House bill would reclassify power plants as manufacturers, shifting tax treatment and touching Education Trust Fund

Representative Michael Vose introduced House Bill 696 FN on Feb. 11, asking the Science, Technology and Energy Committee to exempt electricity generation facilities from the utility property tax and include them under the statewide education property tax (SWEP), effective Jan. 1, 2027. The bill follows recommendations from a multi‑year property tax commission that recommended treating non‑utility generators as manufacturers for tax purposes.

The bill’s supporters said the change would reduce duplicate assessments and litigation. Representative Vose told the committee the Department of Revenue Administration (DRA) currently assesses generators for utility property tax (UPT) while municipalities separately assess the same facilities for local property tax; those assessments can vary dramatically (he cited Seabrook as an example) and trigger lawsuits that drive costs for municipalities, ratepayers and taxpayers. Pat Abrami and representatives of generator groups said three study commissions reached a consensus that many generators are no longer regulated utilities and should be taxed like other commercial businesses.

Testimony and data: witnesses and the updated fiscal note presented to the committee said the measure would reduce UPT revenues now going into the Education Trust Fund. Representative Vose and witnesses cited an updated fiscal estimate stating Education Trust Fund revenue would decrease by about $5.36 million in fiscal 2028 and by $12.72 million in fiscal 2029 and thereafter. Committee witnesses also noted the Education Trust Fund currently has a large surplus and said the change could be mitigated by raising the SWEP statutory cap (current statutory cap cited in testimony: $363,000,000). Supporters noted the bill keeps the SWEP nominal cap intact but adds generation value to the equalized valuation that determines the SWEP rate; some witnesses said that may lower the SWEP rate while broadening the tax base.

Local pilots and transition: the bill includes a transition for existing payment‑in‑lieu‑of‑tax (PILOT) agreements, preserving those agreements until their contractual end or until January 1, 2031 (whichever comes first). Hydropower representatives told the committee that PILOT transitions matter for facilities already subject to negotiated municipal agreements.

Concerns and clarifications: municipal assessors and the New Hampshire Municipal Association testified they are neutral but urged that municipal assessors receive any information necessary to make accurate assessments, noting DRA currently collects nonpublic data that municipalities do not always have. DRA staff described that their appraisal process involves nonpublic filings and that municipalities have the option to use DRA appraisals but frequently hire their own assessors; DRA staff warned that shifting generators into the SWEP calculation will include their valuations in statewide equalized valuation and could change rates and adequacy calculations.

Who would pay what: witnesses repeatedly emphasized the complexity of projecting the tax bill for any single generator because municipal assessments may be higher than DRA values, while the SWEP rate is lower than the historical UPT rate. Presenters said the net tax change for an individual facility could be higher or lower depending on local assessments and the ultimate SWEP cap/structure decided by subsequent committees.

Next steps: supporters said the bill is likely to go to Ways & Means for the fiscal issues; the commission report and minutes (distributed to lawmakers) formed the main evidentiary record for the measure.

Ending: the committee heard multiple stakeholders (generators, municipal association, DRA, DOE representatives and others) and closed the public hearing for HB 696 after extended testimony and questions. The bill remains under committee consideration.