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Heating pre-buy protection at risk over flood payments owed to some NH towns

State House Bureau

May 29. 2014 8:00PM

CONCORD — The Senate and House negotiators came to loggerheads Thursday over a bill limiting when heating oil companies can advertise pre-paid contracts and making failure to deliver heating fuel a violation under the state Consumer Protection Act.

While House and Senate negotiators came to quick agreement on the heating fuel pre-buy provisions in House Bill 1282, they could not agree whether the state should give towns in the Merrimack River flood control compact $1.1 million from a settlement reached with Massachusetts.

Massachusetts has refused to compensate communities for the land they lost to the flood control area that cannot be used for any other purpose. The Attorney General’s Office reached a settlement with Massachusetts last year to pay about one-quarter of what it owes from 2009 to 2012.

The House rejected the provision in a Senate bill that would have turned over all the money in the settlement to the towns. Instead, the House wants to use the money to pay communities in the current biennial budget.

The Republican-dominated, 2011-12 Legislature did not include money in its budget to pay the communities in the compact.House negotiator Rep. Peter Leishman, D-Peterborough, said the House Finance Committee is concerned about the state’s finances and does not believe it can afford to give up all $1.1 million but would agree to fund one of the two years the communities were not paid.



“The decision not to fund those communities was made by the last Legislature,” Leishman said.

But the Senate’s chief negotiator Sen. Andy Sanborn, R-Bedford, argued the state has an obligation under the terms of the interstate compact to make the communities whole.

“You want to hold our communities hostage,” Sanborn said. “This continues to show the state is not complying with its laws and not keeping its word.”

He said what the House wants to do is equivalent to finding a wallet by the side of the road, pulling the money out and then keep walking without seeing who the money belongs to.

But Leishman reminded Sanborn that he and other senators voted for a budget that failed to fund the communities for two years.



He said he talked to selectmen and town administrator in Peterborough and they were disappointed in the last Legislature, but grateful that current lawmakers decided to pay the town during the current biennium.



The House’s chief negotiator, Rep. Donna Schlachman, D-Exeter, told the senators they were digging in their heels and refusing to compromise, nothing the House agreed to the changes the Senate made on the heating oil bill.

“We’ve offered a compromise on the piece you stuck on this very important consumer protection bill,” she noted.

Sanborn said $500,000 was not a compromise, but money due the towns in the compact that the House wants to use for something else.

Neither the House nor the Senate were willing to change their positions so Schlachman said the House would draft a compromise report and see who signs it. That will allow Senate President Chuck Morse, R-Salem, to decide if he wants to change Senate negotiators to keep the heating fuel portion of the bill alive.

The deadline for reaching an agreement is Friday at 4 p.m.

The pre-buy bill allows heating fuel dealers to use inventories to meet current requirements that dealers have 75 percent of the pre-buy fuel covered through futures’ contracts, surety bond or letter of credit.

The bill also requires dealers to register with the Secretary of State’s Office and file an annual report demonstrating how the company will satisfy its obligations to consumers.

The bill gained momentum this winter when customers of Fred Fuller Oil and Propane Co. Inc. failed to meet scheduled deliveries of heating oil when promised or when tanks were low.

The bill limits when dealers can advertise and solicit customers for pre-buy contracts to between May 1 and Oct. 31.At a public hearing last month, several dealers testified that dealers in financial trouble often solicit contracts in January or February for the next heating season and then use the money to buy fuel for the current heating season.Under the bill, failure to deliver heating oil under a prepaid contract would be a violation of the Consumer Protection Act that would be in most instances a class B misdemeanor but could be increased to a class A misdemeanor for repeated or gross violations.

Senior Assistant Attorney General James Boffetti, who heads the consumer protection division, told senators at the public hearing that his agency has qualified support for the bill.

He said the real problem is how to secure pre-buy contracts. Despite the changes in the bill, “we’re still left with insufficient security with customers’ money,” he said. And he fears requiring dealers to register with the Secretary of State will give consumers a false sense of security.

If agreement is reached on the bill, the House and Senate will vote on it next week.

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