2011 Legislative Wrap-Up

Cordell Johnston

Barring unforeseen events, by the time you read this, the New Hampshire legislature will have finished its regular business for the 2011 session. At this writing, all bills that survived the committee of conference process were on their way to the full House and Senate for final action. June 23 was the last day for both houses to act on committee of conference reports.

Highlights, and lowlights, of the year included an extremely difficult budget process and major reforms to the state retirement system. For municipalities, the positive developments on retirement costs were offset by the continued loss of revenues from the state. On other fronts, the legislature gave municipalities more control over collective bargaining, but less over zoning and building codes, and blocked reinstatement of the dreaded pole exemption.

The budget. Municipalities had suffered severely under the state budget adopted two years ago, with the suspension of revenue sharing, the freezing of the meals and rooms tax distribution at the 2009 level and a reduction in the state's contributions to the retirement system for teachers, police and firefighters. Things did not improve this year—revenue sharing remained in suspension, meals and rooms tax revenue remained frozen, and the state's retirement contribution was reduced to almost zero (although that reduction should be offset by savings from retirement reform).

Retirement system. On the brighter side, the legislature passed significant retirement reform legislation. Although the Governor vetoed the pension reform bill, SB 3, the legislature brought it back by including identical language in HB 2, the budget trailer bill, which we believe the Governor is highly unlikely to veto. These reforms will reduce municipal costs by, among other things, transferring the remaining funds in the special account to the pension fund, raising employee contribution rates, increasing retirement ages and length-of-service requirements, limiting the definition of "earnable compensation" and lowering the maximum retirement benefit.

Labor issues. One of the first bills enacted this year was SB 1, which repealed the automatic "evergreen clause" that had been deemed included in all public employee collective bargaining agreements since 2008. Public employers and unions remain free to include an evergreen clause in their contracts by mutual agreement, but there is no longer an automatic continuation of "any pay plan" contained in the agreement.

The legislature also repealed a 2007 law that allowed public employees to unionize without an election by filing a written authorization signed by a majority of the members of a bargaining unit, and repealed a 2008 law allowing the creation of bargaining units as small as three members.

Pole exemption. In a major victory for municipalities, the House rejected a bill that would have reinstated the property tax exemption for telecommunication poles and conduits. Absent a covert effort to attach the exemption to another bill in a committee of conference, the pole exemption is dead for good—at least until next year!

Zoning/building regulation. There was surprisingly little land use legislation this year, but one popular issue was mandatory installation of fire suppression sprinklers. The legislature passed two bills, SB 91 and HB 109, that together would prevent municipalities from adopting any ordinance, code or regulation requiring sprinklers in single- or two-family dwellings, and would prevent a planning board from requiring sprinklers as a condition of subdivision approval. However, the Governor vetoed HB 109; whether he will do the same with SB 91, and whether the veto(es) will be sustained, remains to be seen.

Of course, there is much more to report. The Final Legislative Bulletin, which will be published and available on our website later this summer, will summarize all 2011 laws of municipal significance.

Cordell Johnston is Government Affairs Counsel for the New Hampshire Municipal Association. Contact the government affairs staff at 800.852.3358, ext. 384.