2016 trade talk

Is compromise in the air for the new legislative session?


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Raise the state minimum wage! But not for those under 17, and maybe not so much the tipped wage – as an attempt to make a hike more amenable to small businesses and the restaurant industry.

Lift the cap on net metering! But only for a year, and then let the Public Utilities Commission set a lower rate, to cater to utilities.

Put restaurant signs up on the highways! But only south of Concord, so as not to offend those fiercely protecting the scenic beauty of the North Country.

Three major bills pending in the 2016 session of the N.H. Legislature, designed not to provoke, but to pass. Such bills imply a spirit of compromise from the get-go, something not seen in this state capital in quite a while. Surprisingly, this seems to be happening in an election year, a very bombastic one at that if presidential candidates are setting the tone. But New Hampshire has often gone its own way.

A willingness to listen, then bend, has been almost as rare of late in Concord as in Washington, but the fact that much of its legislative business is about business is not unusual at all.

NH Business Review examined the 765 legislative service requests, or LSRs, filed for the 2016 non-budget session, and found a little more than a third – 273 – that directly affect business.

Of course, state lawmakers have forged compromises before, and in the recent past.

Take Medicaid expansion, the biggest item on the agenda this session, affecting some 45,000 people too poor to afford to pay health insurance premiums under the Affordable Care Act but not poor enough to qualify for Medicaid.

When New Hampshire lawmakers agreed two years ago to initiate the expansion, the federal government covered 100 percent of the cost. In the upcoming session, they will have to decide whether to pony up 10 percent of the cost that will no longer be met by the federal match. Not only Democrats and social welfare organizations support the action but also business organizations fearing cost-shifting to group health plan premiums that would result in tens of thousands of people losing their insurance.

While most Republicans are reluctant to contribute state funds to sustain President Obama’s signature accomplishment, Senate Majority Leader Jeb Bradley, R-Wolfeboro, said he supports reauthorization. 

“It has helped minimize the hidden tax, the cost-shifting onto business. Someone has to pay for that care, and it seems reasonable not to turn away hundreds of millions of dollars of federal money to help those who have fallen through the cracks of Obamacare,” he said.

How both sides work together on the Medicaid issue might set the tone for the rest of the legislative session, where the main issues affecting business might be summed up as follows: labor, energy, taxes and everything else.

Minimum wage

New Hampshire hasn’t had its own minimum wage since 2011, defaulting to the federal minimum of $7.25 an hour, the lowest rate in New England. Massachusetts, for instance, just raised its to $10, and it’s due to go up to $11 next year. 

Previous attempts to raise the New Hampshire minimum have gone nowhere, so Rep. Ed Butler, D-Hart’s Location, a long-term member of the House Commerce Committee and the owner of the Notchland Inn, has a more modest proposal. 

House Bill 1480 would raise the state’s minimum wage to $9.50 an hour by 2019, but with a twist: It would exempt those under 17 years old. Butler’s bill also minimizes increases for tipped workers, now set to 45 percent of the minimum.

“My goal is to increase the minimum wage, but recognize the challenges that brings to small businesses. I would exempt kids up to the age of 17, because in many cases, it will help them get their first job,” he said. “I want to be very reasonable, with the hope that some conservatives might consider this.”

“Certainly that would make it more palatable,” said Henry Veilleux, a lobbyist for the NH Lodging and Restaurant Association, though he said he would have to see the language of the bill once it is introduced and run it by his board. 

What is not palatable to the association is a bill sponsored by Rep. Jacalyn Cilley, D-Barrington, to raise the tipped wage to the full minimum by 2020, a variation of bills being introduced in state houses around the country. Opponents argue that servers make more in tips than wages anyway, and might actually lose money if they are perceived to make a living wage, but that hasn’t happened in other places were the tipped minimum increased Cilley said.

“People don’t stop tipping,” she said.

Cilley also has a bill that would require those with state-funded projects to pay prevailing wages, though it exempts municipal public works projects. Local contractors, primarily non-union, have opposed similar measures, arguing that it would result in work going to out-of-state union firms.

Cilley said the exact opposite is true: New Hampshire’s lower wages attract non-union firms from out of state. Raising wages will mean more work for local contractors.

Budget watchers will point to the fiscal impact statement, predicting it would raise the cost of projects by $2.6 million annually, with more than 60 percent borne by the state.

But Cilley retorted that the state will also save money because higher-paid workers don’t need as many state-funded benefits.

Also, expect a battle over HB 1252, which would allow employers to pay hourly employees every other week. (Currently only salaried employees can be paid biweekly.)

“This can come as a big surprise for small businesses without a human resources department and for employers that operate in multiple states, who can find themselves in a government audit and penalty situation,” said Laurie Sanborn, R-Bedford, and the chair of the House Business Caucus, who introduced the bill.

Unions are concerned that those living paycheck to paycheck, especially part-time workers with irregular hours, might end up waiting almost a month before they receive their first check.

Energy/environment

Lifting the net metering cap is the top priority of the NH Clean Tech Council.

With net metering, utilities are required to credit customers when their alternative energy source produces more energy than they consume. The cap was put in place to protect utilities, which argue the rate they are required to pay doesn’t take fixed costs into account.

Bradley’s bill – Senate Bill 333 – straddles both positions, lifting the cap from 50 to 75 megawatts to handle the immediate situation, but instructing the PUC set a “less generous rate so the people not net-meeting are not paying a subsidy for those who are,” he said.

Stakeholders appear to be on board with the compromise, at least in concept. 

But something better be worked out, warned Clean Tech Council coordinator Kate Epsen. She argued that, otherwise, those producing their own energy will simply store it in a those new high tech batteries coming out, and leave the grid altogether, which would be the worst outcome, at least as far as the utilities are concerned. 

There are other bills addressing net metering. One, House Bill 1483, sponsored by Rep. Lee Oxenham, D-Sullivan, would require that a utility bill individuals in a group project. If that doesn’t fly, Oxenham said, there are two other provisions: one that would exempt companies that install net metering systems, and another that would provide a discount for such projects. 

Utilities also will be dealing with a number of bills trying to stymie major energy projects.

This year, the focus has shifted from Eversource’s Northern Pass to Kinder Morgan’s natural gas pipeline, which is proposed to run through the southern end of the state.

Rep. James McConnell, R-Keene, is sponsoring five bills related to the subject, from charging royalties on gas exports to requiring that pipelines are built below the frost line.

“My overall objective, to be honest, is to defeat this pipeline by increasing the economic pain to Kinder Morgan by making them meet the minimal considerations for health and safety of the citizens,” McConnell said.

There also will be a few bills aimed at dealing with electric vehicles.

One, introduced, by Rep. Norman Major, R-Plaistow, would increase registration fees for fuel-efficient cars and double them for electric cars, since they don’t pay any gas tax.

“The good news is energy efficiency, but the bad news is that the highway fund gets blown away when these cars take over,” said Bill Ohm, R-Nashua, a supporter of the bill, who joked that the bill might create a bipartisan consensus “against it” by uniting conservatives opposed to all tax hikes and liberals who don’t want to penalize fuel-efficient cars.

Meanwhile, Sen. David Watters, D-Dover, is sponsoring a bill that would allow municipalities to spend transportation funds to finance charging stations in city-owned parking garages.

Environmental initiatives are also on the radar screen of the construction industry.

Look for a tug of war over environmental standards in the state’s building code, the continuation of the Shoreland Protection Act, environmental permit requirements and a bill dealing with the effects of rising sea levels due to climate change, which would require state agencies to audit existing laws governing construction of state-funded projects on the Seacoast.

Taxes

Just because 2016 isn’t a budget year doesn’t mean that taxes are off limits. There are several bills dealing with what was once known as the “Planet Fitness tax,” aimed at easing the tax burden on companies that go public or sell shares to outside investors. 

Towards the end of the 2015 session, Planet Fitness threatened to leave the state unless the law was changed. The change was not made, and Planet Fitness stayed. And now that the crisis has passed, said Bradley, “it will help us have a rational discussion.”

There will probably be another battle over a bill sponsored by Sen. Nancy Stiles, R-Hampton, that would return more rooms and meals tax revenue to municipalities that contribute more, as well as HB 1214, sponsored by Rep. Laura Pantelakos, D-Portsmouth, which would allow cities and towns to add additional surcharges on the rooms tax.

And there are number of tax breaks for those paying business taxes. 

Keene Republican McConnell is sponsoring a bill that would exempt manufacturers in rural counties, and there are other bills exempting new business and the film industry.

On the other hand, Rep. Susan Almy, D-Lebanon, wants to repeal a provision in the law governing reasonable compensation. HB 1443 would shift the burden of proof back from the Department of Revenue Administration to the taxpayer when it comes to large taxpayers paying state business taxes.

Almy said that reasonable compensation is allowing companies to claim another $100 billion of income as compensation, rather than profits, lowering their BPT tax burden by $85 million without a real fear of being challenged.

Retail and hospitality

The NH Retail Association will be watching bills addressing genetically engineering labeling, those restricting the use of food stamps in convenience stores and the sale of gift certificates.

The latter bill – which the association supports – would lift the threshold from $100 to $250 at which the state would require the issuer of an unused gift certificate or card to turn the money over to the state after a certain period of time. 

Meanwhile, the Lodging and Restaurant Association will be dealing with “disruptive” industries, like Airbnb.

Butler, the Hart’s Location Democrat and innkeeper, is sponsoring a bill that would require that such companies turn over records so the DRA can make sure they pay the rooms and meals tax.

Perhaps the biggest impact on the hospitality industry would be a bill sponsored by Sen. Regina Birdsell, whose bill would allow logos on state highway signs to point motorists to restaurants and other amenities.

But only south of Concord, stressed Veilleux.

“This bill is a compromise,” he said. “Remember what those are?”

But the real question for 2016 isn’t whether lawmakers remember what compromises are, but remember how to make them. 

Bob Sanders can be reached at bsanders@nhbr.com.

 

BILL NUMBER

CHAMBER IN WHICH BILL PASSED

BILL TITLE

PRIME SPONSOR

TAXATION AND REGULATION

SB342

S

Making certain changes to business profits tax provisions affecting a business organization when owners sell or exchange ownership interests in the business.

Jeb Bradley

HB1658

H

Establishing one-stop business permitting.

Neal Kurk

HB1348

H

Repealing the exemption for certain transactions under the consumer protection act.

David Luneau

HB1441

H

Requiring business impact notes for proposed legislation.

Laurie Sanborn

SB304

S

Prohibiting corporate advertising and marketing on school property.

Nancy Stiles

HB1262

H

Relative to the application of zoning ordinances to home-based businesses.

Max Abramson

HB1150

H

Relative to the penalty for failure to deliver goods under the Uniform Commercial Code.

Richard Marple

HB1258

H

Establishing exemptions from the business profits tax and business enterprise tax for new businesses in New Hampshire.

Benjamin Baroody

HB1422

H

Creating an exemption from the business profits tax for new businesses in New Hampshire.

Eric Estevez

HB1254

H

Providing an exemption from the business profits tax and the business enterprise tax for certain manufacturing businesses.

James McConnell

HB1385

H

Relative to the sale or exchange of an interest in a business organization under the business profits tax.

Patricia Lovejoy

HB1538

H

Relative to revising the business enterprise tax as a business flat tax, reducing the rate of the interest and dividends tax, repealing certain taxes, and establishing a commission to recommend statutory changes for the implementation of this new tax structure.

Paul Ingbretson

HB1443

H

Relative to the reasonable compensation deduction from gross business profits under the business profits tax and requiring the department of revenue administration to prepare draft rules relative to auditing.

Susan Almy

HB1572

H

Establishing a broadband deployment tax credit incentive program against the business profits tax and the business enterprise tax.

Charles Townsend

ENERGY AND UTILITIES

HB1374

H

Relative to rebates to ratepayers from the renewable energy fund.

Jeanine Notter

HB1116

H

Relative to net metering.

Frank Edelblut

SB333

S

Relative to net metering.

Jeb Bradley

HB1602

H

Establishing a road usage fee and making an appropriation therefor.

Norman Major

HB1195

H

Relative to prepayment contracts for petroleum products.

John Hunt

HB1483

H

Relative to community renewable energy.

Lee Oxenham

SB359

S

Relative to funding electric vehicle charging stations with municipal registration permits.

David Watters

HB1104

H

Relative to electric renewable energy classes.

David Murotake

HB1691

H

Making certain changes to the renewable portfolio standard.

Michael Vose

HB1140

H

Relative to financial responsibility for gas transmission pipelines.

Eric Estevez

HB1660

H

Relative to eminent domain for gas pipelines and relative to assessment of the land use change tax for eminent domain takings for energy infrastructure.

James Belanger

HB1148

H

Relative to pipeline capacity contracts.

James McConnell

HB1149

H

Requiring a royalty on the price of natural gas conveyed by pipeline intended for use in a foreign country.

James McConnell

HB1472

H

Relative to the siting of certain new pipelines and storage vessels.

James McConnell

HB1275

H

Relative to net energy metering capacity.

John Mann

HB1659

H

Relative to the implementation of the clean power state implementation plan.

Michael Vose

HB1101

H

Prohibiting charges to New Hampshire residents for the construction of high pressure gas pipelines.

Eric Eastman

HB1568

H

Relative to prepaid road tolls for certain alternative energy vehicles.

Franklin Tilton

HEALTH AND INSURANCE

HB1696

H

Requesting a modification of the New Hampshire health protection program.

Joseph Lachance

HB1690

H

Extending the New Hampshire health protection program.

Thomas Sherman

LSR2940

S

Relative to Medicaid home health care services.

Andrew Hosmer

LSR2834

S

Relative to a special health care service license.

Jeb Bradley

HB1159

H

Relative to sale of tobacco products.

John Hunt

HB1142

H

Relative to employee compensation at certain hospitals.

Kermit Williams

HB1316

H

Relative to hospital rates for self-pay patients.

John Hunt

LSR2878

S

Relative to prior authorization for substance abuse treatment.

Nancy Stiles

HB1495

H

Relative to insurance incentives to lower costs of health care.

Neal Kurk

HB1342

H

Prohibiting the use of certain information to underwrite insurance.

William Hatch

HB1444

H

Relative to the rate of the insurance premiums tax.

Susan Almy

EMPLOYMENT

HB1480

H

Establishing a state minimum wage.

Edward Butler

HB1512

H

Relative to the definition of "employee" for the purposes of workers' compensation and unemployment compensation.

Keith Murphy

SB393

S

Relative to data privacy in the workplace.

Jeb Bradley

HB1641

H

Relative to requiring prevailing wages on state-funded public works projects.

Jacalyn Cilley

HB1346

H

Relative to minimum wage for tipped employees.

Jacalyn Cilley

HB1561

H

Relative to freedom of expression on college campuses.

Frank Edelblut

HB1108

H

Relative to inquiries by employers into the criminal history of applicants for employment.

Frank Heffron

HB1301

H

Relative to the issuance of youth employment certificates.

Gregory Hill

HB1476

H

Relative to prohibitions on the employment of youth.

J.R. Hoell

HB1341

H

Relative to employee payments to unions.

John Martin

HB1185

H

Relative to breaks for hourly employees.

John Potucek

HB1252

H

Permitting employers to pay wages to employees weekly or biweekly.

Laurie Sanborn

HB1376

H

Relative to temporary workers.

Michael Cahill

HB1523

H

Relative to government construction contracts.

Max Abramson

REAL ESTATE, CONSTRUCTION, ENVIRONMENT

HB1320

H

Relative to assignment or transfer of an operating permit issued by the department of environmental services.

John Cloutier

SB375

S

Establishing the coastal marine natural resources and environment commission.

David Watters

SB374

S

Requiring the office of energy and planning to update coastal flooding trends.

David Watters

LSR2724

S

Requiring certain state agencies to conduct an audit of laws governing coastal regions to enable authorities to take appropriate actions.

David Watters

SB440

S

Repealing the repeal of certain fees in the shoreland protection act.

Jeb Bradley

SB446

S

Relative to requirements of the state building code.

Gary Daniels

HB1282

H

Relative to the state building code.

Carol McGuire

HB1243

H

Relative to storm water or sewage penalties.

Carol McGuire

HB1579

H

Relative to regulation of the practice of out-of-state brokers by the real estate commission.

Benjamin Baroody

HB1196

H

Relative to the amount of a money judgment for unpaid rent.

Brian Chirichiello

HB1204

H

Relative to payment of rent pending the stay of an eviction proceeding.

Patrick Abrami

HB1315

H

Adding mixed-use development to the definition of business and industrial facility.

Catherine Cheney

HB1617

H

Relative to funding for housing projects by the New Hampshire housing finance authority.

Tara Sad

HB1298

H

Relative to damage to private property.

Gene Chandler

RETAIL

SB403

S

Relative to the sale of gift certificates with expiration dates.

Jeanie Forrester

HB1674

H

Requiring the labeling of genetically engineered foods.

Max Abramson

HB1675

H

Relative to the legalization and taxation of marijuana.

Michael Brewster

HB1425

H

Restricting the use of food stamps in convenience stores.

Don Leeman

HB1227

H

Repealing provisions of law regulating Sunday business activities.

Eric Schleien

HB1208

H

Relative to administration of the tobacco tax.

Russell Ober

HB1554

H

Establishing a state sports lottery.

Adam Schroadter

HB1151

H

Relative to after market tinting on side windows.

Gregory Hill

TOURISM, HOSPITALITY

LSR2733

S

Establishing video lottery and table gaming at one location.

Lou D'Allesandro

HB1214

H

Allowing towns and cities to authorize an additional surcharge on hotel occupancy under the meals and rooms tax.

Laura Pantelakos

LSR2696

S

Relative to highway signs.

Regina Birdsell

HB1360

H

Establishing a credit against business profits taxes for media production expenditures in New Hampshire.

Eric Eastman

SB345

S

Relative to the definition of agritourism.

David Boutin

HB1141

H

Defining "agritourism."

Robert Haefner

HB1355

H

Relative to poultry producers exempted from meat inspection requirements.

Peter Bixby

HB1689

H

Relative to operator requirements under the meals and rooms tax.

Franklin Sterling

LSR2703

S

Relative to disposition of meals and rooms tax revenues to towns and cities.

Nancy Stiles

HB1590

H

Relative to the regulation and taxation of short-term rental businesses.

Edward Butler

LSR2839

S

Enabling municipalities to license and regulate short-term rental businesses.

Martha Fuller Clark

HB1605

H

Prohibiting the use of latex gloves and utensils in the food service industry.

Suzanne Smith

HB1697

H

Relative to the operation and insurance of transportation network companies.

John Hunt

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