With no discussion or debate, the House Judiciary Committee voted 19-2 this week to eliminate the various immunities from lawsuits that, for decades (and centuries in some cases), have protected local officials and employees from tort liability for good-faith decisions made in the performance of their duties. 

HB 111 is, with minimal changes, a model bill drafted by an out-of-state libertarian organization. The bill purports to eliminate “qualified immunity,” which applies in a very narrow class of lawsuits—those filed under federal law for violations of a person’s rights under the United States Constitution. 

However, the bill does so much more than that. It eliminates any “defense or immunity” in any lawsuit against a municipal (or state) official or employee, whether brought under federal or state law. It expressly states that it will be no defense in such cases that the official or employee acted in good faith, or that the official or employee reasonably believed that his or her conduct was lawful. In essence, it imposes strict liability on local officials and employees for any injury that results from their conduct, no matter how reasonable the conduct was. That liability is, in turn, imputed to the municipality. In any case in which the plaintiff prevails, the municipality would be liable for all attorney fees and litigation costs. 

Thus, a municipality will be liable for damages, attorney fees, and costs if (1) a police officer, relying on solid information from a usually reliable source, arrests the wrong person; or (2) a police officer arrests someone for violating a state statute, and the supreme court subsequently rules that the statute is unconstitutional; or (3) a building inspector, relying on a good-faith interpretation of the building code, denies a building permit, and his decision is reversed by a court; or (4) a town manager in good faith denies an assembly permit, believing it will be unduly disruptive, and a court rules that the denial violated the applicants’ First Amendment rights. The list could go on forever. 

The bill implicitly repeals RSA 31:104, which protects local board members and other officials from liability for damages for decisions made in good faith and within the scope of their authority. It expressly supersedes RSA 507-B, which shields municipalities from tort liability in some circumstances and provides damage limitations in cases where immunity does not apply. It states that the individual official will not be financially liable (the municipality will be instead), but oddly allows the municipality to fire the individual. It raises the question of why anyone would ever be willing to work for a municipality. 

Providing most municipal services—from public safety to community movie nights and hiking trails—is voluntary. This legislation would leave some municipalities wondering whether it is worth the liability risk—and cost to its citizens—to provide services such as police and fire protection at all. 

HB 111 is one of the most alarming bills we have ever seen. Local officials and employees need to be extremely concerned about this. Please contact your representatives and insist that they vote to kill HB 111.

Two years ago, the legislature repaired a fundamental flaw in the process for adopting the official ballot referendum (SB 2) form of town meeting. From its inception, the process had inexplicably required that the question be placed on the official ballot, leaving voters to make their choice without the benefit of any discussion or debate, and often with no idea of what the question even means. In 2019 the legislature fixed the statute to require that the question be voted on during the town meeting’s business session, just as almost everything else is. 

Unfortunately, there is an effort this year to undo that improvement. This coming Monday, March 8, at 10:00 a.m., the Municipal and County Government Committee will hear testimony on HB 374, which would reinstate the law’s original defect. 

Other major changes to town government—such as establishing a budget committee or imposing a tax cap—are required to be voted on in open town meeting, where there is ample opportunity for explanation of what the change will mean for the town. That is, after all, how a legislative body works:  questions are submitted, explained, and debated, and are voted on only after members are satisfied that they understand the question. 

Adoption of SB 2 is a fundamental change in how the legislative body operates; it is a far more significant change than adoption of a budget committee or a tax cap, and it needs to be treated that way. A huge, and likely permanent, change in how town meeting operates should be based on thorough discussion and debate, not on the whims or guesses of voters who have a few seconds to make up their minds about a question they are seeing for the first time. 

Please consider signing or testifying in opposition to HB 374, or contact committee members to express your opposition. 

The House introduced HB 2, relative to state fees, funds, revenues, and expenditures on Tuesday.  Also known as the “budget trailer bill,” HB 2 contains 156 pages of legislative changes proposed by the governor to support HB 1, the governor’s proposed operating budget. HB 2 can also include separate topics and appropriations. 

The following sections in HB 2 affect municipal budgets: 

Section 42, Revenue Sharing. RSA 31-A is (again) suspended for fiscal years 2022 and 2023. Until 2009, $25.2 million in general fund revenue was distributed annually to municipalities; but due to the financial impacts of the Great Recession, the legislature suspended the revenue sharing statute in the 2009 budget process and has continued to suspend it each budget session since then. The cumulative loss to towns and cities through the current fiscal year amounts to $300 million. Revenue sharing, formally titled “Return of Revenue to Cities and Towns,” 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. Here is a link for the 2009 distribution amounts to each municipality. 

Section 100, Distribution of Meals and Rooms Tax. This section amends RSA 78-A:26, II, to clarify that if there is no increase in the income received from the meals and rooms tax compared to the previous fiscal year, the distribution to municipalities shall equal the prior year’s distribution. Contrary to the governor’s operating budget, based on current revenue projections, municipalities would not receive an increase in meals and rooms tax distributions in fiscal year 2022, budgeted at $5 million. Revenue projections do support a $5 million increase in the fiscal year 2023 distribution—but not the projected $10 million increase in the governor’s budget. In prior budget processes, the legislature suspended RSA 78-A:26, II, and capped the municipal distribution at the 2017 level:  $68.8 million through fiscal year 2021. 

Section 60, State Aid Grants. This section prohibits the disbursing of state aid grants for eligible infrastructure projects that did not achieve “substantial completion” by December 31, 2019, including wastewater treatment, public water systems, and landfill closure projects. This moratorium would prevent the funding of 110 wastewater projects which the Department of Environmental Services has identified as expected to be “substantially complete” and eligible for final funding approval in fiscal years 2022 and 2023. Further, the governor’s operating budget does not include funds for the 11 projects that were substantially complete prior to December 31, 2019, and were appropriated to receive funding in the current biennium. 

Section 60 represents another suspension of state statute requiring payment of state funding obligations—another promise that is not fulfilled. RSAs 486, 486-A, and 149-M, all include language stating “the State SHALL (emphasis added) pay” the 20-25 percent amortization costs of eligible costs for these essential environmental projects (state aid grants).  Under these statutes, towns and cities are encouraged to move forward with very substantial capital infrastructure projects with the full expectation that the state is a partner in providing for critical clean drinking water and a safe environment. Towns and cities must finance the full cost upfront, and they are required to work with DES through the entire project process of grant pre-application, planning, design and engineering, construction, and one-year warranty before the projects are deemed “substantially complete.” Only then are municipalities able to receive final approval by the governor and executive council for payment by the state of the promised statutory 20-to-25 percent share of the annual amortization costs.  

The House Finance Committee Divisions I, II, and III have scheduled numerous budget work sessions over the next two weeks and will be holding budget hearings later in March on both HB 1 and HB 2.

In a legislative session that has featured many bills focused on restricting local authority, HB 372 stands out as one bill that would increase local authority—although not, to our knowledge, in a way that any local officials have requested. On Thursday the House Election Law Committee heard brief testimony on HB 372, which would expand the authority of both county attorneys and municipal prosecutors to include the investigation and enforcement of the state election laws, as well as require periodic reporting to the General Court on such investigations and enforcement actions in some circumstances. 

Interestingly, HB 372 would clearly segregate the authority of municipal prosecutors appointed by the governing body pursuant to RSA 41:10-a from those police officers who may prosecute the same or similar cases on behalf of the municipality. The bill would grant those attorneys appointed as municipal prosecutors the authority to “enlist the aid of the state police, and other public officers” in the investigation and prosecution of the state election laws, give them a limited authority to seek subpoenas from grand juries outside of the purview of the county attorney or attorney general's offices, and expand their prosecutorial authority to the superior court in the context of felony-level violations of the election laws. Presently, municipal prosecutors are restricted to appearing in the circuit courts. 

NHMA is not taking a position on HB 372, but we are suggesting that those with opinions on this bill contact their representatives to express them.

NHMA’s second follow-up COVID financial impact survey is complete. Here is a link to  the results. 

Thursday, March 4, 2021 

SB 46, relative to the use of electronic poll books by cities and towns. Passed with Amendment. 

SB 54, relative to the procedure used to complete and submit applications for absentee ballots and absentee ballots. Passed with Amendment. 

SB 63, relative to business liability protection for exposure to coronavirus and COVID-19. Re-referred. 

SB 85-FN, establishing a broadband matching grant initiative and fund. Passed with Amendment; referred to Finance. 

SB 86-FN, adopting omnibus legislation relative to planning and zoning. Passed with Amendment. 

SB 118-FN-A-L, relative to the property tax relief act of 2021. Passed; Laid on Table. 

SB 132-FN, adopting omnibus legislation relative to COVID-19. Passed with Amendment; referred to Finance. 

SB 152-FN-A, relative to affordable housing program funding. Passed with Amendment.