Revision: Jan. 17, 2019, 3:07 p.m.
SB 57-FN - AS INTRODUCED
2019 SESSION
19-0917
10/05
SENATE BILL 57-FN
AN ACT relative to phasing out and repealing the utility property tax.
SPONSORS: Sen. Bradley, Dist 3; Sen. Birdsell, Dist 19; Sen. Carson, Dist 14; Sen. Giuda, Dist 2; Sen. Gray, Dist 6; Sen. Morse, Dist 22; Sen. Starr, Dist 1; Sen. Ward, Dist 8; Rep. Abrami, Rock. 19; Rep. Baldasaro, Rock. 5
COMMITTEE: Ways and Means
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ANALYSIS
This bill lowers the rate of the utility property tax and repeals the tax effective April 1, 2023.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
19-0917
10/05
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nineteen
AN ACT relative to phasing out and repealing the utility property tax.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Utility Property Tax; Rate of Tax. Amend RSA 83-F:2 to read as follows:
83-F:2 Tax Imposed.
I. For taxable periods beginning April 1, 1999 to April 1, 2019, a tax is imposed upon the value of utility property at the rate of $6.60 on each $1,000 of such value, to be assessed [annually] as of April 1, [and every year thereafter,] and paid in accordance with this chapter.
II. For the taxable period beginning April 1, 2020, a tax is imposed upon the value of utility property at the rate of $4.95 on each $1,000 of such value, to be assessed as of April 1, and paid in accordance with this chapter.
III. For the taxable period beginning April 1, 2021, a tax is imposed upon the value of utility property at the rate of $3.30 on each $1,000 of such value, to be assessed as of April 1, and paid in accordance with this chapter.
IV. For the taxable period beginning April 1, 2022, a tax is imposed upon the value of utility property at the rate of $1.65 on each $1,000 of such value, to be assessed as of April 1, and paid in accordance with this chapter.
2 Reference Deleted; Treasurer Accounts. Amend RSA 6:12, I(b)(65) to read as follows:
(65) Money received under RSA 77-A, RSA 77-E, RSA 78, RSA 78-A, RSA 78-B, [RSA 83-F,] RSA 284:44 and RSA 284:47, and from the sweepstakes fund, which shall be credited to the education trust fund under RSA 198:39.
3 Reference Deleted; Board of Tax and Land Appeals. Amend RSA 71-B:7-a to read as follows:
71-B:7-a Representation by Nonattorneys. Nonattorneys may commonly represent taxpayers in RSA 76:16[,] and RSA 76:16-a[, and RSA 83-F] appeals before municipalities and the board. Nothing in this section shall prevent the board from denying representation by any individual it deems to be improper, inappropriate, or unable to adequately represent the interests of the taxpayer.
4 Renewable Generation Facilities; Payment in Lieu of Taxes. Amend RSA 72:74, II to read as follows:
II. [A renewable generation facility subject to a voluntary agreement to make a payment in lieu of taxes under this section shall be subject to the laws governing the utility property tax under RSA 83-F.] Payments made pursuant to [such agreement] a voluntary agreement to make a payment in lieu of taxes under this section shall satisfy any tax liability relative to the renewable generation facility that otherwise exists under RSA 72. The payment in lieu of taxes shall be equalized under RSA 21-J:3, XIII in the same manner as other payments in lieu of taxes. In the absence of a payment in lieu of taxes agreement, the renewable generation facility shall be subject to taxation under RSA 72.
5 Reference Deleted; 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 taxable pursuant to RSA 76:8, 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.
6 Reference Deleted; Education Tax Warrant. Amend RSA 76:8, I(a) to read as follows:
I.(a) The commissioner shall annually determine a municipality's tax base for the education tax by subtracting from the total equalized valuation of all property, as determined under RSA 21-J:3, XIII for the preceding year, property that was then taxable under RSA 82 [and RSA 83-. In determining the tax base, the value of any utility property that is included in the total equalized valuation upon which the statewide education property tax is computed, and is also taxable under RSA 83-F for that year, shall also be subtracted from the tax base, provided the sum value of the utility property represents at least 5 percent of the total equalized value of all property, except property taxable under RSA 82 or RSA 83-F in the preceding year].
7 Repeal of Utility Property Tax; 2023. The following are repealed:
I. RSA 83-F, relative to the utility property tax.
II. RSA 198:39, I(f), relative to utility property tax funds paid to the education trust fund.
I. Sections 2-7 of this act shall take effect April 1, 2023.
II. The remainder of this act shall take effect July 1, 2019.
19-0917
1/11/19
SB 57-FN- FISCAL NOTE
AS INTRODUCED
AN ACT relative to phasing out and repealing the utility property tax.
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2020 | FY 2021 | FY 2022 | FY 2023 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease |
Expenditures | $0 | $0 | $0 | $0 |
Funding Source: | [ ] General [ X ] Education [ ] Highway [ ] Other | |||
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METHODOLOGY:
This bill phases out and eventually repeals the Utility Property Tax. The current rate is $6.60 on each $1,000 value of utility property. The rate would reduce to $4.95 on each $1,000 value for the taxable period beginning April 1, 2020, reduce to $3.30 on each $1,000 value for the taxable period beginning April 1, 2021, reduce to $1.65 for the taxable period beginning on April 1, 2022 and then repealed effective April 1, 2023. The Department states it has no way to determine the value of utility property in future years to determine the exact decrease in Education Trust Fund revenue. The Department is able to provide an estimate assuming utility property for the period of FY 2020 through FY 2024 remains unchanged from the April 1, 2018 utility property value of $6,330,430,107. Based on this value the current tax rate of $6.60 results in a Utility Property Tax of $41,780,839. The Department has determined that due to estimate payments (April, June, September, and December) and a true-up payment (January), every tax year covers two fiscal years. The Department has furthered determined that 48% of the tax payments occur in the corresponding fiscal year and 52% occurs in the subsequent fiscal year. For example, for tax year 2018, 48% of the tax will be collected in FY 2018 and 52% in FY 2019. Based on these assumptions, the Department has estimated the following decrease in Education Trust Fund revenue:
Fiscal Year | Revenue Increase/(Decrease) |
FY 2020 | ($5,013,701) |
FY 2021 | ($15,458,910) |
FY 2022 | ($25,904,120) |
FY 2023 | ($36,349,330) |
FY 2024 | ($41,780,839) |
AGENCIES CONTACTED:
Department of Revenue Administration