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Senate panel hears testimony on N.H. Municipal Association legislation

A Senate committee heard testimony yesterday on a bill that would set forth guidelines in state law for the New Hampshire Municipal Association’s nonprofit structure, board composition and lobbying activities.

The legislation, introduced by Democratic Sen. Donna Soucy of Manchester, comes amid an ongoing legal battle over the business practices of the association’s parent organization, the Local Government Center.

Soucy told the Senate Public and Municipal Affairs Committee that her bill would clarify the association’s proper role, even as the LGC’s fight with state regulators heads to the Supreme Court.

“What I believe is that no matter what happens outside of here . . . there should be an organization, an organization for local cities and towns to share information, gather information and to interact with the Legislature in some form,” Soucy said.

But the association opposes the bill. Its lobbyists and supporters told the committee yesterday that it would be inappropriate for the state to dictate details like the board composition of a nonprofit group – even a quasi-governmental organization like the association.

“With all due respect, we don’t think it would be within the purview of the Legislature to tell our members how they want to govern our association, their association,” said Judy Silva, a lobbyist for the municipal association. “If there is confusion about who we are, I think that is for us to address and for us to address with our members.”

The New Hampshire Municipal Association was established in 1941 as a nonprofit group to represent the interests of towns and cities. In 1987, it began operating public risk pools to provide those governments with insurance coverage.

In 2003, it changed its name to the Local Government Center and reorganized. At that time, a new limited liability company controlled by the LGC was given the name “New Hampshire Municipal Association,” and the association continues to lobby at the State House on issues of interest to local governments.

The legality of that 2003 corporate reorganization is among the issues raised by regulators from the Bureau of Securities Regulation, which is part of the secretary of state’s office. The LGC has defended the legality of its actions and last year appealed a ruling by an administrative-hearing officer to the state Supreme Court, which has not yet ruled in the case.

One area of dispute at yesterday’s hearing was over a basic question: Is the New Hampshire Municipal Association still, as it claims to be, a nonprofit group?

Secretary of State Bill Gardner said the 2003 corporate reorganization left the association as an LLC, meaning it’s now a for-profit organization. But Cordell Johnson, a municipal association lobbyist, said there’s nothing in state law that precludes an LLC from being a nonprofit organization.

Soucy’s bill would require the association to be a nonprofit and nonpartisan organization, governed by a board of directors of up to 30 elected officials. In addition to a ban on partisan political activity, the association would be barred from lobbying on issues “which directly affect organizations or entities affiliated with the association” – presumably, the LGC and the public risk pools it operates.

Eight local officials from communities around the state spoke yesterday in support of the association, many objecting to the requirement in Soucy’s bill that the association’s board consist of elected, rather than appointed, officials. Soucy said she’s willing to amend the bill to allow a mix of elected and appointed officials on the board.

The committee heard about an hour and 45 minutes of testimony, but didn’t debate or vote on the bill.

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)

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