Week Three - January 30, 2009

With the 2009 legislative session in Concord now underway, it's time for the Greater Nashua Chamber of Commerce to start delivering to you its weekly legislative update known as The Advocate. You will receive this electronic update every Friday afternoon, and can use it to review what has happened in Concord that week, read about our Chamber's lobbying efforts relating to those activities, and preview what we are doing on behalf of our Chamber members in the coming week.

This weekly update is made possible by the generous support of Devine Millimet & Branch, one of the state’s top law firms and our Chamber’s contracted representative in Concord. If your business has a legislative or local issue that needs strategic consulting and attention, they are a valuable resource that can help navigate you through both local and state processes.

This weekly update is designed and maintained by our friends at ActiveEdge, and we thank them for their help in delivering this piece to your inbox every Friday!

This Week’s Update

This was quite a busy week indeed for the Chamber, even with the snowstorm that canceled all legislative hearings this past Wednesday.

Senate Bill 83: Possible Business Stimulus in the works?

(Disclaimer: this topic is packed full of legislative and tax jargon, so reply to this email if you need clarification on anything related to this topic!)

One of our favorite initiatives led by your Chamber in 2002 is back again as a possibility of providing a stimulus to business in this current recession. SB 83, which creates a committee to study the Net Operating Loss (NOL) carry-forward provisions under the Business Profits Tax and Business Enterprise Tax, had a hearing before the Senate Ways & Means Committee this week. The Chamber testified in support of the study, but respectfully asked that the legislation be amended to actually increase the current $1 million limit on NOL’s in New Hampshire to mirror the unlimited cap which is already in federal law and is also in the laws of the other New England states.

The original NOL law enacted in 1988 created a carry-forward provision of 5 years, a carry-back of 2 years (later became a “phantom” carry-back due to Department of Revenue Administration rules that disallowed a credit or refund on taxes), and a dollar cap of $250,000.

In 2002, thanks to the initiative of the Nashua Chamber, the NOL cap was incrementally increased over a 4-year period from $250,000 to $1 million on July 1, 2005. The phantom carry-back was eliminated and the carry-forward was extended to 10 years instead of 5 years.

Due to our current economic downturn, this is an optimum year to increase the NOL to an unlimited cap. Any business that is losing money will not be paying the BPT. As the economy begins to turn around, it would be a tremendous stimulus to business to increase the NOL limit. It would be an even better stimulus to businesses to reinstate a truly allowable carry-back. Therefore, the businesses could move quickly to rehire laid off workers and invest capital in equipment, etc., in order to get the business back on the profitable side of the ledger.

Increasing the NOL cap would initially cost the state nothing. If a business is losing money, it doesn’t pay the BPT anyway. So, no BPT money is going to the state. Every business is, however, paying the BET - even while losing money. As the business comes out of its downturn, the question is, “does the business invest in people or capital outlays in order to become profitable, or does it pay the BPT to the State?” It’s a small investment by the State to generate increased business profitability. No other state in New England, with the exception of New Hampshire, has a cap on NOL’s. We as a state need to be truly business friendly, especially now. This would be a huge stimulus move for NH businesses.

House Bill 30: Budget Cuts

The Governor has to wait another week for the House to pass HB 30, his latest round of budget cuts, as the snow and ice cancelled the House and Senate sessions on Wednesday. As you will recall from previous bulletins, HB 30 not only includes major cuts for the hospitals, but also takes all surplus funds in dedicated accounts over $500,000. The House Ways & Means Committee heard HB 170, a bill which is requiring certain dedicated funds in the Department of Safety to report annually to the Governor and Legislature what funds they receive and how they are spent. As part of the hearing, Safety produced a chart showing the monies in these dedicated funds at the end of 2008. Interestingly, E-911 has over $4 million in their fund. Wonder if the Governor will decrease the surcharge which was put into place a few years in order to pay the cell companies for development of Phase I and II of E-911? The cell phone companies have been paid, and so the surcharge was suppose to be decreased last April - but it hasn’t been. It will be interesting to follow this money.

Senate Bill 40: Duty to Warn

The Chamber President, Chris Williams, and Legislative Chair, Jeff Rose, met with Department of Labor Commissioner Copadis this afternoon to discuss The Chamber’s concerns on SB 40, which requires advanced notice of plant closings and mass layoffs. There is already Federal law on duty to warn, which is aptly known as the Federal WARN Act. This bill, as promoted by the NH Commissioner of Labor in its current form, would apply to employers of 75 or more employees. Federal law applies to companies with 100 or more employees. We are not sure why New Hampshire has to have stricter standards. Stay tuned, as today’s meeting will certainly shed more light on the Chamber’s plans for either opposing this bill or working with legislators to amend some of the more worrisome provisions.

Business Taxes

The Chamber attended a meeting yesterday with eleven other business groups across New Hampshire to prepare for a press conference on Monday, February 2, to articulate to the New Hampshire Legislature and the general public the role the New Hampshire business community plays as the strong backbone of the New Hampshire tax system. For example, 55.2% of all taxes collected at the state and local level come from businesses. Only six other states have a higher percentage. How business friendly does that make New Hampshire? Our 8.5% BET is one of the highest corporate income tax rates in the country. Again, how business-friendly does this make us? Four states have no corporate income tax. In one comparison of state-to-state business taxes, New Hampshire ranks worst at #50. We also rank 50th in state and local property taxes as a percentage of personal income. Our myth as being business-friendly could come into question this session, should business tax increases start to be included in budget discussions.

The Weeks Ahead

Stay tuned, as this and other issues continue to develop in the coming weeks…

If you have questions about this update, or comments to share with us about other issues in Concord, please email Chris Williams at cwilliams@nashuachamber.com. We want to be sure we're representing you to the best of our ability, so do not hesitate to reach out to us!

J. Christopher Williams
President & CEO
Greater Nashua Chamber of Commerce
151 Main St.
Nashua, NH 03060
Phone: 603.881.8333
Fax: 603.881.7323