Revision: June 19, 2023, 3:56 p.m.
SB 78 - AS AMENDED BY THE HOUSE
SENATE BILL 78
SPONSORS: Sen. Innis, Dist 7
COMMITTEE: Election Law and Municipal Affairs
This bill establishes requirements and limits on the security required for street work and utility installations, landscaping, final pavement, and fire suppression systems under subdivision regulations regarding completion of improvements prior to final approval.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
8Jun2023... 1627h 23-0977
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Three
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Subdivision Regulations; Completion of Work. Amend RSA 674:36, III and IV to read as follows:
III. The subdivision regulations of the planning board may stipulate, as a condition precedent to the approval of the plat, the extent to which and the manner in which streets shall be graded and improved and to which water, sewer, and other utility mains, piping, connections, or other facilities shall be installed. The regulations or practice of the planning board:
(a) May provide for the conditional approval of the plat before such improvements and installations have been constructed, but any such conditional approval shall not be entered upon the plat.
(b) Shall provide that, in lieu of the completion of street work and utility installations prior to the final approval of a plat, the planning board shall accept a performance bond, irrevocable letter of credit, or other type or types of security as shall be specified in the subdivision regulations; provided that in no event shall the exclusive form of security required by the planning board be in the form of cash or a passbook. As phases or portions of the secured improvements or installations are completed and approved by the planning board or its designee, the municipality shall partially release said security to the extent reasonably calculated to reflect the value of such completed improvements or installations when substantial improvements are made. Cost escalation factors that are applied by the planning board to any bond or other security required under this section shall not exceed  15 percent per year. No cost increases shall be allowed for engineering, administration, or other non-construction reasons. The planning board shall, within the limitations provided in this subparagraph, have the discretion to prescribe the type and amount of security, and specify a period for completion of the improvements and utilities to be expressed in the bond or other security, in order to secure to the municipality the actual construction and installation of such improvements and utilities. The municipality shall have the power to enforce such bonds or other securities by all appropriate legal and equitable remedies.
(c) May provide that in lieu of the completion of street work [and], utility installations, landscaping, and final pavement prior to the final approval of the plat, the subdivision regulations may provide for an assessment or other method by which the municipality is put in an assured position to do said work and to make said alterations at the cost of the owners of the property within the subdivision.
IV. The planning board limitations under this section shall not require letter of credit, cash, or passbook as the only method securing the completion of the work. A planning board may allow road and utility construction to start without a bond, however, a bond for the infrastructure, roads, and utilities must be in place prior to the sale of any parcel of land within the subdivision or a request for a building permit for structures for human occupation. The planning board shall not require that forfeiture or automatic call bonds be provided by the developer.
V. Inspections required by the municipality for release of a bond shall be completed within 30 business days of written request delivered by hand or sent by courier or service. Any requirements not recognized by the municipality as complete or non-compliant shall require written notification be sent, delivered by hand or sent by courier or service, within 15 business days of the inspection, to the bonded party. The bonded party shall complete the work within 30 days of receipt of notification. The municipality shall inspect for completion of the work cited as incomplete or non-compliant in the first inspection, within 15 business days of written notification delivered by hand or sent by courier or service. All bonds shall be released within 90 days of final sign off.
[IV.] VI. In accordance with RSA 153:5, III, the planning board shall not require, or adopt any regulation requiring, the installation of a fire suppression sprinkler system in proposed one- or 2-family residences as a condition of approval for a local permit. Nothing in this paragraph shall prohibit a duly adopted regulation mandating a cistern, dry hydrant, fire pond, or other credible water source other than a fire suppression sprinkler system. [Nothing in this paragraph shall prevent an applicant from offering to install fire suppression sprinkler systems in proposed one- or 2-family residences and, if the planning board accepts such offer, the installation of such systems shall be required and shall be enforceable as a condition of the approval. The applicant or the applicant's successor in interest may substitute another means of fire protection in lieu of the approved fire suppression sprinkler system provided that the planning board approves the substitution which approval shall not be unreasonably upheld or delayed.]
SB 78-FN- FISCAL NOTE
AS AMENDED BY THE HOUSE (AMENDMENT #2023-1627h)
FISCAL IMPACT: [ ] State [ ] County [ X ] Local [ ] None
Estimated Increase / (Decrease)
This bill establishes requirements and limits on the security required for street work and utility installations, landscaping, final pavement, and fire suppression systems under subdivision regulations regarding completion of improvements prior to final approval as well as modifies the bond language for municipalities.
The New Hampshire Municipal Association states that municipalities release performance bonds when substantial improvements are made, and cost escalation factors of up to 15 percent are allowed, excluding engineering, administration, and other non-construction costs. Multiple security options must be allowed, rather than limiting to a letter of credit, cash, or passbook. A planning board may allow construction to start without a bond, but infrastructure bonds must be in place before land sale or building permit requests. The bill also sets a time line for bond inspection and release. While there may be additional administrative costs for partial bond releases and compliance with statutory requirements, the increased flexibility in cost escalation factors and bonding timing may decrease some municipal costs associated with project completion. Revenues and expenditures will vary by municipality as each municipality adopts different approaches to balance administrative costs against increased revenue potential.
It is assumed any fiscal impact will occur after FY 2023.
New Hampshire Municipal Association