Distant Dome: New Ethics Law In Place For Lawmakers

By GARRY RAYNO, Distant Dome, InDepthNH

CONCORD, NH — Legislators are now under the new ethics law which was enacted during the 2024 session requiring much greater accountability for conflicts of interest.

The new law has two key elements that require a lawmaker to recuse him or herself from participating in discussions on a bill or voting on it.

If a lawmaker has a personal conflict of interest or if he or she or a member of his or her household would stand to benefit or suffer financially from a bill’s outcome they must recuse themselves.

The second instance is if a lawmaker or a household member works for an organization that lobbies on the bill, they must recuse themselves.

This past session, one major issue was the state’s method of administering the Statewide Education Property Tax and if the state should comply with a superior court ruling finding the current method of allowing property wealthy communities to retain the excess money they raise under the levy to provide their students with an adequate education or about $4,200 per student.

Since 2011 when the legislature changed the law, property wealthy communities have been able to retain the excess money and use it to lower the local education property tax rate or some other use for public education although a number of towns clearly were using the money to offset the cost of municipal projects like sewer systems etc.

There were a number of bills in the 2025 session that dealt with the issue although none came to fruition, but the House members from property wealthy communities like along the Seacoast, or the Lakes Region, or the Lake Sunapee-Dartmouth region did not have to recuse themselves from work on the bills or voting on the bills.

Passing the bills to require the money be sent to the state for redistribution to property poor communities as was the original structure, would have increased property taxes in the property wealthy communities while lowering the property taxes in the property poor communities so a good number of legislators would have had to recuse themselves, although that is now a moot issue after the Supreme Court ruling overturning that aspect of the lower court’s decision.

Another example would be those landowners serving in the legislature who have property in current use.

An earlier ruling by the Legislative Ethics Committee discussed the issue when it was asked to clarify aspects of the new law.

“Under the new law, if a bill would change the formula for taxation, increasing or decreasing the amount of taxes to be paid, it may be expected to have a ‘direct and substantial’ financial impact on the legislator, making recusal mandatory. At the same time, not all current use bills would necessarily require recusal,” the ethics committee ruled and noted changes in classification or vegetation or the filing process would not require recusal, but would still require disclosure of interest.

The state retirement system is another example the committee discussed in its ruling, noting recusal would be required “if a bill is introduced that changes the retirement benefit or member contribution rate, it is expected to have a direct and substantial financial impact on the legislator or a member of the legislator’s household,” but not for things like the system’s investment strategy, its operating procedures or its staffing.

“Recusal is required when a legislator recognizes that a legislative activity could reasonably be expected to have a direct and substantial financial impact upon them or a member of their household. That could be at a committee meeting or at any time in the legislative process. At that point, the legislator should refrain from any further legislative involvement on the legislative activity and file a Declaration of Intent form with the Clerk of their respective body, noting their recusal,” the opinion states.

That brings up the issue of House Majority Leader Jason Osborne, R-Auburn, whose wife has a homeschooling nonprofit that three school years ago collected $28,750 in Education Freedom Account grant money.

It is impossible to tell what she collected since the 2022-2023 school year because the Children’s Scholarship Fund NH has not released what was spent with vendors for the last two school years although it should have closed its books after June 20, 2025.

However, that nonprofit is still listed as an approved vendor on the scholarship fund’s website.

Osborne continues to be a vocal advocate for the program and its expansion and also a frequent sponsor of legislation to expand eligibility.

Until July 1, when the new law went into effect, the New Hampshire Legislature handled the conflict-of-interest question inconsistently leaving the recusal from voting or participating on a bill to individual lawmakers to decide.

Many would file a “Declaration of Intent” noting their vested interest in the subject, but participate anyway, although some do refrain from voting.

Homebuilders voted on state building codes, hospital officials voted on uncompensated care formulas, insurance agents voted on mandatory requirements, state workers voted on pay raises or future retirement system benefits, and child-care providers voted on expanding the system, to name but a few of the conflicts that existed but were deemed not to require recusal.

In an attempt to have a more uniform system, lawmakers in 2024 approved House Bill 1388 which requires a lawmaker to recuse himself or herself when he or she or any member of their household could “be expected to incur a direct and substantial financial benefit or detriment as an outcome of the legislative activity.”

Despite what the law says, there is a major exception that exempts lawmakers from the recusal mandate for state budget or general revenue bills.

In other words, if you are a business owner and a member of the legislature you still will be able to vote to give yourself a business tax cut or if you are a former state worker to vote to increase your retirement benefits if those are in the budget bills.

The ethics committee was recently asked what constitutes a budget bill or more importantly is the trailer bill a budget bill?

The committee had no problem saying that the bill with the operating budget numbers — usually House Bill 1 — and the capital budget — usually House Bill 25 — were clearly budget bills, but had some discussion about House 2 or the trailer bill which includes the changes in law needed to correspond to the numbers in House Bill 1, but in recent years it has included other bills that one body or the other wanted badly and stuck it in the budget package which is much more difficult to veto or kill than the stand alone bill.

That is how the auto inspection repeal made it through and also several other bills including several dealing with voting.

The committee found the trailer bill’s primary purpose is not to enact provisions to produce revenue, therefore it is not a budget bill under the recently enacted law, but the bill “plays a critical role in the implementation of the budget and is indispensable to the budget process.”

The committee decided unanimously that as the law “applies to recusal, it makes little sense to require legislators to recuse themselves from the trailer bill but not the budget” and declared it comes under the exemption for recusal.

However, the committee split 4-3 on the question of whether amendments to House Bill 2 were also covered by the exemption, and the majority found they were not.

“A majority of the Committee believed that it was logically inconsistent to require a legislator to recuse for a conflict of interest on a bill during the regular legislative process and then allow that legislator to vote on the same bill when it is offered as an amendment to the trailer bill. A minority of the Committee believed that the process of amending the trailer bill is different than the regular legislative process,” committee chair Edward “Ned” Gordon, a former lawmaker and judge wrote for the committee.

The committee recommended the legislature may want to clarify the issue and the question of the trailer bill as well.

So in other words, amendments to the trailer bill such as the agreement on returning lost benefits to Group II Retirement System members, which hung up the Committee of Conference on the budget until the last minute and caused Gov. Kelly Ayotte’s threatened veto of the budget if it were not fixed would require recusal from current lawmakers affected by the change and there are a number.

The committee’s decision on amendments may help return future trailer bills to their original purpose which is the changes in law needed to correspond to the numbers in the operating budget instead of being the “last chopper out of Saigon” as lobbyists often refer to it.

The 2026 session of the legislature should be interesting to watch with the new ethics law in place and the changes it brings.

Garry Rayno may be reached at garry.rayno@yahoo.com.

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.

This article first appeared on InDepthNH.org and is republished here under a Creative Commons license.