Revision: April 27, 2017, 4:13 p.m.
HB 568-FN - AS AMENDED BY THE SENATE
04/20/2017 1381s
2017 SESSION
17-0366
10/03
HOUSE BILL 568-FN
AN ACT relative to the taxability of lease interests in public property.
SPONSORS: Rep. Almy, Graf. 13; Rep. Abrami, Rock. 19
COMMITTEE: Municipal and County Government
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This bill clarifies the taxability of lease interests in public property and allows for political subdivisions to adopt an exemption from the taxability requirement for land leased exclusively for agriculture.
This bill is a result of the commission to study the taxability of lease interests in public property, established in RSA 72:79.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
04/20/2017 1381s 17-0366
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT relative to the taxability of lease interests in public property.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Property Taxation; Exemption; Lease Interests in Public Property. Amend RSA 72:23, I(b) to read as follows:
(b)(1) All leases and other agreements, the terms of which provide for the use or occupation by others of real or personal property owned by the state or a county, city, town, school district, or village district, entered into after July 1, 1979, shall provide for the payment of properly assessed real and personal property taxes by the party using or occupying said property no later than the due date.
(2) [This] Subparagraph (1) shall not apply to leases of state-owned railroad properties which are subject to railroad taxes under the provisions of RSA 82 or which provide revenue to the state, a portion of which is distributed to cities and towns pursuant to RSA 228:69, I(a).
(3) Any political subdivision of the state may adopt as an exemption from the requirement of subparagraph (1) land leased exclusively for agriculture as defined in RSA 21:34-a, II.
(4) All [such] leases and agreements described in subparagraph (1) unless exempted under subparagraphs (2) or (3) shall include a provision that "failure of the lessee to pay the duly assessed personal and real estate taxes when due shall be cause to terminate said lease or agreement by the lessor.'' All such leases and agreements entered into on or after January 1, 1994, shall clearly state the lessee's obligations regarding the payment of both current and potential real and personal property taxes, and shall also state whether the lessee has an obligation to pay real and personal property taxes on structures or improvements added by the lessee. Failure of the lease to contain the precise language of this subparagraph shall not affect the occupant's obligation to pay property taxes.
2 Effective Date. This act shall take effect upon its passage.
17-0366
Amended 4/21/17
HB 568-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2017-1381s)
AN ACT relative to the taxability of lease interests in public property.
FISCAL IMPACT: [ ] State [ X ] County [ X ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
COUNTY: | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Revenue | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Expenditures | $0 | $0 | $0 | $0 |
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LOCAL: |
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Revenue | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
Expenditures | Indeterminable | Indeterminable | Indeterminable | Indeterminable |
METHODOLOGY:
This bill clarifies the current requirement that private use or occupancy of public property is subject to taxation and allows for the creation of local option property tax exemptions for leases of agricultural land. The bill also adds counties to the list of political subdivisions that are required to include the prescribed statutory property taxation language in leases.
The Department of Revenue Administration does not have sufficient information to calculate the possible cost to municipalities to administer the proposed local option exemption or to calculate any potential revenue decrease to counties resulting from the renegotiation of leases.
The New Hampshire Association of Counties is unable to determine the fiscal impact due to the diversity of administration of county lands.
The New Hampshire Municipal Association states the adoption of the exemption is discretionary and pertains to public lands leased for agricultural purposes, with relatively small assessed value, resulting in a minimal fiscal impact. Failure of the lease to contain the statutory language will not affect a lessee’s obligation to pay property taxes. Lessees of public lands who are not currently paying property taxes because the lease does not contain the necessary language may now be subject to the property tax. This may result in increased revenue or a slight decrease in a municipality’s tax rate but the net effect is unknown.
AGENCIES CONTACTED:
Department of Revenue Administration, New Hampshire Association of Counties, and New Hampshire Municipal Association