Week Thirteen - April 02, 2010

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

Big things are happening this week.

An impressive array of businesses and business organizations lined up on Tuesday to support the Chamber’s primary legislative initiative of the 2010 session: SB 383, the Net Operating Loss bill. As you know, we want to see the NOL limit in New Hampshire raised from $1M to $10M; a significant increase at first glance, but not really: this increase from $1M to $10M would still leave New Hampshire in 50th place - dead last - with respect to our NOL cap. Indeed, we are the only state in the country that even has a cap.

As has been the case all year, Nashua’s two senators led the way for our businesses. Senator Bette Lasky, the prime sponsor of the bill, and co-sponsor Senator Peggy Gilmour, began the testimony before the House Ways and Means Committee. In the face of some pretty overt skepticism from a couple of members of the Committee, the Senators offered compelling explanations for why it is important for this bill to pass. The Senators focused on the need to make New Hampshire businesses competitive, something which is particularly important to the Nashua region, where it is possible to simply look across the border a few feet away to see our competition.

Chamber President Chris Williams and Advocacy Chair David Heath once again went before the Ways and Means Committee to talk about the details of what the NOL bill does, and the impact that it would have on Nashua area businesses as well as businesses around the entire State. There was also testimony in support of the bill from Mike Skelton of the Manchester Chamber, and Dave Juvet of the BIA. The list of businesses or organizations who signed in as supporters of the legislation included the Concord Chamber, PSNH, the Retail Merchants Association of New Hampshire, the Auto Dealers Association, the General Contractor’s Association, and the Grocers Association. There was even a letter supporting this bill from the perspective of dairy farmers, presented by Representative Tara Sad, the Chair of the Environment and Agriculture Committee in the House. No one testified in opposition to the bill.

Oddly, and to our chagrin, the Department of Revenue Administration did not testify. Based upon the discussions in the Committee, it appears that this was a result of some sort of administrative or procedural mix-up. We know the DRA does not like this bill, and wonder if the administrative mix-up was the real reason behind their non-appearance. The Committee is going to conduct a work session on this bill on April 7 to hear from DRA concerning the fiscal impact.

We are happy to hear what DRA has to say, but we are going to be very watchful. DRA has a long history, going back to the initial increase in the NOL limits from $250,000 to $1M, of predicting that NOL threshold increases will have a drastic impact on state revenues, only to see those fears never realized. We think that DRA has failed to recognize the fundamental purpose of the NOL law: to attract and retain businesses, and to create jobs. After all, businesses are only going to be paying taxes in New Hampshire if they do business in New Hampshire.

This is one of the most significant jobs bills of 2010. Let’s hope that the Executive Branch gets in line with the job-creation philosophy that the Governor has been espousing, and helps to make this bill a reality instead of standing in the way.

LLC Tax and Reasonable Compensation

The two remaining bills for this session that deal with the LLC Tax and Reasonable Compensation have now been scheduled for their second round of hearings. SB 497, the bill that the Chamber is supporting, has been scheduled for a House hearing on April 13. The other bill, HB 1607, is scheduled for a Senate hearing on April 6.

We continue our position that, while both bills make improvements to Reasonable Compensation, SB 497 is far preferable because it makes meaningful changes rather than cosmetic ones. It has an important safe harbor known as the “independent investor test,” which is far superior to HB 1607, which only allows a safe harbor of $50K per entity (in other words, if an entity has three investors, all three would have to split that $50K harbor amongst themselves, which is a pittance).

Word has it that the Governor and the DRA are quietly pushing the House to water down SB 497 by removing the independent investor harbor. We hope this is not true, because it would go against the Governor’s rhetoric over the past number of months in which he has been publicly saying we need to do more to support our businesses with real solutions. SB 497 does just that!

Property Taxation of Poles and Conduits

Speaking of taxes, on Wednesday the House Local and Regulated Revenues Committee held a hearing on SB 492, which is intended to keep in place a long-standing property tax exemption for telephone poles and conduits. This bill is co-sponsored by Senator Lasky, and is supported by the Chamber. Although telecom providers pay a number of taxes and fees to local governments, and although the municipalities have the right to tax the telecom providers for the use and occupancy of the public rights-of-way, the municipalities have never had the legal authority to actually levy a tax on the poles and conduits themselves. So if this bill does not pass, the existing exemption will sunset, and the cities and towns will be able to levy a property tax on those poles and conduits for the first time. Thus, the failure to pass SB 492 will effectively mean that the State is allowing the cities and towns to levy a new tax. Why in the world would the State want to do something like that, particularly in the midst of a recession? Everyone knows this new tax would only be passed onto the end-users, both business and residents. The municipalities argue that this tax exemption results in higher property taxes; however, everyone knows that, if they were to succeed in getting the authority to levy this new tax, they would not balance it by reducing local property taxes.

Gaming Bill Has Its Hearing In The House

Less than a week after the gaming bill passed the Senate, it had a hearing in front of the House Local and Regulated Revenues Committee. Not surprisingly, the hearing lasted an entire day, and there was vigorous testimony from both sides of the issue. It looks like the plan is for the bill to hit the House Floor on April 21st. Up to this point, the Chamber has not weighed in on the issue. However, the Chamber Board has been asked by our local senators to take a position on this bill, and is reviewing the matter. We anticipate that we will likely enter the debate within the near future. On which side, we do not know right now.

Happy Easter and Happy Passover to All!!

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