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NH committee hears bill to treat power generators as manufacturers for school property-tax purposes
Summary
Lawmakers heard hours of testimony on HB 696, which would exempt electricity generators from the utility property tax and instead include their property under the statewide education property tax, changing how generators are assessed and shifting revenue flows into the Education Trust Fund starting Jan. 1, 2027.
Representative Michael Vose (R‑Epping) introduced House Bill 696, which would remove electricity generation facilities from the state'administered utility property tax (UPT) and subject them to the statewide education property tax (commonly called SWEP), beginning Jan. 1, 2027.
Proponents told the Science, Technology and Energy Committee they view independent generators as manufacturing operations that should be assessed like other commercial property. Vose said a multi-year state commission concluded "generators of electricity are in fact just manufacturers ... They are not utilities." Supporters said the change would reduce duplicate assessments and litigation between municipal assessors and the Department of Revenue Administration (DRA).
The nuts and bolts: committee testimony and a fiscal note issued in late January show a phased revenue effect. DRA and the bill's sponsors told the committee the change would reduce UPT receipts from generators by about $5.36 million in fiscal 2028 and about $12.72 million in fiscal 2029 and thereafter. Supporters noted the statewide education trust fund (ETF) has carried a surplus (testimony referenced roughly $100 million), and that the bill preserves the SWEP statutory cap (current statute figure in testimony: $363,000,000). As explained by Representative Vose and by presenters from the generator industry, inclusion of generation property in the equalized valuation used to set the SWEP rate is expected to lower the SWEP tax rate; bill proponents said that, taken together, these effects could largely be a wash for the ETF but acknowledged Ways and Means or Finance would weigh any cap adjustments.
Municipal assessors raised a different set of concerns. Bridal Deshaies of the New Hampshire Municipal Association told the committee the DRA currently uses additional nonpublic information to value generators for UPT; municipal assessors say they lack that same access and that, without improved reporting, valuations by municipalities could diverge from DRA valuations and produce continued appeals. DRA's assistant director Adam Denoncourt confirmed DRA produces public appraisals and noted municipalities may already choose to use them but often hire private appraisers instead.
Industry testimony: Molly Connors for the New England Power Generators Association said the market-facing, non-utility generators are not economically regulated by the New Hampshire Public Utilities Commission and "we really do view them as manufacturing facilities." She told the committee generators already produce extensive public filings that can be used by assessors and that New Hampshire's current approach subjects generators to two separate assessments and administrative burdens unique to their industry.
Other witnesses included former state representative Pat Abrami, who recounted multi-year study commissions and described the commission's conclusion that removing generators from the UPT reduces disputes; Madeline Minot of the Granite State Hydropower Association, who supported a provision preserving existing payment-in-lieu-of-tax (PILOT) agreements; and Megan Stone of the New Hampshire Department of Energy, who said the department is neutral on the bill because it does not regulate generators.
Where the debate stands: supporters say the bill reduces duplicative assessments and litigation, protects existing PILOT agreements through transition language, and treats generators consistently with other businesses. Critics — especially municipal assessors — say the state should ensure municipal assessors receive the same confidential data DRA uses now or otherwise provide a clear path to accurate municipal valuations. Several committee members repeatedly flagged the SWEP cap and said Ways and Means will need to consider whether to adjust the cap to avoid an ETF shortfall.
A next step: the bill drew substantial testimony and will likely be considered by Ways and Means or Finance, where any adjustment to the SWEP cap would be decided. No committee vote on HB 696 occurred during the Feb. 11 hearing.
Ending note: proponents stressed the bill's effective date of Jan. 1, 2027, and an explicit transition protecting existing PILOT contracts through their current end dates (or to Jan. 1, 2031, whichever comes first). Several speakers urged reading the commission report circulated to committee members for additional context.
