HB 0668

This bill allows towns and cities to adopt a local addition to the real estate transfer tax which would be appropriated for use by a conservation commission or exclusively for land conservation purposes.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.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 Paragraph; Conservation Commission Appropriations; Transfer Tax Revenues. Amend RSA 36-A:5 by inserting after paragraph III the following new paragraph:

IV. In a municipality that has adopted the provisions of RSA 78-B:1, I(c) as provided in RSA 78-B:1-b, the specified revenues received pursuant to RSA 78-B:8, III shall be placed in the conservation fund.

2 New Subparagraph; Transfer Tax; Local Addition. Amend RSA 78-B:1, I by inserting after subparagraph (b) the following new subparagraph:

(c) For a town or city which has adopted the provisions of this subparagraph pursuant to RSA 78-B:1-b, an additional rate of tax shall be imposed not to exceed $.50 per $100, or fractional part thereof, of the price or consideration for such sale, grant, or transfer.

3 New Section; Procedure for Local Adoption of Additional Rate. Amend RSA 78-B by inserting after section 1-a the following new section:

I. Any town or city may adopt the additional imposition of real estate taxes for conservation purposes provided in RSA 78-B:1, I(c) in the following manner:

(a) In a town, the question shall be placed on the warrant of a special or annual town meeting, by the governing body or by petition pursuant to RSA 39:3, and shall be voted upon by official ballot if that town has adopted the official ballot for the election of officers. A public hearing shall be held at least 15 but not more than 60 days prior to the vote.

(b) In a city or a town with a town council, the legislative body may consider and act upon the question in accordance with its normal procedures for passage of resolutions, ordinances, and other legislation. In the alternative, the legislative body of such city or town may vote to place the question on the official ballot for any regular municipal election.

II. The vote shall specify the provisions of the local addition to the real estate transfer tax which would be appropriated for land conservation purposes, and shall set a rate as authorized in RSA 78-B:1, I(c). The additional rate shall take effect in the tax year beginning April 1 following its adoption and shall apply to all transfers of land in the jurisdiction.

III. A municipality may modify or rescind the additional real estate transfer tax rate in the manner described in paragraph I.

I. This chapter shall be administered by the commissioner of revenue administration. The commissioner may adopt rules, pursuant to RSA 541-A, relative to the administration of this chapter. The commissioner shall recommend the amount of bond for each register of deeds. The cost of such bond shall be paid by the state as an expense of administering this chapter. Each register of deeds, or county if the register of deeds is on a salary basis, shall be paid for his or her services 4 percent of the face value of the stamps or other approved indicia of payment of the tax sold in [~~his~~] the registry. Such payment for services shall be made prior to remitting all taxes collected, and shall be deducted from the remittance made in paragraph II and paragraph III. A sum sufficient to pay each register of deeds for [~~his~~] services pursuant to this section is hereby continually appropriated. The governor is authorized to draw [~~his~~] a warrant for the payment thereof out of any funds in the treasury not otherwise appropriated.

II. Following payment for [his] services in paragraph I, each register of deeds shall remit the taxes [so] collected pursuant to RSA 78-B:1, I(b), minus payment for his or her services, to the department monthly or more often. All funds received from the sale of stamps and other approved indicia shall be credited to the department for administering this chapter and shall not lapse, but whenever the amount available exceeds $12,000, the excess shall be paid over to the state treasurer.

III. Following payment for his or her services in paragraph I, each register of deeds shall remit the taxes collected pursuant to a local additional tax under RSA 78-B:1, I(c), minus payment for his or her services, to the tax collector of the town or city monthly or more often. All funds received by a municipality shall be credited to the conservation fund pursuant to RSA 36-A:5, IV, or otherwise shall be used by the town or city exclusively for the purpose of land conservation.

The Department of Revenue Administration, Association of Counties and the New Hampshire Municipal Association state this bill may increase county and local revenue and county expenditures by an indeterminable amount in FY 2004 and each year thereafter. There will be no fiscal impact on state and local expenditures or state revenues.

Department of Revenue Administration (DRA) states that this bill is permissive, giving authority to municipalities to adopt a local tax rate addition to the real estate transfer tax (RETT) dedicated to conservation purposes. The increase in county and local revenue is indeterminable because the increase is dependent on whether any of the 259 municipalities adopt the RETT increase authorized by this bill. The DRA indicates that if all of the municipalities approved the maximum allowable $.50 per $100 of the value of sales, based on FY 2002 RETT collected, the municipalities would receive $64.9 million and the counties would receive their 4% commission of $2.7 million. The DRA also states that expenditures will increase for the purchase of tax stamp machines/meters by either counties or municipalities. RETT forms will need to be changed to accommodate additional local tax rates. These form changes can be done by the DRA at no additional cost.

The New Hampshire Municipal Association and Association of Counties also state that the tax increases in this bill are permissive and indeterminable. For those communities that adopt the provisions of this bill, it would mean county and local tax revenue will increase, as well as additional revenue for the local conservation fund. It is impossible, however, to determine how many communities would adopt such a provision or in what amount, or the number of parcels it would affect each year.

The Association of Counties indicates that county expenditures may increase for additional administration costs to calculate the varying amount to be sent back to each municipality on a monthly basis.