’08 bills could have big impact on business
This may be an off season for the New Hampshire Legislature, since lawmakers won’t be considering a budget in 2008, but it might as well be open season when it comes to bills that could affect business, for better or worse.
With the budget passed, legislators can finally turn their full attention to the problems at hand. And with mortgage foreclosures, rising health-care and fuel costs, looming educational adequacy costs – among other issues — there is no shortage of things to fix.
The follow is a brief summary of what lawmakers have in mind.
Even if House Bill 471 (the bill passed last year that opened a can of worms by requiring that officers of small construction firms pay for workers’ compensation insurance) is repealed or partially repealed, as expected, in the first week of the session, the industry – in the throes of the worst housing slump since the early ‘90s – should still pay attention to what is going on in Concord.
First, look for some kind of replacement bill to further crack down on independent contractors, which could result in higher workers’ comp premiums.
There’s also a bill sponsored by Rep. Trinka Russell, D-Stratham, that would add Americans with Disabilities Act standards into the state building code and allow the fire marshal to certify third-party inspectors who could go after those in violation.
Several bills would toughen excavation standards, though perhaps speed up the permitting process. Or a bill that would allow towns to charge impact fees for development on state highways, not just local roads.
Several bills are seeking to tackle workforce housing, which is a priority of the Business and Industry Association as well as other business organizations. Lawmakers recently passed a carrot — funding municipalities that put workforce housing in their plans. Now it will again try to pass a stick — requiring it.
One bill, sponsored by Rep. Frances Potter, D-Concord, would require municipalities to provide “reasonable and realistic opportunities” for the development of workforce housing. Municipalities have opposed a similar bill in the past as an unconstitutional unfunded mandate. The BIA argued that courts have already mandated it, and this was just a clarification of case law, but so far to no avail.
“It wasn’t ready for prime time,” said BIA Vice President David Juvet. But “this year leadership recognizes the importance of the issue. Different times, different players.”
Sen. Martha Fuller Clark, D-Portsmouth, is sponsoring a bill that would provide expedited relief from municipal actions that “deny, impede or delay” qualified proposals for workforce housing.
Mortgage and financing
One can’t talk about housing without mentioning the subprime lending crisis that has contributed to a doubling in the number of mortgage foreclosures in the last few years.
One solution, proposed by Rep. Beverly Rodeschin, R-Newport, would enable municipalities to lend a helping hand without being caught holding the bag. It would allow a town to place a priority lien on any mortgage assistance they provide.
“If we give them help, and they lose their home anyway, we want to recoup what they paid for the mortgage. It will help the taxpayers,” said Rodeschin.
Banks and mortgage companies, however, don’t want to stand second in line.
“When someone takes out a mortgage they are asking a lender to give a huge amount of money to a stranger,” said Jerry Little, president of the New Hampshire Bankers Association. “If something goes wrong, at least they are in the first position. This would make underwriting tougher and drive costs higher.”
On the other side of the issue, a bill sponsored by Rep. Cynthia Dokmo, R-Amherst, would make it easier for purchasers of foreclosed homes to evict their new tenants.
Meanwhile, the state Banking Department has proposed a bill to better regulate mortgage brokers – who some blame for making shaky loans in the first place. The head of the House Finance Committee — Rep. Tara Reardon, D-Concord – on behalf of the department is sponsoring the bill, which would for the first time license mortgage originators.
Lawmakers last year defined an adequate education. Now it’s time for the other shoe to drop — how much it is going to cost to implement it, and how to raise the money.
With an income tax still politically off the table (though one is proposed again this year), and property taxes already pushed to the limit, that leaves few options. One of them is casinos. Look for yet another debate on casinos at pari-mutuel facilities. At the same time, prepare for another attempt to regulate the “charity” Texas Hold ‘Em games, with an attempt to give charities a bigger take, with the state skimming a little off the top too.
Thus far, no bill has surfaced that suggests increasing business taxes, but there are several bills affecting them.
For instance, House Ways and Means Chair Susan Almy, D-Lebanon, for instance, would rewrite the Business Profits Tax to “clarify” that any deduction taken by a proprietorship, partnership or limited liability company be equal to what the individual might reasonably earn if performing like services as an employee. This bill was written because of accountants’ concern the state was low-balling the deduction, and would benefit businesses, not hurt them, Almy said.
Almy also is sponsoring a bill that would allow municipal officials to request rental, lease and expense information from commercial and industrial properties for the purpose of determining market value. While the information is considered confidential, it could be made public if any laws were violated resulting in prosecution.
Almy said that commercial property sales are so rare that business records give a more reliable measure of value.
In the meanwhile, a number of smaller tax changes are in the works. For instance, Rep. Jessie Osborne, D-Concord, would like to add a nickel to the current 30-cent-a-gallon beer distribution tax in order to fund alcohol abuse programs.
Told retailers might complain the increase could hurt border stores, Osborne said, “Come on – 5 cents is not going to stop someone from buying a six pack.”
Speaking of dedicated taxes, look for some effort to roll back the Registry of Deeds surcharge, earmarked for the Land and Community Heritage Investment Program. There is also a bill, sponsored by Sen. Deborah Reynolds, D-Plymouth, to ease the real estate transfer tax by passing an exemption for transfers between closely held corporations and trusts.
Of course, the biggest dedicated fund of all is the highway fund, which is so underfunded that the state’s 10-year highway plan will take several years longer than that to complete.
Rep. Fred King, R-Colebrook – in response to a suggestion from the Transportation Commissioner Chuck O’Leary – proposed a 6-cent gas tax increase to help pay for the highway play. But his boss – Gov. John Lynch – said he prefers to borrow the money instead, so any tax gas increase will be difficult to pass.
Lynch’s proposed $114 million bond issue has the full support of the Associated General Contractors, who are hoping that an injection of road construction funds will help offset the slowdown in the housing market.
Truckers have mixed feelings about the 6-cent gas tax increase, according to Robert Sculley, president of the New Hampshire Motor Transport Association. While they favor the goal, “the big question is how much of an increase is manageable,” said Scully.
There also is a bill calling for a much smaller increase (and with more chance of support) on both gasoline and home heating oil in order to better fund a state program to clean up oil spills.
Two bills – sponsored by Anthony Simon, D-Manchester – would increase the fuel import fee a fifth of a penny to 1.2 cents a gallon, and slightly less than a quarter of a penny to increase the import fee on home heating oil to 1.725 cents a gallon.
The Transport Association is less ambiguous about a much smaller fuel tax surcharge, because it considers the levy unconstitutional in the first place: a disguised gas tax that is being used for environmental purposes.
Meanwhile Sen. Peter Burling, D-Cornish, would like to shave a penny or two off the price of gas by looking at laws that would standardize pricing at the pump. The law would take into account the temperature of the gas (which apparently affects fuel volume and efficiency) and would forbid fuel being sold by the fraction of a cent.
House Bill 1434 is New Hampshire’s response to part of a Regional Greenhouse Gas Initiative (RGGI) adopted in 2005.
If adopted, the bill would institute a regional cap and trade program to go into effect in 2009, but with a twist. Other such programs usually offer certain “allowances” to pollute for free until a collective cap is reached. If you use up those allowances you have to purchase them from another utility on the open market.
The RGGI program would have a regional cap of 188 million tons, with New Hampshire limited to 8.6 million tons (to be reduced by 10 percent by 2018.) But there would be no free allowances, explained Joe Fontaine, trading program manager for the state Department of Environmental Services. That means that emitters would have to pay up for every ton of CO2 they admit.
“There are still a lot of questions about how it would be rolled out,” said the BIA’s Juvet. “How much will it cost? How would the proceeds be used?”
Meanwhile several bills would outline the siting of renewable energy facilities, including one that would allow Public Service of New Hampshire to recover the cost of constructing generation facilities and a bill that would require the Public Utilities Commission to establish an excess consumption tax on electricity.