As we pass the midpoint in the state’s legislative session, a lot of issues are up in the air: business tax cuts; a state-backed voluntary paid family and medical program; workforce housing; vaccine mandates; a whole new cannabis industry; and perhaps hundreds of millions of dollars in federal funding.

And because of divisions in the Republican Party, which controls both chambers and the governor’s office, the outcome on much of the legislation is more unpredictable than usual.

The debate about cannabis, once primarily a Democratic cause, shows how party alignment can be fluid. In struggling to come up with a solution that might make the more cautious Senate feel more comfortable, House Bill 1598 hands the new industry to the State Liquor Commission, which would regulate, buy and sell pot.

But that has led to charges from libertarian Republicans that the state wants a monopoly, and some Democrats wanted to make sure edibles would be included, to be more competitive with neighboring states. The resulting vote was 169-156, with both parties backing it by extremely narrow margins.

Covid: the mandate not to mandate

The session opened with dozens of Covid-related bills, but that number is now down to an even dozen.

Perhaps the biggest among those is House Bill 1210, which would let workers refuse an employee-mandated vaccine if it violates that worker’s conscience, and the employer would have to accept that, though it could try to work out a reasonable accommodation.

One problem is there is a federal mandate, upheld by the U.S. Supreme Court, that requires any health facility that receives Medicare and Medicaid to mandate that workers get vaccinated with no conscience exemption. Thus, the bill could put at risk hundreds of millions of dollars of federal funding, but it also would interfere with the right of other business owners to protect their own safety, not to mention those of their workers or customers.

“I don’t know how you can fix that,” said David Juvet, senior vice president at the Business & Industry Association.

Juvet did say lawmakers might be able to fix HB 1098, which originally invalidated non-compete agreements if workers leave because of a vaccine mandate, but it has since been altered to make it more universal by adding an undefined phrase “material change in employment” as a reason to make such agreements null and void.

On the Senate side, there is SB 319, which would allow — not mandate, as in the original bill — health insurers to provide incentives to members who do get vaccinated, similar to those for not smoking or losing weight.

Taxes, how low can we go?

In a non-budget year, the conventional wisdom was that lawmakers would leave taxes alone, but the House, spurred on by Gov. Chris Sununu saying, “Let’s do it again” in his State of the State address, voted to pass HB 1221, which would cut the business profits tax rate another point to 7.5 percent. This was the culmination of a series of tax cuts that began in 2016 but was stalled during Covid when lawmakers tied the cuts to revenue stream.

It’s a pretty safe bet it will pass in the Senate too. “That’s one bill we will salute,” Senate Majority Leader Jeb Bradley told NH Business Review. “We always stated that was our goal.”

Indeed, the only question is whether the final result will include a business enterprise tax cut. The original version of HB 1221 cut the rate from 0.55 to 0.5 percent, but that cut was eliminated by the House Ways and Means committee after a good look at the $40 million cost indicated by the Department of Revenue Administration’s fiscal note, while the BPT cut alone would cost $8.5 million.

That was particularly disappointing to Bruce Berke, state director of the National Federation of Independent Business, since smaller businesses usually pay that tax.

“It’s important to consider the impact on the small business community as they are drivers of big business and the job creators,” Berke said.

But Bob Giuda, chair of the Senate Ways and Means Committee, asked for estimates for each decimal. At deadline, the Senate scheduled a hearing on April 6 to tack on a two-month gas holiday on HB 1221, backfilling the $26 million loss to the highway trust fund from the general fund.

Sununu has also been pushing for a holiday on the room and meals tax after legislative attempts to reduce that tax failed.

Housing: What to do about the crisis?

“Workforce housing” has long been the rallying cry of business groups — especially Realtors and builders, yet the availability of affordable housing continues to grow scarcer. In February 2016, for instance, there were 7,500 homes for sale, said Bob Quinn, CEO of the NH Association of Realtors. Fast-forward to February of this year, and there were 900. And that’s after creation of the Housing Appeals Board and the mandate that municipalities make a place for workplace housing in their zoning plans.

This year, the biggest bill is SB 400, which mostly takes a carrot approach but does include a few sticks.

It would reward municipalities that earn a Housing Champion certification with training funds, allows municipalities to extend tax relief for projects with workforce housing, but it would also require that cities and towns apply the same density and lot size allowances to workforce housing as they do for any other type of housing and require speeding up the planning and zoning board review process by providing specific timelines.

The bill sailed through the committee process, with the NH Municipal Association staying neutral on the bill, but the full Senate just barely passed it, 13-11.

“It’s odd,” said Quinn. “If people had concerns with the bill, I wish they would have told us.”

This doesn’t bode well for its fate in the House, where a similar bill failed last session, and it just narrowly tabled two other affordable housing bills recommended by committee. One was HB 1177, the “missing middle housing” bill which would have granted owners of private property the ability to create up to four residential dwelling units on any single-family lot in a residential zoning district served by water and sewer. The other was HB 1087, which would forbid ordinances that require more than a 10,000-squarefoot lot size for single-family housing, again without public water and sewer, lost by three.

There were several bills related to building codes. At crossover, the Senate passed SB 443, which would have municipalities submit their code to a review board, which could nix codes that conflict with the latest one adopted by the state. And that state code would be the national code of 2018, if another House bill now in the Senate Finance Committee becomes law.

And then there is SB 249, a bill that would ban municipal prohibitions of short-term rentals but would step up their regulation. Critics of such rentals say they take regular apartments off the market, driving up rents and create unfair competition for the lodging industry, which is more strictly regulated.

Energy tug of war

This year will be another tug of war between the House, which wants to limit clean energy, and the Senate, which wants to at least modestly expand it.

One of the biggest bills that came out of the Senate is SB 262, which would expand the size of commercial projects receiving favorable net metering rates from 100 kilowatts to 500 kilowatts, and manufacturers’ larger-scale projects of 1 to 5 megawatts could join municipalities and other government entities in being eligible to sell excess energy. Sununu has vetoed that later provision in the past, but Clean Energy NH Executive Director Sam Evans-Brown is hoping, that since it is limited to manufacturers, he might sign it this time, if it gets through the House.

The House has approved a number of bills that would limit the net metering rates. One, HB 1629, would simply pay the default rate — the same rate utilities pay to buy power from other generators. Brown contends that this ignores some of the rate-saving advantages that net metering provides, like fewer distributed resources and lowering peak loads. There are several other similar bills, but Evans- Brown said this one was the “most extreme.”

The Senate also has passed other renewable energy bills this session. Two of them, SB 268 and SB 440, would jump-start the offshore wind industry and another, SB 424, would encourage development of renewable natural gas.

Finally, there is SB 271, which would require the Public Utilities Commission to reverse itself on the Burgess Bio-Power facility, a North Country wood-burning plant, and open a docket with the purpose of keeping it open. Bradley, sponsor of the bill, admitted that “my friends over in the House might see things a little differently.”

Transportation and infrastructure

The Senate, in a surprise move at crossover, added $77 million on top of the Highway Fund, to help towns fix roads and bridges, not to mention another $122 million would go toward a broadband matching grant fund, though the latter is for more general funds, plus a bill that would enable the state to spend another $17 million for electric vehicle infrastructure. It is not clear how the House will react to that extra spending, no matter how much revenues are coming in above budget.

On the other hand, the House passed HB 2022, which would prohibit any state funding to support commuter rail, which has become a real possibility thanks to the federal infrastructure bill.

Bob Sanders can be reached at bsanders@nhbr.com.

This year will be another tug of war between the House, which wants to limit clean energy, and the Senate, which wants to at least modestly expand it.