HB 1451-FN-LOCAL – AS INTRODUCED
2006 SESSION
10/04
HOUSE BILL 1451-FN-LOCAL
AN ACT requiring a prorated assessment of new construction in the year completed.
SPONSORS: Rep. Lasky, Hills 26
COMMITTEE: Municipal and County Government
This bill requires that new construction shall be assessed at its improved value for the prorated part of the year in which it is completed.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
06-2446
10/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT requiring a prorated assessment of new construction in the year completed.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Property Tax Year. Amend RSA 76:2 to read as follows:
76:2 Property Tax Year. The property tax year shall be April 1 to March 31 and all property taxes, except for assessment on new construction under RSA 76:21, shall be assessed on the inventory taken in April of that year.
2 New Subdivision; Assessment of New Construction. Amend RSA 76 by inserting after section 20 the following new subdivision:
Assessment of New Construction
76:21 Assessment of New Construction.
I. Completed new construction of real estate completed after the first day of the property tax year is liable for the payment of property taxes from the date the certificate of occupancy is issued or the date on which the new construction is first used for the purpose for which it was constructed, whichever is the earlier, prorated for the assessment year in which the new construction is completed. The prorated tax is computed on the basis of the current year’s applicable rate of tax with respect to the property, including the applicable rate of tax in any tax district in which the property is subject to tax following completion of the new construction, on the date the property becomes liable for the prorated tax in accordance with this section.
II. The building inspector issuing the certificate shall, within 10 days after issuing the certificate, notify, in writing, the assessor of the issuance of the certificate of occupancy.
III. Not later than 90 days after receipt by the assessor of the notice from the building inspector or from a determination by the assessor that the new construction is being used for the purpose for which it was constructed, the assessor shall determine the increment by which the assessment for the completed construction exceeds the assessment on inventory for the immediately preceding assessment date. The assessor shall prorate that amount from the date of issuance of the certificate of occupancy or the date on which the new construction was first used for the purpose for which it was constructed, as the case may be, to the first day of the property tax year immediately following and shall add the increment as so prorated to the inventory for immediately preceding first day of the property tax year and shall within 5 days notify the record owner and tax collector of the additional assessment.
IV. Any person claiming to be aggrieved by the action of the assessor may, within 60 days of notice of the additional assessment appeal to the assessing officials in writing for an abatement from the assessment. If the assessing officials neglect or refuse to abate, an owner may, at the owner's election within 6 months of notice of such tax and not afterwards, petition the superior court of the county where the operation took place, or the board of tax and land appeals. A petition to the board of tax and land appeals shall be accompanied with a $65 filing fee.
V. Upon receipt of the notice from the assessor, the tax collector shall within 10 days thereafter mail or hand a bill to the owner based upon an amount prorated by the assessor. The tax shall be due and payable and collectible under RSA 80 as other local taxes and subject to the same liens and processes of collection.
VI. Nothing in this section authorizes the collection of taxes twice in respect of the land upon which the new construction is located.
76:22 Disposition of the New Construction Property Taxes. The tax collected under this section shall be paid by the tax collectors into their respective treasuries for the general use of the city or town.
2 Effective Date. This act shall take effect April 1, 2006.
LBAO
06-2446
11/21/05
HB 1451-FN-LOCAL - FISCAL NOTE
AN ACT requiring a prorated assessment of new construction in the year completed.
FISCAL IMPACT:
The Department of Revenue Administration and New Hampshire Municipal Association state this bill will increase local expenditures and county and local revenue in FY 2006 and each year thereafter. There will be no fiscal impact on state and county expenditures or state revenue.
METHODOLOGY:
The Department of Revenue Administration states current law only allows new construction to be assessed at its percent of completion as of April 1 and not thereafter. If a structure were 50% complete as of April 1 and finished on April 2, the assessor would not be able to assess the portion finished on April 2 until the following April 1. Prorating new construction at the date of completion after April 1 in the same tax year would increase revenues in that tax year for local and county government. Administrative costs would increase at the local level in an effort to track these various dates of completion. The Department is unable to determine the exact fiscal impact at this time.
The New Hampshire Municipal Association states while this bill may increase a municipality’s tax base, it would not bring in greater tax revenue unless the property met conditions for taxation after the establishment of the final property values for tax rate setting purposes. Any new construction added before that time would reduce the amount of taxes to be paid by other local taxpayers. This bill would increase municipal administrative costs, for both assessing officials and building inspectors, as they would be required to certify occupancy and/or use, as well as determine the value of the property with the new construction (after having valued the property the prior April 1), as well as determine the proper prorating of taxes due. The Association is unable to determine the exact fiscal impact at this time.