hb 1414

CHAPTER 103

HB 1414-FN-A-LOCAL - FINAL VERSION

SPONSORS: Rep. Whalley, Merr 5; Rep. Burling, Sull 1; Rep. Wheeler, Hills 7; Rep. McGuirk, Ches 1; Rep. P. Davis, Coos 1; Sen. Boyce, Dist 4; Sen. Johnson, Dist 3; Sen. Burns, Dist 1

This bill establishes the method of taxation for an excavation area and repeals provisions relating to the excavation activity tax. The bill also establishes a committee to study the taxation of earth.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

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

I. In 1999, the general court enacted Chapter 301, Laws of 1999, amending RSA 72-B, and clarifying the process of taxation of property containing earth as defined in RSA 155-E:1, and establishing a new method of taxation for the excavation of earth as defined in RSA 155-E:1, and for the area of excavation activity.

II. In November 2001, after upholding the constitutionality of its classification of property, the New Hampshire supreme court ruled that one of said chapter's provisions, RSA 72-B:12, III, was not constitutional because it did not provide for a methodology for assessment of the excavation activity area at its "true value."

III. The general court recognizes that although the remainder of RSA 72-B was left undisturbed by the court's decision: that the methodology of assessment for the area of excavation activity must be revised to meet the court's tests for its assessment methodology; that the cities and towns are now clearly directed regarding the taxation of property containing earth, the excavation tax and the excavation area; that there continues to be an incentive for reclamation of excavated areas to preserve the environment; and that the general court must act in a timely fashion to enable the cities and towns to assess the excavation area in a manner that is clearly constitutional.

103:3 Excavation Tax; Excavation Area. RSA 72-B:1 is repealed and reenacted to read as follows:

I. Earth, as defined in RSA 155-E:1, I, shall be exempt from taxation as real property under RSA 72:6 and RSA 72:13. An excavation tax shall be assessed upon the excavation of earth against an owner as defined in RSA 72-B:2, VIII. Such tax shall be assessed at the rate of $.02 per cubic yard of earth excavated. The following are exempt from the excavation tax:

(a) Any excavation of earth from a parcel of land that is put back on the parcel, or other parcel that is contiguous and in common ownership, in the construction, reclamation, reconstruction, or alteration of such parcel of land within the same tax year.

(b) Any excavation of earth that is used exclusively for agricultural or forest management by the owner of the land within the state of New Hampshire.

(c) Any excavation upon a parcel of land which does not exceed 1,000 cubic yards within any tax year; however, the owner of such excavation shall be required to file a notice of intent to excavate pursuant to RSA 72-B:8, but such owner shall not be subject to the enforcement fee under RSA 72-B:16 and such parcel shall not be subject to the excavation tax lien under RSA 72-B:7, I.

(d) Any excavation which is solely necessary to construct a foundation, septic disposal system, or which is incidental to other construction projects and does not result in the removal from the parcel of more than 1,000 cubic yards of earth within the tax year.

II. Excavations, as defined in RSA 155-E:1, II, and excavation areas as defined in RSA 155-E:1, VI, shall be taxed as real property pursuant to RSA 72:6 independent of any earth contained therein. The following shall not be considered to be included within the excavation area:

(b) An excavation area that is exposed rock ledge not subject to reclamation under RSA 155-E:5, I and III or RSA 155-E:5-a and has not been excavated during the preceding tax year, provided that exposed rock ledge that is the subject of intents or modifications thereof filed pursuant to RSA 72-B:8 during the preceding tax year and exposed rock ledge that is the subject of a permit granted pursuant to the provisions of RSA 155-E shall be included within the excavation area.

(c) An excavation that has ceased commercially useful operation prior to August 24, 1977, as set forth in RSA 155-E:2, II(c).

III. The owner shall furnish to the assessing officials for the jurisdiction in which the excavation is located such information as the assessing officials may require to determine the area constituting a taxable excavation including, if requested, any material differences between excavation activity and excavation intents filed the previous tax year.

103:4 Renumbering of Provision of Prior Act; Exemption from Excavation Tax. New subparagraph (j) as inserted into RSA 72-B:1, IV pursuant to the provisions of 2001, 211:1 shall be renumbered as RSA 72-B:1, I(e) in order to conform to the reenactment of that RSA section by section 3 of this act.

103:5 New Paragraph; Definitions; Excavation Area. Amend RSA 72-B:2 by inserting after paragraph VII the following new paragraph:

103:6 Section Heading Changed. Amend the section heading of RSA 72-B:4 to read as follows:

72-B:7 Lien. Unless a bond or other security is required pursuant to RSA 72-B:5[:

I.], excavation tax assessments levied under RSA 72-B:4 shall, on the date the excavating commences, create a lien upon the land on account of which it is made and against the owner of record of such land[.

~~II. Excavation activity tax assessments levied under RSA 72-B:12 shall, on April 1, create a lien upon the land on account of which it is made and against the owner of record of such land.~~

~~III. Liens created under RSA 72-B:7, I and II~~] and shall continue for a period of 18 months following the date of assessment by the local assessing officials. All excavation tax [~~and excavation activity tax~~] assessments shall be subject to statutory collection proceedings against real estate as prescribed by RSA 80.

I. The excavation tax[~~, and the excavation activity tax,~~] collected in the incorporated towns and cities under RSA 72-B:4 shall be paid by the tax collectors into their respective treasuries for the general use of the city or town.

II. The taxes assessed under RSA 72-B:4 in any unincorporated place shall be collected by the county commissioners of the county in which the place is located and paid by them to the county treasurer. The county commissioners shall have the same powers in collecting the taxes as provided under RSA 80 and RSA 81. All taxes collected by the counties under RSA 72-B:4 shall be credited to the unincorporated place from which the excavation tax [~~and the excavation activity tax~~] was collected and shall be used against the unincorporated place's share for the county tax for the ensuing year.

103:9 Local Regulation Excavation; Excavation Area; Definition. Amend RSA 155-E:1, VI to read as follows:

VI. "Excavation area" means the surface area within an excavation site where excavation has occurred or is eligible to occur under the provisions of this chapter.

I. If an owner does not own land in the town where such owner intends to excavate and has filed an intent to excavate form with respect to any parcel of land, the assessing officials shall, within 30 days of the receipt of that filing, notify the owner in writing of the amount and conditions of any bond or other security deemed necessary to secure the payment of the excavation tax to be due from the excavation described in the notice of intent to excavate. The owner shall provide the bond within 30 days of notice or be guilty of a misdemeanor. No owner who owns land in the town where the owner intends to excavate shall be required to post a bond or other security as a condition for filing an intent to excavate or receiving a permit to excavate, unless the owner is delinquent on town timber taxes[~~, excavation activity taxes,~~] or property taxes.

I. There is hereby established a committee to study all issues affecting the taxation of earth as defined in RSA 155-E:1, I; the taxable value of such materials before and after excavation; and methods of taxation.

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

III. The committee also shall solicit input from the department of revenue administration and from the public, as needed.

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

V. The members of the study committee shall elect a chairperson from 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.

VI. The committee shall report its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the senate president, the house clerk, the senate clerk, the governor, and the state library on or before November 1, 2002.