HB238 (2011) Detail

Relative to the assessment of the education tax by towns and cities.


HB 238-FN-A – AS INTRODUCED

2011 SESSION

11-0782

09/04

HOUSE BILL 238-FN-A

AN ACT relative to the assessment of the education tax by towns and cities.

SPONSORS: Rep. Hatch, Coos 3; Rep. Weber, Ches 2; Rep. G. Richardson, Merr 4; Rep. Benn, Graf 9; Rep. Almy, Graf 11

COMMITTEE: Special Committee on Education Funding Reform

ANALYSIS

This bill requires municipalities to assess the education tax only on the value of each taxpayer’s property after an exemption of $100,000 in assessed valuation for a maximum of one principal structure per lot that is being used for residential or commercial purposes.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

11-0782

09/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eleven

AN ACT relative to the assessment of the education tax by towns and cities.

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

1 Intent and Purpose. The general court finds that:

I. The availability and affordability of real estate used for residential and commercial purposes is essential for the public welfare.

II. The purpose of the exemption provided for in this chapter for residential property is to assist citizens to obtain certain basic housing at an affordable cost.

III. The purpose of the exemption provided for in this chapter for commercial property is encourage the business entrepreneurship that forms the backbone of our economy and generates employment opportunities for our citizens.

2 Education Tax. Amend RSA 76:3 to read as follows:

76:3 Education Tax. Beginning July 1, 2005, and every fiscal year thereafter, the commissioner of the department of revenue administration shall set the education tax rate at a level sufficient to generate revenue of $363,000,000 when imposed on all persons and property the value of each taxpayer’s property taxable pursuant to RSA 76:8 after an exemption of $100,000 in assessed valuation for a maximum of one principal structure per lot that is being used for residential or commercial purposes, except property subject to tax under RSA 82 and RSA 83-F. 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 Assessment of Education Tax by Municipalities. Amend RSA 76:8, II to read as follows:

II. The commissioner shall issue a warrant under the commissioner’s hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality by December 15 directing them to assess such sum and pay it to the municipality for the use of the school district or districts and, if there is an excess education tax payment due pursuant to RSA¬†198:46, directing them to assess the amount of the excess payment and pay it to the department of revenue administration for deposit in the education trust fund. The education tax shall be assessed by the municipalities only on the value of each taxpayer’s property after an exemption of $100,000 in assessed valuation for a maximum of one principal structure per lot that is being used for residential or commercial purposes. Such sums shall be assessed at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.

4 Effective Date. This act shall take effect July 1, 2011.

LBAO

11-0782

Revised 01/31/11

HB 238 FISCAL NOTE

AN ACT relative to the assessment of the education tax by towns and cities.

FISCAL IMPACT:

      The Department of Revenue Administration and Education states this bill will have an indeterminable fiscal impact on local revenue in FY 2012 and each year thereafter. This bill will have no fiscal impact on state, county, and local expenditures, or state and county revenue.

METHODOLOGY:

      The Department of Revenue Administration states this bill would provide for a reapportionment of relative tax burdens under the state wide education property tax (SWEPT) by requiring municipalities to assess the education tax only on the value of each taxpayer’s property after an exemption of $100,000 in assessed valuation for a maximum of one principal structure per lot that is being used for residential or commercial purposes. The most recently calculated SWEPT rate is $2.325 per thousand dollars of valuation. By statute, this is the amount that will raise at least $363,000,000 in SWEPT revenue. The Department estimates the total amount of proposed exemption at approximately $25,000,000 annually. It is estimated that the total equalized value less utilities, modified by the proposed exemption would be approximately $131,000,000, and the estimated SWEPT rate under this proposal would total approximately $2.77 per thousand dollars of valuation.

    The Department of Education states they are unable to determine the impact of the proposed bill since they do not have the information to determine the value of each taxpayer’s assessed value which exceeds $100,000 for setting the education property tax rate, and whether the principal structure per lot is being used for residential or commercial purposes. While the bill provides a change in the state total assessed value to be used to generate revenue of $363,000,000, it does not alter the formula used to distribute adequate education aid. The Department is unable to determine a fiscal impact at this time.