers for Disease Control and Prevention guidance.

MINNESOTA

Full Strength Beer — Minnesota remains the only state that limits beer sales at c-stores and grocery stores to 3.2 percent beer. The regulation was once common among all states dating back to Prohibition.

Four years ago, the state legislature and then-Gov. Mark Dayton approved language allowing Minnesota liquor establishments to be open for business on Sundays. As a result, c-stores and grocery stores in Minnesota are losing sales and customers. In addition, many beer manufacturers ceased production or limited sizes of 3.2 beer and production runs due to a lack of consumer demand for the prohibition product, according to the Minnesota Service Station & Convenience Store Association.

NEW YORK

Tobacco — Gov. Andrew Cuomo did not call for additional tobacco retailing restrictions in his proposed 2021-22 state budget, despite public health advocates calling for measures like a ban on flavored tobacco products and increased taxes.

However, New York retailers are not out of the woods on these issues; individual state legislators have introduced standalone bills designed to impose those restrictions, according to the New York Association of Convenience Stores (NYACS).

NYACS recently released a study by Regional Economic Models Inc. warning of the negative fiscal and economic consequences of banning flavored tobacco products in New York. According to the study, the state would lose $3.4 billion in tax revenue over a 10-year period, tobacco retailers would lose more than $450 million a year in sales revenue, 1,200 jobs would be eliminated, mostly in retail, and it would drive some New York flavored tobacco users to border states and an already thriving black market.

NYACS has shared the findings with the governor's and the state legislature.

Lottery — Cuomo also proposed repealing the 2,500-square-foot minimum size requirement for vendor locations selling Quick Draw. Currently, New York is the only state with such a restriction. In addition, the governor wants to lower the minimum age for playing Quick Draw in places that serve alcoholic beverages from 21 to 18, and remove statutory limitations on the number of per-day offerings for lottery draw games such as Take 5, Pick 10, and Lotto, according to the state association.

In addition, the state Lottery Division is reducing the payment cycle for scratch-off games from 45 days to 28 days, effective July 1, 2021. Also, the Lottery Division authorized licensed courier services to begin offering scratch-off tickets in addition to the draw games they were already authorized to re-sell to remote customers. NYACS opposed the licensing of courier services because it negatively impacts brick-and-mortar lottery retailers.

PENNSYLVANIA

Plastic Bag Ban — According to the Pennsylvania Food Merchants Association (PFMA), the Philadelphia City Council is eyeing Oct. 1 to implement the city's single-use plastics prohibition. The council approved the measure more than a year ago and Mayor Jim Kenney signed into to law at the end of 2019. The city delayed implementation and enforcement due to the COVID-19 pandemic and the passage of a state pre-emption law.

Actual enforcement measures will not go into effect until April 2, 2022, following a six-month grace period during which only warnings will be issued for noncompliance. Retailers will be required to offer notification to customers of the upcoming ban by July 31.

Federal CARES Funding — Facing a billion-dollar budget gap for the 2020-21 fiscal year, Pennsylvania turned to unspent federal CARES funding to balance its books, allocating $1.3 billion to various human services and other lines in a move that drew criticism from stakeholders who felt the money was intended to target and help ailing industry sectors, according to PFMA.

With FY 21-22 budget negotiations set to begin in the coming weeks, Pennsylvania is likely to find itself facing another deficit, the extent of which will depend on what further aid comes from the federal government in another round of stimulus funding, it added.

While Congress and the Biden Administration negotiate the next round of stimulus, state lawmakers are finalizing legislation allocating almost $1 billion in federal funding from the December stimulus bill approved by Congress and former President Trump. While much of the funding was distributed according to formula, funds for rent and utility relief, among other areas, need to be assigned legislatively.

State Budget — Gov. Tom Wolf laid out some of his 2021 objectives ahead of his official budget address, which was scheduled for Feb. 2. Among his priorities are an increase in the state minimum wage from its current level of $7.25 per hour to $12 per hour, with a path to a further increase to $15 per hour, and the legalization of adult-use cannabis, with a portion of revenues going to support restorative justice programs.

PFMA opposes a significant increase to the minimum wage to $15 an hour but is willing to discuss a more reasonable, lower-wage increase.

Convenience Store News encourages local trade associations and business groups to contribute to this column. To spotlight a local or state issue, please email Editorial Director Don Longo at [email protected].