Bill Text - HB1237 (2020)

(New Title) establishing a committee to study the requirements of reporting by utility companies of information required for valuation of certain utility property for purposes of RSA 72.


Revision: Dec. 2, 2019, 12:27 p.m.

HB 1237-FN - AS INTRODUCED

 

 

2020 SESSION

20-2469

10/04

 

HOUSE BILL 1237-FN

 

AN ACT relative to reporting of information required for utility property valuation.

 

SPONSORS: Rep. Merner, Coos 7; Rep. French, Graf. 14; Rep. McGhee, Hills. 40

 

COMMITTEE: Science, Technology and Energy

 

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ANALYSIS

 

This bill revises the requirements and methodology for the reporting by utility companies of inventory and information on valuation to the department of revenue administration and the towns or cities in which utility property is located.

 

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

20-2469

10/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty

 

AN ACT relative to reporting of information required for utility property valuation.

 

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

 

1  Valuation of Electric, Gas, and Water Utility Company Distribution Assets; Methodology.  Amend RSA 72:8-d, IV and V to read as follows:

IV.(a) Each utility company, upon request for any tax year, shall report by May 1 [of each year] to the selectmen or assessors of each town or city in which its utility company assets are located and to the department of revenue administration, the inventory, age, original cost and net book value as of December 31 of the preceding year of each account code category of distribution, transmission, and generation assets, if any, located within such town or city in accordance with FERC Form 1 and/or Form 2 Federal Account Code items.  

(b)  Each town or city in which utility company assets are located or the department of revenue administration may request the information described in subparagraph (a) on an annual basis or from time to time as necessary.  If the utility fails to provide required information upon request the utility shall be precluded from appealing the reasonable determination of value made by the department or by the selectmen or assessors of the town or city in which its utility company assets are located.

V.  The commissioner of the department of revenue administration shall adopt rules under RSA 541-A for the forms [and], methodology, and requirements for the reporting under paragraph IV.  Such reporting requirements shall also include an obligation on the utility company with utility company assets to utilize an accounting system to report and track with the best information available, in an efficient, equitable and transparent manner using the best information then available from the utility company's accounting records, contributions in aid of construction (CIAC), construction works in progress (CWIP), and undistributed plant assets in each town or city and the original cost of each such asset as reported by the contributing entity.  The rules shall include a methodology for mandatory reporting upon request which detail the historic original cost of its property by account code required by the federal government for each year, a description of the property, including type, size, capacity, and amount, the book depreciation reserve assigned by account code, and the net book value per year for the property.  The rules shall prescribe the electronic format to be used which shall be tailored towards the different types of utility property and type of utility accounting procedures. Failure to provide the information will bar the utility from seeking an appeal.

2  Utility Property Tax; Determination of Value.  Amend RSA 83-F:3 to read as follows:

83-F:3  Determination of Value.  On or before December 1 of the tax year, the commissioner shall determine the [market] value of utility property for the purposes of this chapter by utilizing generally accepted appraisal methods and techniques.  [Market value means the property's full and true value as defined under RSA 75:1.]  The value of electric, gas, and water utility company distribution assets shall be determined as provided in RSA 72:8-d.  In the case of regulated public utilities as defined in RSA 362:2, the commissioner shall hold a single public hearing annually prior to performing assessments, in order to receive public input on assessments under this chapter.  Notice of such determination shall be given to the taxpayer within 15 days of the commissioner's determination.

3  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

20-2469

11/4/19

 

HB 1237-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to reporting of information required for utility property valuation.

 

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

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2020

FY 2021

FY 2022

FY 2023

   Appropriation

$0

$0

$0

$0

   Revenue

$0

Indeterminable

Indeterminable

Indeterminable

   Expenditures

$0

Indeterminable

Indeterminable

Indeterminable

Funding Source:

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

 

LOCAL:

 

 

 

 

   Revenue

$0

$0

Indeterminable

Indeterminable

   Expenditures

$0

$0

$0

$0

 

METHODOLOGY:

This bill adds additional information to what is currently required to be reported by a utility for property located in a municipality but such report will now only be required when requested by a municipality or the Department of Revenue Administration (DRA).  Failure to provide such report when requested will bar a utility from filing for an appeal of the assessed value of the utility's property within such municipality, whether such assessment is made by the municipality or the DRA.

 

The bill also requires the DRA to value electric, gas, and water utilities' distribution assets using only the methodology outlined in RSA 72:8-d.  The DRA indicates it currently utilizes the unit valuation method for the whole utility property, including distribution, transmission, and generation assets.  For equalization purposes, the DRA allocates a percentage of this total value to each municipality where the utility is located based on original cost.  The DRA assumes it will incorporate the formula specified in RSA 72:8-d for distribution assets only and will continue to allocate the total value of the utility's property to each municipality based on original cost.  Therefore, the allocated value for equalization purposes of the distribution assets located within a municipality may still vary from the value determined by a municipality pursuant to           RSA 72:8-d.  State utility property tax revenues may also change based on the resulting new values of utility property.  The bill is effective upon passage and the DRA assumes this change will be applicable to the 2021 tax year (FY 2022 for equalization purposes).  The DRA is unable to calculate the possible impact of valuing utility distribution assets differently or estimating any possible effect on the equalization process.  The DRA may need to update its tax system by an indeterminable amount or possibly need to hire additional staff.

 

AGENCIES CONTACTED:

Department of Revenue Administration