HB1356: assessing a fee on water withdrawn for commercial bottling purposes from water supply sources in the state.

HB 1356-FN-A-LOCAL - AS INTRODUCED

2003 SESSION

03-2006

09/01

HOUSE BILL 1356-FN-A-LOCAL

AN ACT assessing a fee on water withdrawn for commercial bottling purposes from water supply sources in the state.

SPONSORS: Rep. M. Carter, Hills 44; Rep. Ross, Hills 44

COMMITTEE: Ways and Means

ANALYSIS

This bill establishes a fee of $.05 per gallon of water withdrawn from a water supply source in New Hampshire for the purpose of sale as bottled water. Under this bill, any person who withdraws less or the same amount of water for commercial bottling purposes in each 12-month period following the effective date of this bill than such person withdrew in the 12-month period prior to the effective date of this bill shall not be subject to the fee. This bill also requires persons who withdraw water for the purpose of commercial bottling to register with the department of environmental services.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-2006

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

AN ACT assessing a fee on water withdrawn for commercial bottling purposes from water supply sources in the state.

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

1 New Chapter Water Withdrawal Fee. Amend RSA by inserting after chapter 486-A the following new chapter:

CHAPTER 486-B

WATER WITHDRAWAL FEE

486-B:1 Water Withdrawal Fee.

I. Any person who withdraws water for the purpose of commercial bottling shall register with the department. Any person licensed by the department of health and human services pursuant to RSA 143:11 shall be considered registered with the department of environmental services.

II. Except as provided in paragraph III, a fee of $.05 per gallon of water withdrawn from a water supply source in New Hampshire for the purpose of sale as bottled water, as that term is used in RSA 143, shall be assessed at the time of withdrawal. No person shall bottle or export water from this state prior to paying the fee required by this section. Moneys collected pursuant to this section shall be paid to the state treasurer for deposit in the general fund.

III. This fee shall not be assessed on any person who, for each 12-month period following the effective date of this chapter, withdraws the same or a lesser amount of water for commercial bottling purposes than such person withdrew in the 12-month period prior to the effective date of this chapter.

IV. The fee established by this section shall be collected by agents of the department. For purposes of determining the amount of the fee assessed, each person registered shall, on or before the twentieth day of each calendar month, render a return to the department on forms prescribed and furnished by the department. Such return shall show the total number of gallons withdrawn during the previous calendar month, together with such other information as the department may require for the reasonable administration of this section.

V. Failure to file by the required date shall result in the assessment of a 10 percent penalty to be added to the amount of fees due for that month. Said penalty shall immediately accrue, and thereafter the overdue fees and the penalty shall bear interest at the rate established by the Internal Revenue Service effective on the first business day of the calendar year. The department may waive all or any portion of such penalty and interest for good cause.

VI. Except as otherwise provided in this section, any person who violates any provision of this section shall be guilty of a misdemeanor if a natural person or guilty of a felony if any other person.

2 Effective Date. This act shall take effect July 1, 2004.

LBAO

03-2006

7/10/03

HB 1356-FN-A-LOCAL - FISCAL NOTE

AN ACT assessing a fee on water withdrawn for commercial bottling purposes from water supply sources in the state.

FISCAL IMPACT:

The Department of Environmental Services states this bill will have an indeterminable fiscal impact on state revenue in FY 2005 and each year thereafter. There will be no impact on state, county, and local expenditures or county and local revenue.

METHODOLOGY:

The Department is aware of sixteen facilities that may withdraw water for commercial bottling purposes. Nine of the facilities are registered water users and must report water use on a quarterly basis to the Department. The other seven facilities either use less than 20,000 gallons per day, and therefore, do not have to report water use, or are facilities that may have received permits, but have not initiated operations to date. The Department estimates that no new bottled water facilities would be developed or be permitted in New Hampshire if subject to a $0.05/gallon tax at start-up, based on the following:

· A tax of $0.05/gallon would make the development of a bottled water business in New Hampshire unfeasible because alternative sources of water in neighboring states would represent a lower cost alternative even after incorporating additional transportation costs.

· Since January 2000, no new sources of bottled water have been approved by both the Department and the Department of Health and Human Services.

· Bottled water facilities nationwide are competing with traditional beverage manufacturers who in addition to producing carbonated and artificially flavored beverages are now also producing bottled water using water that is purchased from community water systems, treated, bottled, and sold. These products have recently begun to dominate retail shelf spaces, distribution networks, and sales. It is unlikely that withdrawals at traditional bottled water facilities will increase significantly.

· If the proposed tax is applied to any increase in yearly withdrawal volume for bottled water facilities, it is very unlikely that any of these facilities would elect to exceed the withdrawal volume that would trigger the proposed tax.

LBAO

03-2006

7/10/03

Page 2

This bill will result in a minimal increase in scope of work for the Department's administration of the Water Use and Reporting Program because it is anticipated that few, if any, bottled water facilities will be affected by this bill. The Department estimates the proposed tax will not generate any additional revenue or result in additional agency expenditures.