NH LEGISLATIVE REPORT– June 12, 2012
The NH State Legislature is over, but members could return on June 27th, if necessary, to take up any bills vetoed by Governor Lynch.
Here is a final disposition of bills that the NHHTC tracked and/or took a position. They will become law, unless otherwise indicated.
House Bill 1418 (5 separate topics combined in one bill.
- BET Threshholds: Increases in the threshold amounts for taxation under the Business Enterprise Tax. The gross business receipts threshold would increase from $150,000 to $200,000. The gross enterprise value tax base threshold would increase from $75,000 to $100,000. Both are adjusted for inflation at the time of filing. NHHTC supported verbally with legislators as the bill evolved.
- Business Tax Study: Extends the Commission to Study Business Taxes. A report on proposed changes in business taxes is due by the next legislation session.
- Internet Access Taxes: Clarifies state law so that Internet access service is not subject to the communication services tax. Some companies were charging the 7% Communications Services Tax on access and data plans, and State revenue officials were telling companies to pay the tax if their offerings to consumers were bundled. This bill stops those practices. NHHTC supported.
- Tax Revenue Transfer: Allows certain revenues received from the Insurance Premium Tax to be transferred to the Department of Health and Human Services to provide services to the developmentally disabled.
- BPT Expense Deductions: Allows a business organization to calculate expense deductions not to exceed $25,000 in the calculation of gross business profits under the Business Profits Tax.
Senate Bill 295 – Increase in Research & Development Tax Credit Cap
This number one priority bill for the NHHTC and the BIA is dead because of legislative gamesmanship played in the NH House. The R&D tax credit bill would have raised the overall cap on available credits against the Business Profits Tax and Business Enterprise Tax from $1 million to $2 million. It had passed the NH Senate and was in the NH House, where there were enough votes to pass it. But, House leaders, knowing the bill had wide support, added a non-germane amendment on abortion restrictions to the R&D bill and sent it back to the NH Senate which had already defeated similar language on abortion restrictions earlier in the session. The Senate, faced with an R&D tax credit bill that was no longer in its pure form, defeated it. Instead, the Senate revived a House-approved R&D bill from the last legislative session that was still in play, and passed it. It extends the current R&D tax credit on the books from 2012 to 2015. Senate leaders said they will try to increase the cap next session.
Senate Bill 203 – Modernizing NH LLC Act
This bill makes the LLC law more user friendly with less red tape. There is a new definition of the fiduciary duties of members and managers, and the elimination of ambiguities in the law, which makes it more understandable so small businesses don’t have to pay lawyers to decipher it. It betters defines terms such as allocation and distribution. NHHTC supported verbally with legislators as bill evolved.
Tax Credit for Scholarships
Termed a school voucher program, it would direct money from a business tax credit to a scholarship fund that would pay for students to attend private or public schools outside their district. The fund would have a cap of $3.4 million in year one, and $5.1 million in year two. The average scholarship would be $2,500. The business credit would be 85% of donations and taken against either the Business Profits Tax or Business Enterprise Tax. Governor Lynch has concern about using public money to fund private schools. The bill appeared quickly at the end of the session. Another scholarship bill earlier in the session would have created a business tax credit for contributions to NH Community Colleges for scholarships, but it was defeated. NHHTC supported the earlier bill.
International Baccalaureate Program
The NH Senate killed legislation that would have banned the International Baccalaureate Program from NH public schools. It had been approved in the House. The program is offered in Bedford and Merrimack Valley School Districts. The Program encourages students to become active and lifelong learners in order to understand that people from other cultures, with their differences, can also be right. Our own Matt Pierson and Paul Mailhot jumped on this legislation and met with State Senate Education Committee Chair, Nancy Stiles, to oppose the legislation. They were instrumental is its defeat.
Right to Work
Once again, Right to Work legislation failed in the NH Legislature.
Constitutional Amendments on Taxes, Education
CACR 13: This proposed amendment would add a ban on personal income taxes to the NH Constitution. It passed the NH House and NH Senate. It will be on the November ballot, and must receive a two-thirds vote to take effect.
CACR 6: This proposed amendment would let voters decide if there would need to be a super-majority, or 3/5th vote in the Legislature, to pass new or increases taxes and fees in NH. It passed the NH Senate, but failed in the NH House, and won’t be on the November ballot.
CACR 12: This proposed amendment would shift control of schools from the courts to lawmakers by giving the NH Legislature full power and authority to set education standards and accountability, and also determine how best to distribute state aid to school districts. It passed the NH Senate, but failed in the NH House, despite a major arm-twisting campaign by House leadership. It will not be on the November ballot.