May 16, 2014

Thank you for your interest in one of our most proud efforts- business advocacy during the legislative session.Our Chamber is very proud of its efforts to represent you and all of our members in Concord. Our work would not be possible without the strong support of our friends at Devine, Millimet & Branch, whose lobbying team serves as our "boots on the ground" in Concord on a daily basis. We thank them for their unyielding support of our advocacy efforts, particularly through the sponsorship of this newsletter.

This weekly newsletter is intended to give you an overview of what has happened at the State House over the past week. Read this every Friday to learn about our Chamber's lobbying efforts relating to those activities, and to preview what we are doing on behalf of our Chamber members.

House and Senate Pass Medicaid Enhancement Tax Proposals

As expected, the House and the Senate acted this week to pass competing proposals on how to address the hospital Medicaid Enhancement Tax (MET) going forward. As we reported last week, the MET issue has come to the forefront in the wake of a recent New Hampshire Superior Court decision that declared the tax unconstitutional and thereby threw into question the continued receipt by the State of the $185 million that the MET brings in each year (over $70 million of which the State keeps as revenues). The House and Senate proposals will now be discussed in committees of conference that will meet in the next two weeks in an attempt to produce a final consensus version.

The Senate proposaltakes rehab hospitals out of the MET tax base and phases down the MET by a quarter of a percent in each of the coming four years. It also increases the Medicaid rates that will be paid to hospitals. Under this proposal, the proceeds of the MET would be used for the purpose that they were ostensibly designed for (to increase Medicaid payments to hospitals), but this of course would also diminish the amount of MET funds that the State would be able to utilize for general fund purposes unrelated to the hospitals (which is what the State has been doing with this money). Senate President Chuck Morse, the sponsor of this amendment, has made it clear that, while in his view this is the right thing to do, it will leave a hole of a little more than $50 million to be filled by the writers of the state budget that will go into effect in July, 2015.

The House proposal is actually two plans in one. The first piece seems to simply reword the MET statute, apparently with an eye toward attempting to short-circuit at least the immediate impact of the court's decision declaring the existing MET statute unconstitutional. The second piece would levy the MET against entities that are not currently covered under the tax but which provide services identical to those provided in hospitals (a good local example would be The Lamprey Health Center, which primarily provides healthcare to those who are underserved in our community). That part of the House proposal is an attempt to try to bring the MET into compliance with constitutional demands as expressed in the Superior Court's order (this second piece of the House proposal would only go into effect, by its own terms, if the first piece is held to be unconstitutional).

We will keep you updated as this fluid situation develops.

Senate Buries Transmission Line Bill (HB 569)

HB 569 was one of those Northern Pass-related bills which we have been following over the last couple of years and which we have been expressing concern over because the ill-advised attempts to foreordain a conclusion on what happens with the Northern Pass lines not only would be problematic for the Northern Pass project but also for future projects which no one has yet even begun to contemplate. The end result of these sorts of bills undoubtedly would be impediments to the establishment of new sources of energy and thus higher costs for New Hampshire electric customers. HB 569 was a bill that would have required that the site evaluation committee give a "preference" to the burial of electric transmission lines - a preference that undoubtedly would have had the practical effect of being a requirement for burial in virtually all cases. Yesterday, however, the Senate voted to send HB 569 to interim study, an action which in effect kills the bill. While the bill may be studied further this year, it cannot be passed in this legislative session, and if anyone wants to pursue this proposal a new bill would have to be introduced when the new Legislature convenes next winter.

Energy Efficiency Fund Diversions (SB 268)

Energy efficiency has been the subject of many pieces of legislation in Concord over the course of the last few years. New Hampshire's electric utilities run the CORE Energy Efficiency programs, which have done really excellent work in producing significant energy savings in this state for both business and residential customers. SB 268 was filed in an attempt to allow energy efficiency programs other than the CORE programs to draw money from the State's energy efficiency fund, but the Senate wisely amended the bill so that this diversion of funds would be ended at the conclusion of any current projects being done by those other programs. Unfortunately, however, the House voted this week to amend the bill so that the diversion of the money would be allowed to continue. We hope that the Senate will refuse to go along with the action of the House, because the energy efficiency funds should be primarily targeted for the CORE programs, which we think provide the most "efficient" use of the monies.

Senate Sends Municipal Broadband Bill Off To Interim Study (HB 286 )

Another bill that the Senate fortunately sent off to interim study yesterday was HB 286, a bill that was passed by the House to give municipalities the ability to issue bonds for the construction of broadband infrastructure. This is a concept that was first proposed several years ago, and even then it was a bad idea because it would have meant putting municipalities into competition with the private businesses that were building out broadband. With each passing year, this concept has become even more imprudent, because the service providers (who obviously understand the economic reality that this is something they need to do) have been working with great success to provide broadband access to people all over the state. So we are happy to say that this one, like the burial of lines bill, will die at the end of this session.

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