Business groups left smiling after legislative session

After little new legislation, and some failed major bills, the assessment: no harm, no foul


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The biggest thing that happened last legislative session, as far as business is concerned? Almost nothing. And that – for many business organizations – is just fine.

“This was a pretty good session for business,” said David Juvet, senior vice president of the Business and Industry Association of New Hampshire. “Everybody was holding their breath hoping nothing bad would happen. And nothing did.”

No casino gambling. No Medicaid expansion. No minimum wage increase. No gas or beer tax hike, no soft drink tax. No increased business taxes and no messing with business tax breaks. No major budget cuts to hospitals, the university or tourism.

“There were even a few positive, proactive things,” Juvet added.

Here the top four:

 • A major rewrite of the state’s Business Corporations Act (Senate Bill 41). It was the first revision of the law in 20 years, enabling electronic filing, remote shareholder meetings and generally making it easier for out-of-state corporations to domicile here. “This law changes everything,” said Juvet. “We will be as up to date as any state in the country, and it will be useful for that small family-held corporation that we seek to encourage.”

 • Enactment of the Auto Dealers Bill of Rights (SB 126). Dealers didn’t like manufacturers forcing them to invest thousands to upgrade their showrooms every five years or so (at the risk of losing the franchise if the upgrades weren’t made) because, as Peter McNamara, president of the New Hampshire Automobile Dealers Association, said, “Buildings don’t sell cars.” Other states have passed similar laws, but only in New Hampshire are auto manufacturers limited to requiring those upgrades once every 15 years. The bill has some other unique features, including giving dealers access to market share and performance reports.

 • An increase in the reasonable compensation safe haven from $50,000 to $75,000 for sole proprietors (House Bill 598). This is the amount that sole proprietors can pay themselves so that the money will count as wages, taxed under the state business enterprise tax (0.75 percent) as opposed to profits, taxed under the state business profits tax, at 8.5 percent, without triggering an audit. HB598 increased the safe haven from $50,000 to $75,000. “It was off the radar screen, but it was really helpful,” said Bob Nash, of the New Hampshire Association of Insurance Agents. “We think it should be $100,000, but it was a step in the right direction.”

 • Expansion of the research and development tax credit. SB 1 – whose number represents the priority that supporters, including Gov. Maggie Hassan, gave the bill – would double from $1 million to $2 million aggregate cap on the credit and make the new cap permanent. The bill passed both chambers the previous session, only to be sacrificed after it was attached to a non-germane bill about abortion. SB 1 would not change the $50,000 per-business credit cap that is currently allowed against either the BPT or BET, but it would effectively double the number of businesses receiving the tax break.

Other measures passed in the last legislative session: a new program that would allow some people collecting unemployment benefits to start a business, as opposed to looking for work (SB 143); a renewable energy bill that increases alternative compliance payments for those burning wood chips, so utilities will be more likely to buy those chips from Granite State producers (SB 148); a bill allowing restaurants to sell alcohol until 2 a.m. if authorized by local ordinance (HB 575); SB 124 and HB 416 both streamline various environmental permitting processes; and HB 513 enacts changes in the Shoreline Protection Act that is aimed at dissuading municipalities from adding their own ordinances, resulting in a patchwork quilt of regulation.

No ‘tip tax’

But the bigger story is the major legislation that failed.

A bill allowing a casino didn’t happen. Chalk one up for the New Hampshire Lodging and Restaurant Association, which came out against the measure this year, along with a host of other organizations, as well as the $80 million-a-year charitable gaming industry.

Expansion of Medicaid – pushed by the governor and the House -- has been put off until at least October, pending the results of a study commission. The delay occurred much to the disappointment of the health care industry, including the New Hampshire Hospital Association, but the New Hampshire Independent Insurance Agents don’t mind the wait. Ditto when it comes to the watered-down version of any state partnership with the federal exchange.

As for the state budget, hospitals didn’t get cut as much as they feared, and now will play ball with the state on the Medicaid managed-care system whose future was touch-and-go until the hospitals agreed to take part. The university system did all right, resulting in a big sigh of relief by the high-tech industry. And the tourism budget even got a raise. It will again receive 3.15 percent of rooms and meal tax revenue -- estimated to be $7.2 million in 2014, or a $400,000 increase.

Three tax breaks passed last session were about to be thrown off the fiscal cliff by the House, but the Senate rode to the rescue and put them safely back onto the budget.

Two had to do with the net operating loss carryforward deduction, doubling the number of years (from five to 10) it can be taken and raising the amount that can be carried forward from $1 million to $10 million. The third was the recent increase in the reporting thresholds on the BET -- from $75,000 to $100,000 for a business enterprise, or $100,000 to $200,000 of gross sales.

A last-minute hospitality industry amendment to the budget’s trailer bill halted what it saw as the state Department of Revenue Administration’s end-run to gain revenue via a “tip tax,” or an effort to include tips received by employees in calculating the BET.

The DRA said the law justified counting tips because they are reported on an employee’s W-2 form, but the NHLRA argued that because businesses aren’t allow to touch tips, they therefore couldn’t be counted as wages. Lawmakers agreed and knocked the DRA efforts out of bounds.

“We are very happy,” said NHLRA president Mike Somers. “We thought that was great. It put us exactly where we wanted to be, because it really changed nothing.”

The 12 cent-a-gallon gas tax hike, approved the by House, was a non-starter in the Senate. The money was destined to help shore up the state’s sagging highway fund.

“We do need good roads,” said John Dumais, president of the New Hampshire Grocers Association. But more important are those people driving across the border on any roads to fill up their trunks with tax-free merchandise. Even a small rise in the gas tax “is going to be a restraint on those sales,” he said.

However, if the gas tax failure means that the widening of Interstate 93 won’t reach Manchester, “then I put that in the disappointment column. It kicks that can down the road,” said Will Stewart, a lobbyist for the Greater Manchester Chamber of Commerce.

Stewart was pleased, however, that the state is going ahead with a rail study and is studying an infrastructure bank that might enable the state to finance highway construction in the future.

‘Remarkably civil’

The state did raise the cigarette tax a dime, but that wasn’t exactly a big change, since it lowered it a dime the last session, with the hope that increased border sales would offset the loss of revenue. That didn’t happen, but the Dumais was glad that grocers didn’t have to pay the “floor tax” -- a tax on unsold tobacco inventory, which results in a storeowner having to take “thousands of dollars from his operating cash and give it to the state.”

And then there was – in what has become a routine practice – the looting of dedicated funds.

In this case, it was a $17.35 million raid on the Renewable Energy Fund, money that utilities pay for not meeting increasingly stringent renewable energy standards. (There was a $16.1 million outright raid on the REF to bolster the budget as well a $1.25 million “loan” to help bail out Tri-County Community Action Program, based in Berlin.) The fund is designed to help homes and businesses switch to renewable energy, which would have helped that industry.

However the major accomplishment when it came to the budget was that, I the end, it was passed without rancor and endorsed by both sides.

“It was remarkably civil,” said Juvet. “When was the last time you saw Democrats and Republicans both voting for the budget?”

With Democrats taking over the House and keeping the corner office, there were high hopes among labor unions, but the word that AFL-CIO president Mark McKenzie used to describe the last legislative session was “disappointing,” and he wasn’t even talking about the failure to raise the minimum wage, but to two bills passed by both legislative bodies, but killed in conference committee. One would have prohibited businesses from demanding a worker’s social media passwords, and the other would stopped firms from using credit checks when hiring.

The Senate killed the latter by attaching an amendment that would have allowed a company to require workers to give up their paycheck for a debit card, and all the fees that come along with the card.

So everyone’s worst fears were not realized. And that just about sums up the session.

“On the whole, they did a fairly decent job,” said Stewart of the Manchester chamber. “It was definitely better than last session. Not as much drama.”

BILL#

HOW IT WILL AFFECT BUSINESS

TAXES AND CORPORATIONS

HB1 -A     

The budget increases funding to the state university system and the tourism department. Raids the renewable energy fund by some $17 million.

HB2 -FN-A-L     

The trailer bill, which funds the budget, allows cigarette tax to go back up a dime, prevents the DRA from including tips as wages in calculating the BED.  Leaves in place recent changes resulting in a more liberal net operation loss deductions and relaxed reporting thresholds for the BET. 

HB598       

Increases the safe haven the reasonable compensation deduction under the business profits tax for proprietors, from $50,000 to $75,000.

SB1 –FN-A         

Doubles the $1 million aggregate cap on the research and development tax credit against the business profits tax

SB41         

Modernized the New Hampshire business corporations act, enabling electronic filing, remote board meetings, and generally making it easier for out of state corporations to domicile in NH.

HB25 –FN-A         

The capital budget – for the most part – does add $3 million to the business one-stop project.  But neither this nor the budget offers long term funding solutions for sustaining the DOT expansion plans for I-93 and other projects.  Also neither budget lifts the moratorium on school construction.

HB185 -FN         

Adds a quarter cent to the penny tax on heating oil for fuel oil discharge cleanup.

HB676 -FN-A-L       

Extends the Coos county job creation tax credit for five years (2018), still renewable for four years (2022).

HEALTH CARE

SB148 -FN       

Allows state Insurance department to regulate the exchange under Obama care.  (The bills title and most of the text concern states Renewable Energy program, but its the same language covered under 542)

HB573 -FN         

Allows medical marijuana, and procedures for registering “alternative treatment centers” to dispense them.  At least two will be certified around 2015.

HB313       

Requires that pharmacists label compounded drugs.

SB87       

Applies patients' bill of rights to the home health care industry

LABOR, WORKER’S COMPENSATION

SB143 -FN         

Allows some of those collecting unemployment to start a business rather than look for a job.

HB546       

Requires that workers comp insurers requesting an “independent” medical examination, reveal that it is at the request of the employer and insurance carrier and not for treatment.

SB95       

establishes that an injured employee has the right to choose his or her own pharmacy under workers’ compensation.

SB147 -FN       

Requires pharmacists proscribe cheaper generic drugs for workers compensation unless the prescribing physician indicates that the brand name drug is necessary.

HB246       

Increases the penalty of both employers and unemployment benefits recipients who falsely report.

UTILITIES, ENERGY

HB306         

Cuts the amount power plants emit New Hampshire’s regional greenhouse gas initiative (RGGI), increasing their cost to do so.

HB630 -FN         

At least 15 percent of proceeds from the RGGI efficiency programs will help low income people conserve energy.

SB123 -FN-L         

Requires $2 million of RGGI go to municipal energy programs.

HB542       

Lowers the requirements for biomass for the Renewable Portfolio Standards, but increases the amount paid to those burning woodchips, enables Concord Steam plant and other plants to get renewable credits for heat generated.  It also insures that the PUC doesn’t regulate  Voice Over Internet Protocol, and IP-enabled service

SB179       

Allows the Wheelabrator incinerator in Claremont plant to make payments in lieu of property taxes, along with renewable energy providers.

SB99         

Requires a third party evaluation the site evaluation committee and new rules in place by 2015.

HB374       

Instructs the PUC to allow utilities to charge rate payers for programs that increases energy diversity at a reasonable cost

SB191 -FN-A       

Creates a council to forge a state energy strategy.

SB98       

Allows customers to form a group for net metering purposes.

REAL ESTATE/LANDLORD-TENANT

HB413       

Makes it easier for a landlord to regain possession of a property when abandoned by tenants.

HB482 -FN       

Requires landlords to respond to tenant complaints concerning bedbugs, and requires tenants to cooperate in efforts to remediate the pest.

HB211       

Allows landlords to send it by certified mail to the last known legal address of demand for rent and eviction notice.

SB60       

Excludes assisted living facilities from landlord tenant law.

SB43       

Allows municipalities to lower assessments of historic buildings, thereby cutting property taxes.

HB235       

Allows counties to contract with real estate agents for sale or lease of country property.

SB42       

Requires appraisers to submit to criminal background checks

CONSTRUCTION

HB513       

Clarifies the shoreland protection act, tightening it in some respects, with the hope that municipalities won’t pass local ordinances.

HB416       

Shortens the appeals process for a permitting decision relative to fill and dredge in wetlands.

SB124 -FN       

Establishes an integrated land development permit, sort of a one-stop shop for developers.

SB49

provides for appeals of planning board decisions concerning a subdivision or site plan to the board of adjustment prior to appeal to the superior court.

SB12

Preserves of significant archeological deposits.  Backed by builders.

HB507 -FN       

Limits the maximum permit application fee for certain municipal dredging projects to $10,000 plus consulting services.

TRANSPORTATION

SB126 -FN         

The Automobile Dealer Bill of Rights prevents manufacturers from requiring an upgrade until 15 years after the last one, as well as numerous other dealer protections.

SB192 -FN-L         

establishes a committee to study the establishment of a state infrastructure bank.

SB22       

Exempts small trailers from inspection requirements; allowing qualified dealers to inspect trailers.

HB196        

Increases the allowable weight of commercial vehicles with idle reduction devices.

TOURISM, RETAIL, LIQUOR

HB575         

Allows bars to stay open an hour later, to 2 am.

HB383       

Allows OHRVs to travel on portion of public highways to access businesses.

HB635       

Creates a committee to come up with a procedure to naming rights to rest areas.

HB202 -FN       

Allows serving to beverage and liquor licenses for bed and breakfasts in a customer’s room.

HB253       

Allows nano breweries to serve its customers -- with its own product only -- on the premises.

HB254 -FN-A       

Abolishes three person liquor commission board.

HB599 -FN       

establishes a single liquor commissioner.

HB686       

requires liquor commission contracts in excess of $10,000 be approved by executive council.

SB89       

Sets as June, 2016, the ban on the sale of lead fishing sinkers and jigs.

BANKS AND LICENSING

HB559       

Permits fewer examinations of banks that have been given high rating sin previous exams.

SB172

Allows the state and municipality to split up deposit accounts so that each account have a balance under the threshold to be federally insured

SB135 -FN       

Regulates genetic counseling.

HB282       

Requires fingerprinting and criminal background checks for driver education instructors

HB376       

Removes the requirement that barbers, cosmetologists, manicurists, and estheticians have one year of experience prior to the granting of a shop license.

HB385       

Adds a requirement of 2 years of experience to be an elevator and accessibility lift mechanic.

SB173       

Requires child care institutions and child care agencies to conduct criminal background checks of prospective employees..

SB189 -FN       

Abolish plumbers board, and establishes a mechanical licensing board for plumbers, fuel gas fitters and water treatment technicians.

HB177       

Requires organic processor or handler be certified

SB122 -FN       

Establishes commercial license for those transporting northern shrimp

 

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