Week Two - January 18, 2008

The Advocate is a new electronic tool provided to our business members and regional state legislators.  This publication, sponsored by Devine Millimet & Branch and designed by ActiveEdge, is intended to keep you up to date with all the latest happenings in Concord concerning legislation impacting businesses.  We hope you enjoy this weekly electronic publication!

This week continued to set the tone for the year - taxes (income tax, flat tax); privacy, privacy, privacy; regulation, regulation…watch out business! We may even outpace Vermont and Massachusetts if the trend continues.

Week Two of Privacy Issues

Patient Information

• ­HB 1587-FN, an act relative to patient health care information, was heard by the House Health, Human Services and Elderly Affairs Committee on Thursday. The hearing drew a broad spectrum of health care related interested parties, including representatives of hospitals, physician groups, medical office administrators, health plans, and pharmacy benefit managers. Two sponsors of the legislation, Rep.Cindy Rosenwald and Rep.Neal Kurk, spoke to the purpose and need for the bill, pointing out that as electronic medical records become the norm, and as interoperability of systems holding such records deliver the promise of increased efficiencies and lower costs, challenges to the security of patient health care information will mount. Rep. Kurk noted his opinion that HIPPA, which requires that all state covered entities comply with federal privacy protection provisions, does not go far enough and that states are free to, and should, pass stronger privacy provisions.

Apparently, the proposed legislation grew out of work done by a subcommittee of the Citizen’s Health Initiative. (Interestingly, the legislation’s purpose melds nicely with one of this session’s House Democratic leadership priorities...privacy interests.) While one of the drafters who testified indicated that the working subcommittee included representatives of parties likely to be most affected and that the bill was a “consensus” draft, the proposal was subjected to considerable adverse commentary from various segments of the health care delivery community. The general thrust of the commentary was that while confidentiality protections are of utmost importance, and while HIPPA may need further work, it is work that should first be done at the Federal level. Meanwhile, any proposed New Hampshire provisions should be carefully weighed against their potential for adverse effects.

In any event, everyone indicated a willingness to continue discussion of the proposal within the context of a House Health, Human Services and Elderly Services subcommittee. It is likely the bill will be given the “careful consideration” specifically requested by Governor Lynch in his letter to the Committee.

RFID

• In a very surprising move, the House leadership decided this week to try to overturn the House Commerce Committee report to kill HB 686, which regulates tracking devices.

A number of years ago, legislation passed the House which would have put a huge damper in the development and use of RFID, or Radio Frequency Identification Devices. The Senate changed the House bill into a Commission which has been effectively working for over a year and a half to study the benefits and privacy issues involved with RFID and come up with appropriate legislation. Fortunately, the Chamber along with multiple business groups, was able to have HB 686 recommitted to the House Commerce Committee instead of the bill passing as leadership wanted. The Commission has nearly finished drafting legislation which will strengthen the computer crime laws per any RFID violations, and will also address other issues such as human implantation of RFID. The Chamber fully supports the work of the Commission which is comprised of representatives of the legislature, industry, education, financial services, retail as well as specialists in the RFID technology. It has the expertise to address all RFID concerns.

More concerns for business.

Travel time pay.

• The House Labor Committee held a very extensive public hearing on HB 1342, which requires employers to pay work-related travel time at the employee’s regular pay rate. The sponsors may have been targeting home care employees, however, as drafted the language applies to all businesses whose employees have to travel during their working day. The prime sponsor offered an amendment which states that if any employer is required by law to pay employees for travel time, then it should be at the regular pay rate. The Chamber opposed this legislation, believing that the current law is totally sufficient. Any Federally funded (Medicaid, Medicare, highway) programs would be further complicated by this bill and some of the employers administering the Federal programs would experience added cost.

Recycling

• Thank goodness the sponsor of HB 1584, a bill that creates a fund to cover the cost of electronic recycling, has asked for the bill to become a study to identify the best programs for NH to use for recycling computers, etc. and how to fund recycling. Even the Department of Environmental Services joined the Chamber in opposing this legislation. The Chamber believes this is an issue better dealt with at the federal level, plus the ban that went into effect last year in NH is beginning to work. The number of recyclers is increasing. We have gone from 15 to 25 in the state. Let’s sit tight for now on this issue.

Energy Efficiency.

One of the major areas of energy policy which the legislature is going to be considering this year is energy efficiency and conservation. Currently, the Public Utilities Commission oversees energy efficiency programs for electric and gas utilities. These programs have been markedly successful; the electric efficiency programs, for example, have saved 4.3 billion kWh in electrical energy since 2002, amounting to enough electrical energy to serve the City of Concord for over 11 years. This week, the House Science & Technology Committee took up consideration of two energy efficiency bills. HB 1268 would establish a commission to review creating incentives for electricity conservation. HB 1561 would create an energy conservation and efficiency board, which would coordinate all of the efficiency programs (currently, these are being handled through the utilities and the Public Utilities Commission). Some of the utilities expressed concern about the addition of a new layer of bureaucracy on top of the existing structure. PSNH noted that, while efficiency programs generally take about five months to be approved in New Hampshire, approval takes about a year in a state like Massachusetts which has an energy efficiency board similar to the one which was in the bill which was filed. It looks as if the sponsor is working hard to address that issue, however, and this bill along with HB 1268 will go to a subcommittee for further review. Because the efficiency programs are funded out of rates (through the systems benefit charge), it is important that governmental oversight of the energy efficiency programs be as efficient as possible.

In Other Electrical News...

The Science & Technology Committee also met to review HB 1499, which would replace the current electricity consumption tax with an electricity generation tax. Of the nine committee members who were in attendance at this work session, the opinions were decidedly against this bill. Primarily, the members who are opposed believed that the benefits of this course of action were unclear, while the risks were fairly significant. For instance, some of the committee members expressed concern that the enactment of this bill would provide a disincentive for the establishment of new sources of generation in New Hampshire. A straw poll at the end of the discussions came out 6-2 in favor of killing the bill, so it looks as if HB 1499 may be running out of juice.

Chamber Spotlight Issue of the Week

As national reports and forecasts continue to point toward a potential recession in the coming year, news of the impact this could have on New Hampshire hit home this week.

Governor John Lynch released a warning this week to our state legislators in Concord, stating that he would accept no new requests this year for any increases in state spending. While this warning pertains only to the general fund, the Governor’s warning makes it very clear that very few changes will be allowed that impact the state’s bottom line.

Taking it one step further, the Governor announced that he expects a shortfall of $50 million in state revenues this year, which he believes will result in a budget cut of 5.7%.

The Governor attributed this shortfall and the subsequent call for budget cuts to the national economy. "The news is sobering," the Governor said to legislators this past Tuesday. "We are beginning to see the impact of the national economic downturn here in New Hampshire. We can minimize that impact, if we continue to be fiscally responsible."

The Governor told the House Finance Committee members that he's warned all state agency heads that they need to prepare spending reductions. "We must be prepared to cut spending to keep the budget balanced and meet our responsibilities to the people of New Hampshire," Lynch said.

Despite the bleak outlook on the state’s budget, the Governor reiterated his belief that the state’s business community is still very strong, and that his support for incentives such as a R&D tax credit, which passed last year, remains a central part of his efforts to continue attracting high tech companies to the state.

The warning by Governor Lynch that the state budget will likely face budget cuts could mean two things for businesses in the state. On the positive side, it could assure us that no new programs will pass this year requiring additional business taxes or fees to support such programs. On the negative side, it means our Chamber will need to be even more vigilant to defend the business community against potential tax or fee increases as legislators will be tempted to find ways other than budget cuts to make up for the projected shortfall.

As always, your Chamber will be on the forefront of statewide efforts to support the interests of our business members in Concord.