SB 584-FN - AS AMENDED BY THE SENATE
02/08/2024 0185s
2024 SESSION
24-2855
10/08
SENATE BILL 584-FN
SPONSORS: Sen. Lang, Dist 2; Sen. Watters, Dist 4; Sen. Innis, Dist 7; Sen. Pearl, Dist 17; Rep. Moffett, Merr. 4
COMMITTEE: Ways and Means
─────────────────────────────────────────────────────────────────
ANALYSIS
This bill adds an exemption for the state education property tax for certain electric generating facility property subject to a payment in lieu of taxes as a renewable generation facility. The bill also transfers 50 percent of the annual communications services tax revenues to the education trust fund.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
02/08/2024 0185s 24-2855
10/08
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Property Taxation; Liability for Tax; Certain Electric Generation. Amend RSA 72 by inserting after section 74-a the following new section:
72:74-b Exemption From State Education Property Tax. In the case of an electric generating facility that is exempt from the utility property tax pursuant to RSA 83-F:1, V(g) and is making payments in lieu of taxes to a municipality pursuant to RSA 72:74, if the payment in lieu of tax agreement was in effect as of January 1, 2025, then the facility will not be liable for payment of the state education tax under RSA 76:3 until that payment in lieu of taxes agreement expires or until January 1, 2030, whichever occurs first. Once payment of the state education tax under RSA 76:3 is required, it may be included in a payment in lieu of taxes pursuant to a new agreement reached under RSA 72:74 or it may be paid in addition to a payment in lieu of taxes if the underlying agreement has not expired or been reopened and renegotiated. If the state education tax under RSA 76:3 is paid separately from the payment in lieu of taxes, then the amount of the state education tax owed by the facility shall be determined by using the imputed value of the facility that is calculated and used by the department of revenue administration for purposes of equalization under RSA 21-J:3, XIII.
2 New Subparagraph; Utility Property Tax; Definition of Utility Property; Exclusion Added. Amend RSA 83-F:1, V by inserting after subparagraph (f) the following new subparagraph:
(g) Property used for the purposes of generating electricity owned by entities defined in RSA 362:4-c, I.
3 New Subparagraph; Utility Property Tax; Payment Forms. Amend RSA 83-F:5, V by inserting after subparagraph (b) the following new subparagraph:
(c) As of May 1 of each year the owners of property exempted from the definition of utility property under RSA 83-F:1, V(g) shall file a form, designated by the commissioner, that collects sufficient information identifying utility and non-utility property and maintain an inventory of assets that are and are not subject to the utility property tax. The form shall be signed by an authorized representative, subject to the pains and penalties of perjury. If by May 1 the taxpayer is unable to file the form required under this subparagraph, the taxpayer shall request an extension from the department. Such extension shall be valid only upon written confirmation from the department, and shall not exceed 30 days per request. No more than 2 extensions shall be granted in a given tax year.
4 Reference Added; Utility Property Tax; Exemptions. Amend RSA 83-F:9 to read as follows:
83-F:9 Exemption From Education Tax. Persons and property subject to taxation under this chapter shall not be subject to tax under RSA 76:3; provided, however, that nothing in this chapter shall be construed to exempt such persons or property from local school, municipal, district, or county taxation under RSA 76, except as provided in RSA 72:74-b.
5 Effective Date. This act shall take effect January 1, 2025.
24-2855
Amended 2/15/24
SB 584-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENT #2024-0185s)
FISCAL IMPACT: [ X ] State [ ] County [ ] Local [ ] None
|
| |||||
Estimated State Impact - Increase / (Decrease) | ||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||
Revenue | $0 | Indeterminable Decrease | Indeterminable Decrease | Indeterminable Decrease | ||
Revenue Fund(s) | Education Trust Fund
| |||||
Expenditures | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None
| |||||
Appropriations | $0 | $0 | $0 | $0 | ||
Funding Source(s) | None
| |||||
• Does this bill provide sufficient funding to cover estimated expenditures? [X] See Below • Does this bill authorize new positions to implement this bill? [X] No | ||||||
METHODOLOGY:
This bill exempts certain electric generating facility properties from the Utility Property Tax (UPT). The bill also does not subject these electric generating facility properties to the Statewide Education Property Tax (SWEPT) while making payments in lieu of taxes (PILOT) of which an agreement was in effect as of January 1, 2025. The properties will not be subject to SWEPT until the PILOT agreement expires or until January 1, 2030, whichever occurs first. However, the SWEPT may be included in a new PILOT or may be paid in addition to the PILOT if the underlying agreement has not expired or been reopened and renegotiated. Should the SWEPT be paid separate from a PILOT, that SWEPT shall be determined using the imputed value of the facility that is calculated and used by the Department of Revenue Administration for equalization purposes. Lastly, the bill directs 50 percent of the Communication Services Tax (CST) be directed from the General Fund to the Education Trust Fund.
The Department states exempting properties used for the purposes of generating electric from the UPT will decrease Education Trust Fund funding by an indeterminable amount beginning in FY 2025. The Department is not able to calculate the exact impact as it is not able to determine future valuation of the exempted properties. The Department is able to calculate the potential fiscal impact using Tax Year 2022 information. The properties employed in the generation of electricity were valued at approximately $1.7 billion in Tax Year 2022. Applying the tax rate of $6.60 on each $1,000 of value results in UPT revenue for these specific properties of $11.24 million. Based on this, Education Trust Fund revenue will decrease by $5.62 million in FY 2025 (due to an effective date of January 1, 2025) and by $11.24 million in FY 2026 and each year thereafter.
This bill keeps SWEPT at the statutorily required amount of $363 million; however, the inclusion of property employed in the generation of electricity will result in a change to the overall statewide equalized valuation and SWEPT rate. The Department is unable to predict future equalized value due to the movement of the market prices of property. However, an increase in the property base to be equalized would generally increase the statewide equalized value, which is the denominator in the calculation of the statewide SWEPT rate, and, therefore, reduces the statewide SWEPT rate. Any resulting affect from this would be reflected in the SWEPT warrant for Tax Year 2027 (FY 2028).
The Department would need to update all necessary tax return forms and electronic management systems to reflect the changes contained in this bill; however, it is not anticipated this will result in any additional administrative costs that could not be absorbed in the Department's operating budget.
AGENCIES CONTACTED:
Department of Revenue Administration
| Date | Amendment |
|---|---|
| Jan. 18, 2024 | 2024-0185s |
| Date | Body | Type |
|---|---|---|
| Jan. 17, 2024 | Senate | Hearing |
| Jan. 17, 2024 | Senate | Hearing |
| Feb. 8, 2024 | Senate | Floor Vote |
March 21, 2024: Refer to Interim Study, MA, VV; 03/21/2024; SJ 7
March 5, 2024: Committee Report: Referred to Interim Study, 03/21/2024, Vote 7-0; SC 11
Feb. 8, 2024: Ought to Pass with Amendment 2024-0185s, MA, VV; Refer to Finance Rule 4-5; 02/08/2024; SJ 3
Feb. 8, 2024: Committee Amendment # 2024-0185s, AA, VV; 02/08/2024; SJ 3
Feb. 8, 2024: Ought to Pass with Amendment 2024-0185s, MA, VV; Refer to Finance Rule 4-5; 02/08/2024; SJ 3
Jan. 18, 2024: Committee Report: Ought to Pass with Amendment # 2024-0185s, 02/08/2024; Vote 5-0; CC; SC 6
Jan. 9, 2024: Hearing: 01/17/2024, Room 100, SH, 10:00 am; SC 3
Jan. 8, 2024: Hearing: 01/17/2024, Room 100, SH, 10:00 am; SC 3
Dec. 14, 2023: To Be Introduced 01/03/2024 and Referred to Ways and Means; SJ 1