Senate panel reviews H.397: shifts local-option tax split, allows voluntary flood buyouts and changes municipal finance rules

Staff member Chris led the committee through the fiscal note for H.397, an omnibus hazard-response bill that would change how local-option tax revenue is split, authorize voluntary buyouts of flood‑impacted and flood‑prone properties, and make several municipal finance changes.

The most immediate fiscal change described by Chris would alter the current 70/30 split of certain local‑option tax revenue so that towns retain 75% and the pilot special fund receives 25%, effective Oct. 1 at the Tax Department’s request. "This bill would change that allocation to 75 25," Chris said. Chris estimated the full annualized impact at roughly a $2,800,000 shift of revenue away from the pilot fund to towns and warned that moving to an 80/20 split would create a structural deficit in the pilot fund.

Tucker Anderson, Legislative Counsel, described other provisions in the bill. He said the Community…