Commissions, study panels emerged from 2004 session
Compared to recent years, the 2004 session of the New Hampshire Legislature was pretty quiet on the utility front. If there was one characteristic common to most utility-related pieces of legislation this year, it was the desire to study the underlying issues rather than to enact legislation of any lasting consequence — particularly if it concerned taxes.
The most contentious utility issue by far was an issue pitting Verizon and other telephone companies against municipalities over whether or not to allow the taxation of telephone poles and conduits.
Even though the Legislature had studied the issue in 2003, it passed legislation extending the property-tax exemption for wooden poles and conduits for another two years, setting up yet another study committee. The committee will have three House members and three senators and must report its findings by Nov. 1.
The committee will explore whether to continue the exemption, the feasibility of sharing communications services tax and potential property tax revenues between local communities and the state, wireline companies’ profits and the pass-through to customers of any property tax, among other issues.
On another utility tax issue, legislators passed a law clarifying the computation of tax on certain telecommunications services under the communications services tax.
This legislation establishes certain rules for computation of the tax for private communications services and paid calling services, and also establishes a committee composed of three House members and three senators to study the feasibility of unbundling communications services charges, the record-keeping required by communications services providers, the revenue implications of excluding unbundled charges from taxation, and the application of the tax to voice over Internet services. This has become of particular interest in recent weeks because of the Department of Revenue’s proposal to amend the communications services tax rules in areas that arguably are the subject of this study — though DRA has apparently decided to send the whole issue to the study committee before proceeding.
In other action, the Legislature passed a law urging the oversight committee on telecommunications to study aspects of federal universal service funding, including the reasons for the net loss of money from the state, the low rate of funding for schools and libraries, and to identify ways to remedy the situation whether by decreasing payments to the fund, advocating for revised program criteria, or implementing an effort to increase the number of successful applications to the fund by NH parties.
Universal service funding is part of the Universal Service Program, administered by the Schools and Libraries Division of a not-for-profit corporation appointed by the Federal Communications Commission after the passage of the Federal Telecommunications Act of 1996 to ensure that the benefits of telecommunications services reach students and communities across the country. This 2004 law also requires the state commissioner of education to develop and distribute to school districts concise instructions on the proper methods for application for the schools and libraries portion of the universal service fund.
In action, the Legislature:
• Established requirements for public interest payphones, established a public interest payphone fund for maintaining these payphones, and required payment of 85 percent of abandoned deposits held by telephone utilities into the public interest payphone fund starting July 1, 2005.
• Established a committee to study the effects that electric utility restructuring has had on the state’s hydro-lease program and the state dam maintenance fund and to study alternatives for the funding and operation and maintenance of state-owned dams. The committee is to report its findings by Dec. 1, 2004.
• Authorized the Public Utilities Commission to charge a late penalty to a utility that does not pay its assessment for expenses to the PUC in a timely manner.
• Spelled out the authority and jurisdiction of the PUC under the electric utility restructuring laws with respect to rural electric cooperatives.
• Established a 14-member energy planning advisory board to monitor and assist in the implementation of the New Hampshire Energy Plan, issued in 2002, and to meet regularly to discus energy policy and planning at the state level and develop strategic planning for the state’s energy policies.
• Established a telecommunications planning and development fund that is nonlapsing (any money in the fund at the end of the two-year budget period for the state remain in that fund instead of being put into the general fund for the state) and expires July 1, 2008.
• Established a 10-member commission to study the benefit to municipalities of using bonds for construction, development, improvement and acquisition of broadband facilities. The commission is to report its findings and any recommendations on or before Nov. 1, 2005.
• Established a commission to study, among other things, the tax exemption for water and air pollution control facilities, used by many utilities to reduce their property taxes. The commission must report its findings and any recommendations by Nov. 30, 2004. nhbr
Doug Patch, former chairman of the New Hampshire Public Utilities Commission, is with the Concord law firm of Orr and Reno.