Bill Details - HB636 (2019)

HB 636-FN-A-LOCAL - AS INTRODUCED

 

 

2019 SESSION

19-0741

05/10

 

HOUSE BILL 636-FN-A-LOCAL

 

AN ACT relative to state reimbursement of town and city property tax credits and exemptions.

 

SPONSORS: Rep. J. Schmidt, Hills. 28

 

COMMITTEE: Municipal and County Government

 

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ANALYSIS

 

This bill requires the state to reimburse municipalities for the value of property tax credits and exemptions granted in the prior tax year.  The amount distributed to municipalities shall then be used as a credit against the amount to be raised from taxes in the next tax year.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

19-0741

05/10

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Nineteen

 

AN ACT relative to state reimbursement of town and city property tax credits and exemptions.

 

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

 

1  New Section; Assessment of Taxes; State Reimbursement of Property Tax Credits and Exemptions.  Amend RSA 76 by inserting after section 15-c the following new section:

76:15-d  State Reimbursement of Property Tax Credits and Exemptions.

I.  Each municipality shall determine the total amount of property tax credits granted in the property tax year.  The municipality also shall determine the value of all property tax exemptions granted by multiplying the applicable tax rate by the total of such exemption amounts.  The value for exemptions shall be added to the value of all property tax credits granted.  This total amount shall be reported to the department of revenue administration in such form as the department may prescribe.  

II.  Based on the data submitted, the department shall determine the total value of all property tax exemptions and credits granted by municipalities in the prior calendar year and report such amount to the fiscal committee of the general court.  The amount sufficient to reimburse each town and city shall be appropriated to the department of revenue administration in each fiscal year.

III.  Each municipality shall apply to the department for a reimbursement grant in the amount of all property tax exemptions and credits granted.  The department shall reimburse the towns and cities with sums appropriated.  The municipality shall use any funds received as a credit against the amount to be raised from taxes in the following year.

2  Effective Date.  This act shall take effect April 1, 2019.

 

LBAO

19-0741

Revised 1/23/19

 

HB 636-FN-A-LOCAL- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to state reimbursement of town and city property tax credits and exemptions.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Revenue

$0

$0

$0

$0

   Expenditures

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [    ] Other

 

 

 

 

 

LOCAL:

 

 

 

 

   Revenue

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

Indeterminable Increase

   Expenditures

$0

$0

$0

$0

 

METHODOLOGY:

This bill requires the State to reimburse municipalities for the value of all property tax credits and exemptions granted at the local level in the property tax year.  Each municipality must report such total amount to the Department of Revenue Administration (DRA) and DRA shall determine the value of all such exemptions and credits granted in the prior calendar year and report such amount to the Fiscal Committee of the General Court.  An amount sufficient to reimburse each town and city shall be appropriated to the DRA in each fiscal year.  Each municipality shall apply for a reimbursement grant in the amount of all property tax exemptions and credits granted.  The DRA shall reimburse each municipality, which shall use funds received as a credit against the amount to be raised from taxes in the following year.

 

The DRA states the total amount of property tax credits and exemptions in future years is unknown.  There are mandatory and optional tax credits and exemptions.  Each municipality may adopt or modify any optional property tax credit and exemption and the amount of such exemption as prescribed by law.  Municipalities may also modify net income and net asset limitations for the elderly, deaf and disabled property tax exemptions.  The DRA does not know what property tax credits and exemptions would be adopted and at what amounts or who may qualify within each municipality.  DRA indicates that if municipalities are reimbursed by the State, municipalities may be more likely to adopt additional property tax credits and exemptions, increase the amounts of such exemptions and ease requirements.  In FY 2017, municipalities granted property tax credits and exemptions in the following amounts:

 

Blind Exemption     $645,724

Deaf Exemption       $12,399

Disabled Exemption    $2,089,669

Veterans' Tax Credits $27,063,323

Elderly Exemption $23,568,119

Total $53,379,234

 

The New Hampshire Municipal Association assumes the proposed legislation includes property taxes lost due to the elderly exemption, blind exemption, educational and special exemptions and veteran's property tax credits.  The Association used data as reported in the NH Department of Revenue Administration 2017 publication "Tables by Counties", including a statewide average tax rate of $22.02, and assumed a 2% annual increase in the property tax rate for future projections.  Local option exemptions are not included in these estimates.  The Tables by Counties listed the following statewide totals for these exemptions:

 

Property Value for Blind Exemption       $25,809,250

Property Value for Elderly Exemption      $973,138,748

Property Value for Educational & Special Exemptions   $223,017,796

Property Value for Total Exemptions $1,221,965,794

 

Calculate Value of Exemptions at statewide average tax rate of $22.02:

$1,221,965,794 / 1,000 x $22.02 =     $26,907,687

Add Amount of Veteran's Tax Credit       $27,063,323

Estimated Amount of 2020 reimbursement    $53,971,010

2% Increase for 2021    $55,050,430

2% Increase for 2022    $56,151,439

2% Increase for 2023    $57,274,468

 

AGENCIES CONTACTED:

Department of Revenue Administration and New Hampshire Municipal Association

 

Docket

Date Status
Jan. 3, 2019 Introduced 01/03/2019 and referred to Municipal and County Government HJ 3 P. 23
Jan. 22, 2019 Public Hearing: 01/22/2019 02:30 pm LOB 301
Jan. 30, 2019 Executive Session: 01/30/2019 10:00 am LOB 301
Committee Report: Inexpedient to Legislate (Vote 18-0; RC)
Feb. 14, 2019 Committee Report: Inexpedient to Legislate for 02/14/2019 (Vote 18-0; RC) HC 11 P. 19
Feb. 14, 2019 Inexpedient to Legislate: MA VV 02/14/2019

Action Dates

Date Body Type
Jan. 22, 2019 House Hearing
Jan. 30, 2019 House Exec Session
House Floor Vote
Feb. 14, 2019 House Floor Vote

Bill Text Revisions

HB636 Revision: 4891 Date: Jan. 24, 2019, 10:42 a.m.