HB1514: relative to excess funds paid to municipalities for the use of school districts.

HB 1514-FN-A-LOCAL - AS INTRODUCED

2024 SESSION

24-2245

02/10

HOUSE BILL 1514-FN-A-LOCAL

AN ACT relative to excess funds paid to municipalities for the use of school districts.

SPONSORS: Rep. Bickford, Straf. 3

COMMITTEE: Ways and Means

ANALYSIS

This bill requires municipalities to remit any excess statewide education property tax to the state for deposit in the general fund.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

24-2245

02/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Twenty Four

AN ACT relative to excess funds paid to municipalities for the use of school districts.

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

1 New Sections; Adequate Education; Excess Statewide Education Property Tax Payment. Amend RSA 198 by inserting after section 47 the following new sections:

198:47-a Excess Statewide Education Property Tax Payment.

I. Any excess statewide education property tax shall be remitted to the department of revenue administration on or before March 15 of the tax year in which the excess occurs.

II. The commissioner of the department of revenue administration shall collect from the municipality the excess tax and pay the excess tax over to the state treasurer for deposit in the education trust fund.

III. The amount of such excess to be remitted shall not include any income derived from the investment of funds by the municipal treasurers under RSA 41:29 and RSA 48:16. Any funds remaining after full payment of the excess tax required in paragraph I shall become available for unrestricted use by the municipality.

198:47-b Forms. The commissioner shall approve and provide forms relative to the reporting and remitting of excess statewide education property tax by the municipalities.

2 New Paragraph; Determination of Education Grants and Excess Statewide Education Tax. Amend RSA 198:41, I(b) by inserting after paragraph II the following new paragraph:

(b) Subtract the amount of the education tax warrant to be issued by the commissioner of revenue administration for such municipality reported pursuant to RSA 76:8 for the next tax year, not including the amount of the education tax payment remitted back to the department of revenue administration under 198:47-a; and

3 Assessment of Education Tax; Commissioner's Warrant. Amend RSA 76:8, II 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 municipality for the use of the school district or districts and, if there is an excess statewide education property tax payment due pursuant to RSA 198:47-a, directing them to assess the amount of the excess payment and pay it to the department of revenue administration for deposit in the education trust fund. Such sums shall be assessed at such times as may be prescribed for other taxes assessed by such selectmen or assessors of the municipality.

4 Education Trust Fund Created and Invested. Amend RSA 198:39, II(k) to read as follows:

(k) Funds collected and paid over to the to the state treasurer by the department of revenue administration pursuant to RSA 198:47-a.

(l) Any other moneys appropriated from the general fund.

5 Effective Date. This act shall take effect July 1, 2024.

LBA

24-2245

12/6/23

HB 1514-FN-A-LOCAL- FISCAL NOTE

AS INTRODUCED

AN ACT relative to excess funds paid to municipalities for the use of school districts.

FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None

Estimated State Impact - Increase / (Decrease)

FY 2024

FY 2025

FY 2026

FY 2027

Revenue

$0

$0

$0

$0

Revenue Fund(s)

None

Expenditures

$0

Education Trust Fund - ($29,036,762)

General Fund - DRA $300,000

Indeterminable Decrease

Funding Source(s)

Education Trust Fund, General Fund

Appropriations

$0

$0

$0

$0

Funding Source(s)

None

• Does this bill provide sufficient funding to cover estimated expenditures? [X] No

• Does this bill authorize new positions to implement this bill? [X] N/A

Estimated Political Subdivision Impact - Increase / (Decrease)

FY 2024

FY 2025

FY 2026

FY 2027

Local Revenue

$0

($29,036,762)

Indeterminable Decrease

Local Expenditures

$0

$0

$0

$0

METHODOLOGY:

This bill remits excess Statewide Education Property Tax (SWEPT) collected by municipalities to the education trust fund. While the proposed bill does not explicitly define “excess SWEPT”, the mechanics of how the adequacy formula interacts with SWEPT, makes excess SWEPT revenue equal to SWEPT revenue exceeding the cost of an adequate education. Using this methodology, excess SWEPT is estimated to be $29,036,762 for FY 2025. Since the proposed bill does not reallocate the excess SWEPT funding to another program after being remitted to the education trust fund, the estimated impact is a decrease in $29,036,762 in state expenditures, as the excess would not be kept in the form of a grant, and a decrease in local revenue in the form of a reduced state grant. Based on FY 2025 preliminary data, “excess SWEPT” by municipality is as follows:

State Total

$29,036,762

Alton

$1,321,539

Bartlett

$1,323,865

Bridgewater

$334,983

Cambridge

$15,417

Carroll

$490,340

Center Harbor

$505,349

Clarksville

$14,113

Dix's Grant

$1,650

Dixville

$14,553

Easton

$26,530

Eaton

$23,351

Errol

$90,324

Franconia

$235,814

Freedom

$687,553

Gilford

$146,240

Hale's Location

$99,692

Harrisville

$105,664

Hart's Location

$24,530

Hebron

$279,117

Holderness

$552,461

Jackson

$550,375

Lincoln

$1,584,356

Martin's Location

$105

Meredith

$1,625,279

Millsfield

$7,209

Moultonborough

$5,105,266

New Castle

$1,319,596

New London

$1,179,248

Newbury

$973,964

Newington

$723,992

North Hampton

$493,169

Odell

$4,637

Other Unincorp. Places

$32,514

Pinkham's Grant

$7,480

Pittsburg

$400,467

Portsmouth

$803,917

Randolph

$8,872

Rye

$2,264,409

Sandwich

$284,129

Success

$21,892

Sugar Hill

$72,606

Sunapee

$1,557,735

Tuftonboro

$1,396,872

Washington

$23,342

Waterville Valley

$504,231

Wentworth Location

$13,217

Wolfeboro

$1,784,796

Impact on FY 2026 will likely be similar, but is indeterminable at this time as applicable data is not yet available.

The Department of Revenue Administration states it would be responsible for updating all necessary forms related to this proposed legislation, which would not result in any additional administrative costs that could not be absorbed in its operating budget. However, the proposed legislation contemplates that the Department will bill and collect excess SWEPT. To administer this new requirement and build out the functionality within its new Revenue Information Management System (RIMS) and on-line user portal Granite Tax Connect (GTC), the estimated cost is $300,000, assumed to be incurred in FY 2025.

AGENCIES CONTACTED:

Department of Education and Department of Revenue Administration