HB1457 (2006) Detail

Establishing an electricity transmission utility property tax.


HB 1457-FN-A-LOCAL – AS INTRODUCED

2006 SESSION

06-2515

09/10

HOUSE BILL 1457-FN-A-LOCAL

AN ACT establishing an electricity transmission utility property tax.

SPONSORS: Rep. Kurk, Hills 7; Rep. Weyler, Rock 8; Rep. Spang, Straf 7; Rep. Norelli, Rock 16; Sen. Odell, Dist 8; Sen. Larsen, Dist 15

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes an electricity transmission utility property tax. Portions of revenues raised by this tax are deposited in the education trust fund, the land and community heritage investment program trust fund, and the general fund.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

06-2515

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT establishing an electricity transmission utility property tax.

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

1 New Chapter; Electricity Transmission Utility Property Tax. Amend RSA by inserting after chapter 83-F the following new chapter:

CHAPTER 83-G

ELECTRICITY TRANSMISSION UTILITY PROPERTY TAX

83-G:1 Definitions. In this chapter:

I. “Commissioner” means the commissioner of the department of revenue administration.

II. “Department” means the department of revenue administration.

III. “High-voltage electrical transmission utility” means any person, partnership, limited liability company, association, corporation, or other entity, their trustees or receivers appointed by any court, owning or possessing high-voltage transmission utility property, engaged in the transmission of electric power.

IV. “High-voltage electrical transmission utility property” means all real estate, buildings and structures, machinery, apparatus, fixtures of all kinds and descriptions, and electrical transmission wires, lines, poles, and towers located within New Hampshire employed in the transmission of electric power by means of overhead electrical transmission lines; and which property is subject to tax under RSA 72:6, 72:7 and 72:8, but not exempt under RSA 72:23.

V. “Land and community heritage investment program trust fund” means the trust fund established under RSA 227-M:7.

VI. “Taxable period” means the period beginning April 1, and ending March 31 of the following year.

83-G:2 Tax Imposed. For taxable periods beginning on or after April 1, 2006, a tax is imposed upon the value of high-voltage electrical transmission utility property at the rate of $ 50 on each $1,000 of such value, to be assessed annually as of April 1, and every year thereafter, and paid in accordance with this chapter.

83-G:3 Determination of Value. On or before December 1 of the tax year, the commissioner shall determine the value of high-voltage electrical transmission utility property for the purposes of this chapter by appraising such property at its full and true value. Notice of such determination shall be given to the taxpayer within 15 days of the commissioner’s determination.

83-G:4 Persons Liable. The tax imposed by this chapter shall be assessed upon each high-voltage electrical transmission utility owning or possessing high-voltage electrical transmission utility property. If an owner of high-voltage electrical transmission utility property has filed an election pursuant to RSA 83-G:5, II, the tax imposed by this chapter shall be assessed upon each person with an ownership interest in high-voltage electrical transmission utility property, in the proportion that such person’s ownership interest bears to the entirety of the ownership in the property.

83-G:5 Returns and Declarations.

I. On or before January 15 each year, each person liable for the tax shall file with the commissioner, on a form prescribed by the commissioner, a return based on the valuation for April 1 of the prior year. The return shall be accompanied by the payment of such amount as has not been prepaid in accordance with paragraph III of this section. If the return shows an additional amount to be due, such additional amount is due and payable at the time the return is filed. If such return shows an overpayment of the tax due, a credit against a subsequent payment or payments due, to the extent of the overpayment, shall be allowed. The return shall be accompanied by the payment of the tax.

II. On or before April 15 of each year, a person with an ownership interest in the high-voltage electrical transmission utility property, may elect to have the tax assessed in the proportion that such person’s ownership interest bears to the entirety of the ownership in the property. If such an election is made, on or before April 15 of each year, each high-voltage electrical transmission utility property owner liable to pay the tax imposed by this chapter shall file with the department, on a form prescribed by the commissioner, a statement setting forth the amount of such person’s ownership interest as of April 1. The statement shall include such additional information as the commissioner shall require and shall be signed by an authorized representative, subject to the pains and penalties of perjury.

III. For taxable periods ending before April 1, 2007, each utility or property owner liable to pay the tax shall, in addition, file a declaration on or before July 1, 2006 of the estimated tax to be assessed as of April 1 in the current taxable period, based on the equalized value of high-voltage electrical transmission utility property used in the department’s equalization report for April 1, 2005 accompanied by payment of 1/3 of the estimated tax due. Additional payments of 1/3 of the estimated tax shall be made on September 15, 2006 and December 15, 2006.

IV. For taxable periods ending after March 31, 2007, at the time the statement required by paragraph II is filed, each person or utility liable for the tax shall, in addition, file a declaration of the estimated tax to be assessed as of April 1 in the current taxable period, based on the tax assessed for the preceding taxable year, accompanied by payment of 1/4 of the estimated tax due. Additional payments of 1/4 of the estimated tax shall be made on June 15, September 15, and December 15.

V. As of June 1 of each year the utility shall file a list of the changes made to the high-voltage electrical transmission utility property since the prior April 1 of the preceding year. This statement shall include such additional information as the commissioner shall require and shall be signed by an authorized representative, subject to the pains and penalties of perjury.

VI. Taxes and estimated taxes not paid when due shall be subject to appropriate penalties and interest under RSA 21-J.

83-G:6 Additional Returns. When the commissioner has reason to believe that a taxpayer has failed to file a return or to include any part of the taxable value of its high-voltage electrical transmission utility property in a filed return, the commissioner may require the taxpayer to file a return or a supplementary return showing such additional information as the commissioner prescribes. Upon the receipt of the supplementary return, or if none is received within the time set by the commissioner, the commissioner may find and assess the amount due upon the information that is available. The making of such additional return does not relieve the taxpayer of any penalty for failure to make a correct original return or relieve it from liability for interest imposed under RSA 21-J:28 or any other additional charges imposed by the commissioner. This section shall not be construed to modify or extend the statute of limitations provided in RSA 21-J:29.

83-G:7 Records.

I. Every person liable for tax under RSA 83-G:4 shall:

(a) Keep in the state such records as may be necessary to determine the amount of such person’s liability under this chapter.

(b) Preserve such records for the period of at least 3 years or until any litigation or prosecution under this chapter is finally determined.

(c) Make such records available for inspection by the commissioner or authorized agents, upon demand, at reasonable times during regular business hours.

II. Whoever violates any of the provisions of this section shall be subject to the penalties imposed under RSA 21-J:39.

83-G:8 Administration; Rulemaking.

I. The commissioner shall collect the taxes, interest, additions to tax and penalties imposed under this chapter and shall pay over to the state treasurer the amount of funds collected under this chapter for deposit as follows:

(a) Of all funds collected under this chapter, $1,860,000 annually shall be deposited in the education trust fund established by RSA 198:39;

(b) $6,000,000 annually shall be deposited in the land and community heritage investment program trust fund established by RSA 227-M:7; and

(c) The remainder shall be deposited in the general fund.

II. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to:

(a) The administration of the tax imposed under RSA 83-G:2; and

(b) The recovery of any tax, interest on tax, or penalties imposed by this chapter.

III. The commissioner may institute actions in the name of the state to recover any tax, interest on tax, additions to tax or the penalties imposed by this chapter.

IV. In the collection of the tax imposed by this chapter, the commissioner may use all of the powers granted to tax collectors under RSA 80 for the collection of taxes. The commissioner shall also have all of the duties imposed upon the tax collectors by RSA 80 that are applicable to the commissioner. The provisions of RSA 80:26 shall apply to the sale of land for the payment of taxes due under this chapter, and the state treasurer is authorized to purchase the land for the state. If the state purchases the land, the state treasurer shall certify the purchase to the governor, and the governor shall draw a warrant for the purchase price out of any money in the treasury not otherwise appropriated.

83-G:9 Appeals. High-voltage electrical transmission utility property taxpayers aggrieved by a determination by the commissioner pursuant to RSA 83-G may appeal such determination according to the procedures and subject to the time limits provided for other taxes administered by the department under RSA 21-J:28-b.

83-G:10 Exemption From Statewide Enhanced Education Tax. Persons and property subject to taxation under this chapter shall not be subject to tax under RSA 76:3; provided, however, that nothing in this chapter shall be construed to exempt such persons or property from local school, municipal, district, or county taxation under RSA 76.

2 Statewide Enhanced Education Property Tax; Reference Added. Amend RSA 76:3 to read as follows:

76:3 Statewide Enhanced Education Tax. Beginning July 1, 2005, and every fiscal year thereafter, the commissioner of the department of revenue administration shall set the statewide enhanced education tax rate at a level sufficient to generate revenue of $363,000,000 when imposed on all persons and property taxable pursuant to RSA 76:8, except property subject to tax under RSA 82 [and], RSA 83-F and RSA 83-G. The education property tax rate shall be effective for the following fiscal year. The rate shall be set to the nearest 1/2 cent necessary to generate the revenue required in this section.

3 Statewide Enhanced Education Tax; Commissioner’s Warrant; Utility Property. Amend RSA 76:8, I(a) to read as follows:

I.(a) The commissioner shall annually determine a municipality’s tax base for the statewide enhanced education tax by subtracting from the total equalized valuation of all property, as determined under RSA 21-J:3, XIII for the preceding year, property that was then taxable under RSA 82 [and], RSA 83-F, and RSA 83-G. In determining the tax base, the value of any utility property that is included in the total equalized valuation upon which the statewide education property tax is computed, and is also taxable under RSA 83-F or RSA 83-G for that year, shall also be subtracted from the tax base, provided the sum value of the utility property represents at least 5 percent of the total equalized value of all property, except property taxable under RSA 82 [or], RSA 83-F, or RSA 83-G in the preceding year.

4 Education Trust Fund. Amend RSA 198:39, I(k) to read as follows:

(k) Funds collected and paid over to the state treasurer by the department of revenue administration pursuant to RSA 83-G:8, I(a), relative to the electricity transmission utility property tax.

(l) Any other moneys appropriated from the general fund.

5 Collection After Repeal; Electricity Consumption Tax. Nothing in this act shall be construed to excuse any tax obligation or liability accruing under RSA 83-E as amended prior to and up to the date of repeal. The commissioner of the department of revenue administration shall retain full authority to institute any authorized administrative action and any other proceedings to require payment of and to collect said taxes, additions to tax, and penalties and interest where applicable, within the applicable statute of limitations.

6 Repeal. RSA 83-E, relative to the electricity consumption tax, is repealed.

7 Effective Date.

I. Sections 2 and 3 of this act shall take effect July 1, 2006.

II. The remainder of this act shall take effect upon passage and shall apply to returns for taxable periods ending after March 31, 2006.

LBAO

06-2515

11/10/05

HB 1457-FN-A-LOCAL - FISCAL NOTE

AN ACT establishing an electricity transmission utility property tax.

FISCAL IMPACT:

      The Public Utilities Commission and Department of Revenue Administration indicate this bill will decrease state unrestricted revenue and state, county and local expenditures, and increase state restricted revenue by an indeterminable amount in FY 2007 and each year thereafter. There is no fiscal impact on county and local revenues.

METHODOLOGY:

    The Public Utilities Commission states this bill establishes an electricity transmission utility property tax with portions of the revenues raised by this tax deposited in the education trust fund, the Land and Community Heritage Investment Program (LCHIP) trust fund and the general fund. While the Commission states that they are unable to estimate the overall fiscal impact of this bill, the Commission did a rough estimate of the electrical transmission utility property in New Hampshire. Using federal and state regulatory filings as well as state tax data, the Commission estimates the value of this property to be in the range of $214 million. With this as a base, the Commission calculated the new tax at approximately $10.7 million, with $1.860 million deposited in the education trust fund, $6.0 million deposited in the LCHIP trust fund and $2.84 million deposited in the general fund. Offsetting this increase is the loss of the general fund electrical consumption tax revenue. The Commission further indicates that state, county and local expenditures will decrease for the electric consumption tax that is repealed and no longer included in utility bills.

    The Department of Revenue Administration states the fiscal impact of this bill is indeterminable. The Department cannot break out the different types of property taxed under RSA 83-F to be able to make an estimate of the revenue that would be generated by this bill. The Department states that the electricity consumption tax that is repealed would decrease state unrestricted revenue by $6.2 million based on FY 2005 statistics.