HB 1559:
"AN ACT relative to property taxes paid by education facilities leasing property."

HB 1559-FN - AS INTRODUCED

2016 SESSION

16-2061

09/03

HOUSE BILL 1559-FN

AN ACT relative to property taxes paid by education facilities leasing property.

SPONSORS: Rep. Horrigan, Straf. 6

COMMITTEE: Municipal and County Government

-----------------------------------------------------------------

ANALYSIS

This bill expands the optional property tax exemption for certain property leased to a chartered public school facility to certain other education facilities.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

16-2061

09/03

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Sixteen

AN ACT relative to property taxes paid by education facilities leasing property.

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

1  Taxpayer Inventory Blank; Reference Change.  Amend RSA 74:4, VIII to read as follows:

VIII.  The blank shall require owners of property rented or leased to a qualifying [chartered public school] education facility under RSA 79-H to indicate whether any changes in use of the qualifying [chartered public school] education facility have been made.

2  Appraisal; Reference Change.  Amend RSA 75:1 to read as follows:

75:1  How Appraised.  The selectmen shall appraise open space land pursuant to RSA 79-A:5, open space land with conservation restrictions pursuant to RSA 79-B:3, land with discretionary easements pursuant to RSA 79-C:7, residences on commercial or industrial zoned land pursuant to RSA 75:11, earth and excavations pursuant to RSA 72-B, land classified as land under qualifying farm structures pursuant to RSA 79-F, buildings and land appraised under RSA 79-G as qualifying historic buildings, qualifying [chartered public school] education facility property appraised under RSA 79-H, residential rental property subject to a housing covenant under the low-income housing tax credit program pursuant to RSA 75:1-a, renewable generation facility property subject to a voluntary payment in lieu of taxes agreement under RSA 72:74 as determined under said agreement, and all other taxable property at its market value.  Market value means the property's full and true value as the same would be appraised in payment of a just debt due from a solvent debtor.  The selectmen shall receive and consider all evidence that may be submitted to them relative to the value of property, the value of which cannot be determined by personal examination.

3  Declaration of Public Interest.  Amend RSA 79-H:1 to read as follows:

79-H:1  Declaration of Public Interest.  The general court hereby finds it to be in the public interest to authorize municipalities to allow a [chartered public school] qualifying education facility to be able to rent or lease its building or facilities from a property owner which is not exempt from property taxes, and not have the property taxes attributable to the [chartered public school facilities] qualifying education facility be taxed to the owner at the full market value of the facilities.

4  Definitions.  Amend RSA 79-H:3, IV to read as follows:

IV.  "Qualifying [chartered public school] education facility'' means the building, or portion thereof, and the land appurtenant thereto, which, pursuant to a rental or lease agreement, [is used exclusively as a chartered public school, established and operating under RSA 194-B, and which] is rented or leased from an owner who is not exempt from property taxation under RSA 72 and which is used exclusively:

(a)  As a chartered public school, established and operated under RSA 194-B.

(b)  By the university system of New Hampshire for educational or administrative purposes.

(c)  By the community college system of New Hampshire for educational or administrative purposes.

(d)  By a kindergarten to grade 12 public school for educational or administrative purposes.

(e)  By a school district or school administrative unit.

(f)  By the department of education.

5  Appeals to Board of Tax and Land Appeals.  Amend RSA 79-H:5, I to read as follows:

I.  If the assessing officials deny in whole or in part any application for assessment of certain property as a qualifying [chartered public school] education facility, the applicant, having complied with the requirements of RSA 79-H:4, II may, on or before 6 months after any such action by the assessing officials, in writing and upon a payment of a $65 filing fee, apply to such board for a review of the action of the assessing officials.

6  Appeal to Superior Court.  Amend RSA 79-H:6 to read as follows:

79-H:6  Appeal to Superior Court.  If the assessing officials deny in whole or in part any application for assessment of the property or portion thereof as a qualifying [chartered public school] education facility, the applicant, having complied with the requirements of RSA 79-H:4, II may, within 6 months after notice of denial, apply by petition to the superior court of the county, which shall make such order thereon as justice requires.  Any appeal to the superior court under this section shall be in lieu of an appeal to the board of tax and land appeals pursuant to RSA 79-H:5.

7  Effective Date.  This act shall take effect 60 days after its passage.

LBAO

16-2061

11/25/15

HB 1559-FN- FISCAL NOTE

AN ACT relative to property taxes paid by education facilities leasing property.

FISCAL IMPACT:

The Department of Revenue Administration, New Hampshire Municipal Association, Judicial Branch, and Board of Tax and Land Appeals state this bill, as introduced, may increase state and local expenditures and state revenue by an indeterminable amount in FY 2016 and each year thereafter.  There will be no fiscal impact to county and local revenue or county expenditures.

METHODOLOGY:

The Department of Revenue Administration and New Hampshire Municipal Association state this bill amends RSA 79-H to expand existing provisions, which allow municipalities to elect to assess property leased to a chartered public school at no more than 10 percent of its market value, to property leased to other types of qualifying education facilities.  Other types of qualifying facilities include the University System of New Hampshire, the Community College System of New Hampshire, a public school, a school district or administrative unit, or the Department of Education.  If a municipality makes the election to assess qualifying education facilities in accordance with the proposed bill, the change to any local assessments would shift the burden of the property tax among local taxpayers without affecting the total amount of revenue received from the tax. The Department of Revenue Administration and New Hampshire Municipal Association are unable to estimate the number of municipalities that will elect to adopt RSA 79-H or how many properties will qualify and apply for the beneficial assessment. The Department of Revenue Administration states local expenditures may increase to the extent that more property owners qualify and apply for RSA 79-H assessment provisions, requiring additional municipal resources to process, evaluate, and approve the requests.   

The Judicial Branch states the proposed bill allows appeals to be brought forward by qualifying educational facilities as included in this bill.  To the extent appeals are brought forward, Judicial Branch expenditures could be impacted.  The table below provides the potential costs associated with appeals:

The Board of Tax and Land Appeals states that to the extent appeals are filed with the Board,  state revenue and expenditures will increase.  The filing fee for an appeal is $65.  The number of appeals that may be brought forward and the associated costs to process them are unknown.