HB 596-FN-LOCAL - AS INTRODUCED
2009 SESSION
10/03
HOUSE BILL 596-FN-LOCAL
AN ACT relative to establishing a property tax credit for all taxpayers whose property taxes exceed 10 percent of household income.
SPONSORS: Rep. Wells, Rock 8; Rep. Sapareto, Rock 5
COMMITTEE: Local and Regulated Revenues
This bill establishes a property tax limit and grants a credit of the amount of taxes that exceed 10 percent of a taxpayer’s household income. The credit applies to all taxpayers in the state beginning April 1, 2011.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
09-0255
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT relative to establishing a property tax credit for all taxpayers whose property taxes exceed 10 percent of household income.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subdivision; Progressive Property Tax Limit. Amend RSA 72 by inserting after section 78 the following new subdivision:
Progressive Property Tax Limit
72:79 Progressive Property Tax Limit; Credit.
I. Any resident taxpayer who is liable for property taxes for any property used as his or her residential real estate, as defined in RSA 72:29, shall receive a credit in the amount of total state, county, and local property taxes owed in excess of 10 percent of the taxpayer’s total household income for the prior year.
II. To receive the credit granted by paragraph I, a taxpayer shall apply as provided in RSA 72:33. Eligibility for the credit shall be verified by the assessors pursuant to the procedures in RSA 72:34 through 72:34-b.
III. In this section, “household income” means the sum of the adjusted gross income for federal income tax purposes of the claimant and any adult member of the claimant’s household who resides in the residential real estate for which a claim is made. “Household income” shall also include all income of any trust through which the claimant holds equitable title, or the beneficial interest for life, in the residential real estate.
IV. The credit established in this section shall apply commencing with the property tax year beginning April 1, 2011. The procedures in RSA 72:27-a shall not be applicable to the credit established in this section and such credit shall be granted to all eligible taxpayers in the state.
2 New Paragraph; Tax Bill Information. Amend RSA 76:11-a by inserting after paragraph I the following new paragraph:
I-a. The tax bill shall show the total amount of property taxes due after the progressive property tax limit is applied pursuant to RSA 72:79. All rates calculated by the department of revenue administration under RSA 21-J:3, XV shall reflect the progressive property tax limit.
3 Education Trust Fund; Reference Removed. Amend the introductory paragraph of RSA 198:39, I to read as follows:
I. The state treasurer shall establish an education trust fund in the treasury. Moneys in such fund shall not be used for any purpose other than to distribute adequate education grants to municipalities’ school districts and to approved charter schools pursuant to RSA 198:42, [to provide low and moderate income homeowners property tax relief under RSA 198:56-198:61,] and to fund kindergarten programs as may be determined by the general court. The state treasurer shall deposit into this fund immediately upon receipt:
4 Software Development. The department of revenue administration is authorized to expend funds and contract for services to develop and implement necessary software and other improvements required for the administration of the progressive property tax limit established in RSA 72:79.
5 Repeal. The following are repealed:
I. RSA 198:56 through RSA 198:61, relative to low and moderate income homeowners property tax relief.
II. RSA 21-I:18, I(l), relative to purchases of services with respect to administration of low and moderate income homeowners property tax relief.
6 Effective Date. This act shall take effect July 1, 2010.
LBAO
09-0255
Revised 02/19/09
HB 596 FISCAL NOTE
AN ACT relative to establishing a property tax credit for all taxpayers whose property taxes exceed 10 percent of household income.
FISCAL IMPACT:
The Department of Revenue Administration and the New Hampshire Municipal Association state this bill will have an indeterminable impact on state and local revenue in FY 2011 and each year thereafter and may increase state and local expenditures by an indeterminable amount in FY 2011 and each year thereafter. There will be no fiscal impact on county revenue or expenditures.
METHODOLOGY:
The Department of Revenue Administration states this bill would create a progressive property tax limit in the form of a property tax exemption to be applied for by residents in each municipality. The proposed bill would set this property tax limit at 10% of total household income for each taxpayer, with taxpayer eligibility for the credit determined in the municipality in which they reside. The Department also states the bill may increase state expenditures, as it allows for expenditure of funds for software and other improvements required for the administration of the limit, but does not provide for those funds. The Department cannot estimate either the property taxes owed on an individual basis or the household income of each residence, so it cannot estimate the fiscal impact of the proposed change. Based on analysis of tax year 2006 returns filed with New Hampshire addresses, the Department states that the majority (approximately 61%) of those returns had an adjusted gross income of less than $50,000. This, coupled with the fact that tax rebates under current law in claim year 2007 were $4.1 million, led the Department to presume that the proposed bill would lead to an increase in tax rebates. However, without more precise data, the Department cannot reasonably estimate the fiscal impact to the State. The Department also states the administration of this program at the municipal level would increase local costs by an amount that it could not estimate.
The New Hampshire Municipal Association states this bill imposes significant new responsibilities on local governments to administer this proposal, with considerable extra cost. The Association also states the bill may decrease local revenue if there are not enough taxpayers to make up for any decline in revenue caused by possible tax limit rebates. The Association cannot reasonably estimate the fiscal impact.
The New Hampshire Association of Counties states this bill should have no effect on overall county revenue or expenditures, as the bill served only to shift tax burden among local taxpayer groups.