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Bill to close ‘‘lease of equipment’’ loophole draws wide opposition from energy firms and municipalities
Summary
HB 372 would bar use of RSA 33:7‑e lease agreements to finance building fixtures — items that become part of a structure — and would treat those financing arrangements as long‑term debt requiring higher voter thresholds.
House Bill 372 drew extended testimony March 3. Sponsor Representative Diane Power described HB 372 as a narrowly targeted measure to stop use of RSA 33:7‑e "lease agreements of equipment" for projects that effectively install fixtures that cannot practically be returned, such as boilers, insulation, flooring, windows, elevators and other building replacements. The sponsor presented examples where school districts and towns used long‑term leases with escape clauses to finance multi‑million‑dollar facility projects and argued taxpayers paid a substantial premium in interest as a result. "Taxpayers should not have to pay a premium lease interest rate for a lease with an escape clause that can't be practically exercised," Representative Power said.
Proponents from Brookline described cases where municipalities placed multi‑year lease warrant articles on local ballots for energy conservation work and found themselves repeatedly reauthorizing or paying much higher financing costs than a comparable bond. "We found that a bond rate was 3.84% and a lease for that same project was 5.45%... just the interest only difference was $1,400,000 for the lease," Brookline speakers said.
Opponents included the National Association of Energy Service Companies (NAESCO), energy‑services firms EEI and Johnson Controls, Clean Energy New Hampshire and municipal officials. Witnesses argued that energy performance contracting and tax‑exempt lease purchases are an important financing tool that can be cost‑neutral to taxpayers when energy savings offset payments, and that removing the option would push some towns to delay needed maintenance or to seek more expensive construction solutions. "The true intended consequence of this bill is that it prevents local government from addressing deferred maintenance and critical capital infrastructure needs through lease agreements," said Natasha Shaw of NAESCO. Industry witnesses and municipal officials detailed recent projects statewide financed via lease agreements and said the governor vetoed similar language last year because it would unduly limit local flexibility.
Committee members asked technical questions about how to define a "fixture" versus returnable equipment, how retroactivity would be handled, and whether the bill would prevent energy performance contracts. Sponsor and supporting witnesses said the bill would not ban leases generally or energy performance contracting; rather, it would treat leases that fund fixtures as long‑term debt and subject them to a three‑fifths approval threshold and different accounting classification.
Remote testimony and the roll call in committee showed significant opposition among external commenters: the transcript reports 3 in support and 29 opposed on the remote sign‑in and multiple municipal and business witnesses appeared in person. The hearing closed with committee members asking staff and sponsors to consider technical fixes and to clarify definitions.
Ending: The bill prompted unusually broad opposition from energy‑services firms and municipal groups; sponsors said they seek to stop demonstrable abuses where long‑term renovations were financed via lease statutes intended for returnable equipment.
