HB 1427-FN-A-LOCAL - AS INTRODUCED

2016 SESSION

16-2032

10/03

HOUSE BILL 1427-FN-A-LOCAL

AN ACT suspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.

SPONSORS: Rep. Cushing, Rock. 21; Rep. Spang, Straf. 6; Rep. F. Rice, Rock. 21; Rep. Oxenham, Sull. 1; Rep. Francese, Rock. 18; Rep. Buco, Carr. 2; Sen. Stiles, Dist 24; Sen. Fuller Clark, Dist 21; Sen. Woodburn, Dist 1

COMMITTEE: Municipal and County Government

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ANALYSIS

This bill suspends the water and air pollution control facilities property tax exemption for the  remainder of the biennium ending June 30, 2017, provides for the taxation of such property during the biennium, and appropriates the revenues collected from utility taxpayers to the department of environmental services for the state municipal grant program for the acquisition and construction of water pollution control facilities under RSA 486:1.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

16-2032

10/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Sixteen

AN ACT suspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.

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

1  Water and Air Pollution Control Facilities; Provisions Suspended; Transfer of Revenues; Appropriation to Department of Environmental Services.  For the remainder of the biennium ending June 30, 2017:

I.  The provisions of RSA 72:12-a, exempting water and air pollution control facilities from property taxation, are hereby suspended.

II.  The provisions of RSA 83-F:1, V(a), excluding water and air pollution control facility property from the utility property tax under RSA 83-F, is hereby suspended.

III.  For the period of the suspension, the exempt percentage of the appraised value of a facility which is included under RSA 72:12-a, and any real estate necessary therefor, shall be subject to taxation, provided that:

(a)  Any such facility that for the biennium meets the definition of utility property under RSA 83-F:1, V, shall be taxed as utility property under RSA 83-F; and

(b)  All other facility property shall be subject to tax under RSA 72.

IV.  Notwithstanding RSA 83-F:7, I, and RSA 198:39, I(f), all revenues collected by the commissioner of the department of revenue administration pursuant to subparagraph III(a) shall be transferred to and are hereby appropriated to the commissioner of the department of environmental services for the purpose of state contributions and grants made to municipalities for the acquisition and construction of water pollution control facilities under RSA 486:1.  Any sums hereby appropriated shall not lapse and shall be expended by the commissioner as follows:

(a)  Applications received.  The following projects shall, if approved by the commissioner of environmental services, be funded under RSA 486:1 during the biennium ending June 30, 2017:

1  Exeter Langdon Ave PS Improvements

2  Rochester WWTP Headworks Upgrade

3  Portsmouth Bartlett Area Sewer Improvements

4  Portsmouth Lincoln Area Sewer Separation - Contract 3A

5  Hanover Water Reclamation Facility Improvements

6  Littleton Bishop St Sanitary Sewer Infrastructure

7  Littleton Bronson St. Sanitary Sewer Improvements

8  Littleton Grove St & South Grove St Sanitary Sewer Replacement

9  Nashua Wet Weather Treatment Facility

10  Claremont Maple Ave. Sewer Improvements & Rehab. Ph. 1 & 2

11  Merrimack WWTF Dewatering Upgrade

12  Claremont Bog Sewer Improvements

13  Berlin Inflow and Infiltration Reduction, Ph. 1, Contract 2

14  Lebanon WWTF Improvements, Ph. 1

(b)  Construction complete.  The following projects shall, if approved by the commissioner of environmental services, be funded under RSA 486:1 during the biennium ending June 30, 2017:

1  Portsmouth Lincoln Area Sewer Separation - Contract #3B

2  Portsmouth Cass Street Area Sewer Improvements

3  Portsmouth Rye Line Pump Station

4  Nashua Primary Clarifier Rehabilitation

5  Durham West End Sewer Improvements

6  North Conway WP Contract 7 Ash Street

7  Nashua Infrastructure Improvements at CSO 004 - Storage Tank

8  Nashua CSO - 004 Infrastructure Improvements Burke Street Phase 1

9  Newport WWTP Upgrade

10  Concord SCADA Phase 2B Upgrades

11  Dover WWTF Dewatering Upgrade

12  Hampton Sludge Handling Improvements to WWTP

13  Derry Rockingham Road Infrastructure Improvements

14  Enfield Route 4 Sewer & Water Extension

15  North Conway WP WWTF Aeration System Improvements

16  Durham Old Concord Road Pump Station Upgrade

17  New London New London Portion of Sunapee WWTF Upgrade

18  Nashua Harbor Ave. Area Sewer Separation

19  Claremont Washington Street and Elm Street Pump Station Improvement

20  Hampton Church Street Pump Station Upgrades

21  Rochester Brock Street Reconstruction

22  Concord Phase 2 Odor Control

23  Sunapee Sunapee WWTF Upgrade

(c)  Construction active.  The following projects shall, if approved by the commissioner of environmental services, be funded according to the priority list established under RSA 486:1 during the biennium ending June 30, 2018 from remaining sums transferred under this paragraph:

1  Portsmouth Lincoln Area Sewer Separation - Contract #3C

2  Conway Village Fire District Sewerage Improvements Program Phase II

3  Berlin Wastewater Treatment Facility Phase 2 Upgrade

4  Nashua WWTF Grit System and Dewatering Upgrade

5  Nashua Aeration and Secondary Clarifier Upgrade

6  Nashua Screening & Disinfection Facility

7  Winchester Wastewater Treatment Plant Upgrades - Phase II

8  Derry Route 28 Water and Sewer Improvements

9  Rochester New Route 125 Pump Station Upgrade

10 Sunapee Perkins Pond Area Sewer Improvements

11 Swanzey Swanzey's Portion of Keene WWTF Upgrade

12 Keene Upgrade of WWTF-Nutrients

13 Merrimack WWTF Phase II & Compost Facility Upgrade

14 Durham Dewatering System Upgrade & Bardenpho Conversion

15 Lebanon CSO and Utility Replacement Improvements Phase 9

16 Lebanon CSO 10- Dana & Craft Ave Area

17 Manchester Aeration System Upgrade

18 Dover Phase I WWTF Upgrade & MLE Conversion

19 Lebanon Etna Road - NH Rte. 120 Sewer Replacement

20 North Conway WP Water & Sewer Infrastructure Improvements Contract 8B

21 Concord SCADA Phase 3 Upgrades

22 Winnipesaukee River Basin Electrical Switch Gear Upgrade

23 Portsmouth Primary Clarifier Upgrade

24 WRBP Electrical Switchgear Replacement

25 Concord WWTF SCADA Upgrades Ph. 3 (Hall St.)

26 Nashua Burke Street CSO 4 PH 2

27 Newmarket WWTF Upgrade

(d)  Construction pending.  The following projects shall, if approved by the commissioner of environmental services, be funded according to the priority list established under RSA 486:1 during the biennium ending June 30, 2018 from remaining sums transferred under this paragraph:

1  Colebrook Main St. Sewer Improvements

2  Jaffrey River Street and Nelson Circle Pump Station Replacement

3  Nashua WWTF Headworks Upgrade

4  Nashua Pump Station Upgrades

5  Newington WWTF and Pump Station Upgrades

6  Northumberland Northumberland Water and Sewer Main Imp

7  Portsmouth Pierce Island WWTF Upgrade

8  Exeter WWTF and Main Pump Station Upgrade

9  Wolfeboro Wolfeboro I/I Rehabilitation

10 Manchester Primary Clarifier Upgrade

2  Effective Date.  This act shall take effect upon its passage.

LBAO

16-2032

11/20/15

HB 1427-FN-A-LOCAL- FISCAL NOTE

AN ACT suspending the water and air pollution control facility property tax exemption and appropriating certain revenues for water pollution control grants to municipalities.

FISCAL IMPACT:

The Departments of Environmental Services and Revenue Administration state this bill, as introduced, will increase state revenue and expenditures by an indeterminable amount in FY 2016 and in each year thereafter.  The New Hampshire Municipal Association states this bill will have an indeterminable fiscal impact on local revenue and expenditures.  There will be no fiscal impact on county revenue or expenditures.

METHODOLOGY:

The Department of Environmental Services states this bill would suspend property and utility tax exemptions for pollution control facilities for the biennium ending June 30, 2017 and transfer the utility property tax revenue collected to the specific projects identified in the bill.  The Department assumes the projects listed are all eligible and applications will be received and processed such that projects will be awarded grants beginning in FY 2016.  The grant estimates assume 20-year debt issued at the current State Revolving Loan interest rate of 3.168%.  The actual payback periods and interest rate will vary with each application.  Based on these assumptions, the Department estimated the following annual expenditures would be necessary to fund the listed projects:

The Department of Revenue Administration states the pollution control facility property tax exemption and the utility property tax exemption are determined as of April 1^st.  For the purpose of the fiscal note, the Department assumes an effective date prior to April 1, 2016 and the pollution control exemptions would be eliminated for FY 2016 property taxes.  The Department assumes the utility property tax collected would increase and the additional amount would be transferred to the Department of Environmental Services.  Pollution control property not subject to the utility property tax under RSA 83-F would be subject to the property tax under RSA 72.  The Department indicates subjecting the pollution control property to the property tax would shift the tax burden among local tax payers without affecting the total revenue received from the tax.  In addition, the proposed bill would result in a reapportionment of the local tax burden among municipalities by increasing the taxable value for some communities.  The Department estimated the impact on Utility Property Tax revenue as follows:

Value of pollution control property subject to the utility property tax                    $550,000,000

    (Based on most recent year.  Does not include changes in value or

      properties being added or removed.)  

Additional Annual Utility Tax Revenue in FY 2016 and in FY 2017      $3,630,000

     ($ 6.60 per  $1,000  X 550,000)      

Finally, the Department states inclusion of new utility tax payers may increase administrative costs to the Department and inclusion of additional property tax payers may increase administrative costs to certain municipalities.  These potential costs are indeterminable.

The New Hampshire Municipal Association assumes the bill would be effective in FY 2016 and the property tax exemption would be suspended for both years of the biennium.  Not all municipalities host property subject to the exemption.  Based on information from the 2013 tax year provided by the Department of Revenue Administration, the value of property reported as exempt was $253.8 million and was located in 13 different municipalities.  The total property tax that would have been paid at the applicable municipal tax rates is $4.3 million.  The Association states suspending the exemption would not necessarily affect municipal revenues or expenditures, but would shift the property tax burden among taxpayers within the affected municipalities.  The Association states the additional tax paid on previously exempt property could be used to support additional appropriations, lower the local tax rate for all other taxpayers, or some combination of both.  Since such decisions would be up to each municipality, the Association states the impact on revenue or expenditures cannot be determined.  

The Association states suspending the property exemption would also affect the payment of county taxes by the municipality affected by the exemption as well as the other municipalities in the same county.  Suspending the exemption would increase the affected municipality’s equalized valuation and its proportionate share of the county tax burden.  Municipalities without property subject to the exemption would experience a reduction in their proportionate share of the county tax.  The Association states similar effects may occur with respect to schools in regional or cooperative school districts.

The New Hampshire Association of Counties does not anticipate any fiscal impact on county revenue or expenditures.