SB384 (2006) Detail

(New Title) establishing a temporary one-time exemption from the real estate transfer tax for certain transfer of family farm or open space land.


SB 384-FN-A-LOCAL – AS AMENDED BY THE SENATE

03/22/06 1490s

2006 SESSION

06-2852

09/10

SENATE BILL 384-FN-A-LOCAL

AN ACT establishing a temporary one-time exemption from the real estate transfer tax for certain transfer of family farm or open space land.

SPONSORS: Sen. Johnson, Dist 2; Sen. Gallus, Dist 1; Sen. Burling, Dist 5

COMMITTEE: Finance

AMENDED ANALYSIS

This bill establishes a temporary one-time exemption from the real estate transfer tax for certain transfers of family farm or open space land.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/22/06 1490s

06-2852

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Six

AN ACT establishing a temporary one-time exemption from the real estate transfer tax for certain transfer of family farm or open space land.

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

1 One-Time Exemption From Real Estate Transfer Tax.

I. A transfer of one or more parcels of land that consist of farm land or open space land as defined in RSA 79-A:2 that is open to public recreational use under RSA 79-A:4, II, from a family holder to one or more family entities shall be exempt from the real estate transfer tax imposed under RSA 78-B. Application for exemption shall be made to the commissioner of the department of revenue administration prior to a transfer of real estate and shall be made on such form as the commissioner shall determine. The application shall be approved if the commissioner finds that:

(a) The transferor of the parcel is a family holder. A “family holder” shall consist of a person or family group consisting of an individual or a husband and wife, and may include any parent, grandparent, child, grandchild, or sibling of such individual or husband or wife, the spouse of such parent, grandparent, child, grandchild, or sibling, or any trust established by an eligible member for estate planning purposes and which is controlled solely by one or more of such eligible members of the family holder;

(b) The transferee of the parcel is one or more family entities. A “family entity” shall consist of a limited liability entity formed under New Hampshire law;

(c) Each holder’s share of ownership and/or beneficial interests in such family entity or entities immediately after the transfer is the same as such holder’s share of ownership of the family holder in the transferred parcel or parcels immediately before the transfer; and

(d) At least 80 percent of the assets of the family entity or entities immediately after the transfer consist exclusively of land that is in current use under RSA 79-A:4, II. The remainder of the assets of the family entity shall be ancillary to, and supportive of, a farm or open space land and its operation.

II. Each parcel of property is limited to one exempt transaction under this act.

2 Repeal. Section 1 of this act, relative to a one-time real estate transfer tax exemption, is repealed.

3 Effective Date.

I. Section 2 of this act shall take effect December 31, 2009.

II. The remainder of this act shall take effect January 1, 2007.

LBAO

06-2852

Amended 4/10/06

SB 384 FISCAL NOTE

AN ACT establishing a temporary one-time exemption from the real estate transfer tax for certain transfer of family farm or open space land.

FISCAL IMPACT:

The Department of Revenue Administration indicates this bill, as amended by the Senate (Amendment #2006-1490s), will decrease state unrestricted general fund revenue, state restricted education trust fund revenue, and county revenue by an indeterminable amount in FY 2007 through FY 2010. There is no fiscal impact on state, county and local expenditures or local revenue.

METHODOLOGY:

The Department of Revenue Administration (DRA) states that this bill establishes a temporary (January 1, 2007 through December 31, 2009) one-time exemption from the real estate transfer tax for transfers of family farm or open space land from current use to public recreational use. The DRA indicates the decrease in state revenue is indeterminable but is expected to be less than $100,000. DRA further states that since the exemption provisions in this bill impacts the real estate transfer tax, any decrease will reduce both general fund and education trust fund revenues. DRA also states that reductions in real estate transfer tax collections will result in a decrease in county revenue from the commission received for processing this tax. The Department states that this tax change can be administered within their existing budget.