HB426: establishing the New Hampshire homestead plan.

HB 426-FN-A-LOCAL – AS INTRODUCED

2009 SESSION

09-0156

04/09

HOUSE BILL 426-FN-A-LOCAL

AN ACT establishing the New Hampshire homestead plan.

SPONSORS: Rep. A. Peterson, Hills 3; Rep. DeJoie, Merr 11; Rep. Hunt, Ches 7; Rep. K. Roberts, Ches 3

COMMITTEE: Ways and Means

ANALYSIS

This bill:

I. Imposes an education property tax at $5.50 per $1,000 of taxable value.

II. Establishes a homestead exemption from the education property tax for the first $150,000 of assessed value of homestead property.

III. Determines the per pupil cost of the opportunity for an adequate education which includes differentiated aid distributed to schools based on the number of pupils receiving special education services, or eligible for a free or reduced-price lunch, or who are English language learners.

IV. Requires schools receiving differentiated aid to use it to implement enhanced programs known to improve pupil achievement.

V. Provides fiscal capacity disparity aid, in addition to aid for the cost of the opportunity for an adequate education, based on a municipality’s equalized valuation, including utilities, per pupil and median family income.

VI. Provides fiscal capacity disparity aid to state-approved charter schools.

VII. Provides sustainability grants to municipalities.

VIII. Provides targeted grants to municipalities based on demonstrated need.

IX. Repeals the provisions governing excess education property tax payments.

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

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

09-0156

04/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Nine

AN ACT establishing the New Hampshire homestead plan.

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

1 Statement of Purpose.

I. The general court finds that the cost of the opportunity for an adequate education for public school students, as established in this act, is based upon the definition of the opportunity for an adequate education enacted in the 2007 Laws of New Hampshire, chapter 270. The methodologies for costing, determination of resources, and elements of cost included in this act are intended to and do fulfill the state’s duty under the Encouragement of Literature clause of the New Hampshire constitution to deliver the opportunity for an adequate education.

II. The individual components of the cost were selected on the basis of their effectiveness in delivering educational opportunity and after extensive review, debate, and discussion by the joint legislative oversight committee on costing an adequate education and the general court. The legislative process consisted of obtaining information from professional educators, government officials, education policy and finance experts, and the public on the establishment of the cost of an adequate education.

III. The joint legislative oversight committee on costing issued detailed findings and recommendations on the composition of the cost of an adequate education and how the funds for an adequate education should be allocated and accounted for in order to ensure that the educational needs of all public school students are met. These findings and recommendations were submitted to the general court and are an integral basis of the costing determinations reflected in this act.

IV. The cost of the opportunity for an adequate education consists of several elements. All such elements must be provided in order to ensure the delivery of the state’s constitutional duty. The universal cost represents the per pupil resources necessary to provide an adequate education where no additional aid is necessary to cover the increased costs of providing that opportunity to students who have special education needs, who have limited English language proficiency, or who are in schools with significant concentrations of economically disadvantaged students. The universal cost represents the costs attributable only to the subset of education that is included in the definition in RSA 193-E:2-a.

V. The general court further finds that additional aid, referred to as differentiated aid, is also required to fulfill the state’s constitutional duty to provide the opportunity for an adequate education for certain students. This act allocates such differentiated aid to special education students, English language learners, and students in schools with significant concentrations of economically disadvantaged students, the latter category based upon eligibility for federally-provided free and reduced-price lunch programs and the concentration of such eligible students in a school.

VI. In determining the need for differentiated aid in addition to providing the universal cost for an adequate education, the general court recognizes that the resources needed to provide the opportunity for an adequate education are not the same for all students or at all schools.

VII. The general court recognizes that certain communities lack the relative wealth and fiscal capacity to fund local education to the extent desired by those communities. For this reason, the general court finds it appropriate to provide money above the cost of the opportunity for an adequate education based upon the fiscal capacity and relative need of certain communities.

VIII. The general court also finds that to preserve the advantages inherent in our system of funding public education it is desirable for our property tax system to evolve to henceforth allow a reasonable adjustment in statewide education property taxes levied on owner occupied homestead property, in the form of a homestead exemption, to the statewide education property tax.

IX. This act is not intended to stand in isolation from the other statutes and rules relating to educating New Hampshire students as required by state and federal law.

2 Application of Receipts; Excess Education Tax Payments. Amend RSA 6:12, I(b)(65) to read as follows:

(65) Money received under RSA 77-A, RSA 77-E, RSA 78, RSA 78-A, RSA 78-B, RSA 83-F, [RSA 198:46,] and from the sweepstakes fund, which shall be credited to the education trust fund under RSA 198:39.

3 Education Property Tax. RSA 76:3 is repealed and reenacted to read as follows:

76:3 Education Property Tax.

I. An annual education property tax at the uniform rate of $5.50 on each $1,000 of the value of taxable property is hereby imposed on all persons and property taxable pursuant to RSA 72, RSA 73, and subject to the exemption under RSA 76-A, except property subject to tax under RSA 82 and RSA 83-F.

II. Taxes due under this section shall be paid to the department of revenue administration. A municipality’s tax collector, or other authorized municipal official, shall act as an agent of the department of revenue administration for the purpose of collecting and forwarding taxes due under this section. The commissioner of the department of revenue administration shall collect all taxes due and certify such amount to the state treasurer for deposit into the education trust fund established in RSA 198:39.

4 Commissioner’s Warrant. RSA 76:8, II is repealed and reenacted to read as follows:

II. The commissioner shall issue a warrant under the commissioner’s hand and official seal for the amount computed in paragraph I to the selectmen or assessors of each municipality by December 15 directing them to assess such sum and pay it to the department of revenue administration pursuant to RSA 76:3, II. Such sums shall be assessed at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.

5 New Chapter; Homestead Exemption. Amend RSA by inserting after chapter 76 the following new chapter:

CHAPTER 76-A

EDUCATION PROPERTY TAX HOMESTEAD EXEMPTION

76-A:1 Definition. In this chapter, “homestead” or “homestead property” means the dwelling owned by a claimant, or in the case of a multi-unit dwelling, the portion of the dwelling, which is used as the claimant’s principal place of residence and the claimant’s domicile for purposes of RSA 654:1. “Homestead” shall not include land and buildings taxed under RSA 79-A, 79-B, or 79-C or land and buildings or the portion of land and buildings rented or used for commercial or industrial purposes. In this section, dwelling owner includes one or more joint tenants or tenants in common and a trustee of a grantor trust pursuant to sections 671-679 of the United States Internal Revenue Code.

76-A:2 Homestead Exemption.

I. The first $150,000 of equalized assessed value of the homestead of a qualifying taxpayer shall be exempt from the education property tax due under RSA 76:3.

II. A qualifying taxpayer is an individual who:

(a) On April 1 owns a homestead subject to the education property tax; and

(b) Files a claim certifying, under the pains and penalties of perjury, that such taxpayer qualifies under subparagraph (a) with the selectmen or assessing official on or before April 15 of the current tax year. Claims filed after April 15 each year shall not be considered timely for the current year, but shall be considered filed for the following tax year. The commissioner of the department of revenue administration may, for good cause, accept late filings of homestead exemption claims. The selectmen or local assessing official may waive the filing of a claim and list the homestead exemption for a taxpayer who has been granted a local property tax exemption under RSA 72:39-a and who is reasonably believed to currently qualify for that exemption.

III. Upon receipt of a claim for a homestead exemption under this section, the selectmen or assessing officials shall forward the claim to the commissioner of the department of revenue administration who shall review the claim and grant or deny the claim in writing to the applicant by May 15 following receipt of the claim. Failure of the commissioner to respond shall constitute acceptance of the claim. Accepted claims shall continue from year to year without necessity for refiling unless there is a change in ownership or use of the property. Accepted claims may at any time be revoked for any tax year or portion thereof following the occurrence of one or more of the following events:

(a) The claimant fails to file a return as required under this section within one year following the close of the tax year for which the exemption is claimed; or

(b) The claimant is no longer qualified under the definition of homestead in RSA 76-A:1 due to a change in ownership or use.

IV. Claims shall be made on forms prescribed by the commissioner of the department of revenue administration and provided to each municipality.

V. The following shall apply to the determination of the amount of property value exempted relative to a homestead which is part of a single tax parcel upon which is located either other dwelling units not owned or occupied by the taxpayer or significant nonresidential use of the property:

(a) If the tax parcel includes property used for business or other nonresidential use, the exempt homestead amount shall include, in addition to the actual homestead, the lesser of 1,000 square feet of floor area of such nonresidential use property or $25,000 of equalized value, except that family owned and operated farms which are not owned by a business entity or held in the name of a non-natural person shall be eligible for the full homestead exemption on all property not assessed under RSA 79-A, RSA 79-B, or RSA 79-C.

(b) If the tax parcel includes other dwellings or dwelling units, the value of the homestead exemption relative to the claimed homestead shall be determined by the assessing official as follows:

(1) Divide the value of the tax parcel by the number of dwelling units; or

(2) If the square footage of each dwelling unit is known, multiply the value of the tax parcel by a fraction consisting of the square footage of the claimed homestead divided by the total square footage of all dwelling units in the parcel.

(c) In lieu of the method of determining the amount of homestead exemption in subparagraph (a) or (b), a taxpayer may present competent evidence of a greater proportion of exempt value to the assessing officials. In such instance the taxpayer bears the burden of proving the claimed exemption by the preponderance of the evidence.

(d) The commissioner of the department of revenue administration shall adopt rules, pursuant to RSA 541-A, relative to the enforcement of the homestead exemption under this chapter.

VI. Only one homestead exemption per married couple may be claimed in any tax year.

VII. A taxpayer who knowingly files a false or fraudulent homestead exemption claim shall be guilty of a class A misdemeanor.

6 Adequate Education; Definitions. RSA 198:38 is repealed and reenacted to read as follows:

198:38 Definitions.

I. “Average daily membership in attendance” or “ADMA” means the aggregate half-day membership of pupils in kindergarten through grade 12 attending schools operated by a school district divided by the number of half-days of instruction offered. The average daily membership in attendance shall include any pupil who is a resident of New Hampshire educated at public expense.

II. “Child with a disability” shall be as defined in RSA 186-C:2, I.

III. “Commissioner” means the commissioner of the department of education.

IV. “Department” means the department of education.

V. “Determination year” means the fiscal year that was 3 years prior to the fiscal year for which aid is to be determined. Unless otherwise indicated, determination year data shall be used to calculate aid.

VI. “English language learner” means a child who has a predominant language other than English or who is educationally disadvantaged by a limited English proficiency, and who is receiving regularly scheduled English language instruction.

VII. “Pupils eligible for a free or reduced-price meal” means pupils in grade 1 through grade 12 who are eligible for the federal free or reduced-price meal program.

VIII. “School district” means school district as defined in RSA 194:1 and shall include cooperative school districts as defined in RSA 195:1, I.

7 Cost of an Opportunity for an Adequate Education. RSA 198:40-a is repealed and reenacted to read as follows:

198:40-a Cost of an Opportunity for an Adequate Education.

I. Beginning July 1, 2009, and for every biennium thereafter, the annual cost of providing the opportunity for an adequate education as defined in RSA 193-E:2-a shall be $3,450 per pupil attending a public school, plus any applicable differentiated aid for which a pupil is eligible. Differentiated aid shall be calculated as follows:

(a) An additional $431 per pupil in kindergarten through grade 12 eligible for the federal free and reduced-price meal program who attends a public school in which less than 12 percent of the pupils reported in the school’s ADMA in the determination year are eligible for the federal free and reduced-price meal program.

(b) An additional $863 per pupil in a public school in which at least 12 percent but less than 24 percent of pupils reported in the school’s ADMA in the determination year, are eligible for the federal free or reduced-price meal program.

(c) An additional $1,725 per pupil in a public school in which at least 24 percent but less than 36 percent of pupils reported in the school’s ADMA in the determination year, are eligible for the federal free or reduced-price meal program.

(d) An additional $2,588 per pupil in a public school in which at least 36 percent but less than 48 percent of the pupils reported in the school’s ADMA in the determination year, are eligible for the federal free or reduced-price meal program.

(e) An additional $3,450 per pupil in a public school in which 48 percent or more of the pupils reported in the school’s ADMA in the determination year, are eligible for the federal free or reduced-price meal program.

II. In addition to the amount in paragraph I, an additional $675 for each pupil reported in the public school’s ADMA in the determination year who is an English language learner and who is receiving English language instruction.

III. In addition to the amounts in paragraphs I and II, an additional $1,856 for each pupil reported in the public school’s ADMA in the determination year who is receiving special education.

IV.(a) The sum total calculated under paragraphs I-III of this section shall be used to determine the cost of an adequate education which shall be used in each year of the biennium.

(b) Prior to or coinciding with the first disbursement of each fiscal year under RSA 198:42, the department shall notify a school district of the total amount of funds that have been allocated for each school within its jurisdiction during the fiscal year based on the sum of the school district’s adequate education grant amount plus the amount available to the school district from the education property tax. In addition, the department shall furnish to each municipality a report showing the municipality’s cost of an adequate education sorted by a pupil’s municipality of residence.

V. The department shall notify school districts of the estimated amounts of grants by the November 15 preceding the fiscal year for which aid is determined. The commissioner shall provide to the general court all data or reports requested by the general court in a form which the general court determines will facilitate the calculations required in this section.

8 Use of Differentiated Aid. RSA 198:40-b is repealed and reenacted to read as follows:

198:40-b Use of Differentiated Aid.

I. A school district which receives differentiated aid under RSA 198:40-a, I(b)-(e) for schools within its jurisdiction, shall separately account for such aid as part of its financial accounting procedures. Differentiated aid shall only be used to provide enhanced programs in schools within its jurisdiction for which such aid has been allocated that are known to improve pupil achievement, including but not limited to: pre-kindergarten programs, full-day kindergarten programs, extended learning time, professional development opportunities for teachers, hiring of additional instructional and non-instructional personnel, programs designed to reduce class size, parental involvement programs, additional technology resources, drop out prevention programs, principal incentive programs, and curriculum enrichment programs. The school district shall determine which programs are most needed and most appropriate for their pupils. The programs provided under this paragraph shall supplement but not supplant existing programs. Such enhanced programs shall be approved by the department, and the department shall annually review and update the list of programs.

II. A school district which receives differentiated aid under RSA 198:40-a, I(b)-(e) shall annually submit a report to the commissioner documenting for each school within its jurisdiction for which such aid has been allocated, the enhanced programs selected for implementation, an explanation of the specific educational needs which the program is intended to address, an explanation of how the program will be implemented in the school, and an estimate of the cost of implementing the program.

III. A municipality which receives differentiated aid under RSA 198:40-a shall direct such aid to its school district for use in the schools for which it was allocated.

9 School Money; Fiscal Capacity Disparity Aid. RSA 198:40-c is repealed and reenacted to read as follows:

198:40-c Fiscal Capacity Disparity Aid.

I. In addition to aid for the cost of the opportunity for an adequate education provided under RSA 198:40-b, each fiscal year the department shall provide fiscal capacity disparity aid to a municipality’s school districts and to chartered public schools approved under RSA 194-B:3-a as follows:

(a) The department of revenue administration shall calculate the equalized valuation per pupil for each municipality in the state and shall sort the results into quartiles based on equalized valuation per pupil and shall divide all quartiles in half.

(b) A municipality with an equalized valuation per pupil in the lower half of the lowest quartile and which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $2,000 multiplied by the municipality’s average daily membership in residence.

(c) A municipality with an equalized valuation per pupil in the upper half of the lowest quartile which has a median family income which is less than the state average median family income shall receive fiscal capacity disparity aid in the amount of $1,250 multiplied by the municipality’s average daily membership in residence shall be distributed pursuant to RSA 198:42.

(d) A chartered public school approved under RSA 194-B:3-a shall receive $2,000 per pupil multiplied by the number of pupils enrolled. The calculation of chartered public school enrollment and aid distribution shall be pursuant to RSA 194-B:11, I(c).

II. Except as otherwise provided in this section, aid shall be distributed to RSA 198:42.

III. In this section:

(a) “Equalized valuation per pupil” means a municipality’s equalized valuation, including properties subject to taxation under RSA 82 and RSA 83-F, as determined by the department of revenue administration, that was the basis for the local tax assessment in the determination year, divided by the school district’s average daily membership in residence, as defined in RSA 189:1-d for the determination year, provided that no kindergarten pupil shall count as more than 1/2 day attendance per calendar day.

(b) “Median family income” means the most recent census data published for New Hampshire counties and municipalities by the United States Census Bureau, United States Department of Commerce, as of October 1 preceding the beginning of the biennium for which aid is to be determined.

10 Adequate Education; Sustainability Grants. RSA 198:40-d is repealed and reenacted to read as follows:

198:40-d Sustainability Grants.

I. A school district in which the estimated state education aid in any fiscal year is less than the adequate education grant received by such school district in the 2008 fiscal year, plus any education property tax revenues raised pursuant to RSA 76:3 and retained by the municipality in the 2008 fiscal year, the commissioner shall disburse a grant to the municipality pursuant to RSA 198:42 in the amount of the difference.

II. Sustainability grants disbursed under this section shall be a charge against the education trust fund established in RSA 198:39.

III. For the purpose of this section, “state education aid” means the sum of the adequate education grant payments received by a school district pursuant to RSA 198:40-a and fiscal capacity disparity aid received by a school district pursuant to RSA 198:40-c.

11 New Sections; Targeted Grants; Consumer Price Index Adjustment. Amend RSA 198 by inserting after section 40-d the following new sections:

198:40-e Targeted Grants. The commissioner shall make targeted grants to municipalities as follows:

I. For the biennium beginning July 1, 2009, and each biennium thereafter, the commissioner shall calculate an education equity index for each municipality that had any resident pupils during the applicable determination year as follows:

(a) Divide one by the sum of:

(1) 0.4 times the statewide average equalized valuation per pupil divided by the equalized valuation per pupil for the municipality;

(2) 0.2 times the statewide median income divided by the municipality’s median income;

(3) 0.095 times the percentage of the municipality’s pupils in grades one through 12 eligible to receive a free or reduced-price meal during the determination year as reported to the department divided by the statewide percentage of pupils in grades one through 12 eligible to receive a free or reduced-price meal during the determination year as reported to the department;

(4) 0.005 times the percentage of the municipality’s pupils in kindergarten through grade 8 identified as English language learners and receiving at least 5 hours per week of special instruction in English during the determination year as reported to the department divided by the statewide percentage of pupils in grades kindergarten through 8 identified as English language learners and receiving at least 5 hours per week of special instruction in English during the determination year;

(5) 0.15 times the statewide average test score on the New England common assessment program divided by the municipality’s average test score administered pursuant to 193-C;

(6) 0.075 times the statewide graduation rate for the determination year as reported by the department divided by the municipality’s graduation rate for the determination year as reported to the department, where each municipality’s graduation rate shall be equal to the graduation rate for the particular high school attended by the municipality’s resident pupils that attend high school; and

(7) 0.075 times the statewide percentage of high school graduates that entered directly into postsecondary education in the determination year as reported by the department divided by the percentage of the municipality’s high school graduates that entered directly into postsecondary education in the determination year as reported to the department, where each municipality’s percentage of high school graduates that entered directly into postsecondary education in the determination year rate shall be equal to the percentage of such high school graduates for the particular high school attended by the municipality’s resident pupils that attend high school.

(b) For the biennium beginning July 1, 2009, and every biennium thereafter, the commissioner shall determine the education equity index for each municipality not later than October 1 in the calendar year preceding the beginning of the biennium for which the education equity index is calculated.

II. In determining the education equity index for any municipality that sends pupils to more than one school or school district, the commissioner shall consider only data from schools or school districts within this state attended by 5 percent or more of the municipality’s resident pupils, and the commissioner shall determine each value necessary to calculate the education equity index for such municipality by weighting the corresponding values for each school or school district to which the municipality sends pupils by the number of resident pupils from the municipality that attend such school or school district. If a municipality sends all of its resident pupils that are relevant to the determination of any value necessary to calculate the education equity index for such municipality to one or more schools not operated by any school district, then the municipality shall be assigned the statewide value for such value.

III. Each fiscal year, the commissioner shall determine the amount of state funds remaining after calculating the estimated amount of funds to be paid to school districts under RSA 198:40-a and RSA 198:40-c, and to municipalities under RSA 198:40-d, and distribute such remaining funds as targeted aid to municipalities, except for municipalities where all school districts therein provide education to all of their pupils by paying tuition to other institutions, as follows:

(a) For each municipality with an education equity index for the applicable fiscal year which is less than 1.2, the commissioner shall determine a number of education equity units equal to the number of resident pupils in the municipality during the applicable determination year multiplied by the excess of 1.2 over the municipality’s education equity index for such biennium. Each other municipality shall be assigned zero education equity units for such biennium.

(b) Each municipality shall receive a targeted grant for such fiscal year equal to the total amount of targeted grants for the fiscal year multiplied by a fraction, the numerator of which is the number of education equity units determined for such municipality for the applicable biennium, and the denominator of which is the total number of education equity units determined for all municipalities for such biennium.

IV. The targeted grant amount for each municipality where all school districts therein provide education to all of their pupils by paying tuition to other institutions shall be the lesser of the following:

(a) The amount calculated in accordance with paragraph III of this section; or

(b) The total amount paid for education expense as determined by the commissioner.

V. Targeted grants disbursed under this section shall be a charge against the education trust fund established in RSA 198:39.

198:40-f Consumer Price Index Adjustment. Beginning July 1, 2011 and every biennium thereafter, the department of education shall adjust the sum of the amounts determined under RSA 198:40-a, based on the average change in the Consumer Price Index for All Urban Consumers, Northeast Region, using the “services less medical care services” special aggregate index, as published by the Bureau of Labor Statistics, United States Department of Labor. The average change shall be calculated using the 3 calendar years ending 18 months before the beginning of the biennium for which the calculation is to be performed.

12 School Money; Determination of Grants. RSA 198:41 is repealed and reenacted to read as follows:

198:41 Determination of Grants.

I. Each fiscal year, the commissioner shall disburse grants in the following order:

(a) First, the adequate education grant amount determined pursuant to RSA 198:40-a, shall be disbursed to the school district.

(b) Second, the sustainability grant determined pursuant to RSA 198:40-d shall be disbursed to the municipality.

(c) Third, the fiscal capacity disparity aid determined pursuant to RSA 198:40-c shall be disbursed to the school district.

(d) Fourth, the targeted grant amount determined pursuant to RSA 198:40-e shall be disbursed to the municipality. If the amount available for targeted grants in any fiscal year is insufficient to fund all targeted grants due under this section, the amount shall be prorated proportionally among all municipalities entitled to a targeted grant.

II. The department of education shall notify school districts and municipalities of the estimated amounts of grants by November 15 of the year preceding the fiscal year for which aid is determined.

13 School Money; Distribution Schedule. RSA 198:42 is repealed and reenacted to read as follows:

198:42 Grant Distribution Schedule; Appropriation.

I. The grants determined in RSA 198:41 shall be distributed from the education trust fund in 4 payments of 20 percent on September 1, 20 percent on November 1, 30 percent on January 1, and 30 percent on April 1 of each school year; provided that for a dependent school district, the grant determined in RSA 198:41 shall be distributed to the municipality, which shall appropriate and transfer the grant funds to its dependent school department.

II. Each fiscal year, the amount necessary to fund the grants under RSA 198:41 is hereby appropriated to the department from the education trust fund created under RSA 198:39. The governor is authorized to draw a warrant from the education trust fund to satisfy the state’s obligation under this section. Such warrant for payment shall be issued regardless of the balance of funds available in the education trust fund. If the balance in the education trust fund, after the issuance of any such warrant, is less than zero, the commissioner of the department of administrative services shall inform the fiscal committee and the governor and council of such balance. This reporting shall not in any way prohibit or delay the distribution of grants.

III. The department of education shall certify the amount of each grant to the state treasurer and direct the payment thereof pursuant to RSA 198:41. When a payment of a grant is made to a school district, the municipality on whose behalf the payment is made shall receive notification from the state treasurer of the amount of the payment made to its school district or districts.

IV. Each fiscal year, the amount necessary to fund chartered public school tuition payments under RSA 194-B:11, I is hereby appropriated to the department from the education trust fund established under RSA 198:39. The education trust fund shall be used to satisfy the state’s obligation under this paragraph. The payment shall be issued regardless of the balance of funds available in the education trust fund.

14 Cooperative School Districts; State Aid. Amend RSA 195:15 to read as follows:

195:15 State Aid. The state aid to which a cooperative elementary and/or secondary district shall be entitled shall be the total of those shares of the aid to which the pupils attending the cooperative district would have entitled the pre-existing districts, had they remained in the pre-existing districts. [For the purposes of crediting the cooperative district’s adequate education cost to the pre-existing districts, each such pre-existing district shall have its adequate education cost under RSA 198:38, VII credited against its share of the cooperative school district budget. However, cooperative school districts formed by 2 or more pre-existing districts whose boundaries approximate those of a single township in which they are located shall be treated as a single school district for the purposes of this section.]

15 Excess Education Property Tax Payment; Subdivision Heading Amended. Amend the subdivision heading preceding RSA 198:46 to read as follows:

[Excess Education Property Tax Payment] Miscellaneous Provisions

16 Severability. If any provision of this act or the application thereof to any person or circumstance is deemed invalid, the invalidity does not affect the other provisions or applications of the act which can be given effect without the invalid provisions or applications and to this end the provisions of this act are severable.

17 Repeal. The following are repealed:

I. RSA 198:46, relative to excess education property tax payment.

II. RSA 198:47, relative to forms for excess education property tax payment.

18 Applicability. The provisions of RSA 76-A as inserted by section 5 of this act shall apply to claims filed on or after the tax year beginning April 1, 2010.

19 Effective Date.

I. Section 5 of this act shall take effect April 1, 2010.

II. The remainder of this act shall take effect July 1, 2009 at 12:01 a.m.

LBAO

09-0156

Revised 02/03/09

HB 426 FISCAL NOTE

AN ACT establishing the New Hampshire homestead plan.

FISCAL IMPACT:

The Department of Education has determined this bill will increase state education trust fund expenditures and local revenue by an indeterminable amount in FY 2010 and each fiscal year thereafter. The Department of Revenue Administration has determined this bill will increase state general fund expenditures and state education trust fund revenue by an indeterminable amount in FY 2010 and each fiscal year thereafter. There will be no fiscal impact on county revenue or county and local expenditures.

METHODOLOGY:

The Department of Education states this bill will increase state education trust fund expenditures and local revenue by an indeterminable amount in FY 2010 and each fiscal year thereafter. The Department states this bill does not amend the calculation of the cost of an adequate education (sections 6 and 7) or fiscal capacity disparity aid (section 9) from current law. The Department has estimated the cost of an adequate education to be $921,443,751 in FY 2010 and FY 2011 and $981,792,785 in FY 2012 and FY 2013, and has estimated the cost of fiscal capacity disparity aid to be $47,893,278 in FY 2010 and FY 2011 and $46,935,414 in FY 2012 and FY 2013. The Department states section 10 of this bill provides for sustainability grants each fiscal year, replacing the current transition law that applies to FY 2011 and FY 2012 only. The Department estimates the cost of sustainability grants under this bill to be $42,079,232 in FY 2010 and FY 2011 and $26,641,561 in FY 2012 and FY 2013. The Department states it is unable to determine the cost of targeted grants under section 11 of this bill since the amount to be expended annually depends on the total amount of education trust fund revenue, and the Department is unable to estimate education trust fund revenue.

The Department of Revenue Administration states there would be significant, indeterminable costs associated with administering this bill, which would increase state general fund expenditures by an indeterminable amount in FY 2010 and each fiscal year thereafter.

The Department estimated state education property tax revenue under this bill in FY 2010 as follows. Total 2007 equalized assessed valuation not including railroad and utilities is $170,101,185,341. Gross revenue at a tax rate of $5.50 per $1,000 of taxable value would be $935,556,519 [($170,101,185,341 / 1,000) x $5.50]. According to 2000 U.S. Census data, there are 330,783 owner-occupied housing units eligible for exemptions of up to $150,000 of assessed value. The Department estimated the total cost of the property tax exemption to be $210,060,029. The Department states 211,986 homes would be fully exempt from the state property tax because their assessed value is below $150,000, with an estimated tax effect of $112,052,504, and the exemption for the 118,797 homes with an assessed value in excess of $150,000 has estimated tax effect of $98,007,525. Therefore, total state property tax revenue under this bill in FY 2010 is estimated to be $725,496,490 ($935,556,519 - $210,060,029), an increase of $362,496,490 over current law ($725,496,490 - $363,000,000). The Department further states due to increased valuations of homes since 2000, that this fiscal estimate would be the minimum achieved under this bill.