Bill Text - HB1473 (2018)

Relative to the timber yield tax.


Revision: Dec. 13, 2017, 11:18 a.m.

HB 1473-FN - AS INTRODUCED

 

 

2018 SESSION

18-2421

05/10

 

HOUSE BILL 1473-FN

 

AN ACT relative to the timber yield tax.

 

SPONSORS: Rep. Spang, Straf. 6

 

COMMITTEE: Resources, Recreation and Development

 

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ANALYSIS

 

This bill permits a municipality to waive the yield tax on land owned by the municipality.  The bill also clarifies the procedure for filing a notice of intent to cut and the subsequent report with municipal officials.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

18-2421

05/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Eighteen

 

AN ACT relative to the timber yield tax.

 

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

 

1  Forest Conservation and Taxation; General Tax; Credits in Certain Cases.  RSA 79:5 is repealed and reenacted to read as follows:

79:5  Tax Rate in Certain Cases.  When timber harvesting is conducted on land owned by a municipality, the municipality may waive the yield tax, but shall report the location, species, and volume of wood and timber cut to the commissioner of revenue administration, who shall send one copy of the report to the division of forests and lands of the department of natural and cultural resources.

2  Forest Conservation and Taxation; Notice of Intent to Cut.  Amend RSA 79:10, I(a) and (b) to read as follows:

I.(a)  Every owner, as defined in RSA 79:1, II, shall, prior to commencing each cutting operation and at the beginning of each new tax year into which the cutting operation shall continue, file with the proper [assessing] municipal officials in the city, town, or unincorporated place where such cutting is to take place a notice of intent to cut provided by the commissioner of revenue administration, stating the owner's name, residence, an estimate of the volume of each species to be cut, and such other information as may be required.  [A supplemental notice of intent shall be filed] Except when a bond is required for the cutting, a supplemental notice of intent shall not be required to be filed.  When required, the supplemental notice shall be filed in the same manner for any additional volume of wood or timber to be cut in excess of the original estimate and within the tax year.

(b)  Any intent received by a city, town, or unincorporated place shall, within [30] 5 business days, be assigned a number in accordance with the guidelines provided by the commissioner of revenue administration, and be signed by the town clerk or assessing officials.  If the conditions for approval have not been met, the town clerk or assessing officials shall send a letter to the owner or the person responsible for cutting, explaining the reason for the intent not being signed.  The assessing officials shall be notified of any notice of intent signed or refused by the town clerk.  The assessing officials shall immediately forward any signed intent to the commissioner of revenue administration and shall also supply a copy to the owner upon request.  Failure of the assessing officials to forward signed intent to cut forms to the department of revenue administration shall constitute a violation.

3  Forest Conservation and Taxation; Report.  Amend RSA 79:11, I to read as follows:

I.  Every owner who has filed a notice of intent to cut as provided in RSA 79:10 shall make under the penalties of perjury and file with the assessing officials a report of all wood and timber cut within 60 days after completion of an operation.  The report shall be upon a form provided by the commissioner of revenue administration, with 2 copies to be sent to him.  The report shall state if no growing wood and timber was cut on an operation for which a notice of intent to cut was filed.  The assessing officials may require that a report of cut be filed immediately upon the completion or termination of the cutting referred to in a notice of intent to cut.  Reports of cut shall contain the name, residence of the owner, volume of wood and timber cut by species or species group and primary products, and such other information as may be necessary to enable the assessing officials to locate, identify, verify and determine the full amount and true stumpage value of all wood and timber cut on the operation for which the report is filed.  In addition, the person who did the cutting or the person responsible for [the cutting must] verifying the volume of the cut shall sign and verify the volumes of wood and timber reported to have been cut by the owner.  The commissioner of revenue administration shall send one copy of the report of cut to the division of forests and lands of the department of natural and cultural resources.  A report of wood and timber severed covering operations still in progress through March 31 of any year shall be filed not later than May 15 of said year for all wood and timber severed during the tax year up to and including March 31.

4  Effective Date.  This act shall take effect upon its passage.

 

LBAO

18-2421

Revised 12/13/17

 

HB 1473-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to the timber yield tax.

 

FISCAL IMPACT:      [    ] State              [    ] County               [ X ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

LOCAL:

FY 2019

FY 2020

FY 2021

FY 2022

   Revenue

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

   Expenditures

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

 

METHODOLOGY:

This bill amends RSA 79 relative to Forest Conservation and Taxation, to allow a municipality to waive the Timber Tax when the harvesting is conducted on land owned by the municipality.  It eliminates the existing duty to file a supplemental notice of intent for additional volumes of wood harvested, except in instances when a bond is required for the cutting.  It allows for the town clerk to sign intents to cut as well as the assessing officials and requires notice to assessing officials of any notice of intent signed or refused by the town clerk.

 

The Department of Revenue Administration (DRA) indicates the Timber Tax for timber harvested is 10% of stumpage value.  The DRA does not have data reflecting the percentage of Timber Tax currently collected from harvests on municipal property and cannot estimate what percentage of municipalities will elect to waive the Timber Tax as the bill allows.  However there would be an indeterminable decrease in municipal revenue should any municipality elect to waive the Timber Tax attributable to timber cut on municipal property.  There may be an additional indeterminable decrease in the amount of local revenue, as reports of timber cut may no longer reflect the total actual timber cut due to the elimination of the duty to file a supplemental notice of intent for additional volumes of wood.  There may be an indeterminable increase in local expenditures when municipalities try to verify the actual timber cut without the benefit of the additional information provided on the supplemental intent to cut.  The Department indicates the bill can be administered by the DRA without any additional costs that could not be absorbed within the operating budget.

 

The New Hampshire Municipal Association indicates the bill repeals and reenacts RSA 79:5. The current version of the statute authorizes a municipality to tax standing wood and timber as general property when the municipality is "unreasonably deprived of revenue because of the failure of an owner to cut standing wood or timber when it shall have arrived at the degree of maturity most suitable for its use".  The bill eliminates this current taxing authority and replaces it with the authority to waive the yield tax on timber harvested on and owned by the municipality.  The NHMA does not have data on the extent to which municipalities exercise the taxing authority pursuant to the existing version of RSA 79:5.  However, repeal of that authority would have an indeterminable negative impact on local revenue since the tax incentive to harvest mature timber would be eliminated as would the ability of a municipality to assess the timber as general property when harvesting does occur.

 

AGENCIES CONTACTED:

Department of Revenue Administration and New Hampshire Municipal Association