The Senate Ways & Means Committee this week was the place to go if you wanted to hear about tax credits.  Tuesday's meeting of this Committee started off with one of the top priority bills of the Chamber this year, SB 6, which would increase the credit on the Research & Development Tax from the current level of $2 million to a new level of $7 million.  That hearing was followed up by a look at SB 215, which takes a somewhat different tack and would allow businesses to get a rebate equal to 65% of the R&D credit they otherwise would be receiving. Nashua Chamber President/CEO Chris Williams traveled to Concord to testify on behalf of these bills. In his testimony, he told the Committee that the Chamber supports these bills because they take a step forward in promoting start-ups in New Hampshire, and start-ups are the companies that can grow the New Hampshire economy.

Significantly, these bills were both supported by DRED, and while there was some compelling testimony by all the witnesses during the course of the hearings about the need for beefing up the R&D tax regime in this state, no one came in to testify in opposition to the bills.  The evidence is clear that this tax credit has been a major boon to local companies that are struggling to get off the ground. As one of the witnesses told the Committee, New Hampshire cannot control things like energy costs, but it CAN control tax credits.

The Committee unanimously voted to recommend that the Senate pass SB 6, and this bill will now be on the Senate floor on Thursday. SB 215 is still in Committee. It looks like the Senate will pass SB 6 and then probably proceed to table the bill so that it can be dealt with as part of the state budget process that is just starting up. If that happens, the language of SB 6 would be included in HB 2, the budget trailer bill. 

...Which brings us to the state budget, the most significant issue that faces the legislature in each odd-numbered year. Yesterday, Governor Hassan appeared before a joint session of the legislature to announce the highlights of the 1200-page budget that she was presenting to the House and Senate. (With technology as it is, one wonders just how many more years we will be treated to the traditional sight of members of the Legislative Budget Office delivering boxes of hot-off-the-press state budgets to the House Finance Committee, the first legislative Committee to get a crack at the thing).

The Chamber applauds the Governor for including in her budget an appropriation of $4 million to perform environmental and engineering assessments that are required to move forward with passenger rail from Boston to Nashua and Manchester. The Governor told the legislature that "finding a consensus to make commuter rail a reality will require buy-in from local communities, the federal government and Massachusetts, as well as robust public-private partnerships."  The Chamber will be doing what it can to lead the way on that front. We were also encouraged to see that the Governor intends to follow through on the Medicaid enhancement tax agreement that the state reached with hospitals last year. We think that is an important measure in trying to stem some of the upward pressures in health care costs.

There were some items in the budget, however, which (at first blush, anyway) are a cause for some concern and which we will want to be examining much more closely. For instance, the Governor is proposing that some of the revenue for this budget will come from a lowering of the level at which DRA can audit business owners over reasonable compensation (the number now is $100,000, and the Governor is proposing a reduction to $75,000). It is also of note that the revenue estimates being used by the Governor are substantially higher than the ones that have emerged from the House Ways & Means Committee (it looks like the difference is about $230 million).

Over the next month or so, the House Finance Committee will be delving into the details, and then that Committee will come up with an amended budget that will go to the House floor. Once the House passes its version of the budget, it will be the Senate's turn. What started yesterday in the House Chamber will undoubtedly end in a House/Senate Committee of Conference in June (usually, attendees complain about how hot it gets in the Legislative Office Building in June, but they may not be complaining this year, either because they will be glad of the warmth or because there will still be a foot of snow on the ground.)

Last week, we reported on the House bill that would establish a workers' comp fee schedule.  This week, the Senate had its first bite at that apple, with the Senate Commerce Committee holding a public hearing on Senator Gary Daniels' SB 3, which would also set up a workers' comp fee schedule. Until July 1, 2016, the fees would be set at 150% of Medicare rates. After that, the fees would be set by the Department of Insurance. If anything, the hearing on SB 3 seemed to be even more heavily attended than was the hearing on HB 477 last week. Once again, the New Hampshire Auto Dealers-led coalition of groups urged a fee schedule as the way to address the issue of workers' comp costs, with health care providers including the NH Hospital Association objecting to what they categorize as price-fixing. There seem to be discussions in the works to try to reach some sort of compromise, although it is impossible to say at this point how that will turn out.

The issue of taxing electric and telecom utility property was back in front of the House this week. Yesterday, the House Municipal & County Government Committee voted to recommend the passage of HB 192, which deals with abatement actions filed by electric utilities to challenge property tax assessments by municipalities. The bill would prohibit the superior court or the Board of Tax and Land Appeals, when considering the value of the utility property, from looking at the number which DRA came up with in its valuation for purposes of the utility property tax. The municipalities that supported the bill said that the DRA evaluations were too low and that they were done for a different type of purpose. The utilities opposed the bill on the ground that the finder of fact should be allowed to look at and consider all the available evidence. This will be on the floor the first week of March, after the legislative winter break.

And at the time of writing, the House Ways & Means Committee is holding a hearing on HB 547, on the familiar old issue of taxing telecom poles. HB 547 seeks to "repeal the repeal" of the exemption on municipal property taxation of telecom poles (if that is not clear enough, and it certainly is not, what that means is that, if the bill passes, telecom poles and conduits will once again be exempt from local property taxation, as they were for many years before the exemption expired in July of 2010).

Finally, at Wednesday's Executive Council meeting, Governor Hassan nominated Department of Safety Commissioner John Barthelemes to serve another 4-year term as Commissioner (he has been serving in that job since 2007). The end of this new term would mark an impressive 12-year run - a long time for department heads in New Hampshire, but still a long way to go to match the tenure of his legendary predecessor Dick Flynn, who was Safety Commissioner for over 35 years!