2014 Legislature: déjà vu all over again

Once again, there are repeating themes, repeat bills and a relative dearth of new subjects

One of my duties in my day job is to review each piece of legislation to determine the interest level of my colleagues in bills filed in the Legislature.

This year, the truth of American philosopher Yogi Berra rings true: “It’s déjà vu all over again.”

Having observed the Legislature for all of the years since it went to annual sessions, the repeating themes, repeat bills and relative dearth of new subjects is apparent. Indeed, this year’s review makes me wonder if annual sessions are a good idea, except in the case of emergencies!

Among those subjects which have come up once again this year: legalizing marijuana for recreational use; expanding or amending the use of marijuana in the medical context; many measures on gambling expansion including a single casino, multiple casinos and revising rules concerning “games of chance”; and surrogacy for health care decisions in the absence of written advance directives. These are only a smattering and whether reconsideration of such subjects this year will add anything to the common good is questionable.

On other matters, there is a bill to make an appropriation for New Hampshire Public Television, which was unfunded during the legislative session of two years ago; a bill on discrimination, which makes certain changes in state law to conform with the Federal Fair Housing Act; a bill on the sale of fireworks; a bill on student social media policies; a bill establishing a state economic development plan and process, assumedly a reaction to the Business and Industry Association’s development of a state economic plan; a “death with dignity” bill, a repeat of efforts periodically offered during the last 20 or 25 years; a bill repealing the death penalty; and a bill prohibiting the use of funds received from a political subdivision of the state to lobby, an interesting calculation to be made by entities doing business with state or local government.

Interestingly, Senate Bill 289 revises the Uniform Trust Act, which would redefine what a “validated will” is and how one can be confirmed. It also allows for establishing the validity of a will during the testator’s lifetime. While this may sound like a very specialized document, New Hampshire’s trend to make probate matters easier and trust administration more flexible appears to be furthered by this proposal.

Another bill of interest is SB 332, relative to the Ballot Law Commission (of which I am a member), which grants the commission jurisdiction over complaints that political advertising has been paid for by organizations that failed to register and report receipts and expenditures required by law. This would add substantially to its workload, and whether the commission is the right place for such subject matter is debatable.

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Finally, one of the most problematic bills is House Bill 1509, submitted by Reps. David Hess and Kenneth Weyler, which would include nonprofit charitable enterprises under the business enterprise tax and lower the tax rate.

Unlike other states, New Hampshire already imposes a tax on the dormitories and cafeterias of educational 501(c)3 organizations, putting them at a competitive disadvantage.

The basic principle here is that “tax-exempt” entities are, and in fact should be, tax-exempt. The current proposal, which was revised substantially through an amendment to the initial language, would seek to apply the BET to 501(c)3 entities with $2 million in certain business activity through providing services, unless those entities were exempt from filing a Form 990 with the Internal Revenue Service. If this sounds complicated, it is.

In a news conference to announce the amendment, Representative Hess indicated that there are large not-for-profits that escape contribution to the tax base, including hospitals and large educational institutions. While this may be true, there is a policy and legal reason for the exemption — namely, the good done by the entities for society, which is a traditional reason for the exemption.

If the purpose of the bill is to tax large hospitals and universities, it misses the mark and traps many, many other not-for-profits. Indeed, service-providing not-for-profits get the majority of their funding through state or federal funding, which is the way New Hampshire has chosen to provide services to a large extent. To then tax the entities to put money in the coffers of the governments that provide the funding seems rather circular.

Additionally, for many of these entities, any surplus they generate during the year or their ability to have break even budgets is due to fundraising efforts. To then make that money the source of taxes seems illogical and counter-productive.

The current effort seems misguided. These not-for-profits have nothing to credit their BET against as for-profit businesses do, and for all the reasons stated above, seems counter-productive.

Brad Cook, a shareholder in the Manchester law firm of Sheehan Phinney Bass + Green, heads its government relations and estate planning groups. He also serves as secretary of the Business and Industry Association of New Hampshire.