HB459: (New Title) relative to the taxation of manufactured housing.

CHAPTER 10

HB 459 – FINAL VERSION

07Jan2004… 2471h

2004 SESSION

03-0714

01/09

HOUSE BILL 459

AN ACT relative to the taxation of manufactured housing.

SPONSORS: Rep. Fraser, Merr 37; Rep. Langley, Rock 88

COMMITTEE: Commerce

AMENDED ANALYSIS

This bill provides that manufactured housing shall be taxed and treated as real estate, and eliminates the separate manufactured housing tax lien system.

The bill makes a change to the definition of security interest in the uniform commercial code.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07Jan2004… 2471h

03-0714

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Four

AN ACT relative to the taxation of manufactured housing.

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

10:1 Property Tax; Manufactured Housing. Amend RSA 72:7-a to read as follows:

72:7-a Manufactured Housing.

I. Manufactured housing suitable for use for domestic, commercial or industrial purposes is taxable as real estate in the town in which it is located on April 1 in any year if it was brought into the state on or before April 1 and remains here after June 15 in any year; except that manufactured housing as determined by the commissioner of revenue administration, registered in this state for touring or pleasure and not remaining in any one town, city or unincorporated place for more than 45 days, except for storage only, shall be exempt from taxation. This paragraph shall not apply to manufactured housing held for sale or storage by an agent or dealer.

I-a. Manufactured housing suitable for use for domestic, commercial or industrial purposes is taxable as real estate in the town, city or unincorporated place to which it is brought and located after April 1 and before the following January 1, provided that said manufactured housing remains in said town, city or unincorporated place for more than 10 weeks, except for storage only, and further provided a tax has not been assessed on it elsewhere in the state for that year. The tax shall be for the pro rata part of the tax year remaining when said manufactured housing became located in the town, city or unincorporated place. The selectmen or assessors may so require and it shall be an obligation of the owner to file with the selectmen or assessors a true and correct inventory of the property subject to taxation under this paragraph within 15 days of the location of the manufactured housing in such form as the commissioner of revenue administration may prescribe.

II. There shall be a lien for uncollected taxes upon any manufactured housing suitable for use for domestic, commercial or industrial purposes that has been taxed pursuant to paragraphs I and I-a. Said lien shall take precedence over all other liens and encumbrances upon said manufactured housing and shall continue in force until 1- years from the assessment of the tax. [The tax collector shall file with the town or city clerk, and with the register of deeds for the county in which the manufactured housing is then located, a copy of a document stating the existence of any such lien, the amount of the uncollected taxes secured by the lien, the name and address of the person liable for the tax as of the date of its assessment, and a description of the manufactured housing upon which the tax has been assessed. The town or city clerk shall keep a file of such documents, which shall be open to public inspection. Upon payment, release, or satisfaction of the lien, the tax collector shall file a notice thereof with the town or city clerk and with the register of deeds. There shall be no fees chargeable for any such filings with the town or city clerk.] Such taxes shall be subject to the collection procedures set forth in RSA 80 for real estate taxes.

10:2 New Section; Proceedings Against Real Estate; Manufactured Housing; Mortgage. Amend RSA 80 by inserting after section 18 the following new section:

80:18-a Definition; Mortgage; Manufactured Housing. In this chapter, “mortgage” shall include a security interest in manufactured housing created and perfected as authorized by RSA 477:44, IV. A mortgagee shall include a holder of such a security interest.

10:3 Personal Property Lien; Manufactured Housing Removed. Amend RSA 454-C:3, II to read as follows:

II. Except as otherwise provided in RSA 454-C:7, and only as to federal[,] and state[, and manufactured housing ]tax liens, whenever any such lien, or a full release of any such lien, is filed with a city or town clerk, the clerk shall within 2 business days transmit to the secretary of state, by mail or other medium prescribed or authorized by the secretary of state, a copy of, or an electronic record of all information contained in, the notice of filing of lien or notice of full release of lien submitted by the person or agency filing the lien or release pursuant to RSA 454-C:2. The term “business day” as used in the preceding sentence shall mean a day on which the clerk’s office is open for business. Only the notice itself or electronic record thereof shall be so transmitted, not the other lien documentation filed with the notice. The secretary of state within 3 business days of such receipt shall enter an image of the notice or the information contained therein in the index, and shall periodically transmit to each such clerk an acknowledgment of receipt of such notices or electronic records. Pursuant to the statutes providing for the filing of each type of lien listed in RSA 454-C:1, I, no such liens other than federal[,] and state[, and manufactured housing] tax liens will be filed with city or town clerks subsequent to the effective date of this chapter.

10:4 Personal Property Lien Index; Transition Period; Manufactured Housing Removed. Amend RSA 454-C:7, IV to read as follows:

IV. Notwithstanding the provisions of RSA 454-C:3, whenever a full release of any pre-effective-date federal[,] or state[, or manufactured housing] tax lien is filed with a town or city clerk, and (in the case of federal tax liens) a notice of filing of such lien or electronic record thereof has not previously been transmitted to the secretary of state pursuant to paragraph II, such clerk shall remove the lien being released from the file, and shall not forward the notice of full release to the secretary of state; and whenever a full release of any pre-effective-date lien of any type is filed with the secretary of state, and information regarding such lien has not previously been entered in the index pursuant to paragraph III, the secretary of state shall remove the lien being released from the file, and shall not enter an image of the notice of full release, or the information contained therein, in the index.

10:5 Secretary of State; Removal of Manufactured Tax Lien Index. The secretary of state shall remove from the consolidated lien index maintained pursuant to RSA 454-C:1 all information pertaining to manufactured housing tax liens filed and maintained prior to the repeal by this act of RSA 454-C:1, I(j). Such removal shall not be deemed to invalidate any such lien.

10:6 Uniform Commercial Code; General Definitions; Security Interest. Amend RSA 382-A:1-201(37) to read as follows:

(37) “Security interest” means an interest in personal property or fixtures which secures payment or performance of an obligation. The term also includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Article 9. The special property interest of a buyer of goods on identification of those goods to a contract for sale under Section 2-401 is not a “security interest”, but a buyer may also acquire a “security interest” by complying with Article 9. Except as otherwise provided in Section 2-505, the right of a seller or lessor of goods under Article 2 or 2A to retain or acquire possession of the goods is not a “security interest”, but a seller or lessor may also acquire a “security interest” by complying with Article 9. The retention or reservation of title by a seller of goods notwithstanding shipment or delivery to the buyer (Section 2-401) is limited in effect to a reservation of a “security interest”. Whether a transaction creates a lease or security interest is determined by the facts of each case; however, a transaction creates a security interest if the consideration the lessee is to pay the lessor for the right to possession and use of the goods is an obligation for the term of the lease not subject to termination by the lessee, and:

(a) the original term of the lease is equal to or greater than the remaining economic life of the goods,

(b) the lessee is bound to renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods,

(c) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement, or

(d) the lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement.

A transaction does not create a security interest merely because it provides that

(a) the present value of the consideration the lessee is obligated to pay the lessor for the right to possession and use of the goods is substantially equal to or is greater than the fair market value of the goods at the time the lease is entered into,

(b) the lessee assumes risk of loss of the goods, or agrees to pay taxes, insurance, filing, recording, or registration fees, or service or maintenance costs with respect to the goods,

(c) the lessee has an option to renew the lease or to become the owner of the goods,

(d) the lessee has an option to renew the lease for a fixed rent that is equal to or greater than the reasonably predictable fair market rent for the use of the goods for the term of the renewal at the time the option is to be performed, or

(e) the lessee has an option to become the owner of the goods for a fixed price that is equal to or greater than the reasonably predictable fair market value of the goods at the time the option is to be performed.

For purposes of this subsection (37):

(x) Additional consideration is not nominal if (i) when the option to renew the lease is granted to the lessee the rent is stated to be the fair market rent for the use of the goods for the term of the renewal determined at the time the option is to be performed, or (ii) when the option to become the owner of the goods is granted to the lessee the price is stated to be the fair market value of the goods determined at the time the option is to be performed. Additional consideration is nominal if it is less than the lessee’s reasonably predictable cost of performing under the lease agreement if the option is not exercised;

(y) “Reasonably predictable” and “remaining economic life of the goods” are to be determined with reference to the facts and circumstances at the time the transaction is entered into; and

(z) “Present value” means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. The discount is determined by the interest rate specified by the parties if the rate is not manifestly unreasonable at the time the transaction is entered into; otherwise, the discount is determined by a commercially reasonable rate that takes into account the facts and circumstances of each case at the time the transaction was entered into.

A rent-to-own agreement, as defined in RSA 358-P:2, V, shall not create or be construed as a “security interest”.

10:7 Repeal. RSA 454-C:1, I(j), relative to the index of manufactured housing tax liens, is repealed.

10:8 Effective Date. This act shall take effect upon its passage.

(Approved: April 5, 2004)

(Effective Date: April 5, 2004)