HB 671-FN-A-LOCAL – AS INTRODUCED

2005 SESSION

05-0864

09/01

HOUSE BILL 671-FN-A-LOCAL

AN ACT relative to an exemption from the real estate transfer tax.

SPONSORS: Rep. Currier, Merr 5; Sen. Odell, Dist 8

COMMITTEE: Ways and Means

ANALYSIS

This bill exempts from the real estate transfer tax transfers of title which are in connection with refinancing of indebtedness the repayment of which is secured by a mortgage on the transferred real estate:

(1) To an entity that is wholly-owned by the transferor;

(2) To a person or entity that wholly owns the transferor; or

(3) Between 2 entities that are each wholly-owned by the same person or entity.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

05-0864

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to an exemption from the real estate transfer tax.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Paragraph; Real Estate Transfer Tax; Exceptions. Amend RSA 78-B:2 by inserting after paragraph XVIII the following new paragraph:

XIX. To a transfer of title (i) to an entity that is wholly-owned by the transferor, (ii) to a person or entity that wholly owns the transferor, or (iii) between 2 entities that are each wholly-owned by the same person or entity, in each case in connection with the refinancing of indebtedness the repayment of which is secured by a mortgage on the transferred real estate.

2 Applicability. This act shall apply to all transfers of title occurring on or after the effective date and to any transfer of title occurring prior to the effective date that is subject to an assessment of tax and is appealed pursuant to RSA 21-J:8-b.

3 Effective Date. This act shall take effect July 1, 2005.

LBAO

05-0864

Revised 2/14/05

HB 671 FISCAL NOTE

AN ACT relative to an exemption from the real estate transfer tax.

FISCAL IMPACT:

The Department of Revenue Administration has determined this bill will decrease state unrestricted and restricted revenue by an indeterminable amount in FY 2006 and each year thereafter. The Department also states this bill will increase state general fund expenditures by an indeterminable amount in FY 2006 and each year thereafter. There will be no fiscal impact on county and local revenue or expenditures.

METHODOLOGY:

The Department estimates, based on previous exemptions to the real estate transfer tax, this bill would result in a revenue reduction of $4,000,000 to $7,000,000 in FY 2006 and each year thereafter. One-third (1/3) of real estate transfer tax revenue is transferred to the education trust fund as restricted revenue. Two-thirds (2/3) of the real estate transfer tax revenues remains in the general fund as unrestricted revenue. The Department states the Department’s cost to administer this bill is undeterminable, however, due to the difficulty in auditing this tax, the Department states the cost could be significant. The Department further states that five field auditors and a data entry position, plus benefits, at a cost of $232,700 would be needed, and at least $50,000 for computer system upgrades and data compilation. The Department estimates the minimum cost of this bill would be $4,282,700 to $7,282,700.