NH Travel Bureau Posts Updates on Legislation

TOURISM PROMOTION BUDGET: The House passed a state-operating budget for fiscal years 2012 and 2013. The Governor's proposed budget would provide $2,050,000 for direct tourism promotion in 2012 and $2,075,000 in 2013. The House passed budget cut it to $1,360,000 in funding each year. The House also cut promotion to international tourists from $250,000 in 2012 to $105,000 and from $275,000 in 2013 to $92,500. The Senate Finance Committee starts its work on a budget next week.

ABOLISHING THE DEPARTMENT OF CULTURAL RESOURCES: Another part of the House-passed budget is the abolishment of the NH Department of Cultural Resources as of July 1, 2011 and transfer of some of the department's current functions. HB 2 would move libraries and cultural resources to the Department of State, and the film office to the Department of Resources & Economic Development. The Arts Council would be eliminated, and Commissioner Van McLeod's position would be eliminated. The Senate Finance Committee begins its work on a budget next week.

NORTHERN PASS FOES GET VICTORY IN THE HOUSE: The House passed HB 648 with amendment on a vote of 317-51. As amended, the bill would prohibit public utilities from petitioning for permission to take private land or property rights for the construction or operation of transmission facilities, so long as the transmission facility is not needed for system reliability. The bill now goes to the Senate.

HAPPY HOUR AND DRINK PRICE ADVERTISING: The Senate passed SB 120 with amendment on a voice vote. Last week, the Senate Commerce Committee was deadlocked at 2-2, and ended up recommending that the bill be killed. The Senate decided to pass the bill after adding a floor amendment. As introduced, the original bill would remove the restrictions on advertising happy hours. It is currently legal to have happy hours and reduced drink prices, but it is illegal to advertise them outside the walls of the business. As amended by the floor amendment, SB 120 will allow establishments to advertise happy hours and reduced drink prices, but enable cities and towns to adopt ordinances prohibiting exterior signs promoting reduced drink prices. Interior signs facing the public way would be allowed, however. The bill now goes to the House for consideration.

KEEPING LIQUOR ENFORCEMENT AT THE LIQUOR COMMISSION: On Thursday, April 7 at 9:25 a.m. the Senate Executive Departments & Administration Committee will hear HB 88, which would repeal the transfer of the liquor enforcement division from the Liquor Commission to the Department of Safety, scheduled to take effect on July 1, 2011.

REQUIRING DEPARTMENT OF LABOR TO WARN EMPLOYERS FIRST: The Senate passed SB 86 with amendment on a voice vote. As amended, the bill will require the Department of Labor to issue one warning to employers for certain violations before a fine may be imposed. The Commissioner would not be required to issue a warning and could fine an employer if the violation involves any of the following: failure to pay an employee on time; payment of wages by checks not convenient to the place of employment; failure to pay final wages in full; failure to pay amounts withheld for court ordered child support; failure to pay amounts withheld for insurance benefits; illegal withholding of wages to compensate employer for employee actions resulting in damage or loss; employing illegal aliens; or requiring employees to perform any illegal activity under threat of job loss. It now goes to the House.

HEALTH INSURANCE: The Senate killed SB 119 on a voice vote. The bill would have allowed groups like the New Hampshire Lodging & Restaurant Association to offer health insurance coverage to members through the formation of a health trust, similar to the association's workers compensation trust.

SCHOOL FUNDING CONSTITUTIONAL AMENDMENT: The Senate passed CACR 14, which would give the Legislature full authority over state education spending. CACR 14 would allow the State to target funding to only those communities in need. The House passed a similar constitutional amendment a couple weeks ago.

REASONABLE COMPENSATION: On Tuesday, April 5 at 10:45 a.m. the House Ways & Means Committee will hear SB 125. Later that same day at 2:45 p.m. the Senate Ways & Means Committee will hear HB 557. Both bills would clarify the "reasonable compensation" deduction under the business profits tax. Current law allows an owner of a business to claim a "reasonable compensation" deduction when filing the NH business profits tax. Any compensation above this "reasonable compensation" is subject to the NH business profits tax. Exactly what is "reasonable compensation" is not perfectly clear, and often times requires a business owner to spend tens of thousands of dollars to prove their compensation is "reasonable." SB 125 says that once a business owner proves that at least one or more of the partners provided actual services to the business, the amount they claim as compensation shall be presumed reasonable, and that the burden of proving otherwise shall be on the Department of Revenue. The Department would have to prove "by a preponderance of the evidence" that the deduction claimed by the taxpayer is grossly excessive. This would be a huge victory for taxpayers. Current law requires the taxpayer to prove that the compensation is reasonable. HB 557 is very similar to SB 125. The Department of Revenue Administration has indicated that SB 125 and HB 557 could reduce state revenue by up to $49 million. That is the amount partnerships and proprietorships paid in business profits tax in 2008. The $49 million loss assumes that no partnership or proprietorship will be liable for the business profits tax. They admitted that it could very likely be less, as not all businesses will change their filing practices. The loss of revenue still may come into play at the end of the Session when legislators are finalizing a State budget.