HB1572 — Version 100

2000 SESSION

00-2589

09/10

HOUSE BILL 1572-FN-A-LOCAL

COMMITTEE: Finance

ANALYSIS

This bill repeals the education trust fund, the sources of funding for the education trust fund, and the procedures for funding state aid for educational adequacy. The repeal is effective on January 2, 2003, the date the education property tax is repealed.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

00-2589

09/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand

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

1 Revenue Sharing. Amend RSA 31-A:4, I to read as follows:

I. Its 1978 distribution under RSA 31-A plus its share under the equalized formula of an annual increase of 5 percent in the previous year's aggregate distribution, through the year 1981, excluding revenue derived from RSA 77-A:20. [The amount of money which is removed from the formula for deposit in the education trust fund shall not affect the remaining municipal revenue sharing distribution. The same amount distributed to each municipality in fiscal year 1998, excluding the amount apportioned to the school district in the 1998 property tax calculations, shall be distributed to each municipality in fiscal year 1999 and each year thereafter until the legislature revises the formula or provides additional appropriations that will affect the distribution amount.]

2 Commissioner's Warrant Charged to State Treasurer's Warrant. RSA 76:8 is repealed and reenacted to read as follows:

76:8 State Treasurer's Warrant; Extent. The state treasurer shall make out the proportion of state tax to be raised by each town in accordance with the apportionment then in force, and shall seasonably issue a warrant under his hand and official seal to the selectmen of each town directing them to assess such sum and pay the same into the treasury on or before the day fixed by the legislature therefor. The state treasurer may issue an extent for all sums which shall remain unpaid after such day.

3 Information Required. Amend RSA 76:11-a, I to read as follows:

I. The tax bill which is sent to every person taxed, as provided in RSA 76:11, shall show the rate for municipal, [local education, state education,] school, and county taxes separately, the assessed valuation of all lands and buildings for which said person is being taxed, and the right to apply in writing to the selectmen or assessors for an abatement of the tax assessed as provided under RSA 76:16. The department of revenue administration shall compute for each town and city the rates which are to appear on the tax bills and shall furnish the required information to the appropriate town or city.

4 Business Profits Tax; Rate Reduced. Amend RSA 77-A:2 to read as follows:

77-A:2 Imposition of Tax A tax is imposed at the rate of [8] 7 percent upon the taxable business profits of every business organization.

5 Business Enterprise Tax; Rate Reduced. Amend RSA 77-E:2 to read as follows:

77-E:2 Imposition of Tax. A tax is imposed at the rate of [1/2] 1/4 of one percent upon the taxable enterprise value tax base of every business enterprise. A 2/3 majority of those present and voting of each house of the general court shall be necessary to increase the tax rate under this section.

6 Meals and Rooms Tax; Definition of Operator. Amend RSA 78-A:3, IV to read as follows:

IV. "Operator" means any person operating a hotel[,] or charging for a taxable meal[, or receiving gross rental receipts], whether as owner or proprietor or lessee, sublessee, mortgagee, licensee, or otherwise.

7 Meals and Rooms Tax; Motor Vehicle Rentals Deleted. Amend RSA 78-A:4 to read as follows:

78-A:4 Licenses Required; Penalty.

I. Each operator shall register with the department the name and address of each place of business within the state where it operates a hotel[,] or sells taxable meals[, or rents motor vehicles]. The operator shall pay $5 for each registration, upon receipt of which the department shall issue a license for each place in such form as it determines, attesting that the registration has been made. The license expires on June 30 in each odd-numbered year unless sooner revoked or suspended by the department. The license shall be conspicuously posted in a public area upon the premises to which it relates.

II. No person shall engage in serving taxable meals[,] or renting rooms[, or renting motor vehicles] without first obtaining the license required by this section. The license is nonassignable and cannot be transferred. Any person who fails to register or obtain a license as provided in this section shall be subject to the penalty provisions of RSA 21-J:39.

8 Collection of Meals and Rooms Tax; Motor Vehicle Rentals Deleted. Amend RSA 78-A:7, I to read as follows:

I. The operator shall either state the amount of the tax to each occupant[,] or purchaser of a meal, [or renter,] or state that the tax is included in the price of the occupancy[,] or meal[, or gross rental receipts received]. The operator shall demand and collect the tax from the occupant[,] or purchaser[, or renter]. The occupant[,] or purchaser[, or renter] shall pay the tax to the operator. If the tax is included in the price of the meal[,] or occupancy[, or gross rental receipts received], upon request the operator shall state to the purchaser[,] or occupant[, or renter] the amount of the tax.

9 Collection of Meals and Rooms Tax, Motor Vehicle Rentals Deleted. Amend RSA 78-A:7, IV to read as follows:

IV. In lieu of keeping detailed records of taxes collected, and in lieu of payment of the taxes collected under this chapter, an operator may, in writing, elect to compute the amount of taxes due at 8 percent of the total taxable rent[,] or charge for meals[, or gross rental receipts] received by it, or both, exclusive of the taxes collected on such rents[,] and charges[, and gross rental receipts]. If this election is made, the operator may not change the method of computing taxes without the written consent of the department. Any balance of the tax remaining in possession of the operator may be retained by it.

10 Distribution of Meals and Rooms Tax; Reference Deleted. Amend the introductory paragraph of RSA 78-A:26, I to read as follows:

I. Beginning on July 1, 1995, and for each fiscal year thereafter, the department shall pay over all revenue[, except revenues identified in paragraph III of this section,] collected under this chapter to the state treasurer. On or before October 1 of each year, the department shall determine the cost of administration of this chapter for the fiscal year ending on the preceding June 30, and it shall notify the state treasurer of these costs by a report certified by them as to correctness. After deducting the cost of administration of the chapter from the total income, the state treasurer shall distribute the net income as follows:

11 Real Estate Transfer Tax Rate Reduced. Amend RSA 78-B:1, I(b) to read as follows:

(b) The rate of the tax is [$.75] $.50 per $100, or fractional part thereof, of the price or consideration for such sale, grant, or transfer; except that where the price or consideration is $4,000 or less there shall be a minimum tax of $20. The tax imposed shall be computed to the nearest whole dollar.

12 Cooperative School Districts; References Removed. Amend RSA 195:14, I(c)and (d) to read as follows:

(c) The commissioner of revenue administration shall certify to the state department of education the total amount [to be apportioned among the pre-existing school districts. Such total shall include the adequate education cost for the district under RSA 198:38, XII, and the amount above the cost of an adequate education to be assessed and collected as local educational taxes] of taxes to be raised for the support of the cooperative school district.

(d) The state department of education shall determine the proportional share of [the costs above adequacy to be assessed as local education taxes as follows:

(i) First, the department shall determine each pre-existing district's proportional share of the total amount to be apportioned based on the cooperative school district formula.

(ii) Second, the department shall then deduct each pre-existing school district's adequate education cost under RSA 198:38, XII, from its proportional share of the total amount to be apportioned.

(iii) Third, the department shall notify the commissioner of revenue administration of its determinations.

(iv) If the amount determined in subparagraph (ii) for any pre-existing district is less than zero, the department shall reduce the adequate education grant payable to the cooperative district under RSA 198:42 by the difference between the amount determined in subparagraph (i) and the pre-existing district's adequate education cost under RSA 198:38, XII] said taxes to be borne by each preexisting school district and notify the commissioner of revenue administration of its determination.

13 Cooperative School Districts; State Aid Computation. Amend RSA 195:15 to read as follows:

195:15 State Aid. The state aid to which a cooperative elementary and/or secondary district shall be entitled shall be the total of those shares of the aid to which the pupils attending the cooperative district would have entitled the pre-existing districts, had they remained in the pre-existing districts. [For the purposes of crediting the cooperative district's adequate education cost to the pre-existing districts, each such pre-existing district shall have its adequate education cost under RSA 198:38, XII credited against its share of the cooperative school district budget. However, cooperative school districts formed by 2 or more pre-existing districts whose boundaries approximate those of a single township in which they are located shall be treated as a single school district for the purposes of this section.]

14 Reimbursement Anticipation Notes. Amend RSA 198:20-d to read as follows:

198:20-d Reimbursement Anticipation Notes. Notwithstanding any other provision of law to the contrary, a school district or a city with a dependent school district may incur debt in anticipation of reimbursement under RSA 186-C:18 [and under RSA 198:42]. The governing body, after notice and public hearing, may elect to borrow such funds and to recognize the proceeds of the borrowing as revenue for property tax rate setting purposes by providing written notification to the commissioner of the department of revenue administration stating the specific amount of borrowing to be recognized as revenue. Any borrowing under this section shall be exempt from the provisions of RSA  33, relative to debt limits.

15 Sweepstakes Funds. Amend RSA 284:21-j to read as follows:

284:21-j Establishment. The state treasurer shall credit all moneys received from the sweepstakes commission, and interest received on such moneys, to a special fund from which the treasurer shall pay all expenses of the commission incident to the administration of this subdivision and RSA 287-E. Any balance left in such fund after such expenses are paid shall be deposited in [the education trust fund established under RSA 198:39] the general fund.

16 Repeal. The following are repealed:

I. RSA 6:12, I(www), relative to the education trust fund.

II. RSA 76:9, relative to commissioner's report.

III. RSA 77-A:20-a, relative to distribution of business profits tax revenues to the education trust fund.

IV. RSA 77-E:14, relative to distribution of business enterprise tax revenues to the education trust fund.

V. RSA 78:32, relative to distribution of tobacco tax revenues to the education trust fund.

VI. RSA 78-A:3, XIV-XIX, relative to meals and rooms tax definitions regarding motor vehicle rentals.

VII. RSA 78-A:6, II, relative to taxation of motor vehicle rentals under the meals and rooms tax.

VIII. RSA 78-A:26, III, relative to payment of certain meals and rooms tax revenues to the education trust fund.

IX. RSA 83-F, relative to the utility property tax.

X. RSA 198:38 - 49, relative to the education trust fund and state aid for educational adequacy.

17 Effective Date. This act shall take effect January 2, 2003.

LBAO

00-2589

12/17/99

HB 1572-FN-A-LOCAL - FISCAL NOTE

FISCAL IMPACT: