sb 0193

CHAPTER 297

SB 193-FN-A-LOCAL - FINAL VERSION

AN ACT relative to changes in the property tax system and making an appropriation therefor.

SPONSORS: Sen. Below, Dist 5; Sen. Eaton, Dist 10; Rep. Herman, Hills 13; Rep. Almy, Graf 14

I. Establishes an assessing standards board and an equalization standards board, both of which are administratively attached to the department of revenue administration.

II. Requires appraisers, except for boards of assessors and selectmen, to be certified by the department of revenue administration. The bill grants the department the authority to audit such appraisers.

IV. Makes a change in the formula for annual equalization of valuation of property by the department of revenue administration.

V. Establishes a committee to study the role of selectmen in the assessing function and the feasibility of establishing a professional assessors' licensing board.

VI. Allows the department of revenue administration to petition the board of tax and land appeals for an order of reassessment of valuation of property within a municipality. The bill also allows the department to contract for appraisers to complete reassessments and to receive reimbursement of costs.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to changes in the property tax system and making an appropriation therefor.

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

297:1 Administratively Attached Boards. RSA 21-J:1-a is repealed and reenacted to read as follows:

21-J:1-a Boards Administratively Attached. The following boards shall be administratively attached to the department of revenue administration, under RSA 21-G:10:

297:2 New Subdivisions; Assessing Standards Board; Equalization Standards Board; Certification of Assessors and Auditing Authority; Cooperative Assessment Districts. Amend RSA 21-J by inserting after section 14 the following new subdivisions:

I. There is hereby established an assessing standards board which shall be administratively attached to the department of revenue administration, as provided in RSA 21-J:1-a.

(a) Five members nominated by the New Hampshire Association of Assessing Officials and appointed by the governor with the consent of the council, one of whom shall be an assessing official for a town with a population of less than 5,000; one of whom shall be an assessing official for a town with a population of more than 5,000; and one of whom shall be an assessing official for a city. Each member shall hold office for the term of such member's position for 2 years and until a successor shall have been appointed and qualified. Any vacancy shall be filled for the unexpired term by the governor with the consent of the council.

(b) Two members of the senate appointed by the president of the senate. The term of each member shall be coterminous with the member's term as senator. A vacancy for an unexpired term shall be filled by the president of the senate.

(c) Two members of the house of representatives appointed by the speaker of the house. The term of each member shall be coterminous with the member's term as representative. A vacancy for an unexpired term shall be filled by the speaker of the house.

(d) The commissioner of the department of revenue administration, or the commissioner's designee.

(e) Three members of the public appointed by the governor with the consent of the council, at least one of whom shall be a selectman in a town with a population of 5,000 or less.

III. Members of the assessing standards board who are not state employees or legislators shall each be paid $25 a day for such time as the members are actually engaged in the work of the board. All members shall be paid their actual expenses incurred as the result of such work. Non-legislative members shall be paid mileage at the same rate as state employees, but legislative members shall receive mileage at the legislative rate.

IV. The board shall annually elect a chairperson from among its members. The first meeting of the board shall be called by the first-named house member and shall be held within 30 days after the effective date of this section. A chairperson shall be elected from the board's membership at the first meeting and annually thereafter.

I. The assessing standards board shall adopt rules, pursuant to RSA 541-A, and recommend appropriate legislation relative to:

(a) The annual update and publication of an assessing procedures manual for selectmen and boards of assessors. Such manual shall include the department of revenue administration's appraisal manual, a calendar of tasks to be completed on a periodic basis including those tasks required by state statute, and such other information as the board deems necessary. The board shall examine the report of the expert hired by the department of revenue administration.

throughout the state, relating to the administration of the property tax and assessment of real property used in any state property tax system.

(c) The establishment of certification, continuing education, and revocation and suspension standards for assessing officials. The commissioner of the department of revenue administration shall be responsible for enforcement of those standards.

(d) The establishment of standards for monitoring of local assessment practices by the department of revenue administration, standards for the adequacy of tax maps and other records, and standards for audit by the department of revenue administration of municipalities.

(e) The identification of practices which constitute sales-chasing and penalties to be adopted by the legislature regarding such practices.

(f) Forms and procedures necessary to fulfill the duties of the board consistent with board recommendations and to assure a fair opportunity for public comment.

(g) Any study conducted for the purpose of determining the status of assessing practices or the improvement of assessing in the state.

II. All standards and practices developed or identified by the board, pursuant to this section, shall be reviewed and updated annually. The board shall hold a series of at least 3 public forums annually throughout the state to receive general comment through verbal and written testimony on assessing standards and practices. After the public forums are concluded and the board has made its recommended changes, in accordance with paragraph III, the board shall proceed to adopt any proposed rules.

III. The board, on or before December 1 of each year, shall report its findings and recommendations for proposed legislation to the governor, the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, and the state library.

I. There is hereby established an equalization standards board which shall be administratively attached to the department of revenue administration, as provided in RSA 21-J:1-a.

(a)(1)(A) One member nominated by the New Hampshire Association of Counties and appointed by the governor with the consent of the council.

(B) One member nominated by the New Hampshire School Boards Association and appointed by the governor with the consent of the council.

(C) One member nominated by the New Hampshire Municipal Association and appointed by the governor with the consent of the council.

(D) Two members nominated by the New Hampshire Association of Assessing Officials and appointed by the governor with the consent of the council, one of whom shall be an assessing official for a town with a population of less than 5,000, the other of whom shall be an assessing official for a town or city with a population of more than 5,000.

(2) Each member appointed under subparagraph (a)(1) shall hold office for 2 years, and until such member's successor shall have been appointed and qualified. Any vacancy shall be filled for the unexpired term by the governor with the consent of the council.

(b) Three members of the public, one of whom shall have experience with equalization processes and one with experience in statistics, appointed by the governor with the consent of the council. Each member shall serve for a term of 3 years and until such member's successor shall have been appointed and qualified. Any vacancy shall be filled for the unexpired term by the governor with the consent of the council.

(c) Two members of the senate, appointed by the president of the senate. The term of each member shall be coterminous with the member's term as senator. A vacancy for an unexpired term shall be filled by the president of the senate.

(d) Two members of the house of representatives, appointed by the speaker of the house. The term of each member shall be coterminous with the member's term as representative. A vacancy for an unexpired term shall be filled by the speaker of the house.

(e) The commissioner of the department of revenue administration, or the commissioner's designee.

III. Members of the equalization standards board who are not state employees or legislators shall each be paid $25 a day for such time as the members are actually engaged in the work of the board. All members shall be paid their actual expenses incurred as a result of such work. Non-legislative members shall be paid mileage at the same rate as state employees, but legislative members shall receive mileage at the legislative rate.

IV. The first meeting of the board shall be called by the first-named senate member and shall be held within 30 days after the effective date of this section. A chairperson shall be elected from among the board's membership at the first meeting and annually thereafter.

21-J:14-d Powers and Duties of the Board. The equalization standards board shall have the following powers and duties:

I. The board shall meet, at least annually, to review the procedures of the prior year's ratio studies conducted by the department of revenue administration for the purposes of equalization and the evaluation of assessment performance and to establish procedures for improving the ratio studies for the forthcoming property tax year.

II. The board shall develop standards for equalization and shall review, revise, and approve the equalization manual published by the department of revenue administration. In developing its standards, the board shall review the standards of the International Association of Assessing Officials and any other standards that are consistent with the work of the board.

III. The board shall annually determine, vote upon, and recommend to the chairperson of the board, the ratio study procedures for use in the forthcoming tax year. The board shall hold a series of at least 3 public forums annually throughout the state to receive general comment through verbal and written testimony on the ratio study procedures. After the public forums are concluded and the board has made its recommended changes, in accordance with paragraph IV, the board shall proceed to adopt any proposed rules.

IV. The board, on or before December 1 of each year, shall report its findings and recommendations for proposed legislation to the governor, the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, and the state library.

V. The board shall adopt rules, on or before December 31, 2001, pursuant to RSA 541-A and with specific attention to RSA 541-A:25, relative to unfunded state mandates, relative to:

(a) Standards and procedures for the calculation of equalization ratios and confidence intervals as recommended by the board.

(c) Other forms and procedures necessary to fulfill the duties of the board consistent with board recommendations and to assure a fair opportunity for public comment.

21-J:14-e Auditing Authority. Every person, firm, or corporation making appraisals on behalf of a municipality for tax assessment purposes shall maintain records of its appraisal activities and shall make all such records available for inspection by the commissioner or authorized agents, upon request, at reasonable times during regular business hours. Any willful violation of the provisions of this section shall be subject to the penalties included in RSA 21-J:39.

I. Every person, whether working individually, for a firm or corporation, or as a municipal or department of revenue administration employee, making appraisals of a municipality for tax assessment purposes, except elected officials making appraisals pursuant to RSA 75:1, shall be certified by the department. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to qualifications for certification, standards for continuing education, and standards for revocation or suspension of certification. Rules adopted by the commissioner under this paragraph shall remain effective until the assessing standards board adopts rules under RSA 21-J:14-b, I(c).

II. No person, except boards of assessors and selectmen making appraisals pursuant to RSA 75:1, shall make appraisals of a municipality for tax assessment purposes without first obtaining the certification required by this section. Certification is non-assignable and cannot be transferred. Any person who willfully fails to obtain certification as provided in this section shall be subject to the penalties imposed under RSA 21-J:39.

III. All persons approved or certified by the department or by the New Hampshire Association of Assessing Officials on the effective date of this section shall be deemed certified subject to standards which may be developed for continuing education and revocation or suspension of certification until the assessing standards board adopts rules under RSA 21-J:14-b, I(c).

I. The commissioner, after notice and hearing, may suspend or revoke the certification of any person or may refuse to issue or renew any certification for failure to comply with the provisions of RSA 21-J:14-e and RSA 21-J:14-f or with rules adopted by the commissioner under RSA 21-J:14-f. II. Any person aggrieved by a suspension, revocation, or refusal of the commissioner may appeal from the ruling either by application to the board of tax and land appeals or by petition to the superior court in the county in which such person resides or maintains his or her business within 30 days after receiving written notice of the commissioner's ruling. The board of tax and land appeals or the court, as the case may be, shall hear the appeal forthwith.

21-J:14-h Purpose. The general court finds that the encouragement and support of the establishment of multi-jurisdictional assessing districts is in the state's interest in order to ensure the accuracy and fairness of valuations of real property for the purposes of administration of the statewide property tax, county property taxes, school district property taxes, municipal property taxes, the distribution of various forms of state aid, and the equalization of property values among jurisdictions. The general court further recognizes that many municipalities do not have sufficient numbers of real estate parcels, sufficient varieties of real property, or sufficient levels of new development to make it practical or economical to engage full-time, trained, and certified assessing professionals. The general court further finds that the state has a vested interest in encouraging and supporting the establishment of cooperative assessing districts which can efficiently and economically provide full-time, trained, and certified assessing professionals to serve the municipalities which elect to create and join said districts.

I. Any 2 or more municipalities may form a cooperative assessing district under this chapter by utilizing the process set forth in RSA 53-A, relative to agreements between government units.

II. A cooperative assessing district agreement may include a county as an administrative party to the agreement.

III. A cooperative assessing district may have municipalities from more than one county as members.

I. The intergovernmental agreement used to form a cooperative assessing district shall substantially conform to the provisions outlined in RSA 53-A:3 and shall include the following:

(a) A district cost allocation formula based in whole or in part on the number of parcels of real property in each member municipality.

(b) A governing board on which each municipality in the district is represented by at least one member who has at least one vote.

(d) A requirement of at least 12 months written notice and a vote of the municipality's legislative body before a member may withdraw from the district.

(e) Provisions for holding a withdrawing municipality responsible for payment of its proportionate share of future district expenses to which the district may be committed because of the withdrawing municipality's membership such as capital costs and retirement costs.

(f) Provisions that require a municipality which joins a district to provide its annual pro rata share of the district's budget without regard to whether or not said share is approved and supported by the governing body, the budget committee, or the legislative body of the municipality.

(g) Provisions for administratively attaching the district staff to a political subdivision for the purposes of accounting, payroll, retirement, insurance, and fringe benefits, and for compensating that political subdivision for these administrative services.

(h) Provisions for compensation and oversight if private entities are hired by the district, rather than staff administratively attached to and serving as employees of a political subdivision.

(i) A formula for staffing the district with full-time, trained, and certified professional appraisers which may be based on the number of parcels and types of properties found in the district and other necessary staff.

II. All appraisers employed by a district shall meet current standards pursuant to RSA 21-J:14-f.

297:3 Duties of Commissioner; Hearings. Amend RSA 21-J:3, XVIII to read as follows:

XVIII. Hear appeals on disputed taxes, penalties, and interest and on certification suspension, revocation, or rejection under RSA 21-J:14-g.

297:4 New Paragraph; Rulemaking. Amend RSA 21-J:13 by inserting after paragraph XI the following new paragraph:

XII. Certification, enforcement, and hearing requirements under RSA 21-J:14-f and 21-J:14-g.

297:5 New Paragraph; Penalties. Amend RSA 21-J:39 by inserting after paragraph III the following new paragraph:

IV.(a) No person, except elected officials making appraisals pursuant to RSA 75:1, shall willfully engage in making appraisals of a municipality for tax assessment purposes, unless such person is certified as provided in RSA 21-J:14-f.

(b) No person engaged in making appraisals of a municipality for tax assessment purposes shall willfully fail to maintain and provide the department access to the records required to be kept under RSA 21-J:14-e.

297:6 New Section; Option to Assign Appraisal Responsibility. Amend RSA 31 by inserting after section 95-f the following new section:

31:95-g Option to Assign Appraisal Responsibility. The legislative body of any municipality may vote to authorize the elected officials to delegate the assessing functions imposed on them under RSA 75:1, 75:11, and 79-A:5 to a person certified by the department of revenue administration under RSA 21-J:14-f.

297:7 Appraisals; Oaths of Selectmen and Assessors. Amend RSA 75:7 to read as follows:

75:7 Oath. The selectmen and assessors shall take and subscribe upon the copies or original inventories and assessments of both resident and nonresident taxes, furnished by them to the town clerks in their respective towns, to be recorded in the clerk's records, the following oath, which may be subscribed before any justice of the peace or notary public: We, the selectmen and assessors of __________, [~~do solemnly swear~~] certify under the penalty of perjury that in making the inventory for the purpose of assessing the foregoing taxes [~~we appraised~~] all taxable property was appraised to the best of our knowledge and belief at its full value, [~~and as we would appraise the same in payment of a just debt due from a solvent debtor. So help us God~~] in accordance with state appraisal standards.

297:8 Expert Report. The commissioner of the department of revenue administration shall make available to the assessing standards board, established under RSA 21-J:14-a, and the equalization standards board, established under RSA 21-J:14-c, the findings and reports of any expert hired by the department to analyze the state's equalization and assessing practices. Both boards shall consider the expert's findings in carrying out their statutory duties.

297:9 Committee Established. There is hereby established a committee to study the role of selectmen in the assessing function and to study the feasibility of establishing a professional assessors' licensing board to improve the practice of assessing in the state of New Hampshire.

(b) Three members of the house of representatives, appointed by the speaker of the house.

II. Members of the committee shall receive mileage at the legislative rate when attending to the duties of the committee.

II. The feasibility of establishing a professional assessors licensing board. The committee shall focus on whether such a board would improve the practice of assessing the state of New Hampshire and on the related part I, article 28-a cost issues.

III. Other matters pertaining to improving the administration and equity of the state's property tax system.

297:12 Chairperson; Quorum. The members of the study committee shall elect a chairperson form among the members. The first meeting of the committee shall be called by the first-named house member. The first meeting of the committee shall be held within 45 days of the effective date of this section. Four members of the committee shall constitute a quorum.

297:13 Report. The committee shall report its findings and any recommendations for proposed legislation to the governor, the president of the senate, the speaker of the house of representatives, the senate clerk, the house clerk, and the state library on or before December 1, 2001.

XIII. Equalize annually by May 1 the valuation of the property as assessed in the several towns, cities, and unincorporated places in the state including the value of property exempt pursuant to RSA 72:37, 72:37-b, 72:39-a, 72:62, 72:66, and 72:70 by adding to or deducting from the aggregate valuation of the property in towns, cities, and unincorporated places such sums as will bring such valuations to the true and market value of the property, [including the equalized value of property formerly taxed pursuant to the provisions of RSA 72:7; 72:15, I, V, VII, VIII, IX, X, and XI; 72:16; 72:17; 73:26; 73:27; and 73:11 through 16 inclusive, which were relieved from taxation by the laws of 1970, 5:3; 5:8; 57:12; and 57:15, the equalized valuation of which is to be determined by the amount of revenue returned in such year in accordance with RSA 31-A,] and by making such adjustments in the value of other property from which the towns, cities, and unincorporated places receive taxes or payments in lieu of taxes as may be equitable and just, so that any public taxes that may be apportioned among them shall be equal and just. In carrying out the duty to equalize the valuation of property, the commissioner shall follow the procedures set forth in RSA 21-J:9-a.

297:15 Revenue Administration; Duties of Commissioner; Reassessment. Amend RSA 21-J:3, XXV to read as follows:

XXV. Petition the board of tax and land appeals to issue an order for reassessment of property pursuant to the board's powers under RSA 71-B:16-19 whenever the valuation of property [~~for equalization purposes~~] in a particular city, town, or unincorporated place is disproportional to the valuation [~~for equalization purposes in other cities, towns, or unincorporated places in the state~~] of other property within that city, town, or unincorporated place.

297:16 Equalization Procedure; Options. Amend the introductory paragraph of RSA 21-J:9-a, III to read as follows:

III. If less than 2 percent of the total taxable parcels in a city, town, or unincorporated place has been transferred by an arm's length sale or transfer during the 6 months prior to and 6 months following April 1 of the tax year for which such equalization is made or the commissioner determines the sales are unrepresentative of the property within the municipality, the commissioner may choose one or more of the following options [~~in the order listed~~]:

297:17 New Sections; Petition for Order of Reassessment; Procedure and Expenses. Amend RSA 21-J by inserting after section 9-a the following new sections:

21-J:9-b Petition for Order of Reassessment. The commissioner, in petitioning for an order of reassessment pursuant to RSA 21-J:3, XXV, may consider any information that indicates that property in a city, town, or unincorporated place is valued disproportionately to other property within that municipality in determining whether to petition the board of tax and land appeals to issue an order for reassessment. Additionally, the commissioner shall petition the board of tax and land appeals to issue an order for reassessment of property if the following criteria are met:

I. The commissioner's most recent annual sales-assessment ratio study indicates that the coefficient of dispersion exceeds 20 employing a 95-percent level of confidence, provided however that if the sample size for a sales-assessment ratio study is less than 30, the commissioner may use a level of confidence as low as 70 percent;

III. A municipality has not contracted for a full revaluation of the property within such municipality to be effective no later than the tax year following such determination.

21-J:9-c Orders for Reassessment. The following provisions shall govern cases in which the board of tax and land appeals has certified an order for reassessment to the department pursuant to RSA 71-B:17:

I. The commissioner may contract for the services of certified appraisers as needed to complete such reassessments in compliance with any certified orders of the board of tax and land appeals.

II. All reasonable expenses incurred by the department in completing a reassessment shall be paid in the first instance from the appropriation for the department, but each city, town, or county in the case of an unincorporated place, shall, upon notification by the commissioner of the amount due, reimburse the department for such expenses incurred as follows:

(a) The expenses for completing a reassessment, including, but not limited to, salaries of staff of the department for such time as the staff have spent on the reassessment, with the exception of expenses incurred by the department in the supervision and monitoring of appraisals pursuant to RSA 21-J:11, shall be reimbursed; and

(b) The amount of such reimbursement to the department shall, without vote of the municipality, be assessed and collected.

297:18 Property Taxes; What Taxes Assessed; Expenses of Reassessment. Amend RSA 76:5 to read as follows:

76:5 What Taxes Assessed. The selectmen shall seasonably assess all state and county taxes for which they have the warrants of the commissioner of revenue administration and county treasurers respectively; all taxes duly voted in their towns; and all school and village district taxes authorized by law or by vote of any school or village district duly certified to them; and all sums required to be assessed by RSA 33 and RSA 21-J:9-c.

II. The remainder of this act shall take effect 60 days after its passage.

II. Remainder shall take effect September 15, 2001)