Before it was passed, a bill prohibiting transgender people from using public bathrooms with the sex they identify as drew passionate debate on the floor of North Carolina's state legislature. Gov. Pat McCrory (R) has signed the bill into law. (Reuters)

In a matter of hours, North Carolina became ground zero for the increasingly heated battle over gay and transgender rights -- not unlike Indiana's time in the spotlight last year.

And just like in Indiana, you could make the argument that the law North Carolina Republicans passed in just 12 hours on Wednesday could play right into Democrats' hands for the state's contested statewide races -- especially the 2016 governor's race.

In a dramatic special session Wednesday, North Carolina became the first state in the nation to require transgender people to use the bathroom corresponding with the gender they were born with rather than the one they identify with.

Lawmakers passed it in response to a nondiscrimination ordinance adopted last month by Charlotte, North Carolina's largest city and the state's commercial hub. Incensed state Senate Democrats walked out of the vote in protest, but Gov. Pat McCrory (R), who originally opposed the special session, signed the bill into law late Wednesday, saying it was necessary to protect North Carolinian families concerned about their privacy and safety.

So-called "bathroom bills" are a major flash point in the ongoing debate about LGBT rights since the Supreme Court legalized same-sex marriage last year. South Dakota's Republican governor vetoed one earlier this month, and other states are considering their own.

Simply repealing Charlotte's bathroom ordinance probably wouldn't have made such a large political ripple in a socially conservative-leaning state like North Carolina. One local poll showed 66 percent of likely North Carolinian primary voters either wanted the law repealed or a referendum on it.

But the political danger for Republicans comes from the fact that Republican legislators made the law much broader than even Democrats had anticipated. The law also prevents municipalities from creating new LGBT protections -- whether in bathrooms, in public accommodations or at the workplace. Some Democrats also think the law makes it difficult to sue for discrimination, though the interpretation of that clause is up for debate. (State Rep. Dan Bishop (R), the bill's sponsor, says the state's constitution required Republicans to override all LGBT non-discrimination laws just to override Charlotte's.)

Still, its breadth has stirred up a backlash not unlike what Indiana Republicans faced last year when the state passed a religious freedom bill aimed at protecting businesses. Companies and organizations like American Airlines, Wells Fargo, Apple, Microsoft, Dow Chemical and the NCAA -- many of which have a significant presence in North Carolina -- have strongly opposed North Carolina's law.

With the business community at their backs, Democrats can argue this new law won't just hurt LGBT residents, but that it will hurt North Carolina's economy -- just like evidence shows it hurt Indiana's. A survey found Indiana's largest city, Indianapolis, was estimated to have lost $60 million in economic investment in the aftermath of a religious freedom bill that passed the state last year. The business community was already in action in nearby Georgia, where Disney and Marvel are threatening to pull out of filming in Georgia if the state's Republican governor signs a religious liberty bill into law aimed at protecting clergy who don't want to perform same-sex weddings.

Sure enough, McCrory's Democratic opponent, state Attorney General Roy Cooper, released a video statement Wednesday that ties North Carolina's newest law to Indiana.

"We have seen how this played out when Indiana tried it – business left the state, or thought twice about bringing in new jobs, and millions of dollars in revenue was lost," he said.

What's more, because the law preempts local ordinances, Democrats can reasonably argue Republicans are the ones playing the big-government role.

Some of these arguments seem to have worked in Indiana. Indiana Gov. Mike Pence (R), once a safe bet for reelection, is now considered vulnerable after his approval ratings plummeted in the religious freedom debate. Pence is actually one of two vulnerable GOP governors that made our list of the top five. The other? McCrory.

McCrory was elected in 2012 as part of a Republican wave that swept the state's government. The former Charlotte mayor ran as a relative moderate in the general election, but Democrats hope to make the case in November that he's swung far to the right to accommodate the conservative state legislature.

The fact that the governor just signed one of the most sweeping bathroom bills in the nation can only help fuel that narrative.

"He needs moderates to win," said state Sen. Jeff Jackson, a Democrat from the Charlotte area.

Republicans say Democrats might be in a sticky position, too. Eleven Democrats in the House, more than a third of the caucus there, voted for the bill, so they're far from a united front. And given local polls showing concern over the Charlotte ordinance itself, it's fair to wonder if Democrats coming out so publicly against it might backfire on them. How would Cooper hold up in trying to explain North Carolina families why he supports letting transgender residents use public bathrooms and argue he's trying to dodge that?

Things moved quickly Wednesday in North Carolina's special session; the law was introduced and passed in a matter of 12 hours. But it is very likely to remain an issue. Civil liberty and LGBT advocacy groups are looking at their legal options, claiming the bathroom section of it violates federal law.

And like much of the fallout from this law, that, too, may benefit North Carolina Democrats.