Committee hears bill to move power generators from utility tax to statewide education tax

The House Ways and Means Committee heard testimony on House Bill 696, which would reclassify electricity generators as manufacturers and move them from the state's utility property tax to the statewide education property tax (SWEPT), Representative Michael Vose (R-Rockingham District 5) told the committee. The bill would not take effect until the 2028 tax year, the prime sponsor said.

Supporters, including industry representatives and a study commission that worked three years on the issue, said the proposal would resolve long-running assessment disputes between the Department of Revenue Administration and local assessors and place generators on the same tax footing as other commercial businesses. Molly Connors of the New England Power Generators Association told the committee New Hampshire currently subjects non-utility power plants to two distinct property assessments and appeals processes, which she called "costly, inefficient, unfair, and contribut[ing] to increased litigation costs for host communities, plant owners, and the state itself."

The bill shifts generators out of the utility property tax (UPT) and into SWEPT. Representative Vose said the change would generally be a wash statewide: "The utility property tax will go down, but the SWEPT in many cases will go up and it'll be essentially a wash," he said. He urged members to consult the 81-page commission report the panel produced during three years of study.

Committee members pressed witnesses on fiscal and local impacts. Representative Schomburg cited DRA figures in the fiscal note showing a projected reduction to the Education Trust Fund of about $5,360,000 in 2028 and $12,700,000 in 2029; Vose and others said the reduction largely reflects timing and that SWEPT receipts would increase in other places, producing little net statewide change. Vose walked the committee through a table in the commission report illustrating effects on the town of Seabrook: under the bill Seabrook's SWEPT revenue would rise to $5,303,674, an increase of $2,023,655, and the state's adequacy payment to the town would fall by $16,252 because the town would become an "excess SWEPT" community.

Witnesses described pilot (payment-in-lieu-of-tax) agreements as bilateral contracts between municipalities and property owners and said the bill preserves those contracts for their remaining term or until Jan. 1, 2031, whichever comes first. Madeline Munoz of the Granite State Hydropower Association said pilots are available only to renewable generators and typically are limited to five years unless longer terms are necessary for financing a project. She urged the committee not to "upend the terms of that contract midterm."

Department of Revenue Administration assistant director Adam Denoncour told the committee SWEPT is capped at $363,000,000; adding a new class of property to SWEPT would lower the uniform SWEPT rate because the cap limits total SWEPT dollars. "When you change the tax base, whether you remove something from it or in this case, you're adding a new class of property to the tax base, what you're effectively doing is reducing the rate," he said, adding that pilot agreements are treated as agreed revenue amounts when municipal warrants are calculated.

Supporters also said the proposal would reduce litigation. Pat Abaramey, who served on prior commissions on assessing utilities, said one rationale for the bill is to eliminate the recurring appeals that arise when DRA and municipal assessors produce widely divergent valuations.

The committee heard several technical questions about how the change would affect individual communities, with Representative Vose pointing to appendix tables in the commission report that show town-by-town impacts; using 2024 revenue figures as an example, he said the bill would increase SWEPT revenues for the town of Bow by about $2,445.

The hearing concluded with the committee adjourning the public record; Representative Vose and others noted the full commission report and town tables are available on the legislature's website for members seeking more detail.

What happens next: the hearing was closed; committee members discussed further review and reconciliation with a Senate version of the bill before any subsequent committee action.