Committee backs shifting electricity generators from utility tax to statewide education property tax; three‑year pilot phase considered

The Ways and Means Committee voted to recommend passage of House Bill 696 by a 17–2 roll call after extended testimony from the Department of Education, municipal representatives, and generation industry groups.

HB696 would reclassify electric generators that are currently taxed under the state utility property tax (UPT) so they instead are subject to the statewide education property tax (SWEPT). The draft includes a phase-in provision and a limited period in which existing payment‑in‑lieu‑of‑tax (PILOT) or pilot agreements would remain in force before reclassification is fully effective.

Mark Manganiello of the Department of Education’s Bureau of School Finance explained how the change affects multiple layers of revenue. Using current data, he said moving qualifying generators into SWEPT would reduce utility property tax receipts by roughly $12.7 million while SWEPT revenue would remain at its current certified level; the net effect, according to the department, is that school district adequacy funding would not change because total SWEPT revenue is set and districts’ adequacy is driven by student counts.

Manganiello summarized likely local effects: utilities that become SWEPT taxpayers would see a lower per‑thousand rate but their shift into the SWEPT base would expand that base and reduce the SWEPT tax rate for other taxpayers. "Non‑utility property taxpayers would also see a reduction," he said, noting the impact depends on the final composition of the tax base.

Municipal assessors’ representatives told the committee they want access to the same information the Department of Revenue Administration (DRA) would use to value generators so local assessors can produce more accurate assessments and limit litigation. The New Hampshire Municipal Association asked that host municipal assessors be included among recipients of information gathered for assessment purposes.

Generator industry associations — represented by the New England Power Generators Association and the Granite State Hydropower Association — urged a narrow bill and defended existing pilot agreements. They said many nonutility generators compete in wholesale electricity markets and historically have been assessed at values different from local assessments; the associations supported a limited three‑year continuation of existing pilot agreements to avoid renegotiation and disruption.

Committee members also discussed whether the bill would affect ongoing municipal budgets. Department testimony noted the bill’s effective date is designed to avoid immediate disruption; one industry representative said the change was not intended to affect current budgets in the current biennium because the measure would go into effect for tax years after a multi‑year notice period.

The committee approved the motion to recommend passage in executive session; the clerk recorded a roll-call vote with 17 in favor and 2 opposed. Representatives asked for minority and majority reports on a short timetable.

Key implementation questions raised during the hearing included: how existing PILOT agreements are treated during the phase‑in; whether municipal assessors should receive DRA assessment information; and the net effect of the change on local tax rates during any transition period. Witnesses said pilots are voluntary municipal agreements and that the bill preserves them for the transition period so local revenues are not immediately disrupted.

Votes at a glance: In executive session Representative Eulary moved and Representative Borer seconded the motion that HB696 ought to pass. The committee clerk recorded a roll-call vote; the motion passed 17–2.

Committee leadership said they will schedule follow-up hearings and asked members to file majority and minority reports on the usual timeline.