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Counties, state clash over fair-market renewal rates as subcommittee hears bill on state leases
Summary
A bill requiring state agencies to renew leases at fair market value drew county managers and municipal officials to a hearing. Sullivan County testified the state often offers "take it or leave it" terms that leave counties subsidizing court space; county groups asked for an objective standard for renewals.
County officials and municipal managers urged the Executive Departments and Administration subcommittee to require that state agency lease renewals be negotiated at fair market value rather than by automatic, formulaic renewals.
Representative Judy Aaron introduced House Bill 694 on behalf of Sullivan County. She told the panel that the state's most recent operating-lease inventory (published Jan. 2024) lists nearly 90 active leases statewide and roughly 2 million square feet of leased space. County managers said several of the leases for court space and related facilities were being renewed at amounts that do not cover operating costs, forcing counties to make up shortfalls with property-tax revenue.
Sullivan County Manager Derek Furland described past negotiations with the Bureau of Court Administration and the Department of Administrative Services (DAS). He said the state sometimes treated renewals like a take-it-or-leave-it offer and that counties lacked an objective standard for setting renewal rates. Furland proposed a process grounded in fair-market-value data or realtor comparables, with utilities and custodial services priced to reflect actual costs at each renewal.
Testimony from the New Hampshire Association of Counties echoed those concerns and said a fair-market step in the renewal process could ease a transfer of costs to local property taxpayers. Committee members asked whether property owners could simply refuse state offers; county witnesses said physical limitations of specialized courthouse buildings often make alternative tenants impractical. Lawmakers also discussed differences between state-held and private-sector leases and noted some state-owned court complexes would be consolidated under the capital budget.
Representatives and county managers asked for cleaner statutory guidance; House Bill 694 would apply to lease renewals and allow use of a submarket rate only when the property owner agreed. The committee closed the hearing and said the bill would be scheduled for further subcommittee referral and drafting; lawmakers also flagged drafting errors in statute cross-references to be fixed during later drafting.
