Current use study efforts fizzle in NH Legislature
Efforts to probe system’s effect on taxpayers tabled in House, Senate
Legislation to undertake a study of the fiscal impacts of New Hampshire’s current use program on small rural municipalities has stalled in both the House and Senate.
The Legislature enacted the current use law in 1973, five years after voters approved a constitutional amendment to allow land to be taxed according to its to current use rather than its ad valorem, or fair market, value.
The program was introduced as rapid population growth increased land values, prompting owners of farmland and woodlots to sell properties on which the property taxes eroded or exceeded the economic returns. The program has enjoyed strong support from conservationists and environmentalists as well as the NH Timberland Owners Association and NH Farm Bureau.
But there are opponents, or at least people who seek to fine-tune the system. They include Lyme Selectman Bradford “Rusty” Keith, who, in a recent NH Business Review article, criticized “the tax scheme” underpinning it.
He said that assessing the value of land on the basis of its current use rather than its market value reduces local tax bases, increases local tax rates and costs property taxpayers some $118 million a year – a burden that falls disproportionately on the property owners in small rural municipalities where the share of land enrolled in current use is greatest.
Originally, House Bill 1210, sponsored by Rep. Francis Gauthier, R-Claremont, called for convening a study committee to address the issue. The Municipal and County Government Committee heard the bill in February and subsequently amended, at the initiative of the committee’s chair, Rep. James Belanger, R-Hollis, to refer the issue to the Assessing Standards Board.
As amended, the bill carried the committee unanimously and was placed on the consent calendar, only to be withdrawn and ultimately tabled when the Assessing Standards Board informed lawmakers it was not prepared to conduct a study.
Effort in Senate
Meanwhile, Sen. Bob Giuda, R-Warren, who co-sponsored HB 1210, amended Senate Bill 405 to establish a commission to undertake the study.
He proposed the commission consist of one member of the Senate and one member of the House together with a representative of the NH Municipal Association, a member of the Current Use Advisory Board and a selectman appointed by the governor. His amendment also specified that the commission consider the fiscal impact of current use and conservation restrictions on the tax bases and tax rates of small, rural municipalities and the method of valuing and assessing land enrolled in current use or under a conservation restriction along with whether land subject to a permanent conservation easement should qualify for enrollment in current use.
Although the Senate Ways and Means Committee reported the bill ought to pass, it met with opposition from the Timberland Owners Association, Society for the Protection of New Hampshire Forests, Nature Conservancy and what Giuda called “other vested interests,” which objected to the composition of the commission and scope of the study. “They saw it as a dagger aimed at the heart of current use and don’t want to see the questions asked,” Giuda said. The bill was tabled, 17-6.
“It’s not going to happen this year,” said Giuda, who explained that rather than bring the bill to a vote he preferred to ensure “the bill has no history of having been killed. The idea has merit,” he said, while adding that the original bill was introduced without adequate preparation to lend it sufficient momentum.
“It is very disappointing that our legislators and the legislative process would allow special interests to keep them from passing a bill, recommended unanimously out of committee, to study and educate them on the tax impact this law imposes on our rural communities,” said Keith.
He added that since he began pursuing the issue four years ago he has yet to find a lawmaker who understands how the current use law affects the taxes paid by their constituents.