HB 1649 FN A L relative to collection of the education property tax and to rebate certain property tax payments


AN ACT relative to collection of the education property tax and establishing a program to rebate certain excessive property tax payments of eligible taxpayers.

SPONSORS: Rep. G. Richardson, Merr 4; Rep. Foose, Merr 1

COMMITTEE: Special Committee on Education Funding Reform

This bill transfers the authority to collect the education property tax from the municipalities to the department of revenue administration. The bill establishes a program for the rebate of excessive education property tax payments made by eligible taxpayers in the state. Claims for rebates shall be made to the department of revenue administration and qualifying claims shall be paid from the interest which accumulates on education property taxes collected by the department.



The Department of Revenue Administration and New Hampshire Municipal Association state this bill will increase state and local revenue and expenditures by an indeterminable amount in FY 2013 and each year thereafter. This bill would have no fiscal impact on county revenue and expenditures.


The Department of Revenue Administration (DRA) states under this bill, DRA would be responsible for collecting approximately an additional 1,270,000 tax payments. The Department would need to use the Statewide GIS computer system to implement this tax, which may cause a timing problem with the implementation of the administration of the tax due to the fact that the GIS system is still being constructed and would have to be modified to allow for the receipt of all pertinent tax bill information. A new collection system would have to be developed in order to handle over one million documents. The cost of creating a new division within the DRA or expanding the current Property Appraisal Division could exceed $3,000,000. In addition, the estimated cost for information technology staff and equipment would be approximately $2,417,500. The Department also estimates mailing costs and costs for the proposed Education Property Tax Relief Program would total an additional $997,000. The Department states that based upon a sampling done by the Property Appraisal Division, approximately $13,000,000 would be made in reimbursements of claims under the proposed Education Property Tax Relief Program. The bill would repeal the existing Low and Moderate Income Homeowners Property Tax Relief which would reduce current state expenditures by $3,300,000 annually. In summary, the Department estimates this bill will increase state expenditures by approximately $16,114,500 annually [($3,000,000 + $2,417,500 + $997,000 + 13,000,000) - $3,300,000].

The New Hampshire Municipal Association states this bill proposes to have cities and towns issue property tax bills for the State Wide Education Property Tax (SWEPT) with the taxpayers remitting the tax directly to the Department of Revenue Administration (DRA), rather than the municipality. Municipalities would be reimbursed $0.50 for each bill issued. The Association assumes there are approximately 660,000 property tax bills issued statewide, and bills are issued twice a year. As a result, the Association estimates local revenue would increase by $660,000 annually (660,000 X $0.50 X 2). The Association states there may be increased local expenditures as a result of implementation and reconciliation of tax bills payable to the State, but are unable to determine a fiscal impact at this time. The Association states this bill also proposes that a portion of property tax relief claims for education taxes above 10% of household income will be paid by the municipality, and then reimbursed by the State. The Association is unable to estimate the amount of such tax relief claims at this time.