The Advocate Recap – 3/10/17

Nashua Bulletin March 10, 2017

Senate Passes Minimalistic Version of ERZ Tax Credit Bill (SB 74)

One of the first bills that the Senate Ways & Means Committee took up in January was SB 74, a bill that was introduced in order to increase the cap on economic revitalization zone (ERZ) tax credits. As you know, the ERZ law was created out of legislation that was put forward by this Chamber, so we feel a great sense of proprietary pride and interest in these ERZ bills and what’s been accomplished to date. In fact, our companies in the greater Nashua area who were awarded tax credits in the past three years have invested back significant dollars into our communities as a result:
• $2,937,399 in 2013
• $25,467,595 in 2014
• $15,744,792 in 2015
That’s real economic impact, affecting real businesses.

The aggregate cap on the amount of tax credits that can be claimed by all taxpayers in a particular year is currently $825,000. The bill sought an increase in that cap to $3 million, and it also included some minor tweaks to the existing ERZ law with respect to eligibility ( currently, the applicant needs to show that the applicant’s project “will expand” the commercial or industrial base in the ERZ zone, and that it “will create” new jobs in the state; SB 74 changes the tense of those mandates to require the applicant to show that the applicant “has expanded” the C&I base and that it has “created” new jobs.)

Yesterday, the Senate passed a pared-down version of the bill and removed the section that would have increased the aggregate amount of the credit. We suspect that the cap increase provision probably fell victim to the revenue concerns that are floating around the State House these days (last week, the House Ways & Means Committee came up with revenue estimates that were $60 million below what the Governor had based his proposed new biennial budget on, and so there is no doubt that the revenue situation is looming large in the minds of legislators).

Hopefully, when this bill gets over to the House, there will be better revenue news and the House and Senate will have a greater degree of comfort in expanding the scope of the available credits. This would be an important way of helping the folks at DRED market the state to potential new businesses.

House Kills Bills to Limit Factors in Employment Decisions (HB 130 & HB 442)

This was a particularly busy week for the House. Because there were so many bills that had to be voted on, the House had to meet on Wednesday in addition to its normal Thursday session. There is nothing unusual about this; it is virtually certain that bills will pile up whenever the House is hitting a major deadline, as was the case this week (the House needed to have all of the non-budget bills voted out by yesterday).

As part of its work over the last two days, the House killed two bills which the Chamber opposed: HB 130 would have prohibited employers from using credit history in employment decisions, and HB 442 would have prevented employers from asking job applicants about criminal history.

Although there are certainly some good-faith arguments that have been made in support of both of these bills, we think that decisions about these types of matters are best left to employers. Given the fact that employers really are in the business of looking for the best possible employees, it is highly unlikely that they will be deterred by concerns about things that are extraneous to the prospective employee’s actual ability to perform the job well. If the employer thinks an issue is important, then it most likely is.

Both of these issues have come up before and been rejected, so we don’t expect that we’ve seen the last of them even now. But at least for purposes of this session, these bills are dead.

House Pans Nonprofit Hospital Tax (HB 573)

Another excellent decision by the House this week was to vote down HB 573, legislation that was intended to subject charitable nonprofit hospitals to local property taxation. The bill specifically would have allowed municipalities to levy property taxes on portions of hospitals that are not located on the main campus of the hospital. As with similar bills in the past few years, the Chamber opposed this bill because, in addition to the difficulty of determining exactly what property is included under the ambit of this law, this new expansion of property taxes would undoubtedly serve as a disincentive to hospitals in bringing services closer to the community, and it ultimately would increase the taxes paid by hospitals and thus the cost of healthcare for all of us – not exactly what, ahem, the doctor ordered at this point in time.

As with the credit check and criminal background check bills, this issue is dead for the next two years because once an issue has been voted down in the first year of a legislative session, it cannot be brought up again in the second year. So for now, all is well on this front.

Next Week…

With the House having completed pretty much all of its work on the non-budget bills that were before it, the focus now turns with a vengeance to the House committees that are working on HB 1 and HB 2 (the state operating budget and the budget trailer bill) and HB 25 (the capital budget). The committees that are looking at those bills began their work several weeks ago, but the rubber is going to start hitting the road next week, when the House Finance Committee (and especially Division III of House Finance, the committee that is responsible for the DHHS portion of the state budget, by far the largest piece of the budget) begins looking at possible cuts in what the Governor has proposed (cuts which some on the House Finance Committee feel are necessary as a result of those revenue estimates from House Ways & Means we mentioned earlier). We are going to be paying particularly close attention to how the budget proposals will impact businesses that provide health care services and whether the state tries to shift costs down to these businesses.

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