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Week Nine - March 20, 2009
This electronic publication, known as The Advocate,
is brought to you each Friday by your Greater Nashua Chamber of
Commerce, in partnership with our friends at Devine Millimet &
Branch, and ActiveEdge. Please use this piece to review what has
happened in Concord this past 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 Week’s
Update
Looks like this session is going to be standing-room only for every piece of legislation that your Chamber of Commerce weighs in on. What does that say about this session?
SB 40
Senate Bill 40 is a bill that would require 60-day advanced notice for plant closings and mass layoffs for all businesses, profit and non-profit, with 75 or more employees. The hearing for this bill brought out not only your Chamber but many new business faces in opposition. In addition to Chamber President Chris Williams, Chamber members The Mount Washington Hotel and BAE Systems testified in opposition to the bill. While we appreciate the Department of Labor’s desire for authorization to engage on behalf of employees in a layoff or closing as early as possible, there are too many troublesome issues in the bill for passage.
The most onerous part of SB 40 for every business entity is the language that allows the State of New Hampshire to “pierce the corporate veil” by going after the personal assets of senior-level managers, board directors and investors. No other state has such a punitive law. What message does that send to businesses here in New Hampshire and businesses thinking of coming to New Hampshire - don’t take the risk of doing business here because if your business unexpectedly has trouble and you do not give appropriate notice, you, your board, your parent company, etc. can be held personally liable for the wages and benefits of all your employees for 60 days. Who would take that risk? Who would even try to work out the issues and save the company knowing that, if unsuccessful, one could be held personally liable? Who would sit on any board, profit or non-profit, if one could be personally liable if the company or organization closes?
Chris Williams testified that SB 40 represents a classic case of “throwing out the baby with the bathwater.” Specifically, the bill initiates two changes with consequences that we believe go far beyond the intent of those who agreed to sponsor this legislation:
- The bill lowers the threshold of companies held responsible under the federal WARN Act from 100 to 75 employees. While seemingly a benign change, this would result in a far larger group of New Hampshire’s businesses suddenly needing to comply with the New Hampshire state WARN Act. Compliance will require legal counsel in many instances, as well as additional H.R. training, all of which cost extra dollars at a time when every dollar is critical to our businesses.
- The bill not only pierces the corporate veil, but in our opinion, completely shreds it. Many New Hampshire businesses rely on board directors and investors, and all of them certainly rely on senior-level management. This bill would significantly hinder the ability of companies to recruit senior-level managers and board directors to their governing infrastructure, due to the fact that these same individuals would now be held personally liable in any future violations of this act. Just the risk of such a liability is enough to keep our state’s best directors off of local boards, without even accounting for the investors themselves who would no longer wish to invest in local companies. The impacts of this change far outweigh the benefits hoped for within the Department of Labor.
Jeff Rose of BAE Systems testified in opposition to the bill and even brought BAE’s general counsel for back-up legal interpretation. BAE’s concerns are that the state WARN Act “establishes specific trigger thresholds that are more stringent than those of the federal WARN act. This creates a burden on business due to this variance.” BAE recommended mirroring the thresholds of 100 employees established within the federal legislation. For BAE Systems, as well as other national companies with operations in New Hampshire, “the requirement to track and manage a New Hampshire set of figures, as well as federal, adds a layer of burden to the business process. While this may not sound like much, when you consider the hundreds of programs BAE’s New Hampshire operations may be working on at any given time, and the borderless nature of the enterprise (i.e. the business areas that directly oversee the New Hampshire workforce could be run from a different locations), creating a system to comply exclusively for New Hampshire is onerous to the business.”
Chamber member Pat Corso, General Manager of the Mount Washington Resort, had real concerns about the fact that seasonal employee layoffs are not exempt. The tourism industry, particularly a ski resort, is largely dictated by the weather. If there is no snow, the season ends early and there are layoffs until the summer season begins. It is impossible to give 60 days notice of a layoff of seasonal workers. If this bill passes, Mr. Corso could be personally liable for those layoffs. He also testified as a former businessman in North Carolina, that the state of NC and others will immediately begin to use SB 40 in their marketing efforts to recruit our businesses to the Tarheel state. In closing, he stated this is the worst economic climate he has ever seen and this is definitely not the time to pass SB 40.
As has been noted in earlier bulletins, The Chamber has been working with Labor Commissioner Copadis and the prime sponsors of the legislation to come to an agreeable compromise. We met with the Commissioner and sponsors again after the hearing. Added to our team attempting to negotiate a workable compromise are Mark Broth, the Chair of the Devine Millimet Employment Department, and Gemma Dreher, the BAE legal counsel. Our team will meet with the Commissioner again Tuesday.
Good News
HB 496: The House Science & Technology Committee killed HB 496, which capped the cost recovery for PSNH on the Merrimack scrubber project. We opposed the bill as it was setting a terrible precedent.
HB 478: We dodged another RFID bullet as HB 478 was unanimously retained by the House Commerce Committee. Being “retained” does not mean the issue has gone away; it has just been slowed down and will be worked on this summer and fall. The Chamber has opposed regulation of radio frequency device technology since the legislature began trying to regulate it.
SB 83: This bill, known as the Net Operating Loss study bill, is moving forward. We would have preferred in this anti-business climate to see the Governor and Senate send the business community a bone but instead we got more study of a simple pro-business incentive to reform our Net Operating Loss regulations. At least they did not kill it and slam the door on business in this bad economy.
HB 222: This bill was a provision to require Dept. of Environmental Services to look at upland impacts when reviewing dredge and fill applications. Like the RFID bill, this bill was also retained. This would have added more determination of functions and values in the wetlands when doing any development project with wetland impacts. This was another hurdle for anyone trying to develop property. The issue will linger but there is a commission of experts looking at the issue.
HB 697: A bill to increase penalties against public utilities (which possibly would have increased our utility rates) was killed. We are trying hard to keep the cost of doing business in New Hampshire stable.
HB 2: The budget bill
The House Ways and Means Committee retained almost all of their bills that increased fees, permits, taxes, etc. However, they took straw votes on each and are planning on putting all that had favorable results on HB 2 which they believe is a bill that is failure-proof. We expect HB 2 will include:
- A reinstatement of the inheritance tax for all who do not have children or spouses, which when repealed was contributing nearly $30 million to the state annually;
- A new capital gains tax which is thought to bring in a new $138 million;
- An increase in all tobacco taxes - snuff, smokeless, non-premium cigars will go from 9% to 49%. Premium cigars will be taxed but not at such a high rate;
- An increase in the rooms and meals tax;
- Environmental fees are increasing.
So far, beer will not have a tax increase but it was such a tight vote, that could change.
We do not expect the consolidation of professional boards and sunsetting on non-statutory boards will be included in HB 2. There was a huge outcry from every profession against the Governor’s proposal.
Next week the Finance Committee will be continuing to cut budgets and looking at any fee or tax increases, or tax reinstatement possible to fund government. So far no mention of business tax changes. Mum’s the word.
Acknowledgements
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!
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
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