HB 0589

This bill establishes a solid waste reduction tax of 5 percent on purchases of newsprint paper stock. The tax shall be paid by the purchaser who purchases the newsprint paper for a product to be distributed within the state. This bill also establishes a bulk newsprint recycling fund. Moneys collected under the bulk newsprint tax shall be placed in the fund and distributed annually to municipalities that have recycling programs that include materials printed on newsprint quality paper.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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

1 New Chapter; Solid Waste Reduction Taxes. Amend RSA by inserting after chapter 78-C the following new chapter:

I. "Bulk newsprint paper stock" means rolls of paper of the quality used by newspapers, which is intended for use in printed material.

II. "Taxable period" means a quarterly period of 3 months commencing on January 1, April 1, July 1, and October 1.

I. For the purpose of reducing the volume of solid waste generated by printed material on newsprint quality paper there is hereby established a bulk newsprint tax. The tax imposed by this section is in addition to any other fees or taxes imposed by law. The commissioner of the department of revenue administration shall administer this tax.

II. Effective January 1, 2004, a disposal tax of 5 percent shall be levied on each roll of bulk newsprint purchased for use in a product which is distributed in New Hampshire.

III. The purchaser making the first purchase of the newsprint for use in a product which is distributed within the state shall be liable for and shall pay the bulk newsprint tax to the department of revenue administration. The taxpayer shall be subject to the penalty provisions of RSA 21-J:31 and 33. The commissioner of the department of revenue administration shall collect and enforce, in accordance with rules adopted under RSA 541-A, the payment of taxes required under this chapter and any penalty taxes assessed under RSA 21-J:31 and 33. The commissioner of the department of revenue administration is also authorized to use, as appropriate, the procedures of RSA 80 for such collection and enforcement.

I. Every person engaged in printing who makes the first purchase of bulk newsprint for use in a product distributed within the state during a taxable period shall, on or before the fifteenth day of the first month following the expiration of the taxable period, make a return to the commissioner of the department of revenue administration under such regulations and in such form or manner as the commissioner may prescribe. Returns shall contain full data as required by the commissioner for correct computation of the tax hereunder. All returns shall be signed by the taxpayer or by his authorized representative, subject to the pains and penalties of perjury.

II. Any person who fails to file any return at the time prescribed in this section shall pay at the time the return or declaration is filed, in addition to any tax liability and without assessment or demand, a late filing fee of $100 for each day or fraction thereof which has elapsed between the prescribed filing date and the date of actual filing.

I. Any amount due on the return required by RSA 78-D:3 shall be due and payable at the time the return is filed.

II. Any person engaged in printing who makes the first purchase of bulk newsprint for use in a product distributed within the state who fails to make payment when due shall, in addition, pay a late payment charge equal to 10 percent of the defaulted payment plus interest computed at the rate of one percent per month or fraction thereof from the prescribed payment date to the date payment is actually made. Such late payment charge and interest shall be in addition to any late filing fee which may be due under the provisions of RSA 78-D:3, II.

78-D:5 Taxpayer Records. Every person engaged in printing who makes the first purchase of bulk newsprint for use in a product distributed within the state shall:

I. Keep such records as may be necessary to determine the amount of its tax liability under this chapter.

II. Preserve such records for the period of 3 years or until any litigation or prosecution under this chapter is finally determined.

III. Make such records available for inspection by the commissioner or his authorized agents, upon demand, at reasonable times during regular business hours.

78-D:6 Form of Notice. Any notice required by this chapter to be given by the commissioner of the department of revenue administration to a taxpayer shall be by certified mail and in the case of hearings, shall be given at least 10 days before the date thereof.

I. There is established a nonlapsing newsprint recycling fund to be used for the purposes enumerated in paragraph II and to be administered by the commissioner of the department of environmental services. The state treasurer shall deposit receipts from the bulk newsprint tax into the fund. All interest from the fund shall also be credited to the fund.

II. Costs for administering this chapter shall be paid from the fund in an amount not to exceed 3 percent of the tax revenues generated by the bulk newsprint tax. The remaining balance shall be distributed on December 15 of each year to towns, as defined in RSA 21:5, which have recycling programs that include materials printed on newsprint quality paper. The funds shall be distributed on a per ton basis based on the number of tons of paper recycled during the preceding calendar year. Such moneys shall only be used for solid waste management purposes.

78-D:8 Report. The commissioner of the department of environmental services shall prepare an annual accounting report for the general court regarding funds received and disbursed from the bulk newsprint recycling fund established in RSA 78-D:7.

2 New Subparagraph; Fund Created. Amend RSA 6:12, I by inserting after subparagraph lllllllll the following new subparagraph:

(mmmmmmmmm) Moneys deposited in the bulk newsprint recycling fund established in RSA 78-D:7.

The Departments of Revenue Administration and Environmental Services indicate this bill will increase state restricted revenues and expenditures by an indeterminable amount in FY 2004 and each year thereafter. The New Hampshire Municipal Association indicates this bill will increase local revenues by an indeterminable amount in FY 2004 and each year thereafter. There is no fiscal impact on county and local expenditures or county revenues.

The Department of Revenue Administration (DRA) states that DRA does not have the information necessary to project the revenue increase from a 5% tax on newsprint. The Department also states that the cost to administer this tax will be significant, but cannot be estimated at this time.

The Department of Environmental Services (DES) estimates that the increase from a 5% tax on newsprint will be approximately $600,000 in FY 2004 and $1.2 million in FY 2005 and each year thereafter. The Department determined this by applying the 5% tax on 44,000 tons of newsprint costing $560 per ton, per year. Since the effective date of this bill is January 1, 2004, the Department estimated FY 2004 collections at half the total expected annual amount. The Department did not estimate the cost to administer the tax, but estimated the increase in expenditures that DES will incur. DES related expenditures would include administering the new fund, distributing grants to towns, and reporting the activity of the fund on an annual basis. The Department estimates that these responsibilities can be accomplished by a part-time Program Specialist II (labor grade 21) working the equivalent of 40 days per year. Using these assumptions, the Department estimates these administrative costs to be $4,376 in FY 2004 and $5,752 in FY 2005 and each year thereafter.

The New Hampshire Municipal Association (NHMA) states that local revenues will increase by an indeterminable amount to qualifying municipalities from the money generated by the newsprint tax. The Association cannot estimate how much money will be generated by the tax, how many communities will be eligible to receive funds, or the size of grant each community will receive.