HB 1427-FN-A-LOCAL - AS INTRODUCED
2016 SESSION
\t16-2032
\t10/03
HOUSE BILL\t1427-FN-A-LOCAL
AN ACT\tsuspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.
SPONSORS:\tRep. Cushing, Rock. 21; Rep. Spang, Straf. 6; Rep. F. Rice, Rock. 21; Rep. Oxenham, Sull. 1; Rep. Francese, Rock. 18; Rep. Buco, Carr. 2; Sen. Stiles, Dist 24; Sen. Fuller Clark, Dist 21; Sen. Woodburn, Dist 1
COMMITTEE:\tMunicipal and County Government
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ANALYSIS
\tThis bill suspends the water and air pollution control facilities property tax exemption for the remainder of the biennium ending June 30, 2017, provides for the taxation of such property during the biennium, and appropriates the revenues collected from utility taxpayers to the department of environmental services for the state municipal grant program for the acquisition and construction of water pollution control facilities under RSA 486:1.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
\t16-2032
\t10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Sixteen
AN ACT\tsuspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Water and Air Pollution Control Facilities; Provisions Suspended; Transfer of Revenues; Appropriation to Department of Environmental Services. For the remainder of the biennium ending June 30, 2017:
\t\tI. The provisions of RSA 72:12-a, exempting water and air pollution control facilities from property taxation, are hereby suspended.
\t\tII. The provisions of RSA 83-F:1, V(a), excluding water and air pollution control facility property from the utility property tax under RSA 83-F, is hereby suspended.
\t\tIII. For the period of the suspension, the exempt percentage of the appraised value of a facility which is included under RSA 72:12-a, and any real estate necessary therefor, shall be subject to taxation, provided that:
\t\t\t(a) Any such facility that for the biennium meets the definition of utility property under RSA 83-F:1, V, shall be taxed as utility property under RSA 83-F; and
\t\t\t(b) All other facility property shall be subject to tax under RSA 72.
\t\tIV. Notwithstanding RSA 83-F:7, I, and RSA 198:39, I(f), all revenues collected by the commissioner of the department of revenue administration pursuant to subparagraph III(a) shall be transferred to and are hereby appropriated to the commissioner of the department of environmental services for the purpose of state contributions and grants made to municipalities for the acquisition and construction of water pollution control facilities under RSA 486:1. Any sums hereby appropriated shall not lapse and shall be expended by the commissioner as follows:
\t\t\t(a) Applications received. The following projects shall, if approved by the commissioner of environmental services, be funded under RSA 486:1 during the biennium ending June 30, 2017:
1 Exeter \tLangdon Ave PS Improvements
2 Rochester \tWWTP Headworks Upgrade
3 Portsmouth \tBartlett Area Sewer Improvements
4 Portsmouth \tLincoln Area Sewer Separation - Contract 3A
5 Hanover \tWater Reclamation Facility Improvements
6 Littleton \tBishop St Sanitary Sewer Infrastructure
7 Littleton \tBronson St. Sanitary Sewer Improvements
8 Littleton \tGrove St & South Grove St Sanitary Sewer Replacement
9 Nashua \tWet Weather Treatment Facility
10 Claremont \tMaple Ave. Sewer Improvements & Rehab. Ph. 1 & 2
11 Merrimack \tWWTF Dewatering Upgrade
12 Claremont \tBog Sewer Improvements
13 Berlin \tInflow and Infiltration Reduction, Ph. 1, Contract 2
14 Lebanon \tWWTF Improvements, Ph. 1
\t\t\t(b) Construction complete. The following projects shall, if approved by the commissioner of environmental services, be funded under RSA 486:1 during the biennium ending June 30, 2017:
1 Portsmouth \tLincoln Area Sewer Separation - Contract #3B
2 Portsmouth \tCass Street Area Sewer Improvements
3 Portsmouth \tRye Line Pump Station
4 Nashua \tPrimary Clarifier Rehabilitation
5 Durham \tWest End Sewer Improvements
6 North Conway \tWP Contract 7 Ash Street
7 Nashua \tInfrastructure Improvements at CSO 004 - Storage Tank
8 Nashua \tCSO - 004 Infrastructure Improvements Burke Street Phase 1
9 Newport \tWWTP Upgrade
10 Concord \tSCADA Phase 2B Upgrades
11 Dover \tWWTF Dewatering Upgrade
12 Hampton \tSludge Handling Improvements to WWTP
13 Derry \tRockingham Road Infrastructure Improvements
14 Enfield\tRoute 4 Sewer & Water Extension
15 North Conway \tWP WWTF Aeration System Improvements
16 Durham \tOld Concord Road Pump Station Upgrade
17 New London \tNew London Portion of Sunapee WWTF Upgrade
18 Nashua \tHarbor Ave. Area Sewer Separation
19 Claremont\tWashington Street and Elm Street Pump Station Improvement
20 Hampton \tChurch Street Pump Station Upgrades
21 Rochester \tBrock Street Reconstruction
22 Concord \tPhase 2 Odor Control
23 Sunapee\t Sunapee WWTF Upgrade
\t\t\t(c) Construction active. The following projects shall, if approved by the commissioner of environmental services, be funded according to the priority list established under RSA 486:1 during the biennium ending June 30, 2018 from remaining sums transferred under this paragraph:
1 Portsmouth \tLincoln Area Sewer Separation - Contract #3C
2 Conway Village\tFire District Sewerage Improvements Program Phase II
3 Berlin \tWastewater Treatment Facility Phase 2 Upgrade
4 Nashua \tWWTF Grit System and Dewatering Upgrade
5 Nashua \tAeration and Secondary Clarifier Upgrade
6 Nashua \tScreening & Disinfection Facility
7 Winchester \tWastewater Treatment Plant Upgrades - Phase II
8 Derry \tRoute 28 Water and Sewer Improvements
9 Rochester \tNew Route 125 Pump Station Upgrade
10 Sunapee \tPerkins Pond Area Sewer Improvements
11 Swanzey \tSwanzey's Portion of Keene WWTF Upgrade
12 Keene \tUpgrade of WWTF-Nutrients
13 Merrimack\tWWTF Phase II & Compost Facility Upgrade
14 Durham \tDewatering System Upgrade & Bardenpho Conversion
15 Lebanon\tCSO and Utility Replacement Improvements Phase 9
16 Lebanon \tCSO 10- Dana & Craft Ave Area
17 Manchester\tAeration System Upgrade
18 Dover \tPhase I WWTF Upgrade & MLE Conversion
19 Lebanon \tEtna Road - NH Rte. 120 Sewer Replacement
20 North Conway \tWP Water & Sewer Infrastructure Improvements Contract 8B
21 Concord \tSCADA Phase 3 Upgrades
22 Winnipesaukee\tRiver Basin Electrical Switch Gear Upgrade
23 Portsmouth\tPrimary Clarifier Upgrade
24 WRBP \tElectrical Switchgear Replacement
25 Concord\tWWTF SCADA Upgrades Ph. 3 (Hall St.)
26 Nashua \tBurke Street CSO 4 PH 2
27 Newmarket \tWWTF Upgrade
\t\t\t(d) Construction pending. The following projects shall, if approved by the commissioner of environmental services, be funded according to the priority list established under RSA 486:1 during the biennium ending June 30, 2018 from remaining sums transferred under this paragraph:
1 Colebrook \tMain St. Sewer Improvements
2 Jaffrey \tRiver Street and Nelson Circle Pump Station Replacement
3 Nashua \tWWTF Headworks Upgrade
4 Nashua \tPump Station Upgrades
5 Newington \tWWTF and Pump Station Upgrades
6 Northumberland \tNorthumberland Water and Sewer Main Imp
7 Portsmouth \tPierce Island WWTF Upgrade
8 Exeter \tWWTF and Main Pump Station Upgrade
9 Wolfeboro \tWolfeboro I/I Rehabilitation
10 Manchester \tPrimary Clarifier Upgrade
\t2 Effective Date. This act shall take effect upon its passage.
\t\t\t\t\t\t\t\t\t\t\t16-2032
\t\t\t\t\t\t\t\t\t\t\t11/20/15
HB 1427-FN-A-LOCAL- FISCAL NOTE
AN ACT\tsuspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.
FISCAL IMPACT:
The Departments of Environmental Services and Revenue Administration state this bill, as introduced, will increase state revenue and expenditures by an indeterminable amount in FY 2016 and in each year thereafter. The New Hampshire Municipal Association states this bill will have an indeterminable fiscal impact on local revenue and expenditures. There will be no fiscal impact on county revenue or expenditures.
METHODOLOGY:
The Department of Environmental Services states this bill would suspend property and utility tax exemptions for pollution control facilities for the biennium ending June 30, 2017 and transfer the utility property tax revenue collected to the specific projects identified in the bill. The Department assumes the projects listed are all eligible and applications will be received and processed such that projects will be awarded grants beginning in FY 2016. The grant estimates assume 20-year debt issued at the current State Revolving Loan interest rate of 3.168%. The actual payback periods and interest rate will vary with each application. Based on these assumptions, the Department estimated the following annual expenditures would be necessary to fund the listed projects:
| FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 |
Applications Received | $1,225,692 | $1,188,141 | $1,176,120 | $1,161,356 | $1,305,328 |
Construction Complete | $961,750 | $961,746 | $961,747 | $961,749 | $961,751 |
Construction Active | $0 | $0 | $2,059,889 | $2,252,396 | $2,252,398 |
Construction Pending | $0 | $0 | $63,803 | $153,231 | $1,415,175 |
Totals: | $2,187,442 | $2,149,887 | $4,261,562 | $4,528,732 | $5,934,652 |
The Department of Revenue Administration states the pollution control facility property tax exemption and the utility property tax exemption are determined as of April 1st. For the purpose of the fiscal note, the Department assumes an effective date prior to April 1, 2016 and the pollution control exemptions would be eliminated for FY 2016 property taxes. The Department assumes the utility property tax collected would increase and the additional amount would be transferred to the Department of Environmental Services. Pollution control property not subject to the utility property tax under RSA 83-F would be subject to the property tax under RSA 72. The Department indicates subjecting the pollution control property to the property tax would shift the tax burden among local tax payers without affecting the total revenue received from the tax. In addition, the proposed bill would result in a reapportionment of the local tax burden among municipalities by increasing the taxable value for some communities. The Department estimated the impact on Utility Property Tax revenue as follows:
Value of pollution control property subject to the utility property tax $550,000,000
(Based on most recent year. Does not include changes in value or
properties being added or removed.)
Additional Annual Utility Tax Revenue in FY 2016 and in FY 2017\t\t $3,630,000\t
($ 6.60 per $1,000 X 550,000) \t\t
Finally, the Department states inclusion of new utility tax payers may increase administrative costs to the Department and inclusion of additional property tax payers may increase administrative costs to certain municipalities. These potential costs are indeterminable.
The New Hampshire Municipal Association assumes the bill would be effective in FY 2016 and the property tax exemption would be suspended for both years of the biennium. Not all municipalities host property subject to the exemption. Based on information from the 2013 tax year provided by the Department of Revenue Administration, the value of property reported as exempt was $253.8 million and was located in 13 different municipalities. The total property tax that would have been paid at the applicable municipal tax rates is $4.3 million. The Association states suspending the exemption would not necessarily affect municipal revenues or expenditures, but would shift the property tax burden among taxpayers within the affected municipalities. The Association states the additional tax paid on previously exempt property could be used to support additional appropriations, lower the local tax rate for all other taxpayers, or some combination of both. Since such decisions would be up to each municipality, the Association states the impact on revenue or expenditures cannot be determined.
The Association states suspending the property exemption would also affect the payment of county taxes by the municipality affected by the exemption as well as the other municipalities in the same county. Suspending the exemption would increase the affected municipality’s equalized valuation and its proportionate share of the county tax burden. Municipalities without property subject to the exemption would experience a reduction in their proportionate share of the county tax. The Association states similar effects may occur with respect to schools in regional or cooperative school districts.
The New Hampshire Association of Counties does not anticipate any fiscal impact on county revenue or expenditures.