The House Criminal Justice & Public Safety Committee heard testimony this week on HB 307, the bill discussed in last week's Bulletin that seeks to punish local governing body members for attempting to enact gun restrictions. If there was any doubt that the bill’s intent is strictly punitive, that was dispelled when supporters repeatedly stated that local officials must be punished for “violating the law.” 

As we explained both in last week’s Bulletin and in testimony to the committee, RSA 159:26 already preempts local regulation of firearms. The bill’s supporters did not suggest that the existing law is insufficiently clear or broad. They merely stated that governing body members need to be punished. 

All local governing body members are volunteers, getting paid little or nothing for their work, and very few of them are legal experts. It is not surprising, then, that they sometimes try to adopt ordinances or regulations that are beyond their authority—whether it is a rent control ordinance, a prohibition on high-voltage transmission lines, or term limits for elected officials. The remedy in most cases is that the town attorney explains that the regulation is invalid; at worst, the matter goes to court and the court rules that the regulation is unenforceable. 

The sponsors of HB 307 believe attempts to regulate firearms should be treated differently. Local officials who innocently try to regulate firearms would be personally liable for a $500 fine, “liquidated damages” of $100,000, and payment of their own legal expenses and those of any “aggrieved” person who challenges the regulation. None of these amounts could be paid with public funds or insurance purchased by the municipality. If the violation is found to be “purposeful or knowing,” the local officials would be subject to “removal from office by the governor”; but the financial penalties would apply regardless of knowledge, intent, or purpose. 

While the committee heard supportive testimony from several gun-rights groups and opposition from anti-gun advocates, the bill clearly is not about guns. It is about whether the state should have respect for local officials. If selectmen are going to be fined for adopting gun regulations, there is no reason not to expect similar treatment for all kinds of “violations.” Next year could bring legislation subjecting planning board members to personal liability for improperly rejecting a site plan application, or fining assessors for over-valuing a property. 

As readers know, it is difficult enough to find people who are willing to participate in local government. Serving on a board of selectmen, council, or board of aldermen is already a largely thankless job; if the position now brings with it the threat of financial ruin, the pool of candidates will shrink dramatically. 

Committee members and your own representatives need to hear from you. Please contact them immediately and insist that they kill HB 307.

The Senate Ways & Means Committee heard SB 99, an NHMA policy bill, on Monday.  This bill removes the annual increase limit (i.e., repeals the “catch-up formula”) on the meals and rooms tax distribution to municipalities so that 40 percent of net revenue would be immediately distributed annually.  Seventy-four people signed in support of the bill; no one signed in opposition.  Two municipal officials spoke in support of the bill, along with NHMA.   

The bill’s primary sponsor, in introducing the bill, noted that under statute, the state is supposed to share this revenue with cities and towns:  60 percent to the state treasury and 40 percent to municipalities.  “However,” she said, “the legislature has broken this promise and kept more than its share.”  She also referenced another promise made by the legislature in 1993 to catch up on the lost revenue by increasing the local share by $5 million each year. The legislature has usually failed to keep this promise as well. The state is so far behind that even if it did increase the local share by $5 million every year going forward, it would never get to the full 40 percent.  

In fiscal year 2020, when meals and rooms tax revenue was approximately 14.8 percent below budget due to the pandemic, the tax brought in $314 million, and $69 million, or 22 percent, was distributed to towns and cities.  Had the legislature shared the full 40 percent, it would have provided an additional $56 million in local property tax relief.  NHMA provided a calculation tool to project the municipal impact of SB 99 over the past 11 years if the bill had been in place. 

This bill is an opportunity to begin to restore what has been promised to municipalities for decades and has existed in statute for just as long.  It is an opportunity to begin to relieve the consequential property tax burden that has been subtly downshifted by the state to the local level.  Members are urged to contact their senator and members of the Senate Ways and Means Committee and ask them to support this bill. 

The Senate Finance Committee heard SB 118-FN on Tuesday. As we reported last week, cities and towns would receive two more years of “municipal aid” under this bill, but 60 percent of that aid would be required to be used for property tax rate reduction.  The municipal aid ($20 million for each year) would be issued to municipalities on or before October 1 in fiscal years 2022 and 2023.  Aid received by October 15, 2021, would be considered unanticipated revenue under RSA 31:95-b. Twenty percent of each municipality’s distribution would be based on its statewide ratio of ADMR (average daily membership in residence of pupils who are legal residents of the school district).  The remaining 80 percent would be based on its statewide ratio of ADMR eligible for free or reduced-price meals.  

In introducing the bill, the prime sponsor explained that this was an opportunity to address concerns heard year after year after year, particularly during the budget process, that the burdens brought to municipalities manifest themselves in property taxes.  This bill—unlike the municipal aid from the last biennium that came with “no strings attached”—requires that 60 percent of the aid be used specifically for property tax relief to address those concerns.  

It was also noted that the one-time municipal aid appropriated in the last budget was intended to replace the long-standing annual “revenue sharing”—$25 million annually. Revenue sharing, formally titled “Return of Revenue to Cities and Towns” in RSA 31-A, was established in 1969 when the state reformed how businesses were taxed, replacing the old stock in trade tax that had been collected by municipalities when business inventory was an integral part of towns’ and cities’ property tax base.  Annual distributions were made under this chapter until 2009, when, in the aftermath of the Great Recession, the distribution was suspended; and the suspension has been repeated each year through 2021. The sponsor expressed his hope of someday returning to the revenue sharing concept, explaining that revenue sharing was annual and consistent, as promised; and as a result, communities did have the option to exercise discretion over how monies were to be used, allowing for reductions in property taxes or to help with other things. 

Questions and concerns were expressed by committee members about the constitutionality and/or the concept of telling municipalities what they must do with the money.  The importance of looking at the totality of the property tax problem, recognizing it is not a one- or two-year problem, was suggested, noting this bill could provide for an artificial reduction in property tax rates that could create as much or more furor when rates “snap back.” Concern was also expressed about using ADMR as the ratio with which to allocate funds among municipalities, due to a statewide problem this year (pandemic-related) of school enrollment and free and reduced meal forms not being completed, which could unintentionally skew some towns’ or cities’ allocation amounts.  NHMA testified in support of the bill, noting that municipalities would receive only $8 million in discretionary aid, and underscored the budgeting difficulty associated with the loss of one-time $20 million appropriations and the continued suspension of the long-standing $25 million revenue sharing distributions.  Since this bill is a budget issue, the Senate president expressed his hope that it would be addressed as part of the overall budget process.

We continue to pick up tips about the remote hearing protocols for House and Senate hearings. We learned this week that you must sign up before 8:00 a.m. on the day of the hearing to get on the list to testify. This was stated in connection with a House committee that had morning hearings, so it is unclear whether it applies to all committees in both chambers—but to be safe, we do recommend signing up before 8:00 a.m., or preferably a day or two in advance, whether it is a House or Senate committee. (We also saw a statement from an unofficial source that you must sign up 24 hours in advance. That is definitely not true, although it is not a bad idea.) If you are unable to sign up early, you can still testify by “raising your hand” when the committee chair asks for additional testimony at the end. 

Also, many committees are imposing strict time limits for testimony, ranging from two to five minutes. Typically the committee chair will announce this at the beginning and several times throughout the hearing. Most committee chairs will inform you that your time is up and allow you a sentence or two to finish, but this is not always true. You could find yourself summarily muted in the middle of a sentence at exactly the two-minute mark, so be prepared. 

Given the restrictions on oral testimony, you are encouraged to send written testimony to the committee if you have something important to say. Each committee’s web page has a link you can click on to send an e-mail to all members of the committee. 

For basic information on how to sign up and testify at hearings, see "How to Watch/Testify at a Legislative Hearing" in last week’s Bulletin (page 8 in the PDF version). And please contact us if you have questions.

Thursday, February 11, 2021 

SB 17, relative to brew pubs allowing customers to bring dogs to outdoor areas.  Passed with Amendment. 

SB 61, prohibiting collective bargaining agreements that require employees to join a labor union.  Passed. 

SB 64, extending unpaid leave benefits to employees for COVID-19 purposes.  Laid on Table. 

SB 79-FN, relative to the authority of the moderator to verify the device count. Re-referred. 

SB 80-FN-A, establishing an independent advisory commission on redistricting.  Inexpedient to Legislate. 

SB 106, adopting omnibus legislation relative to codes. Passed.