2015 LEGISLATIVE VICTORIES AND DEFEATS FOR NEW HAMPSHIRE BUSINESSES

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1 Promoting a healthy climate for job creation and a strong New Hampshire economy 2015 LEGISLATIVE VICTORIES AND DEFEATS FOR NEW HAMPSHIRE BUSINESSES HB 673 Establishing a sales and use tax Highlights This bill would have established a sales and use tax in New Hampshire. BIA opposed this bill because it would have taken away one of the key components of New Hampshire s competitive advantage, lack of a sales tax. The House killed this legislation. Victory SB 1 Reducing the rate of the business profits tax This bill provided a modest reduction in the business profits tax from the current 8.5 percent to 7.9 percent, phased in over a three-year period. BIA supported this legislation noting that it would send a positive message promoting job creation in New Hampshire while providing companies with immediate tax relief to compensate for other high costs such as electricity, labor, health care and workers compensation insurance. The Senate included SB 1 in the budget, which ultimately passed the House and Senate and was signed by the governor as SB 9. Victory SB 2 Reducing the rate of the business enterprise tax This bill provided a modest reduction in the business enterprise tax from the current.75 percent to.675 percent, phased in over a three-year period. BIA supported this legislation noting that it would send a positive message promoting job creation in New Hampshire, especially for small businesses, while providing companies with immediate tax relief to compensate for other high costs such as electricity, labor, health care and workers compensation insurance. The Senate included SB 2 in the budget, which ultimately passed the House and Senate and was signed by the governor as SB 9. Victory SB 6 Increasing the research and development tax credit This bill increased state investment in the research and development tax credit from the current $2 million per year to $7 million per year, which more closely approximates business demand for the credit. The R&D tax credit is an important incentive for advanced manufacturers and technology companies, New Hampshire s most important economic sector. The Senate included SB 6 in the budget (starting July 1, 2017), which became law as a result of the House and Senate override of the governor s state budget veto. Victory HB 658 Prohibiting collective bargaining agreements that require employees to join a labor union This bill was one of several related to right-to-work. Right-to-work means that employees cannot be forced to join or financially support labor unions in the workplace as a condition of employment. BIA supported this bill as a way to separate New Hampshire from other states in the Northeast. This bill passed the House, but was tabled in the Senate. Defeat

2 2 HB 591 Relative to the road toll rate and eliminating a capital appropriation for highway projects This bill would have repealed the 4.2-cent increase in the gas tax BIA supported in The increase in this user fee provided much-needed revenue for municipal road and bridge aid as well as for the expansion of I-93 between Salem and Manchester. The House killed this legislation. Victory SB 266 Adopting the Uniform Securities Act This bill provides much-needed modernization to New Hampshire s Securities Act. It clarifies text, eliminates outdated and confusing provisions, and substitutes clear language that more closely aligns with current practices and regulatory policies. BIA supported this bill, which ultimately reduces hurdles for businesses trying to raise capital needed to grow and create jobs. The bill passed the House and Senate and was signed into law by the governor. Victory SB 101 Prohibiting the state from requiring implementation of common core standards This bill was an effort to roll back the implementation of the Common Core higher education standards. BIA opposed this effort because we recognize the importance that more rigorous education standards play in the development of our future workforce. This bill passed the House and Senate but was vetoed by the governor. Victory HB 431 Relative to the placement of all new elective electric transmission lines in New Hampshire This legislation would have resulted in additional burdensome criteria for the siting of certain transmission lines. BIA opposed this bill because it would have resulted in additional costly mandates on badly needed energy infrastructure development and an upward pressure on rates paid by NH businesses and other energy consumers. HB 431 was killed in the House. Victory SB 221 Relative to electric rate reduction financing This legislation permits the Public Utilities Commission to authorize issuance of certain rate reduction bonds for cost recovery of the Merrimack Station scrubber and divestiture of Eversource s remaining generation plants in New Hampshire. BIA supported this legislation because it was the least costly alternative to moving towards a truly competitive energy market, which should provide much-needed relief to rate payers. SB 221 passed both chambers and was signed by the governor. Victory HB 163 Establishing a state minimum hourly rate This bill sought to establish a statewide minimum wage of $16 per hour, more than double the federal minimum wage. BIA opposed this bill, which would put upward pressure on labor costs and put all New Hampshire employers at a competitive disadvantage. If the minimum wage is increased, it should be addressed at the federal level so that all employers across the country are treated equally. The bill was killed in the House. Victory HB 450 Establishing a commission to study and make recommendations for a common definition of employee This House version of this bill, which BIA supported, established a unified definition for employee for use by the NH Department of Employment Security relative to unemployment benefits and by the NH De-

3 3 partment of Labor relative to workers compensation coverage. Currently the two agencies use different definitions that create confusion for employers. The Senate scrapped the language creating a unified definition and in its place created a commission to study the issue. Ultimately the two chambers could not resolve their differences and the bill died. Defeat HB 600 Relative to paid sick leave for employees This bill would have required employers to provide paid sick leave for employees. BIA opposed this legislation noting that it would increase employer costs, hamper job growth, and inappropriately intrude into private sector employee benefit design. The House killed this legislation. Victory SB 153 Relative to the accessibility of criminal records This bill, supported by BIA, preserved the right of employers to conduct criminal background checks on prospective employees when necessary. This bill was passed by the House and Senate and signed by the governor. Victory HB 365 Prohibiting an employer from using credit history in employment decisions This bill sought to prohibit employers from using credit histories when making hiring decisions. BIA opposed this legislation believing it is an inappropriate intrusion by the state into private sector decision making relating to employment. The bill was killed by the House. Victory Budgetary/Fiscal CACR 2 Relating to dedicated funds, providing that funds shall be used solely for the purpose of the fund This resolution, if passed, would allow voters to amend the state constitution to require that revenue from state fees or assessments only be used for the special program for which the fees or assessments were originally imposed. BIA supports this concept (which was also included as a tactic in BIA s 2013 Strategic Economic Plan for New Hampshire). The CACR was retained by the House Ways and Means Committee for action next section. Neutral HB 224 Repealing the exemption for water and air pollution control facilities from local property taxation This bill would repeal the exemption from local property taxes for the appraised value of water and air pollution control equipment as determined by the Department of Environmental Services. BIA opposed this bill. If passed, it would have penalized many New Hampshire businesses that have invested in environmental protection at their facilities. The bill was killed in the House. Victory HB 551 Relative to preventing diversion of business income to tax havens This legislation sought to close a loophole by preventing the diversion of business income to so-called tax havens. BIA opposed this bill because it would increase the New Hampshire tax burden on foreignowned companies doing business in New Hampshire. Only two other states have passed similar legislation, thus New Hampshire would become an outlier, discouraging foreign business investment in our state. The bill was tabled in the House. Victory

4 4 HB 622 Relative to taxation of the taxable estates of decedents This bill sought to reinstitute the estate tax in New Hampshire, which taxes inheritance. BIA opposed the bill because of the punitive effect it would have on family-owned small businesses. The House killed the legislation. Victory HB 634 Relative to applying the interest and dividends tax to trusts, and extending the tax to capital gains This bill, opposed by BIA, sought to implement a capital gains tax in New Hampshire to provide some relief for homeowner property taxes. BIA opposed this legislation because of the harmful effect it would have on business investment in the state. The bill has been retained by the House Ways and Means committee for action next session. Neutral SB 34 Relative to a voluntary tax disclosure and tax amnesty program in the department of revenue administration This legislation, which BIA supported, would have created a voluntary tax disclosure program and tax amnesty program (taxes due are paid without penalty). These programs have been offered in the past in New Hampshire with good results. The Senate included SB 34 in the budget, which became law as a result of the House and Senate override of the governor s state budget veto. Victory SB 232 Exempting certain leases from the real estate transfer tax This bill, which BIA supported, clarifies that New Hampshire shall not collect real estate transfer taxes on long-term ground leases. (A ground lease is an agreement in which a tenant is permitted to develop property during the lease period, after which the land and all improvements are turned over to the property owner. A ground lease is typically a long-term lease.) The bill resulted from Department of Revenue Administration efforts to begin taxing these long-term ground leases, creating higher costs for many businesses. This bill has passed the House and Senate and was signed by the governor. Victory Economic Development HB 279 Establishing a commission to study the economic impact of the arts and culture in New Hampshire This bill establishes a commission to study the economic impacts of arts and culture in New Hampshire, an important quality-of-life metric noted in BIA s 2013 Strategic Economic Plan for New Hampshire. This bill passed the Legislature and was signed into law by the governor. Victory HB 402 Establishing the Franklin Partin right-to-work act This bill was one of several related to right-to-work. Right-to-work means that employees cannot be forced to join or financially support labor unions in the workplace as a condition of employment. BIA supported this bill as a way to separate New Hampshire from other states in the Northeast. It was killed by the House. Defeat

5 5 HB 460 Establishing a commission to study revenue alternatives to the road toll for electric and hybrid vehicles for the funding of improvements to the state s highways and bridges This bill forms a commission to review and make recommendations for highway funding. Road and bridge infrastructure was identified as a key component for economic growth in BIA s 2013 Strategic Economic Plan for New Hampshire. The House and Senate passed this legislation and it was signed into law by the governor. Victory SB 107 Prohibiting collective bargaining agreements that require employees to join or contribute to a labor union This bill was another one of several related to right-to-work. Right-to-work means that employees cannot be forced to join or financially support labor unions in the workplace as a condition of employment. BIA supported this bill as a way to separate New Hampshire from other states in the Northeast. It died in the Senate on a vote. Defeat SB 143 Relative to defining phased development This bill implemented practical changes to municipal zoning that eases the development of housing projects. BIA supported this bill as a way to improve the cost and availability of housing for working people. The House and Senate passed the bill, which was signed by the governor. Victory SB 146 Relative to accessory dwelling units This bill prohibited municipalities from restricting home owners from building accessory dwelling units (commonly known as mother-in-law apartments) on their property. BIA supported this bill because accessory dwelling units are a practical way to improve the cost and availability of housing for working people. The bill passed the Senate but was retained by the House Municipal and County Government Committee for action next session. Neutral SB 223 Relative to name availability for business organizations This legislation, which BIA supported, clarifies statutes relating to naming of business organizations. Making this small but important change removes much of the subjectivity involved in approving business names by the Secretary of State. This bill passed the House and Senate and was signed into law by the governor. Victory Education/Workforce Development HB 124 Relative to the implementation of new college and career readiness standards This bill, if passed, would have required the state board of education to conduct public hearings in each executive council district before new college and career standards could be implemented. BIA opposed these efforts because we recognize the importance that more rigorous education standards play in the development of our future workforce. The bill ultimately was killed in the Senate. Victory

6 6 HB 603 Relative to student exemption from the statewide assessment This bill would have allowed any high school student to be exempted from taking educational assessment tests. BIA opposed this legislation because it sends a message that more rigorous education standards don t matter and because it could have led to the potential loss of federal education funds. The Legislature passed the bill but it was vetoed by the governor. Victory SB 81 Relative to powers of the state board of education This bill was another effort to roll back the implementation of the Common Core higher education standards. BIA opposes these efforts because we recognize the importance that more rigorous education standards play in the development of our future workforce. This bill was killed in the Senate. Victory SB 82 Relative to the authority of the commissioner of the department of education This bill was another effort to roll back the implementation of the Common Core higher education standards. BIA opposes these efforts because we recognize the importance that more rigorous education standards play in the development of our future workforce. This bill was killed in the Senate. Victory Energy HB 208 Relative to allowance sales under the NH Regional Greenhouse Gas Initiative (RGGI) program The House version of this bill would have returned RGGI auction proceeds to all electric customers (currently the first dollar of auction proceeds supports energy efficiency projects). The Senate version would allow rebates to commercial and industrial users, but would eliminate rebates to residential customers to continue funding for low-income weatherization and energy efficiency projects for municipalities and school districts. BIA supported both versions because either would provide modest but important energy cost savings to New Hampshire companies struggling to pay some of the highest electricity rates in the country. The House and Senate conferees were unable to compromise and HB 208 died. Defeat HB 227 Relative to eminent domain on public lands This bill would have required the approval of the appropriate legislative body (city, county or state) before acquisition of land acquired with public funds or land donated to a public entity. BIA opposed this bill, which would have resulted in confusion and delays of badly needed energy infrastructure projects and led to costly litigation for municipalities and affected companies. HB 227 was killed in the Senate. Victory HB 544 Allowing the general court to deny a utility the use of the power of eminent domain This bill would have required public utilities to notify the governor and all state legislators of the proposed project and to wait until a full, regular legislative session has passed before acquiring rights in land by eminent domain. BIA opposed this bill because it would have created unreasonable delays for utilities seeking to develop energy projects and because it would have conflicted with existing law giving the Public Utilities Commission authority over eminent domain takings by public utilities. It also is preempted by federal law. The bill was killed by the House. Victory

7 7 HB 572 Relative to taking land by eminent domain for high pressure gas pipelines and relative to siting of high pressure gas pipelines The House version of this legislation requires payment of the land-use-change tax by the taker when land is taken by eminent domain to build energy infrastructure. The land-use-change tax results when use of land no longer qualifies for a current use assessment. The Senate version completely eliminated mention of eminent domain and the land-use-change tax and instead addressed siting concerns at the Site Evaluation Committee level. BIA opposed both versions of the bill because it creates unnecessary delays to important energy infrastructure projects. HB 572 passed the House and Senate and was signed by the governor. Defeat HB 626-FN Authorizing energy infrastructure development and designating energy infrastructure corridors This bill would have established designated energy infrastructure corridors and a commission to study the designation of energy infrastructure corridors. BIA opposed this bill because it would have resulted in additional costly mandates on energy development putting upward pressure on electric rates. HB 626 was retained by the House Science, Technology and Energy Committee with a recommendation that the bill be killed next session. Partial Victory Health Care HB 330 Establishing an oversight commission for medical cost transparency This bill established an oversight commission for medical cost transparency to monitor and further develop the NH HealthCost website. NH HealthCost is a website developed and maintained by the NH Insurance Department that provides information about the cost of medical services to help NH residents make informed healthcare decisions. The commission is intended to provide the necessary assistance and support to help makes this a more robust tool. BIA supported this bill because of the important role transparency plays in controlling healthcare costs. The bill passed the House and Senate and was signed by the governor. Victory SB 42 Relative to employee notification of contraceptive coverage This bill would have required employers to notify prospective employees of whether or not the company s health insurance policy provided oral contraceptive coverage. This effort, which BIA opposed, was a response to the Hobby Lobby decision (Burwell v. Hobby Lobby Stores Inc., 2014), which struck down the contraceptive mandate under the Affordable Care Act. New Hampshire has had a state contraceptive mandate since BIA felt this bill would have cast a broad net, requiring all companies offering health insurance to comply with new notification requirements when the vast majority would already be complying with the state law. The bill was tabled in the Senate. Victory SB 185 Extending the New Hampshire health protection program This bill would have removed the sunset provision of Dec. 31, 2016 in the New Hampshire Health Protection Program, a New Hampshire solution to expanded Medicaid access under the Affordable Care Act. BIA supports reauthorization of the Health Protection Program because it is increasing access to health insurance, which will lead to improved health, lower healthcare spending, lower premiums and improved worker productivity. This bill was tabled in the Senate. Defeat

8 8 Human Resources/Employment HB 120 Relative to complaint procedures before the state commission for human rights This bill would have disrupted administrative procedures at the Human Rights Commission (a state agency that investigates discrimination and civil rights actions against employers) and could have led to lengthy delays in the resolution of issues before the commission. BIA opposed this legislation (which was ultimately killed) because of delays and increased costs that to which employers would be subject if the bill became law. Victory HB 370 Enabling counties and municipalities to establish minimum wage rates This bill was a backdoor attempt to increase the minimum wage in New Hampshire above what the federal government requires. BIA opposed this bill believing it would put upward pressure on labor costs for all New Hampshire employers. If the minimum wage is increased, it should be addressed at the federal level so that all employers across the country are treated equally. The bill was killed by the House. Victory HB 392 Relative to the minimum hourly wage This bill would increase the minimum wage in New Hampshire to $9 per hour and tie future increases to changes in the consumer price index. BIA opposed this bill believing it would put upward pressure on labor costs for all New Hampshire employers. If the minimum wage is increased, it should be addressed at the federal level so that all employers across the country are treated equally. The bill was killed by the House. Victory HB 684 Establishing a state minimum hourly wage This bill would increase the minimum wage in New Hampshire to $14.25 and tie future increases to changes in the consumer price index. BIA opposed this bill believing it would put upward pressure on labor costs for all New Hampshire employers. If the minimum wage is increased, it should be addressed at the federal level so that all employers across the country are treated equally. The bill was killed by the House. Victory SB 261 Establishing a state minimum wage This bill would increase the minimum wage in New Hampshire to $10 per hour. BIA opposed this bill believing it would put upward pressure on labor costs for all New Hampshire employers. If the minimum wage is increased, it should be addressed at the federal level so that all employers across the country are treated equally. The bill was killed by the Senate. Victory Telecommunications SB 260 Relative to the authority of the public utilities commission to regulate telecommunications service providers This bill would have reestablished the telecommunications sector in New Hampshire as a regulated industry. BIA opposed this bill, which seemed to be a solution in search of a problem. The bill was re-referred to the Senate Energy, and Natural Resources Committee for action next session. Neutral