NH House panel OKs corporate jet fee cuts

Committee also backs reduced registration for out-of-state truck fleets

A key NH House committee has recommended cutting registration fees in order to attract corporate jets and large fleets of trucks to the state.

The Ways and Means Committee on Wednesday easily passed House Bill 124, which would eliminate the portion of the state’s aircraft registration fee that is based on value. That fee was causing jet owners to base their private planes out of state, proponents of the bill said. The bill replaces lost revenue by reducing the value fee by increasing fees on small aircraft and more than doubling the aviation fuel tax.

The committee also passed on a 13-10 vote HB 579, which would give a discount on registration fees for out-of-state truck companies. Opponents worried that the bill would encourage local firms to use shell companies to register their trucks out of state, causing local municipalities to lose revenue without attracting enough fleets to make it worthwhile to the state or the economy.

Both bills, retained from last year, will be voted on by the full House in January.

HB 124 originally would have eliminated the aircraft registration fee. That fee put the state at a competitive disadvantage with Massachusetts, which exempts planes from its sales tax. As a result, those basing a new jet in New Hampshire could pay as much as $300,000, compared to $300 if it was based in Massachusetts. This particularly hurt general aviation at Portsmouth and Nashua airports.

But the state’s other, smaller airports depend on a quarter of those registration fees for operational costs. To replace that money, the bill would increase the portion of the fee based on weight – the only portion required of older planes. Thus the owner of a small older plane would actually pay $100 per year rather than $48. (Larger planes would have to pay as much as $3,500.)

The bill also would increase tax on private jet fuel from 2 cents to 4 cents per gallon and fuel for commercial airlines would increase a 0.5 cents to 2.7 cents.

“We are the lowest in fuel tax by far,” said Rep. Patrick Abrami, R-Stratham, who sponsored the amendment. “Even with the increase it isn’t even close.”

But Rep. Christopher Herbert, D-Manchester, objected, saying the measure “taxes those in the state’s largest airport, to make something happen for someone else.”

Abrami replied that the extra tax amounted to 32 cents a seat.

“The airline industry charges $75 a bag, and they are going to complain?” he said.

Herbert was the only one to vote against the bill.

Truck fleets

HB 579 would allow out-of-state trucking companies to register their semitrailers with a trailer agent, bypassing municipalities, and if they do it for a dozen years, the permit fee would be cut by 10 percent.

The program, similar to one already instituted in Maine, is aimed at getting large trucking firms, such as those owned by UPS or Federal Express to register their vehicles in New Hampshire rather than elsewhere, increasing the state’s revenue.

That’s what the state Department of Safety predicts, but opponents argued that it is expensive to set up such a program and that the estimated increase in registrations was overly optimistic. In the meantime, it is not only unfair to charge local trucking companies more than a big national firm, it would create an incentive for them to form a shell company out-of-state for registration purposes. And municipalities would lose the fees they had been collecting.

Rep. Marc Abear, R-Meredith, argued that it would be worth it, if New Hampshire could even capture a fraction of the 11 million semi-trailers nationally.

But Maine has been doing this for over a decade and only managed to get 110,000 trucks registered.

“We are trying to compete for the same market as Maine,” said Rep. Susan Almy, D-Lebanon. “Maine was not able to get that much and we probably won’t either. Other states are trying to stop this trend from low-bidding each other, and now we are just joining the competition.”