Rep. Nancy Murphy urges protection for towns in bill to curb transfers of state highway property

Representative Nancy Murphy introduced House Bill 561 on behalf of New Hampshire municipalities, saying the bill would protect towns and cities from state actions that would transfer state-owned highway property to local governments without funding or local approval. “HB 561 has been filed to protect municipalities from state action that would impose an unfunded mandate upon them,” Murphy said, asking the committee for an OTP recommendation.

The bill would amend provisions of state statute cited in testimony as “RSA 230:57, RSA 4:39, and RSA 4:40” to limit or condition discontinuance, reclassification or reversion of portions of Class 1 and 2 highways to towns. Murphy told the committee that such transfers would “place an undue and disproportionate, potentiate budget crippling burden” on affected municipalities and that the bill was intended to prevent what she called an unfair downshift of costs to local property taxpayers.

Merrimack officials described a local example. Finley Rothaus, chairman of the Merrimack Town Council, and Paul McCauley, Merrimack’s town manager, said a roughly two-mile segment of Continental Boulevard—maintained by NHDOT—was set by recent legislation to transfer to Merrimack and that the town estimates maintenance costs could be about $500,000 a year. Rothaus told the committee the change would “be a huge impact to our town,” and McCauley said NHDOT’s repaving estimate for that stretch is about $1,800,000; he added that the town’s estimate of ongoing maintenance equates to roughly $500,000 annually and would affect local tax rates.

Steve Labonte, legislative liaison for the New Hampshire Department of Transportation and former Bureau of Right of Way administrator, described how the department now handles discontinuances and reclassifications under existing statutes. Labonte told the committee that active-use highways are not treated as surplus property and that discontinuances generally apply to old roadbeds no longer in use. He said the discontinuance process requires departmental notice to towns, a 60-day town response window, and that if a town takes no action a discontinued segment can revert to the town; the statutory scheme also provides a damages claim process for property owners.

Labonte noted that some reclassifications are made as part of projects that bypass sections of roadway—so those sections “take on the character of a local road”—and cited prior examples, including Enterprise Drive in Windham and other project-specific reclassifications. He referenced a state Supreme Court decision involving Nelson, saying that case was decided against the town on an unfunded-mandate claim. Several committee members asked whether the Continental Boulevard transfer resulted from administrative action or legislation; witnesses said it was enacted by legislative amendment tied to the budget process and not solely by the DOT commissioner.

Representatives Wendy Thomas and Rosemarie Rung, both from Merrimack-area districts, urged support for HB 561 and cited Senate Bill 539 (recently enacted) as precedent establishing a procedure for transferring state-owned assets with a governing-body vote; Rung read language from that bill to illustrate a process that requires governing-body review and a legislative-body decision. Committee members asked for year and statute references during questioning.

No formal committee vote on HB 561 was recorded in the public hearing. The public hearing on HB 561 closed after DOT testimony and questions; committee members then moved on to other bills on the agenda.

Ending — The committee heard testimony from multiple Merrimack officials and DOT staff outlining fiscal and procedural consequences of transferring state highway segments to towns. Witnesses urged committee members to consider statutory changes so municipalities cannot be required to accept state road sections—and their costs—without fully funded terms or local approval.