INSURANCE

Senate Passes Amended Version of Premium Tax Reduction

May 5, 2006

By Donald J. Pfundstein*

Late last evening (May 4, 2006) the New Hampshire Senate adopted the favorable Finance Committee recommendation to pass the bill as amended. The Senate voted 23-0 in favor of passing the bill. 

The Senate-passed version maintains the phase-in of the tax reduction from 2- to 1-percent over 4 1/2 years as crafted by the House. The Senate has added an accelerated payment mechanism requiring the companies to pay the tax quicker than current law requires. The Senate did this to create an additional $1.3 million for the state coffers. The Senate also expanded the Department of Insurance obligation to pursue the redomestication of insurers to New Hampshire. It also requires detailed reporting on jobs retained and created by this legislation.

Will final legislative action make New Hampshire a destination resort for insurance companies and their good paying jobs?

Procedurally, the House of Representatives could concur with the Senate-passed version. This action would send the bill to Governor Lynch for his signature. Should the House not agree with the Senate version, it could effectively kill the bill by voting to nonconcur. However, the House previously passed the measure earlier this legislative session. The House could also vote to nonconcur and request a committee of conference. This would require the two bodies to work out their differences. In the absence of an agreement, the measure would die.

New Hampshire needs prompt concurrence and the Governor’s favorable action on the bill. It is critical that this economic development measure be enacted. It’s clear that making this investment makes sense. When the editorial writers at both spectrums of the tax issue agree, (see Editorial Positions, at right) you know it’s the right thing to do.

*Donald J. Pfundstein is admitted in New Hampshire.

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