HB 1466

AN ACT providing for the assignment to the state of the collection of certain state education property taxes deemed uncollectible due to bankruptcy or disaster.

SPONSORS: Rep. P. Bradley, Coos 6; Rep. Gallus, Coos 7; Sen. Below, Dist 5

This bill requires municipalities to assign to the department of revenue administration the collection of state education property taxes for uncollectible taxes due to bankruptcy or disaster. The bill also requires the adjustment of adequate education grants to reflect the amount of such assigned taxes.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT providing for the assignment to the state of the collection of certain state education property taxes deemed uncollectible due to bankruptcy or disaster.

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

1 New Section; Collection of Taxes; Assignment to the State in Situations of Taxpayer Bankruptcy or Declared Disaster. Amend RSA 76 by inserting after section 15-c the following new section:

76:15-d Assignment to the State in Situations of Taxpayer Bankruptcy or Declared Disaster.

I. A municipality shall assign the collection of any delinquent state education property tax, imposed under RSA 76:3, to the department of revenue administration under the following circumstances:

(a) When a taxpayer, whose property represents 20 percent or more of the municipality's tax base becomes bankrupt subsequent to the assessment date of April 1.

(b) When property, owned by a taxpayer and representing 20 percent or more of the municipality's tax base, is destroyed in a state or federal declared disaster subsequent to the assessment date of April 1.

II. The tax shall be deemed uncollectible on the date that the taxpayer files a petition in bankruptcy or the taxpayer is adjudicated bankrupt under any chapter of the federal bankruptcy laws, or the date on which a state or federal disaster is declared.

III. The department shall obtain a lien upon the real estate under the procedures of RSA 21-J:28-c for the amount of the delinquent state education taxes assigned. This lien shall be separate and apart from and in addition to any other lien created by or provided for in RSA 80 on behalf of the municipality or the county. The amount of any lien obtained by the municipality or the county under RSA 80 for property taxes due, for the tax year for which the assignment is made, shall exclude all amounts attributable to the assignment of delinquent state education tax including applicable penalties and interest. The department's lien shall have priority over all other liens, including, but not limited to, other tax liens established under RSA 80. Notwithstanding the 6-year limitation on the duration of a lien under RSA 21-J:28-c or the issuance of a tax deed under RSA 80:76, the department's lien shall survive until the property is redeemed through payment of the amount of the lien together with interest, at 18 percent per annum upon the whole amount of the recorded lien from the date of execution to the time of payment in full, redemption costs, and cots of identifying and notifying the mortgagees, if any.

IV. The commissioner of the department of revenue administration shall certify to the department of education the amount of the assignment.

V. Upon certification of the assigned amount of delinquent state education property tax, under paragraph IV, the department of education shall adjust the municipality's education grant under RSA 198:41 and make distributions to the municipality's school district or districts as provided in RSA 198:42.

2 New Paragraph; Determination of Adequate Education Grants; Adjustment to Grant Amount in Situations of Taxpayer Bankruptcy or Declared Disaster. Amend RSA 198:41 by inserting after paragraph II the following new paragraph:

III. In the event a municipality assigns the collection of delinquent state education property tax to the state as provided in RSA 76:15-d, the department of education shall increase the municipality's grant under this section by the amount certified by the commissioner of revenue administration under RSA 76:15-d.

AN ACT providing for the assignment to the state of the collection of certain state education property taxes deemed uncollectible due to bankruptcy or disaster.

The Department of Revenue Administration indicates this bill may increase state expenditures and local revenue in FY 2003 and each year thereafter. There will be no fiscal impact on state and county revenue or county and local expenditures.

The Department states the taxpayers that represent 20 percent or more of a town's tax base are unknown as are the likelihood of bankruptcy or disaster therefor, no fiscal impact can be estimated.

The Department states that state expenditures and local revenue will increase when the assignment of delinquent taxes is made and the Department of Education increases the amount of the grant paid to the district to whom the town normally sends statewide property tax receipts.