Preview of H.397: state buyout program, 10-year municipal reimbursements and local-option tax split draw scrutiny

Senate Government Operations Committee staff and municipal advocates on Friday previewed H.397, a bill focused on flood response and municipal finance that is currently pending in the Senate Government Operations Committee.

“H.397 is currently in Senate Government Operations. They just took additional testimony on the bill,” said Patrick Anderson, legislative counsel, during a committee walkthrough. The draft would direct the Division of Emergency Management within the Department of Public Safety to update the state emergency management plan, provide municipal assistance for all-hazards response, and stand up a voluntary buyout program for flood‑impacted properties.

Why it matters: The proposal touches municipal budgets and state special funds. It would require properties acquired in buyouts to be permanently dedicated as open space, trigger a new 10‑year reimbursement program to offset municipal grand‑list losses, and shift how local option tax revenue is split between towns and the pilot special fund — changes that could put more money in some municipal coffers while altering the state’s pilot surplus.

The bill’s buyout and reimbursement structure

Under the draft previewed for the committee, buyouts performed through the Division of Emergency Management or in coordination with FEMA would require restrictive covenants recorded on the title to keep the land as open space. That permanent dedication would remove taxable structures and create a loss on municipal grand lists — the basis for the bill’s municipal reimbursement mechanism.

Chri…